ThermoLife Int'l LLC v. Am. Fitness Wholesalers LLC
| Decision Date | 07 April 2020 |
| Docket Number | No. CV-18-04189-PHX-JAT,CV-18-04189-PHX-JAT |
| Parties | ThermoLife International LLC, Plaintiff, v. American Fitness Wholesalers LLC, Defendant. |
| Court | U.S. District Court — District of Arizona |
Pending before the Court is Defendant American Fitness Wholesalers LLC's Motion for Attorneys' Fees (Doc. 36). The Motion has been fully briefed (Doc. 36; Doc. 39-1;1 Doc. 43; Doc. 44). The Court now rules on the Motion (Doc. 36).
Plaintiff sued Defendant for: (1) false and deceptive advertising under the Lanham Act, 15 U.S.C. § 1125; (2) false patent marking under 35 U.S.C. § 292; (3) unfair competition under Arizona state law; and (4) civil conspiracy under Arizona state law. (Doc. 1 at 59-64). The Court dismissed the Complaint (Doc. 1) under Federal Rule of Civil Procedure 12(b)(1), and alternatively, under Rule 12(b)(6). (Doc. 25 at 19 & n.6). Plaintiff then filed an amended complaint, alleging only three claims: (1) false and deceptive advertising in violation of the Lanham Act, 15 U.S.C. § 1125; (2) false patentmarking under 35 U.S.C. § 292; and (3) unfair competition under Arizona state law. (Doc. 29 at 82-86).
Defendant moved to dismiss the Amended Complaint (Doc. 29). (Doc. 31). Defendant also requested attorneys' fees within its motion to dismiss. (Id. at 16-18). The Court granted the motion to dismiss (Doc. 31)—again under Rule 12(b)(1), (6)—and found that "Plaintiff's statutory claims under the Lanham Act, 15 U.S.C. § 1125, and false marking statute, 35 U.S.C. § 292, are wholly frivolous, and Defendant is entitled to its reasonable attorneys' fees that were incurred in filing the Motion to Dismiss these claims (Doc. 31)." (Doc. 34 at 12). The Court then held that, before the Court would award attorneys' fees to Defendant, Defendant was required to file a motion for attorneys' fees that complied with District of Arizona Local Rule of Civil Procedure 54.2. (Doc. 34 at 13-14). The Defendant then filed the pending Motion at bar. (Doc. 36).
Both the Lanham Act and the false marking statute provide for fee shifting in "exceptional cases." See 15 U.S.C. § 1117(a) (Lanham Act); 35 U.S.C. § 285 (false marking statute). The fees requested by the prevailing party must be "reasonable." See 15 U.S.C. § 1117(a); 35 U.S.C. § 285. A fee award that is based on the lodestar method—that is, the number of hours reasonably expended multiplied by the reasonable hourly rate—is presumptively reasonable. Intel Corp. v. Terabyte Int'l, Inc., 6 F.3d 614, 622 (9th Cir. 1993).
Local Rule 54.2 provides the procedural vehicle for seeking an award of reasonable attorneys' fees. See LRCiv 54.2(b)-(e). The rule requires, among other things, that a party seeking attorneys' fees file: (1) a memorandum in support of the motion for attorneys' fees that includes a discussion of the reasonableness of the requested award, (2) any necessary supporting documentation, and (3) a task-based itemized statement of fees and expenses. Id.
The party seeking fees must show the amount of fees requested is reasonable. See Aviva USA Corp. v. Vazirani (Aviva USA Corp. I), No. CV-11-0369-PHX-JAT, 2012 WL2503962, at *1 (D. Ariz. June 28, 2012). Therefore, the task-based itemized statement required under Local Rule 54.2(e) "must adequately describe the services rendered so that the reasonableness of the charge can be evaluated." LRCiv 54.2(e)(2). Once the party establishes that the sought amount of fees is reasonable, the burden shifts to the party opposing the motion to show that the fee amount requested is not reasonable by separately identifying each time entry or expense item it disputes. See LRCiv 54.2(f); Aviva USA Corp. I, 2012 WL 2503962, at *1.
There is no dispute that Defendant is the prevailing party as the Court granted Defendant's motion to dismiss (Doc. 31) with prejudice. ANT v. McPartlin, No. CV 09-7672 PSG RZX, 2010 WL 4572690, at *2 (C.D. Cal. Nov. 2, 2010). Defendant seeks $70,073 in attorneys' fees. (Doc. 39-1 at 7). Plaintiff responds that Defendant can only recover $20,262.40 (Doc. 43 at 8). The Court has reviewed the materials submitted, including Defendant's task-based itemized statement, (Doc. 36-1 at 10-11), and now reviews Defendant's fee request.
The Court begins its analysis by calculating the number of hours reasonably expended on Defendant's motion to dismiss the Amended Complaint (Doc. 31).
As noted above, the Court previously determined that Defendant is entitled to an award of attorneys' fees as a result of Plaintiff's frivolous claims under the Lanham Act, 15 U.S.C. § 1125, and false marking statute, 35 U.S.C. § 292. See 15 U.S.C. § 1117(a) (Lanham Act); 35 U.S.C. § 285 (false marking statute). Specifically, the Court held, "Defendant's request for attorneys' fees is granted but is limited to the reasonable fees it incurred in filing the Motion to Dismiss (Doc. 31) count 1 (the Lanham Act, 15 U.S.C. § 1125, claim) and count 3 (the false marking statute, 35 U.S.C. § 292, claim) of the Amended Complaint." (See Doc. 34 at 13 (emphasis added)). Through this holding, the Court sought to make clear that Defendant was only entitled to attorneys' fees it incurredin seeking dismissal of the first and third counts of the Amended Complaint (Doc. 29 at 82-86).
Yet, Defendant claims it is entitled to fees for tasks going back to February 2019.2 (See Doc. 39-1 at 5; see also Doc. 36-1 at 7, 10). The Court already held that Defendant did not show that it was entitled to fees incurred in filing the motion to dismiss the original Complaint (Doc. 16). (Doc. 25 at 20). The Court implicitly embraced that holding when it specified that entitlement to fees is "limited to the reasonable fees [Defendant] incurred in filing the Motion to Dismiss (Doc. 31) count 1 (the Lanham Act, 15 U.S.C. § 1125, claim) and count 3 (the false marking statute, 35 U.S.C. § 292, claim) of the Amended Complaint." (Doc. 34 at 13 (emphasis added)). The Court will therefore deduct the total amount of fees incurred from all entries dated prior to the filing of the Amended Complaint (Doc. 29) on September 18, 2019. That leaves Defendant with a total of 84.3 hours or $60,786 left in fee entries.3
Defendant also claims it is "entitled to an award of its reasonable attorneys' fees related to dismissal of the entire Amended Complaint, as Count 1 and Count 2 are inextricably intertwined." (Doc. 39-1 at 4 (citing Gracie v. Gracie, 217 F.3d 1060, 1070 (9th Cir. 2000))). However, the Court must attempt to apportion the entries between the claims before it can say that the claims are inextricably intertwined such that "it is impossible to differentiate between work done on [the] claims." Gracie, 217 F.3d at 1070. Indeed, the Court has a "duty to make some attempt to adjust the fee award to reflect, even if imprecisely, work performed on non-Lanham Act claims." Id.
As Plaintiff points out, Defendant's itemized statement of attorneys' fees, (Doc. 36-1 at 10-11), includes vague entries that make it difficult, if not impossible, to determine how much time Defendant spent on the state law unfair competition claim. (Doc. 43 at 4). Nonetheless, "the impossibility of making an exact apportionment does not relieve the district court of its duty to make some attempt to adjust the fee award in an effort to reflect an apportionment." Gracie, 217 F.3d at 1070.
Defendant clearly did some work on the portion of the motion to dismiss (Doc. 31) that discussed the unfair competition claim. In fact, Defendant lists various general tasks that were performed on the motion to dismiss (Doc. 31), such as comparing the allegations in the Amended Complaint (Doc. 29) to the allegations in the original Complaint (Doc. 1) for a total of 3.6 hours as well as drafting, reviewing, and revising the motion to dismiss (Doc. 31)—which of course included the portion of the motion to dismiss (Doc. 31) that dealt with the unfair competition claim—for a total of 34.5 hours. (Doc. 36-1 at 10-11). In all, Defendant claims that 55.7 hours were spent on tasks related to drafting, revising, and filing the motion to dismiss.4 (Id.)
Defendant asserts that the Court should apportion no more than one hour of work to the unfair competition claim, but it provides no basis for that number. (Doc. 39-1 at 4 n.1). The Court will apportion based on extrapolating the amount of time expended on the unfair competition claim from the number of pages devoted to the unfair competition claim. See Lucky Break Wishbone Corp. v. Sears, Roebuck & Co., No. C06-312Z, 2009 WL 10676467, at *3 (W.D. Wash. Jan. 8, 2009) (). The motion to dismiss included about half-a-page on the unfair competition claim. (Doc. 31 at 13). There were seventeen pages of substance total. (Doc. 31). Therefore, approximately 2.94% of the motion to dismiss was devoted to the unfair competition claim. Taking 2.94% of the total time spent on the motion to dismiss—55.7 hours—comes to about 1.64 hours.
The Court will round to two hours as it was Defendant's burden to articulate the reasonableness of its fees, and it chose, for whatever reason, not to explicitly detail how much time it spent on the unfair competition claim. That failure is especially egregious given that Defendant gains from a lower number of hours being apportioned to the unfair competition claim (as Defendant is not entitled to fees based on time spent for that claim). Therefore, the Court apportions two hours of the fee entries to the unfair competition claim and deducts those two hours from the 84.3 hours spent working on the motion to dismiss (Doc. 31) (and reply (Doc. 33)) after September 18, 2019. The amount of fees deducted is $1,380 (two hours of defense attorney Cole Schlabach's time at an hourly rate of $690).5
Defendant also claims, in the Reply (Doc. 44), that it is entitled to fees—totaling $10,350—for fifteen hours of work done on the Motion for Attorneys' Fees (Doc. 36...
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