Flir Sys., Inc. v. Sierra Media, Inc.

• Court: United States District Courts. 9th Circuit. United States District Court (Oregon)
• Citation: 965 F.Supp.2d 1184
• Docket Number: No. 3:10–cv–00971–HU.,3:10–cv–00971–HU.
• Parties: FLIR SYSTEMS, INC., an Oregon corporation, Plaintiff, v. SIERRA MEDIA, INC., a Washington corporation, and Fluke Corporation, a Washington corporation, Defendants.
• Decision Date: 08 August 2013

965 F.Supp.2d 1184

FLIR SYSTEMS, INC., an Oregon corporation, Plaintiff,
v.
SIERRA MEDIA, INC., a Washington corporation, and Fluke Corporation, a Washington corporation, Defendants.

No. 3:10–cv–00971–HU.

United States District Court, D. Oregon.

Aug. 8, 2013.

[965 F.Supp.2d 1188]

Devon Zastrow Newman, Schwabe, Williamson & Wyatt P.C., Portland, OR, for Plaintiff FLIR Systems, Inc.

William A. Brewer III, John W. Bickel II, Michael J. Collins and Robert M. Millimet, Bickel & Brewer, Dallas, TX, for Plaintiff FLIR Systems, Inc.

Kenneth R. Davis II and Parna A. Mehrbani, Lane Powell P.C., Portland, OR, for Defendant Fluke Corporation.

Dane H. Butswinkas and Matthew V. Johnson, Williams & Connolly LLP, Washington, DC, for Defendant Fluke Corporation.

Benjamin N. Souede and David H. Angeli, Angeli Law Group LLC, Portland, OR, for Defendant Sierra Media, Inc.

OPINION AND ORDER
HUBEL, United States Magistrate Judge:

If ever there were a case where the Court hoped that the “parties [would just decide] to chill,” Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 908 (9th Cir.2002), this would be it. Indeed, it is an understatement to say that this case has been hotly contested, or that there is some animosity between the two business competitors involved. The parties have had a multitude of disagreements long before this case, and their contentious relationship resulted in protracted litigation here and acrimonious discovery disputes. Tit-for-tat arguments were raised at every conceivable opportunity. Conferral did not always occur. At one point, the Court was compelled to remind counsel to be courteous and professional in their dealings with one another. And the kitchen-sink approach to trial, offering every conceivable piece of evidence and raising as many objections as possible, led to laborious, seemingly never-ending pretrial sessions to resolve the raft of unfocused issues raised by the parties. To adapt an old saying, “Too many lawyers spoil the case.”

In December 2012, the Court conducted a nine-day jury trial on Plaintiff FLIR System, Inc's (“FLIR”) claim of false advertising and on Defendant Fluke Corporation's (“Fluke”) counterclaims of false advertising (six counts), trademark infringement, and unfair competition. The jury returned a verdict in favor of FLIR on its false advertising claim and awarded $103,000 in damages. The jury also returned a verdict in favor of Fluke on all but three counts of false advertising and awarded $4,136,975 in damages. In January and February 2013, the parties filed the following post-trial motions which are now before the Court: (1) Fluke's redaction request; (2) Defendant Sierra Media's (“Sierra”) motion for an award of attorney's fees pursuant to 15 U.S.C. § 1117(a); (3) Fluke's motion re: post-trial issues; and (4) FLIR's motion for post-trial relief, judgment as a matter of law, or alternatively, for a new trial.

I. LEGAL STANDARD A. Judgment as a Matter of Law

Under Federal Rule of Civil Procedure (“Rule”) Rule 50(b), a party who has moved for judgment as a matter of law (“JMOL”) at the close of all the evidence may renew the motion after entry of judgment. Fed.R.Civ.P. 50(b). However, “[a] party cannot raise arguments in its post-trial motion for judgment as a matter of law under Rule 50(b) that it did not raise in its pre-verdict Rule 50(a) motion.”

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Freund v. Nycomed Amersham, 347 F.3d 752, 761 (9th Cir.2003).

When considering a Rule 50(b) motion, the court must view the evidence in the light most favorable to the nonmoving party, and all reasonable inferences must be drawn in favor of that party. Horphag Research, Ltd. v. Pellegrini, 337 F.3d 1036, 1040 (9th Cir.2003). “Judgment as a matter of law is proper when the evidence permits only one reasonable conclusion and the conclusion is contrary to that reached by the jury.” Ostad v. Oregon Health Scis. Univ., 327 F.3d 876, 881 (9th Cir.2003). Because the court may not substitute its view of the evidence for that of the jury, it neither makes credibility determinations, nor weighs the evidence. Costa v. Desert Palace, Inc., 299 F.3d 838, 859 (9th Cir.2002), aff'd,539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003). Indeed, the court must “disregard all evidence favorable to the moving party that the jury is not required to believe.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 151, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

B. New Trial

The court may grant a new trial “for any of the reasons for which new trials have heretofore been granted.” Fed.R.Civ.P. 59. Those reasons include when “the verdict is contrary to the clear weight of the evidence, or is based upon evidence which is false, or to prevent, in the sound discretion of the trial court, a miscarriage of justice.” Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814, 819 (9th Cir.2001) (quoting United States v. 4.0 Acres of Land, 175 F.3d 1133, 1139 (9th Cir.1999)). “While the trial court may weigh the evidence and credibility of the witnesses, the court is not justified in granting a new trial ‘merely because it might have come to a different result from that reached by the jury.’ ” Roy v. Volkswagen of Am., Inc., 896 F.2d 1174, 1176 (9th Cir.1990) (quoting Wilhelm v. Associated Container Transp. (Australia) Ltd., 648 F.2d 1197, 1198 (9th Cir.1981)).

II. DISCUSSION A. Sierra's Entitlement to Fees

Sierra has moved for an award of attorney's fees based on the Court's conclusion—at the summary judgment stage—that FLIR lacked prudential standing to sue Sierra for false advertising under the Lanham since they are not competitors. FLIR opposes Sierra's motion for attorney's fees on the grounds that (1) Sierra is not entitled to fees under the applicable legal standard, (2) FLIR had substantial legal and factual support for claiming that Sierra was jointly and severally liable with Fluke for false advertising, and (3) it would be inequitable to award Sierra attorney's fees because Sierra failed to raise its contention that FLIR lacked prudential standing prior to summary judgment and Sierra admitted during discovery that Fluke voluntarily agreed to, and did in fact, pay Sierra's attorney's fees in this case.

Section 35 of the Lanham Act permits an award of attorney's fees to a “prevailing party” in “exceptional cases.” 15 U.S.C. § 1117(a). The Ninth Circuit has held that the exceptionality “requirement is met when the case is either groundless, unreasonable, vexatious, or pursued in bad faith.” Cairns v. Franklin Mint Co., 292 F.3d 1139, 1156 (9th Cir.2002) (citation and internal quotation marks omitted). Under § 1117(a), an award of attorney's fees is “never automatic and may be limited by equitable considerations.” Adidas Am., Inc. v. Payless Shoesource, Inc., No. 01–1655–KI, 2009 WL 302246, at *1 (D.Or. Feb. 9, 2009) (quoting

[965 F.Supp.2d 1190]

Rolex Watch, U.S.A., Inc. v. Michel Co., 179 F.3d 704, 711 (9th Cir.1999)).

Sierra proceeds on the theory that FLIR's Lanham Act false advertising claim against it was groundless. As Sierra points out, FLIR opposed its motion for summary judgment by relying primarily, either directly or indirectly, on Second Circuit case law. In an Opinion and Order dated October 9, 2012, 903 F.Supp.2d 1120 (D.Or.2012), this Court agreed with Sierra's argument that FLIR's reliance on such cases was misplaced and tantamount to ignoring Ninth Circuit precedent in favor of the Second Circuit's directly conflicting standard. That decision was based upon the Court's reading of Jack Russell Terrier Network of Northern California v. American Kennel Club, Inc., 407 F.3d 1027 (9th Cir.2005), where the Ninth Circuit stated that “different causes of action alleged pursuant to the different subsections of 15 U.S.C. § 1125(a) have different standing requirements.” Id. at 1037. Under the “false association” prong of § 43 of the Lanhan Act, 15 U.S.C. § 1125(a)(1)(A), the parties are not required to be competitors “in the traditional sense.” Jack Russell, 407 F.3d at 1031. By contrast, for standing pursuant to the “false advertising” prong of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), “a plaintiff must show: (1) a commercial injury based upon a misrepresentation about a product; and (2) that the injury is ‘competitive,’ or harmful to the plaintiff's ability to compete with the defendant.” Jack Russell, 407 F.3d at 1037;Barrus v. Sylvania, 55 F.3d 468, 470 (9th Cir.1995) (explaining that standing under the “false advertising” prong requires a “commercial injury based upon a misrepresentation about a product, and also that the injury was ‘competitive,’ i.e., harmful to the plaintiff's ability to compete with the defendant.”) ¹

This dichotomy is not present in the Second Circuit because, under its reasonable interest approach, “a plaintiff asserting a false advertising claim under § 43(a) need not be a ‘competitor.’ ” Phoenix of Broward, Inc. v. McDonald's Corp., 489 F.3d 1156, 1166 (11th Cir.2007) (citing PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1111 (2d Cir.1997)). Indeed, as the district court stated in Grant Airmass Corp. v. Gaymar Industries, Inc., 645 F.Supp. 1507 (S.D.N.Y.1986), a case heavily relied upon by FLIR at the summary judgment stage, “[o]ur Court of Appeals has held that competitive injury is not required for recovery under section 1125(a).” Id. at 1511 (citation and internal quotation marks omitted).

FLIR claims that its reliance on Second Circuit case law was merely a good faith attempt to extend the law of this circuit, which should preclude a finding of exceptionality under the Lanham Act. The district court's decision in Cairns v. Franklin Mint Co., 115 F.Supp.2d 1185 (C.D.Cal.2000), and the Fifth Circuit's decision in Procter & Gamble Co. v. Amway Corp., 280 F.3d 519 (5th Cir.2002), are instructive in this regard. In Cairns, the court concluded

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that the plaintiffs' false endorsement claim was not “exceptional” under § 1117(a) of the Lanham Act, stating:...