Raul Caiz v. William Leonard Roberts, II et al

Filing 66

ORDER Re: DEFENDANTS' MOTION FOR ATTORNEYS' FEES 60 by Judge Ronald S.W. Lew. Defendants' Motion for Attorneys' Fees 60 is DENIED. (jre)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 RAUL CAIZ, 13 14 15 16 17 18 19 20 21 22 ) ) ) Plaintiff, ) ) v. ) WILLIAM LEONARD ROBERTS II, ) ) aka MASTERMIND aka RICK ) ROSS, UNIVERSAL MUSIC ) GROUP, INC., DEF JAM ) RECORDS, INC., MAYBACH ) MUSIC GROUP, LLC, ) ) ) Defendants. ) ) CV No. 15-09044-RSWLAGRx ORDER Re: DEFENDANTS’ MOTION FOR ATTORNEYS’ FEES [60] I. INTRODUCTION Currently before the Court is Defendants William 23 Leonard Roberts II aka Mastermind aka Rick Ross 24 (“Roberts”), Universal Music Group, Inc. (“Universal”), 25 Def Jam Records, Inc., (“Def Jam”), and Maybach Music 26 Group, LLC’s (“Maybach”) (collectively, “Defendants”) 27 Motion for Attorneys’ Fees (“Motion”) [60]. The Court, 28 having reviewed all papers and arguments submitted 1 1 pertaining to this Motion, NOW FINDS AND RULES AS 2 FOLLOWS: Defendants’ Motion for Attorneys’ Fees [60] is 3 DENIED. 4 II. BACKGROUND 5 A. Factual Background 6 Plaintiff Raul Caiz (“Plaintiff”) is a hip-hop 7 music artist. Compl. ¶ 2, ECF No. 1. On December 24, 8 2005, Plaintiff applied for registration of the 9 trademark “Mastermind” for use in Classes 009 and 41. 10 Id. at ¶ 25. It was registered on July 16, 2013. 11 Roberts is also a hip-hop artist. Id. at ¶ 3. Id. On 12 January 7, 2013, Roberts announced the title of his 13 sixth album would be “Mastermind.” Id. at ¶ 28. 14 Roberts went on to refer to himself as “Mastermind,” 15 claiming it as his own and creating confusion in the 16 marketplace. Id. at ¶ 29. Universal, Def Jam, and 17 Maybach reviewed, approved, and assisted in the 18 creation and distribution of infringing materials which 19 had the “Mastermind” mark. 20 Id. at ¶ 31. Plaintiff alleged Defendants wilfully infringed his 21 trademark rights by releasing an album entitled 22 “Mastermind,” titling Roberts’ tour “Mastermind,” and 23 by Roberts taking on the persona of “Mastermind,” 24 causing confusion in the marketplace. Id. Plaintiff 25 claimed that the value of his trademark diminished 26 because people mistakenly believed Plaintiff released 27 the “Mastermind” album that Defendants had already 28 released. Id. at ¶ 7. Plaintiff alleged he used the 2 1 name “Mastermind” since 1999 in various ways, 2 including: purchasing recording equipment, recording 3 music, performing at venues, obtaining synchronization 4 deals for multiple songs, making a music video, and 5 receiving a licensing deal to use a song as a mall 6 jingle. 7 Id. at ¶ 32. Plaintiff’s claims against Defendants included 8 Federal Trademark Infringement pursuant to 15 U.S.C. § 9 1114, a violation of the Lanham Act, 15 U.S.C. § 10 1125(a), Federal Trademark Dilution, Unfair Enrichment, 11 Unfair Competition, and Misappropriation. 12 39-65. Id. at ¶¶ Defendants filed a Counterclaim of cancellation 13 of the federal trademark registration under 28 U.S.C. § 14 2201(a) and 15 U.S.C. §§ 1119, 1064. Countercl. ¶ 5. 15 Defendants alleged the “Mastermind” mark is invalid 16 because it is a generic and/or merely descriptive term 17 that lacks secondary meaning. Id. at ¶ 12. Defendants 18 requested the Court cancel Plaintiff’s registration of 19 the “Mastermind” mark pursuant to 15 U.S.C. § 1119. 20 Id. at ¶ 18. 21 B. Procedural Background 22 On November 20, 2015, Plaintiff filed a Complaint 23 with this Court [1]. 24 filed an Answer [18]. On February 16, 2016, Defendants On February 18, 2016, Defendants 25 filed a Counterclaim against Plaintiff [22]. On March 26 8, 2016, Plaintiff filed an Answer to the Counterclaim 27 [23]. On October 7, 2016, Defendants filed a Motion 28 for Summary Judgment [44]. On December 15, 2016, this 3 1 Court granted Defendants’ Motion for Summary Judgment 2 [58]. On December 16, 2016, Judgment was entered in 3 favor of Defendants [59]. On December 30, 2016, 4 Defendants filed the instant Motion [60]. On January 5 10, 2017, Plaintiff filed its Opposition [61]. On 6 January 17, 2017, Defendants filed their Reply [64]. 7 III. DISCUSSION 8 A. Legal Standard 9 1. 10 Exceptional Cases “The court in exceptional [trademark] cases may 11 award reasonable attorney fees to the prevailing 12 party.” 15 U.S.C. § 1117(a). The interpretation of 13 what constitutes an “exceptional case” is a question of 14 law. Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 15 1210, 1216 (9th Cir. 2003). 16 Courts may consider several factors to determine 17 whether “exceptional circumstances” exist. E & J Gallo 18 v. Proximo Spirits, Inc., No. CV-F-10-411 LJO JLT, 2012 19 WL 3639110, at *5 (E.D. Cal. Aug. 23, 2012). An action 20 may be exceptional where plaintiff’s case is 21 “groundless, unreasonable, vexatious, or pursued in bad 22 faith.” Stephen W. Boney, Inc. v. Boney Servs., 127 23 F.3d 821, 827 (9th Cir. 1997)(quoting Scott Fetzer Co. 24 v. Williamson, 101 F.3d 549 (8th Cir. 1996)). The 25 Supreme Court has noted several “nonexclusive” factors 26 to consider including “frivousness, motivation, 27 objective unreasonableness (both in the factual and 28 legal components of the case) and the need in 4 1 particular circumstances to advance considerations of 2 compensation and deterrence.” Octane Fitness, LLC v. 3 ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 n.6 4 (2014)(quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 5 534 n.19 (1994)). 6 The Ninth Circuit has recently held that courts 7 should look to the “totality of the circumstances” in 8 determining if a case is exceptional and “exercis[e] 9 equitable discretion in light of nonexclusive factors 10 identified in Octane Fitness and Fogerty, and us[e] a 11 preponderance of the evidence standard.” SunEarth, 12 Inc. v. Sun Earth Solar Power Co., Ltd., 839 F.3d 1179, 13 1181 (9th Cir. 2016). Additionally, “[t]he Court is 14 not compelled to award attorney's fees even if the case 15 is exceptional.” Starbuzz Tobacco, Inc. v. Addison 16 Specialty Services, Inc., No. 13-CV-1539-MMA (KSC), 17 2015 WL 11251805, at *5 (S.D. Cal. July 29, 2015) 18 (citing Fifty–Six Hope Rd. Music, Ltd. v. A.V.E.L.A., 19 Inc., 915 F. Supp. 2d 1179, 1186 (D. Nev. 2013) aff'd, 20 778 F.3d 1059 (9th Cir. 2015)). 21 2. 22 When attorneys’ fees are awarded under § 1117(a) of Reasonable Attorneys’ Fees 23 the Lanham Act, the amount of the fee award is subject 24 to the court’s discretion. Sealy, Inc. v. Easy Living, 25 Inc., 743 F.2d 1378, 1384 (9th Cir. 1984). “When it 26 sets a fee, the district court must first determine the 27 presumptive lodestar figure by multiplying the number 28 of hours reasonably expended on the litigation by the 5 1 reasonable hourly rate.” Intel Corp. v. Terabyte 2 Int’l, Inc., 6 F.3d 614, 622 (9th Cir. 1993)(internal 3 citation omitted). In appropriate cases, courts may 4 then adjust the “presumptively reasonable” lodestar 5 figure based upon factors set forth by the Ninth 6 Circuit in Kerr v. Screen Extras Guild, Inc., 526 F.2d 7 67, 69–70 (9th Cir. 1975) abrogated on other grounds by 8 City of Burlington v. Dague, 505 U.S. 557 (1992).1 9 C. Analysis 10 1. 11 12 Defendants’ Failure To Comply With Local Rule 7-3 Local Rule 7-3 requires that “counsel contemplating 13 the filing of any motion shall first contact opposing 14 counsel to discuss thoroughly, preferably in person, 15 the substance of the contemplated motion and any 16 potential resolution.” L.R. 7-3. The Local Rule 17 further requires that this conference shall take place 18 at least seven (7) days prior to the filing of the 19 motion. Id. The Court may, in its discretion, refuse 20 to consider Defendants’ Motion for failure to comply 21 with Local Rule 7-3. See, e.g., Reed v. Sandstone 22 1 The 23 the noveltyKerr factors are: (1) the time and labor required, (2) and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the 24 25 26 27 28 preclusion of other 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. Kerr, 526 F.2d at 69–70. 6 1 Properties, L.P., No. CV 12-05021 MMM (VBKx), 2013 WL 2 1344912, at *6 (C.D. Cal. Apr. 2, 2013). Defendants 3 assert when the parties met and conferred regarding 4 Defendants’ intention to file a Motion for Summary 5 Judgment on September 9, 2016, Defendants’ counsel 6 advised Plaintiff’s counsel that Defendants would seek 7 attorneys’ fees if the motion was granted. Decl. of 8 Craig Holden (“Holden Decl.”) ¶ 2, ECF No. 60-1. 9 Plaintiff claims that the meet and confer was only 10 about the Motion for Summary Judgment and there was no 11 substantive discussion at that time regarding the 12 instant Motion; thus, Defendants’ Motion should be 13 denied. 14 Pl.’s Opposition (“Opp’n”) 4:1-15. While Plaintiff may have been put on notice that 15 Defendants would seek attorneys’ fees if the Motion for 16 Summary Judgment was granted, the purpose of Local Rule 17 7-3 is to facilitate possible resolution without the 18 need for an unnecessary motion. Defendants failed to 19 properly meet and confer with Plaintiff regarding the 20 instant Motion. There was no substantive discussion 21 about attorneys’ fees during the meet and confer on 22 September 9, 2016, because at that time only the Motion 23 for Summary Judgment was contemplated. 24 In his Opposition, Plaintiff neither demonstrates 25 that Defendants’ Motion is “unnecessary,” nor does 26 Plaintiff show that he has suffered prejudice as a 27 result of the absence of a conference. Rather, 28 Plaintiff conclusory states Defendants did not properly 7 1 meet and confer and the Motion should therefore be 2 denied. Opp’n 4:8-16. Because there appears to be no 3 prejudice to Plaintiff in considering Defendants’ 4 Motion on the merits, the Court exercises its 5 discretion to do so. Reed, 2013 WL 1344912 at *6; see 6 Thomas v. U.S. Foods, Inc., No. 8:12-cv-1221-JST 7 (JEMx), 2012 WL 5634847, at *1 n.1 (C.D. Cal. Nov. 14, 8 2012)(considering the plaintiff’s motion despite 9 failure to comply with Local Rule 7-3). 10 2. The Case is Not “Exceptional” in Light of the 11 “Nonexclusive” Factors and the Totality of the 12 Circumstances 13 Defendants ask the Court to award them $150,100 in 14 attorneys’ fees incurred in defending Plaintiff’s 15 “objectively unreasonable claims” because this case is 16 “exceptional” within the meaning of 15 U.S.C. § 1117. 17 Defs.’ Mot. for Atty’s Fees (“Mot.”) 1:3-7. Defendants 18 argue they are entitled to attorneys’ fees because this 19 Court cancelled Plaintiff’s “Mastermind” trademark by 20 finding the mark was descriptive, did not acquire 21 secondary meaning, and because Plaintiff failed to 22 support his federal dilution claim. 23 Plaintiff argues that because he believed his mark 24 was suggestive, the case is not exceptional. 25 2:11-13. Opp’n Determining whether a mark is descriptive or 26 suggestive is a high evidentiary bar and a close 27 question; therefore, Plaintiff was justified in his 28 reasonable belief that the mark was suggestive and did 8 1 not require showing the mark acquired secondary 2 meaning. 3 Id. at 2:14-19; 2:23-28. Exceptional cases “stand[] out from others with 4 respect to the substantive strength of a party’s 5 litigating position (considering both the governing law 6 and the facts of the case) or the unreasonable manner 7 in which the case was litigated.” SunEarth, 839 F.3d 8 at 1180 (quoting Octane Fitness, 134 S. Ct. at 1756). 9 In light of the “nonexclusive” factors of “frivousness, 10 motivation, objective unreasonableness (both in the 11 factual and legal components of the case) and the need 12 in particular circumstances to advance considerations 13 of compensation and deterrence,” this case is not 14 exceptional and does not support an award of attorneys’ 15 fees because Plaintiff had a registered trademark, his 16 motivation in pursuing the lawsuit was to police and 17 enforce his trademark rights, and the case was not 18 objectively unreasonable both in the factual and legal 19 components of the case. Octane Fitness, 134 S. Ct. at 20 1756 n.6 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 21 517, 534 n.19 (1994)). 22 If a plaintiff has raised “debatable issues” and 23 can be found to have had a legitimate reason for 24 bringing the lawsuit, it supports a finding that a case 25 is not exceptional. Nutrivita Laboratories, Inc. v. 26 VBS Distribution Inc., 160 F. Supp. 3d 1184, 1192 (C.D. 27 Cal. 2016). However, where a party has not complied 28 with a court’s order, that conduct may render a case 9 1 exceptional. ROAR, LLC v. ROAR Global Limited, No. 2 2:15-cv-05865-ODW (AFM), 2016 WL 7115902, at *7 (C.D. 3 Cal. Dec. 5, 2016). Additionally, a plaintiff’s 4 actions, including unreasonable conduct such as 5 misrepresentations and misleading statements to the 6 court, may be sufficient to find that a case is 7 exceptional. Elem Indian Colony of Pomo Indians of the 8 Sulphur Bank Rancheria v. Ceiba Legal, LLP, No. C 169 03081 WHA, 2017 WL 467839, at *2 (C.D. Cal. Feb. 2, 10 2017). Here, there is no evidence Plaintiff mislead 11 the Court or misrepresented any facts. 12 Contrary to Defendants’ assertions, the fact that 13 Plaintiff did have a registered trademark supports a 14 finding that Plaintiff’s claims were not frivolous and 15 Plaintiff had a legitimate reason for bringing the 16 lawsuit. A presumption of validity exists when there 17 is a registered trademark. Solid 21, Inc. v. Hubolt of 18 America, 109 F. Supp. 3d 1313, 1322 (C.D. Cal. 2015) 19 (citing Yellow Cab Co. Of Sacramento v. Yellow Cab of 20 Elk Grove, Inc., 419 F.3d 925, 927 (9th Cir. 2005)). 21 Having a validly registered trademark entitles 22 Plaintiff to police his mark if he reasonably believes 23 the mark has been infringed. The fact that Plaintiff 24 sent cease and desist letters to other entities—and at 25 least one responded by taking down content from their 26 website—counters Defendants’ assertion that Plaintiff’s 27 claims were completely baseless and Plaintiff’s 28 motivation in filing the lawsuit against Defendants may 10 1 have been to “receive a quick pay day” from Defendants. 2 Pl.’s Opp’n to Defs.’ Mot. for Summ. J. 7:4-11, Ex. F, 3 ECF No. 52; Reply 5:15-19. 4 Additionally, the Court disagrees with Defendants’ 5 attempt to analogize the present case with the holding 6 from Dzinesquare, Inc. v. Armano Luxury Alloys, Inc., 7 CV 14-01918 JVS (JCGx), 2015 U.S. Dist. LEXIS 178443, 8 at *7 (C.D. Cal. Apr. 1, 2015).2 Here, while Plaintiff 9 did not address his federal dilution claim in his 10 Opposition to Defendants’ Motion for Summary Judgment, 11 that alone is not sufficient to find the case is 12 exceptional. 13 Complaint. That was only one claim in Plaintiff’s That does not make Plaintiff’s claim “stand 14 out” from the others and show that the entire case was 15 objectively unreasonable. SunEarth, 839 F.3d at 1180 16 (quoting Octane Fitness, 134 S. Ct. at 1756). 17 Defendants have also failed to show that Plaintiff 18 19 20 21 22 23 24 25 26 27 28 2 In Dzinesquare, the court held that the case was exceptional for plaintiff’s patent claim because plaintiff failed to provide a Statement of Genuine Disputes, admitted the patent was invalid, and admitted his patent infringement claims were objectively baseless. The court also found that the case was exceptional, warranting attorneys’ fees against plaintiff for his claims under the Lanham Act because plaintiff did not provide proof that his mark acquired secondary meaning. Id. at *10. Plaintiff argued this was because defendant filed the motion for summary judgment prior to the discovery cut-off date and plaintiff did not have time to refute this assertion. Id. The court held plaintiff should have had this evidence irrespective of when defendant filed the motion for summary judgment. Id. Plaintiff’s evidence of his sales was insufficient to support his trade dress dilution claim. Id. at *11. Due to the combined weakness of both claims, the court found the case stood out from others and was exceptional under Octane Fitness. Id. 11 1 litigated the case in an unreasonable manner. 2 Plaintiff attempted to show that Defendants infringed 3 on his mark “Mastermind.” Although the Court did not 4 find Plaintiff’s arguments persuasive, Plaintiff 5 nevertheless set forth good faith arguments and what he 6 believed was evidence that the mark was suggestive and 7 not descriptive, therefore not necessitating the need 8 for a showing of secondary meaning. The Court noted in 9 its Order on Defendants’ Motion for Summary Judgment 10 that a determination of whether a mark is suggestive or 11 descriptive is not as clear or objective as one would 12 think. 13 No. 58. Order Re Defs.’ Mot. for Summ. J. 10:2-5, ECF Plaintiff attempted to show—through flyers for 14 performances where Plaintiff beared the name 15 “Mastermind” and screenshots of some of Plaintiff’s 16 songs released using the name “Mastermind”—that the 17 mark was distinctive of Plaintiff’s goods and acquired 18 secondary meaning. Id. at 15:24-16:4. While the Court 19 found this to be insufficient, it is difficult for the 20 Court to conclude, as Defendants suggest, that it was 21 frivolous or objectively unreasonable for Plaintiff to 22 pursue this litigation. “[W]here a party has set forth 23 some good faith argument in favor of its position, it 24 will generally not be found to have advanced 25 exceptionally meritless claims.” Deckers Outdoor Corp. 26 v. Romeo & Juliette, Inc., No. 2:15-cv-02812-ODW (Cwx), 27 2016 WL 5842187, at *3 (C.D. Cal. Oct. 5, 2016) 28 (internal quotation marks and citation omitted). 12 1 In Applied Information Sciences Corp. v. eBay, 2 Inc., 511 F.3d 966, 973 (9th Cir. 2007), the Ninth 3 Circuit affirmed the district court’s finding that the 4 case was not exceptional. In that case, plaintiff 5 registered a trademark, “Smartsearch,” and was issued a 6 registration by the Patent and Trademark Office. 7 at 969-70. Id. In 2000, defendant began using “Smart 8 Search” as a link on its homepage. Id. at 970. The 9 Ninth Circuit affirmed the district court’s grant of 10 summary judgment because plaintiff failed to produce 11 “any admissible evidence tending to show a likelihood 12 of confusion, or address any of the Sleekcraft factors 13 required for a likelihood of confusion analysis.” 14 at 973. Id. Despite this failure of proof, however, the 15 Ninth Circuit affirmed the district court’s finding 16 that the case was not exceptional, agreeing that 17 “[plaintiff’s] case was not frivolous and that 18 [plaintiff] raised debatable issues.” Id. The court 19 “[found] no compelling proof that [plaintiff] acted 20 capriciously or pursued litigation to harass 21 [defendant], or that [plaintiff] intended to bring a 22 meritless or unreasonable case against [defendant].” 23 Id. Here too, Defendants’ main contention in 24 attempting to show the case is exceptional is 25 Plaintiff’s failure of proof in his Opposition to 26 Defendants’ Motion for Summary Judgment. Defendants 27 have failed to set forth any evidence that Plaintiff 28 pursued this litigation to harass Defendants or any 13 1 other basis to find the case is exceptional. 2 Defendants have also failed to set forth how there 3 is a particular need in this case to advance 4 considerations of compensation and deterrence. While 5 Defendants argue awarding attorneys’ fees would deter 6 future plaintiffs from suing “in the hopes of getting 7 rich quick,” this argument is unpersuasive because 8 Defendants have failed to show that was the reasoning 9 behind the instant litigation. 10 Reply 6:7-9. While the standard for awarding attorneys’ fees 11 under 15 U.S.C. § 1117 has been relaxed, Defendants 12 must still prove by a preponderance of the evidence and 13 in light of the totality of the circumstances that the 14 case is exceptional. Defendants’ only basis for such a 15 finding is Plaintiff’s failure to show the trademark 16 acquired secondary meaning and Plaintiff’s failure to 17 defend his federal dilution claim. However, mere 18 failure of proof on a claim or lack of success in a 19 lawsuit is not sufficient to warrant a finding that a 20 case is exceptional. Defendants have failed to meet 21 the required burden of proof. In exercising equitable 22 discretion considering the “nonexclusive” factors and 23 in light of the totality of the circumstances, this 24 case is not exceptional and Defendants are not entitled 25 to attorneys’ fees. 26 /// 27 /// 28 /// 14 1 IV. CONCLUSION 2 Accordingly, the Court DENIES Defendants’ Motion 3 for Attorneys’ Fees [60]. 4 IT IS SO ORDERED. 5 DATED: March 1, 2017 6 s/ HONORABLE RONALD S.W. LEW Senior U.S. District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15

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