Harris et al v. Lexjet Corporation et al

Filing 29

MEMORANDUM AND OPINION. Signed by District Judge James R. Spencer on 1/11/10. (kyou, )

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION ROBERT HARRIS, and WORLD ANSWERS, INC., and NATURAL SYSTEMS TECHNOLOGIES, INC. v. Plaintiffs, Action No. 3:09­CV­616

LEXJET CORP. and LEXJET SERVICES CO., LLC, Defendants. MEMORANDUM OPINION THIS MATTER is before the Court on Defendants' Motion for Attorneys' Fees and Full Costs (Docket No. 21) based on 17 U.S.C. § 505. For the reasons that follow, the Court will DENY the Motion. I. BACKGROUND This controversy concerns software that Plaintiffs World Answers, Inc., Natural Systems, Technologies, Inc., and Robert Harris developed while H a r r i s w a s e n g a g e d a s a n independent contractor by the makers of digital printing technologies, Defendants Lexjet Corporation and Lexjet Service Co., LLC (collectively "Lexjet"). In November 2009, Harris and his two former corporations, World Answers and Natural Systems, filed a five co u n t A m e n d e d C o m p l a i n t a g a i n s t L e x j e t . I n C o u n t s 1 a n d 2 , H a r r i s a l l e g e d L e x j e t w a s d i r e c t l y a n d s e c o n d a r i l y i n f r i n g i n g on Harris's copyrighted software. Count 5 sought to enjoin that behavior. In Count 3, Harris alleged a violation of

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t h e V i r g i n i a C o m p u t e r C r i m e s A c t . Count 4 alleged that Lexjet t o r t i o u s l y i n t e r f e r e d w i t h Harris's business relationships. A f t e r r e v i e w i n g t h e p a r t i e s ' w r i t t e n s u b m i s s i o n s a n d h o l d i n g a h e a r i n g , t h e C o u r t granted Lexjet's Motion to Dismiss without prejudice as to Coun t s 1 , 2 , a n d 5 , a n d g r a n t e d the Motion with prejudice as to Counts 3 and 4. In relation to the copyright claims, Lexjet h a s n o w f i l e d t h i s M o t i o n , s e e k i n g i t s a t t o r n e y s ' f e e s a n d f u l l costs under 17 U.S.C. § 505. Harris opposes the Motion. II. ANALYSIS Title 17, Section 505 of the United States Code provides authority for a court to award full costs to the prevailing party in a copyright infring ement action, which includes reasonable attorney's fees. Specifically, this provision states: 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 U n i t e d S t a t e s o r an officer thereof. Except as otherwise provided by this title, the court may a l s o a w a r d a r e a s o n a b l e a t t o r n e y ' s f e e t o t h e p r e v a i l i n g p a r t y as part of the costs. 17 U.S.C. § 505. The threshold--and dispositive--issue in this case is whether Lexjet qualifies as a prevailing party. More specifically, the Court must consider w h e t h e r o b t a i n i n g a d i s m i s s a l without prejudice, as Lexjet did here, confers it with "prevailing party" status. The Fourth Circuit has concluded that a voluntary dismissal without prejudice is insufficient to make a d e f e n d a n t a p r e v a i l i n g p a r t y b e c a u s e t h e p l a i n t i f f c a n r e f i l e t he complaint. Best Indus., Inc. v. CIS BIO Int'l, Nos. 971217, 971412, 1998 WL 39383, *4 (4th Cir. Feb. 2, 1998) (citing Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 107677 (7th Cir. 1987)). In Best,

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the Fourth Circuit reasoned that " w h e n a d e f e n d a n t r e m a i n s a t r isk of another suit on the s a m e c l a i m , h e c a n h a r d l y b e c o n s i d e r e d t o b e i n t h e s a m e p o s i ti o n a s a d e f e n d a n t w h o n o longer faces the claim due to a dismissal with prejudice." Id. Although Lexjet benefitted not from a voluntary dismissal without prejudice, but from an involuntary dismissal without prejudice, that distinction still fails to forge a m a t e r i a l c h a n g e i n t h e l e g a l r e l a t i o n s h i p o f t h e p a r t i e s . S e e Buckhannon Bd. and Care Home, Inc. v. W. Va. Dept. of Health and Human Res. , 5 3 2 U . S . 5 9 8 , 6 0 4 ( 2 0 0 1 ) . H a r r i s certainly lost this battle, but t h e c o n f l i c t b e t w e e n t h e s e p a r t i e s m a y r e s u r f a c e i f H a r r i s chooses to refile his complaint. In fact, the Fourth Circuit has stated that when additional litigation is possible, a dismissal without prejudice is "more like a draw than a victory." Best Indus., 1998 WL 39383, *4. The Court therefore concludes that Lexjet is not a "prevailing party." Since 17 U.S.C. § 505 permits an award of attorneys' fees and costs only to prevailing parties, Lexjet's Motion is DENIED.1 III. CONCLUSION For the foregoing reasons, the Court DENIES the Motion for Attorneys' Fees and Full Costs. Also before the Court is Harris's counsel's Motion to Withdraw as Counsel (Docket No. 26). Because the Court has now disposed of the only remaining substantive motion in this case, the Motion to Withdraw is DENIED as MOOT.

Because the Court finds that Lexjet was not a prevailing party, the parties' arguments concerning whether attorneys' fees are appropriate and what the amount should be are not addressed. 3

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An appropriate Order will accomp any this Memorandum. Let the C lerk send a copy of this Memorandum to all counsel of record. It is SO ORDERED. /s/ James R. Spencer Chief United States District Judge

ENTERED this 11th day of January 2010

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