Civil No. 99-1975 ADM/SRN
May 4, 2001
Daniel W. McDonald, Esq., and Jeffrey C. Brown, Esq., Merchant Gould, P.C., Minneapolis, Minnesota, on behalf of the Plaintiffs.
Defendant did not appear.
AMENDED JUDGMENT AND ORDER
On March 28, 2001, this Court issued an Order granting default judgment in favor of Plaintiffs Deluxe Corporation and Deluxe Financial Services, Inc. ("Deluxe") and against Defendant MIPS Dataline America, Inc. ("Defendant") [Doc. No. 25]. This matter is before the undersigned United States District Judge pursuant to Deluxe's Petition for Attorneys' Fees [Doc. No. 27]. After a review of all the files, records, pleadings and proceedings herein, Deluxe's Petition for Attorneys' Fees is granted.
As a general rule, each party to a lawsuit is responsible for their own attorneys' fees, absent a statute mandating otherwise. Two statutes operate here. The Lanham Act allows the prevailing party to recover reasonable attorneys' fees in circumstances where the other party's conduct is "exceptional." See 15 U.S.C. § 1117(a) ("The court in exceptional cases may award reasonable attorney fees to the prevailing party."). An exceptional case is one in which "one party's behavior went beyond the pale of acceptable conduct." Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 877 (8th Cir. 1994). Such exceptional behavior involves action that is "groundless, unreasonable, vexatious, or pursued in bad faith." Scott Fetzer Co. v. Williamson, 101 F.3d 549, 555 (8th Cir. 1996); Hartman v. Hallmark Cards, Inc., 833 F.2d 117, 123 (8th Cir. 1987). The Minnesota Deceptive Trade Practices Act ("MDTPA") permits the court to award attorneys' fees to the prevailing party if "the party charged with a deceptive trade practice has willfully engaged in the trade practice knowing it to be deceptive." Minn. Stat. § 325D.45, subd. 2; see Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1118 (8th Cir. 1999) (stating that the MDTPA permits, but does not require, an award of attorneys' fees and affirming a denial of such). The MDTPA attorneys' fees provision is not preempted by the Lanham Act. See Tonka Corp. v. Tonk-A-Phone, Inc., 805 F.2d 793, 795 (8th Cir. 1986).
The petition for an award of attorneys' fees in this case blurs the distinction between "exceptional" cases under the Lanham Act and "willful knowing" conduct under the MDTPA. See Minnesota Pet-Breeders, Inc. v. Schell Kampeter, Inc., 843 F. Supp. 506, 519-20 (D.Minn. 1993) (finding that the Lanham Act provision allowing award of attorneys' fees only in exceptional cases is a "stricter standard" than the willful standard applied in the MDTPA). Because there are no facts or circumstances making this an exceptional case as defined by the case law, an award of attorneys' fees pursuant to the Lanham Act is not appropriate. The MDTPA, however, allows an award of attorneys' fees in this case.
Deluxe received a default judgment in its favor after alleging in its Complaint that Defendant willfully knowingly misappropriated and diluted the "Deluxe" mark. A party's default is deemed to constitute a concession of all well pleaded allegations of liability. See McMillian/McMillian, Inc. v. Monticello Ins. Co., 116 F.3d 319, 321 (8th Cir. 1997) (holding that when a default judgment has been entered, facts alleged in the complaint may not be contested by the defaulted party); Greyhound Exhibitgroup, Inc. v. ELUL Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Fed.R.Civ.P. 8(d).
Because Defendant is deemed to have conceded that it willfully engaged in a trade practice knowing it to be deceptive, pursuant to the MDTPA reasonable attorneys' fees may be awarded to Deluxe. See Minn. Stat. § 325D.45, subd. 2. The more difficult question becomes: what fee is reasonable? The amount of a reasonable attorneys' fee must be determined on the facts of each case. Hensley v. Eckerhart, 461 U.S. 424, 429 (1983). The district court has wide discretion in determining the amount of the attorneys' fee award. See id., at 437; see, e.g., Jarrett v. ERC Properties, Inc., 211 F.3d 1078, 1084-85 (8th Cir. 2000) (concluding that granting an attorneys' fees award of $21,816, while rejecting a claim for $36,360, was not an abuse of the district court's "substantial discretion"); Rural Water Sys. #1 v. City of Sioux Center, 202 F.3d 1035, 1039 (8th Cir. 2000) (affirming a forty-four percent reduction of the attorneys' fees requested); Rogers v. Kelly, 866 F.2d 997, 1001 (8th Cir. 1989) (concluding that the district court did not abuse its discretion in making fee awards of $3,375 to one attorney and $1,875 to another, denying their requests of $14,053.50 and $9,227.50, respectively). The Eighth Circuit stated that it gives "great deference to the district courts on fee matters having to do with services performed before them [because those courts] are necessarily more familiar than we are with the members of their own bar and with the course of litigation before them, including what lawyers may have done that was unnecessary and what may have taken up more time than it needed to." Griffin v. Jim Jamison, Inc., 188 F.3d 996, 997 (8th Cir. 1999). The Supreme Court warned that "[a] request for attorney's fees should not result in a second major litigation." Hensley, 461 U.S. at 437.
"The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley, 461 U.S. at 433. "This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." Id. Deluxe's counsel requests $55,200.50 in attorneys' fees, an amount reached by multiplying 208.95 hours by an average billing rate of approximately $264.18 per hour. This lodestar amount is not the end of the inquiry. There are factors that may weigh in favor of adjusting the fee upward or downward. The factors to be evaluated are:
(1) the time and labor required;
(2) the novelty and difficulty of the questions;
(3) the skill requisite to perform the legal service properly;
(4) the preclusion of employment by the attorney due to acceptance of the case;
(5) the customary fee;
(6) whether the fee is fixed or contingent;
(7) time limitations imposed by the client or the circumstances;
(8) the amount involved and the results obtained;
(9) the experience, reputation, and ability of the attorneys;
(10) the "undesirability" of the case;
(11) the nature and length of the professional relationship with the client; and
(12) awards in similar cases.
Hensley, 461 U.S. at 430 n. 3. (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974); ABA Code of Professional Responsibility, Disciplinary Rule 2-106); accord Tusa v. Omaha Auto. Auction Inc., 712 F.2d 1248, 1256 (8th Cir. 1983) ("the district court should have used the rate it considered reasonable to reach the lodestar amount and then used the Johnson factors to adjust the lodestar amount").
It is unnecessary for the Court to examine exhaustively and explicitly all of the factors that are relevant to the amount of a fee award in every case. Griffin, 188 F.3d at 997 (citing Johnson, 488 F.2d 714, and Lawrence v. Westerhaus, 749 F.2d 494 (8th Cir. 1984)). In this case, three factors are relevant.
The first factor to examine is the time and labor this case required of Deluxe's counsel. A review of the timekeeping report indicates that Deluxe's counsel diligently recorded their hours and described the corresponding tasks. See Brown Aff., Ex. D. Deluxe's counsel billed a total of 208.95 hours. Id. This amount of time appears reasonable under the circumstances.
The experience, reputation, and ability of the attorneys is another consideration in determining a reasonable fee. There is little doubt that Deluxe's attorneys possess a high level of skill and competence in intellectual property litigation. See, e.g., Mem. in Supp., at 8-9. Analyzing the legal complexity factor, however, reveals that the legal questions presented in pursuing this default judgment were not particularly novel or difficult. Deluxe's counsel have filed a Complaint [Doc. No. 1], a Rule 26(f) Report [Doc. No. 20], and a Motion for Memorandum in Support of Default Judgment [Doc. Nos. 21-22]. While the practical inconveniences and ethical considerations involved in dealing with the withdrawal of Defendant's counsel and the attempts by Mr. Thomas Villwock to appear pro se on behalf of Defendant may have been frustrating to Deluxe's attorneys, such circumstances do not rise to the level of difficult or novel legal issues. This case simply did not require the full range of intellectual property litigation expertise possessed by Deluxe's counsel. A lower hourly billable rate than requested is reasonable.
Mr. Villwock is President of Defendant MIPS Dataline America, Inc.
Consistent with the foregoing considerations, a reasonable hourly rate of $200 will be multiplied by the 208.95 hours billed in this case, resulting in an attorneys' fees award of $41,790. Pursuant to the MDTPA, and as requested, Deluxe also is awarded $3,529.50 in costs. See Minn. Stat. § 325D.45, subd. 2. ("Costs shall be allowed to the prevailing party unless the court otherwise directs."). The total attorneys' fees and costs awarded to Deluxe are $45,319.50.
Based upon all of the files, records and proceedings herein, and for the foregoing reasons, IT
IS HEREBY ORDERED that:
Deluxe's Petition for Attorneys' Fees [Doc. No. 27] is GRANTED. Attorneys' fees and costs are awarded to Deluxe in the amount of $45,319.50.
LET JUDGMENT BE ENTERED ACCORDINGLY.