Noxell Corp. v. Firehouse No. 1 Bar-B-Que Restaurant, BAR-B-QUE

• Decision Date: 23 August 1985
• Docket Number: No. 1,B-Q,I,84-5196,BAR-B-QUE,Nos. 84-5167,1,s. 84-5167
• Citation: 771 F.2d 521,248 U.S.App.D.C. 329
• Parties: , 54 USLW 2148, 227 U.S.P.Q. 115 NOXELL CORPORATION, et al., Appellants, v. FIREHOUSE NO. 1RESTAURANT, d/b/a San Francisco Firehouse Stationnc., et al. NOXELL CORPORATION, et al. v. FIREHOUSE NO. 1RESTAURANT, d/b/a San Francisco Firehouse Stationnc., et al., Appellants, Peter Lyons, d/b/a FirehouseBar-ue Restaurant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 521

771 F.2d 521

248 U.S.App.D.C. 329, 54 USLW 2148,

227 U.S.P.Q. 115

NOXELL CORPORATION, et al., Appellants, v. FIREHOUSE NO. 1 BAR-B-QUE RESTAURANT, d/b/a San Francisco

Firehouse Station No. 1, Inc., et al.

NOXELL CORPORATION, et al. v. FIREHOUSE NO. 1 BAR-B-QUE RESTAURANT, d/b/a San Francisco

Firehouse Station No. 1, Inc., et al., Appellants,

Peter Lyons, d/b/a Firehouse No. 1 Bar-B-Que Restaurant.

Nos. 84-5167, 84-5196.

United States Court of Appeals, District of Columbia Circuit.

Aug. 23, 1985.

As Amended Aug. 23 and Aug. 30, 1985.

Rehearing En Banc Denied Oct. 11, 1985.

Seth P. Waxman and Stephen L. Nightingale, Washington, D.C., were on the motion for attorney fees.

George T. Mobille and Robert W. Adams, Washington, D.C., were on the reply to motion for attorney fees.

Before WALD, GINSBURG, and SCALIA, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

Dissenting opinion filed by Circuit Judge WALD.

GINSBURG, Circuit Judge:

We here rule on a motion for attorney fees invoking section 35 of the Lanham Act, 15 U.S.C.A. Sec. 1117(a) (West Supp.1985). The provision in question, applicable to trademark infringement litigation, authorizes court-awarded fees "to the prevailing party" in cases found "exceptional."

The attorney fees request was filed following our decision in Noxell Corp. v. Firehouse No. 1 Bar-B-Que Restaurant, 760 F.2d 312 (D.C.Cir.1985) (Noxell I ); in that decision, we ordered the district court to dismiss a trademark infringement action, pursuant to 28 U.S.C. Sec. 1406(a) (1982), because venue had been laid in the wrong district. Location of the action in the District of Columbia, we held in Noxell I, was "unreasonable," contrary to "established law," and, in view of the Supreme Court's definitive pronouncement in Leroy v. Great Western United Corp., 443 U.S. 173, 185, 99 S.Ct. 2710, 2717, 61 L.Ed.2d 464 (1979), unsupported by "even a wisp" of tenable argument. 760 F.2d at 313, 317. We now grant the attorney fees application in the amount requested.

I. BACKGROUND

To explain why we regard this case as "exceptional" and the fee applicants as "prevailing parties," we first recapitulate Noxell I.

Noxell Corporation (Noxell), incorporated in Maryland, is a food, cosmetics, and household-products conglomerate. Together with its wholly-owned Texas subsidiary, Caliente Chili, Inc. (Caliente), Noxell commenced a trademark infringement action in the District Court for the District of Columbia against two defendants: Firehouse No. 1 Bar-B-Que Restaurant (Firehouse) and its sole proprietor, Carl T. English, Jr., a full-time San Francisco firefighter. The Firehouse enterprise consisted of two modest barbeque restaurants, both in San Francisco; in addition, Firehouse markets one product, a barbeque sauce derived from a recipe of English's grandparents. Noxell charged that Firehouse's use of ALARM terms at the bottom portion of Firehouse labels to denote the "hotness" of the barbeque infringed upon Caliente's registered ALARM marks placed conspicuously on chili mixes and other spicy products marketed by Caliente.

Firehouse, we observed,

has no office or employees outside the San Francisco area. At the time Noxell lodged its complaint [in the District of Columbia], no more than 200 cases of Firehouse's product had been sold in the District. This number of cases amounted to less than 1.5% of Firehouse's total barbeque sauce sales. By contrast, 40% of Firehouse's total barbeque sauce sales occur in California.

Noxell I, 760 F.2d at 314.

Less than a month after Noxell filed the trademark infringement complaint, Firehouse (and its proprietor, firefighter English) moved to dismiss the action or to transfer it (pursuant to 28 U.S.C. Sec. 1406(a) (wrong venue--dismissal or transfer) or, alternatively, 28 U.S.C. Sec. 1404(a) (inconvenient forum--transfer)) to the Northern District of California. Promising an opinion that never followed, the district court issued a spare order denying the motion. After rejecting Firehouse's venue objection, the district court heard and then denied Noxell's motion for a preliminary injunction. Noxell appealed from the denial of its preliminary injunction motion, and Firehouse challenged by cross appeal the district court's unexplained rejection of Firehouse's objection to venue in the District of Columbia.

Noxell argued first that the venue ruling was not appealable. Although tendering an extra, unauthorized brief on the point, see Noxell I, 760 F.2d at 315 n. 5, Noxell overlooked the dispositive decision in this circuit, Lee v. Ply*Gem Industries, Inc., 593 F.2d 1266, 1270 (D.C.Cir.), cert. denied, 441 U.S. 967, 99 S.Ct. 2417, 60 L.Ed.2d 1073 (1979). We found Noxell's endeavor to stop the cross appeal wholly unworthy--lacking support "in statute law, this circuit's decisions, or good sense." Noxell I, 760 F.2d at 315.

Turning to the merits of Firehouse's venue objection, we found Noxell's presentation "remarkable," id. at 316, because it was totally at odds with the Supreme Court's unambiguous instruction in Leroy v. Great Western United Corp., supra. Defendants' San Francisco residence meant that the action could be maintained in the District of Columbia only if "the claim [I]t is absolutely clear that Congress did not intend to provide for venue at the residence of the plaintiff or to give that party an unfettered choice among a host of different districts.... In our view, ... the broadest interpretation of the ["claim arose"] language of Sec. 1391(b) that is even arguably acceptable is that in the unusual case in which it is not clear that the claim arose in only one specific district, a plaintiff may choose between those two (or conceivably even more) districts that with approximately equal plausibility--in terms of the availability of witnesses, the accessibility of other relevant evidence, and the convenience of the defendant (but not of the plaintiff)--may be assigned as the locus of the claim.

                arose" here within the meaning of 28 U.S.C. Sec. 1391(b).    Leroy crisply explained that the "claim arose" language, in cases of the kind brought by Noxell, must be interpreted with a view to the convenience of defendants (not plaintiffs)
                

443 U.S. at 185, 99 S.Ct. at 2717.

In light of Leroy, we determined:

Noxell has chosen the District of Columbia simply to suit its own convenience. The forum Noxell has selected is barely plausible in terms of the accessibility of relevant evidence; certainly the District of Columbia is a far less plausible choice from that vantage point than is the Northern District of California. While trial in the District of Columbia would serve plaintiffs' convenience, it would in no way serve the convenience of the defendants.

Noxell I, 760 F.2d at 317. We found it "inescapable" that "the District of Columbia may not be assigned as the locus of the claim in this case." Id. "Because we regard[ed] Noxell's attempt to lay venue in the District of Columbia as unreasonable, we d[id] not find it 'in the interest of justice' to order a transfer." Id. (quoting 28 U.S.C. Sec. 1406(a)). Instead, we vacated the order denying Noxell's preliminary-injunction motion and remanded the case to the district court with instructions to dismiss the action because Noxell had so unjustifiably laid venue in the wrong district. Id. ¹

II. ATTORNEY FEES

Section 35 of the Lanham Act provides in relevant part: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C.A. Sec. 1117(a) (West Supp.1985). Firehouse's application presents the question whether an appellate court may award fees under this section to a litigant who demonstrates that the trademark infringement action instituted against him warrants dismissal on the ground that plaintiff's venue selection was improper and unreasonably imposed hardship on the fee applicant. Noxell I, 760 F.2d at 317. We answer yes.

Congress had two classes of litigants in mind when it enacted the fee provision of section 35. First, the legislature envisioned "make whole" compensation for certain victims of infringement; second, Congress endeavored to afford protection to defendants "against unfounded suits brought by trademark owners for harassment and the like." S.REP. NO. 1400, 93d Cong., 2d Sess. 5, 6 (1974), U.S.Code Cong. & Admin.News 1974, pp. 7132, 7136.

Noxell interposes no challenge to the reasonableness of the hourly rates or the hours expended on the litigation as detailed by Firehouse. Instead, Noxell assails the fee request in four respects. Noxell first asserts that Firehouse, because it achieved dismissal of the action on a procedural ground not preclusive of a second action elsewhere, fails to qualify as a "prevailing party." Further, Noxell maintains that

                this case is not "exceptional."    Additionally, Noxell contends that if fees are not denied to Firehouse here and now, the matter should be remitted to the district court for initial consideration;  and that, in any event, no recovery should be allowed for time Firehouse spent resisting Noxell's effort to obtain a preliminary injunction.  We address and reject each of these protests
                

A.

In rejecting Noxell's argument that a defendant qualifies as a "prevailing party" within the compass of section 35 of the Lanham Act only when he obtains a judgment on the merits, we align our court with the position taken by the Ninth Circuit under a Copyright Act provision for attorney fees. In Corcoran v. Columbia Broadcasting System, 121 F.2d 575 (9th Cir.1941), the Ninth Circuit considered defendants "prevailing parties" entitled to a fee award when their successful motion for a more definite statement led to a voluntary dismissal by the plaintiff:

[Plaintiff] claims that in view of his voluntary dismissal without prejudice, [defendants] were not "the prevailing party" within the meaning of the statute.... We think this is too narrow an interpretation of the statute. The authority given is not...