ThermoLife International LLC v. Gaspari Nutrition Incorporated et al

Filing 447

ORDER that Gaspari Nutrition, Inc.'s Application for Attorneys' Fees (Doc. 405 ) is denied, ThermoLife's Motion for an Award of Attorneys' Fees and Non-Taxable Expenses Related to GNI's Counterclaims (Doc. 398 ) is denied, and Plaintiff's Application for Attorneys' Fees Related to Discovery Master's Award of Sanctions (Doc. 396 ) is denied. See Order for details. Signed by Judge Neil V. Wake on 03/13/2014. (NVW, mh)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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ThermoLife International, LLC,
Plaintiff/Counterdefendant,

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ORDER

v.

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No. CV-11-01056-PHX-NVW

Gaspari Nutrition, Inc., et al.,
Defendants/Counterclaimants.

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Before the Court are three requests for attorneys’ fees: Gaspari Nutrition, Inc.’s

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Application for Attorneys’ Fees (Doc. 405), ThermoLife’s Motion for an Award of

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Attorneys’ Fees and Non-Taxable Expenses Related to GNI’s Counterclaims (Doc. 398),

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and Plaintiff’s Application for Attorneys’ Fees Related to Discovery Master’s Award of

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Sanctions (Doc. 396). In deciding these requests, the Court does not consider Gaspari

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Nutrition, Inc.’s Notice of Evidence Relevant to a Finding of Exceptionality (Doc. 387)

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and GNI’s response (Doc. 389), which were filed without leave of court or other

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authorization.

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I.

BACKGROUND

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ThermoLife International, LLC (“TLI”) and Gaspari Nutrition, Inc. (“GNI”) have

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been competitors in the business of selling dietary supplement products related to

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bodybuilding. In its First Amended Complaint, TLI alleged eleven counts, nine of which

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were for false advertising under 15 U.S.C. § 1125(a)(1)(B), which is § 43(a)(1)(B) of the

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Lanham Act.

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competition and tortious interference with business and business expectancy. In its

The First Amended Complaint also alleged common law unfair

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Counterclaim, GNI alleged unfair competition, trade disparagement, and, under

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15 U.S.C. § 1125(a), false designations of origin, false descriptions, false advertising, and

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unfair competition.

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On January 10, 2014, four motions by GNI and two motions by TLI to exclude all

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or portions of the opposing party’s expert witness evidence were granted, and both

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parties’ motions for summary judgment were granted. (Doc. 391.) In addition, two

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motions by TLI for sanctions were denied. (Id.) On January 27, 2014, the Court ruled

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that, although each party prevailed on its motion for summary judgment, only one party is

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permitted to recover taxable costs, GNI was the prevailing party in net, and therefore GNI

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was entitled to recovery of taxable costs that were not pertinent only to prosecution of

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GNI’s unsuccessful counterclaims. (Doc. 406.)

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II.

LEGAL STANDARD

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Both parties seek fees under 15 U.S.C. § 1117(a), which provides that the court

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may award reasonable attorneys’ fees to the prevailing party on § 1125(a) claims in

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exceptional cases.

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attorneys’ fees to a prevailing party in ‘exceptional circumstances.’” Gracie v. Gracie,

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217 F.3d 1060, 1071 (9th Cir. 2000). Awards under § 1117(a) “are never automatic and

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may be limited by equitable considerations.”

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506 F.3d 1165, 1178 (9th Cir. 2007) (quoting Rolex Watch, U.S.A., Inc. v. Michel Co.,

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179 F.3d 704, 711 (9th Cir. 1999)).

Section 1117(a) “permits, but does not mandate, an award of

Perfumebay.com Inc. v. eBay, Inc.,

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An action may be considered “exceptional” when a plaintiff’s case is groundless,

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unreasonable, vexatious, or pursued in bad faith. Secalt S.A. v. Wuxi Shenxi Const. Mach.

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Co., Ltd., 668 F.3d 677, 687 (9th Cir. 2012). “The line distinguishing exceptional cases

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from non-exceptional cases is far from clear. It is especially fuzzy where the defendant

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prevails due to plaintiff’s failure of proof.” Id. “[E]xceptional cases include instances

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where plaintiff’s case is frivolous or completely lacking in merit.” Id. Animosity

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between parties alone does not make a case exceptional. See Stephen W. Boney, Inc. v.

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Boney Servs., Inc., 127 F.3d 821, 827 (9th Cir. 1997).
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III.

ANALYSIS

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GNI seeks an award of $1,743,053.13 for attorneys’ fees and $343,643.60 for its

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expert witness fees. GNI contends this is an exceptional case because TLI’s claims were

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groundless and TLI acted in bad faith throughout the litigation. GNI particularly points

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to TLI’s conduct outside of the litigation as evidence of bad faith.

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TLI does not believe a fee award is appropriate in this case, but contends that if

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there is any basis for awarding GNI fees for prevailing on TLI’s claims, the same basis

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exists for awarding TLI fees for prevailing on GNI’s counterclaims. TLI contends that

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GNI’s counterclaims were baseless and GNI engaged in litigation misconduct,

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particularly regarding discovery.

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appropriate for either party, TLI requests an award in the amount of $384,101.75 for fees

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and $163,230.42 for non-taxable costs incurred defending against GNI’s counterclaims.

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This includes $123,768.80 for the cost of electronically stored discovery.

To the extent that the Court finds that fees are

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TLI also seeks attorneys’ fees related to the Discovery Master’s award of

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sanctions. (Docs. 239, 309.) TLI seeks an award of $5,672.50, but only $1,657.50 if

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granted its fee request related to prevailing on GNI’s counterclaims.

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This is one of those cases where the line distinguishing exceptional cases from

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non-exceptional cases is “especially fuzzy.” Neither party was successful on any of its

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claims.

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contentions that the opposing party’s claims were groundless even though the Order did

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not address whether the claims completely lacked merit.

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misconduct and overlitigation by both parties. It would be possible to examine the fee

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requests in detail, eliminate certain categories such as expert witness fees, reduce and/or

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shift discovery fees and expenses based on fault, and determine whether either party

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would be entitled to any award after offset. However, equitable considerations support

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denial of all of the fee requests without doing further calculation and weighing.

Both parties rely on the Court’s January 10, 2014 Order to support their

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And the record shows

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Therefore, it is unnecessary to decide which side of the line this case falls on because fees

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will be denied to both parties regardless of exceptionality.

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IT IS THEREFORE ORDERED that Gaspari Nutrition, Inc.’s Application for

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Attorneys’ Fees (Doc. 405) is denied, ThermoLife’s Motion for an Award of Attorneys’

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Fees and Non-Taxable Expenses Related to GNI’s Counterclaims (Doc. 398) is denied,

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and Plaintiff’s Application for Attorneys’ Fees Related to Discovery Master’s Award of

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Sanctions (Doc. 396) is denied.

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Dated this 13th day of March, 2014.

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