SunEarth Inc. et al v. Sun Earth Solar Power Co., Ltd. et al

Filing 195

ORDER REGARDING ( 168 , 169 , 172 , 173 ) BILLS OF COSTS AND OBJECTIONS. Signed by Judge Claudia Wilken on 4/18/2014. (ndr, COURT STAFF) (Filed on 4/18/2014)

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3
4
5
6

SUNEARTH, INC., a California
corporation, and THE SOLARAY
CORPORATION, a Hawaiian
corporation,

ORDER REGARDING
BILLS OF COSTS AND
OBJECTIONS

Plaintiffs,

7
8

No. C 11-4991 CW

(Docket Nos. 168,
169, 172, 173)

v.

10

SUN EARTH SOLAR POWER CO., LTD.,
a Chinese limited liability
company, and NBSOLAR USA INC., a
California corporation,

11

Defendants.

United States District Court
For the Northern District of California

9

12

________________________________/

13
14

On August 23, 2013, the Court entered judgment in favor of

15

Plaintiffs SunEarth Inc. and The Solaray Corporation and against

16

Defendants Sun Earth Solar Power Co., Ltd. and NBSolar USA Inc.,

17

including an award of costs.

18

Plaintiffs and Defendants filed a bill of costs.

19

objections to the other’s bill of costs.

20

these objections.

21
22

On September 6, 2013, both
Both sides filed

The Court now resolves

BACKGROUND
On October 11, 2011, Plaintiffs filed a complaint asserting

23

Defendants infringed Plaintiffs’ SUNEARTH mark.

24

March 13, 2012, the Court entered a preliminary injunction against

25

Defendants.

26

upon Plaintiffs a Rule 68 offer of judgment.

27

Defendants offered Plaintiffs a $50,000 payment, cancellation of

28

Defendants’ trademark registration, and consent to making

Docket No. 80.

Docket No. 1.

On

On April 2, 2012, Defendants served
Docket No. 168-1.

1

permanent the terms of the Court’s modified preliminary

2

injunction.

3

judgment.

Id.

Plaintiffs rejected Defendants’ offer of

4

On April 24, 2012, Plaintiffs filed a motion for civil

5

contempt, alleging that Defendants violated the preliminary

6

injunction.

7

submission Plaintiffs’ request for attorneys’ fees incurred in

8

bringing the motions for preliminary injunction and for sanctions.

9

The Court granted the motion in part and took under

After a bench trial, on August 23, 2013, the Court issued

United States District Court
For the Northern District of California

10

findings of fact and conclusions of law and entered judgment in

11

favor of Plaintiffs and against Defendants.

12

The Court entered a permanent injunction against Defendants.

13

Docket No. 164.

14

connection with Plaintiffs’ second motion for contempt and denied

15

fees in connection with Plaintiffs’ third motion for contempt.

16

Docket No. 162.

17

judgment and amended the permanent injunction.

18

185.

19

for (1) trademark and trade name infringement under the Lanham

20

Act, 15 U.S.C. § 1125(a), et seq., as well as California Business

21

and Professions Code §§ 14415 and 14402, and (2) cybersquatting

22

under the Anticybersquatting Consumer Protection Act, 15 U.S.C.

23

§ 1125(d) as to the sunearth.us domain only, and (3) cancellation

24

of Defendants’ Trademark Registration No. 3,886,941.

25

185.

26

awarded costs to Plaintiffs pursuant to Federal Rule of Civil

27

Procedure 54.

Docket Nos. 163, 165.

The Court also awarded attorneys’ fees in

On November 22, 2013, the Court amended the
Docket Nos. 184,

Judgment was entered in favor of Plaintiffs on their claims

The Court awarded no damages.

See id.

28
2

See id.

Docket No.

The judgment also

1

On September 6, 2013, Plaintiffs filed a bill of costs

2

claiming $18,699.68 under Federal Rule of Civil Procedure 54.

3

Docket No. 169.

4

in the amount of $12,719.27 pursuant to Federal Rule of Civil

5

Procedure 68.

6

parties filed objections to the other side’s bill of costs.

7

United States District Court
For the Northern District of California

10

Docket No. 168.

On September 13, 2013, both

LEGAL STANDARD

8
9

On the same day, Defendants filed a bill of costs

Federal Rule of Civil Procedure 54(d)(1) states that, unless
otherwise provided, costs other than attorneys’ fees should be
awarded to the prevailing party.

11

Rule 68 provides an exception that shifts an award of costs

12

to the non-prevailing party where the non-prevailing party

13

previously made an offer of judgment that was rejected.

14

must be made at least fourteen days before trial, be served in

15

specific terms, and include costs then accrued.

16

68(a).

17

the judgment that the offeree finally obtains is not more

18

favorable than the unaccepted offer, the offeree must pay the

19

costs incurred after the offer was made.”

20

Rule 68(d) supersedes Rule 54(d) and uses the threat of the burden

21

of costs to encourage pretrial settlement of cases.

22

Heublein, Inc., 485 F. Supp. 110, 113 (N.D. Cal. 1979).

23
24
25

I.

The offer

Fed. R. Civ. P.

In the event that the offer of judgment is rejected, “[i]f

Fed. R. Civ. P. 68(d).

Waters v.

DISCUSSION
Costs incurred by Plaintiffs after Defendants’ April 2,
2012 offer
Defendants argue that because they served on Plaintiffs a

26

Rule 68 offer of judgment exceeding Plaintiffs’ actual recovery,

27

Plaintiffs must bear their own costs as well as Defendants’ costs

28
3

1

following the date of said offer of judgment.

2

Alliant Techsystems, Inc., 927 F. Supp. 1374, 1383 (D. Colo. 1996)

3

aff'd, 182 F.3d 757 (10th Cir. 1999).

4

asserting that the Court’s judgment exceeded Defendants’ offer of

5

judgment.

6

See Dalal v.

Plaintiffs disagree,

The underlying question of the Rule 68 determination is

7

whether Plaintiffs were substantially justified in refusing

8

Defendants’ offer.

9

2008 U.S. Dist. LEXIS 94673, 59 (N.D. Cal.).

See Hawkins v. Berkeley Unified Sch. Dist.,
As the party

United States District Court
For the Northern District of California

10

bringing the motion for cost-shifting under Rule 68, Defendants

11

bear the burden of showing that their offer was in fact more

12

favorable. See id.; 12 Charles Alan Wright et al., Federal

13

Practice and Procedure § 3006.1 (2d ed. 2013).

14

Defendants’ offer to Plaintiffs’ final recovery, the Court must

15

consider both monetary and nonmonetary relief.

Liberty Mut. Ins.

16

Co. v. EEOC, 691 F.2d 438, 442 (9th Cir. 1982).

While it may be

17

difficult to include nonmonetary relief in the calculus, it is

18

necessary to do so because injunctive relief can be a strong

19

motivator for bringing and maintaining a lawsuit.

In comparing

See id.

20

A.

21

Defendants offered $50,000 in monetary relief.

22

Monetary terms
The Court

awarded no money damages to Plaintiffs.

23

The award of pre-offer costs, however, must be added to the

24

final judgment amount or, alternatively, deducted from the offer

25

amount.

26

1016, 1020 (9th Cir. 2003).

Champion Produce Inc. v. Ruby Robinson Co., 342 F.3d
See also Fed. R. Civ. P. 68(a).

27
28
4

1

Plaintiffs state that they incurred $6,916.46 in costs prior to

2

April 2, 2012.1

3

See Docket No. 169, Exs. 8, 15-17, 20.

Plaintiffs note that the offer language stated that the offer

4

amount included “all damages and injunctive relief that may be

5

awarded to Plaintiffs . . . as well as prejudgment interest, court

6

costs, expert witness fees, and attorneys’ fees.”

7

168-1 at ¶ 2.

8

phrase “court costs” in this sentence is somehow “ambiguous” and

9

indicates that “Plaintiffs’ judgment amount should further be

Docket No.

Plaintiffs argue that Defendants’ inclusion of the

United States District Court
For the Northern District of California

10

increased by the amount of post-offer costs to which Plaintiffs

11

are entitled, $11,783.22.”

12

point is not well-taken.

13

Defendants intended to offer an amount that would cover court

14

costs incurred until the point of the offer.

15

say that Defendants intended to include in their offer any further

16

costs that Plaintiffs would incur by litigating the case further

17

-- exactly what Defendants’ offer was intended to prevent.

18

Marek v. Chesny, 473 U.S. 1, 7 (1985) (“The Court of Appeals

19

correctly recognized that post-offer costs merely offset part of

20

the expense of continuing the litigation to trial, and should not

21

be included in the calculus”).

22

Docket No. 173 at 4.

Plaintiffs’

The term “court costs” is not ambiguous.

It makes no sense to

See

Plaintiffs next contend that, because the Court awarded

23

Plaintiffs attorneys’ fees in connection with Plaintiffs’ second

24

motion for contempt, Plaintiffs’ final judgment amount should

25
26
27
28

1

Defendants calculated that Plaintiffs incurred $7,272.41 in
pre-offer costs, which is higher than the amount stated by
Plaintiffs. The Court adopts Plaintiffs’ assessment of their own
costs.
5

1

further be increased by the amount of the award.2

2

that Defendants made unacceptably vague and conclusory statements

3

in their report of compliance with the preliminary injunction

4

order, the Court granted Plaintiffs’ motion to find Defendants in

5

civil contempt and awarded Plaintiffs reasonable attorneys’ fees

6

for bringing the motion.

7

Court awarded attorneys’ fees, the parties stipulated to the

8

amount to be awarded: $33,000.

9

Docket No. 162 at 4, 11.

After finding

After the

Docket No. 171.

Attorneys’ fees are not automatically considered costs under

United States District Court
For the Northern District of California

10

the Rule 68 analysis.

11

costs include attorneys’ fees “where the underlying statute

12

defines ‘costs’ to include attorney’s fees,” absent any

13

congressional expression to the contrary.

14

(holding that because attorneys’ fees are defined in § 1983 as

15

costs, they were properly considered as costs in the Rule 68

16

analysis, and a Rule 68 offer would bar recovery of post-offer

17

attorneys’ fees).

18

and costs separately, attorneys’ fees are not considered Rule 68

19

costs.

20

1995) (ruling that attorneys’ fees for an FLSA claim are not Rule

21

68 costs).

22

The Supreme Court has ruled that Rule 68

Marek, 473 U.S. at 9

But where the statute defines attorneys’ fees

Haworth v. State of Nev., 56 F.3d 1048, 1051 (9th Cir.

The Court is not altogether convinced that this award should

23

be factored into the final judgment.

24

here were not awarded under a statute’s fee-shifting provision;

The attorneys’ fees at issue

25
26
27
28

2

Plaintiffs contend that post-offer attorneys’ fees were
somehow included in the offer’s “ambiguous” language. As
previously noted, the offer language is not ambiguous, and this
argument is similarly invalid.
6

they were awarded to compensate Plaintiffs for bringing a motion

2

for civil contempt for violation of the preliminary injunction.

3

Accepting the Rule 68 offer likely would not have barred the

4

attorneys’ fee award.

5

offer, a permanent injunction would have been in place.

6

Defendants also violated the offered permanent injunction,

7

Plaintiffs likely would have been able to enforce the injunction

8

in a similar fashion and also seek reasonable attorneys’ fees.

9

The attorneys’ fees award for bringing the motion for contempt

10
United States District Court
For the Northern District of California

1

thus appears to be independent of any final judgment and likely

11

would have been provided anyway.

12

therefore of questionable relevance to the comparison of

13

Defendants’ offer of judgment with Plaintiffs’ final recovery.

14

If Plaintiffs had accepted Defendants’
Assuming

The attorneys’ fees award is

Nonetheless, if the $33,000 were included, the final judgment

15

would total $39,916.46, which is less than the $50,000 monetary

16

offer.

17

B.

18

In their Rule 68 offer, Defendants proposed to cancel their

Non-monetary terms

19

trademark registration and make permanent the terms of the

20

preliminary injunction.

21

Defendants’ trademark registration and entered a permanent

22

injunction.

23

to make permanent the terms of the preliminary injunction was

24

equivalent to the final permanent injunction which the Court

25

entered.

26

The Court ultimately cancelled

The question then becomes whether Defendants’ offer

As acknowledged by the Court in entering the permanent

27

injunction, the terms are “similar to those that the Court

28

included in the modified preliminary injunction.”
7

Docket No. 163

1

at 44-45.

2

permanent injunction terms similar to those in the preliminary

3

injunction.”

4

permanent injunction are substantially identical except for some

5

differences in wording to make the injunction permanent.

6

are two differences of note between the preliminary and permanent

7

injunctions.

8

to block United States visitors from accessing the websites then

9

before the Court, SunEarth.com, SunEarthpower.com, and

The Court also noted that it would “maintain in the

Id. at 59.

Indeed, the preliminary injunction and

There

First, the preliminary injunction ordered Defendants

United States District Court
For the Northern District of California

10

SunEarthpower.net, and provide a “choice” page that would allow

11

visitors to access Plaintiffs’ website.

12

similarly ordered Defendants to block those sites, but generalized

13

the prohibition to any subsequent sites, including any website

14

that Defendants maintained with “SUN EARTH” in the address.

15

Although the permanent injunction is broader, the preliminary

16

injunction was narrowly tailored to address the status quo, which

17

at the time, and as far as the Court was aware, was limited to the

18

three websites mentioned.

19

all future scenarios, extending beyond the Court’s knowledge at

20

the time.

21

Sunearth.us domain name be placed on registry hold status in order

22

to preserve the option of an eventual transfer to Plaintiffs,

23

which would be appropriate if Plaintiffs prevailed.

24

injunction followed through on that option and ordered the

25

transfer of the domain name.

26

substantial and do not exceed what was contemplated by the

27

preliminary injunction.

The permanent injunction

The permanent injunction had to address

Second, the preliminary injunction had ordered that the

The permanent

These differences are therefore not

28
8

1

Because the nonmonetary terms of the offer and judgment are

2

roughly equal, and the monetary terms of the offer exceed that of

3

the judgment, the Court concludes that Plaintiffs were not

4

substantially justified in rejecting Defendants’ offer.

5

II.

Miscellanous objections to costs

6

A.

7

Defendants further object to two categories of Plaintiffs’

Defendants’ objections to certain of Plaintiffs’ costs

8

costs.

9

and the Court has already determined those costs must be borne by

Because these costs were incurred after the offer date,

United States District Court
For the Northern District of California

10

Plaintiffs themselves, the Court need not decide if they are

11

taxable or not.

12

B.

13

According to Plaintiffs’ motion, the parties met and

Plaintiffs’ objections to certain of Defendants’ costs

14

conferred and reached resolution on one of Plaintiffs’ objections.

15

Specifically, Defendants agreed to withdraw their request for the

16

$2,800 for “Interpreter’s fee for preparing witness” on October 8,

17

2012.

18

However, Plaintiffs maintain their objection to Defendants’

19

claim for $2,989.96 in costs for “Witness airfare” on October 7,

20

2012, which has not been resolved.

21

(1) this type of cost is not taxable, and (2) Defendants have not

22

provided sufficient documentation to validate this request.

23

Plaintiffs provide no citation to authority to substantiate their

24

complaint.

25

witness expenses such as “per diem, subsistence and mileage

26

payments” “to the extent reasonably necessary and provided for by

27

28 U.S.C. § 1821.”

28

carrier and by the “shortest practical route,” “at the most

Plaintiffs contend that

Civil Local Rule 54-3(e) permits the taxation of

As long as the witness traveled by common

9

1

economical rate reasonably available,” the Court sees no reason to

2

bar Defendants from taxing costs because their witness traveled by

3

air from China.

4

Passenger Transportation Receipt.

5

why the documentation is insufficient.

6

denied.

Defendants provided an International Air

7
8
9

Plaintiffs have not explained
The objection is therefore

CONCLUSION
Because Plaintiffs were not justified in refusing Defendants’
April 2, 2012 offer, Plaintiffs cannot recover any post-offer

United States District Court
For the Northern District of California

10

costs.

11

offer costs.

12

costs, with the reduction of the $2,800 for “Interpreter’s fee for

13

preparing witness” that Defendants agreed to withdraw.

14

Plaintiffs’ bill of costs shall be reduced to $6,916.46 only,

15

which shall also be taxed by the Clerk of the Court.

16

Plaintiffs must also reimburse Defendants for their postThe Clerk of the Court shall tax Defendants’ bill of

IT IS SO ORDERED.

17
18
19

Dated: 4/18/2014
CLAUDIA WILKEN
United States District Judge

20
21
22
23
24
25
26
27
28
10