Dent v. Lotto Sport Italia S.p.A.
Opinion
1 WO 2 3 4 5
9 David Dent, No. CV-17-00651-PHX-DMF
10 Plaintiff,
11 v. ORDER
12 Lotto Sport Italia SpA,
13 Defendant. 14 15 Pending before the Court is Plaintiff David Dent’s (“Plaintiff”) Motion for 16 Attorneys’ Fees pursuant to 15 U.S.C. § 1117(a) and Rule 54(d)(2) of the Federal Rules of 17 Civil Procedure. (Doc. 115 at 4, 5)1 Defendant Lotto Sport Italia, SpA (“Defendant”) filed 18 a response in opposition (Doc. 116) and Plaintiff filed a reply (Doc. 117). For the reasons 19 set forth below, the Court will grant Plaintiff’s motion. 21 In 2016, Plaintiff purchased the domain names
26 1 Citations to the record indicate documents as displayed in the official electronic document filing system maintained by the District of Arizona under Case Number CV-17-00651-
28 2 Defendant was founded in 1973 and took its name from the final five letters of Caberlotto, the last name of the company’s founder. 1 selling athletic footwear, sportswear, and sports accessories, received registration of the 2 trademark LOTTO WORKS in the European Union in 2009. (Id.) Defendant obtained 3 registration of this trademark in the United States in 2018 for use in connection with 4 materials related to eyeglasses and clothing, including shoes. (Id. at 3-4) Defendant does 5 not have trademark rights in the term “lotto” for gambling or lottery. (Id. at 4) 6 Shortly after Plaintiff purchased the disputed domain names in 2016, Defendant 7 initiated arbitration with the World Intellectual Property Organization (“WIPO”) regarding 8 the use of domain name
26 3 Plaintiff’s Count One originally alleged violation of both § 1114(2)(D)(iv) and § 1142(2)(D)(v). (Doc. 1 at 9-10) District Judge Silver found that § 1114(2)(D)(iv) and § 27 1114(2)(D)(v) define separate violations and that only § 1114(2)(D)(v) addressed reverse domain name hijacking. (Doc. 17 at 4) Judge Silver concluded that Plaintiff had failed to 28 state a claim under § 1114(2)(D)(iv) for fraud in a domain dispute proceeding and dismissed without prejudice any claim under that subsection. (Id.) 1 dismissed without prejudice with leave to amend if deficiencies in the claim were cured. 2 (Docs. 1, 17) Plaintiff did not amend his complaint. Plaintiff also requested statutory 3 damages under 15 U.S.C. § 1117(d) (Doc. 1 at 13), but he did not argue for such damages 4 in his motion for summary judgment. (Docs. 86-91) 5 The parties filed cross-motions for summary judgment on Counts One and Two. 6 (Docs. 83, 91, 95, 86, 89, 96) This Court granted Plaintiff’s motion for summary judgment 7 and denied Defendant’s motion for summary judgment on both counts, found Plaintiff’s 8 registration and use of the domain names were not unlawful under the ACPA or the 9 Lanham Act, ordered that the domain names remain registered with Plaintiff, and further 10 ordered that the domains be unlocked or reactivated for Plaintiff’s lawful use. (Doc. 97 at 11 23) 13 Pursuant to the “American Rule,” a litigant’s “attorney’s fees are not ordinarily 14 recoverable in the absence of a statute or enforceable contract providing therefor.” 15 Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717 (1967). The 16 American Rule addresses concerns that “one should not be penalized for merely defending 17 or prosecuting a lawsuit,” and that persons of modest means “might be unjustly 18 discouraged from instituting actions to vindicate their rights if the penalty for losing 19 included the fees of their opponents’ counsel.” Id. at 718. The Supreme Court further 20 recognized that “litigating the question of what constitutes reasonable attorney’s fees 21 would pose substantial burdens for judicial administration.” Id. 22 The Lanham Act permits an award of attorneys’ fees to the prevailing party in 23 “exceptional cases.” 15 U.S.C. § 1117(a). In Octane Fitness, the United States Supreme 24 Court reviewed Section 285 of the Patent Act, providing that “[t]he court in exceptional 25 cases may award reasonable attorney fees to the prevailing party.” Octane Fitness, LLC 26 v. ICON Health & Fitness, Inc., 572 U.S. 545, 553-54 (2014) (citing 35 U.S.C. § 285). 27 The Supreme Court held “that an ‘exceptional’ case is simply one that stands out from 28 others with respect to the substantive strength of a party’s litigating position (considering 1 both the governing law and the facts of the case) or the unreasonable manner in which the 2 case was litigated.” Id. at 554. The Court concluded that a decision on whether to award 3 attorney fees was not formulaic and that a district court should perform a case-by-case 4 assessment, considering the totality of the circumstances. Id. The Supreme Court also 5 instructed that the applicable burden of proof to establish entitlement to attorney fees in 6 patent litigation is a preponderance of the evidence standard, which “allows both parties 7 to share the risk of error in roughly equal fashion.” Id. at 557-58 (citation and quotation 8 marks omitted). The Court cited Fogerty v. Fantasy, Inc., 510 U.S. 517
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1 WO 2 3 4 5
9 David Dent, No. CV-17-00651-PHX-DMF
10 Plaintiff,
11 v. ORDER
12 Lotto Sport Italia SpA,
13 Defendant. 14 15 Pending before the Court is Plaintiff David Dent’s (“Plaintiff”) Motion for 16 Attorneys’ Fees pursuant to 15 U.S.C. § 1117(a) and Rule 54(d)(2) of the Federal Rules of 17 Civil Procedure. (Doc. 115 at 4, 5)1 Defendant Lotto Sport Italia, SpA (“Defendant”) filed 18 a response in opposition (Doc. 116) and Plaintiff filed a reply (Doc. 117). For the reasons 19 set forth below, the Court will grant Plaintiff’s motion. 21 In 2016, Plaintiff purchased the domain names
26 1 Citations to the record indicate documents as displayed in the official electronic document filing system maintained by the District of Arizona under Case Number CV-17-00651-
28 2 Defendant was founded in 1973 and took its name from the final five letters of Caberlotto, the last name of the company’s founder. 1 selling athletic footwear, sportswear, and sports accessories, received registration of the 2 trademark LOTTO WORKS in the European Union in 2009. (Id.) Defendant obtained 3 registration of this trademark in the United States in 2018 for use in connection with 4 materials related to eyeglasses and clothing, including shoes. (Id. at 3-4) Defendant does 5 not have trademark rights in the term “lotto” for gambling or lottery. (Id. at 4) 6 Shortly after Plaintiff purchased the disputed domain names in 2016, Defendant 7 initiated arbitration with the World Intellectual Property Organization (“WIPO”) regarding 8 the use of domain name
26 3 Plaintiff’s Count One originally alleged violation of both § 1114(2)(D)(iv) and § 1142(2)(D)(v). (Doc. 1 at 9-10) District Judge Silver found that § 1114(2)(D)(iv) and § 27 1114(2)(D)(v) define separate violations and that only § 1114(2)(D)(v) addressed reverse domain name hijacking. (Doc. 17 at 4) Judge Silver concluded that Plaintiff had failed to 28 state a claim under § 1114(2)(D)(iv) for fraud in a domain dispute proceeding and dismissed without prejudice any claim under that subsection. (Id.) 1 dismissed without prejudice with leave to amend if deficiencies in the claim were cured. 2 (Docs. 1, 17) Plaintiff did not amend his complaint. Plaintiff also requested statutory 3 damages under 15 U.S.C. § 1117(d) (Doc. 1 at 13), but he did not argue for such damages 4 in his motion for summary judgment. (Docs. 86-91) 5 The parties filed cross-motions for summary judgment on Counts One and Two. 6 (Docs. 83, 91, 95, 86, 89, 96) This Court granted Plaintiff’s motion for summary judgment 7 and denied Defendant’s motion for summary judgment on both counts, found Plaintiff’s 8 registration and use of the domain names were not unlawful under the ACPA or the 9 Lanham Act, ordered that the domain names remain registered with Plaintiff, and further 10 ordered that the domains be unlocked or reactivated for Plaintiff’s lawful use. (Doc. 97 at 11 23) 13 Pursuant to the “American Rule,” a litigant’s “attorney’s fees are not ordinarily 14 recoverable in the absence of a statute or enforceable contract providing therefor.” 15 Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717 (1967). The 16 American Rule addresses concerns that “one should not be penalized for merely defending 17 or prosecuting a lawsuit,” and that persons of modest means “might be unjustly 18 discouraged from instituting actions to vindicate their rights if the penalty for losing 19 included the fees of their opponents’ counsel.” Id. at 718. The Supreme Court further 20 recognized that “litigating the question of what constitutes reasonable attorney’s fees 21 would pose substantial burdens for judicial administration.” Id. 22 The Lanham Act permits an award of attorneys’ fees to the prevailing party in 23 “exceptional cases.” 15 U.S.C. § 1117(a). In Octane Fitness, the United States Supreme 24 Court reviewed Section 285 of the Patent Act, providing that “[t]he court in exceptional 25 cases may award reasonable attorney fees to the prevailing party.” Octane Fitness, LLC 26 v. ICON Health & Fitness, Inc., 572 U.S. 545, 553-54 (2014) (citing 35 U.S.C. § 285). 27 The Supreme Court held “that an ‘exceptional’ case is simply one that stands out from 28 others with respect to the substantive strength of a party’s litigating position (considering 1 both the governing law and the facts of the case) or the unreasonable manner in which the 2 case was litigated.” Id. at 554. The Court concluded that a decision on whether to award 3 attorney fees was not formulaic and that a district court should perform a case-by-case 4 assessment, considering the totality of the circumstances. Id. The Supreme Court also 5 instructed that the applicable burden of proof to establish entitlement to attorney fees in 6 patent litigation is a preponderance of the evidence standard, which “allows both parties 7 to share the risk of error in roughly equal fashion.” Id. at 557-58 (citation and quotation 8 marks omitted). The Court cited Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994) for a 9 “nonexclusive list of factors” a court could consider, including “frivolousness, motivation, 10 objective unreasonableness (both in the factual and legal components of the case) and the 11 need in particular circumstances to advance considerations of compensation and 12 deterrence.” Id. at 554 n.6 (internal quotation marks omitted). 13 Prior to the Supreme Court’s decision in Octane, the Ninth Circuit had instructed 14 that under the Lanham Act, cases were exceptional where a plaintiff’s case is groundless, 15 unreasonable, vexatious, or pursued in bad faith, and where the plaintiff has no reasonable 16 or legal basis to believe in success on the merits. See Secalt S.A. v. Wuxi Shenxi Constr. 17 Mach. Co., 668 F.3d 677, 683 (9th Cir. 2012), abrogated by SunEarth, Inc. v. Sun Earth 18 Solar Power Co., 839 F.3d 1179 (9th Cir. 2016) (en banc). Subsequently, the Ninth Circuit 19 explained that the Supreme Court in “Octane Fitness and Highmark[Inc. v. Allcare Health 20 Mgmt. Sys., Inc., 572 U.S. 559 (2014)] have altered the analysis of fee applications under 21 the Lanham Act.” SunEarth, 839 F.3d at 1180-81. Although Octane addressed attorney 22 fees provisions in the Patent Act and SunEarth considered attorney fees provisions under 23 the Lanham Act, the “fee-shifting provisions in both acts are parallel and identical” and 24 courts “rely on an interpretation of the fee-shifting provision in one Act to guide our 25 interpretation of the parallel provision in the other.” Id. at 1180 (citation and internal 26 quotation marks omitted). The Ninth Circuit indicated that district courts should exercise 27 equitable discretion and consider the nonexclusive Fogerty factors. Id. (quoting Octane 28 Fitness, LLC, 572 U.S. at 1756 n.6). 2 A. The Parties’ Arguments 3 1. Plaintiff’s arguments 4 Plaintiff argues this case qualifies as “exceptional” under the Octane standard 5 because the facts presented here and in AirFX are closely similar and the District of Arizona 6 in AirFX found that case was exceptional and awarded fees even under the stricter, pre- 7 Octane standard. (Doc. 115 at 7, citing AirFX.com v. AirFX, LLC, No. CV 11-01064-PHX- 8 FJM, 2013 WL 857976, at *1 (D. Ariz. Mar. 7, 2013) (citations and internal quotation 9 marks omitted)). Plaintiff further contends that Defendant’s arguments were objectively 10 unreasonable. (Id. at 10-19) Moreover, Plaintiff asserts that applying the post-Octane 11 standard of a preponderance of the evidence rather than the pre-Octane clear and 12 convincing standard used by the AirFX court to decide essentially identical facts as those 13 presented here should result in this Court’s finding that this case is exceptional. (Id. at 9- 14 10) 15 Plaintiff states that Defendant was aware prior to filing its WIPO complaint that the 16 domain name
27 4 The docket in AirFX also indicates that Mr. Randazza cited GoPets in support of the plaintiff’s argument that the defendant’s counterclaim asserting the plaintiff violated the 28 ACPA failed as a matter of law. AIRFX.com et al. v. AirFX LLC, No. 2:11-cv-01064-FJM, Doc. 33 at 4-7 (D. Ariz. Nov. 22, 2011). 1 Plaintiff enumerates additional instances where he alleges Defendant’s positions in 2 this case were inconsistent with facts in the record, which Plaintiff argues Defendant knew 3 or could readily have discovered, including: (1) Defendant’s argument that Plaintiff had 4 placed advertising on at least one of the disputed domains; (2) Defendant’s attributing to 5 Plaintiff information on the previous owner’s parking pages associated with 6
23 courts of appeals, and even lower courts of other circuits, may decline to 24 follow the rule we announce—and often do. This ability to develop different interpretations of the law among the circuits is considered a strength of our 25 system. It allows experimentation with different approaches to the same 26 legal problem, so that when the Supreme Court eventually reviews the issue it has the benefit of “percolation” within the lower courts. 27 Id. at 1173. 28 1 In Massanari, the Ninth Circuit instructed that a published, precedential opinion 2 “must not only consider the facts of the immediate case, but must also envision the 3 countless permutations of facts that might arise in the universe of future cases.” Id. at 1176. 4 Here, Defendant claims it was “free to attempt to distinguish GoPets on the basis that 5 [Plaintiff’s] was a re-registration by a third party.” (Doc. 116 at 15) However, as the AirFX 6 court concluded, GoPets did not limit its holding to parties affiliated with the original 7 registrant of a domain name. 8 In its August 2012 order on summary judgment, the AirFX court addressed the 9 defendant’s argument that the Ninth Circuit’s reasoning in GoPets could be distinguished 10 because the domain name owner had transferred the domain name to an entity the owner 11 co-owned, whereas the individual plaintiff in AirFX had purchased the domain name at 12 issue from a third party unrelated to the plaintiff. The court concluded that: 13 GoPets did not distinguish between transfers of a domain name to related 14 parties and other kinds of domain name transfers. To the contrary, GoPets broadly reasoned that if an original owner’s rights associated with a domain 15 name were lost upon transfer to “another owner,” the rights to many domain 16 names would become “effectively inalienable,” a result the intention of which was not reflected in either the structure or the text of the ACPA. 17 [GoPets, 657 F.3d] at 1031–32. 18 AirFX.com v. AirFX LLC, No. 2:11-cv-01064-FJM, 2012 WL 3638721, at *4 (D. Ariz. 19 Aug. 4, 2012). 20 This Court agrees with District Judge Martone’s conclusion in AirFX. It is plain 21 that the Ninth Circuit did not intend for its holding in GoPets to apply only where an initial 22 registrant transfers a domain name to an affiliated party and that the holding in GoPets 23 would not extend to instances where the registrant transfers the domain name to an 24 unrelated third party. The Ninth circuit explained: 25 The words “registration” and “register” are not defined in ACPA. It is 26 obvious that, under any reasonable definition, the initial contract with the registrar constitutes a “registration” under ACPA. It is less obvious which 27 later actions, if any, are also “registrations.” After registering, a registrant 28 can take a variety of actions that modify the registration. For instance, the registrant can update the registration if her contact or billing information 1 changes. She can switch to “private” registration, where a third party’s name is substituted for hers in the public databases of domain registrants. She can 2 switch between registrars, but leave her contact and billing information 3 unchanged. A registrant can change the name of the registrant without changing who pays for the domain, or a registrant can transfer both the 4 domain and payment responsibilities to someone else. Even if the registrant 5 does none of these things, she must still renew the registration periodically. All of these actions could conceivably be described as “registrations” within 6 the meaning of § 1125(d)(1). 7 GoPets, 657 F.3d at 1030-31. As noted, the Ninth Circuit recognized that a registrant of a 8 domain name could transfer the domain to “someone else.” The court then assessed the 9 transfer of a registered domain name under property right principles and concluded that it 10 could: 11
12 see no basis in ACPA to conclude that a right that belongs to an initial 13 registrant of a currently registered domain name is lost when that name is transferred to another owner. The general rule is that a property owner may 14 sell all of the rights he holds in property. GoPets Ltd.’s proposed rule would make rights to many domain names effectively inalienable, whether the 15 alienation is by gift, inheritance, sale, or other form of transfer. Nothing in 16 the text or structure of the statute indicates that Congress intended that rights in domain names should be inalienable. 17 18 Id. at 1031-32. The Ninth Circuit’s discussion of transfers of a domain name does not 19 support Defendant’s argument that the Ninth Circuit intended to limit such transfers only 20 to a party affiliated with the original registrant. And, as Defendant observes, the Ninth 21 Circuit has not altered its analysis of re-registration since it published GoPets. (Doc. 116 22 at 14) Defendant does not claim that intervening statutes or Supreme Court opinions have 23 created clearly irreconcilable conflicts with GoPets. 24 Further, Defendant’s other arguments asserted to establish the reasonability of its 25 defense do not overcome the obstacle posed by the Ninth Circuit’s ruling in GoPets. 26 Defendant asserts that its defense was reasonable because it held valid trademarks, did not 27 bring any counterclaims, and was merely defending its rights. (Doc. 116 at 9-10) 28 However, the fact that Defendant held valid trademarks is a required element to a claim 1 under the ACPA and does not provide a basis for Defendant’s argument that his litigation 2 of this case was reasonable given the law in this circuit. Defendant further contends its 3 litigation was reasonable because it prevailed in its case before WIPO. This circumstance 4 may support a parties’ argument for litigating a case in federal court under other 5 circumstances, but because a WIPO panelist’s decision is entitled to no deference in 6 deciding a claim pursuant to 15 U.S.C. § 1114(2)(D)(v), Barcelona.com, Inc. v. 7 Excelentisimo Ayuntamiento De Barcelona, 330 F.3d 617, 626 (4th Cir. 2003), Defendant’s 8 success in non-binding arbitration with WIPO also does not overcome Defendant’s 9 problem with the law of the circuit established in GoPets.6 10 Defendant further argues that its litigation in this matter was reasonable because it 11 argued that the phrase “under this chapter” in § 1114(2)(D)(2) refers to the Lanham Act as 12 a whole rather than only to the ACPA. (Doc. 116 at 12-13) Defendant concludes that 13 although this Court rejected its argument, the fact that this Court analyzed and discussed 14 the issue establishes that Defendant’s defense was reasonable. (Id. at 13) In Defendant’s 15 motion for summary judgment, it contended that if the phrase were limited to apply only 16 to the ACPA, a cybersquatter acting in bad faith with a claim for RDNH could gain control 17 of an infringing domain name despite having violated the Lanham Act. (Doc. 83 at 17) 18 However, the evidence in this case clearly does not support such a circumstance even if 19 this Court had agreed with Defendant’s position. 20 In its March 11, 2020, order on cross-motions for summary judgment, this Court 21 found there was no evidence of Plaintiff’s unlawful use of the disputed domain names or 22 of bad faith on Plaintiff’s part by registering the domain names. (Doc. 97 at 17) This Court 23 further found no evidentiary support for a finding that Plaintiff obtained the domain names 24 intending to sell them to Defendant, that Plaintiff had any plan to profit by diverting 25 potential customers from Defendant’s websites to Plaintiff’s websites, or that Plaintiff was 26 aware of Defendant when he acquired the domain names. (Id. at 17-19) Similarly, this
27 6 The Fourth Circuit further observed that “because a UDRP decision is susceptible of being grounded on principles foreign or hostile to American law, the ACPA authorizes 28 reversing a[n arbitration] panel decision if such a result is called for by application of the Lanham Act.” Barcelona.com, Inc., 330 F.3d at 62. 1 Court found no evidence that Plaintiff possessed control over content placed on the parking 2 pages holding the domain names or had any intent to divert consumers from the parking 3 pages for commercial gain. (Id. at 20) Moreover, this Court concluded that under the 4 undisputed material facts, Plaintiff did not act in bad faith and qualified for the safe harbor 5 under the ACPA. (Id. at 17-20) Given these findings based on the evidence, Defendant’s 6 arguments concerning both re-registration of the domain names and application of the 7 phrase “under this chapter” were unreasonable. 8 D. Defendant’s litigation under the totality of the circumstances in this case 9 was not reasonable in light of GoPets; this case is exceptional for purposes of an award 10 of attorney fees under § 1117(a) 11 Defendant’s defense was premised on its argument that Plaintiff’s registration was 12 not lawful pursuant to 15 U.S.C. § 1114(2)(D)(v), that the Ninth Circuit’s reasoning and 13 decision in GoPets had been rejected by other federal courts, and that even if GoPets was 14 the correct application of law, Defendant’s case was distinguishable on the facts. As is 15 discussed above, however, the published decision in GoPets is the precedential law in the 16 Ninth Circuit. Massanari, 266 F.3d at 1169. As is further addressed above, the GoPets 17 opinion does not support Defendant’s attempts to escape its reach based on the facts 18 presented in this case. Accordingly, this Court finds that Defendant’s defense was without 19 merit and this case is exceptional under Octane Fitness. 20 This Court does not find that Defendant pursued its defense with improper 21 motivation or that the facts presented support a finding that fees are warranted to advance 22 policies of compensation or deterrence. See Octane Fitness, LLC, 572 U.S. at 1756 n.6. 23 Instead, as the Court concluded in AirFX on closely comparable facts, here “[n]either the 24 factual basis for [the Court’s] conclusion, nor the law compelling it, were genuinely subject 25 to dispute.” 2013 WL 857976 at *2. See also Dropbox, Inc. v. Thru Inc., 728 Fed.Appx. 26 717, 719 (9th Cir. 2018) (holding the district court did not abuse its discretion in awarding 27 fees under § 1117(a) in part based on a finding that the defendant’s counterclaims were 28 “wholly lacking in merit”); Ketab Corp. v. Mesriani Assocs., P.C., 734 Fed.Appx. 401, 1 411-12 (9th Cir. 2018) (affirming district court’s award of § 1117(a) attorneys’ fees after 2 finding the plaintiff’s arguments were “groundless, frivolous, and unreasonable[.]”); 3 Amusement Art, LLC v. Life is Beautiful, LLC, 768 Fed.Appx. 683, 687 (9th Cir. 2019) 4 (holding the defendant was entitled to attorneys’ fees on Lanham Act claims where plaintiff 5 fraudulently obtained trademark registrations and because trademark claims were weak). 6 In the exercise of equitable discretion, considering the preponderance of the 7 evidence standard, and under the totality of circumstances, this Court finds that this case 8 “stands out from others” and is exceptional such that § 1117(a) attorneys’ fees are 9 warranted. 10 E. Plaintiff’s Request for Reasonable Attorney Fees is Reduced to Account 11 for Unsuccessful Claims in the Complaint 12 Plaintiff requests attorneys’ fees totaling $243,991.50. (Doc. 115 at 4) As is 13 detailed above, Defendant argues Plaintiff is not entitled to an award of attorneys’ fees 14 because this case is not exceptional. However, Defendant states it does not contest the 15 hourly rates claimed by Plaintiff’s counsel and does not specifically object to the hours 16 claimed other than to state that Plaintiff has made “no attempt to cull out time spent on the 17 3 of 5 claims on which [Defendant] was successful.” (Doc. 116 at 8 n.1) 18 The Lanham Act permits an award of “reasonable” attorneys’ fees to “the prevailing 19 party” in an “exceptional case.” 15 U.S.C. § 1117(a). This Court finds that Plaintiff is the 20 prevailing party. A party is a prevailing party for purposes of an attorneys’ fee award under 21 § 1117(a) if it ‘“achieved a material alteration in the legal relationship of the parties that is 22 judicially sanctioned.’” Fifty-Six Hope Road Music, Ltd. v. A.V.E.L.A., Inc., 778 F.3d 23 1059, 1078 (9th Cir. 2015) (quoting Klamath Siskiyou Wildlands Ctr. v. U.S. Bureau of 24 Land Mang., 589 F.3d 1027, 1030 (9th Cir. 2009) (internal quotation marks omitted)). 25 ‘“The material alteration in the legal relationship of the parties must be relief that the 26 would-be prevailing party sought.’” Id. The Ninth Circuit has further recognized that a 27 “party need not succeed in all of its claims to be the prevailing party.” Id. (citing San Diego 28 Police Officers’ Ass’n v. San Diego City Emps.’ Ret. Sys., 568 F.3d 725, 741 (9th Cir. 1 2009). Here, because this Court found Plaintiff’s registration of the disputed domain names 2 was not unlawful under the ACPA or the Lanham Act and ordered that the domain names 3 remain registered to Plaintiff for his lawful use, Plaintiff obtained “a material alteration in 4 the legal relationship of the parties that is judicially sanctioned” and he is the prevailing 5 party. 6 Although Defendant does not dispute that Plaintiff is the prevailing party for 7 purposes of attorney fees, it notes that Plaintiff did not prevail on all his claims. (Doc. 116 8 at 11-12) Defendant accurately indicates that its motion to dismiss Plaintiff’s claims for 9 fraud pursuant to § 1114(2)(D)(iv) and for tortious interference was granted and that 10 Plaintiff did not pursue his claim for statutory damages under 15 U.S.C. § 1117(d) in his 11 October 9, 2019, motion for summary judgment. (Id.) In his complaint, Plaintiff requested 12 statutory damages pursuant to 15 U.S.C. § 1117(d) in an amount of between $1,000 and 13 $100,000 per domain name because his action involved the Defendant’s argument that 14 Plaintiff had violated 15 U.S.C. § 1125(d)(1). (Doc. 1 at 13) However, Plaintiff did not 15 seek summary judgment on his claim for § 1117(d) damages. 16 A court determines a reasonable attorneys’ fee award by reference to the lodestar 17 calculated by multiplying the number of hours reasonably expended on litigation times a 18 reasonable hourly rate. Jordan v. Multnomah Cnty., 815 F.2d 1258, 1262 (9th Cir. 1987) 19 (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). To determine a reasonable 20 number of hours, the court reviews the record to assess whether the hours claimed by the 21 applicant are adequately documented and whether any of the time claimed was 22 unnecessary, duplicative, or excessive. Chalmers v. City of Los Angeles, 796 F.2d 1205, 23 1210 (9th Cir. 1986). In considering whether hourly rates are reasonable, a court looks to 24 the prevailing rate in the community for similar work performed by attorneys of 25 comparable skill, experience, and reputation. Id. at 1210-11. The party seeking fees bears 26 the burden of establishing entitlement to fees and submitting supporting evidence. 27 Hensley, 461 U.S. at 433, 437. A court may reduce an award based on inadequate 28 documentation of hours or rates requested. Id. at 433. 1 Plaintiff was represented by the firm of Schmeiser, Olsen & Watts, LLP of Mesa, 2 Arizona (“SOW”), and by John Berryhill, a Pennsylvania attorney appearing pro hac vice. 3 In his affidavit, Jeffrey W. Johnson, an of counsel attorney with SOW, attests he recorded 4 522.2 hours on this matter and billed at hourly rates of $340 and $390. (Doc. 115-2 at 3, 5 5) Mr. Johnson further states that: Sean K. Enos, Senior Partner, recorded 11.6 hours on 6 the case at hourly rates of $475 and $520; Albert L. Schmeiser, Managing Partner, recorded 7 2.5 hours at hourly rates of $525 and $575; associate attorney Karl Webster recorded 22.4 8 hours at an hourly rate of $200; and Mr. Berryhill recorded 27 hours at an hourly rate of 9 $350. (Id.) Mr. Johnson declares that paralegals with SOW recorded 61 hours at an 10 average hourly rate of $144.30. (Id. at 6) Mr. Johnson explains that all attorneys working 11 on this case practice in the area of intellectual property and that these attorneys have 12 practiced intellectual property law for between 14 and 21 years, with the exception of Mr. 13 Webster, who was a first-year associate at the time of the work he performed for Plaintiff. 14 (Id. at 3-4) Mr. Johnson avers that the rates billed in this matter are reasonable in the 15 Phoenix, Arizona legal market and cites to a national survey of billing rates by intellectual 16 property lawyers in 2016. (Id. at 6-7) 17 This Court concludes that the hourly rates billed in this matter are reasonable given 18 the respective attorneys’ specialization and experience. See BoxNic Anstalt v. Gallerie 19 degli Uffizi, No. CV-18-1263-PHX-DGC, 2020 WL 2991561, at *2 (D. Ariz. June 4, 2020) 20 (concluding that hourly rates of $695 to $725 for an experienced partner practicing in 21 intellectual property and of $520 to $575 for a senior associate were reasonable, and further 22 concluding that hourly rates of $250 for associate attorneys and of $150 for paralegals were 23 reasonable in the Phoenix, Arizona legal market); Kaufman v. Warner Bros. Entm’t Inc., 24 No. CV-16-02248-PHX-JAT, 2019 WL 2084460, at *12 (D. Ariz. May 13, 2019) (an 25 hourly fee of law firm partner with over three decades of experience in intellectual property 26 actions ranging between $552.00 to $715.00 was reasonable); Jackson v. Wells Fargo 27 Bank, N.A., No. CV-13-00617-PHX-SPL, 2015 WL 13567069 at *2 (D. Ariz. Oct. 23, 28 2015) (“The best indicator of a reasonable hourly rate for a fee-paying client is the rate 1 charged by the lawyer to the client.”). 2 Moreover, Mr. Johnson’s affidavit (Doc. 115-2) and time sheets (Doc. 115-3) 3 provide sufficient detail to permit the Court to determine that the substantial amount of 4 time spent on this case was reasonable. This Court has carefully reviewed Plaintiff’s 5 counsel’s time records which cover the period between March 2017 and November 2019. 6 The time records detail significant time devoted to discovery (Doc. 115-3 at 29-39, 41-43, 7 46-47, 50-51, 54-55, 58-61, 63-66, 68, 70); preparation for and participation in a settlement 8 conference and other settlement negotiations (Id. at 10, 46-47, 70-71); and preparing 9 Plaintiff’s motion for summary judgment and extensive supporting documents as well as 10 responding to Defendant’s motion for summary judgment (Id. at 65-66, 70-71, 73-86). 11 In setting a reasonable fee, a court should apportion fees between claims on which 12 the successful party prevailed and claims on which the party did not prevail. Gracie v. 13 Gracie, 217 F.3d 1060, 1071 (9th Cir. 2000). As noted, in an order dated February 12, 14 2018, the Court dismissed without prejudice Plaintiff’s claims for tortious interference and 15 for fraud pursuant to § 1114(2)(D)(iv). (Doc. 17) Accordingly, attorneys’ fees attributable 16 to these claims should be excluded from an award under § 1117(a). 17 Plaintiff’s counsel’s billing records indicate that time recorded by counsel and 18 paralegals associated with the complaint and Plaintiff’s response to Defendant’s motion to 19 dismiss claims totals $12,065.00. (Doc. 115-3 at 2, 4, 8, 14, 16, 18, 19) Because two of 20 Plaintiff’s five claims for relief were dismissed (Doc. 17), this Court will exclude forty 21 percent of this total, or $4,826.00, from Plaintiff’s requested fees. 22 Plaintiff also declined to assert his claim for statutory damaged under 15 U.S.C. § 23 1117(d) in his motion for summary judgment filed in October 2019. (Doc. 86) Section 24 1117(d) provides that “[i]n a case involving a violation of section 1125(d)(1),” the plaintiff 25 may elect statutory damages instead of actual damages and profits and seek “an award of 26 statutory damages in the amount of not less than $1,000 and not more than $100,000 per 27 domain name, as the court considers just.” 15 U.S.C. § 1117(d). Here, Plaintiff initially 28 sought declaratory relief that his registration of the disputed domain names did not violate || Defendant’s rights under § 1125(d)(1). However, aside from alleging Plaintiff's right to 2|| statutory damages pursuant to § 1117(d) in the complaint, there is no record that Plaintiffs || counsel devoted any time specifically to this claim for damages between filing □□□□□□□□□□□ 4|| response to Defendant’s motion to dismiss and when Plaintiff filed his motion for summary 5 || judgment, which did not argue for statutory damages. Accordingly, this Court will deduct 6 || an additional twenty percent of attorneys’ fees associated with the complaint and Plaintiff’ s response to Defendant’s motion to dismiss, or an additional $2,413.00. Accordingly, 8 || attorneys’ fees that will be excluded as attributable to Plaintiff's claims that were dismissed 9|| or not asserted on summary judgment total $7,239.00. Subtracting excluded attorneys’ 10|| fees of $7,239.00 from Plaintiffs claimed fees of $243,991.50 leaves a remainder of 11]| $236,752.50. IV. CONCLUSION 13 For the reasons set forth above, this Court will grant Plaintiff's motion and award attorneys’ fees of $ 236,752.50. 15 Accordingly, 16 IT IS ORDERED granting Plaintiffs Motion for Attorneys’ Fees as set forth □□ herein. (Doc. 115) 18 IT IS FURTHER ORDERED awarding Plaintiff $ 236,752.50 in attorneys’ fees. 19 Dated this 25th day of January, 2021. 20 2p 21 Ud bard UW Zin, 9 Honorable Deborah M. Fine United States Magistrate Judge 23 24 25 26 27 28
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Dent v. Lotto Sport Italia S.p.A. (Dent v. Lotto Sport Italia S.p.A.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.