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Itex Corp. v. Global Links Corp.

United States District Court, District of Nevada

May 7, 2015

ITEX CORPORATION, Plaintiff,
v.
GLOBAL LINKS CORP and BXI TRADE EXCHANGE, INC., Defendants.

ORDER

ROBERT C. JONES UNITED STATES DISTRICT JUDGE

This case arises from Defendants’ alleged violation of the Lanham Act. Pending before the Court is ITEX Corporation’s (“ITEX”) Motion for Attorneys’ Fees (ECF No. 45). Defendants have filed a Response (ECF No. 50) and ITEX submitted a Reply (ECF No. 52). For the reasons contained herein, the Motion is granted in part and denied in part.

I. FACTS AND PROCEDURAL HISTORY

ITEX filed this action alleging in part that Defendants had engaged in false or misleading advertising related to their trade barter company. The parties engaged in discovery and ITEX filed a motion for partial summary judgment claiming that certain statements made by Defendants in commerce were false or otherwise misled consumers regarding Defendant BXI Trade Exchange’s (“BTE Nevada”) origin and history. The Court found that Defendants’ statements violated the Lanham Act and it issued a permanent injunction prohibiting Defendants from disseminating any additional false or misleading information. (Order, ECF No. 44).

The Court also determined that this case was “exceptional” under the Lanham Act because the various statements were made with the intent to deceive or confuse consumers. (Id. at 24). Accordingly, the Court ruled that ITEX was entitled to an award of reasonable attorneys’ fees on its second and third causes of action pursuant to 15 U.S.C. Section 1117(a). (Id. at 27). The present Motion was filed at the Court’s direction that ITEX provide the necessary documentation as required by the Local Rules so that the proper fee award could be determined. (Id. at 27–28).

ITEX seeks $90, 284.40 in attorneys’ fees and $1, 669.07 in costs, for a total award of $91, 983.47. Defendants argue that this is an unreasonable amount given the stage of the proceedings and the complexity of the claims at issue here-false or misleading advertising. Defendants contend that the fee award should be greatly reduced and that an award totaling no more than $20, 000 should be deemed reasonable under the facts of this case.

II. LEGAL STANDARD

Under the Lanham Act, “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). Having previously ruled that this case is exceptional as to ITEX’s second and third causes of action, the Court must now determine whether ITEX’s requested fee award is reasonable. “[T]he determination of fees ‘should not result in a second major litigation.’” Fox v. Vice, 131 S.Ct. 2205, 2216 (2011) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). In reviewing a fee applicant’s documentation, “trial courts need not, and indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection.” Id.

Trial courts are thus given “substantial deference” when determining an appropriate fee award. Id. They “may take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorney’s time.” Id. Indeed, the Supreme Court has stated that it “can hardly think of a sphere of judicial decisionmaking in which appellate micromanagement has less to recommend it.” Id. So long as the district court provides “a concise but clear explanation of its reasons for the fee award, ” Hensley, 461 U.S. at 437, the award will generally be upheld if the court has “call[ed] the game by the right rules, ” Fox, 131 S.Ct. at 2217.

When calculating a fee, the district court applies a two-step process. Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 622 (9th Cir. 1993). “First, the court must calculate the ‘lodestar figure’ by taking the number of hours reasonably expended on the litigation and multiplying it by a reasonable hourly rate.” Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000) (citing Hensley, 461 U.S. at 433). “Second, the court must decide whether to enhance or reduce the lodestar figure based on an evaluation of the Kerr factors that are not already subsumed in the initial lodestar calculation.” Id.

The Kerr factors include: “(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.” Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975).

III. DISCUSSION

As an initial matter, the Court notes that Defendants do not object to the rate billed by ITEX’s counsel in this case. The two partners responsible for the case billed between $436.50 an hour and $472.50 an hour over the course of the litigation, with incremental rate increases each year from 2013 to 2015. (Mot. Att’ys’ Fees 6, ECF No. 45). The Court agrees that this is a reasonable rate given the expertise of the attorneys, the subject-matter of the litigation, and the facts of this particular case. The associates assisting in the case billed at a rate between $297 an hour and $324 and hour, also with incremental increases in 2014 and 2015. (Id.). Finally, the paralegal assigned to the case billed between $216 an hour and $220.50 an hour for the work performed in 2014 and 2015. (Id.). The Court likewise finds these rates to be reasonable.

Before the lodestar amount may be calculated, however, the Court must determine whether the hours reported by ITEX’s counsel were “reasonably expended.” Hensley, 461 U.S. at 433. “A district court should exclude from the lodestar amount hours that are not reasonably expended because they are ‘excessive, redundant, or otherwise ...


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