Stipulating to Dismissal May Not Bar a Request for Attorneys’ Fees

In Keith Manufacturing Co. v. Butterfield, No. 2019-1136 (Fed. Cir. Apr. 7, 2020), the Federal Circuit held that stipulating to a case’s dismissal does not necessarily foreclose a party from seeking attorneys’ fees.

Keith Manufacturing Co. sued its former employee, Larry Butterfield, for patenting allegedly misappropriated trade secrets. Keith asserted state-law contract and tort claims and sought a declaratory judgment of noninfringement. The parties eventually resolved their dispute, filing a stipulation of dismissal with prejudice. Then Butterfield moved for attorneys’ fees. The court denied the motion citing Fed. R. Civ. P. 54(d)’s requirement that the movant “specify a judgment” that justifies attorneys’ fees. The court reasoned that, because a stipulation is not appealable, it cannot be a judgment.

On appeal, the Federal Circuit vacated the district court’s ruling, holding a Rule 54 “judgment” includes “more than just appealable orders.” Though “minimizing appellate litigation” motivates limiting the bases for both appeals and motions for attorneys’ fees, the Federal Circuit recognized that the limits are not identical. The difference is self-evident in Rule 54, which defines “judgment” as merely “includ[ing]” any appealable “order,” without being limited to them. The Court remanded, leaving to the district court the question of whether a self-executing stipulation constitutes a “judgment.”