McKesson Corp.. v. Islamic Republic of Iran (D.C. Cir., June 3, 2014) [click for opinion]

In May 2013, McKesson, a health information technology company, was awarded over $29 million in damages, plus interest, caused by its share in an Iranian dairy being seized during the 1979 Iranian revolution. After a 32-year legal battle over McKesson's share in the dairy, McKesson sought to recoup attorneys' fees spent during the decades-long pursuit.

The district court held that it had authority to award reasonable attorneys' fees under international law or, alternatively, Iranian law. The district court considered three fee petitions from McKesson and awarded a total of $13 million in fees. Despite having decided that Iranian law applies, the district court assessed the "reasonableness" of McKesson's attorney-fee award using exclusively American case law. Iran contended that an official tariff applied to McKesson's fee petitions under Article 3 of Iran's 2006 regulation on attorneys' fees and Article 518 of Iran's Civil Procedure Act of 2000. Iran calculated that the tariff yielded a mere $29,516 in fees for McKesson.

In vacating the district court's $13 million attorneys' fee award to McKesson, the D.C. Circuit reasoned that the burden was on McKesson to show that the tariff did not apply, which it failed to do. The D.C. Circuit further held that discretion only exists where the tariff does not apply and, in McKesson's case, the tariff applies.

The D.C. Circuit vacated the district court's fee award with instructions to grant McKesson $29,516 in attorneys' fees on remand.