San Diego County Credit Union v. Citizens Equity First Credit Union

Filing 429

Order Denying Plaintiff's Motion for Attorneys' Fees and Denying Defendant's Motion for Attonreys' Fees (Dkt. Nos. 413 , 414 . Signed by Judge Gonzalo P. Curiel on 11/14/23. (jmo)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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SAN DIEGO COUNTY CREDIT
UNION,

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ORDER DENYING PLAINTIFF’S
MOTION FOR ATTORNEYS’ FEES
AND DENYING DEFENDANT’S
MOTION FOR ATTORNEYS’ FEES

Plaintiff,

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Case No.: 18cv967-GPC(MSB)

v.
CITIZENS EQUITY FIRST CREDIT
UNION,

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[Dkt. Nos. 413, 414.]

Defendant.

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On April 21, 2023, the Ninth Circuit affirmed in part, vacated in part and remanded

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the case with instructions for further proceedings.1 San Diego Cnty. Credit Union v.

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Citizens Equity First Credit Union, 65 F.4th 1012, 1037 (9th Cir. 2023). In part, the

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Ninth Circuit vacated the Court’s bench order on the fourth count for declaratory

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judgment of invalidity of Defendant’s common law mark for lack of Article III subject

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matter jurisdiction. Id. On November 3, 2023, pursuant to the Ninth Circuit directive,

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A petition for a writ of certiorari was filed with the United States Supreme Court on July 20, 2023.
(Dkt. No. 417.) On October 2, 2023, the Supreme Court denied the petition for a writ of certiorari.
(Dkt. No. 425.)
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the Court dismissed the fourth count of the second amended complaint and an amended

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Clerk’s Judgment was filed. (Dkt. Nos. 426, 427.)
Because this Court’s decision to award attorneys’ fees under 15 U.S.C. § 1117

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was due, in part, to Plaintiff’s success on the fourth count, which has been vacated and

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dismissed, the Ninth Circuit remanded the case for the Court to “reassess its exceptional-

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case and prevailing-party determinations, and if necessary, revisit the amount of its fee

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award.” San Diego Cnty. Credit Union, 65 F.4th at 1037.

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On remand, Plaintiff as well as Defendant filed motions for attorneys’ fees

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pursuant to the Lanham Act, 15 U.S.C. § 1117. (Dkt. Nos. 413, 414.) Oppositions and

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replies were filed. (Dkt. Nos. 415, 416, 421, 422.) The Court finds that the matter is

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appropriate for decision without oral argument pursuant to Local Civ. R. 7.1(d)(1).

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Based on the reasoning below, the Court DENIES both parties’ motions for attorneys’

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fees.

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Background
On May 16, 2018, Plaintiff San Diego County Credit Union (“SDCCU”) filed a

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complaint against Defendant Citizens Equity First Credit Union (“CEFCU”) alleging

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eight causes of action for: 1) declaratory judgment of non-infringement of federally

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registered trademark for “CEFCU. NOT A BANK. BETTER.”; 2) declaratory judgment

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of non-infringement of common law mark “NOT A BANK. BETTER.”; 3) declaratory

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judgment for invalidity of federally registered trademark for “CEFCU. NOT A BANK.

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BETTER.”; 4) declaratory judgment for invalidity of common law mark “NOT A BANK.

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BETTER.”; 5) false or fraudulent trademark registration under 15 U.S.C. § 1120; 6)

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unfair competition under 15 U.S.C. § 1125; 7) unfair competition under California

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Business and Professions Code sections 17200 et seq; and 8) unfair competition under

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California common law. (Dkt. No. 1. Compl.)

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On June 21, 2018, Defendant filed a motion for dismiss for lack of personal

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jurisdiction pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(2), which the

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Court denied on July 31, 2018. (Dkt. Nos. 29, 39.) On August 13, 2018, Defendant filed
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a second motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) on

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the first four causes of action for declaratory relief and for failure to state a claim under

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Rule 12(b)(6) on the remaining four causes of action. (Dkt. No. 40.) On October 2,

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2018, the Court denied the motion to dismiss for lack of subject matter jurisdiction,

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granted the motion to dismiss the fifth and sixth causes of action with leave to amend and

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granted dismissal of the seventh and eight causes of action as unopposed. (Dkt. No. 47.)

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On October 12, 2018, Plaintiff filed a first amended complaint (“FAC”) alleging

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the same initial six causes of action with additional factual allegations. (Dkt. No. 48.)

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On October 26, 2018, Defendant filed a third motion to dismiss the first four causes of

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action for lack of subject matter jurisdiction under Rule 12(b)(1) and for failure to state a

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claim on the fifth and sixth causes of action under Rule 12(b)(6). (Dkt. No. 49.) On

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February 5, 2019, the Court denied Defendant’s motion to dismiss for lack of subject

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matter jurisdiction relying on its prior ruling of October 2, 2018, (Dkt. No. 47), denied

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Defendant’s motion to dismiss the fifth cause of action for false/fraudulent registration of

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trademark under 15 U.S.C. § 1120 and granted dismissal of the sixth cause of action for

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unfair competition under 15 U.S.C. § 1125 for failure to state a claim. (Dkt. No. 55.)

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Defendant filed its answer on February 19, 2019, and a counterclaim for cancellation of

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SDCCU’s ‘596 trademark registration. (Dkt. No. 56.) Pursuant to an unopposed motion,

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Defendant filed an amended answer and counterclaim on August 6, 2019. (Dkt. No. 74.)

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On February 28, 2020, Defendant filed a motion for judgment on the pleadings

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under Rule 12(c) seeking to dismiss the fifth cause of action as barred by the three-year

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statute of limitations. (Dkt. No. 118.) On April 14, 2020, the Court granted Defendant’s

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motion for judgment on the pleadings with leave to amend. (Dkt. No. 134.) On April 23,

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2020, Plaintiff filed the operative second amended complaint (“SAC”) alleging the same

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initial five causes of action. (Dkt. No. 139.) On May 7, 2020, Defendant filed its answer

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and counterclaim. (Dkt. No. 141.) The counterclaims sought cancellation of SDCCU’s

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‘596 registration of its trademark. (Id. at 11-14.2) On May 28, 2020, Plaintiff filed its

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answer to the counterclaim. (Dkt. No. 174.)

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On May 18, 2020, Defendant filed a motion for summary judgment on the fifth

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cause of action and Plaintiff filed its motion for summary judgment on the first and

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second causes of action for declaratory judgment of non-infringement of Defendant’s

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registered trademark, CEFCU. NOT A BANK. BETTER, and common law mark, NOT

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A BANK. BETTER as well as on CEFCU’s counterclaim for cancellation of SDCCU’s

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registered Mark.3 (Dkt. Nos. 152, 161.) On September 29, 2020, the Court granted

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Defendant’s motion for summary judgment on the fifth cause of action for false or

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fraudulent trademark registration pursuant to 15 U.S.C. § 1120 and granted Plaintiff’s

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motion for summary judgment on the first and second causes of action for declaratory

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judgment on non-infringement as unopposed and sua sponte dismissed CEFCU’s

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counterclaim for lack of subject matter jurisdiction. (Dkt. Nos. 256, 259.) On January 5,

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2021, the Court granted the parties’ joint motion to dismiss the third cause of action with

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prejudice because it was premised on the fifth cause of action. (Dkt. Nos. 276, 277.) The

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fourth cause of action was the remaining claim left at the bench trial.

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A bench trial was held, via Zoom, on March 30, 2021, and April 1, 2021 on the

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fourth cause of action for declaratory judgment of invalidity of CEFCU’s common law

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mark, NOT A BANK. BETTER. (Dkt. Nos. 348, 349.) On May 25, 2021, the Court

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issued its Memorandum Decision and Order for Entry of Judgment in favor of Plaintiff

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SDCCU and against CEFCU on the fourth count for declaratory judgment seeking

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invalidity of CEFCU’s common law mark, NOT A BANK. BETTER. (Dkt. No. 353.)
On August 26, 2021, the Court granted in part SDCCU’s motion for attorney’s fees

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concluding that, under 15 U.S.C. § 1117, SDCCU was the prevailing party because there

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was a material alteration in the legal relationship of the parties when it prevailed on its

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Page numbers are based on the CM/ECF pagination.
Neither party moved for summary judgment on the third and fourth causes of action.
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claims for declaratory judgment of non-infringement of CEFCU’s registered mark and

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common law mark as well as declaratory judgment of invalidity of CEFCU’s common

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law mark. (Dkt. No. 381 at 8.) The Court also concluded that the case was exceptional

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due to CEFCU’s repeated attempts to re-litigate personal jurisdiction and subject matter

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jurisdiction throughout the litigation. (Id. at 19.) After receiving supplemental briefing

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on the amount of SDCCU’s attorneys’ fees, on December 2, 2021, the Court awarded

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$126,524.01 in attorneys’ fees to SDCCU. (Dkt. No. 397.)

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On April 21, 2023, the Ninth Circuit held that at the pleading stage and at summary

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judgment, SDCCU had standing to pursue its declaratory judgment claims. San Diego

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Cnty. Credit Union, 65 F.4th at 1025, 1028. However, after the Court granted summary

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judgment on the first and second claims in favor of Plaintiff on declaratory relief of non-

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infringement of CEFCU’s trademarks, it did not retain Article III standing to invalidate

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that mark. Id. at 1030-32. As such, the Ninth Circuit vacated the Court’s judgment and

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remanded with instructions to dismiss count four of SDCCU’s complaint for lack of

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Article III jurisdiction and “reassess its exceptional-case and prevailing-party

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determinations and, if necessary, revisit the amount of its fee award.” Id. at 1037. On

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November 3, 2023, the Court dismissed the fourth count of the second amended

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complaint for lack of Article III subject matter jurisdiction. (Dkt. No. 426.) The Court

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now reassesses the attorneys’ fees issue based on both parties’ motions for attorneys’

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fees.

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Discussion
A.

Attorneys’ Fees under 15 U.S.C. § 1117

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The Lanham Act provides that “[t]he court in exceptional cases may award

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reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). The Court must

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determine whether SDCCU or CEFCU is a prevailing party and whether this is an

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exceptional case. See id.; see also Yeager v. Airbus Grp. SE, Case No. 8:19-cv-01793-

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JLS-ADS, 2021 WL 3260624, at *3 (C.D. Cal. July 1, 2021) (“an award of fees under the

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Lanham Act requires a determination that the party seeking fees is the “prevailing
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party”); SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd., 839 F.3d 1179, 1181 (9th Cir.

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2016) (courts must examine the “totality of the circumstances” in assessing if the case is

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exceptional).

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In the prior attorneys’ fees order, the Court held that SDCCU was the prevailing

Prevailing Party

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party because it had obtained court judgments in its favor on the first two causes of action

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for declaratory judgment of non-infringement of CEFCU’s registered trademark and

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common law mark and on the fourth claim for declaratory judgment of invalidity of

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CEFCU’s common law mark. (Dkt. No. 381 at 8.) The Court concluded that SDCCU

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achieved actual relief and a material alteration in the legal relationship that was

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“judicially sanctioned.” (Id.)

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On remand, SDCCU argues the Ninth Circuit’s decision does not change the

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Court’s prior finding that it was the prevailing party. (Dkt. No. 413-1 at 12-13.) It

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explains that the Ninth Circuit merely held the Court lacked Article III standing to

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proceed to trial on the invalidity claim because it was unnecessary or mooted since

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SDCCU had already prevailed with a judgment of non-infringement at summary

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judgment. (Dkt. No. 413-1 at 12-13.) SDCCU contends that the favorable summary

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judgment ruling of declarations of non-infringement of CEFCU’s registered and common

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law trademarks resulted in a material alteration in the legal relationship because before

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the litigation, it had an apprehension of fear that it may be subject to litigation for

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infringement of CEFCU’s trademarks and now it is no longer fearful because CEFCU

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can no longer sue for infringement.4 (Id. at 14.)

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Alternatively, SDCCU summarily argues, in one sentence, that if the Court concludes it is no longer
the prevailing party, the Court should grant its motion for attorneys’ fees pursuant to the Court’s
inherent powers to impose sanctions due to CEFCU’s “bad faith” and “frivolous” re-litigation of
jurisdictional issues. (Dkt. No. 413-1 at 15-16.) CEFCU does not address this in its opposition and
SDCCU does not raise it in the reply. The Court denies SDCCU’s motion. First, SDCCU has not
shown that the legal standard for imposing sanctions under the Court’s inherent powers is the same or
similar to demonstrating an exceptional case under the Lanham Act. Compare SunEarth, Inc. 829 F.3d
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CEFCU maintains and responds that it is the prevailing party because it “won

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dismissal on the merits, with prejudice” on six5 of SDCCU’s claims against it concerning

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“unlawful,” “unfair,” or “fraudulent” conduct, final judgment on the third cause of action

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as well as prevailing on certain “Prayer[s] For Relief” sought in the second amended

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complaint.6 (Dkt. No. 414-1 at 18-19; Dkt. No. 416 at 7-8.)

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“Prevailing party” is defined as “a party in whose favor a judgment is rendered,

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regardless of the amount of damages awarded.” Buckhannon Bd. & Care Home, Inc. v.

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W. Virginia Dep't of Health & Human Res., 532 U.S. 598, 603 (2001). “Prevailing party”

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in varying fee-shifting statutes are interpreted consistently. CRST Van Expedited, Inc. v.

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E.E.O.C., 578 U.S. 419, 422 (2016) (“Congress has included the term ‘prevailing party’

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in various fee-shifting statutes, and it has been the Court’s approach to interpret the term

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in a consistent manner.”); Klamath Siskiyou Wildlands Ctr. v. United States Bureau of

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Land Mgmt., 589 F.3d 1027, 1030 (9th Cir. 2009) (“The term ‘prevailing party,’ in this as

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in other statutes, is a term of art that courts must interpret consistently throughout the

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United States Code.”); Breaking Code Silence v. Papciak, Case No. 21-cv-00918-BAS-

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DEB, 2022 WL 4241733, at *2 n. 2 (S.D. Cal. Sept. 13, 2022) (applying Buckhannon to

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attorneys’ fee motion under Lanham Act trademark infringement case).

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A party prevails when it has achieved (1) a “material alteration in the legal

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relationship of the parties” that is (2) “judicially sanctioned.” Buckhannon Bd., 532 U.S.

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at 1180) (exceptional case determination under the Lanham Act requires the Court to look at the
substantive strength of a party’s litigating position or the unreasonable manner in which the case was
litigated) with Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 n. 10 (1991) (court may impose attorneys’
fee sanctions under its inherent powers when a party has acted in bad faith, acted vexatiously, wantonly,
or for oppressive reasons, delayed or disrupted litigation, or taken actions in the litigation for an
improper purpose). Moreover, SDCCU has not demonstrated that the legal standard under the court’s
inherent powers have been met. See Primus Auto. Fin. Servs., Inc. v. Batarse, 115 F.3d 644, 648 (9th
Cir. 1997) (before awarding such sanctions, the court must make an express finding that the sanctioned
party's behavior “constituted or was tantamount to bad faith.”).
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CEFCU exaggerates stating that it prevailed on six counts by including re-pleaded counts five and six
that were dismissed from prior complaints.
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In order to demonstrate CEFCU won on many fronts, it adds in the prayers for relief in the SAC as
additional ways it prevailed. CEFCU has not provided any legal support for such an analysis.
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at 604-05; Klamath Siskiyou Wildlands Ctr.., 589 F.3d at 1030 (“The material alteration

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and the judicial sanction are two separate requirements.”). First, a “material alteration in

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the legal relationship” is prevailing in some of the relief, whatever its form, that the

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prevailing party sought. Klamath Siskiyou Wildlands Ctr., 589 F.3d at 1030. Actual

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relief may be legal or equitable relief, including declaratory relief. Id. at 1031 & n. 3.

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Second, a party must secure either a judgment on the merits or a court-ordered consent

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decree. Buckhannon Bd., 532 U.S. at 604-05 (noting requirement of “judicial

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imprimatur”); Perez–Arellano v. Smith, 279 F.3d 791, 793 (9th Cir. 2002) (two judicial

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outcomes for “prevailing party” status include (1) an enforceable judgment on the merits

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or (2) a court-ordered consent decree.).

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Fifteen years later, the Supreme Court, addressing when a defendant may be

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considered a prevailing party, clarified “that a favorable ruling on the merits is not a

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necessary predicate to find that a defendant has prevailed.” CRST Van Expedited, Inc.,

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578 U.S. at 421 (reversing Eight Circuit ruling that denied attorneys’ fees because the

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defendant did not win “on the merits”). The Ninth Circuit has also recognized that “a

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litigant can ‘prevail’ for the purposes of awarding attorney’s fees as a result of judicial

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action other than a judgment on the merits or a consent decree (provided that such action

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has sufficient ‘judicial imprimatur’).” Carbonell v. I.N.S., 429 F.3d 894, 899 (9th Cir.

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2005). For instance, “a defendant is a prevailing party following dismissal of a claim if

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the plaintiff is judicially precluded from refiling the claim against the defendant in federal

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court.” Cadkin v. Loose, 569 F.3d 1142, 1150 (9th Cir. 2009). Whether a party is a

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“prevailing party” is a question of law. San Diego Cnty. Credit Union, 65 F.4th at 1033-

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34.

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Further, the Ninth Circuit has applied the Buckhannon “prevailing party” standard

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to Rule 54’s “prevailing party” analysis for costs. Miles v. State of Cal., 320 F.3d 986,

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989 (9th Cir. 2003) (applying Buckhannon's material alteration test in assessing

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prevailing party status under Rule 54(d)); see also Dattner v. Conagra Foods, Inc., 458

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F.3d 98, 101-02 (2d Cir. 2006) (stating that “a litigant who is a prevailing party for
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purposes of attorney's fees is also the prevailing party for purposes of costs” and noting

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that several courts, including Miles, have applied Buckhannon to Rule 54(d) motions for

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costs).

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In this case, the original complaint alleged eight causes of action seeking 1)

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declaratory judgment of non-infringement of CEFCU. NOT A BANK. BETTER.; 2)

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declaratory judgment of non-infringement of NOT A BANK. BETTER.; 3) declaratory

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judgment for invalidity of CEFCU. NOT A BANK. BETTER.; 4) declaratory judgment

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for invalidity of NOT A BANK. BETTER.; 5) false or fraudulent trademark registration

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under 15 U.S.C. § 1120; 6) unfair competition under 15 U.S.C. § 1125; 7) unfair

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competition under California Business & Professions Code section 17200 et seq.; and 8)

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unfair competition under common law. (Dkt. No. 1, Compl.) CEFCU also asserted a

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counterclaim seeking cancellation of SDCCU’s ‘596 trademark registration. (Dkt. No.

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141.)

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On the first two causes of action, SDCCU prevailed on summary judgment. On

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the other hand, CEFCU prevailed on the third cause of action for invalidity of CEFCU’s

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federally registered trademark as it was jointly dismissed with prejudice, see Zenith Ins.

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Co. v. Breslaw, 108 F.3d 205, 207 (9th Cir. 1997) (abrogated on other grounds by Ass’n

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of Mexican-American Educators v. State of Cal., 231 F.3d 572 (9th Cir. 2000) (voluntary

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dismissal with prejudice “sufficient to confer prevailing party status on the . . . defendants

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for those claims . . . [b]ecause a dismissal with prejudice is tantamount to a judgment on

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the merits”), and on the related fifth cause of action for false or fraudulent trademark

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registration as it was dismissed in favor of CEFCU on summary judgment, (Dkt. No.

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256).

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On the fourth count for declaratory judgment of invalidity of CEFCU’s common
law mark, CEFCU prevailed.

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The Court in CRST explained,

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Plaintiffs and defendants come to court with different objectives. A plaintiff
seeks a material alteration in the legal relationship between the parties. A

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defendant seeks to prevent this alteration to the extent it is in the plaintiff's
favor. The defendant, of course, might prefer a judgment vindicating its
position regarding the substantive merits of the plaintiff's allegations. The
defendant has, however, fulfilled its primary objective whenever the
plaintiff's challenge is rebuffed, irrespective of the precise reason for the
court's decision. The defendant may prevail even if the court's final
judgment rejects the plaintiff's claim for a nonmerits reason.

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CRST Van Expedited, Inc., 578 U.S. at 431.
The Ninth Circuit in Amphastar Pharm., Inc. v. Aventis Pharma SA, 856 F.3d 696,
710 (9th Cir. 2017), superseded on other ground as stated in Silbersher v. Valeant
Pharms. Int’l, Inc., 76 F.4th 843 (9th Cir. 2023), overruled its earlier holding in Branson
v. Nott, 62 F.3d 287 (9th Cir. 1995) that “when a defendant wins because the action is
dismissed for lack of subject matter jurisdiction he is never a prevailing party.” Id. In
Amphastar, even though the defendant in the action did not win on the “merits,” it had
spent significant time, eight years, and resources, such as money and energy, fighting the
lawsuit, and fees were awarded to deter future frivolous filings. Id. In other words,
“[c]ommon sense says that [the defendant] has won a significant victory and permanently
changed the ‘legal relationship of the parties.’” Id. (quoting CRST, 136 S. Ct. at 1646).
Similarly, in this case, CEFCU won a victory on appeal resulting in dismissal of
the fourth count seeking invalidity of its common law mark for lack of subject matter
jurisdiction. As such, it prevailed by rebuffing Plaintiff’s challenge to the validity of its
common law mark.
Next, the Court concludes that CEFCU prevailed on the sixth claim for unfair
competition under the Lanham Act because it was dismissed from the first amended
complaint under Rule 12(b)(6). (Dkt. No. 55 at 22). Even though the Court did not
explicitly dismiss with prejudice, it essentially barred Plaintiff from re-litigating the claim
concluding that Plaintiff had failed to allege the ® symbol used in connection with
CEFCU’s common law mark concerned the “the nature, characteristics, qualities, or
geographic origin” of CEFCU’s credit union services, a required element to state a claim
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for unfair competition under 15 U.S.C. § 1125. (Id. at 22.) Moreover, the Court

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concluded that SDCCU’s claim that the use of the ® symbol with the CEFCU Mark

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presents a false advertising claim because it was fraudulently obtained was not proper

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but, instead, could be raised as a claim for false or fraudulent registration of a mark under

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15 U.S.C. § 1120. (Id. at 20.) Plaintiff did not re-plead the sixth claim in the operative

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second amended complaint presumably because it could not, even with amendment, cure

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the deficiencies.

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Further, CEFCU did not prevail on the seventh and eighth causes of action because
SDCCU voluntary dismissed them without prejudice, (Dkt. No. 47). Because the

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dismissal was without prejudice, CEFCU may be subject to the risk of refiling on the

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seventh and eighth counts and there was no ruling on the merits; therefore, there was no

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alteration in the legal relationship of the parties. See Cadkin, 569 F.3d at 1149 (a district

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court’s dismissal without prejudice and a party’s voluntary dismissal of the claim without

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prejudice not sufficient to confer prevailing party status because there is no material

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alteration of the legal relationship of the parties because the plaintiff is not judicially

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precluded from refiling the claim); Oscar v. Alaska Dep't of Educ. & Early Dev., 541

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F.3d 978, 981-82 (9th Cir. 2008) (holding “dismissal without prejudice did not confer

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prevailing party status upon the defendant” as “dismissal without prejudice does not alter

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the legal relationship of the parties because the defendant remains subject to the risk of

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re-filing”).

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Finally, the Court sua sponte dismissed the counterclaim for lack of statutory

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standing, (Dkt. No. 259); therefore, SDCCU prevailed on this claim. See Cadkin v.

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Bluestone, 290 Fed. App’x 58, 59 (9th Cir. 2008) (granting award of fees under

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Copyright Act to defendant where the “Plaintiff did not have standing to bring the claim

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and he knew he did not have standing, yet brought the claim anyway.”) (emphasis in

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original); Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 885, 889

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(9th Cir. 1996) (affirming district court’s conclusion that MPI did not have standing to

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pursue copyright claims and awarding attorneys’ fees); Alternative Pet. Techs. Holding
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Corp. v. Grimes, Case No. 3:20-cv-00040-MMD-CLB, 2022 WL 3718863, at *5 (D.

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Nev. July 25, 2022) (defendant was the prevailing party under Patent Act attorneys’ fee

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provision based on dismissal for lack of standing). Therefore, SDCCU is deemed to have

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prevailed on the dismissal of the counterclaim for lack of statutory standing.

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Ultimately, because both parties obtained significant victories in judicial decisions

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in each of their favors, the Court concludes that neither SDCCU or CEFCU is a

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prevailing party in this mixed judgment case. See Amarel v. Connell, 102 F.3d 1494,

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1523 (9th Cir. 1996) (in the event of a mixed judgment, “it is within the discretion of a

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district court to require each party to bear its own costs”); see also Univ. Accounting

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Serv., LLC v. Schulton, Case No. 3:18-cv-1486-SI, 2020 WL 4053499, at *2 (D. Or. July

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20, 2020) (denying costs where “it is unclear who is the ‘prevailing party’ as between

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UAS and ScholarChip,” as “[b]oth won a portion of this lawsuit, and both lost a

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portion”); Royal Palm Props., LLC v. Pink Palm Props., LLC, 38 F.4th 1372, 1380 (11th

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Cir. 2022) (district court may find no prevailing party for purposes of costs and fees

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where there has been a split-judgment); but see Shum v. Intel Corp., 629 F.3d 1360, 1367

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(Fed. Cir. 2010) (“For the purposes of costs and fees, there can be only one winner. A

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court must choose one, and only one, ‘prevailing party’ to receive any costs award.”).

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Both parties prevailed on substantive claims that affected the material legal

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relationship between the parties. SDCCU, who once had a reasonable apprehension of

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being sued for infringement is no longer fearful while CEFCU can now be rest assured

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that no claims can be raised as to whether it falsely or fraudulently registered its

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trademark and its trademark cannot be subject to being declared invalid for that reason.

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CEFCU also successfully rebutted SDCCU’s unfair competition claim under the Lanham

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Act.

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Further, both parties prevailed on judgments for lack of jurisdiction. CEFCU

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succeeded on the dismissal of the fourth count seeking declaration of invalidity of

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CEFCU’s common law mark for lack of Article III subject matter jurisdiction while

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SDCCU won on the Court’s sua sponte dismissal of the counterclaim seeking to cancel
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18cv967-GPC(MSB)

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its ‘596 trademark registration for lack of statutory jurisdiction. Therefore, because both

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parties achieved successes and failures, the Court concludes neither party is a prevailing

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party, and each party shall bear its own attorneys’ fees. See Amarel, 102 F.3d at 1523;

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see also East. Iowa Plastics, Inc., 832 F.3d at 907 (“Where the parties achieve a dead

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heat, we don't see how either can be declared the ‘prevailing party.’”).

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Because neither party is a prevailing party, the Court need not address whether this

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is an exceptional case. See Certified Nutraceuticals, Inc. v. Clorox Co., Case No.: 18-cv-

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00744 W (KSC), 2020 WL 818894, at *2 (S.D. Cal. Feb. 19, 2020) (“Because we have

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concluded the Individual Defendants are not the prevailing party, we need not discuss

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whether this case is an exceptional one pursuant to the Lanham Act.”); Diem LLC v.

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Bigcommerce, Inc., Case No. 18-cv-05978-SI, 2019 WL 1003356, at *3 (N.D. Cal. Mar.

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1, 2019) (“Because BigCommerce is not the prevailing party, the Court need not reach

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whether the case is exceptional.”). Therefore, the Court DENIES Plaintiff’s and

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Defendant’s motions for attorneys’ fees.

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Conclusion
Based on the above, the Court DENIES both parties’ motion for attorneys’ fees
under the Lanham Act, 15 U.S.C. § 1117.

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IT IS SO ORDERED.

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Dated: November 14, 2023

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