Advanced Multilevel Concepts, Inc. et al v. Stalt, Inc. et al

Filing 70

Order by Hon. Samuel Conti denying 58 Motion for Attorney Fees.(sclc1, COURT STAFF) (Filed on 8/7/2012)

1
2
3
4

IN THE UNITED STATES DISTRICT COURT

5

FOR THE NORTHERN DISTRICT OF CALIFORNIA

6
7

ADVANCED MULTILEVEL CONCEPTS,
INC. and ABLE DIRECT MARKETING,

8
9

Plaintiffs,
v.

United States District Court

For the Northern District of California

10
11
12
13

STALT, INC., and DOES 1 through
30, inclusive,
Defendants.

14

) Case Nos. 11-6679-SC
)
) ORDER DENYING PLAINTIFFS'
) MOTION FOR ATTORNEY FEES
)
)
)
)
)
)
)
)
)

15
16

Plaintiffs Advanced Multilevel Concepts and Able Direct

17

Marketing (collectively, "Plaintiffs") bring this case in

18

connection with allegedly unlawful stop orders imposed on their

19

shares of VitaminSpice.

20

transfer agent that allegedly imposed the stop orders; Hillard M.

21

Sterling ("Sterling"), the attorney who allegedly counseled

22

VitaminSpice to issue the stop orders; and Freeborn & Peters LLP

23

("Freeborn & Peters"), Sterling's former law firm.

24

2012, the Court granted Sterling and Freeborn & Peters'

25

(collectively, the "Freeborn Defendants") motion to dismiss for

26

lack of personal jurisdiction, but denied their motion for Rule 11

27

sanctions.

28

Plaintiffs have sued Stalt, Inc., the

On May 21,

ECF No. 57.

Plaintiffs now move the Court to award them the attorney fees

1

they incurred in defending against the Freeborn Defendants' Rule 11

2

motion.

3

$12,750.

4

("Opp'n"), 68 ("Reply").

5

Court finds this matter appropriate for determination without oral

6

argument.

7

ECF No. 61 ("Mot.").

Specifically, Plaintiffs seek

Plaintiffs' Motion is fully briefed.

ECF Nos. 64

Pursuant to Civil Local Rule 7-1(b), the

Plaintiffs' motion is brought pursuant to Rule 11's fee-

A prevailing party on a Rule 11 motion is only entitled to recover

10

United States District Court

shifting provision.

9

For the Northern District of California

8

reasonable fees and costs where the court finds that such an award

11

is "warranted."

12

held that the prevailing party need not show that a Rule 11 motion

13

is frivolous in order to recover.

14

158 F.R.D. 224, 229 (D. Mass. 1994) ("This sanction is available

15

whether or not the motion itself violated Rule 11.").

16

authority cited by Plaintiffs indicates that something more than an

17

unavailing Rule 11 motion is required to justify the award of fees.

18

See Netbula, LLC v. Bindview Dev. Corp., 2007 U.S. Dist. LEXIS

19

44460, 9-10 (N.D. Cal. June 11, 2007) ("Netbula's Rule 11 request

20

clearly was not compliant with the Rule"); Robinson v. City of San

21

Bernadino, 992 F. Supp. 1198, 1208 (C.D. Cal. 1998) (characterizing

22

the Rule 11 motion at issue as "frivolous"); EEOC, 158 F.R.D. at

23

229-30 ("Tandem's persistence in rehashing the same arguments time

24

and again without success can be viewed as nothing but harassment

25

at this juncture.").

26

The fee-shifting provision is not automatic.

Fed. R. Civ. P. 11(c)(2).

At least one court has

See EEOC v. Tandem Computers,

However, the

The Court concludes that an award of attorney fees is not

27

warranted here.

Plaintiffs have not articulated a compelling

28

reason for such an award.

Rather, Plaintiffs merely argue that

2

1

they should be compensated for defending against the Freeborn

2

Defendants' "meritless" Rule 11 motion.

3

is required.

4

defending against the Rule 11 motion merely because that motion was

5

denied.

6

11 motion "needlessly increase[d] the cost of litigation."

7

But Plaintiffs' motion could be characterized in the same way.1

Something more

Plaintiffs may not recover the fees they incurred in

Plaintiffs also argue that the Freeborn Defendants' Rule
Id.

For the reasons set forth herein, Plaintiffs' motion for fees

8
9

Mot. at 4.

is DENIED.

United States District Court

For the Northern District of California

10
IT IS SO ORDERED.

11
12

Dated: August 7, 2012

13
14

UNITED STATES DISTRICT JUDGE

15
16
17
18
19
20
21
22
23
24
25
26
27
1

28

The Freeborn Defendants should not take this as invitation to
move for an award of the attorney fees incurred in defending
against the instant motion.
3