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Abbey Dental Center, Inc. v. Consumer Opinion LLC

United States District Court, D. Nevada

August 10, 2017



          Gloria M. Navarro, Chief Judge United States District Judge

         Pending before the Court is the Motion to Dismiss, (ECF No. 48), filed by Plaintiff Abbey Dental Center, Inc. (“Plaintiff”). Defendant Consumer Opinion LLC (“Defendant”) filed a Response, (ECF No. 49), and Plaintiff filed a Reply, (ECF No. 50). For the reasons discussed below, the Court GRANTS Plaintiff's Motion.

         I. BACKGROUND

         This case arises out of Plaintiff's trademark dispute under the Lanham Act, 15 U.S.C. §§ 1114, 1125, regarding Plaintiff's registered trademark of “Abbey Dental.” (First Am. Compl. (“FAC”) ¶¶ 9-10, ECF No. 28). On October 27, 2015, Plaintiff filed its Complaint, (ECF No. 1), and on December 8, 2016, Plaintiff filed its First Amended Complaint. Defendant filed Motions to Dismiss, (ECF Nos. 25, 30) for both of Plaintiff's Complaints and alleged that Plaintiff's suit is a Strategic Lawsuit Against Public Participation under Nevada Revised Statute (“NRS”) 41.635-70 (“Anti-SLAPP Statute”). (See, e.g., Sec. Mot. to Dismiss 2:18-23, ECF No. 30). Additionally, Defendant filed a Motion for Summary Judgment, (ECF No. 31).

         On June 20, 2017, Plaintiff filed the instant Motion to Dismiss without Prejudice Pursuant to FRCP 41(a). (ECF No. 48). Plaintiff seeks to dismiss its own action because, although it alleges this case was originally filed in “a good-faith effort to protect its trademark, ” it is “no longer financially practicable to continue prosecuting this matter.” (Pl.'s Mot. to Dismiss 2:9, 2:21).


         Rule 41(a)(2) freely permits the plaintiff, with court approval, to voluntarily dismiss an action so long as no other party will be prejudiced. Fed. R. Civ. Pro. 41(a)(2); 9 Wright & Miller, Federal Practice & Procedure: Civil, § 2364, at 165 (1971). Allowing the court to attach conditions to the order of dismissal prevents defendants from being unfairly affected by such dismissal. Id. Thus, “in ruling on a motion for voluntary dismissal, the District Court must consider whether the defendant will suffer some plain legal prejudice as a result of the dismissal.” Id. “Legal prejudice” means “prejudice to some legal interest, some legal claim, some legal argument.” Smith v. Lenches, 263 F.3d 972, 976 (9th Cir. 2001).

         Plaintiff's voluntary dismissal with prejudice with each party to pay its own fees amounts to judgment on the merits, and in such a case the defendant is technically the prevailing party. Zenith Ins. Co. v. Breslaw, 108 F.3d 205, 207 (9th Cir. 2007) (abrogated on other grounds). The prevailing party on a Lanham Act claim may be entitled to reasonable attorney fees in exceptional cases. 15 U.S.C. § 1117(a) (“The court in exceptional cases may award reasonable attorney fees to the prevailing party.”) (emphasis added). Exceptional circumstances include when “a plaintiff's case is groundless, unreasonable, vexatious, or pursued in bad faith.” Interstellar Starship Servs., Ltd. v. Epix Inc., 184 F.3d 1107, 1112 (9th Cir. 1999) (internal quotation marks omitted). Under the Lanham Act, an award of attorney's fees is within the district court's discretion. The District Courts decision is reviewed under an abuse of discretion standard. Stephen W. Boney, Inc. v. Boney Services, Inc., 127 F.3d 821, 825 (9th Cir. 1997).

         “The Ninth Circuit has long held that the decision to grant a voluntary dismissal under Rule 41(a)(2) is addressed to the sound discretion of the District Court.” Hamilton v. Firestone Tire & Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982). In deciding whether to award fees and costs relating to voluntarily dismissed claims, the district court has “broad fact-finding powers” to grant or decline sanctions and that its findings warrant “great deference.” Smith v. Lenches, 263 F.3d 972, 978 (9th Cir. 2001).


         Plaintiff seeks dismissal because “Plaintiff has made a careful assessment of the Parties' financial resources and based on that assessment, has determined that pursuit of the case is no longer financially feasible.” (Pl.'s Mot. to Dismiss 5:13-15). Defendant argues that Plaintiff's dismissal should be denied, and if it is granted, “it should be construed as a consent to the Anti-SLAPP Motion, and thus should function as a dismissal with prejudice, and with all requested attorneys' fees granted.” (Resp. 3:20-22, ECF No. 49). Defendant continues that “this is not only a SLAPP suit, but [also] an ‘exceptional case' under the Lanham Act, ” rendering attorneys' fees necessary in this situation as well. (Id. 3:22-23). The Court will first address Defendant's arguments concerning the SLAPP suit and then will address Defendant's arguments under the Lanham Act.

         A. Anti-SLAPP Motion

         A Strategic Lawsuit Against Public Participation (“SLAPP”) is a meritless suit that seeks to use “costly, time-consuming litigation” to chill a person's constitutionally protected right to free speech. See Metabolife Int'l, Inc. v. Wornick, 264 F.3d 832, 839 (9th Cir. 2001). When a plaintiff files a SLAPP suit against a defendant, Nevada's Anti-SLAPP Statute allows the defendant to file a special motion to dismiss in response to the action. NRS 41.660(1). Additionally, NRS 41.670(2) provides, “[i]f the court grants a special motion to dismiss filed pursuant to NRS 41.660 . . . [t]he person against whom the action is brought may bring a separate action to recover: (a) [c]ompensatory damages; (b) [p]unitive damages; and (c) [a]ttorney's fees and costs of bringing the separate action.”

         Defendant argues that the Court should award Defendant fees under the Anti-SLAPP statute “as there is a presumption that a defendant is the prevailing party in an Anti-SLAPP motion when the plaintiff dismisses its claims prior to a hearing on an Anti-SLAPP motion.” (Resp. 7:1-3). The Nevada Supreme Court holds, however, that “a defendant may not pursue an action for damages and attorney fees pursuant to NRS 41.670(2) when the plaintiff voluntarily dismisses the alleged SLAPP suit before a special motion to dismiss is filed or granted.” Stubbs v. Strickland, 297 P.3d 326, 329 (Nev. 2013) (emphasis added). Although Defendant has not pursued a specific action for damages, it is essentially doing so here in seeking attorneys' fees pursuant to the Anti-SLAPP Motion. (See Resp. 3:22; 3:25-27 n.1 (asserting that “attorneys' fees are mandatory when a party brings a special motion to dismiss under NRS 41.660 and prevails”)). The Court holds that pursuant to the Nevada Supreme ...

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