North Atlantic Operating Company, Inc. v. Scott

CourtDistrict Court, E.D. Michigan
DecidedJune 26, 2020
Docket4:16-cv-12076
StatusUnknown

This text of North Atlantic Operating Company, Inc. v. Scott (North Atlantic Operating Company, Inc. v. Scott) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
North Atlantic Operating Company, Inc. v. Scott, (E.D. Mich. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

NORTH ATLANTIC 4:16-CV-12076-TGB OPERATING COMPANY INC.;

NATIONAL TOBACCO COMPANY, L.P., OPINION AND ORDER GRANTING MOTION FOR Plaintiffs, DEFAULT JUDGMENT (ECF NO. 149) AND GRANTING PLAINTIFFS’ ATTORNEYS’ vs. REQUEST FOR FEES AND COSTS (ECF NOS. 156, 157) WALTER C. SCOTT, et al.,

Defendants.

Plaintiffs, the exclusive manufacturers, marketers, and distributors of ZIG-ZAG® cigarette paper products, brought this trademark and copyright infringement action against online sellers of counterfeit versions of their products. ECF No. 1. Some of the online sellers responded to the action and entered into settlements with Plaintiffs that included stipulated permanent injunctions. Others, the Plaintiff moved for default judgment because they failed to respond, which this Court granted. ECF No. 118. I. Default Judgment

Plaintiffs North Atlantic Operating Company, Inc. and National Tobacco Company, L.P (“North Atlantic”) have now filed a Motion for Default Judgment and Related Relief (ECF No. 149), pursuant to Federal Rules of Civil Procedure 55 and 65 and Local Rule 55.2, seeking entry of default against the following non-responding Defendants: (1) Delroy Johnson; (2) eBay Seller Lenkoseller; and (3) Bonanza Seller Lenkoseller.

(“the Johnson Defendants”). Plaintiffs also seek to convert all preliminary injunctions entered against these non-responding defendants into permanent injunctions, pursuant to Fed. R. Civ. P. 65. Having reviewed the papers and proceedings in support of the Motion, including North Atlantic Operating Company’s Brief, Declaration of Lyndsay S. Ott (with Exhibit) (ECF No. 150), and Declaration of John Hood (ECF No. 151), and this Court being fully satisfied that Defendants were effectively served with copies of the Complaint and other case-initiating documents, and all other papers and

proceedings in this action; and good cause being shown; the Court hereby GRANTS Plaintiff’s Motion for Default Judgment. The Court awards statutory damages in the amount of $200,000, jointly and severally under the Lanham Act, as well as reasonable attorneys’ fees and costs, as outlined below in this Order. The Court hereby converts all preliminary injunctions relating to the defaulting Defendants to permanent

injunctions. II. Attorneys’ Fees and Costs Local counsel from Warner Norcross & Judd LLP and outside counsel from Venable LLP have submitted declarations in support of their firms’ requested fees. ECF Nos. 156, 157. For the reasons discussed below, the Court will approve $3,065.58 in costs and fees for Warner Norcross & Judd, LLP. The Court will approve $11,440.41 in costs and fees for Venable LLP.

A. Analysis The first step in determining attorneys’ fees is “multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate.” U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1193 (6th Cir. 1997) (citing Hensley v. Eckerhart, 461 U.S. 424, 433-37 (1983) (noting that “[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate”)). The party requesting the fees has the burden of establishing that they are entitled

to the requested amount. Yellowbook Inc. v. Brandeberry, 708 F.3d 837, 848 (6th Cir. 2013). “The key requirement for an award of attorney’s fees is that the documentation offered in support of the hours charged must be of sufficient detail and probative value to enable the court to determine with a high degree of certainty that such hours were actually and reasonably expended in the prosecution of the litigation.” Inwalle v.

Reliance Med. Prods., Inc., 515 F.3d 531, 553 (6th Cir. 2008). The trial judge must “question the time, expertise, and professional work of [the] lawyer” applying for fees. Earl v. Beaulieu, 620 F.2d 101, 103 (5th Cir. 1980). And, in calculating the appropriate award, “the district court is required to give a clear explanation,” as to its reasoning. Moore v. Freeman, 355 F.3d 558, 566 (6th Cir. 2004). To determine a reasonable hourly rate for attorneys for firms located out-of-state, “courts use as a guideline the prevailing market rate,

which is defined as the rate that lawyers of comparable skill and experience can reasonably expect to command within the venue of the court of record.” Northeast Ohio Coalition for the Homeless v. Husted, 831 F.3d 686, 715 (6th Cir. 2016) (citing Geier v. Sundquist, 372 F.3d 784, 791 (6th Cir. 2004) (emphasis added) (quotation marks omitted)). As such, the Court uses a report produced regularly by the State Bar of Michigan called the “2017 Economics of Law Practice, Attorney Income and Billing Rate Summary Report,” available at https://www.michbar.org/file/pmrc/articles/0000153.pdf.

“The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection.” Fox v. Vice, 563 U.S. 826, 838 (2011). Thus, trial courts “may take into account their overall sense of a suit and may use estimates in calculating and allocating an attorney’s time,” id., and need only provide “a concise but clear explanation” of their

reason for reaching a certain fee award amount. Hensley, 461 U.S. at 437. On September 28, 2018, this Court issued a comprehensive order on Plaintiffs’ prior request for attorney fees and costs, following the default of nine defaulted Defendants. ECF No. 118. Except where stated otherwise, the Court adopts the findings made therein. As an initial matter, the Court notes that in Plaintiff’s prior motion for default judgment, Plaintiffs stated they were moving for an order granting default against nine “groups” of defendants. ECF No. 104, PageID.1824.

Plaintiff, and the Court, proceeded with the understanding that the action contained 21 “groups” of Defendants, and the court would evenly divide Plaintiffs’ attorneys’ fees and costs amongst the 21 groups. In the currently pending motion for default judgment (ECF No. 149) and declarations in support of attorneys’ fees and costs (ECF Nos. 156-157) it is unclear whether Plaintiffs are treating the “Johnson Defendants” (i.e., Delroy Johnson; eBay Seller Lenkoseller; and Bonanza Seller Lenkoseller) as one group of defaulting Defendants or three separate groups. Because Plaintiffs do not state that the Johnson Defendants

should be treated as three separate groups, the Court will treat them as one. The Court will address the reasonableness of the hour calculations and fee requests for each of the two submitting firms in turn. i. Warner Norcross & Judd LLP Fee Request

Lyndsay Ott submitted the declaration in support of attorneys’ fees for the lawyers at Warner Norcross & Judd LLP (“WNJ”) who served as local counsel. ECF No. 156. Ms.

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