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rejecting plaintiff's request for costs related to "outside professional services" due to lack of explanation or documentation
Summary of this case from Ogilvy Group Sweden v. Tiger Telematics, Inc.Opinion
CV-05-2973 (NG) (JMA).
January 10, 2006
APPEARANCES: Janet Dore, Morgan Finnegan, L.L.P., New York, New York, Attorney for Plaintiff.
REPORT AND RECOMMENDATION
By Order dated October 17, 2005, the above captioned action was referred to me by the Honorable Nina Gershon for a report and recommendation to determine the scope of relief, including injunctive relief, damages, attorney fees, and costs, owed to plaintiff DCH Auto Group (USA), Inc. ("DCH Auto Group"), following the entry of a default judgment against defendant Fit You Best Automobile, Inc. ("Fit You Best Automobile"), for alleged violations of section 43(a) of the Lanham Act, as well as New York statutory and common law.
For the reasons contained herein, I respectfully recommend that plaintiff be awarded costs in the sum of $668.77 and attorney fees in the sum of $36,388.46, for a total damages award of $37,057.23. I further recommend that plaintiff's request for a permanent injunction be granted.
I. BACKGROUND
"Where, as here, `the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" Chen v. Jenna Lane, Inc., 30 F.Supp.2d 622, 623 (S.D.N.Y. 1998) (quoting 10A Charles Alan Wright, Arthur R. Miller Mary Kay Kane, Federal Practice and Procedure § 2688, at 58-59 (3d ed. 1998). Plaintiff DCH Auto Group commenced the instant action against defendant Fit You Best Automobile for trademark infringement pursuant to section 43(a) of the Lanham Act, as amended, 15 U.S.C. § 1125(a), as well as dilution, deceptive acts and practices, and unfair competition under New York statutory and common law. DCH Auto Group is a United States subsidiary of Dah Chong Hong, a conglomerate of companies originally based in Hong Kong. (See Compl. ¶ 16.) Since 1977, DCH Auto Group has been the parent company of all Dah Chong automobile dealerships in the United States and has continuously used, either directly or through its related companies, the ("Dah Chong") mark in conjunction with selling and servicing automobiles in New York and New Jersey. (Id. ¶ 18.) Plaintiff's Chinese name is
("Dah Chong Auto Group (USA)"), which plaintiff has continuously used since 1977. (Id. ¶ 20.) Since 1999, plaintiff has used its Chinese name in printed advertisements for products and services in local Chinese newspapers and program guides for local Chinese community events. (Id. ¶¶ 20-21.)
"DCH" is short for "Dah Chong Hong."
Defendant Fit You Best Automobile operates an automobile sales and service business, located at 55-02 Main Street, Flushing, New York. (Id. ¶ 29.) Defendant also advertises the sale of automobiles through the website www.motorlusa.com. (Id. ¶ 30.) Defendant is not associated, affiliated, or in any way connected with plaintiff, DCH Auto Group. (Id. ¶ 31.)
Plaintiff alleges that in March 2005 defendant began using the mark in connection with its automobile sales and service business. (Id. ¶ 29.) Specifically, plaintiff alleges that defendant's use of the
mark, as incorporated in the Chinese name
and displayed on signs at defendant's dealership and on its website, constitutes trademark infringement, unfair competition, dilution, and deceptive acts and practices under federal and state law. (Id. ¶¶ 39-48.) Plaintiff further alleges that consumers are likely to be confused by defendant's use of the
mark and deceived into believing that Fit You Best Automobile is affiliated with DCH Auto Group. (Id. ¶ 35.)
On April 20, 2005, plaintiff's attorney sent defendant a cease and desist letter stating that "DCH will agree not to seek damages for past misuse or to insist upon other remedies to which it may be entitled" if defendant ceases use of the mark within 30 days. (See Declaration of Janet Dore in Support of Entry of Permanent Injunction and Award of Attorney Fees dated Dec. 2, 2005 ("Dore Decl. II"), Ex. 1.) On June 10, 2005, George Liang, DCH's Senior Vice President and Regional Manager, sent another letter to defendant, indicating that the company "would like to try to resolve this matter amicably, before resorting to the mutually expensive court proceedings." (Id. at Ex. 2.) Having received no response to either letter, plaintiff commenced the instant action against defendant on June 21, 2005.
Plaintiff personally served the Summons and Complaint on defendant at its principal place of business on June 22, 2005. (See Declaration of Janet Dore in Support of Plaintiff's Motion for Default Judgment dated Aug. 10, 2005 ("Dore Decl. I"), ¶ 3.) Defendant's employee, Yun Ying Liu, acknowledged receipt of service. (See Declaration of Service, Dore Decl. I, Ex. A.) Defendant failed to file an answer or otherwise move with respect to the Complaint, and the time to do so expired on July 12, 2005. (Dore Decl. I ¶¶ 4-5.) Defendant also failed to respond to plaintiff's inquiries concerning the case, including a telephone call on July 14, 2005, and a letter dated July 18, 2005. (Id. ¶¶ 6-7; see also Declaration of Jeffrey Liao dated Aug. 10, 2005 ("Liao Decl."), ¶¶ 6-15.) To date, defendant has failed to make an appearance. As a result, plaintiff filed a request for entry of default pursuant to Federal Rule of Civil Procedure 55(b)(2) and Local Civil Rule 55.2(b) on August 10, 2005. An entry of a default judgment against defendant was ordered by Judge Gershon on October 17, 2005 and the discrete issues of damages and injunctive relief were referred to me for a report and recommendation.
II. DISCUSSION
A. Default
Defendant's default amounts to an admission of liability. Therefore, all of the well-pleaded allegations in plaintiff's complaint pertaining to liability are deemed true. See Greyhound Exhibitgroup v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). A plaintiff must prove damages before the entry of a final default judgment. See Credit Lyonnais Sec., Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). The district court must conduct an inquiry to ascertain the amount of damages with reasonable certainty. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997). Rule 55(b)(2) of the Federal Rules of Civil Procedure provides that when granting a default judgment, if "it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence . . . the court may conduct such hearings or order such references as it deems necessary and proper. . . ." The Second Circuit has held that, under Rule 55(b)(2), "it is not necessary for the District Court to hold a hearing, as long as it ensured that there was a basis for the damages specified in the default judgment."Transatlantic Marine, 109 F.3d at 111 (citation and internal quotations omitted).
Plaintiff has submitted the following for the court's review: (1) declarations from attorneys Janet Dore and Jeffrey Liao; (2) a declaration from Simon Li, an employee of DCH Auto Group; (3) copies of letters written by plaintiff's attorneys to defendants (4) a photograph of defendant's place of business; (5) a computer print-out of pages from defendant's website; and (6) a copy of attorney time records and expenditures. The court finds that these documents constitute sufficient evidence to form the basis for an award of damages.
B. The Lanham Act
Section 43(a) of the Lanham Act, prohibits "[a]ny person" from using in commerce,
in connection with any goods or services, or any container for goods, . . . any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . . is likely to cause confusion, or to cause mistake, or to deceive . . . as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.15 U.S.C. § 1125(a). Defendant, by its default, has admitted to the allegations in plaintiff's Complaint, specifically that defendant (1) adopted the
C. Recovery for Violations of the Lanham Act
The assessment of damages for a violation of the Lanham Act is made pursuant to section 35 of the Act, as codified in 15 U.S.C. § 1117. The statute provides, in relevant part, that "plaintiff shall be entitled . . . subject to the principles of equity, to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action." 15 U.S.C. § 1117(a) (emphasis added). The statute further provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." Id.
1. Costs
As a result of defendant's default, plaintiff is unable to obtain evidence that establishes defendant's profits with any certainty. (See Dore Decl. II ¶ 3.) Plaintiff therefore waives its claim to an award of defendant's profits but requests costs in the sum of $3,242.18. (Id. ¶¶ 3, 7.) Courts generally award costs to prevailing parties in cases involving violations of the Lanham Act. See Tri-Star Pictures, Inc. v. Unger, 42 F. Supp. 2d 296, 306 (S.D.N.Y. 1999). "Out-of-pocket litigation costs are generally recoverable if they are necessary for the representation of the client." Id. at 306. As a result of defendant's default, plaintiff has prevailed and is therefore entitled to recover reasonable costs.
The Declaration of plaintiff's counsel, Janet Dore, states that total disbursements amount to $3,242.18, which includes the $250.00 court filing fee. (See Dore Decl. II ¶ 7.) However, a careful review of the invoices indicate that plaintiff's total disbursements actually amount to $3,015.31.
The invoices submitted to the Court indicate the following monthly disbursements:
May 2005 $1,241.11 June 2005 $ 927.24* July 2005 $ 48.61 August 2005 $ 843.15 September 2005 $ 10.70 November 2005 $ 44.50* The billing memorandum accompanying the invoice for the month ending June 30, 2005 indicates that the $350.00 filing fee for the "patent" application is an "unbilled disbursement." However, this $350.00 credit does not appear anywhere on the invoice. Plaintiff should not be compensated for the cost of filing the trademark application to register the Dah Chong mark. Applying this $350.00 credit, plaintiff's disbursements for the month of June 2005 are $577.24, which yields a subtotal of $2,765.31. The $250.00 filing fee for the instant action is not reflected in any of the itemized monthly disbursements. However, a copy of the receipt is annexed to the billing records. Therefore, $250.00 should be added to the above subtotal, bringing plaintiff's total disbursements to $3,015.31.
a. Computer Research
Plaintiff seeks approximately $1,646.14 in electronic research costs. In the Second Circuit, "computer research is merely a substitute for an attorney's time that is compensable under an application for attorneys' fees and is not a separately taxable cost." United States ex rel. Evergreen Pipeline Constr. Co. v. Merritt Meridian Constr. Corp., 95 F.3d 153, 173 (2d Cir. 1996). Courts in this circuit are divided in their application of this general rule. Compare Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., No. 95 Civ. 8833, 2002 WL 1733681, (S.D.N.Y. July 26, 2002) (awarding electronic research costs because plaintiffs' attorney typically charged its clients the cost of such research separate from the attorney hourly rate) and Nat'l. Distillers Prods. Co., LLC v. Refreshment Brands, Inc., No. 00 Civ. 8418, 2002 WL 1766548, at *2 n. 6 (S.D.N.Y. July 20, 2002) (awarding compensation for electronic research under the category of "attorney fees" rather than "costs") with Tsombanidis v. City of West Haven, 208 F. Supp. 2d 263, 287 (D. Conn. 2002) (denying compensation for electronic research costs because it is "the attorney's time that is compensable, not the medium that delivers the message . . .") and BD v. DeBuono, 177 F. Supp. 2d 201, 209 (S.D.N.Y. 2001) (denying compensation for electronic research because it is part of attorney overhead).
In the Eastern District of New York, however, courts routinely "disallow applications for electronic research costs." King v. JCS Enters., Inc., 325 F. Supp. 2d 162 (E.D.N.Y. 2004) (Young, C.J.); see generally S.E.C. v. Goren, 272 F. Supp. 2d 202, 214 (E.D.N.Y. 2003) (Platt. J.) (denying reimbursement for Lexis and Westlaw charges because electronic research "is merely a substitute for an attorney's time that is compensable under an application for attorney's fees and is is not a separately taxable cost") (citation omitted); Rotella v. Bd. of Educ. of the City of New York, No. 01-CV-0434, 2002 WL 59106, at *5 (E.D.N.Y. Jan. 17, 2002) (Garaufis, J.) (same); Fink v. City of New York, 154 F. Supp. 2d 403, 415 (E.D.N.Y. 2001) (Trager, J.) (same); L.I. Head Start Child Dev. Servs., Inc. v. Kearse, 96 F. Supp. 2d 209, 215-16 (E.D.N.Y. 2000) (Spatt, J.) (same). But see General Motors Corp. v. Villa Marin Chevrolet, Inc., 240 F. Supp. 2d 182, 189 (E.D.N.Y. 2002) (Gleeson, J.) (adopting Report and Recommendation of Magistrate Judge Viktor V. Pohorelsky) (electronic research costs compensable under an application for "attorney fees" rather than "costs"). In King, the court stated that "[p]rivate market attorney fee rates reflect overhead costs like electronic research, just as they would reflect the cost of case reporters and other necessary books purchased for a law firm's library." 325 F. Supp. 2d at 172. I find this reasoning persuasive and respectfully recommend that plaintiff's request for electronic research costs be denied.
Chief Judge, District of Massachusetts, sitting by designation.
b. Court Fee
Plaintiff also seeks the $250.00 fee for filing the Complaint. This fee is recoverable pursuant to 28 U.S.C. § 1920(1), which provides for the recovery of fees paid to the Clerk of the Court. Accordingly, I respectfully recommend that plaintiff's request be granted in full.
c. Miscellaneous Costs
Plaintiff also seeks $1,119.17 in miscellaneous costs, reflecting $401.65 for "prior art" $279.80 for photocopies, $255.00 for the "outside professional services," $58.09 for telecommunications (e.g. telephone and facsimile), $43.75 for word processing, $41.77 for a Dun Bradstreet Report, $21.48 for courier service, $16.00 for travel expenses, and $1.63 for postage. "Attorneys may be compensated for reasonable out-of-pocket expenses incurred and customarily charged to their clients. . . ." Miltland Raleigh-Durham v. Myers, 840 F. Supp. 235, 239 (S.D.N.Y. 1993) (citing Reichman v. Bonsignore, Brignati Mazzotta P.C., 818 F.2d 278, 283 (2d Cir. 1987)). However, those expenses that are part of the attorneys' ordinary overhead are not compensable. See Kuzma v. I.R.S., 821 F.2d 930, 933-34 (2d Cir. 1987).
Plaintiff's expenses for photocopies, telecommunications, courier service, travel, postage, and a Dun Bradstreet Report are reasonable out-of-pocket expenses that are customarily compensable. See, e.g., Kuzma, 821 F.2d at 933-34 ("Identifiable, out-of-pocket disbursements for items such as photocopying, travel, and telephone costs are [compensable but] routine office overhead . . . must normally be absorbed within the attorney's hourly rate."); Duke v. County of Nassau, No. 97-CV-1495, 2003 WL 23315463, at *6 (E.D.N.Y. Apr. 14, 2003) ("Courts have continuously recognized the right for reimbursement of costs such as photocopying, postage, [and] transportation . . .") (citation omitted); United States Media Corp., Inc. v. Edde Entm't, Inc. No. 94 Civ. 4849, 1999 WL 498216, at *10 (S.D.N.Y. July 14, 1999) (travel expenses, postage, courier service, and telephone charges "are recoverable as the reasonable out-of-pocket disbursements of an attorney, billable to the client."). I find these expenses to be reasonable and recommend that they be granted in full.
Plaintiff's expenses for word processing, however, are not compensable because they are part of routine overhead. See Kuzma, 821 F.2d at 933; see also Marisol A. ex rel. Forbes v. Guiliani, 111 F. Supp. 2d 381, 390 (S.D.N.Y. 2000) ("secretarial services are part of overhead and are not generally charged to clients"); In re Bausch Lomb, Inc. Sec. Litig., 183 F.R.D. 78, 90 (W.D.N.Y. 1998) (word processing costs "are presumed to be included in counsel's overhead expenses, and are thus properly included in the award of attorney's fees"). I therefore recommend that plaintiff's request for word processing fees be denied.
Plaintiff also seeks $401.65 for the cost of "prior art" and $255.00 for the "outside professional services." Plaintiff has failed to provide any explanation in support of this request and does not provide any documentation to substantiate it. Therefore, I respectfully recommend that plaintiff's request for these costs be denied.
Accordingly, I recommend awarding plaintiff only $418.77 in miscellaneous costs.
2. Reasonable Attorney Fees
Plaintiff also requests $55,982.25 for attorney fees. Section 35(a) of the Lanham Act permits the court to award reasonable attorney fees to the prevailing party, but only in "exceptional cases." See 15 U.S.C. § 1117(a). In the Second Circuit, exceptional cases warranting the award of reasonable attorney fees are limited to those cases evidencing fraud, bad faith, or willful infringement. See Gordon and Breach Sci. Publishers S.A. v. Am. Inst. of Physics, 166 F.3d 438, 439 (2d Cir. 1999) (citing Twin Peaks Prods, Inc. v. Publ'ns Int'l, Ltd., 996 F.2d 1366, 1383 (2d Cir. 1993); see also Bambu Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849 (2d Cir. 1995) ("`exceptional' circumstances include willful infringement"). Even with a finding of bad faith, the decision to award attorney fees remains within the sound discretion of the district court. See Gidatex v. Campaniello Imports, Ltd., 82 F. Supp. 2d 136, 147 (S.D.N.Y. 2000).
In the Complaint, DCH Auto Group alleges that defendant's use of the mark was willful and intentional. (See Compl. ¶ 34.) In a default, the factual allegations set forth in the complaint are deemed true, see Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) and "[a] defaulting party ordinarily cannot contest the merits of the plaintiff's claim absent `indisputable' contradictory evidence." In re Crazy Eddie Sec. Litig., 948 F. Supp. 1154, 1160 (E.D.N.Y. 1996) (citation omitted). Defendant has failed to file an answer or otherwise submit any evidence to contradict the allegations set forth in the Complaint. Defendant's infringement of the
mark is therefore deemed willful. See Tiffany (NJ) v. Luban, 282 F. Supp. 2d 123, 124 (S.D.N.Y. 2003). The evidence submitted by plaintiff sufficiently demonstrates that defendant used the
mark in connection with its automobile sales and service business and continued to do so even after it received cease and desist letters from plaintiff. The evidence also establishes that defendant has refused to respond to any of plaintiff's inquiries regarding this dispute. I am persuaded that defendant's violations were willful and in bad faith and thus constitute exceptional circumstances. Therefore, an award of reasonable attorney fees is appropriate.
The Second Circuit has adopted the lodestar approach to calculating attorney fees. See Bourgal v. Lakewood Haulage, Inc., 827 F. Supp. 126, 129 (E.D.N.Y. 1993) (citing Chambless v. Masters, Mates Pilots Pension Plan, 885 F.2d 1053, 1058-59 (2d Cir. 1989)). In computing the lodestar, the court multiplies the number of hours reasonably worked by what it deems to be a reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Bourgal, 827 F. Supp. at 129. Awards for legal fees are calculated in accordance with "the prevailing market rates in the relevant community. . . ." Chambless, 885 F.2d at 1058 (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)). Moreover, "the district court must ascertain whether `the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.'" Id. at 1058-59 (quoting Blum 465 U.S. at 896 n. 11). When the lodestar has been calculated, the court considers "subjective factors, such as the risk of the litigation, the complexity of the issues, and the skill of the attorneys" New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1140 (2d Cir. 1983) and should exclude hours that are "excessive, redundant, or otherwise unnecessary." See Hensley, 461 U.S. at 434. "Because attorney's fees are dependent on the unique facts of each case, the resolution of the issue is committed to the discretion of the district court."Clark v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992) (citingHensley, 461 U.S. at 437). Finally, a fee applicant has the burden of establishing its hourly rate and hours expended. See Blum, 465 U.S. at 896 n. 11.
Plaintiff submitted contemporaneous time records in support of its request for attorney fees in the amount of $55,982.25, reflecting a total of 205.45 hours expended during the pendency of this action. Plaintiff was represented by attorneys from the firm of Morgan Finnegan, LLP. The time records indicate that various individuals devoted time to plaintiff's case, namely, Maria Lin, 21.45 hours at $530.00 per hour; Janet Dore, 26.25 hours at $540.00 per hour; Jeffrey Liao, 120.50 hours at $205 per hour; Danielle Tully, 24.25 hours at $215.00 per hour; Clifford Hoffman, 6.25 hours at $80.00 per hour; Donald Hom, 3.0 hours at $120.00 per hour; Nicholas Ritzmann, 2.5 hours at $110.00 per hour; and Jennifer Groh, 1.25 hours at $90.00 per hour. The declarations of Ms. Dore, Mr. Liao, and Mr. Hom indicate that Ms. Lin and Ms. Dore are partners, Mr. Liao is an associate, and Mr. Hom is a paralegal. Other than that, however, plaintiff's submissions do not identify the other individuals' positions in the firm. In fact, from the billing records alone, there is no way to identify which individuals are attorneys and which are paralegals because they are all listed under the single heading of "attorney." More importantly, plaintiff's submissions in support of its request for attorney fees fail to describe the education and experience of each attorney who worked on this case. They also fail to establish that the hourly rates are in accordance with those charged by attorneys in this district for similar work. Notwithstanding the absence of this information, I find plaintiff's request for $55,982.25 in attorney fees to be demonstrably excessive.
The Declaration of plaintiff's counsel, Janet Dore, states that attorney fees through November 30, 2005 total $55,982.25. (See Dore Decl. II ¶ 7.) However, the billing records submitted to the Court reflect attorney fees in the amount of $56,707.25.
The only significant activity in this case, as reflected by the docket sheet, is the following: (1) the Complaint, filed June 21, 2005; (2) the Motion for Default Judgment, filed August 10, 2005; (3) the Memorandum of Law in Support of Plaintiff's Motion for Default, dated August 10, 2005, including declarations by Janet Dore, Jeffrey Liao, and Donald Hom; (4) Judge Gershon's Order granting plaintiff's default judgment, dated October 27, 2005; and (4) the Memorandum in Support of Permanent Injunction Attorney Fees and Costs, dated December 2, 2005.
While recognizing counsel's wide latitude regarding the expenditure of time and allocation of resources to a particular case, it is not without limitations. In Hensley, the Supreme Court stated:
Counsel for the prevailing party should make a good-faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission. "In the private sector, `billing judgment' is an important component in fee setting. Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority." Copeland v. Marshall, 641 F.2d 880, 891 (1980) (emphasis added).461 U.S. at 434. Plaintiff's counsel submitted billing records for fees that were not appropriately billed to its client. First, there are numerous entries referring to time spent learning how to use the Electronic Court Filing ("ECF") system. For example, Mr. Liao billed for time he spent on the telephone with the Clerk's office "to ascertain the Bar ID numbers for appearing attorneys" and with the Help Desk to learn how to register an attorney for ECF, change lead counsel, and post documents on ECF. (See "June Invoice," Dore Decl. II, Ex. 5.) He also billed for time spent obtaining judges' individual practice rules and an ECF user guide, as well as time spent summarizing the "filing procedure . . . in memo form for future reference." (Id.) Second, there are several entries for time spent researching the ABA Code of Professional Responsibility for the appropriate rule regarding attorney communication with an adverse party. (Id.) By charging for tasks that are arguably common, and in most cases necessary, to its practice of law, counsel failed to exercise the appropriate billing judgment with respect to these matters.
Plaintiff's counsel also submitted billing records for fees that are not recoverable. Plaintiff's counsel spent 5.0 hours performing tasks associated with a Freedom of Information Law ("FOIL") request it submitted to the New York State Department of Motor Vehicles pertaining to defendant's license to sell used automobiles. (See "July Invoice," Dore Decl. II, Ex. 5.) According to Ms. Lin's entry on June 27, 2005, she "instructed staff to determine whether Fit You Best has appropriate operating license for selling used cars." (See "June Invoice," Dore Decl. II, Ex. 5.) I fail to see the how an investigation into defendant's license to sell used cars relates to defendant's trademark infringement. The contemporaneous time records also include a fee request for 2.75 hours expended to research the "legal basis for 6-month foreign filing deadline (Paris Convention) and different mechanisms available for foreign filing (Madrid Protocol, EU CTM procedure)" and draft an "inquiry letter to Client explaining this and requesting instructions regarding foreign filing." (See "September Invoice," Dore Decl. II, Ex. 5.) Once again, this fee request appears to be unrelated to defendant's trademark infringement.
In addition, the billing records submitted by plaintiff's counsel also include entries for tasks performed by an attorney but that are more appropriately performed by a paralegal. For example, on June 14, 2005, Mr. Liao spent part of 4.75 hours "turn[ing] a magnet into [a] color exhibit." (See "June Invoice," Dore Decl. II, Ex. 5.) Entries on June 21-24, 2005 indicate that he spent part of 7.25 hours making copies, scanning documents, and assembling papers. (Id.) On July 18, 2005, Mr. Liao spent part of 1.25 hours sending a letter via Federal Express. (See "July Invoice," Dore Decl. II, Ex. 5.) On August 9 and 10, 2005, he spent a portion of 12.5 hours preparing exhibits and attachments for electronic filing, as well as assembling courtesy copies of documents for the court. (Id.) On September 19, 2005, Mr. Liao once again spent part of 2.75 hours assembling courtesy copies of documents for the court. (See "September Invoice," Dore Decl. II, Ex. 5.) Mr. Liao billed at an hourly rate of $205.00 for time he spent performing these clerical tasks, all of which could have been done by a paralegal at a substantially lower hourly rate. In Bourgal v. Atlas Transit Mix Corp., No. 93-CV-0569, 1996 WL 75290 (E.D.N.Y. Feb. 7, 1996), the court reduced the fee amount because associates and partners spent time "proofreading, collating, faxing, copying, and serving documents. . . ." Id. at *6.
In light of the above facts, I recommend that plaintiff's request for attorney fees be reduced. "[W]hen there is a fee application containing excessive hours, it is within the discretion of the district court to make an across the board percentage reduction." LaBarbera v. J.E.T. Res., Inc., 01-CV-4039, 2005 WL 2898736 (E.D.N.Y. Nov. 4, 2005); see also New York State Ass'n for Retarded Children, Inc., 711 F.2d at 1146 ("Courts have recognized that it is unrealistic to expect a trial judge to evaluate and rule on every entry in an application.") (citations omitted); S.E.C. v. Goren, 272 F. Supp. 2d. 202, 213 (E.D.N.Y. 2003) ("Courts have routinely reduced fees computed under lodestar methodology by deducting a percentage from the number of hours reasonably billed by or by deducting a lump sum."). After reviewing the contemporaneous time records, considering the nature of the case, the lack of complexity, and the work performed, I find that a 35 percent across-the-board fee reduction is appropriate. This 35 percent adjustment of attorney fees amounts to a reduction of $19,593.79.
While recognizing that trademark law is a particularly specialized field of the law that may, in some instances, warrant higher attorney fees, the instant case is a default judgment with very limited activity reflected in the docket sheet. In light of counsel's billing practices, the Court certainly could have recommended that attorney fees be reduced by a substantially higher percentage.
Accordingly, defendant owes plaintiff $36,388.46 for legal fees incurred during the pendency of this action.
3. Permanent Injunction
Plaintiff also seeks injunctive relief. Specifically, plaintiff seeks to permanently enjoin defendant from:
a. [u]sing in any manner, or holding itself out as having rights to use, the . . . (Dah Chong) mark, or any other name, mark or designation confusingly similar to Plaintiff's . . . (Dah Chong) mark, to identify, designate, describe or refer to itself, or any goods or services it offers;
b. [u]sing the . . . (Dah Chong) mark to render, offer, sell, advertise or promote, any goods or services;
c. [m]aking any statement or misrepresentation whatsoever, or using any false designation of origin or false description or false representation, or performing any act, which can or is likely to cause confusion, mistake, or to deceive, or otherwise mislead the trade or public into falsely believing that Plaintiff and Defendant are one and the same or that there is an affiliation or relationship between Plaintiff and Defendant or the products and services they offer;
d. [o]perating a website at www.motor1usa.com or any other Internet address which displays the . . . (Dah Chong) mark directly or indirectly; and
e. [e]ngaging in any other activity constituting unfair competition with Plaintiff, or constituting deceptive trade practices, or constituting dilution of the . . . (Dah Chong) mark, or of Plaintiff's reputation or goodwill[.]
(See Pl.'s Proposed Final J., at 3.)
The court "may issue an injunction on a motion for default judgment provided that the moving party shows that (1) it is entitled to injunctive relief under the applicable statute and (2) it meets the prerequisites for the issuance of an injunction." Kingvision Pay-Per-View, Ltd. v. Batista, No. 05-CV-0614, 2005 WL 2999427, at *5 (E.D.N.Y. Oct. 6, 2005) (quoting Main Events/Monitor Prods. v. Batista, No. 96-CV-5089, 1998 WL 760330, at *1 (E.D.N.Y. Aug. 26, 1998)).
Section 34(a) of the Lanham Act provides courts with the "power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable . . . to prevent a violation under subsection (a), (c), or (d) of section 1125. . . ." 15 U.S.C. § 1116(a). To obtain a permanent injunction, however, a "plaintiff must [also] demonstrate actual success on the merits and irreparable harm." See Hard Rock Café Int'l. (USA) Inc. v. Morton, No. 97-Civ. 9483, 1999 WL 701388, at *4 (S.D.N.Y. Sept. 9, 1999) (citing Wojnarowicz v. Am. Family Ass'n, 745 F. Supp. 130, 148 n. 13 (S.D.N.Y. 1990). Defendant's default constitutes an admission of liability; therefore, plaintiff has achieved actual success on the merits. See, e.g., Batista, 2005 WL 2999427, at *5. "In a trademark case, irreparable injury is established where `there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question.'" Lobo Enters., Inc. v. Tunnel, Inc., 822 F.2d 331, 333 (2d Cir. 1987) (citation omitted). Both plaintiff and defendant are automobile dealerships and conduct business in New York. Defendant's use of the mark has resulted in three specific instances of actual confusion by consumers who mistakenly believed that defendant Fit You Best Automobile was affiliated with plaintiff DCH Auto Group. (See Declaration of Simon Li dated Dec. 2, 2005 ("Li Decl."), ¶ 2.) I therefore find that plaintiff has satisfied its burden of establishing irreparable injury.
Accordingly, I respectfully recommend that plaintiff's request for a permanent injunction be granted.
III. CONCLUSION
I respectfully recommend that plaintiffs be awarded costs in the sum of $668.77, attorney fees in the sum of $36,388.46, for a total damages award of $37,057.23. I further recommend that plaintiff's request for a permanent injunction be granted.Any objections to this Report and Recommendation must be filed with the Clerk of the Court, with a copy to the undersigned, within ten (10) days of receipt of this Report. Failure to file objections within the specified time waives the right to appeal the District Court's order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72, 6(a), 6(e).
SO ORDERED.