InterDigital Inc (IDCC)

[olddog967]

Harball: there is a cost to the losing party to an arbitration award if they file "frivolous" appeals. Here is what one Federal Appeals court had to say about such tactics. Maybe our legal brethren could furnish some additional insight.

Last, Flexible has moved for an order finding that this appeal is frivolous and awarding double costs and other damages, pursuant to Fed. R. App. P. 27 and 38. Rule 38 provides that if this Court determines that an appeal is frivolous, this Court "may award just damages and single or double costs to the appellee." Fed. R. App. P. 38. An appeal is frivolous within the meaning of Rule 38, when it "was prosecuted with no reasonable expectation of altering the district court's judgment and for purposes of delay or harassment or out of sheer obstinacy." Rosen- burg v. Lincoln American Life Insurance Co., 883 F.2d 1328, 1340 (7th Cir. 1989) (quoting Reid v. United States, 715 F.2d 1148, 1155 (7th Cir. 1983)). This Court has awarded Rule 38 sanctions in other frivolous appeals seeking to overturn arbitral awards. Widell, 43 F.3d at 1152; Chicago Typographical Union, 935 F.2d at 1506-07; Hill v. Nor- folk & Western Ry., 814 F.2d 1192, 1203 (7th Cir. 1987). "The promise of arbitration is spoiled if parties disap- pointed by its results can delay the conclusion of the pro- ceeding by groundless litigation in the district court followed by groundless appeal to this court; we have said repeatedly that we would punish such tactics and we mean it." Hill, 814 F.2d at 1203.

Super Products' appeal had absolutely no prospect of success and has served only to tax the resources of this Court, the district court, and the defendants. Super Prod- ucts' tactics have cost Flexible more than two years of delay in collecting its arbitration award. We therefore con- clude that this is an appropriate case in which to grant Flexible's Rule 38 motion. Flexible shall have fifteen days within which to submit to the Clerk of this Court proper documentation of its expenses in defending this appeal and damages resulting from the delayed receipt of the arbitra- tion award.

http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=search&case=/data2/circs/7th/952160.html



I think it remains to be seen if even an arb victory will result in full payment--or more litigation and perhaps a settlement later. One thing people haven't really discussed here that I've seen is what happens if IDCC wins the arb BUT Nok appeals. The fact that there are limited grounds to do so certainly doesn't mean that it won't happen. If NOK's strategy is to settle for less than full payment, and to pay later rather than sooner, the current arb may not be the end of it.