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Slep-Tone Entertainment Corp v. Backstage Bar and Grill et al

March 25, 2013


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



After Plaintiff Slep-Tone Entertainment Corp. failed to prosecute its suit against the numerous Defendants, the Court dismissed the case with prejudice. (ECF No. 89.) Afterwards, the Court granted Defendants Kelly Sugano and Taka-O's unopposed motion for attorney's fees, finding that they were the prevailing parties in this exceptional case under 15 U.S.C. § 1117(a). (ECF No. 104.) Slep-Tone failed to pay the attorney's-fee award and instead filed a Motion for Reconsideration under Federal Rules of Civil Procedure 59(e) and 60(b)(6). (ECF No. 105.) Defendants opposed the Motion and moved for contempt and sanctions. (ECF No. 108.) After considering the merits of both Motions, the Court DENIES Slep-Tone's Motion for Reconsideration and DENIES Sugano and Taka-O's Motion for Contempt.*fn1


Federal Rule of Civil Procedure 60(b) permits a court to relieve a party of an order for, among other reasons, "any other reason that justifies relief." Fed. R. Civ. P. 60(b)(6). Under Ninth Circuit case law, a party may only seek relief under this catchall provision when the party demonstrates "extraordinary circumstances" warranting the court's favorable exercise of discretion. Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1168 (9th Cir. 2002). To satisfy its burden under this lofty standard, a party must prove both (1) an injury and (2) circumstances beyond its control. Id. Negligence by a party's attorney does not constitute the requisite extraordinary circumstances, unless the client can demonstrate gross negligence by its attorney. Id. at 1168--69.

Under Rule 59(e), a party may move to alter or amend a judgment. But this Rule can only be invoked to reconsider a decision on the merits; it cannot be used to attack an attorney's-fee award because "a request for attorney's fees . . . raises legal issues collateral to the main cause of action-issues to which Rule 59(e) was never intended to apply." White v. N.H. Dep't of Emp't Sec., 455 U.S. 445, 451 (1982).

The Local Rules further elucidate the proper bases for which a party may seek reconsideration:

(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. L.R. 7-18.

Additionally, "[n]o motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion." Id.

Slep-Tone asks the Court to reconsider the January 15, 2013 Order awarding $18,105 in attorney's fees to Sugano and Taka-O, contending that Slep-Tone-and not Sugano and Taka-O-was the prevailing party in this case. Notwithstanding the procedural impropriety of Slep-Tone's Motion and assuming Slep-Tone could demonstrate the requisite extraordinary circumstances, the Court disagrees with SlepTone's assertion that it was the prevailing party.

The Lanham Act provides that a court "in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). While the statute does not define who is a prevailing party, the Supreme Court has interpreted the term several times in the context of federal fee-shifting statutes and has held that the defining factor is whether there has been an "alteration in the legal relationship of the parties." See, e.g., Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 605 (2001), superseded by statute, OPEN Government Act of 2007, Pub. L. No. 110-175, § 4, 121 Stat. 2524, 2525. Under this standard, enforceable judgments on the merits and court-ordered consent decrees suffice as the basis for an attorney's-fee award. Id. at 604.

An involuntary dismissal "operates as an adjudication on the merits," unless the dismissal order states otherwise. Fed. R. Civ. P. 41(b). The Ninth Circuit has recognized that "a defendant is a prevailing party following dismissal of a claim if the plaintiff is judicially precluded from refiling the claim against the defendant in federal court." Cadkin v. Loose, 569 F.3d 1142, 1150 (9th Cir. 2009) (interpreting § 505 of the Copyright Act). Numerous other circuits have held that a dismissal with prejudice renders a defendant the prevailing party.*fn2

In Highway Equipment Co., on the eve of trial, both parties reciprocally agreed to release all claims against each other. 469 F.3d at 1030. The plaintiff moved for a voluntary dismissal, and the court dismissed the case with prejudice. Id. The defendant then moved for attorney's fees under 35 U.S.C. § 285, claiming it was the "prevailing party." Id. at 1031. The district court agreed. On appeal, the Federal Circuit affirmed, holding that, "the dismissal with prejudice, based on the covenant . . . [had] the necessary judicial imprimatur to constitute a judicially sanctioned change in the legal relationship of the parties." Id. at 1035.

In this case, the parties entered into a settlement agreement. Although Sugano and Taka-O paid $5,000 under the settlement agreement, Slep-Tone failed to move to dismiss them from this case. (Opp'n 6.) The Court later dismissed the entire case with prejudice because of Slep-Tone's lack of prosecution. (ECF No. 89.) Sugano and Taka-O are the prevailing parties under ยง 1117(a) of the Lanham Act because of this dismissal with prejudice. Even if Slep-Tone moved to dismiss Sugano and TakaO under the terms of the ...

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