November 14, 2008
Where's the Text, Counselor?
There's a nice bit here about Scalia criticizing counsel for not printing the statutory text in his brief, and apologizing when counsel in fact had done so.
Fifth Circuit Addresses Split on Charging Full Rates for Travel Time under 11 USC 330
In In re Babcock & Wilson, 526 F.3d 824 (5th Cir. 2008), the court addressed whether the district court had erred in awarding a firm only 50% of its usual hourly rates for time its lawyers spent traveling, but not working, in a bankruptcy proceeding. The statute, 11 USC 330, gives broad discretion to district courts, the Fifth Circuit ultimately held, and so it affirmed the trial court's award of only 50% of the rate for time spent traveling. It suggests, in my view, that any firm seeking compensation for such time be sure to make the record clear that firms in the locality charge for travel time at full rates. Interesting split.
November 13, 2008
Damages in Patent Cases Post-eBay
I was somewhere last month where we had a discussion of the availability of post-judgment damages where, pursuant to the Supreme Court's decision in eBay, the district court finds a patent infringed. The courts seem to be disagreeing on what to do: some, for example, grant the same royalty post-judgment as they did for pre-judgment infringement, while others apply a "kicker" to this post-judgment rate.
It seems to me it has to be more than the pre-judgment royalty rate.
Why? Well, for post-judgment infringement it is clearly willful, and so the patentee's other option is to forego the stream of payments and sue every year or so. In that suit, it would get attorneys' fees, willful infringement damages because of the willful nature of the infringement.
Now, maybe Congress should enact statutes that provide otherwise, but the ones we have do not, I don't believe, allow for any different result.
Split in Courts on Availability of Unclean Hands as Defense Under RICO
Is unclean hands a defense to a claim under RICO? The courts split, as a recent decision from the Eastern District of Virginia explained:
The circuit courts are currently divided on this issue. The First Circuit, in Roma Construction Co. v. Russo, 96 F.3d 566, 571-75 (1st Cir.1996), suggested that the doctrine does not apply, but ultimately concluded that the plaintiffs did not have “unclean hands.” The Eleventh and Seventh Circuits have opined that the doctrine may apply in civil RICO actions. See Sikes v. Teleline, Inc., 281 P.3d 1350, 1366 n. 41 (11th Cir.2002); Laborers' International Union of North America v. Caruso, 197 F.3d 1195, 1197-98 (7th Cir.1999). The Third Circuit also has applied the doctrine of unclean hands in the context of determining whether an injunction, after trial, can be denied. Northeast Women's Center, Inc. v. McMonagle, 868 F.2d 1342, 1354-55 (3d Cir.1989).
Notwithstanding, the uncertainty at the circuit court level, it is persuasive that “an overwhelming majority” of district courts to consider the issue have concluded that “the defense of unclean hands is not available in civil RICO actions.” Florida Software Sys. v. Columbia/HCA Healthcare Corp., 1999 U.S. Dist. LEXIS 15294, at *6 (M.D.Fla. Sept. 16, 1999); see, e.g., Local 851 of the Int'l Bhd. of Teamsters, 1998 U.S. Dist. LEXIS 3779, at *5, 1998 WL 178873, at *2 (E.D.N.Y.1998); Bieter Co. v. Blomquist, 848 F.Supp. 1446 (D.Minn.1994); In re National Mortgage Equity Corp. Mortgage Pool Certificates Sec. Litig., 636 F.Supp. 1138 (C.D.Cal.1986).
Moreover, it is significant that courts have historically looked to antitrust law in interpreting RICO, see In re National Mortgage Equity Corp., 636 F.Supp. at 1155, and it is clear that the doctrine of unclean hands is not a defense to a civil antitrust suit. See Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 139, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968). On this basis, a number of courts have declared that the defense of unclean hands does not apply in the civil RICO context. See Bieter Co. v. Blomquist, 848 F.Supp. At 1449.
Finally, the Supreme Court has held that the affirmative defense of unclean hands has “been rejected” in the context of statutes “where Congress [has] authorize[d] broad equitable relief to serve important national purposes.” McKennon v. Nashville Banner Publ. Co., 513 U.S. 352, 357, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995) (addressing unclean hands in the context of an AEDA claim). RICO is such a statute. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (RICO was “designed to advance important public policies”).
The persuasive weight of authority is that the affirmative defense of unclean hands is not available in a civil RICO action and cannot be asserted by the Defendants as an affirmative defense.
Smithfield Foods, Inc. v. United Food and Commercial Workers Int'l Union, ___ F.Supp.2d ___, 2008 WL 4610312 (E.D.Va. Oct. 14, 2008).
It's interesting -- a topic I've never thought about -- implied defenses, as opposed to implied claims.