Friday, January 8, 2016
Best Buy Loses Bid for $8.6 Million Attorney Fee Award
Ninth Circuit Finds $1.7 Million Award Sufficient in Light of Limited Success in Antitrust Case; Affirms Judgment in Its Favor
By a MetNews Staff Writer
Best Buy Co. Inc., a national retailer of consumer electronics products, yesterday failed in its quest to have the Ninth U.S. Circuit Court of Appeals boost its $1.75 million award of attorney fees in its price-fixing action to the $8.6 million it sought—but maintained its victory over defendant HannStar.
HannStar, a Taiwan-based technology company, was found to be involved in antitrust activity in connection with liquid crystal display panels.
“We affirm in all respects,” a three-judge panel said in an unpublished opinion.
On Nov. 20, 2013, Senior District Judge Susan Illston of the Northern District of California entered in favor of Best Buy, pursuant to a jury’s verdict, in the amount of $7,471,943; she trebled the amount to $22,415,829; but then, she offset that amount with the $229 million it had already received in settlements, leaving the plaintiff with no recovery.
Illston that same day referred the matter of attorney fees to Martin Quinn of JAMS, who acted as special master.
In a Feb. 3, 2014 report, he wrote:
“It is inescapable that Best Buy’s dogged pursuit of HannStar and Toshiba through years of litigation and a 6-week trial achieved nothing. Best Buy couldn’t prove its claim against Toshiba at all, utterly failed to prove significant damages against HannStar despite its guilty plea to liability, and ended up with no recovery at all after the settlement offset. Quite simply, this is the same result as if HannStar had obtained a defense verdict. In retrospect, rather than proceed to trial Best Buy would have been better advised to have focused with delight on its $363 million in cash and non-cash settlements, and simply folded its tent as to Toshiba and HannStar.”
Quinn observed that there was “a reasonable argument for awarding no fees at all, or a token amount,” in light of Best Buy’s “zero net recovery,” and that awarding the full amount sought would “border on the unconscionable.” He continued:
“However, HannStar does not argue that the entire case was unjustified, or should never have been brought. HannStar did admit liability. Therefore, it is reasonable to award some fees to compensate Best Buy for a portion of its litigation effort. But a plaintiff that recovers nothing—whether because of a defense verdict or the application of offsets—cannot reasonably expect to be paid a sizeable fee.”
He recommended $1.75 million in attorney fees.
On May 12, 2014, Illston declared that Quinn’s “analysis and calculations are reasonable,” and that she “therefore them as the ruling of this Court.”
In yesterday‘s decision, the court said:
“The record makes clear that the district court, which adopted the analysis and calculations of the special master, reduced Best Buy’s requested attorney’s fees by approximately 80% based on the limited results Best Buy obtained at trial. This is a permissible basis on which to reduce an award of fees under 15 U.S.C. § 15….The award is therefore reviewed for abuse of discretion….Because Best Buy sought nearly $800 million in damages from HannStar, but the jury awarded it only $7.47 million before trebling and offset, the district court did not abuse its discretion in reducing the award of attorney’s fees.”
Best Buy originally sought $9.1 million in attorney fees, but later trimmed its request. It also sought $8.6 million in costs, and $7.6 million in expert witness fees. Quinn recommended, and Illston ordered, that HannStar pay $104,167.97.
The Ninth Circuit panel agreed with Illston that expert witness fees are limited to $40 per day, under a federal statute, and that a contrary statute of Minnesota (where Best Buy is headquarted) is “trumped.”
The case is Best Buy Co., Inc. v. Hannstar Display Corporation, 13-17408.
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