99 Only Stores v. 99 Cent Family Saving

Filing 33

ORDER GRANTING, BUT REDUCING, 99 CENT ONLY STORES' FEE REQUEST signed by Magistrate Judge Michael J. Seng on 6/28/2011. (Yu, L)

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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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99¢ ONLY STORES,

CASE NO.

Plaintiff,

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1:10-cv-1319-LJO-MJS

ORDER GRANTING, BUT REDUCING, 99¢
ONLY STORES’ FEE REQUEST

v.

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(ECF No. 29)
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99 CENT FAMILY SAVINGS, et al.,
Defendants.

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/

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I.

INTRODUCTION

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This matter is before the Court for review of Plaintiff's implicit request for an award of
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fees and costs incurred in this action. Plaintiff has filed a "Declaration of [Attorney] Boris
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Zelkind in Support of Plaintiff's Attorneys' Fees and Costs Pursuant to the Court's April 25,
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2011 Order Adopting Findings and Recommendation" with supporting exhibits. (Zelkind Decl.,
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ECF No. 29.) Although not supported by a motion and memorandum of points and authorities
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explicitly requesting an award of the attorney fees listed, the declaration was filed in response
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to the Court's award of attorney fees and costs and its direction to file a declaration of fees and
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costs. Accordingly, the declaration will be treated as a request for award of fees.
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II.

FACTUAL SUMMARY

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On July 22, 2010, Plaintiff 99¢ Only Stores filed a Complaint for false designation of
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origin, trademark infringement, trademark dilution and unfair competition against Defendant
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99 Cent Family Savings. On September 28, 2010, Plaintiff filed an Amended Complaint that
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appears to be virtually identical to the original Complaint but adds individually named

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Defendant Tuan Ngo as owner of 99 Cent Family Savings.

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According to the Complaint, 99¢ Only Stores is a publicly traded company that, together

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with its wholly-owned subsidiaries, owns and operates over two hundred deep-discount retail

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stores. Plaintiff owns numerous Federal Trademark Registrations, including "ONLY 99

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ONLY", "99¢ ONLY STORES", "DRIVER CARRIES 99¢ ONLY", and others. The common

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and essential component of Plaintiff's family of 99¢ marks is the numeral "99", a central and

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featured component of every mark. Plaintiff's advertising and merchandising heavily utilizes

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its family of 99¢ marks; it appears on the company's shopping carts, bags, baskets, receipts,

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and fleet of trucks and vans, among other things. Plaintiff also owns several California State

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Trademark Registrations for substantially similar marks.

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Defendants own and operate a deep-discount store in Fresno, California, named 99

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Cent Family Savings. The main store sign displays the phrase "99¢ Plus Family Saving" in

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large, block font. The phrase "99¢ Plus Family Saving" also appears in large, block font on

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the monument in front of the shopping plaza.

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After the Amended Complaint was served and went un-answered, the Clerk of the
Court was asked to and did enter default as to both Defendants. (ECF Nos. 13 & 14.)

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On December 10, 2010, Plaintiff filed its Motion for Default Judgment seeking injunctive

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and other relief and attorney's fees and costs. (ECF No. 16.) The Court held a hearing on the

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Motion on January 28, 2011, questioned language in the proposed order and the scope of

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injunctive relief sought, and directed Plaintiff to file an amended proposed order. Defendants

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did not appear at or otherwise participate in the Court's hearing.

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On February 11, 2011, Plaintiff filed an Amended Motion for Default Judgment along

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with an amended proposed order. (ECF No. 21.) On March 23, 2011, this Court issued

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findings and a recommendation that Plaintiff's motion be granted. (ECF No. 23.) The

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recommendation was adopted by the District Court on April 25, 2011; the Court found that the

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case was exceptional and that Plaintiff therefore was entitled to recover its reasonable

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attorney fees and costs. (ECF No. 26.) The Court's Order to that effect was properly served

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on Defendants. (ECF No 27.) Plaintiff thereupon filed its Bill of Costs and Declaration of

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Counsel in support of fees and costs incurred. (ECF Nos. 28 & 29.)

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III.

AUTHORITY FOR AWARDING ATTORNEY FEES

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The Lanham Act allows for the award of attorneys' fees in "exceptional cases." 15

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U.S.C. § 1117(a). "Exceptional cases include those in which the infringing party acted

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maliciously, fraudulently, deliberately, or willfully. Lahoti v. Vericheck, Inc., 636 F.3d 501, 510

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(9th Cir. 2011). The Amended Complaint in this case repeatedly alleged that Defendants

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"willfully and maliciously" violated Plaintiff's marks. Defendants having defaulted, the Court

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takes all well-pled allegations regarding liability as true. See Fair Hous. Of Marin v. Combs,

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285 F.3d 899, 906 (9th Cir. 2002). Based thereon, the Court found that Defendants did

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willfully and maliciously infringe on Plaintiff's marks. Given that finding, Plaintiff is entitled to

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recover reasonable attorneys' fees. See 15 U.S.C. § 1117(a); Derek Andrew, Inc. v. Poof

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Apparel Corp., 528 F.3d 696, 702 (9th Cir. 2008) (allegation in complaint that infringement was

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willful was sufficient to warrant the award of attorneys' fees following defendant's default); Rio

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Properties, Inc. v. Rio Intern. Interlink, 284 F.3d 1007, 1023 (9th Cir. 2002) (same).

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IV.

EVALUATION OF CLAIMED FEES

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A.

Legal Criteria

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Courts use the lodestar approach set forth in Hensley v. Eckerhart, 461 U.S. 424, 433

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(1983), to calculate an award of reasonable attorney fees. See also Nadarajah v. Holder, 569

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F.3d 906, 910 (9th Cir. 2009). This approach directs the Court to multiply the hours reasonably

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spent on litigation by a reasonable hourly rate. In determining the "lodestar" figure, courts are

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to consider the following factors: 1) the time and labor required; 2) the novelty and difficulty

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of the issues; 3) the skill required to perform the legal service properly; 4) the extent to which

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the attorney's work on the case precluded other legal employment; 5) the customary fee for

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such services; 6) whether the fee is fixed or contingent; 7) time limitations imposed by the

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client or circumstances; 8) the amount involved and the results obtained; 9) the experience,

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reputation and ability of the attorneys; 10) the undesireability of the case; 11) the nature and

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length of the professional relationship between the lawyer and the client; and, 12) awards in

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similar cases. Kerr v. Screen Extras Guild, Inc., 526 F. 2d 67, 70 (9th Cir. 1975); Ballen v. City

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of Redmond, 466 F.3d 736, 746 (9th Cir. 2006).

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There is a strong presumption that the lodestar fee is reasonable, but the court may

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adjust it upward or downward as necessary to determine a reasonable fee. Blum v. Stenson,

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465 U.S. 886, 897 (1984); City of Burlington v. Dague, 505 U.S. 557, 559 (1992). The moving

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party has the burden of producing sufficient evidence to show that his or her hourly rates are

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reasonable. Blum, 465 US at 896.

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B.

Analysis

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Plaintiff requests an award of $19,185 in attorney fees and $338.63 in costs related to

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this litigation. Plaintiff attaches in support copies of the attorney billing statements for services

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performed in the case and a declaration from one of the attorneys roughly allocating the work

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to various categories of services performed in various time periods.

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The Court has considered all of the twelve factors listed above but finds that other than

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hourly rate, time spent, and awards in similar cases, none have any significant effect not

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balanced out by another factor. The Court's consideration of time and rates here and in other

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cases alone warrants a fee reduction and the net award provided here.

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1.

Hourly Rates

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The billings on file reflect that some six different attorneys, with billing rates of $285,

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$295, $295, $335, $460 and $470 per hour, respectively, and two paralegals, one billing at

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$200 and the other at $235 per hour, worked on this case. While the Court appreciates that

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some cases present a range of issues which call for an equally wide spectrum of attorney skill

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and experience, there is nothing about this case that seems to do so. Trademark law may be

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specialized, but Plaintiff's firm apparently has the requisite expertise in this field. There is no

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reason given nor found for having six different attorneys working on this uncontested case, a

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case which the Court notes is similar to others litigated for this Plaintiff by this law firm. See

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e.g., 99¢ Only Stores v. 99¢ Store, CV-09-0440 CBM, ECF No. 36 (C.D. Cal., Oct. 9, 2009).

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Certainly, having such a large number of attorneys required a duplication of time which in

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fairness should not be allocated to Defendants.

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Moreover, there is nothing about this trademark case that would require an especially

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experienced intellectual property attorney to pursue it. Once the rather routine trademark

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violation causes of action were identified and the Complaint drafted, the case focused almost

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exclusively on the relatively simple procedural issues involved in any default case.

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Further along these lines, while the Court appreciates that costs of practicing law, and

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hence legal fees, can be significantly higher in Southern California where Plaintiff's firm is

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located than in the Central Valley of California, there is nothing about this case which

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necessitated out-of-town counsel. Plaintiff may have an ongoing relationship with this firm or

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prefer it for other reasons, but that is not a reason to charge Defendants with the added costs

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of such distant counsel. The Court is aware of qualified and experienced trademark litigators

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in the Central Valley who charge no more than $350 per hour for such work. Attorneys in

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Plaintiff's law firm charging less than that worked on this case. The Court cannot justify an

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award of the higher, $460 and $470 rates, sought to be charged here.

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Accordingly, the Court finds that $350 per hour is a generous but reasonable rate for
the legal services performed in this case and uses that figure as the lodestar rate.
2.

Time Spent

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It would require detailed analysis to determine exactly who within Plaintiff's law firm

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provided what services at what times and at what rates. Plaintiff provided no such breakdown.

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Accordingly, the Court will limit its further analysis to trying to determine the difference

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between fees charged for various categories of legal services and, if different, how much time

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should have been charged at the rate of $350 per hour for such services.

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For example, counsel's supporting declaration reflects that attorneys spent $2, 670.50

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drafting the initial Complaint (Decl., ¶ 4.) and another $2,676.50 preparing and filing an

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Amended Complaint to add an individually named Defendant. (Decl., ¶¶ 5-6.) Generally, it

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should take less than five hours to draft a complaint. See, e.g., Jankey v. Beach Hut, 05-3856

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2006 WL 4569361, *4 (C.D. Cal. Dec. 19, 2006); Wallace v. Lending, Inc., 05-560, 2006 U.S.

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Dist. LEXIS 88582, *8 (C.D. Cal. Nov. 30, 2006). The Amended Complaint which did nothing

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more than add an individual defendant should not have involved more than two hours of

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attorney time. Thus the Court will award $2450 (7 hours at $350 per hour) for preparation and

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filing of the pleadings in this case. This generates a $2,897 reduction in the fees sought.

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Also, the Court finds that the $9,037 in attorney fees requested for services involved

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in seeking default judgement are not reasonable. (Decl., ¶¶ 8-10.) Twelve to fifteen hours at

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$350 per hour, or up to $5,250, is a reasonable fee for the task. See Robinson v. Chand,

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S-05-1080 DFL, 2007 U.S. Dist. LEXIS 32347, *7 (E.D. Cal. May 2, 2007); Operating

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Engineers Health & Welfare Trust Fund v. Galleti & Sons, Inc., 98-0897 VRW, 1998 U.S. Dist.

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Lexis 12270, *6 (N.D. Cal. Aug. 4, 1998). Plaintiff is also entitled to $611 for time spent

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conducting a status conference with the Court. This necessitates another $3,176 downward

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adjustment in the fees sought.

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Finally, Plaintiff seeks to recover an additional $5,252 in attorney fees to correct errors

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in papers filed and in the form of the proposed judgement. (Decl., ¶¶ 11-12.) At $350 per

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hour, that would suggest correcting these errors required some 15 hours of time. That is not

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reasonable. These were errors the Court on its own identified and pointed out to Plaintiff's

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counsel.

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preparation by Plaintiff's counsel in not more than seven hours of attorney time, or $2450.

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Thus, a further $2,802 adjustment is in order.

They could have been identified and corrected by careful proofreading and

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For the foregoing reasons, the Court concludes that a reduction in the fees sought in

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the total amount of $8,875, leaving a net fee award of $10,310. The Court finds the latter

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sum to be a reasonable fee for all services rendered by Plaintiff's counsel in this case. Plaintiff

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has also requested an award of $338.63 in costs related to the litigation. The request for costs

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is reasonable, and shall be awarded in full.

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V.

ORDER

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For the above reasons, the Court awards the Plaintiff $10,310 in attorney fees.

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Additionally, the Court awards Plaintiff $338.63 in costs and expenses. In total, the Court

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awards Plaintiff $10,648.63.

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IT IS SO ORDERED.

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Dated:
ci4d6

June 28, 2011

Michael J. Seng

/s/
UNITED STATES MAGISTRATE JUDGE

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