Civil Code Section 3344(a) Does Not Require Fees to Bear a Percentage to Ultimate Recovery.
Well, readers, we are winding to a New Year, but we will blog on a special-fee shifting statute applicable in commercial name misappropriation cases--Civil Code section 3344(a), which has a mandatory fee-shifting provision. The next case we discuss did have occasion to pass on the reasonableness of a $320,000 fee award to the winning plaintiff under this statute.
Orthopedic Systems, Inc. v. Schlein, Case Nos. A126374/A126821 (1st Dist., Div. 4 Dec. 29, 2011) (certified for partial publication; fee discussion not published) involved an orthopedic surgeon who had his name associated with an orthopedic product and who had been paid royalties for a decade by plaintiff/cross-defendant orthopedic products company. Then, suddenly, company cut off the royalties, bringing a declaratory relief action on its ability to do so, prompting surgeon to file a cross-complaint alleging breach of contract, conversion, and commercial misappropriation of his name under Civil Code section 3344.
The matter proceeded to a jury trial, where surgeon won damages of $616,043, lost profits of $1,220,000 (taken away by the trial judge but restored by the appellate court in this decision), and statutory section 3344 damages of $750. The lower court also awarded surgeon $320,000 in fees as the prevailing party under section 3344(a).
Various cross-appeals were brought, with the company challenging the award of post-judgment fees to the surgeon. The surgeon’s fee award was affirmed.
Section 3344(a)’s fee-shifting provision is mandatory in nature. Surgeon did prevail because he recovered both $750 in statutory damages and $1,220,000 in lost profits. However, even if the lost profit award was disregarded, section 3344(a) does not require actual damages, so that the statutory damages award sufficed--especially given legislative history indicating that attorney’s fees under the provision did not have to bear a percentage to the ultimate recovery. (The cited legislative history expressed that fee recovery should be based on time expended rather than the amount of recovery.) Beyond that, no allocation was required between noncompensable claims, because these claims were inextricably intertwined with the fee-entitling misappropriation claim.
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