Trials & Litigation

Federal judge bashes Kramer Levin lawyers, even as he denies sanctions for their conduct

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Three lawyers with Kramer Levin Naftalis & Frankel were spared sanctions but got no vindication in a federal judge’s critical decision earlier this week.

U.S. District Judge William Alsup of the Northern District of California affirmed an award of $5.9 million in “exceptional” case attorney fees and costs to Juniper Networks Inc. but declined to award an additional $1.4 million in sanctions requested by Juniper Networks.

“In no way does this order vindicate attorneys James R. Hannah, Lisa Kobialka and Paul J. Andre,” Alsup wrote, naming three Kramer Levin partners. “Their conduct was improper and frustrated the fairness of the proceedings. Judges in the future should take this into account when dealing with them in future cases.”, Law360 and Above the Law have coverage of the July 26 decision.

Kramer Levin released this statement to the ABA Journal: “We stand by the work our partners did on this matter, and we strongly disagree with the criticism.”

The Kramer Levin lawyers had represented Finjan Inc. in the patent dispute but not in the fee litigation.

Juniper Networks had proposed four reasons why sanctions should be imposed against Finjan. First, Finjan changed its infringement theory in a damages expert’s report to support higher damages. Second, Finjan presented its damages theory to a jury after its expert’s report was excluded. Third, Finjan said Juniper Networks was given actual notice of infringement in a phone call, but the assertion was disproved when Juniper Networks produced a recording. Fourth, Finjan misrepresented a district court decision to the court.

Alsup said the misconduct didn’t rise to a level warranting sanctions under either his inherent powers or Section 1927, which governs litigants who unreasonably and vexatiously multiply proceedings.

“Vociferous and belligerent ligating may transgress into conduct warranting sanctions, and the fees order did point out improper conduct by Finjan and its counsel,” Alsup said.

“While the change in damages theory was a blatant instance of ‘shifting sands,’ it was not comparable to the act of submitting fraudulent documents like in [a different case involving bad faith documents]. The affidavit stating actual notice had been given proved untrue, but Juniper has not demonstrated it was willfully false. Finjan’s misrepresentation of a district court decision was ‘reckless,’ … but, even if a finding of recklessness alone satisfies the Section 1927 standard, this order finds that act, by itself, would not warrant sanctions.” described the Kramer Levin lawyers as “an accomplished team” that won a $1.8 billion award in a different case last year. But their relationship with Alsup “seems fraught right now,” the article said.

Alsup had ruled in January that the case was “exceptional,” which allowed Juniper Networks to pursue attorney fees. At that time, Alsup said Finjan had “flip-flopped” on its infringement theory for one patent, trying to “sneak this theory in with its expert damages report.” At trial, its damages case was “woefully inadequate.”

Finjan should have dropped a claim on a second patent, and it “wasted everyone’s time and energy” in its response to a summary judgment motion, Alsup said.

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