Applied Medical Systems, Ltd. v. English et al

Filing 28

ORDER Granting Defendants' 15 Motion for Attorney Fees and Costs. Defendants are awarded $11,834.00 in fees and $876.59 in costs and expenses. Signed by Judge Roger T. Benitez on 12/9/2011. (All non-registered users served via U.S. Mail Service)(knb)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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APPLIED MEDICAL SYSTEMS, LTD.,

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CASE NO. 10cv1811 BEN (BLM)

Plaintiff,

ORDER GRANTING
DEFENDANTS’ MOTION FOR
ATTORNEYS’ FEES AND COSTS

vs.
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JIM ENGLISH, et al.,

[Dkt. No. 15]
Defendants.

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INTRODUCTION

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Defendants Jim English and Tango Advanced Nutrition, Inc. have filed a Motion for Attorneys’
Fees and Costs pursuant to California Code of Civil Procedure § 425.16(c)(1). (Dkt. No. 15.) The
Court previously granted Defendants’ motion to strike Plaintiff’s state law claims pursuant to §
425.16.1 Defendants seek attorneys’ fees and costs pursuant to § 425.16(c). Plaintiff opposes
Defendants’ motion. Because Defendants prevailed on their motion to strike pursuant to § 425.16,
Defendants’ motion is GRANTED.
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In ruling on the same motion, the Court also dismissed three of Plaintiff’s four federal claims
pursuant to Federal Rule of Civil Procedure 12(b)(6).
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BACKGROUND
Plaintiff’s Complaint asserts eight claims for relief, including four state law claims for
trademark infringement, trademark dilution, unfair competition, and untrue misleading statements.

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On November 15, 2010, Defendants moved to strike all of these claims pursuant to § 425.16.

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The matter was set for hearing on January 18, 2011. The Court granted the parties’ joint motion to

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continue the hearing date to February 14, 2011. On January 31, 2011, the day before Plaintiff’s

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Opposition to the motion to strike was due, Plaintiff offered to dismiss its claims in exchange for each

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party bearing its own cost and fees. (Pl.’s Mem. of P. & A. in Opp’n, Ex. A.) The next day, February

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1, 2011, Plaintiff filed a “Response” to the motion that indicated that Plaintiff sought a stipulation

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from Defendants to dismiss this action with prejudice, but Defendants had not yet responded. (Dkt.

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No. 10.) Plaintiff did not dispute the merits of the motion to strike or substantively oppose the motion.

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(Id.) Defendants responded to Plaintiff’s January 31, 2011 offer to dismiss on February 1, 2011and

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indicated that Defendants would not stipulate to dismissal unless Plaintiff agreed to pay Defendants’

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legal costs and fees incurred and cease use of an infringing mark. (Pl.’s Mem. of P. & A. in Opp’n,

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Ex. A.) On February 7, 2011, Defendants filed a Reply requesting the Court grant Defendants’ motion

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to strike. (Dkt. No. 12.)

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On March 14, 2011, the Court granted Defendants’ motion, striking Plaintiff’s state law claims
pursuant to § 425.16.
DISCUSSION

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Section 425.16(c)(1) provides that “a prevailing defendant on a special motion to strike shall

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be entitled to recover his or her attorney’s fees and costs.” CAL. CIV . PROC. CODE § 425.16(c)(1).

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“Thus, under Code of Civil Procedure section 425.16, subdivision (c), any SLAPP defendant who

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brings a successful motion to strike is entitled to mandatory attorney fees.” Ketchum v. Moses, 24 Cal.

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4th 1122, 1131 (2001). “[D]efendants sued in federal courts can bring anti-SLAPP motions to strike

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state law claims and are entitled to attorneys’ fees and costs when they prevail.” Verizon Delaware,

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Inc. v. Covad Commc’ns, 377 F.3d 1081, 1091 (9th Cir. 2004).

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Despite having prevailed on a motion to strike pursuant to § 425.16, Plaintiff argues that

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Defendants are not prevailing parties because: (1) Plaintiff offered to voluntarily dismiss the case in
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exchange for each party bearing its own costs and fees, and (2) the Court did not analyze the merits

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of Defendants’ motion to strike. However, neither precludes an award of costs and fees to Defendants

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pursuant to § 425.16.

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Plaintiff’s offer to dismiss its claims in exchange for each party bearing its own costs and fees

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while the motion to strike was pending does not preclude an award of fees and costs to Defendants.

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The cases Plaintiff relies on for this assertion compel the opposite conclusion. Both of the cases

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Plaintiff relies on involved parties that had actually dismissed their claims while a motion to strike was

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pending. Moore v. Liu, 69 Cal. App. 4th 745, 749 (3d Dist. 1999); Coltrain v. Shewalter, 66 Cal. App.

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4th 94, 106 (4th Dist. 1998). Plaintiff could have done the same. FED . R. CIV . P. 41(a)(1)(A)(i) (a

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plaintiff may voluntarily dismiss an action without a court order upon the filing of “a notice of

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dismissal before the opposing party serves either an answer or a motion for summary judgment”). But,

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instead of voluntarily dismissing the claims subject to the motion to strike by notice, Plaintiff

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bargained for a waiver of fees that was quickly rejected. (Pl.’s Mem. of P. & A. in Opp’n, Ex. A.)

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Even if Plaintiff had dismissed its claims, that would not have precluded an award of fees to

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Defendants pursuant to § 425.16. Moore, 69 Cal. App. 4th at 751 (reversing lower court decision

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denying award of fees based on claims being dismissed before the lower court ruled on the motion to

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strike); Coltrain, 66 Cal. App. 4th at 107 (affirming trial court’s “discretion to determine whether the

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defendant is the prevailing party” under § 425.16(c) when claims are voluntarily dismissed).

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Nor does Plaintiff’s offer to dismiss its claims, in exchange for each party bearing its own fees

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and costs eleven weeks after the motion to strike was filed make Defendants’ motion to strike frivolous

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pursuant to § 425.16(c)(1).2 Section 425.16(c)(1) provides that “[i]f the court finds that a special

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motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award

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costs and reasonable attorney’s fees to a plaintiff prevailing on the motion.” This provision does not

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apply because Plaintiff did not prevail on the motion to strike. Additionally, Defendants’ refusal to

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waive their entitlement to fees and costs to obtain voluntary dismissal of Plaintiff’s claims does not

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constitute unnecessary delay.

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Plaintiff incorrectly cites California Code of Civil Procedure § 2516(b)(3). However, the
statutory language quoted is found in § 425.16(c)(1).
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Plaintiff’s argument that the Court must conduct an in depth analysis of the merits of the

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motion to strike before awarding Defendants fees and costs as a prevailing party is equally

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unpersuasive. Plaintiff again relies on Moore v. Liu. But, as discussed above, the Moore Court

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reversed a lower court finding that a voluntary dismissal of claims before a hearing on a motion to

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strike automatically precluded an award of fees. Moore, 69 Cal. App. 4th at 751. Here, Plaintiff never

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voluntarily dismissed any claims and when given ample opportunity to oppose Defendants’ motion

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to strike — eleven weeks — Plaintiff failed to file any substantive opposition to the motion to strike.

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Even if Plaintiff had actually dismissed its claims, that itself would have given rise to a presumption

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“that defendants were the prevailing parties.” Coltrain, 66 Cal. App. 4th at 107 (emphasis added).

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That presumption would not have been overcome by Plaintiff’s stated reason for seeking a stipulation

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to dismiss — financial considerations. Id. (finding a claim that dismissal was based on plaintiffs

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running out of money “would only confirm that defendants were the prevailing parties on the motion

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to strike”).

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Because Plaintiff did not voluntarily dismiss its claims, did not oppose Defendants’ motion to

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strike, and, most importantly, the Defendants’ motion to strike was granted, the Court finds that

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Defendants are the prevailing parties pursuant to § 425.16(c)(1) and awards fees of $11,834.003 and

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costs of $876.59.

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CONCLUSION
Defendants’ Motion for Fees and Costs is GRANTED. Defendants are awarded $11,834.00

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in fees and $876.59 in costs and expenses pursuant to § 425.16(c)(1).

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IT IS SO ORDERED.

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DATED: December 9, 2011

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Hon. Roger T. Benitez
United States District Judge

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Defendants’ attorneys’ fees request includes time for a hearing on this motion. However, the
Court took the motion under submission on the papers and vacated the hearing. The Court has reduced
the fee award accordingly.
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