Free Order on Motion for Attorney Fees - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ) ) Plaintiff, ) ) vs. ) ) Brent S. Plew, d/b/a/ Tobacco ) Center & Mini Mart, et al., ) ) Defendants. ) ) I. Introduction On December 1, 2004, Plaintiff Lorillard Tobacco Company ("Lorillard") filed an application for attorneys' fees against Defendants Amer Alshemari, d/b/a Alaya's Dollar Store (referred to collectively as "Alshemari"), and Antoin Yelda and/or Yelda Enterprises, d/b/a Alamo Liquor & Foods (referred to collectively as "Yelda"). Motion (doc. 91). Neither Alshemari nor Yelda filed a response to Lorillard's motion. On May 11, 2005, Lorillard filed a notice of settlement of the case against Alshemari. (doc. 132). Thereafter, the parties filed a stipulation regarding an order of a permanent injunction and Lorillard Tobacco Company, IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

No. CIV 03-00251 PHX RCB O R D E R

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dismissal of the case against Alshemari. (doc. 134). The Court granted such stipulation on May 20, 2005. (doc. 135). Although neither the notice nor the stipulation makes reference to Lorillard's motion for attorney's fees, the Court assumes that the settlement contemplated a resolution of all issues before the Court and that attorneys' fees are no longer at issue. Therefore, with respect to Alshemari, the Court shall deny Lorillard's motion for attorneys' fees, without prejudice. However, attorneys' fees remain at issue as against Yelda. Having carefully reviewed Lorillard's application, the Court now rules. II. Background Facts On February 7, 2003, Lorillard filed its complaint in this matter. (doc. 1). The complaint alleged several claims for relief, including Counterfeiting and Infringement of Federally Registered Trademarks (15 U.S.C. § 1114(1)); Federal Unfair Competition, False Designations, Descriptions and Representations (15 U.S.C. § 1125(a)); Dilution (15 U.S.C. § 1125(c)); Dilution (A.R.S. § 441448.01); Common Law Unfair Competition; and Statutory Unfair Competition (A.R.S. § 44-1453). Id. Lorillard asserted each of these claims against each of the named defendants, including Yelda. Second Amend. Complt. (doc. 76). Lorillard sought relief against Yelda based on the allegation that he was selling counterfeit NEWPORT cigarettes. Second Amend. Complt. (doc. 76). On November 4, 2004, the Court granted default judgment against Yelda. Judgment (doc. 83). In addition to declaratory and injunctive relief, the Court awarded Lorillard damages in the amount of $3,000. Id. Lorillard now moves the Court to grant it attorneys' fees against Yelda in the amount of $11,667.45. Motion -2Document 138 Filed 07/13/2005

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(doc. 91) at 2. III. Standard Pursuant to 15 U.S.C. § 1117, a court may award attorneys' fees in cases involving trademark infringement. The statute holds that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). The Ninth Circuit has held that "[w]hile the term 'exceptional' is not defined in the statute, attorney's fees are available in infringement cases where the acts of infringement can be characterized as malicious, fraudulent, deliberate, or willful." Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1023 (9th Cir. 2002). IV. Discussion Lorillard asserts that this is the kind of "exceptional" case in which 15 U.S.C. § 1117 permits the Court to award attorneys' fees. Specifically, Lorillard contends that Yelda's infringement was willful and deliberate. Motion (doc. 91) at 4. Lorillard first argues that Yelda's failure to answer or otherwise respond to its initial allegation of willful infringement deems the allegation to be admitted. Id. Moreover, Lorillard argues that Yelda's actions were clearly willful and deliberate because Defendant "knew [he was] buying counterfeit cigarettes." Id. at 5. To support this argument, Lorillard notes that Yelda bought the cigarettes from "illicit sources" for "cheaper than the real thing[.]" Id. The general rule of law is that upon default, the factual allegations of a complaint, except those relating to the amount of damages, will be taken as true. Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977). Thus, by entry of default -3Document 138 Filed 07/13/2005

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judgment against Yelda, the Court determined, as alleged in Lorillard's Second Amended Complaint, that Yelda's acts were committed "to take a competitive advantage without expenditure of resources, by a strategy of willful infringement." Second Amend. Complt. (doc. 76) at ¶24. Therefore, Yelda's infringement was determined to be willful, and Lorillard is entitled to reasonable attorneys' fees. Lorillard submits the affidavit of Pamela M. Overton1 to explain the fees incurred in relation to this matter. Exbt. 1 (doc. 91). In her affidavit, Overton describes the time and work expended by the attorneys (Overton, Jennifer M. Dubay, and Leigh Anne Ciccarelli) and paralegals (Jane L. Hernandez and Dianna L. Knothe) who worked on this case. Id. Each charged hourly rates of $315-318, $270-273, $202.50, $155 and $144-145, respectively. Id. In addition, Overton notes that an additional two hours of work, at a rate of $225 per hour, were expended in preparing the motion for attorneys' fees against Yelda. Id. After reviewing Overton's affidavit and finding no clear evidence showing the fees and costs to be unreasonable, the Court concludes that Lorillard's requested amount is appropriate. Therefore, IT IS ORDERED that Lorillard's Motion for Attorneys' Fees (doc. 91) is GRANTED in part and DENIED in part. It is granted with respect to Defendant Yelda and denied without prejudice with respect to Defendant Alshemari. Lorillard is awarded fees and costs

Pamela M. Overton is an attorney for the law firm of Greenberg Traurig, LLP, and one of the attorneys of record for Lorillard. Exbt. 1 (doc. 91) at 2. Case 2:03-cv-00251-RCB -4Document 138 Filed 07/13/2005 Page 4 of 5

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in the total sum of $11,667.45. The clerk shall amend the judgment previously entered in favor of Lorillard and against Yelda to include attorneys fees and costs in the sum of $11,667.45. DATED this 12th day of July, 2005.

Copies to counsel of record

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