Berry v. Hawaiian Express Ser, et al

MOTION for Attorney Fees Employees Motion for Attorneys' Fees and Costs

D. Haw.March 23, 2006

LYLE S. HOSODA & ASSOCIATES, LLC LYLE S. HOSODA 3964-0 RAINA P.B. MEAD 7329-0 345 Queen Street, Suite 804 Honolulu, Hawaii 96813 Telephone: (808) 524-3700 Facsimile: (808) 524-3838 E-mail: lsh@hosodalaw.com Attorneys for Defendants BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, and JACQUELINE RIO IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII WAYNE BERRY, a Hawaii citizen, Plaintiff, v. HAWAIIAN EXPRESS SERVICE, INC., a California corporation; H.E.S. TRANSPORTATION SERVICES, INC., a California corporation; CALIFORNIA PACIFIC CONSOLIDATORS, INC.,a California corporation; JEFFREY P. GRAHAM and PETER SCHAUL, California citizens; MARK DILLON and TERESA NOA, BRIAN CHRISTENSEN, Hawaii citizens; FLEMING COMPANIES, INC.,an Oklahoma corporation; C & S LOGISTICS OF HAWAII, LLC, a Delaware LLC; C & S WHOLESALE GROCERS, INC., a Vermont corporation; C & S ACQUISITIONS, LLC; FOODLAND SUPER MARKET, LIMITED, a Hawaii corporation; HAWAII ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CIVIL NO. CV03-00385 SOM-LEK (Copyright) NOTICE OF MOTION; DEFENDANTS BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, AND JACQUELINE RIO’S MOTION FOR ATTORNEYS’ FEES AND COSTS; MEMORANDUM IN SUPPORT OF MOTION; AFFIDAVIT OF LYLE S. HOSODA; EXHIBITS “A” - “R”; CERTIFICATE OF SERVICE Non-Hearing Motion Magistrate: Hon. Leslie E. Kobayashi [caption continued on next page] Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 1 of 27 2 TRANSFER COMPANY, LIMITED, a Hawaii corporation; RICHARD COHEN, New Hampshire citizen; ES3, LLC, a Delaware Limited Liability Company, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, JACQUELINE RIO, Hawaii citizens; JESSIE GONSALVES, LUIZ RODRIGUES, AL PEREZ and PATRICK HIRAYAMA, California citizens; GUIDANCE SOFTWARE, LLC, a California LLC; MICHAEL GURZI, a California citizen; ALIX PARTNERS, LLC, a Delaware LLC; DOE INDIVIDUALS 2-350; DOE PARTNERSHIPS, CORPORATIONS and OTHER DOE ENTITIES 2-20, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Trial: February 28, 2006 NOTICE OF MOTION TO: TIMOTHY J. HOGAN, ESQ. Lynch, Ichida, Thompson & Kim 1132 Bishop Street, Suite 1405 Honolulu, Hawaii 96813 Attorney for Plaintiff WAYNE BERRY LEX R. SMITH, ESQ. THOMAS YEE, ESQ. Kobayashi Sugita & Goda 999 Bishop Street, Suite 2600 Honolulu, Hawaii 96813 Attorneys for Defendant FLEMING COMPANIES, INC. C & S WHOLESALE GROCERS, INC. C & S LOGISTICS OF HAWAII, LLC and C & S ACQUISITIONS, LLC Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 2 of 27 3 MICHAEL BAUMANN, ESQ. DAMIAN CAPOZZOLA, ESQ. R. OLIVIA SAMAD, ESQ. Kirland & Ellis 777 South Figueroa Street Los Angeles, California 90017 Attorneys for Defendant POST-CONFIRMATION TRUST for FLEMING COMPANIES, INC. KAREN L.S. FINE, ESQ. Nordman Cormany Hair & Compton 1000 Town Center Drive Sixth Floor Oxnard, California 93036 and ROY J. TJIOE, ESQ. EMILY REBER PORTER, ESQ. Alii Place, Suite 1800 1099 Alakea Street Honolulu, Hawaii 96813 Attorneys for Defendants HAWAIIAN EXPRESS SERVICE, INC. H.E.S. TRANSPORTATION SERVICES, INC. CALIFORNIA PACIFIC CONSOLIDATORS, INC. JEFFREY P. GRAHAM and PETER SCHAUL ANDREW V. BEAMAN, ESQ. LEROY E. COLOMBE, ESQ. Chun Kerr Dodd Beaman & Wong 745 Fort Street, 9th Floor Honolulu, Hawaii 96813 Attorneys for Defendant FOODLAND SUPERMARKET, LTD. WESLEY H.H. CHING, ESQ. JULIA MORGAN, ESQ. Fukunaga Matayoshi Hershey & Ching, LLC 1200 Davies Pacific Center 841 Bishop Street Honolulu, Hawaii 96813 Attorney for Defendant HAWAIIAN TRANSFER COMPANY, LTD. Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 3 of 27 4 MARGERY BRONSTER, ESQ. REX Y. FUJICHAKU, ESQ. 2300 Pauahi Tower 1001 Bishop Street Honolulu, Hawaii 96813 Attorneys for Defendant GUIDANCE SOFTWARE, INC. and MICHAEL GURZI JOHN T. KOMEIJI, ESQ. Watanabe Ing Kawashima & Komeiji, LLP First Hawaiian Center 999 Bishop Street, 23rd Floor Honolulu, Hawaii 96813 Attorneys for Defendant ALIX PARTNERS, LLC NOTICE IS HEREBY GIVEN that the undersigned has filed with the above-entitled Court the motion attached hereto. Any opposition to this motion must be filed with the Court no later than eleven (11) days after service of the Statement of Consultation. If service has been made by mail pursuant to Rule 6(e) of the Federal Rules of Civil Procedure, then any opposition to this motion must be filed with the Court no later than fourteen (14) days after service of the motion. Dated: Honolulu, Hawaii, March 23, 2006. /s/ Lyle S. Hosoda LYLE S. HOSODA RAINA P.B. MEAD Attorneys for Defendants BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, and JACQUELINE RIO Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 4 of 27 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII WAYNE BERRY, a Hawaii citizen, Plaintiff, v. HAWAIIAN EXPRESS SERVICE, INC., et al. Defendants. ) ) ) ) ) ) ) ) ) ) ) CIVIL NO. CV03-00385 SOM-LEK (Copyright) DEFENDANTS BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, AND JACQUELINE RIO’S MOTION FOR ATTORNEYS’ FEES AND COSTS DEFENDANTS BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, AND JACQUELINE RIO’S MOTION FOR ATTORNEYS’ FEES AND COSTS Defendants BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, and JACQUELINE RIO (collectively “Employees”), by and through their attorneys, Lyle S. Hosoda & Associates, LLC, hereby move this Honorable Court for an order granting the Employees their attorneys’ fees and costs incurred in defending against the copyright infringement claims in this case. This motion is brought pursuant to Rule 54 of the Federal Rules of Civil Procedure, Rules 54.2 and 54.3 of the Local Rules of Practice for the United States District Court for the District of Hawaii, 17 U.S.C. § 505, and is supported by the \ \ Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 5 of 27 2 Memorandum in Support of Motion, the affidavit and exhibits attached thereto, and the entire records and files herein. DATED: Honolulu, Hawaii, March 23, 2006. /s/ Lyle S. Hosoda LYLE S. HOSODA RAINA P.B. MEAD Attorneys for Defendants BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, and JACQUELINE RIO Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 6 of 27 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . ii I. RELEVANT FACTS . . . . . . . . . . . . . . . . . . . . . . 1 II. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. The Employees are the Prevailing Party in this Lawsuit . . . . . . . . . . . . . . . . . . . . 4 B. As the Prevailing Party, the Employees are Entitled to an Award of Attorneys’ Fees and Costs . . . . . . . 8 C. The Amount of Attorneys’ Fees and Costs Sought in this Motion is Reasonable . . . . . . . . . . . . . . . 13 III. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . 18 Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 7 of 27 ii TABLE OF AUTHORITIES CASES Alflex Corp. v. Underwriters Labs, Inc., 914 F.2d 175 (9th Cir. 1990) . . . . . . . . . . . . . . . 5 Association of Flight Attendants, AFL-CIO v. Horizon Air Industries, Inc., 976 F.2d 541 (9th Cir. 1992) . . . . . 15 Chalmers v. City of Los Angeles, 796 F.2d 1205 (9th Cir. 1986) . . . . . . . . . . . . . 17 Columbia Pictures Television, Inc. v. Krypton Broadcasting of Birmingham, 259 F.3d 1186 (9th Cir. 2001) . . . . . . . . 9 Crawford Fitting Co. v. Gibbons, Inc., 482 U.S. 437 (1987) . . . . . . . . . . . . . . . . . . . 5 Entertainment Research Group, Inc. v. Genesis Creative Group, 122 F.3d 1211 (9th Cir. 1997) . . . . . . . . . . . . 8, 9 Evanow v. M/V Neptune, 163 F.3d 1108 (9th Cir. 1998) . . . . . . . . . . . . . 15 Florentine Art Studio, Inc. V. Vedet K. Corp., 891 F.Supp. 532 (C.D. Cal. 1995) . . . . . . . . . . . 6, 7 Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994) . 6, 13 Haagen-Dazs Co. v. Double Rainbow Gourmet Ice Cream, 920 F.2d 587 (9th Cir. 1990) . . . . . . . . . . . . . . 16 Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) . . . . 6 Pinkham v. Camex, Inc., 84 F.3d 292 (8th Cir. 1996) . . . . . . . . . . . . . . 17 Stacy v. Williams, 50 F.R.D. 52, 14 Fed.R.Serv.2d 397 (N.D. Miss. 1970) . . 16 Studiengesellschaft Kohle v. Eastman Kodak Co., 713 F.2d 128 (5th Cir. 1983) . . . . . . . . . . . . . . 16 Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 8 of 27 iii STATUTES 17 U.S.C. § 504(b) . . . . . . . . . . . . . . . . . . . . . . 3 17 U.S.C. § 505 . . . . . . . . . . . . . . . . . . . 1, 4, 5, 9 28 U.S.C. § 1920 . . . . . . . . . . . . . . . . . . . . . 5, 6 § 1920(1) . . . . . . . . . . . . . . . . . . . . . . . 15 § 1920(2) . . . . . . . . . . . . . . . . . . . . . . . 15 § 1920(4) . . . . . . . . . . . . . . . . . . . . . . . 16 Fed. R. Civ. P. Rule 54(d) . . . . . . . . . . . . . . . . 1, 5 Rule 54(d)(1) . . . . . . . . . . . . . . . . . . . . . . 5 L.R. 54.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 9 of 27 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII WAYNE BERRY, a Hawaii citizen, Plaintiff, v. HAWAIIAN EXPRESS SERVICE, INC., et al. Defendants. ) ) ) ) ) ) ) ) ) ) ) CIVIL NO. CV03-00385 SOM-LEK (Copyright) MEMORANDUM IN SUPPORT OF MOTION MEMORANDUM IN SUPPORT OF MOTION The Employees are a prevailing party and should be awarded their reasonable attorneys’ fees and costs pursuant to Fed. R. Civ P. 54(d) and 17 U.S.C. § 505. I. RELEVANT FACTS Plaintiff filed a Second Amended Verified Complaint on June 18, 2004 (“SAVC”), naming twenty-eight individuals and entities and alleging, among other things, claims of direct infringement, contributory and vicarious infringement, conspiracy to infringe, misappropriation of trade secrets, violations of the Sherman Act, violations of RICO, and injunctive relief. See Second Amended Verified Complaint, filed herein on June 18, 2004. However, by June, 2005, all of these claims were either summarily dismissed or severely limited by the Court’s entry of orders granting in whole and in part motions for summary judgment Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 10 of 27 2 filed by the various defendants. See Hosoda Aff., Exs. A-C. Specifically, the Court found no merit to any of Plaintiff’s claims against Brian Christensen and granted him summary judgment on all counts of Plaintiff’s SAVC. See Hosoda Aff., Ex. A (Jan. 26, 2005 Order) at 32, 37-42. The Court further determined that any infringing acts by Mark Dillon, Teresa Noa, Melvin Ponce, Sonia Purdy, Justin Fukumoto, Alfredda Waiolama, and Jacqueline Rio ceased on June 9, 2003, when Fleming moved to use of the non-infringement Excel Spreadsheets. Any infringement that occurred between April 1, 2003 and June 9, 2003 by these Employees was inadvertent and not willful. The Court concluded the Employees were not aware that the version of FCS they were using during this period of time was not the original licensed version and that they were not allowed to use it. See Hosoda Aff., Ex. A (Jan. 26, 2005 Order) at 32- 42; Ex. C (Jun. 27, 2005 Order) at 7, 11-21. The Court denied Plaintiff’s request for injunctive relief against Fleming and the Employees. The Court found that (1) the process Fleming used to revert to the original version of FCS was not a violation of Plaintiff’s copyright; (2) the act of removing infringing elements of a work was not itself the creation of a derivative work; and (3) even if a derivative was created, it was done innocently and in good faith, without Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 11 of 27 3 causing harm to Plaintiff. See Hosoda Aff., Ex. D (Oct. 8, 2004 Order) at 27-28. Furthermore, any recovery Plaintiff had against the Employees under 17 U.S.C. § 504(b) was limited to his actual damages. Plaintiff was precluded from seeking any profits from the Employees as they did not profit or otherwise financially benefit from their conduct or receive any additional compensation for the development of any computer software while employed by Fleming. See Hosoda Aff., Ex. E (Oct. 21, 2005 Order) at 31-34. For his claim of direct infringement against Fleming and the remaining seven employees, Plaintiff sought between $2,004,891 and $302,252,571 in actual damages. See Hosoda Aff., Ex. F. At trial, Plaintiff’s expert opined that use of Plaintiff’s FCS for 7 weeks between April 1, 2003 and June 9, 2003 entitled Plaintiff to a $2.7 million license fee from each infringer. On March 7, 2006, the jury rejected these exorbitant amounts, and in fact, determined five of the employees should not have to pay a single penny, awarding zero damages to Plaintiff for the use of a derivative version of FCS by Melvin Ponce, Sonia Purdy, Justin Fukumoto, Alfredda Waiolama, and Jacqueline Rio. As to the use of a derivative version of FCS by Mark Dillon and Teresa Noa, the jury believed Plaintiff was only entitled to $4 in nominal damages. See Hosoda Aff., Ex. G. Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 12 of 27 4 Most recently, the Court denied Plaintiff’s request for a permanent injunction, finding no evidence that (1) copies of his FCS were on the computers purchased by C&S or that C&S’s network currently has copies on it and (2) Mark Dillon has a copy of FCS or intends to infringe. The Court concluded the Employees pose no threat of continuing or additional infringement. See Hosoda Aff., Ex. H (Mar. 9, 2006 Order) at 3, 5-13. In light of these facts, the Employees, not Berry, has prevailed in this case and should recover their reasonable attorneys’ fees and costs. The Employees successfully defended against Plaintiff’s claims. Furthermore, the jury’s $4 nominal damage award with respect to two of the employees was a minute fraction, if anything, of the millions Berry insisted he was entitled throughout the course of this litigation. Thus, it is clear the Employees should be deemed the prevailing party in this case. II. ARGUMENT A. The Employees are the Prevailing Party in this Lawsuit Under the Copyright Act, a prevailing party may request an award of reasonable attorneys’ fees and costs. 17 U.S.C. § 505 provides in relevant part: In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 13 of 27 5 award a reasonable attorney’s fees to the prevailing party as part of costs. 17 U.S.C. § 505. With respect to costs other than attorneys’ fees, Rule 54(d)(1) of the Federal Rules of Civil Rule provides in relevant part: Except when express provision therefore is made either in a statute of the United States or in these rules, costs other than attorneys’ fees shall be allowed as of course to the prevailing party unless the court otherwise consented to the reference; but costs against the United States, its officers, and agencies shall be imposed only to the extent permitted by the law. Such costs may be taxed by the clerk on one day’s notice. On motion served within 5 days thereafter, the action of the clerk may be reviewed by the court. Fed. R. Civ. P. 54(d)(1). The costs that may be recovered under Fed. R. Civ. P. 54(d) are limited to those costs generally enumerated in 28 U.S.C. § 1920. See Alflex Corp. v. Underwriters Labs, Inc., 914 F.2d 175, 175 (9th Cir. 1990) (citing Crawford Fitting Co. v Gibbons, Inc., 482 U.S. 437, 441-442 (1987)). Costs defined in § 1920 include the following: (1) Fees of the clerk and marshal; (2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and copies of papers necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title; Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 14 of 27 6 (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title. 28 U.S.C. § 1920. The taxation of the above referenced costs are further exemplified by LR 54.2. For purposes of an award of attorneys’ fees and costs, the prevailing party is one who “succeed[s] on any significant issue in litigation which achieves some of the benefit the parties sought in bringing the suit.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). The Copyright Act entitles prevailing defendants to be awarded attorneys’ fees and costs on the same basis as prevailing plaintiffs. Attorneys’ fees and costs are to be awarded as a matter of the court’s discretion. Fogerty v. Fantasy, Inc. 510 U.S. 517, 534, 114 S.Ct. 1023, 1033, 127 L.Ed.2d 455 (1994). Despite a finding of liability against them, the Employees are a prevailing party for purposes of attorneys’ fees and costs where their liability was inadvertent, not willful and the amount of damages Plaintiff ultimately obtained against only two of the seven employees was a mere $4. In Florentine Art Studio, Inc. v. Vedet K. Corp., 891 F.Supp. 532 (C.D.Cal. 1995), the court found the defendants who prevailed on seven of nine infringement counts were prevailing parties in a copyright infringement suit. The defendants who prevailed on seven of the Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 15 of 27 7 nine infringement counts were found to be innocent infringers on the remaining two, and were assessed the minimum statutory damages. The defendants established they never knowingly copied any copyrighted work. Florentine, 891 F.Supp. at 541. In reaching its determination, the court considered the fact that the plaintiff knew there were only two works at issue yet still brought numerous claims, the plaintiff rejected a November 11, 1993 settlement letter, and there were no complex or novel legal issues in the case which could have justified continuing the action. Id. at 542. Here, similar to the defendants in Florentine, the Employees prevailed on all but one of the claims that were asserted in this case and prevailed on the contested issue of willful infringement. The Employees established that any infringement that occurred between April 1, 2003 and June 9, 2003 was inadvertent and not willful. The Court concluded the Employees were not aware that the version of FCS they were using between April 1, 2003 and June 9, 2003 was not the original licensed version and that they were not allowed to use that software. See Hosoda Aff., Ex. A (Jan. 26, 2005 Order) at 32-42; Ex. C (Jun. 27, 2005 Order) at 11-21. Furthermore, Fleming proved that the Excel Spreadsheets in use after June 9, 2003 was not an infringing derivative work. See Hosoda Aff., Ex. C (Jun. 27, 2005 Order) at 7, 12-21. This is drastically different from Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 16 of 27 8 the claims Plaintiff originally sought with respect to the Employees: direct infringement, Sherman Act and RICO violations, and injunctive relief against all eight of the former Fleming employees, conspiracy to infringe against three of the employees, and contributory and vicarious infringement against one of the employees. See SAVC at 26-27, 30-31, 36, 40-41 and 44. The jury in this case awarded Plaintiff zero damages for five of the seven remaining employee defendants and $4 in nominal damages for the remaining two employees’ inadvertent, non-willful use of a derivative version of his software. See Hosoda Aff., Ex. G. This is in stark contrast to the millions of dollars Plaintiff claimed he was entitled to throughout this litigation. As with the defendants in Florentine, the Employees succeeded in a substantial part of this litigation, and achieved substantially all of the benefits they hoped to achieve in defending this suit, and should be deemed the prevailing party. B. As the Prevailing Party, the Employees are Entitled to an Award of Attorneys’ Fees and Costs. In awarding attorneys’ fees and costs a district court is “given wide latitude to exercise ‘equitable discretion.’” Entertainment Research Group, Inc. V. Genesis Creative Group, Inc., 122 F.3d 1211, 1229 (9th Cir. 1997). While there is no precise formula in the exercise of that discretion, the following are factors a district court may consider: (1) the degree of success obtained; (2) frivolousness; (3) motivation; (4) Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 17 of 27 9 objective unreasonableness (both in the factual and in the legal components of the case); (5) the need in particular circumstances, to advance considerations of compensation and deterrence; and (6) purposes of the Copyright Act. Id.; see also Columbia Pictures Television, Inc. v. Krypton Broadcasting of Birmingham, 259 F.3d 1186, 1197 (9th Cir. 2001). Applying the above-mentioned factors, it is clear that the Employees should be awarded their attorneys’ fees and costs pursuant to 17 U.S.C. § 505: Degree of Success. Plaintiff sued a total of twenty- eight individuals and entities asserting a multitude of claims. By June, 2005, all of the defendants but Fleming and seven of the former Fleming employees, settled or were dismissed by way of summary judgment. For the Employees, the sole issue at trial what, if any, actual damages Plaintiff was entitled to for the infringement that occurred during a 7-week period of time. Plaintiff demanded $2.7 million from each of the seven employees, but only obtained a nominal damages award of $4 with respect to two of the seven remaining employee defendants. See Hosoda Aff., Ex. G. Frivolousness. Plaintiff’s claims against the Employees were frivolous. As part of his May 28, 2004 request for injunctive relief, Plaintiff fixated on the belief that Teresa Noa fled Hawaii to Iowa with a copy of his FCS and that Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 18 of 27 10 she was in fact using his FCS for C&S’ logistics operations. See Plaintiff’s Motion for Issuance of Preliminary Injunction, Memorandum, filed herein on May 28, 2004, at 20-21. On October 8, 2004, the Court rightly determined Plaintiff’s accusations were devoid of any factual support. See Hosoda Aff., Ex. D (Oct. 8, 2004 Order) at 17, 31. It was no surprise then Plaintiff never followed through on taking the deposition of Ms. Noa to confirm his baseless allegations. During this same period of time, Plaintiff sought the production of telephone and internet records from a third-party, Iowa Telecommunications Services, Inc. (“Iowa Telecom”), that allegedly would show Ms. Noa’s use of Plaintiff’s FCS. See Hosoda Aff., Ex. I. Plaintiff’s pursuit of this discovery required the expense of substantial time and effort on the part of the parties and the Court. Discovery conferences were held with Magistrate Kobayashi and an in camera review conducted by Discovery Master Matsui to ensure Ms. Noa’s privacy rights were protected and the information that was produced was relevant to Plaintiff’s claims. See Hosoda Aff., Exs. J-L. In the end, the Iowa Telecom documents were irrelevant and never relied upon by Plaintiff. Motivation. Plaintiff’s baseless attacks against Mark Dillon, Teresa Noa, and Brian Christensen further support an award attorneys’ fees and costs to the Employees. In September Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 19 of 27 11 2003, as part of any settlement discussion, Plaintiff wanted Fleming to terminate its employment of Mark Dillon, Teresa Noa, and Brian Christensen. See Hogan Dec. and Ex. 6 attached thereto. Plaintiff filed claims of direct, contributory, and vicarious infringement against Brian Christensen. Mr. Christensen attested that he never used the FCS and never received financial benefits over and above his regular compensation in his capacity as President of C&S. The Court determined that Mr. Christensen had no knowledge of any infringement or of any infringing elements in the version of FCS that Fleming used between April 1, 2003 and June 9, 2003. The Court properly rejected all of Plaintiff’s claims against Mr. Christensen and summarily dismissed him from the lawsuit. See Hosoda Aff., Ex. A (Jan. 26, 2005 Order) at 32, 38-42. At a minimum, the Court must find Brian Christensen a prevailing party as he successfully defended against all of Plaintiff’s claims and award him all attorneys’ fees and costs related to his counsel’s efforts in getting him out on summary judgment. As discussed, supra, Plaintiff mistakenly believed Ms. Noa fled Hawaii for Iowa in order to set up a boiler room FCS on behalf of C&S. See Plaintiff’s Motion for Issuance of Preliminary Injunction, Memorandum (May 28, 2004) at 20-21. Ms. Noa is originally from Iowa and moved back there because of Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 20 of 27 12 employment uncertainties resulting from Fleming’s bankruptcy. Rather than consider reasonable, rationale explanations, Plaintiff leapt to unfounded conclusions as matter of course throughout this litigation. See Hosoda Aff., Ex. D (Oct. 8, 2004 Order) at 17. As part of his February 10, 2006 motion for reconsideration of the Court’s summary judgment rulings, Plaintiff attacked the integrity of Mark Dillon by claiming he provided false deposition testimony when asked where copies of FCS or its derivatives could be found. Not surprisingly, Plaintiff failed to establish that Mr. Dillon provided false deposition testimony, and the Court denied Plaintiff’s request for reconsideration on all counts. See Hosoda Aff., Ex. M. (Feb. 27, 2006 Order) at 2, 5-8, 19. Objective Unreasonableness of Factual and Legal Arguments. All of Plaintiff’s claims against the Employees were, at a minimum, “objectively unreasonable”. As evidenced by the Court’s summary judgment rulings and the jury’s verdict, Plaintiff was completely and objectively unreasonable in his relentless pursuit of millions of dollars in actual damages from the Employees, who did nothing but show up for work and did as they were told by their employer, Fleming. Considerations of Compensation and Deterrence. One of the stated purposes of the Copyright Act is to enrich the general Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 21 of 27 13 public through access to creative works. To carry out that purpose, the law requires that boundaries of copyright law be clearly demarcated. As such, “defendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement.” See Fogerty, 510 U.S. at 527, 114 S.Ct. at 1030. Consistent with the purposes of the Copyright Act, the Employees defended against and ultimately obtained favorable summary judgment rulings on Plaintiff’s claims of conspiracy, violations of the Sherman Act, violations of RICO, and contributory and vicarious infringement. Brian Christensen was granted summary judgment on all counts of Plaintiff’s SAVC. The Employees were also successful in defending against all of Plaintiff’s claims for injunctive relief. Their successful defense against Plaintiff’s claims have “further[ed] the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of the copyright.” Id. Considering these circumstances as a whole, an award of attorneys’ fees and costs is proper. C. The Amount of Attorneys’ Fees and Costs Sought in this Motion is Reasonable. The Employees seek reasonable attorneys’ fees in the amount of $386,087.50. See Hosoda Aff. and Exs. N-P. As set forth in Lyle S. Hosoda’s Affidavit, the Employees’ counsel Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 22 of 27 14 charged reasonable hourly rates that are consistent with the fees customarily charged in this judicial district for similar legal services. See Hosoda Aff. Lyle S. Hosoda is a member of Lyle S. Hosoda & Associates, LLC, and his law practice primarily consists of litigation. He has been practicing in Hawaii for 20 years. His usual and customary fee is presently $250.00 per hour, but he has been billing the clients at $200 per hour and did not change the hourly rate since 2003 when he was first retained. He expended in excess of 1162 hours in defending claims brought against the Employees by Plaintiff. The background, time investment and other relevant information of the associate attorney assisting Mr. Hosoda in defending this action is delineated in the Affidavit of Lyle S. Hosoda, attached hereto. The estimated number of hours incurred, as well as a description of the work performed and services rendered are itemized as follows: Category LH (Hours/Fees) RM (Hours/Fees) Total Fees A Case Development 271/54,200.00 234/29,250.00 83,450.00 B Pleadings 38/7,600.00 32/4,000.00 11,600.00 C Written Discovery 207/41,400.00 304/38,000.00 79,400.00 D Depositions 109/21,800.00 n/a 21,800.00 E Motions 277.5/55,500.00 442/55,250.00 110,750.00 Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 23 of 27 15 F Court Hearings 72.5/14,500.00 30.5/3,812.50 18,312.50 G Trial 173/34,600.00 173/21,625.00 56,225.00 H Post Trial 14/2,800.00 14/1,750.00 4,550.00 Total Hours 1162/232,400.00 1229.5/153,687.50 360,087.50 See Hosoda Aff. and Exs. O and P. The Employees also seek non-taxable expenses and costs reasonably and necessarily incurred in the defense of the claims asserted against the Employees by Plaintiff in the amount of $34,910.78. See Hosoda Aff. and Ex. N, Q, R. The following is a break down of the non-taxable expenses and costs requested: Category Amount I Mediation Fees (non-taxable expense) 1,678.03 J Travel Expenses (non-taxable expense) 11,655.35 1 Fees of the Clerk 50.00 2 Depositions and Court Reporters 9,097.22 3a Photocopying (in house) 6,162.85 3b Photocopying (outside) 2,670.46 4 Special Master’s Fees 3,596.87 Total 34,910.78 See Hosoda Aff. and Ex. Q, R. Fees of the Clerk. Filing fees charged by the clerk of the court are recoverable costs under 28 U.S.C. § 1920(1). The movants request fees of the clerk in the amount of $50.00. See Hosoda Aff. Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 24 of 27 16 Deposition/Court Reporter Fees. Fees incurred in obtaining deposition transcripts are recoverable costs under 28 U.S.C. § 1920(2). Evanow v. M/V Neptune, 163 F.3d 1108, 1118 (9th Cir. 1998); Association of Flight Attendants, AFL-CIO v. Horizon Air Industries, Inc., 976 F.2d 541, 551 (9th Cir. 1992). Such costs are recoverable if necessarily obtained for use in the case. The movants necessarily incurred depositions costs for preparation of pretrial and trial motions and for use at trial. Costs of hearing transcripts at the trial level are taxable matter within the discretion of the trial court. See Stacy v. Williams, 50 F.R.D. 52, 56, 14 Fed.R.Serv.2d 397, (N.D. Miss. 1970). Daily trial transcripts were necessary and important for trial preparation, trial motions, and trial. The movants incurred deposition and court reporter costs in the total amount of $9,097.22. See Hosoda Aff. Copying Costs. 28 U.S.C. § 1920(4) permit taxation for the copies of papers “necessarily obtained for use in the case” and does not require that the document be introduced into the record. Haagen-Dazs Co. v. Double Rainbow Gourmet Ice Cream, Inc., 920 F.2d 587, 588 (9th Cir. 1990). The movants incurred in-house and outside reproduction costs in the process of filing pleadings and in securing documents during the discovery process in the total amount of $8,833.31. See Hosoda Aff. Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 25 of 27 17 Special Master’s Fees. The taxing of the cost of a special master against a non-prevailing party is clearly within the discretion of the district court and no factual showing of necessity is required. See Studiengesellschaft Kohle v. Eastman Kodak Co., 713 F.2d 128, 134 (5th Cir. 1983). The movants incurred costs related to the special master in the amount of $3,596.87. See Hosoda Aff. The remaining costs associated with mediation fees and travel costs are clearly reasonable and should be allowed where these out-of-pocket expenses are of the kind normally charged to clients by attorneys and may be included as part of any reasonable attorneys’ fees awarded. See Pinkham v. Camex, Inc., 84 F.3d 292, 294-295 (8th Cir. 1996); Chalmers v. City of Los Angeles, 796 F.2d 1205, 1216 n.7 (9th Cir. 1986)(out-of-pocket litigation expenses reimbursable as part of attorney’s fees). As discussed in Sections III.A and III.B, supra, the nature of this litigation justifies the amount of attorneys’ fees, non-taxable expenses, and costs as reasonable. \ \ \ \ \ \ Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 26 of 27 18 III. CONCLUSION Based on the foregoing arguments and authority, the Employees respectfully request that this Honorable Court grant an award of all attorneys’ fees, non-taxable expenses, and costs incurred in defending against the claims in this action. DATED: Honolulu, Hawaii, March 23, 2006. /s/ Lyle S. Hosoda LYLE S. HOSODA RAINA P.B. MEAD Attorneys for Defendants BRIAN CHRISTENSEN, MARK DILLON, TERESA NOA, MELVIN PONCE, SONIA PURDY, JUSTIN FUKUMOTO, ALFREDDA WAIOLAMA, and JACQUELINE RIO Case 1:03-cv-00385-DAE-LEK Document 880 Filed 03/23/2006 Page 27 of 27