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1800 Get Thin, LLC v. Michael Hiltzik

September 13, 2011

1800 GET THIN, LLC, PLAINTIFF,
v.
MICHAEL HILTZIK, AN INDIVIDUAL; LOS ANGELES TIMES COMMUNICATIONS, LLC; STUART PFEIFER; ETC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: United States District Judge Hon. Otis D. Wright, II

I. INTRODUCTION

ORDER DENYING DEFENDANTS' MOTION FOR ATTORNEYS' FEES AND COSTS [28]

Currently before the Court is Defendants, Michael Hiltzik, Los Angeles Times Communications, LLC, and Stuart Pfeifer's, Motion for Attorneys' Fees and Costs. (Dkt. No. 28.) The Court deems the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. For the following reasons, the Court DENIES Defendants' Motion.

II. BACKGROUND

On July 25, 2011, this Court granted Defendants' Motion to Dismiss with prejudice 1800 GET THIN's ("Plaintiff") First Amended Complaint. (Dkt. No. 27.) The Court held Plaintiff's trademark infringement allegations, that Defendants' references to Plaintiff's trademark were false and misleading, were not sufficiently pled and failed to state a claim under the Lanham Act. (Dkt. No. 27.) As a result, Defendants have filed the instant motion requesting costs and attorneys' fees. (Dkt. No. 28.) Defendants seek $97,200.65 in defending against Plaintiff's trademark infringement claims, and an additional $11,506.50 for the fees incurred in connection with the instant motion. (Mot. at 1.)

III. LEGAL STANDARD

Under the "American Rule," each side to a lawsuit bears the costs of their own attorneys' fees unless a statute or private agreement provides otherwise. Carbonell v. INS, 429 F.3d 894, 897-98 (9th Cir. 2005). The Lanham Act permits an award of attorneys' fees to the prevailing party in "exceptional cases." 15 U.S.C. § 1117(a). While the term "exceptional" is not defined by statute, "this 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). Moreover, district courts are vested with the inherent power to issue sanctions in the form of attorneys' fees . See Tumpap v. Aurora Loan Servs. LLC , CIVIL NO. 10-00325 SOM-RLP, 2011 U.S. Dist. LEXIS 78701, at *15 (D. Haw. May 24, 2011). The Ninth Circuit requires a specific finding of bad faith before a court may issue these sanctions pursuant to its powers. Id . (citing Fink v. Gomez , 239 F.3d 989, 992 (9th Cir. 2001)).

IV. DISCUSSION

Defendants seek attorneys' fees in this case pursuant to the Lanham Act, or alternatively, through the Court's inherent powers. The Court will address each in turn.

a. Lanham Act - 15 U.S.C. § 1117(a)

Defendants aver Plaintiff's Lanham Act claims were "without merit." (Mot. at 6.) Therefore, Defendants argue, this litigation is one of the "exceptional cases" which justifies an award of attorneys' fees. (Mot. at 2.) The Court, however, disagrees with Defendants' position.

To bolster their assertion that Plaintiff's claims were without merit, Defendants argue that the Lanham Act "was never intended to apply to use of a trademark in news reporting activities." (Mot. at 8.) However, the Court believes that this statement is overreaching. Although the nominative fair use defense was designed in part to preserve First Amendment interests, the nominative fair use doctrine does not appear to provide blanket protection for news reporting. Indeed, the court in New Kids on the Block v. News America Pub., Inc. , seemed to suggest that the nominative fair use defense would not apply to cases where the use was "false or misleading." 971 F.2d 302, 307-08 (9th Cir. 1992). *fn1 Given the fact that Plaintiff alleged that Defendants' use was false and misleading, the Court does not find that Plaintiff's claim was completely without merit just because Plaintiff's allegations were found insufficient to state a claim. See Ant v. McPartlin , CV 09-7672 PSG (Rzx), 2010 U.S. Dist. LEXIS 122456, at *18-19 (C.D. Cal. Nov. 2, 2010) (noting that a party being entitled to judgment does not mean opposing party's claims were groundless otherwise the "'exceptional' case requirement in the statute would be a nullity.").

Moreover, Defendants argue that Plaintiff's allegations were found to be "too speculative" and insufficient to state a claim, which entitles Defendants to attorneys' fees. (Mot. at 7-8.) The Court declines, however, to use this as the standard to characterize an "exceptional case." There is nothing "exceptional" about failing to state a claim, in fact, it is a regular occurrence within the federal court system.

Finally, Defendants argue this case is "exceptional" because Plaintiff engaged in abusive litigation tactics which was done in bad faith. (Mot. at 9.) Specifically, Defendants argue that Plaintiff filed a convoluted Complaint, filed five lawsuits against Defendants, *fn2 and filed a Motion to Amend on minimum notice. (Mot. at 9-11.) Although the Court agrees with Defendants that Plaintiff's ...


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