Opinion ID: 3171484
Heading Depth: 2
Heading Rank: 2

Heading: Calculation of Attorney Fee Award

Text: The determination of reasonable attorney fees is also “a matter that is committed to the sound discretion” of a district court judge. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 558 (2010). We therefore also review the calculation of an attorney fee award under § 285 for an abuse of discretion. In calculating an attorney fee award, a district court usually applies the lodestar method, which provides a presumptively reasonable fee amount, id. at 554, by multiplying a reasonable hourly rate by the reasonable number of hours required to litigate a comparable case, id. at 551. This method has been characterized as “readily administrable” and “objective,” but “not perfect” and “never intended to be conclusive in all circumstances.” Id. at 551–52, 554. We have noted that “although the amount the client paid the attorney is one factor for the court to consider in determining a reasonable fee, it does not establish an absolute ceiling.” Junker v. Eddings, 396 F.3d 1359, 1365 (Fed. Cir. 2005). In “rare” and “exceptional” cases, a LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 7 district court may enhance the lodestar amount based on various factors, provided they are not adequately taken into account by the lodestar calculation. Bywaters v. United States, 670 F.3d 1221, 1229 (Fed. Cir. 2012) (citing Pennsylvania v. Del. Valley Citizens’ Council for Clean Air (Del. Valley I), 478 U.S. 546, 564–65 (1986); Perdue, 559 U.S. at 552); see also Pennsylvania v. Del. Valley Citizens’ Council for Clean Air (Del. Valley II), 483 U.S. 711, 728 (1987) (noting that enhancement of lodestar can be justified in exceptional cases). Lumen View argues that the district court misapplied the Octane Fitness factors to the determination of enhancing fees because those factors should only apply to the exceptionality analysis. Allowing double consideration of those factors, Lumen View contends, would mean that exceptional cases will always result in enhanced fee awards. Lumen View moreover asserts that Octane Fitness and § 285 only authorize the award of reasonable fees, not the enhancement of fee awards. Lumen View also emphasizes that unlike the punitive purpose of enhancing damages under § 284, the award of attorney fees under § 285 is only intended to be compensatory. Because deterrence is already factored in by the award of attorney fees in the first place, Lumen View argues that enhancing that award as a further deterrent would be unreasonable. Lumen View also disputes whether the court gave any reasonable explanation for the specific multiplier of two for enhancement. FTB responds that the lodestar amount may be ad- justed in rare and exceptional circumstances in which it does not adequately account for a factor in determining a reasonable fee, and this case represents such a circumstance because of Lumen View’s egregious conduct. FTB disagrees that § 284 jurisprudence would be necessarily implicated by allowing enhancement under § 285, particularly because Octane Fitness made the § 285 standard more flexible and thus not analogous to the more restric- 8 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. tive § 284 standard. FTB also posits that enhancement of the lodestar amount may still constitute “reasonable” attorney fees. Moreover, FTB emphasizes the intended compensatory and deterrent effects of the enhancement, as shown by the district court’s specific statement that the enhancement was not punitive. FTB contends that the record and the district court’s opinion provided sufficient support for the multiplier of two: the expedited schedule contributed to the lower-than-expected lodestar amount, and any enhancement had to be large enough to serve the purpose of deterrence, but the overall amount had to remain reasonable. FTB also claims that the court’s selected multiplier is bolstered by objective evidence of the average range of costs for similar litigation. We agree with Lumen View that the district court failed to provide a proper rationale to justify enhancing the attorney fee award by a multiplier of two. The district court justified its award based on the specific circumstances of the case, the court’s proactive case management and expeditious resolution on the merits, which resulted in an “extremely low” lodestar. Lumen View Tech., 63 F. Supp. 3d at 326–27. If the court had adopted Lumen View’s proposed schedule, it stated, FTB would have reasonably incurred “significantly greater” attorney fees. Id. at 327. That analysis, however, appears to align more with the “results obtained” rationale disfavored by Supreme Court precedent, rather than being a justification for enhancing the lodestar determination. See Bywaters, 670 F.3d at 1230–31 (explaining that “the ‘results obtained’ factor is generally subsumed within the lodestar calculation and thus normally should not provide an independent basis for a departure from the lodestar figure.” (citing Blum v. Stenson, 465 U.S. 886, 900 (1984); Perdue, 559 U.S. at 554)). The district court further reasoned that the calculated lodestar amount would be insufficient to deter an ongoing predatory strategy of baseless litigation, and thus the LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 9 deterrent aspect of awarding fees would not be well served by a relatively low amount. But deterrence is not generally a factor to be considered in determining a reasonable attorney fee under § 285. Although deterrence may be a consideration when determining whether to award attorney fees, it is not an appropriate consideration in determining the amount of a reasonable attorney fee, which is principally based on the lodestar method. Unlike sanctions that are explicitly tied to an amount that suffices to deter repetition of conduct, see Fed. R. Civ. P. 11(c)(4), § 285 only specifies “reasonable attorney fees” once an exceptional case is found. And the lodestar method, yielding a presumptively reasonable attorney fee amount, focuses on the counsel retained by the prevailing party: higher standing attorneys are theoretically reflected by higher rates charged, and more complex issues are reflected by more hours worked. Adjusting the lodestar has been condoned for situations in which the prevailing party’s attorney’s performance or conduct somehow is not factored into the lodestar calculation. Perdue, 559 U.S. at 554–56 (finding that enhancement may be appropriate where lodestar does not adequately measure attorney’s “true market value”; attorney is subjected to “extraordinary outlay of expenses” for protracted litigation; or “exceptional delay” in payment of fees). However, factors outside the realm of performance or conduct attributable to the prevailing party’s attorney have not been accepted as justifying an enhancement. See id., 559 U.S. at 554 (noting that “inferior performance by defense counsel, unanticipated defense concessions, unexpectedly favorable rulings by the court, an unexpectedly sympathetic jury, or simple luck” cannot justify an enhanced award). As such, we do not find proper support for the district court’s decision to enhance the lodestar amount by the specified multiplier as a reasonable fee award. Even armed with the deference accorded to a district court’s 10 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. discretionary determinations, the court may enhance the lodestar only when it “fails to take into account a relevant consideration.” Bywaters, 670 F.3d at 1229; see also Perdue, 559 U.S. at 554 (noting that enhancement may be appropriate when lodestar inadequately accounts for “a factor that may properly be considered in determining a reasonable fee”). Because we conclude that the expedited schedule and the deterrence purpose are unrelated to the suitability of compensation of FTB’s attorneys, and hence not relevant to enhancement of the lodestar, we conclude that the district court has not properly justified the amount awarded. We therefore vacate the attorney fee award and re- mand the case for recalculating a reasonable attorney fee award and determining whether there may be other issues open for consideration relating to attorney conduct. Whether the court wishes to utilize Rule 11 or any other statutory framework is of course up to the district court. We have considered the remaining arguments and conclude that they are without merit.