Asset Vision, LLC et al v. Fielding et al

Filing 105

MEMORANDUM DECISION AND ORDER. Defendant's Motion for Attorney's Fees and Costs 88 is GRANTED. BH&As is granted $1,778.53 for court and litigation expenses and attorney fees in the amount of $84,375.50. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
ASSET VISION, LLC, and Idaho limited
liability company, and DEER VALLEY
TRUICKING INC., an Idaho corporation,

Case No. 4:13-cv-00288-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
CREG FIELDING, an individual, BRAD
HALL, an individual, COLE HALL, an
individual, and BRAD HALL &
ASSOCIATES INC., and Idaho
corporation,
Defendant.

INTRODUCTION
The Court has before it Brad Hall & Associates’ (BH&A) Motion for Attorneys'
Fees and Costs (Dkt. 88). The Court has determined that oral argument would not
significantly assist the decisional process and will therefore consider the matters without
a hearing. Being familiar with the record and having considered the parties' briefing, the
Court will grant the motion and award $86,154.03 in fees and costs to BH&A against
Asset Vision.
BACKGROUND
Asset Vision filed a complaint (Dkt. 1) against Creg Fielding for copyright
infringement and related claims for developing software called FreightBooks. Asset

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Vision amended the complaint (Dkt. 12) to include BH&A as a defendant. BH&A denies
any involvement in the use or development of the FreightBooks software, and claims they
don’t know why they were ever involved in this lawsuit. Memo At 6, Dkt. 88-1. Asset
Vision insists that BH&A was using the FreightBooks software, but ultimately all claims
against BH&A were dismissed with prejudice through a motion to dismiss (Dkt. 50), and
an ensuing settlement and stipulation. Order Dkt. 86. BH&A now seeks attorney’s fees
in accordance to Section 505 of the Copyright Act. 17 U.S.C. § 505.
LEGAL STANDARD
Section 505 of the Copyright Act gives courts discretion to “allow the recovery of
full costs” and “reasonable attorney's fee to the prevailing party.” Id. The Ninth Circuit
has stated that a court should exercise its discretion in light of several nonexclusive
considerations, including (1) the degree of success obtained; (2) frivolousness; (3)
objective unreasonableness “both in the factual and legal arguments in the case”; (4)
motivation; and (5) the need “to advance considerations of compensation and
deterrence.” Jackson v. Axton, 25 F.3d 884, 890 (9th Cir.1994) (citing Fogerty v.
Fantasy, Inc., 510 U.S. 517, 534 n. 19, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994)).
In weighing these factors, “[c]ourts should keep in mind the purpose [ ] of the
Copyright Act,” which is to “promote creativity for the public good.” Id. Though a court's
discretion may be influenced by the plaintiff's culpability, “blameworthiness is not a
prerequisite to awarding fees to a prevailing defendant.” Fantasy, Inc. v. Fogerty, 94 F.3d

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553, 558 (9th Cir.1996). Overall, “[f]aithfulness to the purposes of the Copyright Act is .
. . the pivotal criterion.” Id.
ANALYSIS
A. Recovering Attorney’s Fees
1.

Degree of Success

The Supreme Court has considered what constitutes a “prevailing party” where a
plaintiff settles rather than proceeding to a determination on the merits. The Court
concluded that a party who settles their claims may be a prevailing party if the settlement
requires “a material alteration of the legal relationship of the parties.” Buckhannon Board
and Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532
U.S. 598, 604 (2001) (construing the attorney's fees provisions in the Federal Housing
Amendments Act (“FHAA”) and the Americans With Disabilities Act (“ADA”)). See
also Richard S. v. Dep't of Developmental Services 317 F.3d 1080, 1086 (9th Cir.2003);
Barrios v. California Interscholastic Fed'n, 277 F.3d 1128, 1134 (9th Cir. 2002).
The obvious alteration of the legal relationship is the dismissal of all claims with
prejudice against BH&A. In question here is whether BH&A’s agreement not to use the
FreightBooks software as part of a settlement constitutes a material alteration of the legal
relationship of the parties, thus affecting BH&A’s prevailing party status.
Asset Vision argues that ending BH&A’s use and access to FreightBooks is exactly

the outcome sought through litigation, so BH&A is not a prevailing party. Asset Vision
also settled with Cole Hall and Teton who appear to be the developers of the software in

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question. Consequently, the settlement with Cole Hall and Teton “not [to] use, copy,
distribute, sell or create derivatives works of FreightBooks or encourage others to copy,
distribute, sell or create derivative works of FreightBooks” would extend not only to
BH&A, but essentially every business. Resp. at 16 Dkt. 100. By limiting the software at
the source, no business may legally use, copy, distribute, sell or create derivative works
of FreightBooks. BH&A’s inclusion in the settlement is ceremonial at best, and does not
alter the legal relationship of the parties. Buckhannon Board and Care Home, 532 U.S. at
604 (2001).
2.

Frivolousness

A claim is frivolous if “the result is obvious, or the arguments of error are wholly
without merit.' Wilcox v. Commissioner, 848 F.2d 1007, 1009 (9th Cir.1988). Here, the
Court dismissed all claims on a motion to dismiss—except the copyright infringement
claim, and never ruled on the merits of that claim. But, even the most factually and
legally sound claims become frivolous if they are asserted against the wrong party. Here,
the facts strongly suggest that BH&A was the wrong party, but absent further
proceedings, the Court cannot proclaim the charges as frivolous.
3.

Objective Unreasonableness

Even mistaken claims are still reasonable if the mistake is innocent. But a claim
becomes more unreasonable when opportunities to correct or fix a claim are passed over.
The Court is concerned with Asset Visions unwillingness to meet and discuss its claims
against BH&A when requested. Until they were ultimately dismissed with prejudice,

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Asset Vision’s claims against BH&A became increasingly unreasonable because of asset
Vision’s refusal to discuss them with BH&A. Because there are also questionable
motives in bringing claims against BH&A, there is doubt about whether these claims
were ever reasonable. This factor weighs in BH&A’s favor.
4.

Motivation

The Court is concerned that claims were filed against BH&A after they were
offered a “royalty free license to the Asset Vision Source Code in exchange for assistance
in connection with a lawsuit against Fielding…” Resp. at 7, Dkt. 100. This contradicts
Asset Vision’s claim that their goal in filing the lawsuit was “to have BHA cease using
the infringing software . . . .” Id. at 13. It seems apparent, and Asset Vision alludes to as
much, that the lawsuit against BH&A was less about their alleged use of software, and
more about leverage over “Cole Hall and Teton to stop their infringing activity.” Id at 14.
This is not an acceptable motivation under the Copyright Act, and if true, is certainly bad
faith. This factor weighs in BH&A’s favor.
5.

The need to advance considerations of compensation and deterrence.

The Copyright Act's “ultimate aim is . . . to stimulate artistic creativity for the
general public good.” Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156, 95
S.Ct. 2040, 45 L.Ed.2d 84 (1975). A successful defense of a copyright claim can increase
public exposure to creative works and stimulate creativity. Fogerty, 510 U.S. at 527,
(1994). “Thus a successful defense of a copyright infringement action may further the
policies of the Copyright Act every bit as much as a successful prosecution of an

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infringement claim by the holder of a copyright.” Id. Accordingly, defendants who have
meritorious defenses should “be encouraged to litigate them to the same extent that
plaintiffs are encouraged to litigate meritorious claims of infringement.” Id.
Through settlement, Asset Vision has now successfully prevented infringing
software from being used and distributed. The goals of Asset Vision, and the ultimate
outcome, is directly in line with the purpose of the Copyright Act “to stimulate artistic
creativity for the general public good.” Aiken, 422 U.S. at 156, (1975). But, even if Asset
Vision’s intentions were harmonious with the purpose of the Copyright Act, Asset Vision
appears to have perversely employed the Act against BH&A to gain leverage over Cole
Hall and Teton. Doing so frustrates the integrity of the Act. Here, attorney’s fees are
appropriate to protect the integrity of the Copyright Act.
Because BH&A is the prevailing party, and because the factors weigh in their
favor, BH&A is entitled to costs and reasonable attorney’s fees.
B.

Reasonable Fees
The Court must next address the reasonableness of the proposed fee award under

the established Ninth Circuit fee-shifting case law. Hensley v. Eckerhart, 461 U.S. 424,
433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). A reasonable attorney fee is determined by
calculating the “lodestar,” which is “the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate.” Id.
1. Reasonable Rate

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To determine a reasonable hourly rate, the district court looks to hourly rates
prevailing in the relevant legal community for similar work performed by attorneys of
comparable skill, experience, and reputation. Ingram v. Oroudjian, 647 F.3d 925, 928
(9th Cir.2011) (per curiam). The “relevant legal community” is generally the forum in
which the district court sits. Mendenhall v. NTSB, 213 F.3d 464, 471 (9th Cir.2000).
Attorneys and staff request the following rates for work performed in 2013 and
2014: Dana Herberholz $245/$260; Juliette White $270/$280; Jonathan Love $190/$200;
Janelle Finfrock $125/$130. Attorney Herberholz submitted an affidavit stating that these
are reasonable rates in the area for work performed by attorneys of comparable skill,
experience, and reputation. They are also in line with rates this court has deemed
reasonable. Scentsy, Inc. v. BR. Chase, LLC, Case No. 1:11-cv-00249, at *5 (D. Idaho
August 26, 2013) Asset Vision does not object to these rates, and the Court finds that
they are reasonable.
2. Reasonable Hours
Asset Vision disputes whether BH&A is entitled to attorney’s fees for work
performed on claims other than the copyright claim. Asset Vision does not otherwise
dispute the reasonableness of the hours claimed by BH&A.
Asset Vision asks that BH&A resubmit their bill of costs and schedule of fees to
only include costs and fees incurred in connection with the Copyright Clams because
costs incurred in defending non-Copyright Act/Lanham Act claims are not recoverable.
Ritchie v. Gano, 754 F.Supp.2d 605, 609 (S.D.N.Y. 2010). But unlike the 2nd Circuit, the

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9th Circuit allows for recovery in a Copyright Act case of “attorney's fees incurred in
defending against that one claim or any ‘related claims.’ ” Entertainment Research
Group, Inc. v Genesis Creative Group, Inc, 122 F.3d 1211, 1230 (9th Cir. 1997)(quoting
Hensley 461 U.S. at 434–35,(1983)). This Court has already concluded that Asset
Vision’s complaint consisted of copyright infringement and related claims. Asset Vision,
LLC v. Fielding, No. 4:13-CV-00288-BLW, at *2 (D. Idaho Dec. 17, 2013).
Refiling a bill of costs and schedule of fees is not necessary here. The Court finds
the hours billed reasonable.
3. Lodestar Adjustment
After making the lodestar computation, courts sometimes assess whether it is
necessary to adjust the presumptively reasonable lodestar figure on the basis of several
factors. Ballen v. City of Redmond, 466 F.3d 736, 746 (9th Cir. 2006). Those factors are:
(1) the time and labor required, (2) the novelty and difficulty of the
questions involved, (3) the skill requisite to perform the legal service
properly, (4) the preclusion of other employment by the attorney due to
acceptance of the case, (5) the customary fee, (6) whether the fee is
fixed or contingent, (7) time limitations imposed by the client or the
circumstances, (8) the amount involved and the results obtained, (9) the
experience, reputation, and ability of the attorneys, (10) the
‘undesirability’ of the case, (11) the nature and length of the
professional relationship with the client, and (12) awards in similar
cases.
Id. at 746.
However, “The lodestar amount is presumptively the reasonable fee amount, and
thus a multiplier may be used to adjust the lodestar amount upward or downward only in
‘rare’ and ‘exceptional’ cases, supported by both ‘specific evidence’ on the record and

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detailed findings by the lower court[ ] that the lodestar amount is unreasonably low or
unreasonably high.” Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th
Cir.2000).
Nothing in the record suggests that the lodestar amount here is unreasonably low
or unreasonably high. Therefore, the Court will award BH&A attorney’s fees in the
amount of $84,375.50.
C.

Costs
Taxable costs are allowed by 28 U.S.C. § 1920 and reasonable non-taxable costs

under 28 U.S.C. § 1920. See Secalt S.A. v. Wuxi Shenxi Const. Mach. Co., Ltd., 668 F.3d
677, 687–88 (9th Cir.2012) (holding that “attorney's fees under the Lanham Act may also
include reasonable costs that the party cannot recover as the ‘prevailing party.’ ”);
Twentieth Century Fox Film Corp. v. Entertainment Distributing, 429 F.3d 869, 884–85
(9th Cir.2005) (holding that “district courts may award otherwise non-taxable costs,
including those that lie outside the scope of § 1920, under § 505”). Asset Vision does not
object to BH&A’s requested costs. The Court finds BH&A’s costs of $1,778.63
reasonable and recoverable.
Accordingly, the Court will grant an award of costs in the amount of $1,778.53 for
court and litigation expenses and attorney fees in the amount of $84,375.50.
ORDER
IT IS ORDERED:

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1.

Defendant’s Motion for Attorney’s Fees and Costs (Dkt. 88) is
GRANTED. BH&A’s is granted $1,778.53 for court and litigation
expenses and attorney fees in the amount of $84,375.50.

DATED: December 16, 2014

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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