Fleischmann Distilling Corporation v. Maier Brewing Co, No. 214

• Court: United States Supreme Court
• Writing for the Court: WARREN
• Citation: 386 U.S. 714,18 L.Ed.2d 475,87 S.Ct. 1404
• Parties: The FLEISCHMANN DISTILLING CORPORATION et al., Petitioners, v. MAIER BREWING CO. et al
• Docket Number: No. 214
• Decision Date: 08 May 1967

386 U.S. 714 87 S.Ct. 1404 18 L.Ed.2d 475 The FLEISCHMANN DISTILLING CORPORATION et al., Petitioners,

v.

MAIER BREWING CO. et al.

No. 214. Argued Feb. 14, 1967. Decided May 8, 1967.

Moses Lasky, San Francisco, Cal., for peit ioners.

J. Albert Hutchinson, San Francisco, Cal., for respondents.

Mr. Chief Justice WARREN delivered the opinion of the Court.

This is a trademark case arising under the Lanham Act (60 Stat. 427, 15 U.S.C. §§ 1051—1127) in which our sole concern is with the relief that may be granted when deliberate infringement of a valid trademark has been established. The question is whether federal courts have power in that context to award reasonable attorney's fees as a separate element of recovery in light of § 35 of

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the Act which enumerates the available compensatory remedies.¹

The scope of petitioners'² trademark and the fact of respondents'³ infringement were determined by the Court of Appeals for the Ninth Circuit at an earlier stage of this litigation. 314 F.2d 149, cert. denied, 374 U.S. 830, 83 S.Ct. 1870, 10 L.Ed.2d 1053 (1963). The case was then remanded to the District Court for the Southern District of California which, after noting that the Court of Appeals had characterized respondents' infringing activities as deliberate, entered its own finding to that effect. In accord with prior rulings of certain courts of appeals⁴ and district

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courts⁵ that attorney's fees could be recovered if deliberate or willful infringement were established, the District Court awarded petitioners $60,000 after determining that such sum constituted reasonable attorney's fees for prosecution of this litigation. Respondents sought an immediate interlocutory appeal although petitioners' rights to an accounting and other relief remained for determination. The Court of Appeals first dismissed the appeal as premature, but after the District Court issued a certificate under 28 U.S.C. § 1292(b) ⁶ authorization was granted. Sitting en banc the Court of Appeals reversed the award of attorney's fees, holding that under the Lanham Act federal courts are without power to make such awards. 359 F.2d 156 (1966). We granted certiorari to resolve the conflict between that holding and the prior decisions of federal courts upon which the

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District Court had relied. 385 U.S. 809, 87 S.Ct. 56, 17 L.Ed.2d 51 (1966). For the reasons elaborated below, we affirm.

As early as 1278, the courts of England were authorized to award counsel fees to successful plaintiffs in litigation.⁷ Similarly, since 1607 English courts have been empowered to award counsel fees to defendants in all actions where such awards might be made to plaintiffs.⁸ Rules governing administration of these and related provisions have developed over the years. It is now customary in England, after litigation of substantive claims has terminated, to conduct separate hearings before special 'taxing Masters' in order to determine the appropriateness and the size of an award of counsel fees. To prevent the ancillary proceedings from becoming unduly protracted and burdensome, fees which may be included in an award are usually prescribed, even including the amounts that may be recovered for letters drafted on behalf of a client.⁹

Although some American commentators have urged adoption of the English practice in this country,¹⁰ our courts have generally resisted any movement in that direction. The rule here has long been that attorney's fees are not ordinarily recoverable in the absence of a statute or enforceable contract providing therefor. This Court first announced that rule in Arcambel v. Wiseman,

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3 Dall. 306, 1 L.Ed. 613 (1796), and adhered to it in later decisions. See, e.g., Hauenstein v. Lynham, 100 U.S. 483, 25 L.Ed. 628 (1880); Stewart v. Sonneborn, 98 U.S. 187, 25 L.Ed. 116 (1879); Oelrichs v. Spain, 15 Wall. 211, 21 L.Ed. 43 (1872); Day v. Woodworth, 13 How. 363, 14 L.Ed. 181 (1852). In support of the American rule, it has been argued that since litigation is at best uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents' counsel. Cf. Farmer v. Arabian American Oil Co., 379 U.S. 227, at 235, 85 S.Ct. 411, at 416, 13 L.Ed.2d 248 (1964); id., at 236—239, 85 S.Ct. 417—418 (concurring opinion of Mr. Justice Goldberg). Also, the time, expense, and difficulties of proof inherent in litigating the question of what constitutes reasonable attorney's fees would pose substantial burdens for judicial administration. Oelrichs v. Spain, supra, 15 Wall. at 231.

Limited exceptions to the American rule have, of course, developed.¹¹ They have been sanctioned by this Court when overriding considerations of justice seemed to compel such a result. In appropriate circumstances, we have held, an admiralty plaintiff may be awarded counsel fees as an item of compensatory damages (not as a separate cost to be taxed). Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962). And in a civil contempt action occasioned by willful disobedience of a court order an award of attorney's fees may be authorized as part of the fine to be levied on the defendant. Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399, 426—428, 43 S.Ct. 458, 465, 466, 67 L.Ed. 719 (1923). The case upon which petitioners here place their principal reliance—

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Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939)—involved yet another exception. That exception had previously been applied in cases where a plaintiff traced or created a common fund for the benefit of others as well as himself. Central Railroad & Banking Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915 (1885); Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 (1882). In that situation to have allowed the others to obtain full benefit from the plaintiff's efforts without requiring contribution or charging the common fund for attorney's fees would have been to enrich the others unjustly at the expense of the plaintiff. Sprague itself involved a variation of the common-fund situation where, although the plaintiff had not in a technical sense sued for the benefit of others or to create a common fund, the stare decisis effect of the judgment obtained by the plaintiff established as a matter of law the right of a discernible class of persons to collect upon similar claims. The Court held that the general equity power 'to do equity in a particular situation' supported an award of attorney's fees under such circumstances for the same reasons that underlay the common-fund decisions.

The recognized exceptions to the general rule were not, however, developed in the context of statutory causes of action for which the legislature had prescribed intricate remedies. Trademark actions under the Lanham Act do occur in such a setting. For, in the Lanham Act, Congress meticulously detailed the remedies available to a plaintiff who proves that his valid trademark has been infringed. It provided not only for injunctive relief,¹² but also for compensatory recovery measured by the profits that accrued to the defendant by virtue of his infringement, the costs of the action, and damages which may be trebled in appropriate circumstances.¹³ Peti-

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tioners have advanced the proposition that the authority to award 'costs of the action' taken together with the introductory phrase 'subject to the principles of equity' should be deemed implicit authority for an award of attorney's fees in light of the reference in Sprague to the general equity power. But none of the considerations which supported the exception recognized in Sprague are present here. Moreover, since, with the exception of the docket fee provided by 28 U.S.C. § 1923(a),¹⁴ the statutory definition of the term 'costs' does not include attorney's fees,¹⁵ acceptance of petitioners' argument would require u t o ascribe to Congress a purpose to vary the meaning of that term without either statutory language or legislative history to support the unusual...