Case 8:03-cv-00950-DOC-JTL Document 1192 Filed 12/08/08 Page 1 of 4 Page ID #:7223
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES - GENERAL
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`O
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`Case No. SACV 03-950 DOC(JTLx)
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`Date: December 8, 2008
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`Title: Echostar Satellite Corp., et al. v. NDS Group PLC, et al.
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`DOCKET ENTRY
`[I hereby certify that this document was served by first class mail or Government messenger service, postage prepaid, to all counsel (or parties) at their
`respective most recent address of record in this action on this date.]
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`Date:____________ Deputy Clerk: ___________________________________
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`PRESENT:
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`THE HONORABLE DAVID O. CARTER, JUDGE
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` Kristee Hopkins
`Courtroom Clerk
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` Not Present
`Court Reporter
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`ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS:
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`NONE PRESENT
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`NONE PRESENT
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`PROCEEDING (IN CHAMBERS): DENYING MOTION FOR ATTORNEY’S FEES
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`Before the Court is Defendants John Norris, Christopher Tarnovsky, and George
`Tarnovsky’s (the “Individual Defendants”) Motion for Attorney’s Fees (the “Motion”). The Court
`finds this matter appropriate for decision without oral argument. FED. R. CIV. P. 78; Local R. 7-15.
`After reviewing the moving and responsive papers, and for the reasons set forth below, the Court
`hereby DENIES the Motion.
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`I. BACKGROUND
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`In June 2003, at the outset of this lawsuit, Echostar asserted virtually the same allegations
`against NDS Group PLC and NDS Americas, Inc. (collectively “NDS”) and the Individual Defendants
`bringing the instant Motion. The Individual Defendants are former NDS employees. While Echostar’s
`claims against NDS were litigated at trial, after Echostar filed its Fourth Amended Complaint,
`Echostar’s claims against the Individual Defendants were dismissed with prejudice pursuant to a
`12(b)(6) motion (as many of Echostar’s claims were barred by the statute of limitations and Echostar
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`failed to allege sufficient facts to support a claim for the remaining causes of action). The Individual
`Defendants claim that they spent nearly 700 hours of attorney and paralegal time in defending against
`this suit and, as a result, they request attorney’s fees in the amount of $261,475.38 under the Digital
`Millennium Copyright Act, the Lanham Act, and the California Penal Code.
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`II. LEGAL STANDARD
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`Under the “American Rule,” the prevailing party is usually not entitled to attorney’s fees.
`Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 602, 121
`S. Ct. 1835 (2001). “An award of attorneys’ fees to a litigant in federal court is improper in the absence
`of a contract, an applicable statute, a finding that the losing party acted in bad faith, or other exceptional
`circumstances.” Chang v. Chen, 95 F.3d 27, 28 (9th Cir. 1996); see also Sea-Land Serv., Inc. v. Murrey
`& Son’s Co., 824 F.2d 740, 744 (9th Cir. 1987).
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`A plaintiff is considered a prevailing party if it succeeds on any significant issue in
`litigation which gives some benefit that plaintiff sought in bringing the suit. Hensley v. Eckerhart, 461
`U.S. 424, 433, 103 S. Ct. 1933 (1983). To satisfy this requirement, the suit must have produced a
`material alteration of the legal relationship between the parties. Buckhannon, 532 U.S. 598, 604, 121 S.
`Ct. 1835 (2001). This alteration may be the result of an enforceable judgment or comparable relief
`through a consent decree. Farrar v. Hobby, 506 U.S. 103, 111, 113 S. Ct. 566 (1992). If a plaintiff
`achieves only partial success, the reasonable hours expended on the action as a whole multiplied by a
`reasonable rate may be an excessive amount. Hensley, 461 U.S. at 436.
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`Once the Court has determined that attorney’s fees are warranted in a given case, the
`Court must then assess whether the amount of fees requested is reasonable. “‘In setting a reasonable
`attorney’s fee, the district court should make specific findings as to the rate and hours it has determined
`to be reasonable.’” Gracie v. Gracie, 217 F.3d 1060, 1070 (9th Cir. 2000) (quoting Frank Music Corp.
`v. Metro-Goldwyn Mayer Inc., 886 F.2d 1545, 1557 (9th Cir. 1989)). The first step the district court
`must take is to “determine the presumptive lodestar figure by multiplying the number of hours
`reasonably expended on the litigation by the reasonable hourly rate.” Gracie, 217 F.3d at 1070
`(internal quotation marks and citation omitted). Next, the district court should, where appropriate,
`“adjust the ‘presumptively reasonable’ lodestar figure based upon the factors listed in Kerr v. Screen
`Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir.1975), that have not been subsumed in the lodestar
`calculation.” Id. (internal quotation marks and citation omitted).
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`The Kerr factors are: (1) the time and labor required, (2) the novelty and difficulty of the
`questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of
`other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the
`fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the
`amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys,
`(10) the ‘undesirability’ of the case, (11) the nature and length of the professional relationship with the
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`client, and (12) awards in similar cases. Kerr, 526 F.2d at 70.
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`III. DISCUSSION
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`The Court finds no reason to depart from the American Rule in this case. The Individual
`Defendants’ involvement in this litigation did not involve a contract for attorney’s fees or exceptional
`circumstances, such as bad faith, that warrant the imposition of attorney’s fees. Chang, 95 F.3d at 28.
`In fact, the Individual Defendants appear to be requesting attorney’s fees for work performed by an
`NDS attorney and, in light of the Court’s concurrent award of attorney’s fees to NDS, it would be
`improper for the Court to make duplicative attorney’s fee awards. Further, the Individual Defendants
`have not presented the court with any evidence that they paid anything for their attorneys’ services.
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`Congress modified the American Rule under the Digital Millennium Copyright Act
`(“DMCA”), granting the Court permission, in its discretion, to “award reasonable attorney's fees to the
`prevailing party.” 17 U.S.C. § 1203(b)(5). The American Rule was also modified under the Lanham
`Act, under which courts may only award attorney’s fees in “exceptional cases.” 15 U.S.C. §
`1117(a)(3). The Ninth Circuit considers a case to be exceptional, under the Lanham Act, where the
`plaintiff’s case is “groundless, unreasonable, vexatious or pursue in bad faith.” Stephen W. Boney, Inc.
`v. Boney Services, Inc., 127 F.3d 821, 827 (9th Cir. 1997)(citing Scott Fetzer Co v. Williamson, 101
`F.3d 549 (8th Cir. 1996)). The Individual Defendants’ involvement in this litigation was certainly not
`exceptional under the Lanham Act and the Court chooses not to exercise its discretion to award
`attorney’s fees under the DMCA.
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`In making a determination as to whether or not to award attorney’s fees under the DMCA,
`the U.S. Supreme Court has upheld the use of considerations such as “‘frivolousness, motivation,
`objective unreasonableness (both in the factual and in the legal components of the case) and the need in
`particular circumstances to advance considerations of compensation and deterrence’” – “so long as such
`factors are faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and
`defendants in an evenhanded manner.” Hensley v. Eckerhart, 461 U.S. at 534-35 (1983)(citing Lieb v.
`Topstone Industries, Inc., 788 F.2d 151, 156 (1986)); see also The Traditional Cat Ass'n, Inc. v.
`Gilbreath, 340 F.3d 829, 833 (9th Cir. 2003)(stating that “degree of success obtained” is to be
`considered in addition to the four aforementioned factors in determining whether or not to award
`attorney’s fees under the DMCA). In this case, Echostar’s DMCA claims against the Individual
`Defendants were neither unreasonable nor frivolous. Indeed, Echostar’s DMCA claims against NDS
`were litigated at trial. Similarly, the Individual Defendants’ dismissal at the pleading stage, on
`technical grounds, is not the degree of success necessary to merit the harsh remedy of attorney’s fees.
`Finally, there is no need to award attorney’s fees in this case in order to advance considerations of
`compensation and deterrence. This Court, by separate motion, has already awarded substantial
`attorney’s fees to NDS and the Individual Defendants do not dispute the fact that NDS incurred their
`attorney’s fees.
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`Under Cal. Penal Code §593d(f)(2), attorney’s fees must be awarded to the prevailing
`party. However, the CPC does not provide a definition of “prevailing party” to be used in awarding
`attorney’s fees and there is no precedent construing or applying it. In such circumstances, California
`courts require the court to determine prevailing party status “based on an evaluation of whether a party
`prevailed ‘on a practical level.’” Donner Management Co. v. Schaffer, 142 Cal.App.4th 1296, 1310
`(2006)(citing Gilbert v. National Enquirer, Inc., 55 Cal. App.4th 1273, 1277 (1997)). The Court finds
`that the Individual Defendants did not prevail on a practical level given the fact that the complaint
`against the Individual Defendants was dismissed merely for technical reasons, compounded by the facts
`that the Individual Defendants have not provided evidence that they paid anything for their legal
`services and the fact that NDS has already been awarded attorney’s fees for its legal services in this
`litigation – as detailed in a separate order of this Court.
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`IV. OUTCOME
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`For the foregoing reasons, the Motion is DENIED. The Clerk shall serve this minute
`order on all parties to the action.
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