DocRx Incorporated v. DocRx Dispense Incorporated

Filing 34

ORDER granting 31 Motion for Award of Attorneys' Fees and Related Non-Taxable Expenses. The motion is granted to the extent that plaintiff DocRx, Inc. is awarded the sum of $29,539.90 for its attorneys' fees and the sum of $174.79 for its non-taxable expenses, for a total award of $29,714.69 from defendants DocRx Dispense, Inc. and Martin V. Olson, jointly and severally. See order for additional details. Signed by Senior Judge Paul G Rosenblatt on 6/28/2015.(LMR)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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DocRx, Inc.,
Plaintiff,

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vs.
DocRx Dispense, Inc., et al.,
Defendants.

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No. CV-14-00815-PHX-PGR
ORDER

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In its Default Judgment Opinion and Permanent Injunction Order (Doc. 28),

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the Court awarded plaintiff DocRx, Inc. its reasonable attorneys’ fees and costs

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solely pursuant to the Lanham Act, 15 U.S.C. § 1117(a), on the basis that this was

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an exceptional trademark case because defendants DocRx Dispense, Inc. and

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Martin V. Olson had engaged in willful, deliberate trademark infringement. Pending

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before the Court is Plaintiff’s Motion for Award of Attorneys’ Fees and Related Non-

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Taxable Expenses (Doc. 31), wherein it seeks a total award of $40,678.79,

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consisting of $40,504 in attorneys’ fees, which includes $5,940 for the preparation

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of this fee motion, and $174.79 in non-taxable related costs. Having reviewed the

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motion, the Court, in the exercise of its “great deal of discretion in determining the

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reasonableness of the fee[,]” Gates v. Deukmejian, 987 F.3d 1392, 1398 (9th Cir.

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1992), concludes that the plaintiff is entitled to a total award pursuant to § 1117(a)

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of $29,714.69.

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The plaintiff prevailed on all of its Lanham Act and non-Lanham Act claims in

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its First Amended Complaint and seeks recovery of all of its attorneys’ fees incurred

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in prosecuting this action. The general rule is that the recovery of fees pursuant to

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§ 1117(a) is limited to work related to Lanham Act claims and that legal fees incurred

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in litigating non-Lanham Act claims cannot be awarded unless those claims are

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found to be so inextricably intertwined that it is impossible to differentiate between

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them. Gracie v. Gracie, 217 F.3d 1060, 1069-70 (9th Cir.2000). The Court concludes

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that because the factual and legal bases of the non-Lanham Act claims are

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substantially identical to those of the Lanham Act claims, given that all of the claims

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arose out of the same facts and occurrences, the claims are inseparable for

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purposes of apportioning fees between the plaintiff’s Lanham Act and non-Lanham

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Act claims and that any attempt by the Court to apportion and exclude fees incurred

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in prosecuting the non-Lanham Act claims would be meaningless.

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The plaintiff argues that its requested fees are reasonable under the standard

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set forth in Schweiger v. China Doll Restaurant, Inc., 673 P.2d 927 (Ariz.App.1983).

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The Court notes that the Schweiger rule only governs attorneys’ fees awarded under

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Arizona law, not those awarded pursuant to the Lanham Act. Skydrive Arizona, Inc.

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v. Quattrocchi, 2011 WL 1004945, at * 2 (D.Ariz. March 22, 2011). Under the

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governing federal law, reasonable attorneys’ fees are based on the lodestar

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calculation method of Hensley v. Eckerhart, 461 U.S. 424 (1983), which requires a

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determination based on multiplying the number of hours reasonably expended on

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the litigation by a reasonable hourly rate. Secalt S.A. v. Wuxi Shenxi Construction

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Machinery Co., 668 F.3d 677, 689 (9th Cir.2012).

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With regard to the plaintiff’s counsels’ experience and their hourly rates billed

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to and paid by the plaintiff in this litigation, the plaintiff has submitted a declaration

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from Joseph Adams, its lead counsel, wherein he states the following: that he has

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been practicing intellectual property litigation since 1998, that he is a partner in his

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law firm, Snell & Wilmer, and that his hourly billing rate for this litigation was $480

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in 2014 and $490 in 2015; that Kelly Kszywienski has been practicing commercial

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litigation at Snell & Wilmer since 2007 and is a partner in the law firm, and that her

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hourly billing rate was $370 in 2014; that Joy Isaacs has been practicing commercial

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litigation at Snell & Wilmer since 2013 and is an associate in the law firm, and that

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her hourly billing rate was $195 in 2014 and $225 in 2015. Adams’ declaration

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further states that Teresa George has been a litigation paralegal at Snell & Wilmer

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since 2013 and that her hourly billing rate was $150 in 2014, and that Maureen

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Zachow has been a litigation paralegal at Snell & Wilmer since 1997 and that her

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hourly billing was $210 in 2014. The Court concludes that the requested hourly

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rates are reasonable in that they sufficiently reflect the prevailing market rates in the

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Phoenix community for legal professionals with comparable experience.

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With regard to the reasonableness of the hours expended in litigating this

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action through early February 2015 (which is when the submitted time sheets end),

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the plaintiff is seeking payment for 119.3 hours expended by counsel and 4.2 hours

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expended by the paralegals. Joseph Adams’ declaration states that in preparing the

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submitted time sheets he has “excluded or reduced certain additional charges that

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could be deemed duplicative or excessive[,]” but the amounts and dates of those

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charges are not specified. Notwithstanding this claimed reduction, which the Court

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presumes was done in good faith, the Court is obligated to exclude from its fee

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calculation those hours that it believes were not reasonably expended, i.e. hours that

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are excessive, redundant, or otherwise unnecessary. Hensley, 461 U.S. at 433-34.

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Having reviewed the submitted time sheets, the Court concludes that proper

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billing judgment was not sufficiently exercised by the plaintiff’s counsel in that

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excessive hours were expended in preparing certain documents. The first issue that

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the Court has is that Ms. Isaacs, between August 20, 2014 and September 3, 2014,

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spent 17.1 hours, for which the plaintiff is seeking $3,733.50, preparing a “motion for

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extension of time to file entry of default judgment and motion for preliminary

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injunction.” The Court concludes that this time incurred by Ms. Isaacs is non-

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compensable in its entirety because no motion for preliminary injunction was ever

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filed, and although the plaintiff did file a three-page Motion to Conduct Limited Third-

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Party Discovery and to Extend Time for Filing Motion for Default Judgment on

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September 4, 2014, Mr. Adams billed $720 for 1.5 hours of work preparing that

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motion on September 4th. Because the Court concludes that any time spent on

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seeking an extension of the Court’s deadline for filing a default judgment motion

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above the 1.5 hours incurred by Mr. Adams would be excessive, the Court will

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reduce the fee award by $3,733.50.

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The second excessive time-related issue the Court has is with the amount of

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time the plaintiff’s counsel incurred in preparing the default judgment motion. A

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review of the time sheets reveals that counsel, between July 14, 2014 and

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December 19, 2014, spent 37.4 hours, for which the plaintiff seeks $8,604,

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strategizing, researching, drafting, revising and reviewing the plaintiff’s default

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judgment motion (an eight page memorandum), and three declarations (totaling

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some 4½ pages).1 The Court will reduce the $8,604 figure by $1,290.16 (15%) to

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The Court is not including in the 37.4 hours calculation those time
entries solely related to third-party discovery, and conferences/discussions with the
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compensate for the excessive hours.

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The plaintiff is also seeking the amount of $5,940 for the 23 hours it states that

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its counsel incurred post-April 2015 in the preparation of this fee motion. The

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plaintiff argues that it is entitled to such fees pursuant to Arizona law, citing to the

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Arizona Court of Appeals decision in Schweiger, but Arizona law does not govern

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this federal issue. But even assuming that federal law permits such fees, the Court

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declines to award any fees for drafting the fee motion because the plaintiff has failed

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to provide any time sheets supporting the claimed hours, which are in any case

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excessive given the contents of the motion. Without such supporting documentation,

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the Court cannot determine how the hours were expended, who did the work, or how

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much was billed for each task. See Gates v. Deukmejian, 987 F.2d at 1397 (“The fee

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applicant bears the burden of documenting the appropriate hours expended in the

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litigation and must submit evidence in support of those hours worked.”)

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Based on the above, the Court concludes that the appropriate lodestar amount

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for purposes of the attorneys’ fee award is $29,539.90 (the requested amount of

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$40,504 - $10,964.10 in reductions.) The Court further concludes that no adjustment

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of this amount is appropriate based on the factors of Kerr v. Screen Extras Guild,

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Inc., 526 F.2d 67 (9th Cir.1975), which have not already been subsumed in the

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lodestar calculation.

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The plaintiff is further seeking the sum of $174.79 for its non-taxable related

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expenses. The Court will award these expenses because it concludes that the

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plaintiff is entitled to recover its non-taxable expenses under § 1117(a), Scalt S.A.

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v. Wuxi Shenxi Construction Machinery Co., 668 F.3d at 690, and that the plaintiff

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properly incurred the expenses it seeks to recover and has properly documented

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plaintiff’s principal and non-party declarants related to the default judgment motion.
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those expenses. Therefore,

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IT IS ORDERED that Plaintiff’s Motion for Award of Attorneys’ Fees and

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Related Non-Taxable Expenses (Doc. 31) is granted to the extent that plaintiff

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DocRx, Inc. is awarded the sum of $29,539.90 for its attorneys’ fees and the sum of

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$174.79 for its non-taxable expenses, for a total award of $29,714.69 from

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defendants DocRx Dispense, Inc. and Martin V. Olson, jointly and severally. The

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awarded amount shall bear interest from the date this Order is entered until paid at

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the statutory rate set by 28 U.S.C. § 1961(a).

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DATED this 28th day of June, 2015.

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