California Court Refuses to Award Fees for Supplemental Claims, Slashes Fees in Half

Posted on January 17th, 2018 by Legal Fee Advisors

By Zachary Kalmbach.

A California court reduced a fee award by 53% to account for excessive billing practices, overstaffing, and segregation of claims. In Amusement Art v. Life is Beautiful, plaintiff Amusement Art filed a number of intellectual property claims against defendant Life is Beautiful. Plaintiff asserted various state and common law claims and federal copyright and trademark infringement claims. Only one of the claims sought, a federal claim under the Lanham Act, provided for an award of attorneys’ fees. In July 2016, the Court granted summary judgment for defendant as to all of plaintiff’s claims, and defendant subsequently moved for an award of $1,701,584.50 in attorneys’ fees and $266,515.86 in costs.

The Court cut the total fee request after finding that defendant billed for an excessive number of hours and overstaffed depositions. Although defendant was successful on all of plaintiff’s claims, the Lanham Act claim was the only basis for a fee award; the state law claims did not expressly provide for such awards and the Court did not find that the Copyright claim was so “frivolous or objectively unreasonable so as to justify an award of attorneys’ fees.” Thus, the Court applied a further reduction to segregate work performed on the Lanham Act claims from work spent on other claims that were not subject to an award of fees.

The Court identified many instances where defendant billed excessively. For example, three attorneys billed 38.2 hours for preparing for a 30-minute meet-and-confer discovery call. The Court also held defendant had billed excessively for “research[ing] and draft[ing] memo assessing plaintiff’s claims in preparation for mediation,” preparing a “never-filed motion,” and spending 50 hours preparing a single argument in the summary judgment brief. Finally, Defendant billed 235.9 hours for work on the attorneys’ fees motion. The Court found these entries to be excessive, and reduced the number of hours sought by 367.4 hours.

The Court further found instances where depositions were staffed by two attorneys. The Court concluded that it was unnecessary to have two attorneys in attendance, and reduced the total number of hours billed for such depositions by 51 hours.

In light of a review of the entire billing record, the Court applied an additional across-the-board reduction of 10 percent to account for other excessive entries, particularly that of excessive hours spent preparing for various depositions, including ones that it appeared were never actually taken.

In addition to attorneys’ fees, defendants also sought to recover $266,515.84 in costs, $169,175.20 of which for experts’ fees. The Court held that, because the Lanham Act did not expressly provide that expert witness fees were recoverable, defendant could not recover any experts’ fees. After the above reductions, $1,537,182.42 in fees and costs remained.

Finally, the Court addressed the fact that the Lanham Act claim was the only basis for a fee award. The Court rejected defendant’s argument that the Lanham Act claim was so intertwined with the other claims so as to make the claim non-severable. The Court found that the Lanham Act claim comprised 60 percent of the case and thus awarded $922,309.45 in fees and expenses.

This case offers examples of several billing practices courts may find to be excessive, such as the number of attorneys attending depositions. Moreover, this case demonstrates courts’ strictness in only awarding fees for work performed in connection with statutes expressly providing for an award of attorneys’ fees, and how a court may sever such work from non-recoverable work.

Note, at the time of publication an appeal had been filed as of June 23, 2017. We will keep you updated on any progress in the appeal!

Amusement Art, LLC v. Life is Beautiful, LLC, No. 214CV08290DDPJPR, 2017 WL 2259672 (C.D. Cal. May 23, 2017)

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