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Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 1 of 11
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`Judge William J. Martínez
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`Plaintiff,
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`Civil Action No. 20-cv-2595-WJM-KMT
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`REAL ESTATE WEBMASTERS, INC.,
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`v.
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`GREAT COLORADO HOMES, INC., and
`ANDREW FORTUNE,
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`Defendants.
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`
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`ORDER GRANTING PLAINTIFF’S MOTION TO DISMISS
`UNDER FED. R. CIV. P. 41(a)(2)
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`
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`This matter is before the Court on Plaintiff Real Estate Webmasters, Inc.’s Motion
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`to Dismiss Under Fed. R. Civ. P. 41(a)(2) (“Motion”). (ECF No. 38.) For the following
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`reasons, the Motion is granted.
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`I. BACKGROUND
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`Plaintiff is a Canadian technology provider of custom website designs tailored
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`specifically for real estate professionals. (ECF No. 27 ¶ 1.) In 2014, Defendant Andrew
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`Fortune, a real estate agent from Colorado Springs, Colorado, purchased a license to
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`use Plaintiff’s custom website design and agreed to be bound by Plaintiff’s licensed
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`solution agreement (“LSA”), which provided that Plaintiff maintained exclusive
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`ownership and control to all rights, title, interest, and benefit over its products, including
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`customizations, enhancements, and associated intellectual property. (Id. ¶¶ 2–3.) In
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`March 2020, Fortune terminated the LSA and thereafter began using a new website for
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 2 of 11
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`his company, Defendant Great Colorado Homes, Inc. (Id. ¶¶ 4–5.) Plaintiff alleges that
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`Fortune’s website is nearly identical to Plaintiff’s website and uses Plaintiff’s intellectual
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`property, though Fortune claims he created his website and spent over two years
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`developing it with multiple developers. (Id. ¶ 5.)
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`On August 26, 2020, Plaintiff filed its initial Complaint against Defendants Great
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`Colorado Homes, Inc. and Andrew Fortune (jointly, “Defendants”), alleging copyright
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`infringement under the Canadian Copyright Act, R.S.C., ch. C-42 § 13(3) (1985), breach
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`of contract, unjust enrichment, and misappropriation of trade secrets under 18 U.S.C. §
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`1836. (ECF No. 1.) On October 14, 2020, Defendants filed a motion to dismiss. (ECF
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`No. 14.) The Court struck that motion for failure to confer under WJM Revised Practice
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`Standard III.D.1. (ECF No. 20.)
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`Following conferral, Plaintiff filed an Amended Complaint, in which it withdrew its
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`claims for breach of contract and misappropriation of trade secrets, but added a claim
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`for civil theft. (ECF No. 27.) Plaintiff withdrew the breach of contract claim because
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`Defendants stated their intention to enforce an exclusive jurisdiction clause within the
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`applicable contract that required all proceedings asserted thereunder to be brought
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`before the courts of British Columbia, Canada. (ECF No. 38 at 3 (citing ECF No. 29-1
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`at 2).) Plaintiff has filed an action for breach of contract against Defendants in the
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`Supreme Court of British Columbia. (Id.)
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`Defendants filed a Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6). (ECF
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`No. 29.) Plaintiff filed a response on December 9, 2020 (ECF No. 34), and Defendants
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`replied on December 23, 2020 (ECF No. 35). While that Motion to Dismiss was
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`pending, the parties engaged in discovery.
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`2
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 3 of 11
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`On March 30, 2021, counsel for Plaintiff conferred by phone and e-mail with
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`counsel for Defendants regarding a proposed dismissal of this action. (ECF No. 38 at
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`1.) Nearly a month later, having not received a response, Plaintiff’s counsel again
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`sought to confer with Defendants’ counsel. (Id.) During that conferral, the parties
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`discussed dismissal of Plaintiff’s copyright infringement and civil theft claims with
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`prejudice, and its unjust enrichment claim without prejudice; Plaintiff seeks to dismiss
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`the unjust enrichment claim without prejudice because that matter is being litigated in
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`Canada and dismissal with prejudice might have a preclusive effect on the same claim
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`brought in the Canadian case. (Id. at 1–2.)
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`Plaintiff states that Defendants agreed to stipulate to the dismissal of the
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`copyright infringement and civil theft claims with prejudice, but Defendants insisted that
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`the unjust enrichment claim also be dismissed with prejudice. (Id. at 2.) Plaintiff further
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`states that counsel for Defendants stated: “I guess if it will have re [sic] judicata effects
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`in the BC case, then we can stipulate to it being dismissed without prejudice.” (Id.)
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`Plaintiff prepared a dismissal on those terms, but when Defendants received it, they
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`refused to sign, claiming that Plaintiff’s proposal “completely and intentionally
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`mischaracterizes the reasons behind the dismissal and therefore is not acceptable.”
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`(Id.)
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`On May 3, 2021, Plaintiff filed the Motion, seeking to dismiss its copyright
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`infringement and civil theft claims with prejudice, and its unjust enrichment claim without
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`prejudice. (ECF No. 38.) Plaintiff explains that following briefing on the Motion to
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`Dismiss, it “did its own extensive analysis of its damages and determined that
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`proceeding in two forums is not worth the expense of litigation.” (Id. at 7.) Defendants
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`3
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 4 of 11
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`oppose the Motion, arguing that while the case should be over, Plaintiff should be
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`required to pay Defendants’ attorneys’ fees under Federal Rule of Civil Procedure
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`41(a)(2), the fee-shifting provision of the Copyright Act, 17 U.S.C. § 505, or Colorado
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`Revised Statutes § 13-17-201. (ECF No. 39.) Thus, at bottom, the issue for the Court
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`now is whether to award Defendants some amount of attorneys’ fees.
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`A.
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`Rule 41(a)(2)
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`II. LEGAL STANDARDS
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`Rule 41(a)(2) “permits a district court to dismiss an action . . . upon such terms
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`and conditions as the court deems proper.” Frank v. Crawley Petroleum Corp., 992
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`F.3d 987, 998 (10th Cir. 2021) (quoting Am. Nat. Bank & Tr. Co. of Sapulpa v. Bic
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`Corp., 931 F.2d 1411, 1412 (10th Cir. 1991) (internal quotation marks omitted)). “The
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`rule is designed primarily to prevent voluntary dismissals which unfairly affect the other
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`side, and to permit the imposition of curative conditions.” Id. (quoting Brown v. Baeke,
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`413 F.3d 1121, 1123 (10th Cir. 2005) (internal quotation marks omitted)). “Conditions
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`are designed to alleviate any prejudice a defendant might otherwise suffer upon refiling
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`of an action.” Id. (quoting Am. Nat. Bank, 931 F.2d at 1412).
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`“[P]rejudice is a function of . . . practical factors including: the opposing party’s
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`effort and expense in preparing for trial; excessive delay and lack of diligence on the
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`part of the movant; insufficient explanation of the need for a dismissal; and the present
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`stage of litigation.” Brown, 413 F.3d at 1124 (internal quotation marks omitted). “These
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`factors are neither exhaustive nor conclusive; the court should be sensitive to other
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`considerations unique to the circumstances of each case.” Id. “[I]n reaching its
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`conclusion, the district court should endeavor to insure substantial justice is accorded to
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`4
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 5 of 11
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`both parties, and therefore the court must consider the equities not only facing the
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`defendant, but also those facing the plaintiff.” Id. “The district court, however, should
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`impose only those conditions which actually will alleviate harm to the defendant.” Am.
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`Nat. Bank, 931 F.2d at 1412.
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`“These rules apply to dismissals with prejudice as well as dismissals without.”
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`Frank, 992 F.3d at 998 (citing Cnty. of Santa Fe v. Pub. Serv. Co. of N.M., 311 F.3d
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`1031, 1049 (10th Cir. 2002) (the “normal” legal-prejudice analysis that governs
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`dismissals without prejudice also governs dismissals with prejudice, although the
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`presence of prejudice will be “rare”)). “[A] defendant may not recover attorney’s fees
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`when a plaintiff dismisses an action with prejudice absent exceptional circumstances.”
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`AeroTech, Inc. v. Estes, 110 F.3d 1523, 1528 (10th Cir. 1997); accord Vanguard Envtl.,
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`Inc. v. Kerin, 528 F.3d 756, 760 (10th Cir. 2008); Steinert v. Winn Grp., Inc., 440 F.3d
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`1214, 1222 (10th Cir. 2006).
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`B.
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`Copyright Act
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`The Copyright Act, 17 U.S.C. § 101 et seq., provides that “In any civil action
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`under this title, the court in its discretion may allow the recovery of full costs by or
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`against any party other than the United States or an officer thereof. Except as
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`otherwise provided by this title, the court may also award a reasonable attorney’s fee to
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`the prevailing party as part of the costs.” 17 U.S.C. § 505 (emphasis added).
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`The Supreme Court has established several principles and criteria to guide a
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`court in deciding whether to award attorneys’ fees under § 505. Kirtsaeng v. John Wiley
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`& Sons, Inc., 136 S. Ct. 1979, 1985 (2016). The statute clearly connotes discretion and
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`eschews any precise rule or formula for awarding fees. Id. However, in Fogerty v.
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`5
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 6 of 11
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`Fantasy, Inc., 510 U.S. 517 (1994), the Supreme Court established two restrictions: (1)
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`a district court may not award attorneys’ fees as a matter of course; and (2) the
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`Supreme Court noted with approval “several nonexclusive factors” to inform a court’s
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`fee-shifting decisions, including “frivolousness, motivation, objective
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`unreasonableness[,] and the need in particular circumstances to advance
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`considerations of compensation and deterrence.” Id.
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`A.
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`Rule 41(a)(2)
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`III. ANALYSIS
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`Defendants argue that exceptional circumstances exist in this case such that the
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`Court should award them their attorneys’ fees. (ECF No. 39.) For the following
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`reasons, the Court disagrees.
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`First, Defendants argue that they have expended considerable effort and
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`expense in preparing for trial. (Id. at 5.) They cite their two rounds of motions to
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`dismiss and Plaintiff’s “sweeping discovery requests,” which they describe as a “fishing
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`expedition.” (Id. at 6 (emphasis in original).) Defendants state that they “meaningfully
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`engaged in the discovery process and served [their] responses to Plaintiff’s requests.”
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`(Id.) Fortune states in an affidavit that “Prior to Plaintiff moving to voluntarily dismiss its
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`claims against me, I incurred over $20,000 in legal fees defending myself and my
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`business in this action.” (ECF No. 39-5.)
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`While the Court understands that Defendants have participated in the discovery
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`process and have engaged in some motion practice, this case is not yet a year old.
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`Moreover, the case is in the early stages of litigation, discovery only ended in June
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`2021, no depositions were taken, no expert reports were exchanged, and no trial date
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`
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`6
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 7 of 11
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`has been set. (See ECF No. 38 at 5.) Plaintiff states that from January 5, 2021 through
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`March 30, 2021, Defendants made no efforts to seek discovery from Plaintiff. (ECF No.
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`41 at 4.) In addition, Plaintiff points out that although Defendants were served with a
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`round of written discovery requests, they “declined to answer the majority of the
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`requests, and produced a mere 162 images.” (Id.) Given the foregoing, the Court
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`cannot find that Defendants have expended considerable effort and expense in
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`preparing for trial. See Frank, 992 F.3d at 991, 1002 (finding that because Crawley has
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`not identified any legal prejudice it would suffer from the dismissal, the imposition of
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`conditions was an abuse of discretion, where Crawley stated it had spent $1 million
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`defending the suit).
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`Next, Defendants argue that Plaintiff’s lack of diligence has forced them to
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`unreasonably incur substantial fees. (ECF No. 39 at 7.) Specifically, Defendants argue
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`that Plaintiff’s Motion “results from its own failure to conduct a reasonable inquiry prior
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`to bringing its claims, an affront to its obligations under Rule 11.” (Id.) Defendants also
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`state that Plaintiff did not try to confer before adding the civil theft claim to the Amended
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`Complaint. (Id.) Defendants also argue that Plaintiff waited until “nearly the close of
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`discovery” before volunteering to dismiss its claims, which also forced Defendants to
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`incur substantial fees. (Id. at 9.)
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`Although the Court agrees that it would have been advisable for Plaintiff to more
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`thoroughly investigate the merits of its claims and the potential damages available
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`before filing its claims, the Court does not find that Plaintiff’s exhibited a “lack of
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`diligence.” In addition, the Court does not find that Plaintiff waited an inordinately long
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`amount of time to file its Motion. Plaintiff requested conferral on the Motion in March
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`7
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 8 of 11
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`2021, more than two months before the June 2021 discovery deadline. Moreover,
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`Plaintiff was forced to wait for Defendants to respond for at least a month, unnecessarily
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`lengthening the timeline. Such actions do not demonstrate a lack of diligence by
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`Plaintiff such that they transform this matter into an “exceptional” case.
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`Next, Defendants contend that Plaintiff’s explanation for the need for dismissal is
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`insufficient. (ECF No. 39 at 8.) In the Motion, Plaintiff explains that it wishes to dismiss
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`this case because it has grown frustrated with Defendants’ gamesmanship and
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`conflicting positions taken in this case and in the case in Canada. (ECF No. 38 at 4.)
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`Further, due to the COVID-19 pandemic, Plaintiff’s resources have been constrained in
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`a manner that was not foreseeable before commencing both this case and the case in
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`Canada. (Id.) Plaintiff also admits that after it analyzed its possible damages, it
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`determined that proceeding in two forums is not worth the expense of litigation. (Id. at
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`7.) Upon due consideration, the Court finds Plaintiff’s explanations for dismissal
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`sufficient.
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`The Court also notes Defendants’ argument that if the Court does not impose
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`curative conditions, Defendants will suffer a legal detriment. (ECF No. 39 at 10.)
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`Specifically, Defendants argue that this is an exceptional case; they are entitled to fees
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`under § 505; if the Court had ruled on their Motion to Dismiss and dismissed Plaintiff’s
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`claims, they would be entitled to a mandatory award of fees and costs under Colorado
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`Revised Statutes § 13-17-201; and at a minimum, the Court should condition dismissal
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`on an award of attorneys’ fees against Plaintiff for the fees Defendants might have to
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`incur if Plaintiff files another lawsuit against them for unjust enrichment. (Id. at 10–12.)
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`The Court finds Defendants’ arguments unavailing. For the reasons explained
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`8
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 9 of 11
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`above, this is not an exceptional case. As the Court explains below, Defendants are not
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`entitled to attorneys’ fees under § 505, see infra Part III.B. The Court never ruled on the
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`Motion to Dismiss, and therefore any claim of entitlement to attorneys’ fees under
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`Colorado Revised Statutes § 13-17-201 is similarly unsuccessful.
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`Finally, the Court acknowledges that Plaintiff seeks to dismiss the unjust
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`enrichment claim without prejudice. In the Tenth Circuit, “[w]hen a plaintiff dismisses an
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`action without prejudice, a district court may seek to reimburse the defendant for his
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`attorneys’ fees because he faces a risk that the plaintiff will refile the suit and impose
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`duplicative expenses upon him.” AeroTech, 110 F.3d at 1528. In this case, however,
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`the Court construes the Tenth Circuit’s language—specifically, “may seek to
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`reimburse”—as discretionary and declines to award Defendants attorneys’ fees on the
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`unjust enrichment claim, despite the fact that it will be dismissed without prejudice.
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`Therefore, the Court finds that “exceptional circumstances” do not exist in this case
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`such that Defendants may recover attorneys’ fees under Rule 41(a)(2).
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`B.
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`Copyright Act
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`Defendants argue that because the copyright infringement claim will be
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`dismissed with prejudice, they are a prevailing party under the Copyright Act, and thus,
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`the Court should award them attorneys’ fees under § 505. (ECF No. 39 at 12.) Further,
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`Defendants argue that Plaintiff’s “vexatious conduct and bad faith in bringing suit”
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`militate in favor of awarding attorneys’ fees. (Id. at 13.)
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`While Defendants do not appear to acknowledge it, Court is mindful that § 505
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`dictates that the Court “may also award a reasonable attorney’s fee to the prevailing
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`party.” Thus, the Court’s power is discretionary, not mandatory. The Court has
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`9
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 10 of 11
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`considered the “several nonexclusive factors” that the Supreme Court counsels should
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`inform a court’s fee-shifting decisions under § 505, including frivolousness, motivation,
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`objective unreasonableness, and the need in particular circumstances to advance
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`considerations of compensation and deterrence. The Court will not explicitly analyze
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`these factors, as the analysis above, see supra Part III.A, is sufficiently applicable, and
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`the outcome would be no different. The Court disagrees with Defendants’
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`characterization of this litigation, particularly that Plaintiff brought this suit in bad faith or
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`prosecuted it in a vexatious or oppressive manner. (See ECF No. 39 at 13.) As a
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`result, in its discretion, the Court declines to award attorneys’ fees to Defendants under
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`§ 505.
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`IV. CONCLUSION
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`For the foregoing reasons, the Court ORDERS:
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`1.
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`Plaintiff Real Estate Webmasters, Inc.’s Motion to Dismiss Under Fed. R. Civ. P.
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`41(a)(2) (ECF No. 38) is GRANTED;
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`2.
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`Plaintiff’s copyright infringement and civil theft claims are DISMISSED WITH
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`PREJUDICE, and Plaintiff’s unjust enrichment claim is DISMISSED WITHOUT
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`PREJUDICE;
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`3.
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`Defendants’ Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6) (ECF No. 29)
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`is DENIED AS MOOT;
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`The Clerk shall enter judgment and terminate this action; and
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`Each party shall bear his or her own attorney’s fees and costs.
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`10
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`4.
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`5.
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`

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`Case 1:20-cv-02595-WJM-KMT Document 44 Filed 07/16/21 USDC Colorado Page 11 of 11
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`BY THE COURT:
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`______________________
`William J. Martinez
`United States District Judge
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`Dated this 16th day of July, 2021.
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`11
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`

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