Chrome Hearts, LLC v. Talulah

• Decision Date: 25 February 2013
• Docket Number: Case No. 2:12-cv-00280-MMD-NJK
• Parties: CHROME HEARTS, LLC, a Delaware limited liability company, Plaintiff, v. BOUTIQUE TALULAH, an unknown business entity; and DOES 1-10, inclusive, Defendant.
• Court: U.S. District Court — District of Nevada

CHROME HEARTS, LLC, a Delaware limited liability company, Plaintiff,

v. BOUTIQUE TALULAH, an unknown business entity;and DOES 1-10, inclusive, Defendant.

Case No. 2:12-cv-00280-MMD-NJK

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

Dated: February 25, 2013

ORDER

(Def.'s Motion to Reconsider Court Order -

dkt. no. 24)

(Plaintiff's Motion for Attorneys Fees

- dkt. no. 26)

I. SUMMARY

Before the Court is Defendant's Motion to Reconsider the Court's September 28, 2012, Order. (Dkt. no. 24.) For reasons discussed below, Defendant's Motion is denied. Plaintiff's Motion for Additional Attorney Fees (dkt. no. 26) is also denied.

II. BACKGROUND

On February 22, 2012, Plaintiff Chrome Hearts, LLC ("Chrome Hearts") filed its original Complaint (dkt. no. 1) against Defendant Boutique Talulah, alleging trademark infringement, trademark dilution, unfair competition, and copyright infringement. (Dkt. no. 1 at 1.) Plaintiff served Natasha Smith, a manager at Boutique Talulah, by personal delivery on March 9, 2012, and by mail on March 12, 2012. (Dkt. no. 6.) On April 19, 2012, defense counsel notified Plaintiff that it had not served Defendant in accordancewith Nevada law (dkt. no. 17 at 9), asserting that Plaintiff had not sued a legal entity and had only served Defendant by mail.¹ (Dkt. no 17 at 2.)

On May 7, 2012, Plaintiff filed its First Amended Complaint ("FAC") (dkt. no. 9), naming XRTZ, Inc., the legal entity doing business as Boutique Talulah, as Defendant. (Dkt. no. 9 at 2.) Plaintiff served the FAC and Summons on XRTZ's Registered Agent, United States Corporation Agents, by personal service on May 9, 2012, and by mail on March 17, 2012. (Dkt. no. 13 at 2, 3.) Accordingly, Defendant had until May 30, 2012, to file an answer or responsive pleading. Defendant did not file an answer or responsive pleading.

On June 5, 2012, Plaintiff requested entry of default (dkt. no. 15), which the Clerk's Office entered on June 6, 2012 (dkt. no. 16). On June 7, 2012, Defendant filed its Motion to Set Aside and Vacate Entry of Default. (Dkt. no. 17.) That same day, Plaintiff emailed Defendant offering to stipulate to setting aside the default provided that Defendant file an answer immediately upon lifting the default. (Dkt. no. 19 at 31.) Defendant did not respond to Plaintiff's offer. (Dkt. no. 18 at 2.)

On September 28, 2012, this Court granted Defendant's Motion to Set Aside and Vacate Entry of Default on the condition that Defendant pay Plaintiff's attorneys' fees of $1,950. (Dkt. no. 22) On October 15, 2012, Defendant filed this Motion to Reconsider, asking the court to reconsider the portion of the Order entered on September 28, 2012, granting attorneys' fees to Plaintiff. (Dkt. no. 24.)

III. DISCUSSION

A. Legal Standard

Although not mentioned in the Federal Rules of Civil Procedure, motions for reconsideration may be brought under Rules 59(e)² and 60(b). Rule 59(e) provides that any motion to alter or amend a judgment shall be filed no later than 28 days after entry of the judgment. The Ninth Circuit has held that a motion for reconsideration should not be granted "absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law." Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (quoting 389 Orange Street Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)).

Under Rule 60(b), a court may relieve a party from a final judgment, order or proceeding only in the following circumstances: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) the judgment is void; (5) the judgment has been satisfied; or (6) any other reason justifying relief from the judgment. Stewart v. Dupnik, 243 F.3d 549, 549 (9th Cir. 2000). See also De Saracho v. Custom Food Mach., Inc., 206 F.3d 874, 880 (9th Cir. 2000) (noting that the district court's denial of a Rule 60(b) motion is reviewed for an abuse of discretion).

A motion for reconsideration must set forth the following: (1) some valid reason why the court should revisit its prior order and (2) facts or law of a "strongly convincing nature" in support of reversing the prior decision. Frasure v. United States, 256 F. Supp. 2d 1180, 1183 (D. Nev. 2003). On the other hand, a motion for reconsideration is properly denied when the movant fails to establish any reason justifying relief. Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir. 1985) (holding that a district court properly denied a motion for reconsideration in which the plaintiff presented no arguments that were not already raised in his original motion)). Motions forreconsideration are not "the proper vehicles for rehashing old arguments," Resolution Trust Corp. v. Holmes, 846 F.Supp. 1310, 1316 (S.D. Tex. 1994) (footnotes omitted), and are not "intended to give an unhappy litigant one additional chance to sway the judge." Durkin v. Taylor, 444 F.Supp. 879, 889 (E.D. Va. 1977).

B. Analysis

Here, Defendant does not present new evidence (dkt. no. 2 at 2), but argues the Court committed clear error in (1) awarding attorneys' fees without giving Defendant an opportunity to object to the amount of fees sought, and (2) awarding attorneys' fees to Plaintiff for time spent in opposing Defendant's Motion to Set Aside and Vacate Entry of Default. Defendant also argues that Plaintiff's counsel's fees are excessive.

1. Opportunity to object

Defendant argues that an award of attorney fees cannot be granted in the absence of a separate motion by Plaintiff requesting attorney fees. (Dkt. no. 24 at 2-3.) Although Fed. R. Civ. P. 7(b)(1) provides that "[a] request for a court order must be made by motion," Fed. R. Civ. P. 60(b) permits a court to order that an entry of default be set aside upon satisfaction of certain conditions. Brandt v. Am. Bankers Inc. Co. of Fla., 653 F.3d 1108, 1110 (9th Cir. 2011). Accordingly, Plaintiff was not required to file a separate motion for attorneys' fees.

In Brandt, the court set aside the default and default judgment once Defendant satisfied the conditions imposed by the Court. 653 F. 3d at 1110. The conditions imposed by the district court were substantial. Id. at 1110 n.1. Specifically, the district court ordered that the default judgment and entry of default be set aside upon the defendant's reimbursement of (1) plaintiff's attorney's fees associated with the motion to set aside the default judgment, (2) plaintiff's travel expenses to attend the default judgment hearing, and (3) "reimbursement of the cost of [plaintiff's] mortgage payments, plus $1,500 per month, from the date they filed the complaint until the date of the order setting aside the default judgment." Id.

Defendant cites RingCentral, Inc. in support of its argument that it should have had the opportunity to object to the reasonableness of the fees in question. RingCentral, Inc. v. Quimby, 781 F. Supp. 2d 1007 (N.D. Cal. 2011). In RingCentral, the court requested that the plaintiff submit a revised fee application in order to determine the amount of attorney's fees to award as a just condition of setting aside the default judgment and underlying default. Id. at 1012. However, the revised fee application was only necessary because the court could not ascertain the amount of fees incurred specifically in connection with bringing the motion from the original fee application. Id. Although the court permitted defendant to file a response to object to the amount claimed, the court did not establish a rule requiring a court to give a defendant time to object to the amount of attorneys' fees claimed when the court conditions the setting aside of an entry of default on the payment of attorneys' fees.

Here, Defendant's conduct unnecessarily and unfairly imposed additional burdens on Plaintiff. Thus, the Court was permitted to condition the setting aside of entry of default on Defendant's payment of Plaintiff's reasonable attorneys' fees, which were readily ascertainable from Plaintiff's Opposition to Defendant's Motion to Set Aside and Vacate Entry of Default. Cf. RingCentral, 781 F. Supp. 2d at 1012.

2. Fees incurred in opposing the motion

Rule 60(b) specifically provides that relief from a default judgment may be granted upon "just terms." While Rule 55(c) does not contain a similar provision, courts are likewise permitted to impose conditions on the setting aside of a default. Nilsson, Robbins et al. v. Louisiana Hydrolec, 854 F.2d 1538, 1546-47 (9th Cir. 1988) ("it is appropriate to condition setting aside a default upon the payment of a sanction"). A court has wide discretion as to the type of condition. However, "the condition most commonly imposed is that the defendant reimburse the plaintiff for costs incurred because of the default." Id. at 1546.

Here, the bulk of Plaintiff's fees were incurred in preparing its Opposition Brief. (Dkt. no. 26 at 4.) Defendant argues that under Ring Central, "a court order setting asidea mere default does not warrant the granting of attorney fees to the party for the time spent in drafting an opposition that did not prevail." (Dkt. no. 24 at 4.) However, Defendant cites to no authority that establishes a bright-line rule prohibiting courts from awarding attorneys' fees for oppositions to motions to set aside defaults.³ Accordingly, because the Court has wide discretion to impose conditions on the setting aside of a default, which often includes payment of attorneys' fees, Defendant's argument is unpersuasive.

3. Reasonableness of attorneys' fees award

Third, Defendant argues that Plaintiff's counsel's fees are excessive. (Dkt. no. 27 at 4.) Reasonable attorneys' fees are based on the "lodestar" calculation set forth in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). See Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1119 (9th Cir. 2000). The Court must first determine a reasonable fee by multiplying "the number of hours...