United States District Court, D. Nevada
U.S.A. DAWGS, INC., et al., Plaintiff(s),
CROCS, INC., Defendant(s).
before the court is defendant Crocs, Inc.'s
(“Crocs”) motion for sanctions. (ECF No. 29).
Plaintiffs Double Diamond Distribution, Ltd.
(“DDD”) and U.S.A. Dawgs, Inc.
(“Dawgs”) filed a response (ECF No. 38), to which
defendant replied (ECF No. 39).
before the court was defendant Crocs' motion to
dismiss. (ECF No. 6). Notably, plaintiffs filed a
response (ECF No. 12) and discovery plan (ECF No. 17).
Thereafter, plaintiffs filed separate notices of voluntary
dismissal without prejudice. (ECF Nos. 22, 27).
and Dawgs have been in an ongoing legal battle in the
Colorado courts since 2006. (ECF No. 29 at 3). Crocs filed
its Colorado suit in 2006, and the action was generally
stayed from 2006 to 2012. (Id.). During a brief
reopening in 2012, Crocs named a Dawgs' entity “as
a defendant and Dawgs asserted counterclaims” against
Crocs. (Id.). The parties agreed to stay
that suit again in 2012. (Id.).
2014, Dawgs “filed an antitrust action against Crocs in
the District of Nevada” before Judge Boulware.
U.S.A. Dawgs, Inc. v. Crocs, Inc., No.
2:14-CV-01461-RFB-PAL, 2015 WL 5765966, at *2 (D. Nev. Sept.
30, 2015); (ECF No. 12 at 5). That Nevada court transferred
that action to Colorado because the antitrust claims
“substantial[ly] overlap[ped]” with existing
patent claims in the first filed Colorado action, supporting
transfer under the Kohn factors. U.S.A.
Dawgs, 2015 WL 5765966, at *2; see also Kohn Law
Group, Inc. v. Auto Parts Mfg. Mississippi, Inc., 787
F.3d 1237, 1241 (9th Cir. 2015).
early 2016, the Colorado court granted Dawgs' motion to
reopen that suit. (ECF No. 29 at 4).
10, 2016, with its Colorado suit pending, Crocs filed suit
against CVS Health Corporation (“CVS”) in the
United States District Court for the Southern District of
Florida.(ECF No. 40-1 at 2). The Florida complaint
alleged that CVS sold footwear that infringed on the U.S.
Patent No. D 632, 465 (the “'465 patent”).
(ECF No. 38 at 4). It was the first reference to the '465
patent in any of the relevant Colorado, Florida, or Nevada
June 28, 2016, Crocs filed its motion for leave to file its
second amended complaint [in Colorado], the effect of which
would be to add an additional claim against Dawgs for
infringement of the '465 patent.” (ECF No. 40-1 at
Crocs' motion to amend in Colorado, Dawgs filed a
declaratory judgment action with this court on July 18, 2016.
(ECF No. 29 at 2). In this Nevada action, Dawgs asked the
court to adjudicate the “(1) validity of the '465
patent, and (2) whether Dawgs' shoes infringe the
'465 patent.” (Id. at 4). Dawgs
purportedly filed the suit in Nevada to avoid the
“substantial hardship” of litigating in another
August 2, 2016, in Colorado, Crocs argued in its reply in
support of its motion for leave to amend that Dawgs'
Nevada filing was anticipatory and improper, but both suits
remained open. (Id. at 5).
Crocs filed its motion to dismiss the instant action on
September 2, 2016. (Id.). Crocs' Nevada motion
to dismiss also asserted that the underlying suit was
anticipatory and improper. (ECF No. 6).
days before filing its response to the Nevada motion to
dismiss, Dawgs' attorney sent an email to Crocs proposing
that the parties agree to transfer the suit to Colorado. (ECF
No. 12-2 at 2). Dawgs' counsel suggested it wished to
transfer this Nevada suit to Colorado and proposed that Crocs
agree to request specific judges in Colorado. (Id.).
Crocs did not respond because Dawgs' offer would have
purportedly forced Crocs to “forfeit its right to
litigate the '465 patent alongside its other
patents.” (ECF No. 16 at 7). On September 16, 2016,
Dawgs filed a response to Crocs' Nevada motion to
dismiss. (ECF No. 12).
October 6, 2016, a Colorado magistrate judge recommended
denying Crocs' motion to amend, reasoning that granting
the motion might prejudice Dawgs in its pending motion for
declaratory judgment filed in Nevada. See (ECF
No. 40-1 at 4).
submitted a proposed discovery plan for the Nevada suit on
October 17, 2016, and Crocs filed a motion to stay a week
later. (ECF Nos. 17, 18). However, on November 7, 2016, Dawgs
filed a notice of voluntary dismissal for the underlying
suit. (ECF No. 22 at 1). Dawgs sought to intervene in the
Florida case, which forced it to dismiss the Nevada suit for
declaratory judgment. (ECF No. 38 at 4-5). This court closed
the underlying suit on December 6, 2016. (ECF No. 27).
November 2016, Dawgs withdrew its opposition to Crocs'
Colorado motion to amend that complaint. (ECF No. 38 at 4).
On January 27, 2017, that court issued an order granting
Crocs' motion for leave to file a second amended
complaint to include the ‘465 patent, reasoning that
circumstances had changed in light of the Nevada dismissal.
(ECF No. 40-1 at 5).
December 20, 2016, defendant Crocs filed the present motion
for sanctions under either 28 U.S.C. § 1927 or the
court's inherent powers, alleging that plaintiffs Dawgs
and DDD filed the instant declaratory judgment action in bad
faith. (ECF No. 29).
asserts the action was anticipatory and
“vexatiously” multiplied court proceedings.
(Id. at 10). Crocs requests $12, 219.01 in
attorneys' fees and $750.00 in pro hac vice
filing fees. (ECF No. 29-1).
Legal Standards and Discussion
Sanction for attorneys' fees
Legal standard under 28 U.S.C. § 1927
Under Section 1927:
Any attorney or other person admitted to conduct cases in any
court of the United States . . . who so multiplies the
proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs,
expenses, and ...