MEMORANDUM AND ORDER RE: MOTION FOR ATTORNEY'S FEES AND COSTS
Plaintiff Paula Shepard brought this action against defendants Jane Miller,*fn1 Career Press, Inc., and New Page Books, based on defendants' alleged use of plaintiff's protected work in a book about the use of dogs to treat psychiatric disabilities.
In her Complaint, plaintiff alleged a federal copyright infringement claim and state law claims for fraud, common law misappropriation, and violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200-17210.
The court previously granted defendants' special motion to strike plaintiff's state law claims pursuant to California's anti-Strategic Lawsuits Against Public Participation ("anti-SLAPP") statute, Cal. Civ. Proc. Code § 425.16. See Shepard v. Miler, Civ. No. 2:10-1863, 2010 WL 5205108 (E.D. Cal. Dec. 15, 2010). In the same Order, the court denied defendants' motion for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 12(c) on plaintiff's federal copyright claim. Pursuant to subsection 425.16(c)(1) of the anti-SLAPP statute, defendants now seek the attorney's fees and costs incurred in litigating their anti-SLAPP motion.
Pursuant to California's anti-SLAPP statute, "a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney's fees and costs." Cal. Civ. Proc. Code § 425.16(c)(1). It is well-settled that such an award of fees and costs is mandatory under the statute, Ketchum v. Moses, 24 Cal. 4th 1122, 1131 (2001), and applies to successful anti-SLAPP motions brought in federal court. Verizon Del., Inc. v. Covad Commc'ns Co., 377 F.3d 1081, 1091 (9th Cir. 2004). An award of fees under subsection 425.16(c)(1) may also include the "fees incurred in litigating the award of attorney fees," Ketchum, 24 Cal. 4th at 1141, and appellate fees and costs, Metabolife Int'l, Inc. v. Wornick, 213 F. Supp. 2d 1220, 1222 (S.D. Cal. 2002).
"The fee-shifting provision was apparently intended to discourage  strategic lawsuits against public participation by imposing the litigation costs on the party seeking to 'chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances' and encourage 'private representation in SLAPP cases.'" Ketchum, 24 Cal. 4th at 1131 (2001) (quoting Cal. Civ. Proc. Code § 425.16(a)); see also Northon v. Rule, --- F.3d ----, ----, 2011 WL 135720, at *2 (9th Cir. 2011) ("The entitlement to fees and costs enhances the anti-SLAPP law's protection of the state's 'important, substantive' interests."). California courts have thus held that the anti-SLAPP statute reflects a "strong preference for awarding attorney fees to successful defendants" and the "term 'prevailing party' must be interpreted broadly to favor an award of attorney fees to a partially successful defendant." Lin v. City of Pleasanton, 176 Cal. App. 4th 408, 425-26 (1st Dist. 2009) (internal citations and quotation marks omitted).
Although the court granted defendants' anti-SLAPP motion and thus struck all of plaintiff's state law claims, plaintiff nonetheless contends that defendants are not entitled to fees under subsection 425.16(c)(1) as the "prevailing party." Specifically, plaintiff argues that defendants should not be treated as the prevailing party because the court did not grant defendants' motion for judgment on the pleadings as to plaintiff's federal copyright claim, which is similar to her state law claims.
Under certain circumstances, a defendant may not be considered a prevailing party even though the court granted its anti-SLAPP motion because "the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion." Mann v. Quality Old Time Serv., Inc., 139 Cal. App. 4th 328, 340 (4th Dist. 2006). "The crucial question is one of practicality; did anything of substance (technical victories notwithstanding) change in the posture of the case and the claims being lodged against the defendant after it brought the special motion to strike than were in existence beforehand." Brown v. Elec. Arts, Inc., 722 F. Supp. 2d 1148, 1155 (S.D. Cal. 2010).
In Brown, the court determined that the defendant was not entitled to fees after the court granted its unopposed anti-SLAPP motion but gave the plaintiff leave to amend, and the plaintiff reasserted all of his state law claims in an amended complaint. Id. at 1155-57 (discussing Verizon Del., Inc., 377 F.3d at 1090). The court also held that the defendant did not qualify as the "prevailing party" on its second motion to strike the amended complaint because the court simply declined to exercise supplemental jurisdiction over the state law claims, thus leaving the plaintiff free to assert the claims in state court. Id. at 1157.
In Moran v. Endres, 135 Cal. App. 4th 952 (2d Dist. 2006), the state appellate court upheld the trial court's denial of fees under subsection 425.16(c)(1) when the defendant moved to strike all eleven causes of action in the complaint, but prevailed only as to a purported cause of action for "conspiracy." Id. at 954-56. The court held that such a trivial victory did not entitle defendant to fees because, although his motion was granted in part, the ruling "in every practical sense meant nothing." Id. at 956.
Unlike Brown and Moran, the success of defendants' anti-SLAPP motion in this case was neither minor nor technical. In its Order granting defendants' motion, the court addressed the merits and ultimately struck all of plaintiff's state law claims. While the court agrees that plaintiff's misappropriation and UCL claims were similar to her federal copyright claim, it was plaintiff, not defendants, who chose to assert those claims and defendants were entitled to utilize the anti-SLAPP statute to dispose of them. With the elimination of the state law claims--especially the fraud claim--defendants undeniably "narrowed the scope of the lawsuit, limiting discovery, reducing potential recoverable damages, and altering the settlement posture of the case," Mann, 139 Cal. App. 4th at 340. See, e.g., Miller v. Nat'l Am. Life Ins. Co., 54 Cal. App. 3d 331, 336 (1976) ("Respondent's claim of fraud . . . is in tort, and will support a punitive damage award upon proper proof."); U.S. for Benefit & Use of Ehmcke Sheet Metal Works v. Wausau Ins. Cos., 755 F. Supp. 906, 910-11 (E.D. Cal. 1991) ("Presumably, it is the potential for punitive damages inherent in the bad faith claim which makes the claim alluring. Such a threat could induce litigants to assert unwarranted settlement demands, and ultimately to coerce inflated settlements.").
Moreover, the fact that plaintiff's federal copyright claim remains is not indicative of defendants' success on their anti-SLAPP motion because that claim is not subject to the state anti-SLAPP statute. It would also be misguided to treat defendants' success on their anti-SLAPP motion as less significant simply because, in the same Order, the court denied defendants' motion for judgment on the pleadings as to plaintiff's federal copyright claim simply because the two motions--which were actually filed one month apart--were heard on the same date.
Accordingly, because defendants obtained the full extent of relief available to them through the anti-SLAPP statute and prevailed in eliminating plaintiff's state law claims from this action, they are entitled to fees under subsection 425.16(c)(1).
II. Calculating the Award "[T]he fee setting inquiry in California ordinarily begins with the 'lodestar,' i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate." PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1095 (2000); see Ketchum, 24 Cal. 4th at 1131 (indicating that the lodestar is used to calculate fees under the anti-SLAPP statute). "The reasonable hourly rate is that prevailing in the community for similar work." PLCM Grp., 22 Cal. 4th at 1095 (citing Margolin v. Reg'l Planning Comm'n, 134 Cal. App. 3d 999, 1004 (2d Dist. 1982)). The lodestar may then by adjusted upward or downward by the court based on relevant factors." Ketchum, ...