ThermoLife Int'l LLC v. Bpi Sports LLC

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ThermoLife International LLC, et al., Plaintiffs, v. BPI Sports LLC, Defendant.

No. CV-20-02091-PHX-SPL

United States District Court, D. Arizona

May 18, 2023

ORDER

Honorable Steven P. Logan United States District Judge

Before the Court is Defendant BPI Sports, LLC's (“Defendant” or “BPI”) Application for Attorneys' Fees (the “Application,” Doc 72). On September 30, 2022, the Court entered an Order (the “Fee Entitlement Order,” Doc. 71) granting Defendant's Motion for Attorney's Fees and Costs (the “Fee Entitlement Motion,” Doc. 53), finding that-pursuant to the Lanham Act and Federal Rule of Civil Procedure 41(d)-Defendant was entitled to the costs and attorneys' fees incurred in this case (the “Present Action”) and in a previous action filed by Plaintiff ThermoLife International LLC (“ThermoLife” and together with Muscle Beach Nutrition, LLC “Plaintiffs”) against Defendant: ThermoLife International LLC v. BPI Sports LLC (the “Initial Action”), No. 2:18-cv-04663-SPL (D. Ariz. Dec. 12, 2018). (See Doc. 71 at 22). The Fee Entitlement Order only addressed Defendant's entitlement to an award; it did not make any determination as to the amount of the award.^[1] (Id. at 1). Upon finding that Defendant was entitled to an award, the Court ordered Defendant to file the Application presently before the Court. (Id. at 23).

Defendant's Application has been fully briefed and is ready for review. (Docs. 72, 73 & 74). Defendant seeks an award of $530,332.67 in attorneys' fees.^[2] (Doc. 74 at 12). For the following reasons, the Court grants Defendant's Application as modified.^[3]

I. BACKGROUND

The Court incorporates by reference its discussion of the background facts set forth in its Fee Entitlement Order, which describes in detail the Present and Initial Actions between these parties, including the specific claims Plaintiffs pursued against Defendant and the rather complicated procedural history of this litigation. (See Doc. 71 at 2-3).

II. LEGAL STANDARD

Federal Rule of Civil Procedure 54 provides that any “claim for attorneys' fees and related nontaxable expenses must be made by motion.” Fed.R.Civ.P. 54(d)(2). “Unless a statute or a court order provides otherwise, the motion must:

(i) be filed no later than 14 days after the entry of judgment;

(ii) specify the judgment and the statute, rule, or other grounds entitling the movant to the award;

(iii) state the amount sought or provide a fair estimate of it; and

(iv) disclose, if the court so orders, the terms of any agreement about fees for the services for which the claim is made.

Fed. R. Civ. P. 54(d)(2)(B). As noted above, the Court has already determined that Defendant is entitled to an award. (See Doc. 71). Thus, for purposes of this Order, the Court focuses primarily on the third of the above Rule 54 requirements-that is, the amount Defendant seeks in attorneys' fees and whether such amount is reasonable.

Rule 54 also provides that courts may establish their own local rules to resolve fee-related issues. Fed.R.Civ.P. 54(d)(2)(D). In this District, Local Rule of Civil Procedure (“LRCiv”) 54.2 applies to requests for fees and related non-taxable expenses. Under LRCiv 54.2, “[a] party requesting an award of attorneys' fees must show that it is (a) eligible for an award, (b) entitled to an award, and (c) requesting a reasonable amount.” Thompson v. Ariz. Movers & Storage Inc., No. CV-17-03819-PHX-DGC, 2018 WL 2416187, at *1 (D. Ariz. May 29, 2018) (citing LRCiv 54.2(c)).^[4] Again, the Court has already made determinations as to the eligibility and entitlement requirements; only the reasonableness requirement remains at issue.

III. DISCUSSION

In opposing Defendant's Application, Plaintiffs make three broad arguments. First, Plaintiffs argue that Defendant improperly seeks fees for non-Lanham Act work and that such work is not compensable. Second, Plaintiffs argue that Defendant's award should be reduced based on this Court's consideration of the relevant “reasonableness” factors (the Kerr factors). Third, Plaintiffs seek reductions based on block billing and for unreasonable or excessive time spent preparing the Fee Entitlement Motion and the instant Application. The Court will consider each of these three broad arguments in turn.

A. Non-Lanham Act Work

Plaintiffs first argue that Defendant's Application “seeks fees for certain work that is not compensable as an attorney's fee award.” (Doc. 73 at 6). Plaintiff's identify four categories of work for which they argue Defendant cannot receive an award of fees: (i) work on the FDUTPA, civil conspiracy, and other state-law claims; (ii) work related to 28 U.S.C. § 1927; (iii) work related to ThermoLife patents and patent litigations; and (iv) work related to insurance, indemnification, and audit entries. (Id. at 8-9). Plaintiffs argue that Defendant is only entitled to fees for work related to Plaintiffs' Lanham Act claim and that these four categories of work should be excluded from Defendant's fee request because they involved work unrelated to the Lanham Act claim.

1. Work on FDUTPA, Civil Conspiracy, and Unfair Competition Claims

“The Lanham Act simply provides that ‘[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party,' 15 U.S.C. § 1117(a); it does not address the proper procedure for determining reasonable attorney fees in a case involving non-Lanham Act claims and unsuccessful Lanham Act claims, in addition to successful claims under the Act.” Gracie v. Gracie, 217 F.3d 1060, 1069 (9th Cir. 2000). “[A]s a general matter, a prevailing party in a case involving Lanham and non-Lanham Act claims can recover attorneys' fees only for work related to the Lanham Act claims.” Id. (emphasis added). Thus, the Ninth Circuit recognizes a “general rule of apportionment” whereby the Court has a “duty to make some attempt to adjust the fee award in an effort to reflect an apportionment” between fees related to Lanham Act and non-Lanham Act claims, even where an exact apportionment is impossible. Id. (emphasis in original). The only exception to this general rule is where the claims are “so inextricably intertwined that even an estimated adjustment would be meaningless.” Id.

Plaintiffs argue that any time entries relating to work on the FDUTPA, civil conspiracy, and unfair competition claims should be reduced from Defendant's fee request because such work related to non-Lanham Act, state-law claims. (Doc. 73 at 8). Defendant responds by arguing that “the Court determined that the FDUTPA claim was sufficiently intertwined with the Lanham Act claim such that any recovery in connection with the Lanham Act was sufficient to ‘cover Defendant's efforts with respect to the FDUTPA claim.'” (Doc. 74 at 4 (quoting Doc. 71 at 22)).

Defendant misconstrues the Court's holding. The Fee Entitlement Order did not make any express determination as to how “intertwined” the state-law and Lanham Act claims were. Rather, the Court found that “Defendant fails to explain how Plaintiffs' FDUTPA claim was not ‘inseparably intertwined' with Plaintiffs' Lanham Act claim.” (Doc. 71 at 22 (emphasis added)). Likewise, the Court did not find that an award pursuant to the Lanham Act was “sufficient to cover” Defendant's expenses with respect to the statelaw claims. Rather, the Court found that “ Defendant fails to explain . . . why any fees and costs awarded pursuant to the Lanham Act would not be sufficient to cover Defendant's efforts with respect to the FDUTPA claim.” (Id. (emphasis added)). Moreover, given that Defendant had not yet provided the Court with an itemized breakdown of the various tasks for which fees are sought, it was impossible for the Court to even attempt apportionment, let alone make any definitive finding as to whether the FDUTPA, civil conspiracy, and unfair competition claims were “inseparably intertwined” with the Lanham Act claim.

Defendant has now provided the Court with an itemized breakdown of the work for which fees are requested. (Doc. 72-1). Reviewing the time entries, the Court finds that apportionment is possible, and that the FDUTPA, civil conspiracy, and unfair competition claims are therefore not inseparably intertwined with the Lanham Act claims. Specifically, Defendant requests fees for 2.4 hours of work related to the FDUTPA claim. (See id. at 38, 48, & 55). This work equated to $1,489 in requested fees that will be reduced from Venable LLP's (“Venable”) final award. Likewise, Defendant requests fees for 12.1 hours of work related to the civil conspiracy and unfair competition claims (4.0 hours for Venable and 8.1 hours for Hillyer Legal, PLLC (“Hillyer Legal”)). (See id. at 4, 10, 23, 76, 79-80). This work equated to $5,546 in requested fees that will be reduced from both Venable and Hillyer Legal's final award-with a $2,307 reduction from Venable's fee award and a $3,240 reduction from Hillyer Legal's fee award.

In sum, Venable's final fee award shall be reduced by $3,795.68 and Hillyer Legal's final fee award shall be reduced by $3,240.00 for work related to the FDUTPA, unfair competition, and civil conspiracy claims.

2. Work Related to 28 U.S.C. § 1927

Plaintiffs request that the Court reduce Defendant's fee award by five percent, or over $25,000, for time spent working on Plaintiffs' request for fees under 28 U.S.C. § 1927. Plaintiffs reason that the Court denied Defendant's request for fees under § 1927, and that this therefore means that Defendant should not be entitled to fees for the work Defendant did in drafting its § 1927 arguments.

The Court is unpersuaded. Plaintiffs seem to be arguing that an attorney is not entitled to fees for work put into arguments that are ultimately rejected by a court. Plaintiffs do not provide, and this Court is itself...