[00:00:01] Speaker 02: Our next case is Walker versus Health International Corporation. [00:00:34] Speaker 02: Mr. Pizarro? [00:00:36] Speaker 02: Did I pronounce your name correctly? [00:00:39] Speaker 02: Yes. [00:00:39] Speaker 02: All right. [00:00:40] Speaker 02: And you reserve five minutes for rebuttal time. [00:00:42] Speaker 02: Is that correct? [00:00:44] Speaker 02: Correct. [00:00:44] Speaker 02: Okay. [00:00:44] Speaker 02: You may proceed. [00:00:49] Speaker 03: May it please the court, Ramon Pizarro, for the appellant. [00:00:55] Speaker 03: This case has two key areas. [00:00:58] Speaker 03: One of them perhaps [00:01:01] Speaker 03: The most pressing one is jurisdiction, because the district court has the duty to look at all times to maintain its limited jurisdiction. [00:01:13] Speaker 03: The issue of jurisdiction comes up with... Whose jurisdiction? [00:01:18] Speaker 03: Ours? [00:01:19] Speaker 03: No, no, the district court's jurisdiction. [00:01:21] Speaker 03: And so this court definitely has jurisdiction to determine whether the district court had jurisdiction in making its decision. [00:01:28] Speaker 03: And if it didn't have jurisdiction in making its decision, then jurisdiction over what? [00:01:34] Speaker 02: Your initial complaint? [00:01:36] Speaker 03: No, no, no. [00:01:38] Speaker 03: Well, after the settlement agreement was filed, whether the district court had jurisdiction after that. [00:01:47] Speaker 00: How can you argue that when you were filing papers at that time with the court? [00:01:51] Speaker 03: Well, because it was arguable both ways. [00:01:54] Speaker 03: Because the agreement had things to be [00:01:58] Speaker 03: completed, the agreement said it had three steps to it. [00:02:02] Speaker 00: You said you wanted to have the case continue and not have it stayed, and now you're arguing that the court had no jurisdiction. [00:02:07] Speaker 03: Well, at that point, the issue of jurisdiction, I could see that it was open both ways, because the agreement required had three steps to it. [00:02:20] Speaker 03: It had, number one, appellees had to pay the amount of the settlement, then secondly, [00:02:27] Speaker 03: We would deliver a release. [00:02:31] Speaker 03: And then thirdly, then the stipulation of dismissal would be entered. [00:02:35] Speaker 02: The payment had... So all of those conditions precedent existed and they were complied with, correct? [00:02:44] Speaker 02: Correct. [00:02:45] Speaker 02: So you delivered the release. [00:02:48] Speaker 02: Correct. [00:02:49] Speaker 02: And the stipulation of dismissal was filed and pursuant to the agreement, [00:02:54] Speaker 02: The stipulation for dismissal was to dismiss all claims in the action with prejudice. [00:03:05] Speaker 02: Correct. [00:03:06] Speaker 02: But the only thing that kept the court, that kept this issue alive, was that you refused to sign the dismissal. [00:03:15] Speaker 03: No. [00:03:18] Speaker 03: We were always willing to dismiss it once the money was paid. [00:03:21] Speaker 03: Was the money paid? [00:03:22] Speaker 03: It was paid after about [00:03:25] Speaker 03: Almost three weeks after the first payment was issued. [00:03:29] Speaker 03: No, but the money was paid. [00:03:30] Speaker 03: Yes, and immediately after payment. [00:03:32] Speaker 02: And you delivered the release. [00:03:34] Speaker 02: Absolutely. [00:03:36] Speaker 02: Releasing the defendant from all claims. [00:03:38] Speaker 02: Correct. [00:03:39] Speaker 02: Okay. [00:03:39] Speaker 03: And then like as soon as the payment cleared, like within 24 hours, plaintiff filed its motion to dismiss the case based on everything being completed. [00:03:55] Speaker 04: So the issue of... Isn't that an acknowledgement that just the filing of the settlement agreement didn't dismiss the case? [00:04:02] Speaker 03: Well, it is an acknowledgement that there's two ways that they could have been seen both ways. [00:04:09] Speaker 04: How could the settlement agreement ever have dismissed the case? [00:04:12] Speaker 04: Because it wasn't a stipulation. [00:04:14] Speaker 04: It, in fact, contemplated in its plain terms that other things to happen had to happen before the parties would stipulate. [00:04:20] Speaker 03: Yes, a stipulation. [00:04:22] Speaker 03: So the question means that, well, [00:04:24] Speaker 03: What's the difference between a stipulation and an agreement? [00:04:28] Speaker 03: I mean, there's not much of a difference that can be argued. [00:04:33] Speaker 03: So the thing is, well, if, for example, if plaintiff would have agreed to have the agreement filed, the settlement filed, that would have meant every, clearly meant every element of Rule 41A1A2. [00:04:50] Speaker 03: That's right, because we did not want to have the court lose jurisdiction before payment was made. [00:04:55] Speaker 03: But payment was made. [00:04:59] Speaker 02: Yes, but at the time that- So you're arguing today there's no jurisdiction. [00:05:03] Speaker 02: Payment was made, all the conditions of the agreement were met. [00:05:07] Speaker 02: You supplied the release. [00:05:09] Speaker 02: Right. [00:05:11] Speaker 02: Right, right. [00:05:12] Speaker 04: Let me ask you this. [00:05:13] Speaker 04: Even if we agree with you, and I don't, but even if we do, doesn't the district court still retain jurisdiction [00:05:20] Speaker 04: to award sanctions for vexatious misconduct during the litigation, even if the parties have filed a stipulation of dismissal? [00:05:28] Speaker 03: That is correct. [00:05:29] Speaker 03: That's the rule. [00:05:30] Speaker 03: But the issue here, as far as vexatiousness, was, well, at the time that a plaintiff filed... So why are you arguing jurisdiction if you agree that the district court retains jurisdiction to address this conduct? [00:05:45] Speaker 03: Well, because there was no conduct at the time that not only the plaintiff [00:05:50] Speaker 03: conduct at the time. [00:05:52] Speaker 04: Well, that's a different question than jurisdiction. [00:05:54] Speaker 04: It's a merits question of whether your continued litigation of this case after your agreement in the settlement agreement constituted vexatious misconduct. [00:06:03] Speaker 04: It's not jurisdiction. [00:06:04] Speaker 03: Well, okay, so the thing is, I see this analogous as being as what went on in the Rambus-Sampton case. [00:06:13] Speaker 03: Once you offered everything [00:06:16] Speaker 03: that the other party wanted. [00:06:18] Speaker 03: There's no more Article 3 jurisdiction. [00:06:20] Speaker 03: There's no more claim of controversy. [00:06:22] Speaker 03: And so that divests the court of jurisdiction. [00:06:28] Speaker 03: So I think that's what happened at the beginning. [00:06:30] Speaker 03: But there was no clear signal to plaintiff as to whether the court had jurisdiction or not. [00:06:38] Speaker 03: So the thing is that there was an upcoming deadline. [00:06:43] Speaker 03: And furthermore, agreements [00:06:46] Speaker 03: A lot of times, they just ball through. [00:06:48] Speaker 03: There's sometimes an issue of whether there's a mistake or what have you. [00:06:54] Speaker 03: So not until at least they performed at least one part of it, the plaintiff had to keep the case moving. [00:07:01] Speaker 02: So let's go from that point that anything can happen to upset a settlement agreement. [00:07:10] Speaker 02: Correct. [00:07:10] Speaker 02: But you were unwilling to stay the court proceedings until [00:07:14] Speaker 04: you know you can see whether the the agreement was all the terms are going to be met or not correct and and and and even though I mean but you didn't reserve any of those rights in your settlement agreement you didn't set forth timetables or anything like that that would say litigation is going to continue or the like I mean you agreed to settle the case you agreed to payment terms you agreed when you would submit a dismissal I mean when somebody another party settles a case they assume that that's all it [00:07:43] Speaker 04: you need to do is comply with the terms of that settlement agreement. [00:07:46] Speaker 03: Correct. [00:07:47] Speaker 04: Not continue to respond to Discovery and the like. [00:07:50] Speaker 03: We did not respond to Discovery or require that they respond to Discovery. [00:07:54] Speaker 03: In fact, the things that were filed by plaintiff required basically no action until they paid. [00:08:02] Speaker 03: I mean, after the terms of the agreement were completed. [00:08:06] Speaker 04: Can I ask you a different question? [00:08:09] Speaker 04: In your blue brief on page 12, [00:08:11] Speaker 04: You cite the Buckhannon case from the Supreme Court, and you cite language about what a prevailing party is. [00:08:17] Speaker 04: You cite from the party opinion, quoting the petitioner's view of what prevailing party should be, which the court explicitly rejected. [00:08:27] Speaker 04: Isn't that right? [00:08:31] Speaker 04: Have you read that case? [00:08:33] Speaker 03: I've read the cases that I cited. [00:08:35] Speaker 04: Did you read your friend's brief? [00:08:37] Speaker 04: Because it pointed out that it was incorrect. [00:08:40] Speaker 03: Well, other cases, the... No, no. [00:08:43] Speaker 04: I'm asking about Buckhannon. [00:08:45] Speaker 03: Buckhannon. [00:08:45] Speaker 03: Well, as far as that point, I mean, Buckhannon, I don't remember exactly why that argument was rejected. [00:08:54] Speaker 03: But typically, cases say that attorney's fees go to prevailing parties. [00:09:01] Speaker 04: No, Buckhannon. [00:09:02] Speaker 04: But this is the problem. [00:09:03] Speaker 04: You have quoted a portion of Buckhannon that said it's the holding, and it's exactly not the holding. [00:09:10] Speaker 03: I didn't mean to do that. [00:09:12] Speaker 04: Well, but your friend pointed it out in his red brief, and you didn't even bother to acknowledge that mistake in your gray brief. [00:09:20] Speaker 03: Yeah, I don't know why that happened. [00:09:22] Speaker 04: You have no excuse for why you completely miscited a Supreme Court controlling case to this court. [00:09:29] Speaker 03: Oh, no, no, no, no. [00:09:32] Speaker 03: My reading of the Supreme Court's rejection of an argument that was presented [00:09:39] Speaker 03: was that there was a difference in terms of the issue being a prevailing party is entitled to, or can be entitled to, to attorney's fees. [00:09:53] Speaker 03: Sure. [00:09:53] Speaker 04: And what Buckhannon was interpreting was whether the catalyst theory entitled you to prevailing party status. [00:10:02] Speaker 04: And that's the language you quoted. [00:10:04] Speaker 04: The catalyst theory is if a lawsuit brings about a voluntary change in conduct, [00:10:09] Speaker 04: That was the catalyst theory. [00:10:10] Speaker 04: That's the language you quoted on page 12 of your brief. [00:10:14] Speaker 04: It is not the law. [00:10:16] Speaker 04: It is exactly what the Supreme Court rejected. [00:10:20] Speaker 03: I believe there was. [00:10:22] Speaker 04: It isn't that your problem here why you're not the prevailing party. [00:10:26] Speaker 04: You didn't get a judgment on the merits from a court changing the relationship. [00:10:31] Speaker 04: Your lawsuit brought about a voluntary change in the defendant's conduct, which is the catalyst theory. [00:10:38] Speaker 04: which has been rejected by the Supreme Court and this court as the basis for prevailing party status. [00:10:43] Speaker 03: Yes, but I think there were other, I mean, the catalyst theory, I mean, there was some nuances there that I saw that that's why, I mean, there's a nuance in terms of, because sometimes parties can change their positions for different reasons. [00:11:03] Speaker 03: And so, but in this situation, [00:11:07] Speaker 03: It did bring, the lawsuit did bring out about what was sought. [00:11:13] Speaker 02: In view of your exchange with Judge Hughes, is it still your principal argument that you should win today on the basis that you're a prevailing party? [00:11:26] Speaker 03: Well, no, I think the key issue here, well, there is, is that [00:11:37] Speaker 03: there was moving things, keeping things moving along per the schedule while there was no clear signal that this thing would be, would actually hold or be dismissed. [00:11:51] Speaker 03: And especially at a time when we had no sign that they were going to perform. [00:12:00] Speaker 03: And we did things, the plaintiff did things [00:12:05] Speaker 03: in a manner that did not require responses by the other side. [00:12:08] Speaker 03: All that was still pending was that they make the payment and start things going in the first place. [00:12:13] Speaker 02: Mr. Pizarro, you're into your rebuttal time. [00:12:15] Speaker 02: Before you sit down, let me make a comment. [00:12:21] Speaker 02: I was very disturbed when I read your brief. [00:12:25] Speaker 02: I thought that if all I had was just your brief to go by as to what the facts of the case are, [00:12:34] Speaker 02: I would have a complete misunderstanding of what the facts are. [00:12:38] Speaker 02: You left out significant information, factual information that's necessary to this court. [00:12:46] Speaker 02: It's not that you blended or you argued the facts in your favor. [00:12:50] Speaker 02: It's that you misstate the facts altogether. [00:12:56] Speaker 02: And you leave out extremely important aspects of the case that [00:13:03] Speaker 02: that almost cast the entire brief in a very disingenuous manner. [00:13:10] Speaker 02: And now, you were sanctioned below. [00:13:15] Speaker 02: And you brought this appeal to us, and you start arguing the lack of jurisdiction and the issue dealing that you're a prevailing party. [00:13:27] Speaker 02: And in response to Judge Hughes's questions, you acknowledge that, no, maybe the prevailing party [00:13:33] Speaker 02: theory doesn't apply here. [00:13:36] Speaker 02: It really brings to mind as to why we are here, given the allegations in your brief. [00:13:45] Speaker 02: Now, I want to give you some time to think about that. [00:13:51] Speaker 02: And maybe you may want to respond. [00:13:53] Speaker 02: And let's hear what the appellee has to say now. [00:14:02] Speaker 01: And you may please record Dan Dietrich on behalf of Health International Corporation, HSN Inc., and HSN Interactive. [00:14:10] Speaker 01: Your Honor, the district court did not abuse its discretion here when it awarded my client's attorney's fees for the post-settlement actions that appellant took. [00:14:18] Speaker 01: Almost immediately after settling this case on May 6, the appellant took the position that the claims were not fully resolved, and he continued to litigate this matter. [00:14:29] Speaker 01: Three days after that, on May 9th, we filed a notice with the district court that the case settled, asked for a 30-day extension of time for all the pending deadlines, giving my clients time to make its payments. [00:14:41] Speaker 01: The settlement agreement clearly states that we have 30 days to make payment. [00:14:45] Speaker 01: That was our obligation. [00:14:46] Speaker 01: That was our notification when we sat there on May 6th. [00:14:49] Speaker 01: We represented that payment would be made. [00:14:52] Speaker 01: That's the notification that we gave. [00:14:54] Speaker 01: That was our only obligation in that 30-day time period. [00:14:58] Speaker 02: Was there ever any indication on your part to the plaintiff that you were thinking of not paying the settlement amount or that you were backing out on the settlement agreement? [00:15:12] Speaker 01: Absolutely not, Your Honor. [00:15:13] Speaker 01: That discussion never took place. [00:15:15] Speaker 01: On May 12, after Appellant Road submitted his notice to court laying out the reasons why he opposed our motion to stay the deadlines, he said that there were issues to be resolved. [00:15:26] Speaker 01: and that he was eager to keep the case moving forward. [00:15:28] Speaker 01: That was a Friday. [00:15:29] Speaker 01: May 9th was a Friday. [00:15:31] Speaker 01: On May 12th, that Monday, I reached out to Appellant's Counsel and I asked him, what were these outstanding issues? [00:15:37] Speaker 01: I never heard a response. [00:15:39] Speaker 01: I had no idea what the outstanding issue was. [00:15:42] Speaker 01: The next day, May 13th, he filed a motion to amend the complaint adding additional claims. [00:15:48] Speaker 01: And in there, he again took the position that all the issues in the second amended complaint [00:15:53] Speaker 01: We were working towards resolving those, but everything wasn't resolved. [00:15:56] Speaker 01: That was on May 13th. [00:15:58] Speaker 01: Our response to that motion was due prior to June 5th, prior to the date. [00:16:04] Speaker 01: June 5th is the date that our payment was due. [00:16:07] Speaker 01: So the representation that nothing had to be done is incorrect because we had to respond to that motion to amend. [00:16:13] Speaker 01: Litigation for our purposes was continuing to go forward. [00:16:17] Speaker 01: On May 9th, the district court [00:16:19] Speaker 01: denied our motion to extend the deadlines. [00:16:21] Speaker 01: And it specifically explained that the reason was because there appears to be a disagreement over whether or not the settlement agreement resolved all the claims. [00:16:30] Speaker 01: And that's why the case went forward. [00:16:31] Speaker 01: So no, there was no representation. [00:16:33] Speaker 01: In fact, shortly after that, and mind you, there was no obligation on our part to give an ongoing representation of whether or not we were going to comply with the 30 days. [00:16:43] Speaker 01: That was not part of the agreement. [00:16:46] Speaker 01: Regardless, though, we did give notification shortly after that last payment was made on May 22nd. [00:16:52] Speaker 01: On May 28th, I reached out to co-counsel, Appellant's co-counsel, and I notified him that, yes, we have the payments in hand. [00:17:01] Speaker 01: I have them. [00:17:02] Speaker 01: Mind you, on May 19th, that same co-counsel represented that he agreed, and this is all in the record, represented that he agreed that the case was settled. [00:17:10] Speaker 01: So it was confusing to me why the case was continuing to litigate. [00:17:15] Speaker 01: uh... why are are continued motions to extend the deadlines were being rejected i may not i'm going to go out just to send a nice had appellants council agreed to stay the deadlines all his concerns were would have been eliminated because the payment would have been made that we would not be here before you today all this time and energy uh... in the district court in this court would have been a point simply better do you have a ballpark figure and he sat down and figured out [00:17:44] Speaker 02: what your attorney fees are related to the appeal, just the appeal. [00:17:51] Speaker 01: Your Honor, related to the appeal, I can say that unfortunately, it's probably in excess of what the final judgment was. [00:18:00] Speaker 01: And the final judgment was in the $20,000 range. [00:18:03] Speaker 01: You see the briefing, there were a number of misstatements and inaccuracies that we had to address, and a number of [00:18:12] Speaker 01: tangent issues throughout the appellant's brief that we had to address so that the court was fully advised. [00:18:17] Speaker 01: We didn't know we were going to have oral argument, so we wanted to make sure that everything was identified in our briefing. [00:18:22] Speaker 01: So I can get an actual number, but I would say it's in excess, probably between the $20,000 and $30,000 range would be my guess as we sit here today. [00:18:33] Speaker 01: And that is one of the things that we would ask in addition to rejecting the appeal and affirming the judgment, we would ask that the court also award us fees for this appeal. [00:18:42] Speaker 01: We believe, as this is mentioned in one of our motions, we believe the court does continue to have the inherent and equitable authority to do so. [00:18:51] Speaker 01: And Rule 38 also provides that. [00:18:54] Speaker 01: I just want to say one more point, Your Honor, because in the briefing, I feel obligated when my personal, ethical, and professional responsibilities are called into question. [00:19:04] Speaker 01: I believe it was in the reply brief, Appellant's Council mentions the ethical rule of the Colorado rules. [00:19:11] Speaker 01: And I believe I explained it in our briefing, but that rule applies between counsel and his client. [00:19:17] Speaker 01: Appellant is trying to bring that rule as an obligation on my part to appellant. [00:19:24] Speaker 01: Clearly, appellant is not my client. [00:19:26] Speaker 01: The rule is inapplicable. [00:19:28] Speaker 01: I just want to point that out in case it wasn't clear. [00:19:31] Speaker 01: We certainly complied with all of our ethical responsibilities. [00:19:34] Speaker 01: And again, the only obligation we had was to make payment on the 30th day. [00:19:38] Speaker 01: That payment is undisputed. [00:19:39] Speaker 01: It was made on time. [00:19:41] Speaker 01: And for those reasons, as well as the reasons laid out in the district court's order, Your Honor, there was no abuse of discretion in this case. [00:19:48] Speaker 02: Okay. [00:19:48] Speaker 02: Thank you. [00:19:50] Speaker 02: Thank you. [00:19:53] Speaker 03: Thank you, Your Honor. [00:19:56] Speaker 03: There's been a big kind of mixing of claims versus issues. [00:20:02] Speaker 03: What plaintiff told the court [00:20:05] Speaker 03: was there were still many issues left to be resolved. [00:20:08] Speaker 03: And the issues had to do with the things that had to be done pursuant to the agreement, especially coming up with the release and the stipulation of dismissal. [00:20:22] Speaker 03: So it wasn't that there were still a lot of issues in which required work. [00:20:30] Speaker 03: And then the payments, [00:20:33] Speaker 03: It was on June 2nd that we found out that plaintiffs' counsel had the payments. [00:20:42] Speaker 03: And before that, I mean, they had the first payment, I believe, was made on May 16th. [00:20:48] Speaker 03: And so had we even found out about any of that, that would have completely changed everything. [00:20:57] Speaker 03: because the key thing was the payments. [00:21:00] Speaker 03: I mean, I think that's at the core of any kind of a settlement agreement. [00:21:06] Speaker 03: And so in terms of the, also in terms of the catalyst theory, I don't think the, I mean, I didn't, I missed that on the reply, but the catalyst theory, it was not really, it was not a catalyst theory approach. [00:21:23] Speaker 03: It was that, [00:21:26] Speaker 03: The rule, every time that an attorney's fee is awarded, yeah, the definition of a prevailing party was not the catalyst theory. [00:21:38] Speaker 03: But I believe that plaintiff was the prevailing party below. [00:21:42] Speaker 03: And how you define maybe that definition of prevailing party. [00:21:47] Speaker 03: How were you the prevailing party below? [00:21:51] Speaker 03: Well, Mr. Walker got to say, well, they stopped infringing the patent. [00:21:56] Speaker 03: And they also paid him what I think is a substantial amount of money. [00:22:01] Speaker 03: And they took licenses and so on. [00:22:05] Speaker 03: None of that was ordered by the court, right? [00:22:07] Speaker 03: That was done through a voluntary settlement agreement. [00:22:09] Speaker 03: I see. [00:22:10] Speaker 03: I see. [00:22:10] Speaker 03: Yes, yes. [00:22:11] Speaker 03: I see what you're saying. [00:22:14] Speaker 03: Well, my understanding was that if he obtained what he was seeking, then he would be a prevailing party. [00:22:26] Speaker 04: But that's exactly opposite of the law. [00:22:30] Speaker 04: I mean, how can you actually say that after having briefed this case, presumably read these cases that everybody's citing, and having even a cursory knowledge of what prevailing party status is under Buchanan? [00:22:44] Speaker 04: What you're arguing is that because he sued and got a favorable settlement without any involvement of the court, that he's a prevailing party. [00:22:52] Speaker 04: That's the catalyst theory that's been rejected. [00:22:56] Speaker 03: Yes. [00:22:57] Speaker 03: And many of the other cases just say prevailing party. [00:23:03] Speaker 03: And we consider that as being prevailing. [00:23:10] Speaker 02: OK. [00:23:10] Speaker 02: Mr. Zara, we take these matters very seriously, both in the grounds of appeal that you've taken to bring this appeal [00:23:26] Speaker 02: your briefing, your failure to respond to the appellee. [00:23:35] Speaker 02: And I think you kind of followed by the question of this court that were troubled by this. [00:23:44] Speaker 02: So I hereby order you to show cause within 30 days as to why this court should not issue sanctions, both for filing a frivolous appeal [00:23:55] Speaker 02: For making a frivolous argument in this matter. [00:23:59] Speaker 02: We'll follow this with the with the written order we had 30 days as of today in which to respond to the order to show cause and I'll give the aptly 20 days to follow response to that we thank you very much. [00:24:15] Speaker 03: Thank you