Walker v. Health International was decided on January 6, 2017 on appeal from the District of Colorado. There, the district court awarded defendant Health attorney fees and costs for plaintiff Walker’s vexatious actions in continuing to litigate after the parties settled all claims. Walker appealed. Health claimed the appeal was frivolous, and moved for an award of damages and double costs under FRAP 38.
The Federal Circuit affirmed the district court’s conclusion of vexatiousness, and thus its award of fees.
Federal courts have the inherent equitable power to award attorney fees “when the interests of justice so require.” A court may award these discretionary fees when a party “has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Applying the law of the regional circuit (tenth), the Federal Circuit affirmed the fees.
Under FRAP 38, “[i]f a court of appeals determines that an appeal is frivolous, it may… award just damages and single or double costs to the appellee.” Under the rule, an appeal is frivolous as filed when the judgment below was so plainly correct and the legal authority so clearly contrary to appellant’s position “that there really is no appealable issue.” And an appeal is frivolous as argued when “the appellant’s misconduct in arguing the appeal justifies such a holding.” Such misconduct can include “manufacturing arguments by distorting the record, by disregarding or mischaracterizing the clear authority against its position, and by attempting to draw illogical deductions from the facts and the law.”
The Federal Circuit held Walker’s appeal frivolous as filed because in light of the comprehensive settlement, the record lacked any support for Walker’s attempts to prolong litigation. The district court’s conclusion of vexatiousness also supported this holding.
The Federal Circuit also held the appeal frivolous as argued because of “Walker’s numerous mischaracterizations of clear authority.” Where a party blindly disregards long established authority and raises arguments with no factual foundation, the judicial process has been “abused, and sanctions under Rule 38 are warranted.” Walker baselessly accused opposing counsel of violating Colorado Rule of Professional Conduct 1.3. Further, Walker mischaracterized a Supreme Court case, and “continued to press this frivolous argument and reiterated it at oral argument” even after Health pointed out the mischaracterization.
The Federal Circuit thus awarded to Health the requested fees, finding Walker’s attorney who wrote and signed the briefs to be equally responsible for the misconduct in arguing the appeal, and thus “hold[ing] Walker’s counsel jointly and severally liable for the damages.”
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