Xlear v. Focus Nutrition

Filing 56

MEMORANDUM DECISION AND ORDER denying 52 Motion to Set Aside Judgment. Signed by Judge Dee Benson on 8/31/2018. (mas)

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

XLEAR, INC., a Utah corporation,
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.

FOCUS NUTRITION, LLC, a Utah limited
liability company,

Case No. 2:16-cv-643-DB
Judge Dee Benson

Defendant.

Before the Court is Defendant Focus Nutrition’s motion to set aside judgment pursuant to
Federal Rule of Civil Procedure 60(b)(6). [Dkt. 52]. The motion has been fully briefed and the
Court finds oral argument unnecessary. Based on the written arguments of the parties and on the
relevant facts and the law, the Court enters this Memorandum Decision and Order.
BACKGROUND
Plaintiff filed this lawuit alleging three causes of action against Defendant: (1) trade dress
infringement under the Lanham Act; violation of the Utah Truth in Advertising Act; and
common law unfair competition, all with regard to Defendant’s packaging of its sweetener
product. [Dkt. 1]. Defendant filed a motion for partial judgment on the pleadings under Federal

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Rule of Civil Procedure 12(c) whereby it sought dismissal of Plaintiff’s Lanham Act claim. A
hearing was held on the motion at which the Court made findings on the record and denied the
motion. [Dkt. 32]. The parties then filed a stipulation for dismissal of all claims with prejudice
pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii). [Dkt. 34]. The stipulation states that
“[e]ach party expressly reserves its right to seek an award of attorneys’ fees and costs from the
Court.” [Id]. Defendant filed a motion for attorneys’ fees which Plaintiff opposed. [Dkts. 36, 37,
38]. The Court granted the motion and the tenth circuit court of appeals reversed the award of
attorneys fees for defense of the Lanham Act claim on the basis that there had not been sufficient
judicial imprimatur relating to the dismissal. [Dkt. 40]. The court of appeals remanded the award
of attorneys fees under the Utah Truth in Advertising Act for determination by the Court of
whether Defendant is a “prevailing party” under Utah law for purposes of obtaining an award of
its attorneys’ fees for defense of Plaintiff’s UTIAA claim. That issue is currently before the
Court. In the meantime, Defendant filed this motion pursuant to Federal Rule of Civil Procedure
60(b)(6) to set aside the judgment based on the parties’ stipulation for dismissal. Defendant
contends the judgment should be set aside in order for it to “move this Court for relief sufficient
to create the ‘judicial imprimatur’ required by the Tenth Circuit to declare that it is the
‘prevailing party,’ through a motion for dismissal, or for sanctions under Rule 37, or for
summary judgment under Rule 56 against Xlear.” [Dkt. 52 at p. 2].
DISCUSSION
Federal Rule of Civil Procedure 60(b)(6) states: “On motion and just terms, the court
may relieve a party or its legal representative from a final judgment, order, or proceeding for . . .

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any . . . reason that justifies relief.” Motions under Rule 60(b) are within in the discretion of the
district court. Pierce v. Cook & Co., 518 F.2d 720, 722 (10th Cir. 1975). “A Rule 60(b) motion
for relief from judgment is an extraordinary remedy and may be granted only in exceptional
circumstances.” Jackson v. Los Lunas Community Program, 880 F.3d 1176, 1191-92 (10th Cir.
2018).
Defendant argues the judgment should be set aside because the parties agreed to reserve
the right to seek attorneys fees, yet the tenth circuit found that the manner in which the parties
stipulated to dismissal under Rule 41(a)(1)(A)(ii) did not involve sufficient judicial imprimatur
to support an award of fees under the Lanham Act. While counsel discussed and negotiated
issues leading up to the dismissal, including reserving the right of each party to seek attorneys’
fees, they knowingly, voluntarily and willfully entered into the stipulation which expressly states
that the claims are to be dismissed “pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii).”
Although Defendant argues it believed it had a sufficient basis upon which to be awarded
attorneys’ fees for defense of all of its claims, the fact that the tenth circuit did not agree with
regard to the Lanham Act does not constitute an extraordinary basis upon which the Court will
set aside the judgment under Rule 60(b). See Collins v. City of Wichita, Kan., 254 F.2d 837, 839
(10th Cir. 1958)(“A change in the law or in the judicial view of an established rule of law is not
such an extraordinary circumstance which justifies such relief.”); Nemaizer v. Baker, 793 F.2d
58, 63 (2d Cir. 1986)(“[F]ailure to evaluate carefully the legal consequence of a chosen course of
action provides no basis for relief from a judgment.”). Accordingly, the Court declines to set
aside the judgment.

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CONCLUSION
Defendant’s motion to set aside the judgment pursuant to Federal Rule of Civil Procedure
60(b)(6) is hereby DENIED.
IT IS SO ORDERED.
DATED this 31st day of August, 2018.

_________________________________
Dee Benson
United States District Judge

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