Alliance for Good Gov't v. Coal. for Better Gov't

• Decision Date: 19 May 2021
• Docket Number: No. 20-30233,20-30233
• Citation: 998 F.3d 661
• Parties: ALLIANCE FOR GOOD GOVERNMENT, Plaintiff—Appellee, v. COALITION FOR BETTER GOVERNMENT, Defendant—Appellant, Darleen Jacobs, Objecting Party—Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

998 F.3d 661

ALLIANCE FOR GOOD GOVERNMENT, Plaintiff—Appellee,

v.COALITION FOR BETTER GOVERNMENT, Defendant—Appellant,Darleen Jacobs, Objecting Party—Appellant.

No. 20-30233

United States Court of Appeals, Fifth Circuit.

FILED May 19, 2021

Richard T. Sahuc, Gregory D. Latham, Intellectual Property Consulting, L.L.C., New Orleans, LA, for Plaintiff-Appellee.

Donald C. Douglas, Jr., Riess LeMieux, L.L.C., New Orleans, LA, for Defendant-Appellant and Objecting Party-Appellant.

Darleen Jacobs, pro se.

Before Higginbotham, Smith, and Dennis, Circuit Judges.

Patrick E. Higginbotham, Circuit Judge:

Coalition for Better Government and Darleen Jacobs challenge the reasonableness of the district court's award of attorney's fees to Alliance for Good Government for federal trademark infringement under the Lanham Act. Jacobs also argues that she was improperly joined post-judgment. We affirm.

I.

Our two prior opinions detail the relevant background.¹ Briefly, Alliance and Coalition are nonprofit organizations that endorse political candidates in New Orleans. In 2017, Alliance sued Coalition, seeking to enjoin use of its trade name (word mark) and logo (composite mark) for federal trademark infringement under the Lanham Act, state trademark infringement, and unfair trade practices. The district court granted Alliance summary judgment on its federal trademark infringement claim, enjoining Coalition from using both its word and composite marks. Alliance voluntarily dismissed its other claims.

Coalition appealed, and we affirmed the district court's summary judgment but modified its injunction to restrain only Coalition's use of its composite mark.² While the first appeal was pending, Alliance moved for attorney's fees pursuant to the Lanham Act's fee-shifting provision,³ and the district court awarded Alliance $68,237.25 in fees.⁴ Coalition also appealed the fee award. In our second opinion, we concluded that the district court did not abuse its discretion in classifying this case as an exceptional one, warranting reasonable attorney's fees under the Lanham Act.⁵ As Alliance had not prevailed on its word mark claim, it was not entitled to attorney's fees for work related to that claim, or for the claims it voluntarily dismissed.⁶ We remanded, instructing the district court to adjust the fee award to account for claims on which Alliance did not prevail, as best it could in light of our opinion.⁷ We made no reference to and did not prohibit awarding additional fees related to the additional litigation of the fee award.

On remand, the district court instructed Alliance to file a new motion for attorney's fees, separating fees in accordance with our judgment and including any demand for fees related to the appeals "not inconsistent with [our] judgment," which had affirmed the exceptional nature of the case. Alliance argued that its work on the word mark claim was "inextricably intertwined with work" on the composite mark claim, so it was unable to fully disentangle fees related to each claim. Instead, it proposed a 10% across-the-board reduction of fees to estimate for time spent on the word mark claim, and a $1,500 reduction to account for the claims it voluntarily dismissed. Alliance also moved to join Darleen Jacobs, a principal of Coalition, because it had learned during post-judgment discovery that Coalition lacked resources to pay the fee award.

The district court joined Jacobs as a third party to the case, required that Alliance serve her with the court's order, and gave Jacobs two weeks to respond to Alliance's motion. Jacobs opposed Alliance's motion for fees, but the district court ultimately found it appropriate to hold her directly liable. The district court agreed with Alliance's efforts to modify the fee award in accordance with our second opinion, rejected Coalition's objections, and awarded Alliance $148,006.15 in fees.

Both Jacobs and Coalition appealed. Jacobs argues that the district court's order joining her was improper. And both challenge the reasonableness of the district court's fee award.

II.

A.

As the Supreme Court explained in Nelson v. Adams USA, Inc. , a court adding a party post-judgment must afford that party due process.⁸ Such process, as reflected in Federal Rules of Civil Procedure 12 and 15, requires an added party have an opportunity to respond to the claims against him.⁹ We review the district court's decision to join a party for abuse of discretion.¹⁰

The facts here mirror those in Nelson , with key exceptions. In both cases, the prevailing party was awarded attorney's fees and subsequently sought to join an individual in a leadership role within the opposing party entity out of fears the party itself did not have sufficient assets to pay the fee award.¹¹ However, in Nelson , the district court immediately granted the prevailing party's motion, making Nelson a party and subjecting him to the fee award.¹² The Supreme Court held that the district court violated due process because it failed to give Nelson "an opportunity to respond and contest his personal liability for the award after he was made a party and before the entry of judgment against him."¹³ The district court here gave Jacobs two weeks to respond to Alliance's motion for attorney's fees after joining her, and she did so. It was only after considering Jacobs's arguments in opposition that the district court found her liable for the fee award. This procedure met the demands of due process.¹⁴

B.

Jacobs next argues that she is not liable as an individual under the Lanham Act.

The Lanham Act authorizes the award of "reasonable attorney fees to the prevailing party" in "exceptional cases."¹⁵ The text of the provision does not expressly limit the persons who can be held liable for attorney's fees. In interpreting the Patent Act's identically worded fee-shifting provision, the Supreme Court explained that the "text is patently clear. It imposes one and only one constraint on district courts’ discretion to award attorney's fees in patent litigation," which is determining whether the case is exceptional.¹⁶ The Court gave no indication that the provision limited who could be held liable. Indeed, in Nelson , which also concerned attorney's fees under the Patent Act, the Court underscored that its decision to invalidate the manner of Nelson's joinder did "not insulate Nelson from liability."¹⁷

The Federal Circuit in turn has affirmed imposition of fee awards under the Patent Act against individuals who were not party to the underlying litigation when their conduct contributed to the court's decision to award attorney's fees.¹⁸ The decision to do so stems from the fee-shifting provision's purpose of preventing "gross injustice when a party has litigated vexatiously"¹⁹ and the general principle that "[a]n officer is individually liable for any tortious conduct that he committed in connection with his corporate duties."²⁰ Given the similar underlying purpose of the Lanham Act's fee-shifting provision,²¹ we find it reasonable to likewise impose liability for a Lanham Act fee award on a properly-added party responsible for the conduct making a case exceptional.

We affirmed the district court's determination that this case is exceptional because Coalition litigated in an unreasonable manner, including presenting meritless defenses at the summary judgment stage, filing an unsupported laches defense, meritless counterclaim, and a meritless motion to dismiss, and behaving unreasonably during discovery by insisting on proceeding with depositions even after the district court granted summary judgment on Alliance's federal trademark infringement claim and Alliance dismissed its other claims.²² While Jacobs argues she was not responsible for this conduct, she is a principal of Coalition and personally signed the motion for summary judgment, the counterclaim, the motion to dismiss, and Coalition's memorandum insisting on proceeding with depositions after the district court's summary judgment ruling.²³ We find no abuse of discretion in the district court's decision to join Jacobs and hold her directly liable for the fee award.²⁴

III.

Both Appellants argue that the fee award is unreasonable. We review the reasonableness of a fee award under the Lanham Act for abuse of discretion.²⁵

The Appellants raise three challenges to the fee award. They first argue the district court had no authority to award any fees related to the two appeals because only our Court has that authority. The Federal Circuit has interpreted the Patent Act's fee-shifting provision as allowing district courts to "award[ ] fees for the entire case, including any subsequent appeals" because neither the text "nor its legislative history distinguishes between awarding attorney fees in the district court and in the appellate court."²⁶ We again find it appropriate to extend the interpretation of the Patent Act fee-shifting provision to our interpretation of the Lanham Act and find that district courts do have the authority to award appellate fees under the Lanham Act.

The district court's decision to award fees for further litigation of the attorney's fee award did not contravene the mandate rule. On remand, a lower court "must implement both the letter and spirit of [our] mandate, and may not disregard [our] explicit directives."²⁷ The mandate must be "construed in the light of [our] opinion."²⁸ In Alliance II , we "remand[ed] for the district court to assess the amount of the award of fees in light of this opinion."²⁹ Notably, our opinion itself made two conclusions: first, we affirmed the exceptional nature of the case allowing Alliance attorney's fees, and second, we instructed the district court to adjust the award to exclude fees related to Alliance's work on the word mark claim and claims it voluntarily dismissed.³⁰ But we did not address whether Alliance was entitled to further attorney's fees for continued litigation of the fee award either expressly or implicitly. As such, when the district...