Justia Legal Ethics Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
by
The Ninth Circuit certified to the New York Court of Appeals the following questions: 1) Whether a litigation financing agreement may qualify as a “loan” or a “cover for usury” where the obligation of repayment arises not only upon and from the client’s recovery of proceeds from such litigation but also upon and from the attorney’s fees the client’s lawyer may recover in unrelated litigation? 2) If so, what are the appropriate consequences, if any, for the obligor to the party who financed the litigation, under agreements that are so qualified? View "Fast Trak Investment Co., LLC v. Sax" on Justia Law

by
The Ninth Circuit vacated the district court's award of attorneys' fees and litigation expenses to class counsel, following approval of two rounds of settlements in consumer class action litigation. The litigation stemmed from claims of civil antitrust violations based on price-fixing within the optical disk drive industry. The panel held that it has jurisdiction under 28 U.S.C. 1291. In a separately filed memorandum disposition, the panel affirmed the district court's approval of the first- and second-round settlements. Here, the panel vacated the awards of fees and litigation expenses, holding that when class counsel secures appointment as interim lead counsel by proposing a fee structure in a competitive bidding process, that bid becomes the starting point for determining a reasonable fee. The district court may adjust fees upward or downward depending on circumstances not contemplated at the time of the bid, but the district court must provide an adequate explanation for any variance. In this case, class counsel argues that an upward departure from its bid was warranted in part because it did not anticipate the need to litigate a second class certification motion or interlocutory appeals. Without more, the panel held that these factors are insufficient to justify a variance of the magnitude approved in the first- and second-round fee awards. Accordingly, the panel remanded for a more complete explanation of the district court's reasoning. View "Indirect Purchaser Class v. Panasonic Corp." on Justia Law

by
The Ninth Circuit vacated the district court's order denying Dolores' motion for recovery of attorney's fees under the Copyright Act. The district court had granted summary judgment for Dolores on Doc's Dream's complaint seeking a declaration that the late religious leader Dr. Eugene Scott completely abandoned his works to the public domain. The district court then denied Dolores' motion for attorney fees under 17 U.S.C. 505. The panel held that, even when asserted as a claim for declaratory relief, any action that turns on the existence of a valid copyright and whether that copyright has been infringed invokes the Copyright Act. Therefore, attorney's fees may be available under section 505 of the Copyright Act. View "Doc's Dream, LLC v. Dolores Press, Inc." on Justia Law

by
The Ninth Circuit affirmed defendant's conviction of wire fraud and filing false tax returns. The jury found that defendant embezzled over $300,000 from the company for which he served as managing member and president. The panel overruled its prior decisions in light of the Supreme Court's intervening decision in Shaw v. United States, 137 S. Ct. 462 (2016), and held that wire fraud under 18 U.S.C. 1343 requires the intent to deceive and cheat, and that the jury charge instructing that wire fraud requires the intent to "deceive or cheat" was therefore erroneous. However, in this case, the panel held that the erroneous instruction was harmless. The panel noted that it was deeply troubled by an Assistant U.S. Attorney's disregard for elementary prosecutorial ethics, but that the misconduct did not entitle defendant to any relief. The attorney here had a personal and financial interest in the outcome of the case. The panel wrote that as soon as the Department of Justice became aware of the impropriety, it took every necessary step to cure any resulting taint, including turning over the entire prosecution of the case to disinterested prosecutors from the Southern District of California. Finally, the panel found defendant's remaining arguments to be without merit. View "United States v. Miller" on Justia Law

by
The Ninth Circuit affirmed in part and reversed in part the district court's award of attorney's fees after settlement in a 42 U.S.C. 1983 action. The district court awarded just 10 percent of the fees plaintiff claimed. The panel held that, given the size of the 90 percent cut in attorney's fees, the district court's explanation was inadequate. The panel reaffirmed its prior decisions holding that a significant reduction requires a more thorough explanation, and concluded that the district court did not adequately justify the dramatic cut that it imposed here. Therefore, the panel remanded for a recalculation of the number of hours reasonably attributable to counsel. The panel also held that the district court erred by denying fees for work performed by two former attorneys on the basis that their law firm lacked standing to seek fees for work they performed at a different firm. Finally, the district court did not abuse its discretion in reducing the hours and rates of the other attorneys that worked on the case. View "Vargas v. Howell" on Justia Law

by
Plaintiff challenged the district court's attorneys' fee award, arguing that the entire award was arbitrary because the district court did not adequately explain its decision to cut the number of hours expended by class counsel by 25%. The underlying class action was brought by plaintiff on behalf of a nationwide class of consumers, alleging that defendants marketed James Bond DVD and Blu-ray sets as containing all the Bonds films, when in fact they failed to include two movies. The parties settled and the settlement agreement included defendants' agreement to pay attorneys' fees and cost. The Ninth Circuit affirmed the attorneys' fee award, holding that the district court's order, when read in its entirety, explained the lodestar calculation it conducted and its application of the percentage-of-recovery analysis as a cross-check for reasonableness. Therefore, the panel found that the district court adequately explained its reasoning and did not abuse its discretion. View "Johnson v. Metro-Goldwyn-Mayer Studios, Inc." on Justia Law

by
A plaintiff who obtains a preliminary injunction under the All Writs Act does not qualify as a prevailing party for fee-shifting purposes by virtue of that injunction, where the order granting injunctive relief makes no mention of the merits of the plaintiff's claims. In this case, plaintiffs filed suit against the State of Hawaii and other defendants, alleging that defendants became state actors by conducting elections and that the State's involvement in the self-governance process violated the Fourteenth and Fifteenth Amendments and the Voting Rights Act of 1965 because of the race-based restrictions on eligibility. Although the district court denied the injunction and this court denied a motion for an injunction pending appeal, the Supreme Court subsequently granted plaintiffs' application for an injunction under the All Writs Act. The Ninth Circuit affirmed the district court's denial of attorney fees under 42 U.S.C. 1988, holding that there was no indication that the Supreme Court's injunction order addressed the merits. Furthermore, plaintiffs sought and received a voluntary dismissal without prejudice in the district court, which was the opposite of an adjudication on the merits. Therefore, plaintiffs were not prevailing parties entitled to attorney fees. View "Makekau v. Hawaii" on Justia Law

by
The Ninth Circuit vacated the district court's award of attorney's fees after the settlement of a civil rights action. The panel held that the district court abused its discretion by failing to apply the correct legal standard for awarding legal fees and thus remanded for the application of the correct legal standard. In this case, the district court's wholesale rejection of the relevant attorney declarations, and the district court's singular reliance on the hourly rates previously awarded to counsel in unrelated cases departed from the correct legal standard and constituted legal error. The panel also remanded for the district court to make a specific finding regarding when the settlement agreement became final. View "Roberts v. City and County of Honolulu" on Justia Law

by
The en banc court reviewed five consolidated appeals from the district court's orders and judgment certifying a nationwide settlement class, approving a settlement, and awarding attorney's fees in a multidistrict litigation brought against automakers regarding alleged misrepresentations about their vehicles' fuel economy. After class counsel and the settling parties negotiated a settlement that the district court approved, objectors challenged the certification order and fee awards. The en banc court affirmed and held that the district court did not abuse its discretion in finding that common issues predominated where the inclusion of used car purchasers in the class did not defeat predominance and variations in state law did not defeat predominance. The en banc court rejected challenges to the adequacy of the class and held that the notice to class members provided sufficient information; the claim forms were not overly burdensome; and there was no evidence of collusion between class counsel and the automakers. Finally, the en banc court held that the district court did not abuse its discretion in denying fees. View "Ahearn v. Hyundai Motor America" on Justia Law

by
The Ninth Circuit vacated the district court's award of attorneys' fees to plaintiff and remanded for further proceedings. The district court exercised its common law authority to award the fees under the Equal Access to Justice Act (EAJA), but the district court did not have the benefit of Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017), when it issued the award. The panel held that it could not determine whether the district court's failure to apply the appropriate legal framework was harmless. On remand, the panel instructed that Goodyear's causation standard requires the district court to identify those expenses that plaintiffs would not have incurred but for the specific conduct that abused the judicial process, or to determine that the government's misconduct so permeated all or a portion of the suit that "all fees in the litigation, or a phase of it, meet the applicable test: They would not have been incurred except for the misconduct." View "Xue Lu v. United States" on Justia Law