Fender Musical Instruments v. Kelton Swade

• Court: Court of Appeals for the Sixth Circuit
• Decided: April 18, 2019
• Docket: 17-6394
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION File Name: 19a0198n.06

No. 17-6394

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FENDER MUSICAL INSTRUMENTS ) FILED Apr 18, 2019 CORPORATION, ) DEBORAH S. HUNT, Clerk ) Plaintiff - Appellee, ) ) ON APPEAL FROM THE v. ) UNITED STATES DISTRICT ) COURT FOR THE MIDDLE KELTON SWADE, Individually and Doing Business ) DISTRICT OF TENNESSEE as Kelton Swade Guitars; KELTON SWADE, LLC, ) ) Defendants - Appellants. ) )

BEFORE: BATCHELDER, GIBBONS and ROGERS, Circuit Judges.

JULIA SMITH GIBBONS, Circuit Judge. Plaintiff-Appellee Fender Musical

Instruments Corporation (“Fender”) manufactures guitars and related equipment. The designs of

Fender’s headstocks—the top (or “head”) part of the guitar that houses the pegs for the guitar

strings—are trademarked. Defendant-Appellant Kelton Swade runs a business manufacturing

replica vintage guitars in Nashville, Tennessee. Fender filed a trademark infringement action

against Swade on October 12, 2013 in the United States District Court for the Middle District of

Tennessee1 claiming that Swade infringed on certain of Fender’s headstock design trademarks in

violation of the Lanham Act and other state and federal laws. The parties later reached a settlement

agreement in the dispute. The district court entered a Final Judgment and Permanent Injunction

1 The complaint was first filed in February 2013 in the United States District Court for the District of Arizona, then venue was transferred to the Middle District of Tennessee. Case No. 17-6394, Fender v. Swade

Order of Consent on November 12, 2014 reflecting the stipulated findings of fact and conclusions

of law.

Fender filed a motion on August 24, 2016 asking the district court to hold Swade in

contempt and impose sanctions upon him for violating the permanent injunction. After holding

two hearings, the district court granted Fender’s motion on April 7, 2017.

Following the April 7 contempt order, Swade filed two motions in the district court: a

Motion for Reconsideration on September 16, 2017 and a Motion for New Trial on November 24,

2017. The district court denied both of Swade’s motions on the grounds that (1) no trial was held

so the motion for a new trial was irrelevant; and (2) the motion for reconsideration was not timely

filed and even if it had been, it would have been meritless. Between the filings of Swade’s two

motions, the district court granted Fender’s motion for attorneys’ fees on October 30, 2017.

Finally, on November 28, 2017, Swade filed a notice of appeal to this court appealing the contempt

order and the award of attorneys’ fees. The notice of appeal was thus filed approximately seven

months after the contempt order, but within thirty days of the fee order.

Sixth Circuit and Supreme Court precedent compels the conclusion that we do not have

appellate jurisdiction over the contempt order because Swade did not timely appeal the contempt

order. Therefore, we dismiss Swade’s appeal of the district court’s decision finding Swade in

contempt and do not assess the merits of his appeal as to the contempt order. We do, however,

have appellate jurisdiction over the fee order because Swade timely appealed the fee order. We

assess his appeal as to the attorneys’ fees on the merits. Because the district court did not abuse

its discretion in granting Fender’s motion for attorneys’ fees, we affirm the district court’s award.

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I.

We independently determine our own jurisdiction. United States v. Manley, 560 F. App’x

434, 436 (6th Cir. 2013); United States v. Brown, 276 F.3d 211, 214 (6th Cir. 2002). We review

a district court’s award of attorneys’ fees for abuse of discretion. See, e.g. Eagles, Ltd. v. Am.

Eagle Found., 356 F.3d 724, 728 (6th Cir. 2004). The award of attorneys’ fees for violations of

the Lanham Act is reviewed in the same way as any other discretionary grant of attorneys’ fees.

Gnesys, Inc. v. Greene, 437 F.3d 482, 488 (6th Cir. 2005). “This Circuit ‘has defined an abuse of

discretion as a definite and firm conviction that the trial court committed a clear error of

judgment.’” Id. (quoting Eagles, 356 F.3d at 726).

II.

A timely notice of appeal is filed with the district court “within 30 days after entry of the

judgment or order appealed from.” Fed. R. App. P. 4(a)(1)(A); see also 28 U.S.C. § 2107(a) (“[N]o

appeal shall bring any judgment, order or decree in an action . . . before a court of appeals for

review unless notice of appeal is filed, within thirty days after the entry of such judgment, order

or decree.”) The judgment must be a “final decision” of the lower court. 28 U.S.C. § 1291. Here,

the contempt order became “final” upon its issuance and simultaneous entry in April 2017, but

Swade did not appeal it until November 2017—approximately seven months later. Because the

timely filing of an appeal is mandatory and jurisdictional, we lack jurisdiction to hear Swade’s

appeal of the contempt order. Bowles v. Russell, 551 U.S. 205, 212–13 (2007).

Here, appellate jurisdiction turns on whether the April 7 contempt order was a final order

that triggered the thirty-day deadline for filing a notice of appeal under 28 U.S.C. § 2107(a) and

Fed. R. App. P. 4(a)(1)(A).2 Swade contends that the contempt order was not final when it was

2 Fed. R. App. P. 4(a)(4)(A) provides that the time for filing an appeal may be extended, starting from the entry of a district court order disposing of certain motions. In relevant part, these motions include a Rule 59 motion for a new

3 Case No. 17-6394, Fender v. Swade

issued on April 7 because the district court did not grant the revised fee petition until October 30,

2017. Therefore, Swade implies, the November 28, 2017 notice of appeal was timely filed.

Supreme Court and Sixth Circuit precedent directly contradict Swade’s argument that the

April 7 contempt order was not final. The Supreme Court has expressly held that a district court’s

decision on the merits is final—and thus appealable when entered—even when a claim for

attorneys’ fees has not yet been adjudicated. Budinich v. Becton Dickinson & Co., 486 U.S. 196,

202–03 (1988). The Sixth Circuit applied Budinich’s “traditional,” “bright-line rule,” id., in

holding that “even when a statute provides that attorney’s fees are part of the damages claim, an

award of compensatory damages effectively renders the decision final.” Gnesys, 437 F.3d at 487.

In Budinich, the petitioner prevailed on his claims at trial but, unhappy with the amount of

the jury award, made separate motions for a new trial and for attorneys’ fees. 486 U.S. at 197. On

May 14, 1984, the district court denied his motion for a new trial but determined that Budinich

was entitled to attorneys’ fees. Id. at 197–98. After further briefing to determine the appropriate

amount, the district court issued its final attorneys’ fees order on August 1, 1984. Id. at 198.

Budinich filed a notice of appeal for the denial of his motion for a new trial on August 29, 1984.

Id. He appealed within thirty days of the attorneys’ fee order but approximately four months after

the decision denying his motion for a new trial. Id. The Tenth Circuit dismissed the appeal as to

trial, and a Rule 60 motion for relief “if the motion is filed no later than 28 days after judgment is entered.” Fed. R. App. P. 4(a)(4)(A)(v), (vi) (emphasis added). Swade’s motions were unclear as to the rules he was filing under, so the district court analyzed Swade’s motions under Rules 59 and 60. The district court held that his motion for a new trial, which potentially could be analyzed under Rule 59, was meritless because no trial was ever initially held. The district court analyzed Swade’s motion for reconsideration under Rule 59 (to the extent it could) and Rule 60, and held that the motion was untimely under both rules. Even if the motion for reconsideration is properly categorized under Rule 60, it would still not trigger an extension under Rule 4 because it was not timely filed (the motion for reconsideration was filed more than 4 months after the 28-day deadline required under Rule 60). Therefore, neither the motion for a new trial nor the motion for reconsideration would trigger an extension for filing an appeal under Rule 4.

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all issues other than attorneys’ fees because Budinich missed the jurisdictional deadline for those

issues. Id.

The Supreme Court affirmed, holding in relevant part, “Since the Court of Appeals

properly held petitioner's notice of appeal from the decision on the merits to be untimely, and since

the taking of an appeal within the prescribed time is mandatory and jurisdictional, the Court of

Appeals was without jurisdiction to review the decision on the merits.” Id. at 203 (citations

omitted). The Supreme Court explained that 28 U.S.C. § 1291, which provides that “‘all final

decisions of the district courts’ are appealable to the courts of appeals,” governs the question of

whether a district court’s decision on the merits is final before an order of attorneys’ fees. Id. at

198–99.

The Supreme Court later determined that the Budinich rule also applies when “the

unresolved claim for attorney’s fees is based on a contract rather than, or in addition to, a statute.”

Ray Haluch Gravel Co. v. Cent. Pension Fund of Int'l Union of Operating Eng’rs & Participating

Emp’rs, 571 U.S. 177, 179 (2014). In Ray Haluch, the First Circuit had determined that the appeal

was timely because the district court’s order on the merits was not a final judgment, since it did

not include a decision about attorneys’ fees. Id. at 182. The Supreme Court reversed, holding that

“[w]hether the claim for attorney’s fees is based on a statute, a contract, or both, the pendency of

a ruling on an award for fees and costs does not prevent, as a general rule, the merits judgment

from becoming final for purposes of appeal.” Id. at 179.

In a case similar to the instant matter, we applied the Budinich rule and held that the district

court merits order was a final decision, despite a pending motion for attorneys’ fees. Gnesys,

437 F.3d at 487–88. We therefore found the appeal untimely and dismissed. Id. at 488. In Gnesys,

the parties resolved a dispute over intellectual property through a settlement agreement, which the

5 Case No. 17-6394, Fender v. Swade

district court integrated into a Permanent Injunction and Final Judgment. Id. at 485. The

defendants then breached the agreement, and the district court found them in contempt in

November 2002 and awarded damages to the plaintiffs in August 2003. Id. The district court

entered an order awarding the prevailing party’s fees in July 2004. Id. The defendants appealed

all three orders on August 20, 2004. Id. The Gensys defendants claimed that their appeal was

timely because the August 2003 contempt order was not final until attorneys’ fees were awarded

in July 2004, id. at 485, but we rejected this claim, id. at 487 (“The clear message of Budinich is

to the contrary . . . .”). Accordingly, we dismissed the appeals of the November 2002 contempt

order and the August 2003 damages award. Id. at 488.

As applied here, Budinich, Ray Haluch, and Gnesys establish that the April 7 contempt

order was an immediately appealable final decision on the merits. Therefore, Swade needed to

appeal the contempt order within 30 days of its issuance, pursuant to Federal Rule of Appellate

Procedure 4 and 28 U.S.C. § 2107(a), without waiting for the attorneys’ fees to be decided.

Accordingly, the deadline for a timely appeal was May 7, 2017. Swade, however, did not file a

notice of appeal until November 29, 2017. Because a timely appeal is mandatory and

jurisdictional, we do not have jurisdiction to hear the appeal of the contempt order. Budinich, 486

U.S. at 203; United States v. Christunas, 126 F.3d 765, 768 (6th Cir. 1997) (“Compliance with

[the notice of appeal] rule is a jurisdictional prerequisite which this court can neither waive nor

extend.”). Accordingly, we need not assess his appeal of the contempt order on the merits, and we

dismiss his appeal.

III.

Swade timely filed the notice of appeal within thirty days of the fee order, so we have

jurisdiction to hear the merits of his appeal as to that order. See Fed. R. App. P. 4(a)(1)(A)

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(requiring that timely notice of appeal be filed with the district court “within 30 days after the entry

of judgment or order appealed from.”); 28 U.S.C. § 2107(a) (“no appeal shall bring any judgment,

order or decree in an action . . . before a court of appeals for review unless notice of appeal is filed,

within thirty days after entry of such judgment, order or decree.”).

On appeal, Swade notes that he is appealing the district court’s award of attorneys’ fees,

but he does not explain why the panel should alter the fee award. In short, both the Permanent

Injunction and Settlement Agreement contain provisions for fee-shifting that are triggered if an

enforcement action is successful. The district court’s detailed findings in the contempt order that

Swade violated the Injunction and Agreement fully supported the award of attorneys’ fees. In

addition, the record shows that the district court went through a well-reasoned, multi-step process

of analyzing the proper grant of attorneys’ fees, including lowering the hourly rate granted.

The standard for appeal of attorneys’ fees is abuse of discretion. See, e.g. Eagles, 356 F.3d

at 728. The district court here used the lodestar method to calculate the fees. We conclude the

district court did not abuse its discretion in granting Fender’s motion for attorneys’ fees, so we

affirm the district court’s award of fees.

IV.

For the foregoing reasons, we dismiss Swade’s challenge to the contempt order for lack of

jurisdiction and affirm the district court’s award of attorneys’ fees.