A company that was previously found to be in contempt of a federal judge’s order to stop selling patent-infringing electrical wire connectors has been ordered to pay the plaintiff patent holder about $1.5 million in attorney fees after the parties could not reach an agreement on an appropriate amount.
The court also ordered the defendant, Bridgeport Fittings, to pay plaintiff Arlington Industries nearly $500,000 in lost profits, $34,000 in prejudgment interest and more than $280,000 in litigation costs.
In a 28-page opinion issued Monday in Arlington Industries v. Bridgeport Fittings, U.S. District Judge A. Richard Caputo of the Middle District of Pennsylvania rejected Arlington’s argument that attorney fees for its lead counsel should be calculated based on Washington, D.C., rates, rather than on Middle District of Pennsylvania rates.
Arlington had requested about $2.4 million in attorney fees, Caputo said.
According to Caputo, Arlington argued that it was exempt from the general rule that attorney fees be calculated based on the prevailing hourly rates in the venue where the litigation was brought because it was forced to retain as lead counsel highly specialized patent litigators with institutional knowledge of the case from Washington, D.C.-based Crowell & Moring.
But Caputo said Arlington offered no evidence that it made an effort to find lead counsel in the Middle District and noted that the company did hire Robert J. Tribeck, a patent attorney from Harrisburg-based Rhoads & Sinon, as local counsel.
Caputo further reasoned that Crowell & Moring did not need to be lead counsel to provide institutional knowledge of the case, as that information could have been passed on through mere consultation.
“I hasten to add this is not about who Arlington can retain as counsel, but rather what the opposing party is required to pay that retained counsel,” Caputo said.
The parties had vastly different opinions as to what the going rates are for attorneys in the Middle District, according to Caputo.
While Bridgeport’s expert, Wilkes-Barre, Pa.-based attorney Bruce J. Phillips, said the prevailing rate for plaintiffs counsel in the Middle District is between $220 and $300 per hour, Arlington relied on the 2009 Middle District case Broadcast Music v. It’s Amore, in which attorney fees were calculated at $575 per hour.
Caputo, however, said Broadcast Music was not applicable because the fee request in that case was unopposed and the rate was based on the prevailing rate in Philadelphia, where the attorney practiced.
Instead, Caputo found that the appropriate rate with which to calculate Kathryn L. Clune of Crowell & Moring’s fees was $450 an hour, despite it being higher than Tribeck’s actual hourly rate.
“Even though we are applying the forum rate in this case and Mr. Tribeck’s rate represents the going rate for a patent lawyer in the Middle District, the fact is that Ms. Clune has extensive experience which is greater than Mr. Tribeck’s,” Caputo said. “Thus, a rate in the Middle District higher than Mr. Tribeck’s is justified.”
Tribeck said he charged Arlington a reduced hourly rate of $375 to $395 per hour, according to Caputo.
Caputo set Tribeck’s rate at $375 per hour, rejecting Bridgeport’s assertion that it should be $275 per hour because the matter Tribeck worked on was a “‘mere motion for contempt.’”
Caputo said that, despite Bridgeport’s attempt to minimize the matter, he recalled that “the proceeding was complex and involved both an infringement and colorable imitation analysis.”
Caputo said the reasonable rates for the Crowell & Moring associates and counsel who worked on the matter ranged from $220 to $300 per hour, despite Clune’s assertion that their actual rates were between $320 and $560 per hour.
Caputo set the Crowell & Moring paralegals’ rates at between $75 and $130 per hour, even though Clune said their actual rates ranged from $145 to $235 per hour.
For Rhoads & Sinon associates, Caputo said a range of $175 to $220 per hour was appropriate, despite Tribeck’s assertion that the blended hourly rate for associates at the firm is between $275 to $295.
While Tribeck said the Rhoads & Sinon paralegals who worked on the matter had hourly rates ranging from $150 to $170 per hour, Caputo set the rate at $120 per hour.
According to Caputo, Bridgeport “forcefully” objected to the number of hours billed by Arlington’s attorneys as being excessive, duplicative and redundant.
Bridgeport took particular issue with Arlington’s use of “block billing” in its time records, arguing that it was unclear what tasks were being done and for how long.
Caputo said that, where he could not tell how much time was spent on a specific task because of block billing, he deducted the entire time entry from his attorney fee calculation “since the party using a block-billing system bears that risk.”
Caputo also reduced Arlington’s attorneys’ billables in some instances where he agreed with Bridgeport that the work appeared to be duplicative or where the tasks were “vague and overbroad.”
For example, Caputo docked from Clune hours billed to “‘work on’” briefs and Tribeck hours billed to “‘confer with counsel’” and “‘review docs.’”
However, Caputo rejected Bridgeport’s argument that Arlington failed to leanly staff the matter, pointing to Arlington’s assertions that Clune and two associates accounted for 92 percent of the hours billed by Crowell & Moring and Tribeck and one associate accounted for 87 percent of the hours billed by Rhoads & Sinon.
According to court documents, Caputo found in March 2013 that Bridgeport was in contempt of a confession of judgment and injunction that permanently enjoined the company from “directly or indirectly making, using, selling, offering for sale or importing” connectors that infringed on one of Arlington’s patents or inducing others to do the same.
Caputo instructed the parties at the time to “attempt to resolve the questions of lost profits and attorney fees amicably.”
But Caputo said the parties were unable to reach an agreement, so they were then instructed to submit evidence of lost profits Arlington incurred as a result of Bridgeport’s patent infringement along with evidence of reasonable attorney fees and expenses.
Caputo said Monday that Arlington was able to show that it was entitled to nearly $500,000 in lost profits by meeting all three prongs of the two-supplier theory.
Under the two-supplier theory, according to Caputo, a party must show that there are only two suppliers in a relevant market and that it had the capacity to make the sales that went to the patent.
A party must also demonstrate the amount of profit it would have derived if it had made those sales, Caputo said.
Counsel for Bridgeport, Alan M. Anderson of the Alan Anderson Law Firm in Minneapolis, declined to comment.
Clune also could not be reached.
(Copies of the 28-page opinion in Arlington Industries v. Bridgeport Fittings, PICS No. 14-1008, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •