Justia Legal Ethics Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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The Ninth Circuit previously reversed, in part, bankruptcy appellate panel decisions. The court subsequently denied the debtors’ applications, as prevailing parties, for attorney fees under the Equal Access to Justice Act, 28 U.S.C. 2412(d). The EAJA did not authorize attorney fees because a bankruptcy court does not fall within the EAJA’s definition of “United States,” and uncontested Chapter 13 bankruptcy cases are not “civil actions brought by or against the United States.” The EAJA is a limited waiver of the government’s sovereign immunity; it must be strictly construed in favor of maintaining immunity not specifically and clearly waived. View "In re: Sisk" on Justia Law

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Nutrition Distribution filed suit against IronMags, alleging that the company violated the Lanham Act by falsely advertising IronMag's nutritional supplements. After the district court entered judgment, Nutrition Distribution did not file a notice of appeal but, instead, filed a post-judgment motion for attorneys' fees under Federal Rule of Civil Procedure 54(d) and then filed a notice of appeal 30 days after the district court denied that fees motion.The Ninth Circuit held that, because Nutrition Distribution did not file a notice of appeal within 30 days of the district court's judgment or obtain a Rule 58(e) order extending the time to appeal, the notice of appeal was untimely as to the district court's underlying judgment. The notice of appeal was timely as to the district court's later order denying attorneys' fees.The panel explained that the Federal Rules are clear that ordinarily, the entry of judgment may not be delayed, nor the time for appeal extended, in order to tax costs or award fees. Furthermore, a motion for attorneys' fees does not extend the time to appeal the underlying judgment unless the district court so orders under Rule 58(e). In this case, Nutrition Distribution did not seek such an order, nor did the district court enter one. The panel also held that Nutrition Distribution's attempt to now save its untimely appeal of the underlying judgment by recasting its fees motion as a Rule 59 motion to alter or amend the judgment likewise fails. The panel stated that the 1993 amendments to the Federal Rules and the Supreme Court precedent that gave rise to them make clear that attorneys' fees motions cannot be recharacterized as Rule 59 motions to extend the time to appeal an underlying judgment. Accordingly, the panel affirmed the denial of fees, and otherwise dismissed the appeal for lack of jurisdiction. View "Nutrition Distribution LLC v. IronMag Labs, LLC" on Justia Law

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After Sanmina claimed a worthless stock deduction on its federal tax return, the IRS issued a summons for the memoranda authored by Sanmina in-house counsel. Sanmina objected on the basis that they were protected both by attorney-client privilege and the attorney work-product doctrine. On subsequent remand, the district court determined that the memoranda were covered by both attorney-client privilege and work-product protection, but that those privileges had been waived.The Ninth Circuit held that Sanmina waived the attorney-client privilege when it disclosed the Attorney Memos to DLA Piper. However, the panel held that such disclosure did not automatically waive work-product protection over the Attorney Memos and, rather, waiver of work-product immunity requires either disclosure to an adversary or conduct that is inconsistent with the maintenance of secrecy against its adversary. In this case, the panel held that Sanmina did not expressly waive work-product immunity merely by providing the Attorney Memos to DLA Piper, but its subsequent use of the DLA Piper Report to support its tax deduction in an audit by the IRS was inconsistent with the maintenance of secrecy against its adversary. Therefore, the panel explained that Sanmina's implied waiver of the work-product protection only extends to the factual portions of the Attorney Memos. The panel granted in part and denied in part the IRS's petition to enforce its summons. View "United States v. Sanmina Corp." on Justia Law

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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

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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

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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

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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

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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

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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

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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