Gaymar Indus., Inc. v. Cincinnati Sub-Zero Prods., Inc., __ F.3d __ (Fed. Cir. June 25, 2015) (Prost, Bryson, DYK) (W.D.N.Y.: Skretny) (2 of 5 stars)

Federal Circuit vacates denial of attorney fees under section 285.  The district court had concluded that the plaintiff’s claim was not objectively baseless, and that, although the plaintiff had given an intentionally misleading discovery response, the defendant’s own misconduct precluded a fee award.

Federal Circuit found no abuse of discretion in the finding that the plaintiff’s position was not objectively unreasonable—“fees are not awarded solely because one party’s position did not prevail.”  Slip op. at 7.  Nevertheless, the court committed clear error in finding misconduct.  The defendant’s statements at various points in the litigation, when read in context, were not inconsistent, contrary to what the district court thought.  And, although some of the defendant’s arguments “could be properly characterized as overstatements,” none amounted to “misrepresentation or litigation misconduct.”  Id. at 15.  “In addressing potential litigation misconduct in analogous contexts, other circuits have concluded that isolated overstatements do not rise to the level of sanctionable litigation misconduct under Federal Rule of Civil Procedure 11.”  Id.

Because the district court had based its fee denial in part on the erroneous misconduct finding, a remand was required.  The district court remained free, however, to deny fees on remand “based on the totality of the circumstances, including the strength of [plaintiff] Gaymar’s litigation position and the sustained finding that Gaymar’s litigation position was not objectively baseless.”  Id. at 16.