`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`Case No.: 11cv00637 AJB (WVG)
`ORDER:
`(1) GRANTING IN PART AND
`DENYING IN PART PLAINTIFF’S
`MOTION FOR ATTORNEY’S FEES
`AND PREJUDGMENT INTEREST;
`(Doc. No. 112), and
`(2) GRANTING IN PART AND
`DENYING IN PART
`DEFENDANT’S MOTION FOR
`COSTS (Doc. No. 115).
`
`))))))))))))))
`
`BRIGHTON COLLECTIBLES, INC.,
`a Delaware Corporation,
`Plaintiff,
`
`v.
`PEDRE WATCH COMPANY, INC., a
`New York Corporation, et al.,
`Defendants.
`
`_______________________________
`
`
`
`Before the Court are two motions: (1) Brighton Collectibles, Inc’s (hereinafter
`“Brighton” or Plaintiff) Motion for Attorneys’ Fee and Prejudgment Interest pursuant to
`Federal Rule of Civil Procedure 54(d)(2) and the Copyright Act, 17 U.S.C. § 505 and (2)
`Pedre Watch Company, Inc.’s (hereinafter Pedre or Defendant) Motion for Costs
`pursuant to Federal Rule of Civil Procedure 68. (Doc. Nos. 112 and 115.) The Court
`entertained oral arguments on December 19, 2013. After considering the motions, the
`respective briefs filed in support and opposition, and the parties’ arguments offered
`during the hearing, the Court GRANTS in part and DENIES in part both motions, with
`the limitations explained herein.
`
`1
`
`11cv637
`
`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
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 2 of 17
`
`I.
`
`BACKGROUND
`On March 30, 2011, Brighton commenced this action against Pedre alleging one
`claim of copyright infringement. Brighton alleged that Pedre’s “Cimarron” watch
`infringed Brighton’s “Laguna” watch copyright. This was not the first time the parties
`were engaged in a copyright infringement dispute. In 1998, the parties were involved in
`another litigation over Pedre’s alleged infringement of Plaintiff’s “Daytona” watch
`design. (Doc. No. 96 at 3.) Pedre contends that it had never heard of Brighton nor seen
`Brighton designs until Plaintiff sent its cease-and-desist letter in March 1998. Pedre had
`obtained the allegedly infringing watch from Full Field Industrial Limited, a Hong Kong
`company. Pedre voluntarily ceased selling the allegedly infringing watch after Brighton
`made its objections known. (Doc. No. 102 at 2.) However, Brighton commenced an
`action in October 1998. According to the Pedre, that action settled to “avoid future
`litigation costs,” and the parties agreed that the settlement was not to be construed as an
`admission of liability. (Id)
`In 2008, Pedre purchased the Cimarron watch design, the subject of the current
`case, from its supplier, Universe Watch Trading Co., Ltd. in Hong Kong. In selecting
`the design, Pedre’s president, Jill Kiviat, specifically told the supplier she “did not want
`to buy anything that was like Brighton.” (Id. at 5.) The supplier had informed her the
`Cimarron design was made for a South American customer and was not being sold in the
`United States. (Id.) At that time, Brighton had not offered the Laguna for sale for more
`than four years. However, Brighton argued that “Pedre simply did a cursory scan of
`Brighton’s website, saw that Brighton was no longer selling the Laguna, and pressed
`forward.” (Doc. No. 96 at 6.)
`Pedre then made a single sale of 287 watches to its customer, Coldwater Creek.
`Coldwater Creek then began to advertise the watch in its nationwide catalogs. (Doc. No.
`102 at 3-4.) In September of 2008, Coldwater Creek informed Pedre that Brighton
`alleged the Cimarron infringed on their copyright. After receiving notice of Brighton’s
`claims, Pedre accepted the return of Coldwater Creek’s remaining inventory. A total of
`
`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
`
`2
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 3 of 17
`
`181 units were sold to the public, all remaining units were returned to the manufacturer
`for destruction. (Id. at 4.) Brighton filed an action against Coldwater Creek over the
`Laguna design. That action settled. (Id.) Brighton then commenced the instant action
`against Pedre in this Court.
`On September 16, 2011, in an effort to nip the matter in the bud, Pedre offered to
`submit to an entry of judgment against it pursuant to Rule 68. (See Doc. No. 115, Ex. 1.)
`Pedre offered the payment of fifty thousand dollars ($50,000) as well as an execution of
`a written agreement that Pedre is no longer selling, and will not sell at any time in the
`future, the Cimarron watch at issue. (Id.) Brighton did not accept the offer and the
`parties continued with the litigation. A three day trial began on August 19, 2013. The
`jury returned a verdict for Brighton finding: (1) Brighton did have a valid copyright to
`the “Laguna” watch design; (2) Pedre copied original elements of the “Laguna” design;
`(3) the infringement was non-willful; and (4) a judgment of $16,719.50 was the
`appropriate amount of statutory damages.
`This Court then denied Brighton’s Motion for Permanent Injunction after finding
`Brighton failed to satisfy the traditional four-part test to warrant the need for such
`equitable relief. (Doc. No. 108.) The Clerk of Court then entered judgment in favor of
`Plaintiff, Brighton, in the amount of $16,719.50. (Doc. No. 109.) On November 18,
`2013, the parties timely filed post-judgment motions. Brighton now seeks to recover
`attorneys’ fees and prejudgment interest pursuant to the Copyright Act, 17 U.S.C. § 505
`and Pedre seeks to recover costs pursuant to Rule 68. The Court addresses each motion
`in turn.
`II.
`LEGAL STANDARD
`A.
`The Copyright Act of 1976, 17 U.S.C. § 505
`Federal Rule of Civil Procedure 54(d)(2) permits a party to claim attorney’s fees
`by motion under a substantive law. Section 505 of the Copyright Act grants district
`courts the discretion to award reasonable attorney’s fees to the prevailing party in a
`copyright action. 17 U.S.C. § 505. “In copyright infringement cases, generally, the
`
`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
`
`3
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 4 of 17
`
`prevailing party is the one who succeeds on a significant issue in the litigation that
`achieves some of the benefits the party sought in bringing the suit.” Wall Data Inc. v.
`Los Angeles Cnty. Sheriff’s Dept., 447 F.3d 769, 787 (9th Cir. 2006).
`Prevailing parties are to be awarded their reasonable attorney’s fees as a matter of
`the court’s discretion. Fantasy, Inc. v. Fogerty, 94 F.3d 553, 557 (9th Cir. 1996). There
`is no exact formula and courts are to make their determination under equitable
`circumstances. See Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S. Ct. 1023 (1994).
`The guiding principle for courts is the promotion of the Copyright Act’s objectives.
`Frank Music Corp. v. Metro-Goldwyn-Mayer Inc., 886 F.2d 1545, 1556 (9th Cir. 1989).
`A plaintiff bears the burden of showing the time spent and that it was “reasonably
`necessary to the successful prosecution of their copyright claims.” Id. at 1557.
`A court must first determine whether awarding attorney’s fees is appropriate. This
`is a matter for the district court’s discretion and to guide that discretion, the Supreme
`Court has endorsed the non-exclusive list employed by the Third Circuit in Lieb v.
`Topstone Industries, Inc., 788 F.2d 151, 156 (3d Cir. 1986). See Fogerty, 510 U.S. at
`527. The Ninth Circuit identifies those factors as: (1) the degree of success obtained; (2)
`frivolousness; (3) motivation; (4) objective unreasonableness; and (5) the need in the
`particular circumstances to advance considerations of compensation and deterrence.
`Magnuson v. Video Yesteryear, 85 F.3d 1424, 1432 (9th Cir. 1996) (quoting Jackson v.
`Axton, 25 F.3d 884, 890 (9th Cir. 1994)).
`A court must then determine whether the fees requested are reasonable. “To
`determine what fee should be awarded, the court must first determine the ‘lodestar,’
`which is the number of hours reasonable expended on litigation multiplied by a
`reasonable rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 406
`(9th Cir. 1990). Under this calculation, a court should take into account, either under the
`reasonable hours component or the reasonable rate component, (1) the novelty and
`complexity of issues; (2) the special skill and experience of counsel; (3) the quality of
`representation; (4) the results obtained; and (5) the contingent nature of the fee
`
`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
`
`4
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 5 of 17
`
`agreement.” Morales v. City of San Rafael, 96 F.3d 359, 364 (9th Cir. 1996). The court
`may then adjust this amount “on the basis of other considerations.” Lytle v. Carl, 382
`F.3d 978, 988 (9th Cir. 2004).
`B.
`Rule 68
`Rule 68 of the Federal Rules of Civil Procedure shifts to a plaintiff all “costs”
`incurred subsequent to an offer of judgment not exceeded by ultimate recovery. Fed. R.
`Civ. P. 68(d) (“If the judgment that the offeree finally obtains is not more favorable than
`the unaccepted offer, the offeree must pay the costs incurred after the offer was made.”).
`The purpose of Rule 68 is to encourage settlement and avoid litigation.
`Where a statute defines “costs” to include attorney’s fees, such fees are to be
`included as costs for purposes of Rule 68 cost shifting. Marek v. Chesny, 473, U.S. 1, 8-9
`(1985) (concluding “that the term ‘costs’ in Rule 68 was intended to refer to all costs
`properly awardable under the relevant substantive statute or other authority.”) Thus, a
`plaintiff who rejects an offer more favorable than what is thereafter recovered at trial will
`not recover attorney’s fees for services performed afterwards. Id.
`III. DISCUSSION
`The matter of awarding attorney’s fees and costs to the respective parties is
`complicated by the interplay of Rule 68 and § 505. As such, the Court’s analysis for
`each individual motion will necessarily overlap. After a thorough review of the
`litigation record, relevant case law, and the parties’ contentions, the Court has reached a
`resolution under the circumstances, that will serve the purposes of both the Copyright
`Act and Rule 68.
`A.
`Brighton’s Motion for Attorney’s Fees
`For Brighton to collect its attorney’s fees, Brighton must: (1) be the prevailing
`party under the definition of the Copyright Act; (2) satisfy the Fogerty five factor
`analysis; and (3) seek a reasonable amount. Moreover, with the interplay of Rule 68, if
`the offered amount was greater than what Brighton ultimately recovered, Brighton must
`bear its own attorney’s fees incurred post offer date.
`
`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
`
`5
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 6 of 17
`
`Brighton is the prevailing party
`1.
`The material alteration test governs the prevailing party inquiry for an award of
`attorney’s fees under the Copyright Act. Cadkin v. Loose, 569 F.3d 1142, 1149 (9th Cir.
`2009). This inquiry defines a prevailing party to mean one “who was awarded some
`relief by the court.” Buckhannon Bd. And Care Home, Inc. v. West Virginia Dept. Of
`Health and Human Resources, 532 U.S. 598, 603, 121 S. Ct. 1835 (2001). The key
`inquiry is whether some court action has created a “material alteration of the of the legal
`relationship of the parties.” Id. at 604 (internal quotation marks omitted). Ninth Circuit
`case law holds that “attorney’s fees may be properly denied where plaintiff’s success on
`a legal claim can be characterized as purely technical or de minimis . . . De minimis
`judgments are those that confer no right on the party - those that do not affect the
`obligations of the defendants toward the plaintiff.” Park, ex rel. Park v. Anaheim Union
`High School Dist., 464 F.3d 1025, 1246 (9th Cir. 2006) (citation and internal quotation
`marks omitted).
`The parties disagree on who is the “prevailing party.” Pedre contends that, despite
`the ultimate adverse entry of judgment, it is the prevailing party as it “prevailed on all
`but one issue at trial”. (Doc. No. 117 at 8.) Despite its valiant effort and creative
`argument, the Court is unpersuaded by Pedre’s position. By a jury decree, Pedre was
`found liable to Brighton for infringement. “The plaintiff will ordinarily be regarded as
`the prevailing party if he succeeds at trial in establishing the defendant’s liability, even if
`the damages awarded are nominal or nothing.” Wall Data, 447 F.3d at 787 (quoting
`Nimmer on Copyright § 14.10[B][3], at 14-207). Brighton’s success was not de minimis,
`instead it was on the merits. The rights between the respective parties were indeed
`altered by the jury verdict in favor of Brighton. Thus, Brighton is the prevailing party.
`However, prevailing does not mean an automatic award of attorney’s fees. Fantasy, 510
`U.S. at 533 (“The word ‘may’ [in the Copyright Act] clearly connotes discretion.”).
`//
`
`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
`
`6
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 7 of 17
`
`The Ninth Circuit’s Fogerty Test
`2.
`After considering the equitable factors as stipulated by the Ninth Circuit as well as
`other considerations unique to the facts at hand, the Court finds that Brighton should be
`awarded some of its attorney’s fees.
`First, in weighing the degree of success in the lawsuit, the Court finds this factor
`in favor of Brighton. Brighton prevailed on the merits, not on some technical matter.
`Fantasy, 94 F.3d at 559. Thus, despite Pedre’s characterization that it won a majority of
`the issues in this action, the first factor weighs in favor of Brighton.
`Second, in examining whether the underlying suit was frivolous, the Court cannot
`reasonably conclude the underlying suit was such. Brighton did not lack a legitimate
`claim, as the conclusion of the jury trial resulted in a favorable verdict for Brighton.
`Thus, this second factor weighs in favor of Brighton.
`Third, in considering the objective reasonableness of the parties’ claims, both the
`factual and the legal components of the case, the Court cannot declare that Brighton was
`objectively unreasonable in pursuing its claim. As noted above, Brighton did not lack a
`legitimate claim. Brighton was able to prove to a jury all the elements necessary to
`establish a claim of copyright infringement, albeit non-willful infringement.
`Fourth, in determining whether Brighton demonstrated a bad faith motivation in
`litigating the case, the Court cannot conclude Brighton did so. Courts have held a
`plaintiff demonstrates bad faith when alleging copyright claim to secure benefits other
`than merely addressing grievances. E.g., Maljack Prod., Inc. v. GoodTimes Home Video
`Corp, 81 F.3d 881, 889 (9th Cir. 1996) (finding an improper motivation where evidence
`demonstrated that plaintiff brought lawsuit in effort to expose defendant to risk and to
`secure competitive advantage in the market). Here, the Court cannot declare Brighton
`brought this action in bad faith or as an attempt to harass Pedre. Brighton,
`understandably, wanted to establish and secure its copyrights. Although Brighton was
`likely overzealous, and perhaps should have accepted the early settlement offer, Brighton
`did have the right to vindicate its claim before a jury.
`
`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
`
`7
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 8 of 17
`
`Finally, in looking to see whether an award for the moving party would “advance
`considerations of compensation and deterrence,” the Court finds this factor neither
`favors nor disfavors Brighton. Brighton argues that this is the quintessential case to
`award fees, as the ultimate judgment was significantly smaller than what it was forced to
`expend to enforce its copyright. (Doc. No. 112 at 14-15.) Brighton contends an award of
`fees will serve the purpose of the Copyright Act by encouraging private enforcement and
`deterring infringements. (Id. at 14.) Moreover, Brighton argues fees are necessary to
`“make Brighton whole” as the jury verdict fails to place Brighton in the position it would
`have been but for Pedre’s misconduct. (Id. at 15.)
`After considering both parties’ argument, the Court finds this last factor neutral to
`its analysis. First, Brighton ceased sales of its Laguna design in 2004, there were and
`still are no indications that Brighton will resume sales of the Laguna watch. Simply put,
`Brighton did not excessively suffer in terms of lost profits and Brighton was unable to
`establish damage to its reputation. (See Doc. No. 108 at 4-6.) Second, Pedre voluntarily
`ceased selling the Cimarron watch and destroyed all remaining unsold units when it was
`first notified of the possible infringement. Moreover, Pedre made little profit as it only
`sold 181 watches to the public since it began marketing them in 2008. It should be noted
`that the Rule 68 offer included an agreement whereby Pedre would never sell the
`Cimarron watch again. As the Court concluded in its order denying permanent
`injunction, there does not appear to be an immediate and palpable threat of future
`infringement given the facts of the instant case. (Id. at 6-7.) Although awarding fees will
`likely deter future infringement in the general sense, there is little likelihood of future
`infringement to begin with under the factual consideration of this case. Thus, this factor
`does not tip in favor of one party over the other.
`In weighing all the equitable factors, the Court concludes that Brighton is entitled
`to some of its requested attorney’s fees. Determining the appropriate amount is the
`Court’s next task.
`//
`
`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
`
`8
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 9 of 17
`
`Reasonableness of Attorney’s Fees
`3.
`Brighton requests a total of $312,373.40 with an average rate of $473.29 per hour.
`Brighton argues that its request is supported by the evidence and reasonable under the
`circumstances. Brighton has referred the Court to case law finding rates in excess of
`$500 to be reasonable and has submitted detailed billing statements of the work done for
`trial. (Doc. No. 112 at 17-18; Ex. H.) However, Pedre contends the billing rates are
`unreasonable as they are substantially higher than what courts in this district permit.
`(Doc. No. 117 at 18-19.) Pedre takes particular issue with the rate of Mr. Keith Wesley.
`At $525 an hour and with less than ten years of experience, Pedre questions why Mr.
`Wesley receives a significantly higher rate than Mr. Steve Winton, local counsel for
`Brighton and with over twenty years of experience. Pedre believes that a more
`appropriate average rate should be $350. (Id. at 21.) After considering the lodestar
`factors, the Court finds that utilizing the individual rates, rather than an overall average
`rate, would be the most appropriate method.
`First, this case involved just one claim of copyright infringement. It did not
`involve an area of law with little or no precedent, moreover the case did not involve
`complex claims and defenses. The Court takes note of the average rate of $367 per hour
`approved by Judge Marilyn Huff in Brighton v. Coldwater, 2009 WL 160235. Many of
`the same attorneys for Brighton were involved in that case. However, Coldwater
`involved not only copyright infringement, but trade dress infringement, false designation
`of origin, and unfair competition under the common law and statutory authority.
`Furthermore, a jury returned a verdict for Brighton finding Coldwater willfully infringed
`on Brighton’s copyright and engaged in unfair competition with fraud, malice, or
`oppression. Special damages of over $5 million and wrongful profits over $1 million
`were awarded. The complexity and degree of success in the instant case is by no means
`comparable to that achieved in Coldwater.
`Second, no one denies that counsel for Brighton were experienced and strong
`advocates for their client’s position. Mr. Peter Ross is a highly qualified litigator, and
`
`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
`
`9
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 10 of 17
`
`with over 30 years of practicing commercial litigation, the Court finds his rate reasonable
`as he was lead counsel and held a supervisory role. However, the Court agrees with
`Pedre’s position that Mr. Welsey’s rate is likely too high. The Court carefully reviewed
`the billing statements, and after considering the type of work Mr. Wesley performed, the
`Court finds that a rate of $400 an hour to be more appropriate. As Pedre does not
`dispute the rate for Mr. Winton, the Court concludes that $375 is reasonable for his
`services.
`Interaction with Rule 68
`4.
`The instant motion is complicated by the interaction of Rule 68. On September
`16, 2011, just six months after the initiation of this action, Pedre submitted an entry of
`judgment and settlement offer of $50,000 pursuant to Rule 68. The offer included an
`execution of a written agreement that Pedre is no longer selling, and will not sell at any
`time in the future, the Cimarron watch at issue.
`As stated above, absent congressional expression to the contrary, where the
`underlying statute defines “costs” to include attorney’s fees, such fees are to be included
`as costs for purposes of Rule 68. Marek, 473 U.S. 8-10. Section 505 of the Copyright
`Act states, “[e]xcept as otherwise provided by this title, the court may also award a
`reasonable attorney’s fees to the prevailing party as part of the costs.” Thus, given the
`Supreme Court’s dictate in Marek, and the plain language of § 505 defining attorney’s
`fees as part of costs, Brighton’s attorney’s fees incurred post settlement offer must be
`shifted onto itself if its final judgment is less than what was offered. See William F.
`Patry, Patry on Copyright § 22:217 (“Rule 68 [can] be used as a sword against plaintiff
`to deny plaintiff his attorney’s fees postoffer.”).
`As an initial matter, the Court finds Pedre’s Rule 68 offer a valid one. It was not
`ambiguous and contained a definite sum. (See Doc. No. 115, Ex. A.) In arguing against
`any fee shifting, Brighton contends that its final judgment is actually more favorable than
`the settlement amount because (1) Brighton is entitled to pre-offer fees and costs and (2)
`
`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
`
`10
`
`11cv637
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 11 of 17
`
`the value to Brighton of the jury verdict finding liability is far greater than any amount
`offered. (Doc. No. 121 at 4.)
`Under Local Rule 54.1.d, a court may consider any pre-offer costs and fees to
`which the plaintiff is entitled as a part of the total amount of judgment. Brighton
`disputes Rule 68's limitation on its recovery and has not provided the Court with a
`definitive amount of its pre-Rule 68 fees and costs. Pedre calculated this amount to be
`$32,052.50 based on Brighton’s evidence submitted in support of their motion for fees.
`The Court independently assessed the pre-Rule 68 costs and fees and did not arrive at a
`number close to this figure. In any case, the best scenerio for Brighton in totaling its
`1
`pre-Rule 68 offer fees and costs would be $32,052.50. Thus for purposes of just
`determining whether the Rule 68 offer is more favorable, the Court will use the number
`most favorable to Brighton, that being $32,052.50. Then, adding the ultimate jury award
`of $16,719.50, the total amount Brighton would “ultimately recover” as of the making of
`the Rule 68 offer is $48,772.00, less favorable than the settlement offer itself. 2
`As to Brighton’s second contention, the Court does not find it appropriate to
`“value” and take into account the jury finding of liability. In light of the difficulty of
`comparing apples to oranges, some courts will only consider monetary damages awarded
`to monetary damages offer. See e.g., Real v. Continental Group Inc., 653 F. Supp. 736
`(N.D. Cal. 1987) (noting that due to the imprecise nature in valuing nonpecuniary relief
`and the lack of guidance from higher courts, the proper course is to compare monetary
`awards only). The Court reaches this conclusion without needing to address the debate as
`to whether nonpecuniary relief should ever factor into a court’s Rule 68 analysis.
`First, as a practical matter, to appraise the jury verdict is impossible given the
`record before the Court. The Court would have to embark on a lengthy evidentiary
`analysis which would most likely include a battle of the parties’ experts, thereby causing
`
` In trying to determine where the discrepancy arose, the Court noted an August 2011 bill where
`1
`there was an unexplained $6,100 charged by Browne George Ross LLP.
`
`Again, this calculation is only for purposes of determining the favorability of the offer compared
`2
`to judgment.
`
`11
`
`11cv637
`
`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
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 12 of 17
`
`unnecessary delay and racking up even more fees for both sides. Second, Brighton has
`not, and this Court did not, find any authority where a Court takes into account the
`subjective value of a jury verdict finding infringement to the prevailing party. Brighton
`cites to Reiter v. MTA New York Transit Authority, 457 F.3d 224 (2d Cir. 2006) to
`support its position that we must factor in the non-monetary relief it received in this case.
`(Doc. No. 121 at 6.) However, Reiter is a non-controlling opinion from the Second
`Circuit and is easily distinguishable from the facts at hand. In Reiter, the Second Circuit,
`concluded that plaintiff’s equitable relief should factor into the district court’s analysis of
`whether the ultimate judgment received was worth more than the Rule 68 offer. 457
`3
`F.3d at 232. In the instant case, Brighton did not obtain equitable relief, indeed the
`Court denied its motion for permanent injunction. (Doc. No. 108.) Moreover, with
`Reiter, there was a potential for the court to calculate what the equitable relief was
`worth, e.g., look at salary of reinstated position and monetary value of other executive
`perks. Here, the Court has no practical means to establish the worth of the jury finding.
`While the Court believes that it may be appropriate in some circumstances to consider
`the equitable relief obtained for purposes of determining the favorability of a judgment,
`this is not one of those times as Brighton has not received such relief. 4
`Thus, the Court finds that Brighton’s ultimate judgment is not more favorable than
`the unaccepted Rule 68 offer of settlement. All fees subsequent to the offer date must be
`shifted. After meticulously scrutinizing the submitted attorney’s fees bills the Court
`finds the following rates and pre-Rule 68 offer totals proper:
`
` Plaintiff in Reiter prevailed in a Title VII retaliation claim but only obtained monetary damages
`3
`award of $10,000, less than the offer of $20,001 from defendant he rejected. However, plaintiff also
`obtained equitable relief from the court, including reinstatement, return of his corner office with an
`assistant, and other perks lost when he was demoted. Reiter, 457 F.3d at 229-231.
`To the extent it is argued that there was extra deterrent value from the verdict to consider in the
`4
`context of the Rule 68 analysis, it is noted that the second part of the Rule 68 offer was for the execution
`of a written agreement that confirmed that Pedre is no longer selling, and will not sell at any time in the
`future, the Cimarron watch at issue. This consideration was of relatively equal value and would not
`change the analysis.
`
`12
`
`11cv637
`
`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
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 13 of 17
`
`Individual
`JP
`5
`Steve Winton
`Peter Ross
`Keith Wesley
`Melinda Dodge
`TOTAL
`
`Hours
`.10
`4.4
`3.25
`34
`2.25
`
`Rate
`$210
`$375
`$625
`$400
`$180
`
`Total
`$21.00
`$1,650
`$2,031.25
`$13,600
`$405
`$17,707.25
`
`B.
`
`Brighton’s Request for Prejudgment Interest on the Jury Award
`Brighton requests prejudgment interest under the Copyright Act. (Doc. No. 112 at
`19-20.) The Ninth Circuit permits awards of prejudgment interest, but this interest may
`only be awarded in situations of “indisputable infringement,” in order to “discourage
`needless delay and compensate the copyright holder for the time it is deprived of lost
`profits or license fees.” Polar Bear Prod., Inc. v. Timex Corp., 384 F.3d 700, 718 (9th
`Cir. 2004). Courts generally award prejudgment interest out of the belief that the
`defendant has had the benefit of plaintiff’s money from the date of the infringement until
`entry of judgment, thus that profit must be disgorged to make plaintiff whole. Frank
`Music Corp. v. Metro-Goldwyn-Mayer Inc., 886 F.2d 1545, 1552 (9th Cir. 1989).
`In light of the above considerations and the entire record before it, the Court
`exercises its discretion to deny an award of prejudgment interest. As stated above,
`Brighton ceased sales of the Laguna watch in 2004, four years before Pedre started to
`market and sell its Cimarron design. Therefore, this is not a situation where Pedre had
`the benefit of Brighton’s money and therefore Brighton’s profits. Moreover, Pedre’s
`decision to fully litigate against any alleged infringement was not needless delay, the
`Court cannot construe of any misconduct on the part of Pedre to warrant the granting of
`prejudgment interest. The Court finds a final judgement of $34,426.75 for Brighton is
`the appropriate amount, the total of its jury award ($16,719.50) and reasonable attorneys’
`
`5
`
` Paralegal with Law Offices of Gary Freedman.
`
`13
`
`11cv637
`
`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
`
`
`
`Case 3:11-cv-00637-AJB-WVG Document 128 Filed 01/02/14 Page 14 of 17
`
`fees and costs ($17,707.25). Brighton’s Motion for Attorney’s Fees post the Rule 68
`offer are DENIED as is the Motion for Prejudgment Interest.
`C.
`Pedre’s Motion for Costs Pursuant to Rule 68 6
`As noted above, Rule 68 expresses a clear policy of favoring the settlement of
`lawsuits. Marek v. Chesny, 473 U.S. 1, 6 (1986). Thus, where a plaintiff rejects an offer
`of judgment, she is faced with the possibility of (1) paying defendant’s post-offer costs
`and (2) being precluded from recovering her own post-offer costs. Fed. R. Civ. P. 68(d).
`Section 505 does not define costs, but the Supreme Court has held that unless defined,
`“costs” are to be determined by looking to 28 U.S.C. § 1920. See Crawford Fitting Co. v.
`J.T. Gibbons, Inc., 482 U.S. 437, 445, 107 S. Ct. 2494 (1987). The Court has already
`concluded that Brighton’s total judgment award is not greater than the settlement offer.
`Therefore, under Rule 68, Pedre is entitled to its post-offer costs. Pedre asks the Court to
`award it $69,448.86, which includes fees for: (1) services of process; (2) depositions; (3)
`witness fees; (4) expert fees; (5) exemplification and copies of papers; and (6)
`transcripts. (Doc. No. 115; Ex. B.)
`The Court finds that Pedre is entitled to the requested service of process fees,
`deposition costs, and lay witness fees. Pedre has submitted detailed invoices and
`explanations as to why they were incurred, therefore the Court finds them proper under
`the applicable law and Local Rules. See Local Rule 54.1.b. The $2,490.33 requested for
`exemplification and copies are proper as well. Pedre has submitted invoices and
`explained the costs were for copies of papers and exhibits to be used at trial and lodged
`with the Court, thus falling under the permitted costs of Local Rule 54.1(b)(6)(a).
`However, per Local Rule 54.1(b)(2), costs for trial transcripts should not be
`awarded. Trial transcript costs are not normally allowable unless one of three exceptions
`
` In connection with their motion for costs, Pedre asks this Court to take judicial notice of: (1)
`6
`certain Court documents filed with Brighton Collectibles, Inc. v. Coldwater Creek Inc., Case3:08-cv-
`2307; (2) Special Verdict Form for the instant case (Doc. No. 95); and (3) Letter by the Copyright Office
`rejecting registration for the Laguna Design. (See Doc. No. 120, Exs. A-C). Exhibits A and C were
`unnecessary for the Court’s analysis and Exhibit B does not require judicial notice as it is part of the
`docket for the instant case. Therefore, the Court declines to take judicial notice as it is unnecessary