Sream Inc. v. HHM Enterprise Partners, Inc.

Filing 45

ORDER ON DEFENDANTS MOTION TO TAX COSTS AND MOTION FOR ATTORNEYS FEES. ORDERdenying 38 Motion for Bill of Costs; denying 39 Motion to Tax Costs. ; denying 43 Motion for Attorney Fees. Signed by Judge Beth Bloom on 7/14/2017. (kpe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-62641-BLOOM/VALLE
SREAM, INC.,
Plaintiff,
v.
HHM ENTERPRISE PARTNERS, INC.,
Defendant.
__________________________________________/
ORDER ON DEFENDANT’S MOTION TO TAX COSTS AND
MOTION FOR ATTORNEY’S FEES
THIS CAUSE is before the Court upon Defendant, HHM ENTERPRISE PARTNERS,
INC.’s (“Defendant”) Verified Motion to Tax Costs, ECF No. [39], Bill of Costs, ECF No. [38],
and Motion for Attorney’s Fees, ECF No. [43] (collectively the “Motions”). The Court has
carefully reviewed the Motions, the record, all supporting filings, the exhibits attached thereto,
and is otherwise fully advised in the premises. For the reasons that follow, Defendant’s Motions
are denied.
I.

BACKGROUND
Plaintiff, a designer and manufacturer of glass products including water pipes, filed a

Complaint against Defendant claiming trademark infringement pursuant to 15 U.S.C. § 1114
(Count I), trademark counterfeiting pursuant to 15 U.S.C. § 1116 (Count II), false designation of
origin/unfair competition pursuant to 15 U.S.C. § 1125(a) (Count III), and violation of the
Florida Deceptive and Unfair Trade Practices Act (“FDUPTA”). See ECF No. [1]. In the
Complaint, Plaintiff alleges that Sream is a California corporation conducting business in Florida
as “Roor USA,” and is the exclusive licensee in the United States of trademarks owned by RooR.

Case No. 16-cv-62641-BLOOM/VALLE
Id. at ¶¶ 6, 11-12. According to Plaintiff, Defendant engages in the retail sale of counterfeit
RooR-branded water pipes in Broward County, Florida, and on February 4, 2016, Defendant sold
a water pipe with a fake RooR mark. Id. at ¶¶ 7, 20; ECF No. [1-1].
Defendant filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, which this
Court granted, finding that Plaintiff failed to establish it holds a valid license from the registered
trademark owner. See ECF Nos. [33], [37]. The Court concluded that Plaintiff lacked standing
to raise the claims pled in the Complaint and it, therefore, lacked subject matter jurisdiction. Id.
at 5. Declining to exercise supplemental jurisdiction over the remaining FDUPTA claim, the
Court dismissed the Complaint without prejudice. Id.
Defendant’s Motions followed, seeking entry of an order taxing costs and awarding
attorney’s fees against Plaintiff. See ECF Nos. [39] and [43]. Specifically, Defendant seeks to
tax costs for the deposition of Plaintiff’s corporate representative, Jarir Farraj, in the amount of
$268.32, and seeks attorney’s fees in the amount of $6,063.60. See ECF No. [39] at 3, [43] at 7.
Plaintiff filed responses in opposition, ECF Nos. [40] and [44], and Defendant filed a Reply to its
Motion to Tax Costs. See ECF No. [41].
II.

LEGAL STANDARD
Under the “American Rule,” litigants in the United States are “ordinarily required to bear

their own attorney’s fees – the prevailing party is not entitled to collect from the loser.”
Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 602
(2001) (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975)).
Attorney’s fees are generally not awarded unless there is explicit statutory authority. Id. (quoting
Key Tronic Corp. v. United States, 511 U.S. 809, 819 (1994)). Here, Defendant seeks an award
of attorney’s fees pursuant to 15 U.S.C. § 1117(a), which provides that “[t]he court in

2

Case No. 16-cv-62641-BLOOM/VALLE
exceptional cases may award reasonable attorney fees to the prevailing party.” 15 U.S.C. §
1117(a) (emphasis added). Similarly, courts may award costs to the prevailing party pursuant to
Federal Rule of Civil Procedure 54(d)(1) and 28 U.S.C. § 1920. To enter such an award, courts
must first answer the threshold question of whether the party seeking to tax costs and attorney’s
fees is a “prevailing party.”
A prevailing party analysis requires a determination of whether a court-ordered material
alteration of the legal relationship between the parties has occurred. See Smalbein ex rel. Estate
of Smalbein v. City of Daytona Beach, 353 F.3d 901, 905 (11th Cir. 2003); Kernel Records Oy v.
Mosley, No. 09-21597-CIV, 2013 WL 3762452, *2 (S.D. Fla. July 16, 2013). The Eleventh
Circuit has found a “material alteration” in: “(1) a situation where a party has been awarded by
the court at least some relief on the merits of his claim or (2) a judicial imprimatur on the change
in the legal relationship between the parties.” Smalbein, 353 F.3d at 905. Thus, one can be a
prevailing party, “under an enforceable judgment on the merits or under a court-ordered consent
decree.” Buckhannon, 630 U.S. at 604. Whereas, “victory on a jurisdictional point” such as
where a defendant persuades the court that “the plaintiff has sued too soon or in the wrong court .
. . merely prolongs litigation . . . and it remains to be seen who will prevail.” Tarasewicz v.
Royal Caribbean Cruises Ltd., No. 14-CIV-60885, 2015 WL 11197803, at *2 (S.D. Fla. Sept. 3,
2015) (quoting Citizens for a Better Env't v. Steel Co., 230 F.3d 923, 929 (7th Cir. 2000))
(omissions in original).
Ordinarily, a dismissal without prejudice is not a “judgment on the merits'' for purposes
of declaring a prevailing party because it does not alter the legal relationship of the parties, as the
plaintiff may re-file the case. See Int'l Fid. Ins. Co. v. Americaribe-Moriarity JV, No. 15-24183CIV, 2017 WL 668898, at *3 (S.D. Fla. Feb. 14, 2017); see also Oscar v. Alaska Dep't of Educ.

3

Case No. 16-cv-62641-BLOOM/VALLE
& Early Dem, 541 F.3d 978, 981 (9th Cir. 2008) (holding defendant was not a “prevailing party''
based on dismissal without prejudice because the plaintiff was free to re-file the case). The
Eleventh Circuit treats a dismissal for lack of standing as the functional equivalent of a dismissal
for lack of subject matter jurisdiction. See Stalley v. Orlando Regional Healthcare Sys., Inc.,
524 F.3d 1229, 1232 (11th Cir. 2008) (“A dismissal for lack of subject matter jurisdiction is not a
judgment on the merits and is entered without prejudice.”) (quoting Crotwell v. Hockman–Lewis
Ltd., 734 F.2d 767, 769 (11th Cir. 1984)).
III.

DISCUSSION
Here, the dispositive issue is whether the Court’s dismissal of Plaintiff’s Complaint for

lack of standing confers prevailing-party status on Defendant. If Defendant is not deemed a
prevailing party, the analysis ends there. However, if Defendant is a prevailing party, the Court
must then consider whether this is an “exceptional case” for purposes of awarding attorney’s fees
pursuant to 15 U.S.C. § 1117(a). Plaintiff argues that Defendant is not a prevailing party because
the dismissal did not address the Complaint’s substantive merits; as such, Plaintiff can re-file its
claims at a later date. See ECF No. [40] at 1. Defendant, in turn, argues that it has prevailed on
the significant legal issue of Plaintiff’s standing to enforce the RooR trademarks at the time suit
was filed and that, if Plaintiff later obtains standing to enforce the trademarks, Plaintiff must
assert entirely new claims of infringement and counterfeiting. See ECF No. [41] at 3. The Court
concludes that Defendant is not a “prevailing party.”
When a court enters a dismissal without prejudice, such a ruling “is insufficient to
constitute a change in the legal relationship of the parties so as to satisfy the Buckhannon test
because ‘the plaintiff is free to refile its action.’” Orlando Commc’ns LLC v. LG Electronics,
Inc., No. 6:14-cv-1017-ORL-22, 2015 WL 4694066, *4 (M.D. Fla. Aug. 6, 2015) (citing RFR

4

Case No. 16-cv-62641-BLOOM/VALLE
Indus. v. Century Steps, Inc., 477 F.3d 1348 (Fed. Cir. 2007)) (district court’s express statement
that the plaintiff was not barred from filing another lawsuit was effectively a dismissal without
prejudice; therefore, the defendant was not a prevailing party); see also Cadkin v. Loose, 569
F.3d 1142, 1145 (9th Cir. 2009) (“Because the plaintiffs in this lawsuit remained free to refile
their copyright claims against the defendants in federal court following their voluntary dismissal
of the complaint, we hold the defendants are not prevailing parties and thus not entitled to the
attorney’s fees the district court awarded them.”); Torres-Negron v. J & N Records, LLC, 504
F.3d 151, 164-65 (1st Cir. 2007) (a finding that a plaintiff failed to comply with a statutory
requirement implicating subject-matter jurisdiction in a copyright infringement claim does not
confer prevailing-party status on the defendant).
In its Order granting Defendant’s Motion to Dismiss, ECF No. [37], this Court
determined that it lacked subject-matter jurisdiction over the claims asserted in the Complaint
because Plaintiff did not demonstrate it had standing to raise claims of trademark infringement
and violations of FDUPTA. See ECF No. [37] at 5. In reaching this conclusion, the Court
dismissed Plaintiff’s claims without prejudice for jurisdictional reasons. Id. Such a ruling does
not preclude Plaintiff from re-filing suit, subject to any applicable time bars, if and when
Plaintiff can establish standing. For that reason, there has been no “material alteration” in the
legal relationship between the parties. The Court’s conclusion is consistent with several orders
recently entered by other courts in this district in similar cases involving Sream, which were also
dismissed for lack of standing. See Sream v. PB Grocery, Inc., of Palm Beach, No. 16-cv-81584
(S.D. Fla. Jun. 26, 2017) (ECF No. [28], Order Denying Defendant’s Motion for Attorney’s Fees);
Sream v. K and R of WPB, Inc., No. 17-cv-80222 (S.D. Fla. Jun. 26, 2017) (ECF No. [27], Order
Denying Defendant’s Motion for Attorney’s Fees); Sream v. Lamrini Food & Discount Beverage,

5

Case No. 16-cv-62641-BLOOM/VALLE
Inc., No. 16-cv-81656 (S.D. Fla. Jun. 26, 2017) (ECF No. [36], Order Denying Defendant’s Motion

for Attorney’s Fees).
In support of its requests for costs and attorney’s fees, Defendant relies upon several
cases – none of which are analogous to this one. For example, Defendant relies upon Haughton
v. Suntrust Bank, Inc. wherein the Eleventh Circuit affirmed an award of costs to the defendant
because the district court entered “a judgment disposing of all counts in Defendant’s favor.” 403
F. App’x 458, 459 (11th Cir. 2010).

In that decision, the district court entered summary

judgment, finding the plaintiff did not have any rights under the contract at issue. Id. at 460.
The procedural posture here does not parallel that of Haughton as no judgment has been entered
in favor of Defendant. To the contrary, Plaintiff’s claims were dismissed without prejudice,
allowing Plaintiff the ability to re-file in the future. Defendant’s reliance on Smith v. Casey is
similarly misplaced as the “material alteration” test was not addressed there. See Smith v. Casey,
No. 12-23795-CIV-UNGARO/TORRES, 2013 WL 12064518, *2 (S.D. Fla. July 26, 2013).
Instead, Smith’s analysis focused on whether a non-moving defendant dismissed by virtue of
another defendant’s motion could likewise be deemed a prevailing party. Id. Finally, Defendant
relies upon Citizens to argue that a dismissal for lack of jurisdiction renders the defendant a
prevailing party. Citizens, 230 F.3d at 929. Citizens provides that “when a dismissal for want of
jurisdiction forecloses the plaintiff's claim, the defendant is the ‘prevailing party.’” Id. (emphasis
added). Although Plaintiff’s Complaint was dismissed for lack of jurisdiction, the dismissal was
without prejudice and did not, therefore, foreclose Plaintiff’s claim.

That is the critical

difference here.
Because no material alteration in the relationship between the parties has occurred, the
Court concludes Defendant is not a prevailing party and does not satisfy the threshold

6

Case No. 16-cv-62641-BLOOM/VALLE
requirement for an award of attorney’s fees or costs. The Court need not consider whether the
“exceptional case” requirement of 15 U.S.C. § 1117(a) has been satisfied.
IV.

CONCLUSION
For the reasons stated herein, it is ORDERED AND ADJUDGED that Defendant’s

Motion to Tax Costs, ECF No. [39], Bill of Costs, ECF No. [38], and Motion for Attorney’s
Fees, ECF No. [43], are DENIED.
DONE AND ORDERED in Miami, Florida this 14th day of July, 2017.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

7