Nova Chemicals v. Dow was decided on May 11, 2017 on appeal from the District of Delaware. In 2010, after a jury trial, the court entered judgment against defendant NOVA for over $61 million in damages. During the supplemental-damages phase, NOVA became aware of evidence allegedly showing that plaintiff Dow and its counsel had committed fraud on the courts in obtaining the 2010 judgment. So NOVA filed a separate action in equity against Dow for relief from the 2010 judgment. The district court granted Dow’s motion to dismiss the equity action. The district court then granted Dow’s motion for attorney fees, awarding $2.5 million in fees because NOVA’s claims were “not even plausible.” NOVA appealed.
The Federal Circuit affirmed the exceptionality finding under §285.
The district court did not abuse its discretion in finding the case exceptional under the totality of the circumstances. Although the filing of an equity action to set aside a prior judgment is an “extraordinary” tactic, it does not, without more, render a case exceptional under §285. Here, there was more. In awarding fees, the district court also relied on the substantive strength of NOVA’s litigation position, not just on NOVA’s litigation conduct.
“A case presenting exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award.” NOVA’s allegation of fraud rested on purportedly conflicting testimony from two separate actions. The district court found that “the arguable inconsistencies in those actions, even if proven, were immaterial to the 2010 judgment.” Although NOVA’s extensive pre-suit diligence undercut Dow’s assertion of bad faith, it did not sway the district court or the Federal Circuit that the case was not exceptional. “[A]s a general matter,… the extent of a party’s pre-suit investigation or how fervently it believed in its allegations does not affect the objective strength of that party’s litigating position.”
The district court didn’t err in comparing NOVA’s equity case to other general patent cases. Taking NOVA’s argument to “its logical conclusion, continuing to narrow the universe of comparators to cases resolved on similar procedural postures, legal grounds, or facts would leave few or no comparators remaining.”
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