Door Systems, Inc. v. Pro-Line Door Systems, Inc.

• Decision Date: 08 October 1997
• Docket Number: PRO-LINE,Nos. 97-1077,97-1162,s. 97-1077
• Citation: 126 F.3d 1028
• Parties: DOOR SYSTEMS, INC., Plaintiff-Appellant, Cross-Appellee, v.DOOR SYSTEMS, INC., Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1028

126 F.3d 1028

44 U.S.P.Q.2d 1376

DOOR SYSTEMS, INC., Plaintiff-Appellant, Cross-Appellee, v. PRO-LINE DOOR SYSTEMS, INC., Defendant-Appellee, Cross-Appellant.

Nos. 97-1077, 97-1162.

United States Court of Appeals, Seventh Circuit.

Submitted July 10, 1997.

Decided Oct. 8, 1997.

Robert G. Epsteen (submitted on briefs), George Bullwinkel, Harold J. Fassnacht, Eric F. Greenberg, Bullwinkel Partners, James Maher, Chicago, IL, for Plaintiff-Appellant, Cross-Appellee.

Todd S. Parkhurst, Gardner, Carton & Douglas, Thomas Bradley, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Mary J. Schwartz, Chicago, IL, Terry Sullivan, Rolling Meadows, IL, for Defendant-Appellee in No. 97-1077.

Terry Sullivan, Nancy J. Nicol, Judy Chessick, Rolling Meadows, IL, Marty J. Schwartz, Chicago, IL, for Defendant-Appellant in No. 97-1162.

Before POSNER, Chief Judge, and CUMMINGS and DIANE P. WOOD, Circuit Judges.

POSNER, Chief Judge.

The last time this trademark and deceptive practices case was before the court, we affirmed the judgment for the defendant. 83 F.3d 169 (7th Cir.1996). The defendant then moved in the district court for an award of attorneys' fees under both section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a), which authorizes an award of fees to the prevailing party in a trademark dispute "in exceptional cases," and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/10a(c), which provides that the court "may" award attorneys' fees to the prevailing party in a suit under the Act. The magistrate judge found that the plaintiff had not brought this suit in bad faith, and he therefore declined to award attorneys' fees under the Lanham Act. But he did award fees under the Illinois statute.

The briefs haggle inconclusively over the proper standard for an award of fees under the Illinois statute. The Illinois Appellate Court is divided over whether bad faith is required when it is the defendant that is seeking fees, or whether it is enough that there are "special circumstances," compare Haskell v. Blumthal, 204 Ill.App.3d 596, 149 Ill.Dec. 619, 623, 561 N.E.2d 1315, 1319 (1990), with Graunke v. Elmhurst Chrysler Plymouth Volvo, Inc., 247 Ill.App.3d 1015, 187 Ill.Dec. 401, 405-06, 617 N.E.2d 858, 862-63 (1993), and if the latter, what those special circumstances are. Compare id. at 406-07, 617 N.E.2d at 863-64 with Washington Courte Condominium Association-Four v. Washington-Golf Corp., 267 Ill.App.3d 790, 205 Ill.Dec. 248, 271-72, 643 N.E.2d 199, 222-23 (1994). The Supreme Court of Illinois has not resolved these conflicts.

In arguing over the standard, the parties have overlooked a simple point. Nowhere did the magistrate judge articulate or apply a standard; instead, he treated the Illinois statute as if it gave the prevailing party, plaintiff or defendant, an automatic right to attorneys' fees. Clearly, it does not; on that point all the Illinois cases are in agreement. E.g., Majcher v. Laurel Motors, Inc., 287 Ill.App.3d 719, 223 Ill.Dec. 683, 690, 680 N.E.2d 416, 424 (1997); Grove v. Huffman, 262 Ill.App.3d 531, 199 Ill.Dec. 830, 835, 634 N.E.2d 1184, 1189 (1994); Prior Plumbing & Heating Co. v. Hagins, 258 Ill.App.3d 683, 197 Ill.Dec. 84, 87, 630 N.E.2d 1208, 1211 (1994). We could return the issue to the district court, and ask it to pick a standard; but that would delay the resolution of this case. We think it reasonably plain that bad faith is too narrow a standard. Even if a suit is brought in good faith, it could be so lacking in merit or so burdensome to defend against as to be oppressive, in which event the defendant would have a powerful equitable claim to recover a reasonable attorneys' fee. We cannot find any indication that the Illinois statute was intended to create the kind of dual standard--whereby a prevailing plaintiff is entitled to an award of attorneys' fees as a matter of course while a prevailing defendant is entitled to an award of attorneys' fees only if the suit is frivolous--that the federal courts have found to be latent in statutes governing the award of attorneys' fees in civil rights cases. E.g., Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978); Methodist Hospitals, Inc. v. Sullivan, 91 F.3d 1026, 1030 (7th Cir.1996). That dual standard is supported by legislative history and by concern that without it fear of being forced to pay the defendants' fees would unduly discourage the bringing of a class of suits that serve important public ends. The Supreme Court has rejected the analogy of the civil rights statutes in construing the attorneys' fees provision of the Copyright Act, a provision worded almost identically to the provision in the Illinois statute. Fogerty v. Fantasy, Inc., 510 U.S. 517, 521-33, 114 S.Ct. 1023, 1025-32, 127 L.Ed.2d 455 (1994).

In Haskell, it is true, the Illinois Appellate Court held that a dual standard should be impressed on the Illinois Consumer Fraud and Deceptive Business Practices Act. But, in the first place, its holding has been rejected by another division of the court, as we noted. In the second place, Haskell acknowledges that the dual standard need not be the same in different classes of case and that in fact "the scrutiny placed upon the criteria for fee awards to the defense in [civil rights] cases may logically be more stringent than that imposed in proceedings to vindicate consumers' rights." 149 Ill.Dec. at 623, 561 N.E.2d at 1319. In the third place, the court was concerned with the possible effect of potential liability for a defendant's attorneys' fees in deterring consumers from filing small claims, id. at 622-23, 561 N.E.2d at 1318-19--and our case is not a suit by a consumer. In the fourth place, the court relied for the dual-standard approach on our decision in Bittner v. Sadoff & Rudoy Industries, 728 F.2d 820 (7th Cir.1984), a case that Haskell interprets as holding that in ERISA cases attorneys' fees "should be awarded to defendants only when the suit brought against them is frivolous." Id. at 622, 561 N.E.2d at 1318. This is an incorrect interpretation. Bittner holds, anticipating Fogerty, that there is no dual standard under ERISA. 720 F.2d at 829-30. Neither Fogerty nor Bittner bears directly, or perhaps even indirectly, on the interpretation of the Illinois statute; our point is only that Bittner, having rejected a dual standard for the award of attorneys' fees under ERISA, can hardly be thought authority for adopting a dual standard for the award of attorneys' fees under the Illinois statute.

Whether or not there is a formal dual standard under the Illinois statute, plaintiffs and defendants are differently circumstanced and so a uniform standard may not have a uniform impact; the "special circumstances" that warrant an award to a plaintiff may not be the same as those that warrant an award to a defendant. Nor need all plaintiffs, or all defendants, be treated the same. We have noted that this is not a case in which the plaintiff is a consumer; nor, we add, is it a case in which there is a gross disparity in resources between the parties. We think it is helpful, in a case in which the defendant is asking for fees, to ask, by way of clarification or particularization of the "special circumstances" test, whether the plaintiff's suit was oppressive--was something that might be described not just as a losing suit but as a suit that had elements of an abuse of process, whether or not it had all the elements of the tort. That would not be the right question if the plaintiff had prevailed and was seeking the award of attorneys' fees. In such a case the focus would be on whether the defendant had lacked a solid justification for the defense or had put the plaintiff to an unreasonable expense in suing.

The district court rebuffed the defendant's effort to obtain by cross-appeal additional fees under the Lanham Act beyond what was awarded under the Illinois statute, those fees having been properly limited to the defendant's efforts in defending itself against...