Graduation Solutions LLC v. Acadima, LLC et al
Filing
167
ORDER granting in part and denying in part 136 Motion for Attorney Fees, Costs, and Injunctive relief. For the reasons set forth in the attached ruling, Plaintiff's motion for costs is granted in the amount of $400.00. Plaintiff's motion is otherwise denied. Signed by Judge Vanessa L. Bryant on 3/30/2020. (Dannenmaier, Katherine)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
GRADUATION SOLUTIONS, LLC
Plaintiff,
v.
ACADIMA, LLC and ALEXANDER
LOUKAIDES,
:
:
:
:
:
:
:
:
:
No. 3:17-CV-1342 (VLB)
March 30, 2020
Defendants.
RULING ON MOTION FOR ATTORNEY’S FEES AND INJUNCTIVE RELIEF
[Dkt. 136]
Plaintiff Graduation Solutions, LLC (“Plaintiff” or “Graduation Solutions”)
moves for an award of attorney’s fees and costs, as well as for injunctive relief
enjoining Defendant Alexander Loukaides (“Defendant” or “Loukaides”) from
dissipating assets. [Dkts. 136 (Mot.), 136-1 (Attorney Affidavit), 136-2 (Jury Verdict),
136-3 (Mem. Supp. Motion)]. Loukaides responds. [Dkts. 144 (Mot.), 144-1 (House
Listing Documents)]. Plaintiff replies. [Dkt. 154]. After considering the briefing, the
Court grants in part and denies in part Plaintiff’s motion for attorney’s fees and
costs and for injunctive relief. Plaintiff’s motion for costs is granted in the amount
of $400.00. Plaintiff’s motion is otherwise denied.
I.
Background
While this case has involved several discovery and other procedural
disputes, the Court will focus on the facts cited by the parties in their motions.
After a four day trial, a jury found Loukaides liable for copyright
infringement, trade dress infringement under the Lanham Act, violation of the
Connecticut Unfair Trade Practices Act, violation of Connecticut common law
against unfair competition, and unjust enrichment, but that he was not liable for
false advertising under the Lanham Act. [Dkt. 124 (Jury Verdict) at 3-4]. The jury
found that Loukaides “acted with reckless indifference to Plaintiff’s rights or
intentionally or wantonly violated Plaintiff’s rights.” [Dkt. 124 at 9]. Based on these
liability findings, the jury awarded Plaintiff actual damages of $1,615,00.00 and
punitive damages of $1,615,000.00 against Loukaides. Id. at 9-10.
Plaintiff seeks $233,035.11 in attorney’s fees and costs: $222,973.50 in fees
and $10,061.61 in costs. [Dkt. 136-1 (Nelson 7/15/2019 Aff.) at ¶4].
Loukaides is a British national residing in China. [Dkt. 136-1 (Nelson
7/15/2019 Aff.) at ¶4]. In 2012, Loukaides acquired real property in Texas, known as
3207 Cole Avenue, Dallas, Texas 75204 (“Dallas Property”). Id. at ¶14. On April 4,
2016, Loukaides entered into a Residential Listing Agreement with Dave PerryMiller and Associates to sell his Dallas Property. [Dkt. 144-1 (Listing Agreement)].
During the pendency of this action, the Dallas Property was sold. [Dkt. 136-1 at ¶
15].
II.
Attorney’s Fees
Plaintiff moves for an award of attorney’s fees and costs for all their claims:
(i) 15 U.S.C. § 1117(A) for trade dress infringement, (ii) 17 U.S.C. § 505 for copyright
infringement, (iii) the Connecticut Unfair Trade Practices Act, and (iv) Connecticut
common law. Plaintiff seeks approximately $233,035.11: $222,973.50 in fees and
$10,061.61 in costs. Loukaides argues that the fees are not justified. After
considering the arguments, the Court declines to award attorney’s fees. The Court
awards $400 in costs under the Lanham Act.
A. Lanham Act
15 U.S.C. §1117(a) states that a court “may award reasonable attorney fees
to the prevailing party” for claims brought under the Lanham Act in “exceptional
cases.” A prevailing party is entitled to “costs.” Id. In the Second Circuit, an
“exceptional case” under the Lanham Act attorney’s fees provision is one that
meets the Supreme Court’s criteria for an “exceptional case” under the Patent Act
attorney’s fees provision in Octane Fitness, LLc v. Icon Health & Fitness, Inc., 572
U.S. 545 (2014). Sleepy's LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 531
(2d Cir. 2018) (remanding for the district court to apply the Octane test). In Octane
Fitness, the Supreme Court held that an “exceptional” case “is simply one that
stands out from others with respect to the substantive strength of the party's
litigating position (considering both the governing law and the facts of the case) or
the unreasonable manner in which the case was litigated.” 572 U.S. at 553-54.
Relevant factors to this determination include “frivolousness, motivation, objective
unreasonableness (both in the factual and legal components of the case) and the
need in particular circumstances to advance considerations of compensation and
deterrence.” Id. at 554 n.6 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19
(1994)).
In light of the Second Circuit’s application of Octane Fitness to the Lanham
Act, willful infringement alone does entitle a plaintiff to attorney’s fees under the
Lanham Act. 4 Pillar Dynasty LLC v. New York & Co., Inc., 933 F.3d 202, 216 (2d Cir.
2019) (remanding attorneys’ fees question to district court where district court
based
decision
presumption…
on
that
willfulness
cases
“[b]ecause Octane
involving
willful
Fitness establishes
infringement
are
no
necessarily
“exceptional”); see BBK Tobacco & Foods, LLP v. Galaxy VI Corp., 408 F. Supp. 3d
508, 522 (S.D.N.Y. 2019).
Here, Plaintiff argues that it is entitled to fees under the Lanham Act because
the jury found that Loukaides “acted with reckless indifference to Plaintiff’s rights
or intentionally or wantonly violated Plaintiff’s rights.” [Dkt. 124 at 9], cited by Dkt.
136-3 at 7]. But, the question of whether the jury found Defendant’s infringement
willful is distinct from the question of whether Defendant’s litigation position was
unreasonable, frivolous, or in bad faith, and does not by itself demonstrate an
exceptional need for compensation and deterrence, especially where, as here, the
jury awarded Plaintiff over a million dollars in compensatory damages and over a
million dollars in punitive damages. Without any additional analysis by Plaintiff, the
Court cannot find that Loukaides’s reckless or wanton violation of Plaintiff’s right
alone establishes Plaintiff’s entitlement to attorneys’ fees under the Lanham Act.
Plaintiff cites Lavatec Laundry Tech, GmbH v. Voss Laundry Solutions, 2018
WL 2426655 (D. Conn. 2018) for the proposition that “willful” or “bad faith”
infringement merits fees under the Lanham Act. But the Lavatec court awarded
attorneys’ fees on the basis that it had sanctioned the defendant for contempt, id.
at *14, and Plaintiff does not point to any similar litigation misconduct in this case.
The Court declines to award attorneys’ fees under the Lanham Act. However,
because Plaintiff prevailed on one of its Lanham Act claims, the Court will award
costs under the Lanham Act, as discussed below.
B. Copyright Act
17 U.S.C. § 505 gives the Court discretion to award attorneys’ fees to a prevailing
plaintiff in a Copyright Act action:
In any civil action under this title, the court in its discretion may allow
the recovery of full costs by or against any party other than the United
States or an officer thereof. Except as otherwise provided by this title,
the court may also award a reasonable attorney's fee to the prevailing
party as part of the costs.
In Kirstaeng v. John Wiley & Songs, Inc., --- U.S. ----, 136 S. Ct. 1979, 1983 (2016),
the Supreme Court stressed that a district court must give “substantial weight to
the objective reasonableness of the losing party’s position,” but that a court must
also give due consideration to all other factors relevant to granting fees, and it
“retains discretion, in light of those factors, to make an award even when the losing
party advanced a reasonable claim or defense.” Other factors include
“frivolousness, motivation, … and the need in particular circumstances to advance
considerations of compensation and deterrence.” Id. at 1985 (quoting Fogerty v.
Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)).
“The objective-reasonableness approach… both encourages parties with
strong legal positions to stand on their rights and deters those with weak ones
from proceeding with litigation.” Id. at 1986. “In any given case a court may award
fees even though the losing party offered reasonable arguments…. For example, a
court may order fee-shifting because of a party’s litigation misconduct…. Or a
court may do so to deter repeated instances of copyright infringements.” Id. at
1988-89. When awarding fees, the Court keeps in mind the Supreme Court’s
rejection of the proposition that, under Section 505, prevailing parties “should be
awarded attorneys’ fees as a matter of course, absent exceptional circumstances.”
Fogerty v. Fantasy, Inc., 510 U.S. 517, 533-34 (1994) (rejecting matter-of-course feeshifting as “a bold departure from traditional practice” of the American rule).
Here, again, Plaintiff argues that it is entitled to fees because the jury found
that Loukaides “acted with reckless indifference to Plaintiff’s rights or intentionally
or wantonly violated Plaintiff’s rights.” [Dkt. 136-3 at 5] (citing [Dkt. 124 at 9]). But,
again, the point that the jury found Loukaides’s infringement willful is distinct from
the question of whether Loukaides’s litigation position was unreasonable,
frivolous, or in bad faith, and does not by itself demonstrate a need for
compensation and deterrence, especially where, as here, the jury awarded Plaintiff
over a million dollars in compensatory damages and over a million dollars in
punitive damages. Without any additional analysis by Plaintiff, the Court cannot
find that Loukaides’s reckless or wanton violation of Plaintiff’s copyrights alone
establishes Plaintiff’s entitlement to attorneys’ fees.
Plaintiff cites several cases to argue that willful infringement alone supports
attorneys’ fees under the Copyright Act. [Dkt. 136 at 4-5]. But all of them pre-date
Kirstaeng, and almost all of them concerned fee awards in the context of summary
judgment or default judgment, in which no material facts were reasonably disputed,
so the losing party’s litigation position was less justified. See Adobe Systems In.
v. Feather, 895 F. Supp. 2d 297 (D. Conn. 2012) (default judgment); Broad. Music,
Inc. v. Hub at Cobb's Mill, LLC, No. 3:13-CV-01237 VLB, 2015 WL 1525936, at *3 (D.
Conn. Apr. 2, 2015) (summary judgment); Microsoft Corp. v. Black Cat Computer
Wholesale, Inc., 269 F. Supp. 2d 118, 120 (W.D.N.Y. 2002) (summary judgment);
Arclightz & Films Pvt. Ltd. v. Video Palace Inc., 303 F. Supp. 2d 356, 359 (S.D.N.Y.
2003) (summary judgment); Impulsive Music, Inc. v. Bryclear Enterprises, LLC, 483
F. Supp. 2d 188, 191 (D. Conn. 2007) (default judgment); N.A.S. Imp., Corp. v.
Chenson Enterprises, Inc., 968 F.2d 250, 254 (2d Cir. 1992) (bench trial). The Court
does not find them persuasive.
The Court therefore declines to award attorneys’ fees under the Copyright Act.
C. Connecticut Unfair Trade Practices (“CUTPA”)
CUTPA provides that, “[T]he court may award, to the plaintiff ... costs and
reasonable attorneys' fees based on the work reasonably performed by an attorney
and not on the amount of recovery.” Conn. Gen. Stat. § 42-110g(d). An award of
attorneys’ fees is “in addition” to the relief [otherwise] provided” for in the section,
which includes actual and punitive damages. Conn. Gen. Stat. § 42-110g(a), (d).
“[T]he court can award attorneys’ fees under CUTPA only for those expenses that
were related to the prosecution of a CUTPA claim. Jacques All Trades Corp. v.
Brown, 752 A.2d 1098, 1105 (Conn. App. 2000) (“Jaques II”).
The provision is in place “to encourage attorneys to accept and litigate
CUTPA cases,” thereby promoting the underlying “public policy…to encourage
litigants to act as private attorneys general.” Thames River Recycling, Inc. v. Gallo,
720 A.2d 242, 259 (Conn. App. 1998) (quoting Gebbie v. Cadle Co., 714 A.2d 678
(Conn. App. 1998) (quoting Jacques All Trades Corp. v. Brown, 679 A.2d 27, 31
(Conn. App. 1996), aff'd, 240 Conn. 654, 692 A.2d 809 (1997)) (“Jaques I”)). “CUTPA
cases… may entail long hours with little likelihood of an award that will cover
reasonable expenses. For this reason, General Statutes § 42–110g(d) offers an
attorney who accepts a CUTPA case the prospect of recovering reasonable fees
and costs.” Gill v. Petrazzuoli Bros., 521 A.2d 212, 217-18 (Conn. App. 1987), cited
by Jaques I, 679 A.2d at 31. “Awarding attorney’s fees under CUTPA is
discretionary.” Thames River, 720 A.2d at 261. (citations omitted). Where an
attorney’s fee award is not “necessary” to encourage the bringing of a CUTPA
claim and a party is “adequately compensated for his attorney’s fees,” a prevailing
party is not entitled to attorney’s fees under CUTPA. Monahan v. Godfrend, No. CV
93 0131548, 1995 WL 500667, at *5 (Conn. Super. Ct. Aug. 17, 1995) (denying
attorney’s fees where CUTPA claim was asserted as a defensive counterclaim and
party was compensated).
Here, Plaintiff brought its CUTPA claim based on Loukaides’s violations of
federal statutes and has not provided the Court with any breakdown of which hours
were attributable to those claims related to its CUTPA claims, so the Court is not
persuaded that an attorney’s fee award is necessary. Further, Plaintiff sought and
was awarded over $1.5 million in compensatory damages and $1.5 million in
punitive damages from Loukaides alone, so the awarded punitive damages are
more than enough to compensate Plaintiff for its attorney’s fees.
Plaintiff states that it did consider the potential recovery of attorney’s fees
as a factor when bringing its CUTPA claims, and that prevailing plaintiff are
generally entitled to attorney fees under CUTPA. [Dkt. 154 at 8] (citing Carrillo v.
Goldberg, 61 A.3d 1164, 1175-76 (Conn. App. 2013)). But Plaintiff does not show
that the availability of attorneys fees under CUTPA was necessary for it to bring
this action, and Carillo proves less than Plaintiff claims: in Carillo, the actual
damages were far less than the attorney’s fees and no other claims were brought
– exactly the kind of case envisioned by Gil, 521 A.2d at 217-18, and in those
features distinct from the instant case. Therefore, the Court does not award
attorney’s fees under CUTPA.
D. Connecticut Common Law Claims
In Connecticut, common law punitive damages “are limited to the plaintiff’s
attorney’s fees and nontaxable costs.” Bodner v. United Servs. Auto. Ass'n, 222
Conn. 480, 492, 610 A.2d 1212, 1219 (1992) (emphasis added).
Here, the jury awarded Plaintiff punitive damages of $1,615,00.00 and did not
differentiate between punitive damages attributable to each claim. [Dkt. 124 at 910]. Since these damages far exceed Plaintiff’s requested attorney’s fees—
especially, the portion of the requested attorney’s fees attributable to work on
common law claims—the Court finds that any additional award of attorney’s fees
would be inappropriate.
E. Costs
Plaintiff seeks $10,061.61 in costs for this action, supporting its motion with an
attorney affidavit. “Costs relating to filing fees, process servers, postage and
photocopying are ordinarily recoverable” if they are supported by documentation.
Teamsters Local 814 Welfare Fund v. Dahill Moving 7 Storage Co., 545 F. Supp. 2d
260, 269 (E.D.N.Y. 2008) (citations omitted).
The Court takes judicial notice of this district’s filing fee amount of $400, and
awards that amount to Plaintiff. Joe Hand Promotions, Inc. v. Elmore, No. 11-CV3761, 2013 U.S. Dist. LEXIS 76926, at *42 (E.D.N.Y. May 29, 2013) (collecting cases
taking judicial notice of district filing fees). However, the Court finds that Plaintiff
has otherwise failed to submit adequate documentary evidence in support of its
request for the remainder of the costs, and therefore denies Plaintiff’s request for
reimbursement of such costs. Id.
III.
Asset Freeze Injunction
Plaintiff seeks for the Court to issue an order “enjoining Defendant
Loukaides from dissipating, conveying, transferring, disposing, alienating,
or
otherwise encumbering any asset until the judgment entered in this matter is
satisfied.” [Dkt. 136-3 at 13].
While “district courts have no authority to issue a prejudgment asset freeze
pursuant to Rule 65 where such relief was not traditionally accorded by courts of
equity[,] ... they maintain the equitable power to do so where such
relief was traditionally available: where the plaintiff is pursuing a claim for final
equitable relief, and the preliminary injunction is ancillary to the final relief.” Gucci
Am., Inc. v. Weixing Li, 768 F.3d 122, 125 (2d Cir. 2014) (citing Grupo Mexicano de
Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 333 (1999)). An
accounting of profits, or actual damages, is an equitable action. Id. at 131, 133. Rule
65 also provides authority for a court to freeze assets post-judgment. Tiffany (NJ)
LLC v. Forbse, No. 11 CIV. 4976 NRB, 2015 WL 5638060, at *4 (S.D.N.Y. Sept. 22,
2015).
A plaintiff seeking an injunction restraining assets must show (1) “either (a)
a likelihood of success on the merits or (b) sufficiently serious questions going to
the merits to make them a fair ground for litigation and a balance of hardships
tipping decidedly in the plaintiff’s favor”; (2) “the plaintiff is likely to suffer
irreparable injury in the absence of an injunction”; (3) “the balance of hardships
between the plaintiff and defendant ... tips in plaintiff’s favor”; and (4) “the public
interest would not be disserved by the issuance of an… injunction.” Salinger v.
Colting, 607 F.3d 68, 79-80 (2d Cir. 2010) (standard for preliminary injunction),
quoted in Black v. Owen, No. 3:14-CV-23 (RNC), 2018 WL 8065111 (D. Conn.
February 9, 2018) (granting TRO restraining assets). “Though “irreparable harm”
typically means an “injury for which a monetary award cannot be adequate
compensation,” “an injunction may issue to stop a defendant from dissipating
assets in an effort to frustrate a judgment.’” Black, 2018 WL 8065111 at *2 (quoting
Jayaraj v. Scappini, 66 F.3d 36, 39 (2d Cir. 1995), Chemical Bank v. Haseotes, 13
F.3d 569, 573 (2d Cir. 1994)).
Here, unlike in Black, the Court finds that Plaintiff has not made the required
showing. Plaintiff’s only evidence that Loukaides intends to frustrate the judgment
is that Loukaides sold a house during the litigation, but he had entered into a
contract to sell the house before the lawsuit was filed. [Dkt. 144-1]. Therefore, the
Court finds that Plaintiff has not shown a likelihood of irreparable harm, as Plaintiff
has not shown evidence of Loukaides’s intent or effort to frustrate the judgment.
Chem. Bank v. Haseotes, 13 F.3d 569, 573 (2d Cir. 1994) (upholding district court’s
order denying preliminary injunction where district court found that defendant’s
asset sale was legitimate and not an attempt to frustrate judgment); cf. Black, 2018
WL 8065111 (finding intent to frustrate judgment was demonstrated where
judgment debtor had paid nothing on judgment for over seven years).
Plaintiff’s motion for injunction relief is denied.
IV.
Conclusion
For the reasons set forth above, the Court grants in part and denies in part
Plaintiff’s motion for attorney’s fees and costs and for injunctive relief. Plaintiff’s
motion for costs is granted in the amount of $400.00. Plaintiff’s motion is otherwise
denied.
IT IS SO ORDERED.
_________/s/____________
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: March 30, 2020.
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