Western Insulation, LP v. Moore , 362 F. App'x 375 ( 2010 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-2106
WESTERN INSULATION, LP,
Plaintiff - Appellee,
v.
HAL MOORE; MELANIE MOORE,
Defendants - Appellants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, Chief
District Judge. (3:05-cv-00602-JRS)
Argued: December 4, 2009 Decided: January 22, 2010
Before NIEMEYER, MICHAEL, and GREGORY, Circuit Judges.
Affirmed by unpublished opinion. Judge Gregory wrote the
opinion, in which Judge Michael joined. Judge Niemeyer wrote a
separate opinion concurring in part and dissenting in part.
ARGUED: John B. Simpson, MARTIN & RAYNOR, PC, Charlottesville,
Virginia, for Appellants. Paul James Kennedy, LITTLER
MENDELSON, Washington, D.C., for Appellee. ON BRIEF: Ronald S.
Sofen, GIBBS, GIDEN, LOCHER, TURNER & SENET, LLP, Los Angeles,
California, for Appellants. Stephen C. Tedesco, LITTLER
MENDELSON, PC, San Francisco, California; Kathleen A. Goetzl,
LITTLER MENDELSON, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
GREGORY, Circuit Judge.
After extensive litigation on liability and damages for the
defendants’ breach of their non-compete agreement concluded with
a finding against the defendants, Hal and Melanie Moore, the
District Court for the Eastern District of Virginia awarded
Western Insulation, L.P. $218,705.90 in attorneys’ fees and
costs. The district court found the award of attorneys’ fees
proper because the non-compete agreement between the parties
mandated the receipt of fees for actions to enforce a breach of
its terms, and the court imposed the amount of fees it believed
to be proportional to the relief obtained in the case. Because
we find the contractual provision awarding attorneys’ fees
enforceable and the amount of fees awarded reasonable as to each
defendant, we affirm the district court’s order.
I.
We have previously discussed the factual background of the
breach in this case in our opinions in Western Insulation, L.P
v. Moore, No. 06-2028, 242 Fed. App’x 112 (4th Cir. 2007)
(reversing the district court’s award of damages and attorneys’
fees and holding that the imposition of an injunction would not
have harmed third parties), and Western Insulation, L.P. v.
Moore, No. 08-1219, 316 Fed. App’x 291 (4th Cir. 2009)
(affirming the district court’s finding of nominal damages and
2
imposition of an injunction as to Melanie Moore). Thus, here we
describe only the facts which have bearing on the award and
reasonableness of attorneys’ fees.
In March 2001, Western, Inc. (“Western”) entered into an
agreement with Hal Moore (“Hal”) to purchase his company,
Western Insulation, for over $41 million. As part of that
agreement, Hal and his wife Melanie Moore (“Melanie”) entered
into an agreement not to compete with Western for a period of
seven years following the completion of the transaction. Hal
and Melanie did not, however, abide by their agreement.
Contrary to the specific provisions of the agreement, Hal hired
two former Western employees to work in his remaining business
ventures. Additionally, Melanie acted as a surety for a $1.41
million line of credit to one of her former employees who formed
the company American Insulation, a competitor of Western. For
her guarantee of the loan, Melanie was given the right to buy up
to ninety percent of American Insulation for $9,000 at the end
of her non-compete period. Melanie also signed a second surety
agreement for another former employee who formed Empire
Insulation, also a competitor of Western.
Because of these breaches of the non-compete agreement,
Western filed suit, and at the conclusion of a three-day bench
trial, the district court found that both defendants had
breached their covenants not to compete, among other violations,
3
and awarded $943,659 in damages and $361,660 in attorneys’ fees.
On appeal, however, we held that there was no basis for the
district court to award damages for the breaches because the
plaintiff had not shown any compensable harm. We thus vacated
the district court’s orders as to both damages and attorney’s
fees. Western Insulation, 242 Fed. App’x at 125. However, this
Court did find that the plaintiff had established that Melanie
had breached her covenant not to compete and Hal had breached
his non-solicitation agreement, id. at 117-19, and the district
court erred in denying the plaintiff an injunction against
Melanie, id. at 124-25.
On remand, the plaintiff requested that, instead of
compensatory damages, the court impose a permanent injunction
against Melanie to prevent her from competing with Western and
award nominal damages for the breaches of contract. The
district court did so, finding a permanent injunction proper as
to Melanie and awarding $100 in nominal damages from each
defendant for the breaches of contract. This Court on appeal
affirmed the result in its entirety. Western Insulation, 316
Fed. App’x at 300.
In a separate opinion, the district court again awarded
attorneys’ fees to the plaintiff: $165,414.83 from Melanie and
$41,606.46 from Hal. The district court discussed each of the
twelve Kimbrell’s factors and determined that the award of a
4
permanent injunction as to Melanie and the finding of a breach
of the contract by both parties entitled the plaintiff to some
of its attorneys’ fees. See Barber v. Kimbrell’s, Inc., 577
F.2d 216, 226 n.28 (4th Cir. 1978). Western claimed that it
spent $584,380.28 in attorneys’ fees litigating the case in
Virginia. 1 In calculating the lodestar amount of fees for the
case, the court broke the litigation fees down into the amount
spent litigating each part of the case: trial, appeal and
remand. Of the $348,365 spent litigating the case on the
merits, the court awarded one quarter of the fees against
Melanie, because it found half of the plaintiff’s goal had been
realized: an award of damages against each defendant. Of the
$154,098 in fees spent to appeal the judgment to the Fourth
Circuit in the first instance, the court awarded half the fees,
split evenly between Hal and Melanie, because this Court had
ruled in favor of injunctive relief and found breaches of the
agreement. Finally, of the $55,092.28 spent to litigate the
case on remand, the court again awarded half the fees, for which
only Melanie was responsible, because the plaintiff obtained the
remedy of a permanent injunction against Melanie and nominal
1
The district court earlier did not allow the plaintiff to
collect fees from the original action brought in California.
That case was voluntarily dismissed by the plaintiff and then
re-filed in Virginia to comply with a contractual provision
requiring that any action to enforce the agreement be brought in
Virginia.
5
damages. The court increased the lodestar amount by eight
percent given the complexity of the case and arrived at the
total fee award of $270,021.29. This timely appeal followed
concerning solely the award of attorneys’ fees.
II.
This Court reviews the district court’s decision to award
attorneys’ fees under an abuse of discretion standard.
McDonnell v. Miller Oil Co., 134 F.3d 638, 640 (4th Cir. 1998)
(citing Colonial Williamsburg Found. v. Kittinger Co., 38 F.3d
133, 138 (4th Cir. 1994)). The Moores present two issues upon
appeal: whether attorneys’ fees were lawfully awarded, and if
so whether the amount of fees was reasonable in light of the
relief achieved against each defendant. We address each issue
in turn.
A.
In the course of his briefing, Hal argued that there was no
basis upon which the court could award fees against him as
Western had only been awarded nominal damages from him. 2 At oral
argument, however, counsel for the Moores stated they did not
contest the imposition of fees, only the reasonableness of the
2
Melanie did not contest the fact that attorneys’ fees
could be awarded against her, only the reasonableness of the
award.
6
amount awarded. Nevertheless, we briefly describe the basis for
awarding fees.
Hal’s argument relies upon this Court’s decision in Mercer
v. Duke University, 401 F.3d 199 (4th Cir. 2005), and the
Supreme Court’s ruling in Farrar v. Hobby, 506 U.S. 103 (1992).
Both of those cases held that when only nominal damages are
awarded, attorneys’ fees are not generally available. Mercer,
401 F.3d at 203 (quoting Farrar, 506 U.S. at 115). The Courts’
view in those cases was that when the plaintiff fails to prove
an essential element of damages—that any are warranted—the
usual award is no fee at all. Farrar, 506 U.S. at 115. To
determine whether a nominal damages case is the exceptional case
meriting fees, the court must apply a three factor test. First,
and most importantly, the court must compare the relief sought
and the relief obtained. Mercer, 401 F.3d at 204. Second, the
court evaluates the “significance of the legal issue on which
the plaintiff prevailed.” Id. at 206 (quoting Farrar, 506 U.S.
at 122.) Finally, the court determines whether the litigation
served a public purpose beyond the dispute between the parties.
Id. at 207.
However, as argued by Western, there is a fundamental
difference between this case and Mercer and Farrar: the source
of the right to attorneys’ fees. In the two cases cited by Hal,
the plaintiff’s entitlement to fees was a result of 42 U.S.C.
7
Section 1988, which gives the district court discretion to
decide whether the plaintiff is entitled to fees in certain
civil rights actions. In the language of Section 1988, the
district court “may allow” recovery of fees. As such, any
recovery of fees is plainly discretionary. This Court
recognized in Mercer that the statute at hand merely made the
plaintiff eligible for, not entitled to fees. 401 F.3d at 203.
For this reason, the Moores’ reliance on Mercer in their brief
and at oral argument is misplaced. While it is true that the
search for reasonableness in a fee award writ large is similar
both here and in Mercer, the entitlement to fees here has
nothing to do with the congressional policy of awarding fees in
some civil rights actions.
By contrast, the source of Western’s entitlement to fees in
this case is the agreement itself, which the Moores breached.
Paragraph Five of the Moores’ non-compete agreement with Western
provides that “in any action in law or in equity . . . to
enforce this Agreement, the prevailing party in such action
shall be entitled to reasonable attorneys’ fees, costs, and
necessary disbursements . . . .” J.A. 299 (emphasis added). 3 As
this case is a diversity action based on state contract law, the
contract, including its provisions on attorneys’ fees, is to be
3
All citations to “J.A. __” refer to the Joint Appendix
provided by the parties in this case.
8
interpreted using state law. The Virginia Supreme Court has
defined “prevailing party” for fees and costs purposes broadly
as the party in whose favor the judgment is entered in the case.
Richmond v. City of Henrico, 41 S.E.2d 35, 41 (Va. 1947). This
definition of prevailing party certainly includes the party for
whom judgment is entered in the form of nominal damages.
Further, in Ulloa v. QSP, the Virginia Supreme Court held that
the trial court properly awarded attorneys’ fees to QSP for its
breach of contract claim against Ulloa, per a contractual
provision awarding fees, even though the jury, after finding
that Ulloa breached the contract, declined to award any damages
for the breach. 624 S.E.2d 43, 49 (Va. 2006). Noting that
“parties are free to draft and adopt contractual provisions
shifting the responsibility for attorneys’ fees to the losing
party in a contract dispute,” the court upheld the fee award for
the breach of contract claim. Id. (citing Mullins v. Richlands
Nat’l Bank, 403 S.E.2d 334, 335 (Va. 1991)).
This case therefore appears to be controlled by Virginia
law allowing the award of attorneys’ fees to a prevailing party,
broadly defined, when those fees are mandated by contractual
provision between the parties. There is no reason why this
provision in the contract should not be enforced against both
Melanie and Hal. The question then is whether those fees
awarded were reasonable, an issue to which we now turn.
9
B.
The central argument Hal and Melanie make upon appeal is
that even if the award of fees was proper, it was unreasonable.
Hal argues that requiring him to pay $41,606.46 in fees when
only $100 in nominal damages was assessed against him is
presumptively unreasonable. Melanie argues that the district
court incorrectly awarded “virtually” the same amount of
attorneys’ fees against her when the plaintiff received an
injunction and nominal damages as it did when the plaintiff had
received over a $1 million judgment. 4 This is an error, she
argues, because the district court incorrectly valued the
issuance of an injunction and the recovery of significant
compensatory damages as equally important to the plaintiff and
splitting the fees equally between claims was not proper. For
the reasons enumerated below, we find both of these arguments
unavailing.
In reviewing a fee award, this Court gives substantial
deference to the district court which tried the case because of
that court’s “intimate knowledge of the efforts expended and the
value of the services rendered.” Kimbrell’s, 577 F.2d at 226.
4
In its first opinion awarding fees in this case, the
district court did not mention how the fees were to be divided,
presumably because the fees were awarded after the court found
that the defendants violated the non-compete agreement jointly.
Melanie calculates her half of the fee award in the first
instance to be $186,672.29.
10
Even if awarding fees is mandated by a contractual provision,
the amount awarded must still be reasonable. Mullins, 403
S.E.2d at 335. To determine the reasonableness of an award,
this Court has held that a district court must make “detailed
findings of fact with regard to the factors considered.”
Kimbrell’s, 577 F.2d at 226. These factors must include “the
time consumed, the effort expended, the nature of the services
rendered, and other attending circumstances.” 5 Mullins, 403
S.E.2d at 335 (citing Beale v. King, 132 S.E.2d 476, 478 (Va.
1963)). From its consideration of those factors, the court
should determine how many hours were reasonably required for the
litigation and then calculate the lodestar amount using an
hourly rate. Miller Oil, 134 F.3d at 640. The lodestar rate
may then be adjusted for the particular factors and difficulties
of the case at hand.
5
The factors suggested by this Court for the district court
to consider are: “(1) the time and labor expended; (2) the
novelty and difficulty of the questions raised; (3) the skill
required to properly perform the legal services rendered; (4)
the attorney’s opportunity costs in pressing the instant
litigation; (5) the customary fee for like work; (6) the
attorney’s expectations at the outset of the litigation; (7) the
time limitations imposed by the client or circumstances; (8) the
amount in controversy and the results obtained; (9) the
experience, reputation and ability of the attorney; (10) the
undesirability of the case within the legal community in which
the suit arose; (11) the nature and length of the professional
relationship between attorney and client; and (12) attorneys’
fees awards in similar cases.” Kimbrell’s, 577 F.2d at 226
n.28.
11
The district court in this case explained its rationale for
awarding fees against Hal and Melanie at great length,
discussing each of the twelve factors enunciated by the court in
Kimbrell’s. See supra n.5. The most salient factor for the
district court was the complexity of the case given the number
of motions for summary judgment, extensive discovery litigation,
and bicoastal nature of the suit. Additionally, even though
Western “obtained only one meaningful form of relief—an
injunction against Melanie,” the court found the issues so
intertwined that it was impossible to view the work done to
achieve the injunction as separable from the rest of the
litigation. J.A. 335. The Supreme Court held in Hensley v.
Eckerhart, that when a suit involves several claims that have a
core of related facts, division of hours between claims can be
an exercise in futility. 461 U.S. 424, 434-35 (1983).
Therefore, the “district court should focus on the significance
of the overall relief obtained by the plaintiff in relation to
the hours reasonably expended on the litigation.” Id. at 434.
Additionally, this Court has held that a district court
evaluating the degree of success on the merits between
successful and unsuccessful claims should not look to the
motives of the plaintiff as guidance, meaning the court should
not attempt to determine what the plaintiff would have thought
more important. Mercer, 401 F.3d at 205. The comparison should
12
be with the relief “sought” not the relief “most important” to
the plaintiff. Id. (emphasis added). The court must therefore
view the entirety of the suit objectively.
In this case, the plaintiff sought both damages and an
injunction in his original complaint against the Moores.
Concerning an injunction, the plaintiff sought three types of
preliminary and permanent injunction: to prevent further unfair
competition, contractual breaches, and misappropriation of trade
secrets. Western also sought compensatory damages at the amount
proved at trial. The complaint also, of course, sought a
finding of a breach in order to receive either remedy.
At the conclusion of the liability and damages portion of
the proceedings before the district court, the plaintiff
received nominal damages and an injunction. Though it was not
all the relief sought in the complaint, Western certainly was
the prevailing party under Virginia law. It cannot be said from
the face of the complaint or the remedy achieved, therefore,
that injunctive relief was not an important remedy.
Additionally, while no compensable damages were awarded, the
suit did result in a finding of liability. Valuing the damages
in unfair competition cases can be extremely difficult. See
PADCO Advisors, Inc. v. Omdahl, 179 F. Supp. 2d 600, 612 (D. Md.
2002) (“It is for this reason that courts have routinely
enforced covenants not to compete, as it is nearly impossible to
13
quantify the amount of damage caused when former employees work
for direct competitors. In order to protect an employer’s
business interests, such as a loss of clients and good will,
covenants not to compete that require specific performance are
enforceable.”). Thus, the achievement of a permanent injunction
in an unfair competition case is not negligible. In fact, it is
a significant result in that it enforces the original agreement
between the parties.
Melanie attempts to turn precedent on its head by advancing
an argument which evaluates the importance of each kind of
relief. This is plainly erroneous where we have stated that the
relief is to be viewed objectively and where district courts
routinely grant permanent injunctions in non-competition cases.
Viewing this case objectively, the plaintiff achieved
significant relief.
Given the relief achieved against each defendant, the court
then calculated the lodestar amount for each defendant
individually. As regards Hal, the court awarded one fourth of
the amount of fees Western incurred when appealing the case to
the Fourth Circuit, $41,606.46 of $154,098 after the eight
percent lodestar adjustment. 6 Hal was not responsible for any of
6
The eight percent adjustment occurred because the court
felt the lodestar amount should be increased slightly given the
length and complexity of the case.
14
the fees for litigation before the district court at trial or on
remand. The district court found the award of fees for the
litigation before the Fourth Circuit particularly proper because
this Court held that Hal had violated his agreement not to
compete, constituting a final judgment on the issue of Hal’s
breach. We find it was not an abuse of discretion for the
district court to order Hal to pay one-quarter of the fees for
the appeal which found both Hal and Melanie at fault. The fact
that Hal was adjudged in violation of his non-compete agreement,
even though only nominal damages were awarded, made Western a
prevailing party against him and entitled the plaintiff to fees.
Thus, the district court was reasonable in awarding a select
portion of the fees to Hal when the fees concerned the part of
the litigation where his fault was determined.
As regards Melanie, the district court ordered her to pay
one fourth of the fees incurred to try the case, one fourth
incurred to litigate the case before the Fourth Circuit, and one
half incurred to litigate the case on remand, a total of
$174,750.81 after the lodestar adjustment. The court’s logic
was that the plaintiff had achieved half of the relief sought at
trial (damages), half sought on appeal (injunction and finding
of breach), and half on remand (permanent injunction). This
division of fees was certainly not an abuse of discretion when
Western achieved substantial relief, though not all of the
15
relief sought, such that an award of all fees was not proper.
In the aggregate, the fee award from Melanie cannot be said to
be excessive when the plaintiff spent $557,555.30 litigating the
case to a successful conclusion. Therefore, the district court
did not err in the fee award from Melanie.
III.
This Court therefore affirms the decision of the district
court below.
AFFIRMED
16
NIEMEYER, Circuit Judge, concurring in part and dissenting in
part:
After nearly four years of litigation, both Hal Moore and
Melanie Moore were found to have breached their non-compete
agreements with Western Insulation, LP, and each was ordered to
pay $100 in nominal damages. In addition, Western obtained an
injunction against Melanie.
Each non-compete agreement provided that the “prevailing
party” in an action to enforce it “shall be entitled to
reasonable attorneys’ fees,” and the district court ordered Hal
to pay $41,606.46 in attorneys fees and Melanie to pay
$165,414.83. The court reasoned that Hal should pay one-fourth
of the fees that Western incurred during an earlier appeal to
our court and that Melanie should pay: one-fourth of the fees
that Western incurred to try the case; one-fourth of the fees
that Western incurred during the first appeal; and one-half of
the fees Western incurred on remand. The district court also
included in the amounts assessed against both Hal and Melanie an
8% enhancement because the case was “lengthy and complex.”
The majority opinion affirms the attorneys fee awards,
finding them to be reasonable.
I concur in the majority’s opinion to the extent that it
affirms the base award (without the 8% enhancement) assessed
against Melanie. But I conclude that the assessment of $41,606
17
against Hal is excessive, given that Western recovered only $100
in nominal damages from him. I also conclude that the 8%
enhancement is an abuse of discretion. Thus, I would reduce the
assessment against Melanie to $153,161.88, and I would vacate
the assessment against Hal and remand for the district court to
determine a reasonable amount of attorneys fees for Hal to pay
in light of Western’s limited victory against him.
To begin, I agree with the majority that because Western’s
claim to attorneys fees stems from a contract that specified it
was to be interpreted and enforced in accordance with Virginia
law, Virginia law governs the award of fees in this case.
Additionally, I agree that under Virginia law, Western is the
“prevailing party” and is accordingly entitled to attorneys fees
from the Moores pursuant to the parties’ contract. But Western
is entitled to only reasonable attorneys fees. With respect to
the assessment against Hal, the question thus becomes what fee
is reasonable when the plaintiff’s only recovery was nominal
damages.
The Supreme Court has addressed this issue, noting
generally that “‘the most critical factor’ in determining the
reasonableness of a fee award ‘is the degree of success
obtained.’” Farrar v. Hobby, 506 U.S. 103, 114 (1992) (quoting
Hensley v. Eckerhart, 461 U.S. 424, 436 (1983)). Indeed, the
Court has specifically noted that “[w]hen a plaintiff recovers
18
only nominal damages because of his failure to prove an
essential element of his claim for monetary relief, the only
reasonable fee is usually no fee at all.” Id. at 115. Although
these pronouncements of the Supreme Court came in the context of
reviewing fees awarded pursuant to 42 U.S.C. § 1988, the
principles nonetheless provide guidance here and strongly
suggest that it is unreasonable to order Hal, from whom the
plaintiff has only recovered nominal damages of $100, to pay
$41,606 in attorneys fees.
Similarly, our precedents demonstrate that when a plaintiff
is entitled to reasonable attorneys fees, the district court
must account for the plaintiff’s limited success in calculating
the fee, “examin[ing] the size of the proposed attorney’s fee
. . . award in comparison with the total damage award.”
McDonnell v. Miller Oil Co., 134 F.3d 638, 641 (4th Cir. 1998)
(internal quotation marks and citation omitted) (vacating
district court’s award of nearly $20,000 in fees pursuant to a
mandatory fee-shifting statutory provision to a plaintiff who
otherwise recovered only nominal damages); see also Carroll v.
Wolpoff & Abramson, 53 F.3d 626, 629-31 (4th Cir. 1995)
(affirming the district court’s award of $500 in attorneys fees
where plaintiff obtained only $50 in damages).
Most importantly, the Supreme Court of Virginia has held
that a reasonable fee should reflect “the results obtained” by
19
the prevailing party. Chawla v. BurgerBusters, Inc., 499 S.E.2d
829, 833 (Va. 1998). The majority opinion correctly describes
Ulloa v. QSP, Inc., 624 S.E.2d 43, 49 (Va. 2006), as holding
that a plaintiff who established that the defendant breached the
parties’ contract but who recovered no monetary damages for the
claim was nonetheless entitled to attorneys fees pursuant to a
contractual provision. But the court in that case ultimately
reversed the trial court’s substantial award of attorneys fees
and remanded so that the trial court could reconsider the
amount, noting that the plaintiff’s degree of success was a
significant consideration in evaluating the reasonableness of
the award and that “the results obtained by QSP in its
litigation against Ulloa can be characterized, at best, as
marginally successful.” Id. at 50.
As in Ulloa, we should in this case remand so that the
district court can reconsider the amount of attorneys fees in
light of Western’s Pyrrhic victory against Hal. 1
1
Interestingly, the district court at first recognized that
any fee award imposed upon Hal must reflect Western’s failure to
recover any meaningful form of relief from him, observing that
“[t]he fact that Western obtained very little relief against Hal
suggests that an award of fees against him is not warranted.”
J.A. 334. Despite this acknowledgment, the district court
imposed a substantial award against Hal. In my view, it is
necessary to remand so that the district court can simply act
upon its earlier recognition that the fee award must bear some
relation to the relief recovered.
20
The majority opinion, in contrast, finds that the district
court ordered Hal to pay a reasonable amount of attorneys fees,
approvingly noting that the district court found it appropriate
to require Hal to pay one-fourth of the fees Western incurred in
the appeal before us “because this Court held that Hal had
violated his agreement not to compete, constituting a final
judgment on the issue of Hal’s breach.” Ante at 15. Yet, our
declaration of Hal’s fault during the earlier appeal was not the
primary rationale provided by the district court for its
decision to order Hal to pay one-fourth of Western’s fees for
that appeal. Instead, the district court purported to justify
the award by noting that “the Fourth Circuit ruled in Western’s
favor on the issue of injunctive relief with respect to both
defendants.” 2 J.A. 339; see id. (“Since the Fourth Circuit’s
2
The district court’s reliance on this court’s ruling on
injunctive relief in the first appeal also demonstrates the
unreasonableness of the fee award. In Western Insulation, L.P.
v. Moore, 242 F. App’x 112, 124-25 (4th Cir. 2007), the court
did not hold or even suggest that Western was entitled to
injunctive relief against Hal; it merely “reverse[d] the ruling
of the district court that injunctive relief should not be
awarded because the relief requested would impact third parties
not before the court” and “remand[ed] to the district court to
determine in the first instance whether to award such relief,”
expressing “no opinion on whether any particular form of
injunctive relief –- or, indeed, any injunctive relief at all -–
would be appropriate.” I would accordingly hold that the
district court abused its discretion by basing the award against
Hal solely on fees spent obtaining the Fourth Circuit’s reversal
of the district court’s denial of injunctive relief, when the
(Continued)
21
decision reversing the Court’s order on the issue of injunctive
relief affected both Hal and Melanie, they will share the burden
of paying Western for the cost of litigating the case before the
Fourth Circuit”). Indeed, there was good reason for the
district court not to have focused on our finding that Hal had
breached the agreement in making its fee calculation. While we
did describe as a breach of contract Hal’s hiring of two former
Western employees, the issue was not disputed in the appeal
before us. See Western Insulation, L.P. v. Moore, 242 F. App’x
112, 118 n.5 (4th Cir. 2007) (“The district court found that
Hal’s hiring of these employees constituted a breach of his Non-
Compete but that Western failed to prove any damages therefrom.
The Moores do not dispute that these hirings constituted
breaches, and Western does not challenge the determination that
it failed to prove any damages therefrom”).
Therefore, in this case, I cannot agree that it was
reasonable for the district court to have ordered Hal to pay
$41,606.46 in attorneys fees because that was a portion of the
fees incurred at the stage “of the litigation where his fault
was determined.” Ante at 15.
district court on remand again refused to order injunctive
relief against Hal.
22
With respect to the 8% enhancement of the fee award based
on the case’s length and complexity, our court and the Supreme
Court have recognized that “as a general rule, the novelty and
complexity of a lawsuit will be reflected in the number of
billable hours” and that “‘[n]either complexity nor novelty of
the issues, therefore, is an appropriate factor in determining
whether to increase the basic fee award.’” Daly v. Hill, 790
F.2d 1071, 1078 (4th Cir. 1986) (quoting Blum v. Stenson, 465
U.S. 886, 898–99 (1984)). I would, accordingly, vacate the 8%
enhancement of Western’s fee award against Melanie, reducing the
award assessed against her from $165,414.83 to $153,161.88, and
direct that such an enhancement not be considered by the
district court in determining a reasonable attorneys fee award
in Western’s favor against Hal.
23