Ray Communications, Inc. v. Clear Channel Communications, Inc. et al
Filing
158
ORDER granting in part 147 Motion for Bill of Costs and denying 148 Motion for Attorney Fees. Defendants are ordered to resubmit a bill of costs for approval that excludes costs for the video recorded depositions. Counsel should read Order in its entirety for critical information. Signed by District Judge Terrence W. Boyle on 7/26/11. (Tripp, S.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
NORTHERN DIVISION
No.2:08-CV-24-BO
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RAY COMMUNICATIONS, INC.,
Plaintiff,
v.
CLEAR CHANNEL
COMMUNICATIONS, CLEAR
CHANNEL BROADCASTING, INC.,
KATZ MEDIA GROUP, INC., and
KATZ COMMUNICATIONS, INC.
Defendants.
ORDER
This matter is before the Court on Defendants' Motion for Attorneys Fees and
Defendants' Motion for Bill of Costs. Defendants' Motion for Attorney Fees is DENIED and
Defendants' Motion for Bill of Costs is GRANTED in part.
1.
FACTS
Plaintiff sued Defendants in June 2008 for Trademark Infringement.
Plaintiff Ray Communications, Inc. is a radio network owned by William and Lisa Ray.
Plaintiff currently owns the federal registration for the service mark "Agrinet," short for
Agricultural Network. The mark was initially owned by Charlottesville Broadcasting
Corporation, which licensed the trademark to Mr. Ray in 1976 and granted him a full assignment
of its rights in 1986. Mr. and Mrs. Ray are the corporate representatives in this suit.
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Defendant Clear Channel Communications, Inc. is also a radio network. As Clear
Channel Communications is the parent company of the other three Defendants, the Court will
refer to the Defendants collectively.
Beginning in the late 1970's and early 1980's, Defendants' predecessors began using the
terms "Oklahoma Agrinet," "Tennessee Agrinet," and "Kentucky Agrinet" to identify their
programming and in marketing without permission. It is uncontested that Plaintiff was aware of
this use. See, e.g., W. Ray Dep. 253:20-254:4, June 23,2010. Mr. Ray claims that some time
before 1986, he gave several oral licenses without consideration to Defendants' predecessors' I
employees. These alleged licenses were to Jimmy "Kit" Stubblefield for Kentucky Agrinet, Dan
Gordon for Tennessee Agrinet, and Ron Hays for Oklahoma Agrinet.
Plaintiff states that it terminated the license to Stubblefield in 1992, terminated the
license to Dan Gordon when his station was bought by Defendants in fall 1997, and terminated
the license to Ron Hays in 2006. PI.'s Resps. to Def. Clear Channel Broad., Inc.'s 1st Set of
Interrogs., p. 5-6, Oct. 26, 2009.
Jack Crowner, one of Defendants' Broadcasters for Kentucky Agrinet, testified that Mr.
Ray approached him at a National Association of Farm Broadcasters (NAFB) conference in 1992
and said he wanted Crowner to stop using Kentucky Agrinet. Crowner testifies that he did not
believe Plaintiff had a legal right to stop his station from using the mark, but since Mr. Ray was
his friend, Crowner changed his station's mark from Kentucky Agrinet to "Kentucky Agnt" as
"strictly a favor." Crowner Dep. 43:17-44:18, JuI. 5,2010. Kentucky Agrinet is the only mark
I Defendants acquired the property known as the Oklahoma Agrinet, operating as part of the Oklahoma
News Network, on October I, 1984 from Broad Street Communications Corp. Defendants acquired the property
known as the Tennessee Agrinet from Paxson Communications Corp. in fall 1997. Storey Dep. 8:24-9:3, May 25,
2010; Crowner Dep. 78:7-79:14, Jul. 5,2010. Defendants acquired the property known as the Kentucky Agrinet,
operating as part of the Kentucky Network from The American Network Group, Inc. on January 31, 1992. Ex. MM.
2
Defendants permanently stopped using at the request ofPlaintiff.2 Defendants presently continue
to use Oklahoma Agrinet and Tennessee Agrinet. Defendants have also used several marks that
Plaintiff admits never licensing or otherwise granting permission for use, including Alabama
Agrinet, Agrinet of High Plains (based in Texas), and the term Agrinet alone without a
geographic modifier.
Defendants maintain that they never had any license agreement with the Plaintiff.
On December 17,2010, the Court granted Defendants summary judgment. The Court
found that the evidence overwhelmingly showed that there never was a license for Oklahoma
Agrinet. See infra Part II.B.a. The Court also assumed, without deciding, that Plaintiff had a
license agreement with Defendants for Tennessee Agrinet from approximately 1986 to 1997, and
for Kentucky Agrinet from approximately 1986 to 1992.
Ultimately, the Court concluded that the Plaintiff was aware of unlicensed usage since
1978, unreasonably delayed in enforcing its rights for over 30 years, and that the Defendant was
prejudiced by such delay. According, the Defendant prevailed on its affirmative defense of
laches.
DISCUSSION
A. Recovery of Attorneys' Fees under the Lanham Act
Defendants are not entitled to reasonable attorneys' fees under the Lanham Act.
Under § 35(a) of the Lanham Act, the Court "in exceptional cases may award reasonable
attorneys' fees to the prevailing party." 15 U.S.C. § 1117(a). Generally, an "exceptional case" is
one where the defendant's conduct was in "bad faith." Also See Employers Council on Flexible
2 Defendants also stopped using Tennessee Agrinet for approximately a year, but as this was for settlement
negotiations, it is inadmissible evidence. Fed. R. Evid. 408; Fiberglass Insulators, Inc. v. Dupuy, 856 F.2d 652, 654
55 (4th Cir. 1998).
3
Compensation v. Feltman, 384 Fed. Appx. 201,207 (4th Cir. 2010).3 An award "[is] not to be
made as a matter of course, but rather as a matter of the court's considered discretion .... " Ale
House Management, Inc. v. Raleigh Ale House, Inc., 205 FJd 137, 144 (4th Cir. 2000).
The analysis of whether a defendant's behavior was in "bad faith" focuses on whether its
actions underlying the trademark infringement were "malicious, fraudulent, willful or deliberate
in nature." See Employers Council on Flexible Compensation v. Feltman, 384 Fed. Appx. 201,
207 (4th Cir. 2010)(citations omitted). However, such underlying issues are typically not
relevant to trademark infringement plaintiffs. Thus, an analysis of "bad faith" on the part of a
trademark infringement plaintiff must necessarily take into account the plaintiffs litigation
conduct.
In evaluating whether a Plaintiff showed bad faith, relevant factors include the existence
of economic coercion, groundless arguments, and failure to cite controlling law. Ale House
Management, Inc., 205 F.3d at 144. "[T]he good faith, but ultimately unsuccessful, assertion of a
questionable claim or controversial legal theory does not suffice to warrant an award of
attorney's fees, even ifit turns out to be expensive for the prevailing party." Daesang Corp. v.
Rhee Bros., Inc. 2005 WL 1163142 at *15 (D. Md.) (citing People for the Ethical Treatment of
Animals v. Doughney, 263 F.3d 359,370 (4th Cir. 2001 ».
Here, the Plaintiffs conduct was in no way exceptional. Despite the ultimate lack of
factual support for Plaintiff's claims and the parties' discovery disputes in this case, there is no
3 Previously, the Fourth Circuit had laid out a dual standard for determining whether a case is
"exceptiona1." Under this dual standard, a prevailing plaintiff was required to demonstrate that a defendant acted in
bad faith, while a prevailing defendant was only required to show the plaintiff acted in "something less than bad
faith." Scotch Whisky Assoc. v. Majestic Distilling Co., 958 F.2d 594, 599 (4th Cir. 1992). This dual standard
however, has been rejected by the Supreme Court. Fogertyv. Fantasy, Inc., 510 U.S. 517, 5226, n.19 (1994) (stating
that, in the context of attorneys' fees awarded under the Copyright Act, "prevailing plaintiffs and defendants are to
be treated in an evenhanded manner."»
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indication that Plaintiff acted in bad faith. Thus Defendant's Motion for attorney fees and costs is
denied.
B. Recovery of Costs
As the prevailing party, the Defendants are entitled to its litigation costs in this case,
other than attorney fees. Fed. R. Civ. P. 54(d)( 1). Defendants' Bill of Costs request $23,196.31
spent over the three years of this case:
Cost Description
Amount Sought by Defendants
Service of Summons and Subpoena
Printed and Electronically Recorded Deposition
Transcripts
In-House Copying/Printing
Fees for Witnesses
Copies made by Non-Parties
$2,034.25
$18,070.46
$1,483.75
$601.00
$1,006.85
Total
$23,196.31
Plaintiff requests that the Court stay consideration of the Bill of Costs until Plaintiffs
appeal of the Court's order granting Defendants' summary judgment has been resolved. Plaintiff
provides no authority for the requested stay. Moreover, Rule 54(d) of the Federal Rules of Civil
Procedure, which governs the timing of submissions of bills of cost, does not provide for any
such stay, nor does Local Civil Rule 54.1. Accordingly, Plaintiffs request for such a stay is
denied.
Plaintiff also opposes the extent of Defendants' requested costs. The Court approves all
costs except that of the video recordings of the depositions and that for including exhibit
duplicates in the deposition transcripts.
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i. Video depositions
Defendants have applied for $18,070.46 for deposition costs. These costs include both
stenographic transcription and video recordings. The Court declines to tax Plaintiff for this full
amount, allowing only the costs for the stenographic transcriptions
In the Fourth Circuit, a party can recover the costs of both stenographic transcription of a
deposition and videographer services only if the party can show that both recordings were
"necessarily obtained for use in the case." Cherry v. Champion Int 'I Corp., 186 F.3d 442,449
(4th Cir. 1999). A party's desire to enhance its chance of effectively impeaching a witness at trial
is not sufficient cause for both methods of recordation. Id.
Here, Defendants claim the video recordings were necessary to effectively impeach Mr.
Ray during a potential trial. They also argue the video was necessary because "most" of its
witnesses were from out of state, and it was uncertain whether they could attend a trial in North
Carolina. As already stated, effective impeachment is not sufficient cause for video recordings.
Additionally, the Defendants' concern that their witnesses would not be able to attend trial is
merely speculative. Thus, the costs of the video recordings will be excluded from Plaintiffs
costs.
ii. Depositions not used to support summary judgment
Plaintiff next argues that it should only be taxed for the deposition transcripts used in the
summary judgment briefing. The Court disagrees.
In the Fourth Circuit, the costs of a deposition transcript are recoverable "when the taking
of a deposition is reasonably necessary at the time of its taking." La Vay Corp. v. Dominion
Federal Savings and Loan Assoc., 830 F.2d 522, 528 (4th Cir. 1987). It is not necessary for
depositions to be used in trial or dispositive motion briefing for a party to recover those costs.
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See Id. at 528 (taxing costs for depositions not admitted at trial); Ferris v. AAF-McQuay, Inc.,
No. 5:06-cv-00082, 2008 U.S. Dist. LEXIS 13591 at *5-*6 (W.D. Va. Feb. 21, 2008) (taxing
costs for depositions not used in summary judgment briefing).
Thus, the Court will tax Plaintiffs for all the stenographic transcriptions, regardless of
whether they were used for summary judgment.
iii. Court Reporter's Fees for Shipping and Handling of Deposition Transcripts
Next, Plaintiff objects to Defendants' recovery of the reporter's postage and handling
costs associated with the deposition transcripts.
Costs for handling and delivery of deposition transcripts are reasonable under 28 U.S.C. §
1920(2), which allows for "fees for printed or electronically recorded transcripts necessarily
obtained for use in the case." 28 U.S.c. § 1920(2). Local Civil Rule 54.1 specifically allows for
taxation of "the reporter's fee and charge for the original transcript of the deposition." E.D.N.C.
Civ. R. 54. 1(c)(l)(a). Also see, Kennedy v. Joy Techs., 484 F. Supp. 2d 502, 504 (W.D.Va. 2007)
(court reporter's postage and handling fee for deposition transcript "is covered by § 1920(2)").
Thus, Plaintiff will be taxed for these costs.
iv. Costs for Exhibits to Deposition Transcripts
The Court agrees with Plaintiffs request to exclude the costs for most of the exhibits in
the deposition transcripts. See Scallet v. Rosenblum, 176 F.R.D. 522, 529 (W.D. Va.
1997)(denying "costs for the inclusion of exhibits in the deposition transcripts as these are
primarily for the convenience of counsel, who often has a copy of the exhibit at hand already").
The Court does allow however, the costs for exhibits in the deposition transcript of
William "Gary" Cooper as Mr. Cooper produced 809 pages of documents to both parties for the
first time at his deposition.
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,
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v. Costs for Service of Subpoenas on Lindsay Hill and Andy Vance
Plaintiff improperly objects to Defendants' recovery of the fees associated with service of
subpoenas on Lindsay Hill and Andy Vance.
Both Ms. Hill and Mr. Vance were served with a subpoena for documents (subpoena
duces tecum) and a subpoena for deposition testimony. While Plaintiff correctly notes that the
depositions of Ms. Hill and Mr. Vance were cancelled, Defendants only seek reimbursement of
the costs associated with service of the subpoenas duces tecum on these witnesses.
Because Defendants incurred the costs for service of the two subpoenas duces tecum on
Ms. Hill and Mr. Vance, such costs should be taxed against Plaintiff.
vi. Costs for Witness Fees
Plaintiff also objects to Defendants' recovery ofthe amount paid to Richard Parrish in
connection with his deposition, claiming no explanation was given for this fee.
The amounts paid to Mr. Parrish are properly taxable as witness and mileage fees. Mr.
Parrish agreed to travel from his home address in Oklahoma City, Oklahoma for his deposition.
Oklahoma City is approximately 120 miles from Broken Arrow. In exchange for Mr. Parrish's
accommodation for all the parties involved, Defendants properly paid him the amount of
$161.00, representing a $40.00 witness fee and a $121.00 roundtrip mileage fee. 4
vii. Costs for Private Process Server Fees
Plaintiff also objects to the $601 sought by Defendants' in connection with the service of
subpoenas on each deponent on the grounds that such fees are "excessive."
Defendants employed Special Delivery Service, Inc. to coordinate the service of
subpoenas in this case. Over 20 depositions were taken in 8 states over the course of this lawsuit.
4 Notably, service of process fees to Mr. Parrish were avoided because he agreed to accept service
of the subpoena and appear at his deposition voluntarily.
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The Defendants did not seek special services from the process servers, such as "expedited" or
"rush" service. The Court finds that the fees for service of the subpoenas is reasonable and not
excessive. According, such costs should be taxed against Plaintiff in the amount claimed.
vi. Plaintiffs Objections to Costs for Photocopies
Finally, Plaintiff objects to the $ 1,483.75 for in-house copying costs and $ 1,006.85 for
copying costs paid to non-parties, arguing the costs were not properly explained and
unnecessary.
The in-houses costs include the copying of 22 depositions, as well as 2,300 pages of
paper presented to the Court's chambers as courtesy copies in accordance with the Court's
Practice Preferences. The copying costs from non-parties mostly consist of payment to
Henderson Communications LLC and the University of lllinois at Urbana-Champaign for
tracking down and copying archived National Association of Farm Broadcasters Directories
spanning three decades.
The Court finds these costs were in fact properly delineated and necessary to this case.
CONCLUSION
Defendants' Motion for Attorney Fees is DENIED and Defendants' Motion for Bill of
Costs is GRANTED in part.
Defendants are ORDERED to resubmit a bill of costs for approval that excludes costs for
the video recorded depositions. Defendants should also exclude the costs for including exhibits
in the deposition transcripts, besides the exhibits in Mr. Cooper's deposition. The Court
APPROVES all other submitted costs.
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SO ORDERED, this
--J..J-
day of July, 2011.
RRENCE W. BOYLE
UNITED STATES DISTRIC
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