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Inhale, Inc. v. Starbuzz Tobacco, Inc.

United States District Court, C.D. California

March 31, 2015

INHALE, INC., Plaintiff,
STARBUZZ TOBACCO, INC.; WAEL SALIM ELHALAWANI, Defendants. STARBUZZ TOBACCO, INC., Counterclaimant, INHALE, INC.; ROES 1-10, inclusive, Counterdefendants.


OTIS D. WRIGHT, II, District Judge.


Pursuant to the Ninth Circuit's mandate (ECF No. 99.), the Court considers Defendants Starbuzz Tobacco, Inc. and Wael Salim Elhalawani (collectively, "Defendants") application for attorney's fees and costs incurred in defending Plaintiff Inhale, Inc.'s appeal. (ECF No. 87.) Since the Ninth Circuit has held that Defendants are a prevailing party in this action and entitled to attorney's fees and costs, the Court's only inquiry is the reasonableness of the requested fees and costs. For the reasons discussed below, the Court AWARDS $48, 548.44 in attorney's fees and costs to Defendants.[1] (ECF No. 87.)


Plaintiff Inhale, Inc. designs, manufactures, and sells various types of smoking products, including hookahs. A hookah is a device used to smoke tobacco, among other things. A hookah's design directs tobacco smoke down through a pipe and into a water container, which filters and cools the tobacco smoke for inhalation. On August 29, 2008, Plaintiff published a water container decorated with a skull and crossbones graphic and later registered its water container with the United States Copyright Office.

On May 4, 2011, Plaintiff sued Defendants for copyright infringement, alleging Starbuzz sold water containers for hookahs, beginning on December 29, 2010, that infringe Plaintiff's copyrighted design. (ECF No. 1.) This Court granted summary judgment on June 18, 2012 and final judgment in Defendants' favor on July 6, 2012. (ECF Nos. 54, 59.) Plaintiff appealed the decision to the Ninth Circuit Court of Appeals (the "Appeal") and sought a stay of judgment. (ECF Nos. 73, 76.)

On January 9, 2014, the Ninth Circuit denied the Appeal, and ordered Plaintiff to pay Defendants' attorney's fees for the Appeal, pursuant to Defendants' request. On January 23, 2014, Plaintiff petitioned the Ninth Circuit for a rehearing and rehearing en banc. On June 3, 2014, the Ninth Circuit denied Plaintiff's petition. (ECF No. 85.) The Ninth Circuit awarded additional attorney's fees incurred by Defendants opposing the petition and remanded for the district court to determine the amount. ( Id. at 4, 12.)

On June 9, 2014, Plaintiff filed a motion to stay the Ninth Circuit's mandate pending appeal. The Ninth Circuit stayed the mandate for ninety days, to be continued until final disposition by the Supreme Court if a petition for a writ of certiorari is filed. (ECF No. 86.) On June 16, 2014, Defendants filed this Application for Attorney's Fees seeking $48, 237.00 pursuant to the Ninth Circuit's Opinion and Amended Opinion. (ECF No. 85.) The Plaintiff's petition for writ of certiorari was denied on December 8, 2014, and the Ninth Circuit issued an Amended Mandate awarding additional costs against Plaintiff in the amount of $311.44. (ECF No. 99.) Defendants renew their request for attorney's fees and costs for a total amount of $48, 548.44. (ECF Nos. 107, 110.)


A. Attorney's Fees Under the Copyright Act

The Copyright Act of 1976 permits a court to "award a reasonable attorneys' fee to the prevailing party." 17 U.S.C. ยง 505. Attorney's fees are proper when either successful prosecution or successful defense of the action furthers the purposes of the Copyright Act. See Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996). In determining whether a party is entitled to attorney's fees, courts must apply the same standard to prevailing plaintiffs and defendants. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). "[A]n award of attorneys' fees to a prevailing defendant that furthers the underlying purposes of the Copyright Act is reposed in the sound discretion of the district courts." Fantasy, 94 F.3d at 555.

B. Amount of Attorney's Fees

The reasonableness of a party's fee calculation is determined by the "lodestar method." Morales v. San Rafael, 96 F.3d 359, 363 (9th Cir. 1996). Under the lodestar method, the number of hours reasonably expended in litigation are multiplied by a reasonable hourly rate to produce the reasonable fee award. Id. The Court may then consider whether to enhance or reduce the lodestar figure based on various factors. Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1995); Hensley v. Eckerhart, 461 U.S. 424, 430 n. 3 (1983).

The party requesting attorney's fees must submit evidence in support of the number of hours and the hourly rates claimed. See Welch v. Met. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007). Billing rates are "established by reference to the fees that private attorneys of an ability and reputation comparable to that of prevailing counsel charge their paying clients for legal work of similar complexity." Id. at 946. The party opposing the request for attorney's fees "bears the burden of providing specific evidence to challenge the accuracy and reasonableness of the hours charged." McGrath v. County of Nevada, 67 F.3d 248, 255 (9th Cir. 1995). Hours that are "excessive, redundant, or otherwise unnecessary" may be excluded by the Court. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Likewise, hours that are billed in block-format may be reduced. See Lahiri v. Universal Music and Video Dist. Corp., 606 F.3d 1216, 1222-23 (9th Cir. 2010); Welch, 480 F.3d at 948. When faced with a "massive fee application, " the Court may make "across-the-board percentage cuts" instead of making an hour-by-hour analysis. Gates v. Deukmejian, 987 F.2d 1392, 1399 (9th Cir. 1992). The Court may make a small across-the-board reduction, no ...

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