January 6, 2017

When it’s Over, it’s Over

In Walker v. Health International Corp., [2015-1676] (January 6, 2017), the Federal Circuit affirmed the district court’s award of sanctions for vexatious actions in continuing to litigate after the parties settled all claims, and further found the appeal to be frivolous, both as filed and as argued, and granted further sanctions.

The district court dismissed all claims and found “that Plaintiff’s actions have unnecessarily multiplied the proceedings at a time when the underlying claims have admittedly been resolved.”  The district court entered final judgment awarding HSN $20,511.50 in attorneys’ fees because Walker’s “litigation conduct after entering into the Agreement was vexatious and had unnecessarily multiplied the proceedings.”

Applying the Tenth Circuit’s test for the award of attorneys fees, where an award will be reversed only in circumstances which do not show a reasonable ground for the conclusion that vexatiousness existed, the Federal Circuit affirmed the district court’s award, finding ample support in the record for the district court’s conclusion of vexatiousness.  The Federal Circuit said that district court correctly concluded that there remained no legitimate reason to continue litigation once the parties entered into a comprehensive settlement of all claims.

The Federal Circuit also examined appellant’s conduct on appeal, noting that it continued to press frivolous arguments and raise new arguments in its Reply amounting to baseless accusations against opposing counsel.  The Federal Circuit concluded that the positions taken by Walker on appeal in the briefs and at oral argument were frivolous.  Noting that it has “has long disdained” frivolous appeals, the Federal Circuit awarded an additional $51,801.88 in additional attorneys fees and double costs.