M2 Technology, Inc. v. M2 Software, Inc., 083118 FED5, 17-40476

Docket Nº:17-40476
Opinion Judge:PER CURIAM
Party Name:M2 TECHNOLOGY, INCORPORATED, Plaintiff - Appellee v. M2 SOFTWARE, INCORPORATED Defendant KING LAW GROUP, P.L.L.C.; RICHARD C. KING, JR.; MARY ELLEN KING, Appellants
Judge Panel:BEFORE WIENER, GRAVES, AND HO, CIRCUIT JUDGES.
Case Date:August 31, 2018
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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M2 TECHNOLOGY, INCORPORATED, Plaintiff - Appellee

v.

M2 SOFTWARE, INCORPORATED Defendant

KING LAW GROUP, P.L.L.C.; RICHARD C. KING, JR.; MARY ELLEN KING, Appellants

No. 17-40476

United States Court of Appeals, Fifth Circuit

August 31, 2018

Appeal from the United States District Court for the Eastern District of Texas USDC No. 4:12-CV-458

BEFORE WIENER, GRAVES, AND HO, CIRCUIT JUDGES.

PER CURIAM [*]

Richard C. King, Jr., Mary Ellen King, and the King Law Group, PLLC, appeal an imposition of sanctions under Rule 11(b)(2) in the amount of $39, 325.63. We affirm.

I.

This appeal is part of a series of three cases between M2 Technology, Inc. (“M2 Technology”) and David Escamilla and his company, M2 Software, Inc. (“M2 Software”). M2 Technology sued M2 Software, seeking a declaratory judgment that M2 Software infringed the “M2” mark. M2 Software did not appear before the deadline to file an answer. As a result of M2 Software's default, the district court entered a declaratory judgment for M2 Technology. The district court also awarded M2 Technology fees and costs. M2 Software appealed, and we affirmed. M2 Tech., Inc. v. M2 Software, Inc., 589 Fed.Appx. 671, 673 (5th Cir. 2014) (per curiam).

M2 Software moved to set aside the default judgment under Rule 60(b). M2 Technology filed a motion in opposition as well as a motion for sanctions under Federal Rule of Civil Procedure 11. The district court denied M2 Software's motion. We affirmed. Escamilla v. M2 Tech., Inc., 657 Fed.Appx. 318, 319 (5th Cir. 2016) (per curiam).

In the same order, the district court granted M2 Technology's motion for sanctions under Rule 11(b)(2), concluding that “M2 Software's motion to set aside the default judgment lack[ed] merit.” The district court ordered M2 Software's counsel to pay M2 Technology $39, 325.63.

M2 Software's counsel appealed, arguing that the district court abused its discretion by imposing Rule 11(b)(2) sanctions after counsel presented plausible legal grounds for its Rule 60(b) motion. In the alternative, appellants argue that the district court abused its discretion when it: (1) failed to assess what fees would have been incurred “but for” the alleged sanctionable conduct; (2)erred by using M2 Technology's counsel's Chicago-based rate to calculate...

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