United States District Court, E.D. Texas, Marshall Division
PAYNE UNITED STATES MAGISTRATE JUDGE.
case returns to the Court on remand from ADS Security,
L.P.'s (“ADS”) appeal to Court of Appeals for
the Federal Circuit. See Rothschild Connected Devices v.
Guardian Protec., 858 F.3d 1383 (Fed. Cir. 2017). The
Court of Appeals determined that this case should have been
declared exceptional under 35 U.S.C. § 285 and remanded
the case to this Court for a calculation of attorneys'
fees to be taxed against Rothschild Connected Devices
Innovations, LLC (“Rothschild”).
after the remand, this Court ordered ADS to submit a full
accounting of fees and costs sought under § 285 and
afforded Rothschild a chance to respond. See Dkt.
97. ADS's submission accounts for and requests $288,
911.99 in attorneys' fees. Rothschild does not dispute
that the number of hours worked or the hourly rates are
reasonable. Rather, Rothschild continues to argue that the
case is not exceptional-a conclusion that, according to
Rothschild, has not been foreclosed by the Court of
Appeals' mandate. In addition, Rothschild disputes the
time period during which any fees should be assessed.
argument regarding whether the case is exceptional is clearly
foreclosed by any fair reading of the opinion of the Court of
Appeals. The Court of Appeals reversed-as opposed to
vacated-this Court's judgment, and within that judgment
was a determination that the case against ADS was not
exceptional. An attorneys' fees assessment under §
285 involves two questions, first whether the case is
exceptional, and second whether fees should be awarded and if
so, in what amount. See Special Devices, 269 F.3d at
1344. The Court of Appeals disagreed with this Court's
first step in the analysis concerning exceptionality. As a
result, the only possible conclusion is that this case is
exceptional, leaving calculation of fees as the only matter
to be assessed on remand. The panel expressly stated,
“The District Court on remand shall conduct additional
proceedings consistent with this opinion, including those
pertaining to the calculation of attorney fees.”
Rothschild, 858 F.3d at 1390 (emphasis added).
Court therefore rejects Rothschild's argument that
finding the case not exceptional would be “consistent
with the Federal Circuit's opinion.” See
Dkt. 101 at 1. Similarly, Rothschild's argument that a
fee award should be zero is not persuasive. ADS does not
argue that any fees claimed are associated with unreasonable
time or an unreasonable hourly rate.
only dispute regarding the amount of fees to be awarded is
the time period during which fees should be assessed. During
oral argument on appeal, the panel acknowledged that there is
“nothing in the record” supporting an argument
that the amount ADS's fees is unreasonable. See
Oral Argument Tr. at 22:50-22:56. Rothschild's argument
is that fees should only be awarded to the extent they were
incurred prior to the case being dismissed on January 21,
2016. This argument is not persuasive. As the Supreme Court
recently explained, a court's fee shifting authority is
constrained by principles of causation, much like the
constraint on compensatory damages. Goodyear Tire &
Rubber Co. v. Haeger, 137 S.Ct. 1178, 1187 (2017).
“Compensation for a wrong, after all, tracks the loss
resulting from that wrong.” Id. at 1186. After
Rothschild's case was dismissed, ADS's efforts
focused exclusively on seeking attorneys' fees, both at
this Court and at the Court of Appeals. The fees associated
with those efforts would never have been incurred if ADS had
not filed this lawsuit. See Rothschild, 858 F.3d at
1391 (Mayer, J., concurring) (“This suit never should
have been filed, and ADS deserves to be fully compensated for
the significant attorneys' fees it has incurred.”).
and on this record, the Court should award ADS the full
amount of fees it seeks. Having reviewed ADS's proposed
fees and costs, the Court finds that the number of hours
expended and the hourly rates are reasonable. Rothschild does
not seriously dispute the reasonableness of ADS's time or
hourly rates. The Court will therefore not reduce the fee
ADS asks the Court to find Rothschild and its sole member,
Leigh M. Rothschild, jointly and severally liable for the
fees award because the two entities are “one in the
same.” Dkt. 100 at 3. There is insufficient evidence,
however, that the Rothschild corporate entity will be unable
to pay the fee award, and the record is not sufficient at
this point to reach through the corporate entity to the sole
proprietor. Fees will therefore be taxed only against the
Rothschild corporate entity.
It is ORDERED that Rothschild Connected
Devices Innovations, LLC (“Rothschild”) shall pay
ADS (through its counsel of record) attorneys' fees and
costs in the amount of $288, 911.99. Payment
shall be made no later than 30 days from the
date of ...