Defense Counsel Narrowly Avoids Sanctions for Re-Litigating Decided Issues
The US Court of Appeals for the First Circuit “reluctantly” declined to impose sanctions in a “very close case” against defense counsel in a six-year litigation involving indemnification for patent infringement claims. AngioDynamics, Inc. v. Biolitec AG, Case No. 17-1239 (1st Cir., Jan. 23, 2018) (per curiam).
AngioDynamics moved for sanctions against defendants and defense counsel after the First Circuit disposed of the defendants’ fifth appeal in the ongoing litigation. Under Rule 38 of the Federal Rules of Civil Procedure, after determination that an appeal is frivolous, an appellee may be awarded “just damages and single or double costs” upon motion from appellee. A frivolous appeal is one “wholly without merit.” In addition, it is appropriate to sanction a lawyer personally for excess costs where an appeal results in “vexatious advocacy” needlessly multiplying the proceedings.
The First Circuit noted that this case presented several hallmarks of frivolity. The defendants’ latest appeal largely relied on arguments that the defendants had waived in their prior appeal, according to the Court. The Court also found that defendants reused portions of their prior briefing on the waived issue. The Court noted that in other previous cases, it had imposed sanctions where counsel repeated prior arguments or copied portions of prior briefing verbatim.
After oral argument, defense counsel submitted a letter explaining that they had reasonably misinterpreted the Court’s prior decision and thus the appeal was not frivolous. The Court disagreed, concluding that defendants’ tactics “reeked of an attempt at re-litigation.” Nevertheless, the Court gave defendants the benefit of the doubt that but for the misinterpretation of the Court’s prior decision, counsel would not have filed the current appeal. Before denying the motion for sanctions, the Court advised defendants that neither the district court nor the appellate court would be “charitable” in future attempts to prolong the case.