FILED
NOT FOR PUBLICATION AUG 06 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FINISAR CORPORATION, a Delaware No. 08-17124
corporation,
D.C. No. 5:07-cv-04052-JF
Plaintiff - Appellant,
v. MEMORANDUM*
U.S. BANK TRUST NATIONAL
ASSOCIATION, a National Banking
Association,
Defendant - Appellee.
FINISAR CORPORATION, a Delaware No. 08-17761
corporation,
D.C. No. 5:07-cv-04052-JF
Plaintiff - Appellant,
v.
U.S. BANK TRUST NATIONAL
ASSOCIATION, a National Banking
Association,
Defendant - Appellee.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
FINISAR CORPORATION, a Delaware No. 08-17762
corporation,
D.C. No. 5:07-cv-04052-JF
Plaintiff - Appellee,
v.
U.S. BANK TRUST NATIONAL
ASSOCIATION, a National Banking
Association,
Defendant - Appellant.
Appeal from the United States District Court
for the Northern District of California
Jeremy D. Fogel, District Judge, Presiding
Argued and Submitted June 16, 2010
San Francisco, California
Before: SCHROEDER and BYBEE, Circuit Judges, and STOTLER, Senior
District Judge.**
This is an attorney’s fees dispute in which everyone is challenging
everything. Finisar Corporation (“Finisar”) challenges the district court’s award of
attorney’s fees to its opponent, U.S. Bank Trust National Association (“USB”), as
well as the amount of its own fee award. Not to be outdone, USB also challenges
both the award of fees to its opponent and the amount of its own fee award. We
affirm.
**
The Honorable Alicemarie H. Stotler, Senior United States District
Judge for the Central District of California, sitting by designation.
The district court did not err in holding that USB was entitled to reasonable
attorney’s fees under § 7.06 of the Indentures, which provides that Finisar
covenants and agrees to pay or reimburse [USB] . . . upon
its request for all reasonable expenses [or] disbursements .
. . incurred or made by or on behalf of it in accordance with
any of the provisions of this Indenture (including . . . the
reasonable compensation and the expenses and
disbursements of its counsel . . .) except any such expense,
disbursement, or advance as may arise from its negligence
or bad faith.
Because USB did not act negligently or in bad faith in issuing notices of default
and in defending against Finisar’s declaratory judgment action, it was entitled to
recover its attorney’s fees under § 7.06.
The district court did not abuse its discretion in awarding USB a lower
amount than it requested in attorney’s fees. Section 7.06 only entitles USB to
“reasonable” attorney’s fees, and the district court appropriately exercised its
discretion in reducing the amount of USB’s attorney’s fees by about fifteen percent
based on its finding that USB’s persistence in litigating the declaratory judgment
action in the face of mounting adverse (albeit non-binding) legal authority was
“questionable at best.” See Passantino v. Johnson & Johnson Consumer Prods.,
Inc., 212 F.3d 493, 517-18 (9th Cir. 2000) (district court has broad discretion to
determine appropriate amount of attorney’s fee award).
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The district court correctly held that Finisar, as the prevailing party, was
entitled to recover its own reasonable attorney’s fees because California Civil Code
§ 1717 applied to § 7.06 of the Indentures. See Kachlon v. Markowitz, 85 Cal.
Rptr. 3d 532, 556-57 (Ct. App. 2008) (“Actions for a declaration of rights based
upon an agreement are ‘on the contract’ within the meaning of Civil Code section
1717.” (quotation marks omitted)). Although the Indentures contained a
“Governing Law” provision specifying that the Indentures were to be “governed
by, and construed in accordance with, the laws of the State of New York,” this
provision did not bar the application of California Civil Code § 1717. See
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 187(2); ABF Capital Corp. v.
Grove Props. Co., 23 Cal. Rptr. 3d 803, 808, 813 (Ct. App. 2005) (stating that
California Civil Code § 1717 “reflects a fundamental public policy of th[e] state”
and that “California has a materially greater interest in enforcing . . . the reciprocal
attorney fees rule . . . than New York has in assuring the enforcement of New York
law concerning attorney fees”).
Finally, the district court did not abuse its discretion in awarding Finisar
only those reasonable attorney’s fees it actually incurred under California Civil
Code § 1717. See PLCM Group v. Drexler, 997 P.2d 511, 519-20 (Cal. 2000).
AFFIRMED.
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