CALIFORNIA ATTORNEY'S FEES

Celebrities, SLAPP: $493,135 In SLAPP Fees And Costs Awarded To Phoebe Bridgers For Winning A SLAPP Motion In A Defamation Case Brought Against Her

The Request Was $670,510 In Fees And Costs.

            Phoebe Bridgers, an indie folk music songwriter-singer, was sued for defamation by music producer Chris Nelson in Los Angeles County Superior Court.  Earlier, she won a SLAPP motion, which allows for imposition of mandatory reasonable attorney’s fees and costs against the non-prevailing plaintiff.  She moved for fees and costs of $670,510, with Judge Curtis A. Kin on March 9, 2023 awarding her the reduced amount of $493,135.  Goes to show you that SLAPP victories can carry a high price tag for the unsuccessful litigant. 

Celebrities: Trial Litigation Expert For Newsweek Estimates That Johnny Depp Has Spent $5.5 Million And Amber Heard Has Spent $3 Million In Fairfax County, Virginia Litigation Where The Case Is Going To The Jury In Short Order

Mr. Depp May Have Spent $300,000 On Experts, And Ms. Heard Possibly Expended $200,000 On Experts.

            In a May 26, 2022 on-line post in Newsweek, Manny Arora of Arora Law Trial Attorneys has estimated that Johnny Depp has expended $5.5 million in prosecuting his defamation action (requesting $50 million in damages) and in defending against Ms. Heard’s cross-claims (requesting $100 million in damages), while also ballparking that Ms. Heard has spent $3 million in the action where a jury trial is winding down in Fairfax County, Virginia.  Experts were hired by both sides in the case, with Newsweek indicating that Mr. Depp may have expended $300,000 on them and Ms. Heard spending $200,000 on them.  As one person commented in response to the Newsweek post, the only winners were the lawyers!

Celebrities: Trump Campaign Ordered To Pay $1.3M Attorney's Fees To Omarosa Manigault Newman

Celebrities Clash Over Attorney's Fees.

        Maggie Haberman of the NYT reported on April 20, 2022, that the campaign organization of celebrity and former president Donald Trump has been ordered to pay celebrity Omarosa Manigault Newman $1.3M in atttorney's fees. The subject of the dispute was apparently an unsuccessful attempt to enforce a nondisclosure agreement against Newman who wrote a book entitled "Unhinged" that embarrassed Trump. 

Celebrities, SLAPP: Jeff Bezos’ Girlfriend’s Brother Ordered To Pay $254,404 In SLAPP Fees To Mr. Bezos After Losing Defamation Suit

$1.7 Million In Fees Had Been Requested.

            Michael Sanchez, a Hollywood talent agent and the brother of Lauren Sanchez (Lauren is Amazon’s Jeff Bezos’s girlfriend), sued Mr. Bezos for defamation arising from allegations that he leaked nude photos of Mr. Bezos to the press.  A Los Angeles County Superior Court judge dismissed the case based on a SLAPP motion.  Mr. Bezos requested fees of around $1.7 million, but the trial judge awarded $254,404.  From appellate court dockets, it looks like both sides have appealed to the Second District Court of Appeal.

Celebrities, SLAPP: Former U.S. Rep. Katie Hill Ordered To Pay SLAPP Fees Of A Little Under $30,000 To Talk Show Host Joseph Messina

Fees Resulted After She dismissed A Revenge Porn Lawsuit Against Mr. Messina.

            Recently, L.A. Superior Court Judge Yolanda Orozco decided that former U.S. Representative Katie Hill must pay former defendant Joe Messina, a radio talk show host, $29,905 in attorney’s fees under the SLAPP fee shifting provision after she dismissed him from her revenge porn lawsuit on the eve of the SLAPP motion to dismiss.  Mr. Messina had sought recovery of $37,585, but the judge found this to be an excessive request.

Celebrities, Section 998: Voluntary Dismissal Of Likeness Claim Does Not Mandate Fee Recovery; Second Settlement Offer, After Unaccepted Earlier 998 Offer, On A Narrower Claim Superseded Prior One Such That Contractual Fee-Shifting Was In Order

Second 998 Offer Limited To Contractual Claim Extinguished Prior 998 Offer Which Was Broader.

            Our Santa Ana Court of Appeal, in Varney Entertainment Group, Inc. v. Avon Plastics, Inc., Case No. G058903 (4^th Dist., Div. 3 Feb. 23, 2021) (published), got to entertain some interesting fee issues under the California’s commercial name/likeness statute and under Code of Civil Procedure section 998 where different offers were made by the defense.

            In this one, plaintiff filed a simple complaint for breach of contract, but later filed a first amended complaint to assert an unauthorized use of name/likeness under Civil Code section 3344, with the latter containing a fee shifting statute.  (There was a fee shifting basis under the contract, as well.)  The 3344 claim was added shortly before trial, with the trial judge indicating that the claim was governed by Tennessee law such that plaintiff dismissed it without prejudice, electing to pursue the claim in Tennessee.  The defense had much earlier served an initial 998 offer for $250,000, plus costs and fees.  However, the defense then sent a letter to plaintiff indicating it was going to settle the contract claim for $191,626.03 with the caveat that plaintiff would be the prevailing party on the contract claim—an offer which was accepted way before there was a resolution of the 3344 claim. 

            Well, you can imagine what happened.  Both sides moved for fees!  Plaintiff wanted $271,244 in fees, while defendant wanted $242,808 in fees.  The trial court awarded nothing to the defense, but awarded $125,000 in attorney’s fees to plaintiff, triggering a defense appeal.

            The 4/3 DCA, in an opinion authored by Justice Goethals, affirmed.

            The defense motion for fees based on the 3343 claim dismissal was found unpersuasive.  Plaintiff dismissed that claim without prejudice and pursued it in Tennessee, such that no prevailing party could be determined on it until the out-of-state action was resolved.  Besides that, no authority was cited to allow a 3344 fee award where it based only on a voluntary dismissal without prejudice.

            So, what about plaintiff’s fees award?  That got everyone into the weeds of the initial 998 offer and second settlement offer which was accepted.  The precise issue was whether a later offer to enter into a stipulated judgment on the contract issue extinguished an earlier 998 offer covering all causes of action?  The answer was yes, it did.  The DCA was convinced that any different result would result in “gotcha” litigation, where a party quite clearly signaled an intent to settle with specificity on a partial basis.  So, the $125,000 award stood up on appeal.

            BLOG OBSERVATION—This case gives rise to interesting drafting considerations for 998 offers and subsequent settlement negotiations.  We would hazard to guess that litigants have to be careful on crafting revocability language, although it might be difficult to do as far as salvaging the preservation of prior 998 offers once a settlement, even if partial, is accepted and consummated.  However, precise stipulated judgment language by the defense, to the contrary, might have led to a different result.  Interesting case for everyone to consider!

Celebrities, News: Washington Post Reports That Donald Trump Has Instructed Aides Not To Pay Rudy Giuliani's Legal Fees

Of Course, We Are High-Minded And Therefore Only Interested In The Potential Legal Issues . . . 

        On January 13, 2021, journalists Philip Rucker, Josh Dawsey and Ashley Parker of the  Washington Post, reported that outgoing President Donald Trump has instructed his aides not to pay Rudy Giuliani's legal fees. Specifically, they write:

"Trump has instructed aides not to pay Giuliani’s legal fees, two officials said, and has demanded that he personally approve  reimbursements for the expenses Giuliani incurred while traveling on the president’s behalf to challenge election results in key states. They said Trump has privately expressed concern with some of Giuliani’s moves and did not appreciate a demand from Giuliani for $20,000 a day in fees for his work attempting to overturn the election."

Our beat is attorney's fees, and we do not enter into the political fray. Instead, we suggest a few serious questions:

1) When Giuliani undertook the assignment, did he and Trump enter into a written agreement? 

2) If Giuliani and Trump entered into a  written agreement, do disputes require arbitration?

3) Were both parties to the contract mentally competent?

4) What was the  scope of Giuliani's legal  assignment -- to undo the election?

5) Did Giuliani make promises about what he would accomplish, to wit, overturn the popular election results? 

6) Was Giuliani's reported fee of $20,000/day reasonable? (For a New York attorney, former Mayor of Gotham, former  US Attorney for the SDNY, with 50 years experience.)

7) Did Giuliani make proper time entries? Did he block bill?

8) Were Giuliani's fees reasonably and necessarily incurred?

9) Did Giuliani commit malpractice?

10) Does New York state law or other law govern the attorney-client contract?

11) Did Giuliani represent Trump pro bono, and if so, for what period of time?

13) Has Giuliani violated any New York Rules of Professional Conduct during his representation of his client?

14) Did Giuliani provide poor legal advice in connection with the rally on January 6, 2021 in Washington D.C., at which Giuliani and Trump spoke, following which a violent mob stormed the Capitol, resulting in Trump's impeachment?

15) Did Giuliani display absolute fidelity to Trump?

16) Did Giuliani unnecessarily incur legal costs when he booked Four Seasons Landscaping?

17) Did Giuliani display bad hair on camera?

18) Did Trump violate the law by failing to mention Mr. Giuliani or his unpaid labor for 20 months on the annual financial disclosure he filed in May, "which requires that the value and source of gifts — including free legal work — be publicly listed," as reported by the NYT?

19) Has Trump engaged in unfair business practices by following a modus operandi of stiffing business creditors?

20) Are the journalists' reports of a falling out between Trump and his loyal friend and personal attorney Giuliani simply Fake News?

 

 

Celebrities, SLAPP: 4/3 DCA Affirms $137,340.25 Fees/Costs Awarded To SLAPPing Real Housewives Of Orange County Defendant In Defamation Lawsuit

Defendant’s Comments Were Protected Activity As They Were Made In A Public Forum Concerning A Public Interest.

            In Bellino v. Beador, Case No. G057255, consolidated with Case No. G058129 (4^th Dist., Div. 3 October 23, 2020) (unpublished), Shannon Beador and Tamra Judge, two cast members of the reality show the “Real Housewives of Orange County,” were sued by James Bellino, the ex-husband of a former RHOC cast member, and his company. 

            Plaintiffs’ lawsuit for defamation and other related claims stemmed from defendants’ appearance on a gossip podcast wherein they made comments about plaintiffs.  Defendant Beador’s comments were that she had heard plaintiffs no longer had their trampoline parks because they had been sued, that people get paralyzed at trampoline parks, and that she would not allow her children to go to trampoline parks for that reason.

            When Defendant Beador SLAPPed back against plaintiffs’ complaint, the trial court granted her motion in its entirety – reasoning Beador’s statements were protected speech – and subsequently awarded her attorney fees and costs of $137,340.25 out of a requested $220,894.55.

            Plaintiffs appealed both orders, but the 4/3 DCA affirmed.

            In the first of two steps used to determine an anti-SLAPP motion – whether the underlying activity that led to the lawsuit is protected – the appellate court found that Beador’s comments were protected activity.  Pursuant to Code Civ. Proc. § 425.16(e)(3) and (e)(4), Beador’s comments were an exercise of her constitutional right of free speech in connection with an issue of public interest.  In an opinion authored by Justice O’Leary, the 4/3 DCA explained that because Plaintiff Bellino had appeared on RHOC, had been depicted as a businessman on the show, and allowed his lifestyle and divorce to be fodder for public interest, the statements made by Beador were “statements made in a place open to the public or a public forum in connection with an issue of public interest.”

            As to the second step, the appellate panel found plaintiffs failed to meet their burden of showing minimal merit.  Beador’s statement that she heard plaintiffs sold their trampoline parks because they were sued was substantially true as plaintiffs sold trampoline park locations after being sued for personal injuries sustained at one of their trampoline parks.  Additionally, Beador’s statement that she will not allow her children to go to trampoline parks because they are dangerous was also true, and was an exaggeration of the potential worst-case scenario of harm that could come from a trampoline park – not a declarative statement of fact – and, therefore, constitutionally protected.

            Finally, the 4/3 DCA found no abuse of discretion in the trial court’s award of fees/costs given Beador prevailed in her anti-SLAPP motion and the trial court properly considered the detailed records submitted by Beador’s attorneys, Beador’s attorneys’ experience, the complexity of the case, reasonableness of rates, and procedural history.

Celebrities, Prevailing Party, Section 1717: President Donald J. Trump Ordered To Pay $44,100 In Attorney’s Fees In Story Daniels Dismissed Case After It Goes Back to LASC

However, $10,030.65 Costs Request Denied.

            By now, a lot of us are familiar with the Stephanie Clifford (aka Stormy Daniels) case against President Daniel J. Trump, which had been litigated both in federal courts and the Los Angeles County Superior Court (LASC).  In fact, Ms. Clifford got tagged with some SLAPP fees at the federal stage.  What happened eventually was that Ms. Clifford, who brought a declaratory relief suit based on a nondisclosure agreement with a fees clause, sought to invalidate a nondisclosure where $130,000 was wired to her through Michael Cohen’s trust account.  Eventually, the defendants which included President Trump, although he did not sign the nondisclosure agreement, signed a covenant not to sue and acknowledged that the settlement agreement was never formed.  Based on this, defendants moved to dismiss the suit for lack of subject matter jurisdiction in the federal court and remanded the case back of the LASC, which dismissed the case with prejudice upon Ms. Clifford’s request to do so after the defense filed a motion.

            Then, Ms. Clifford moved to recover $64,440.65 in fees and costs under both Civil Code section 1717 and the federal removal statute (28 U.S.C. §1447(c)) in Clifford v. Trump, Case No. BC696568 (L.A.S.C.).   L.A. County Superior Court Judge Robert B. Broadbelt III, in a detailed order entered on August 17, 2020 after substantial briefing by both sides, granted Ms. Clifford $44,100 in fees against President Trump, but denied $10,030.65 in costs.

            The lower court found that fees were warranted under section 1717 because Ms. Clifford prevailed given that she achieved her main litigation objective by having the defendants attempt to enforce the nondisclosure agreement against her.  The result was a procedural dismissal, but a final resolution unlike cases where a procedural dismissal was temporary with no resolution of the merits.  Because President Trump was not a signatory to the nondisclosure agreement with a fees clause, the assigned state judge had to confront whether there was a nonsignatory exception under section 1717 which applied.  He determined there was, finding that President Trump was a third-party beneficiary of the nondisclosure agreement.  With respect to the contention that fees were allowable under the federal removal statute, this did not provide an entitlement basis because the federal court never determined that removal was improper.  Judge Broadbelt found that the lead counsel’s fees were reasonable, but that fees claimed by local counsel were not substantiated by competent evidence (because lead counsel could not competently testify about their efforts in cursory fashion).  On the $10,030.65 costs request, it was denied because Ms. Clifford did not prevail under the routine costs statute—she obtained no net recovery and neither side obtained any relief.  Beyond that, Ms. Clifford failed to file a costs memorandum, a requirement for obtaining costs most of the time in California state courts. 

Celebrities, Prevailing Party, Special Fee Shifting Statute: Nevada Supreme Court Adopts “Catalyst Theory” For Purposes Of Awarding Attorney’s Fees And Costs Under The Nevada Public Records Act

Public Records Request Related To Las Vegas Murder Of American Rap Artist Tupac Shakur; California, Too, Has Adopted This Theory Under The California Public Records Act.

            In Las Vegas Metropolitan Police Dept. v. The Center for Investigative Reporting, Inc., No. 77617, 136 Nev. Advance Opinion 15 (Nev. Sup. Ct. Apr. 2, 2020), the Nevada Supreme Court reviewed the granting of attorney’s fees and costs to the Center for Investigative Reporting and against the Las Vegas Metropolitan Police Department when the Center sought disclosure of records relating to the murder of American rap artist Tupac Shakur.  Although no judgment on the merits was entered, the parties did reach an agreement by which the Center gained access to the requested records.  The lower court granted Center attorney’s fees and costs under a fee-shifting provision of the Nevada Public Records Act.  The Nevada Supreme Court affirmed.

            It endorsed the view that a pre-merits resolution disclosure could result in a fee/costs award under a “catalyst” theory adopted by many states in the context of public record act disputes.  In doing so, it adopted the formulation of the catalyst theory in Graham v. Daimler Chrysler Corp. (2004) 34 Cal.4^th 553.  For California cases discussing that the catalyst theory is applicable to Government Code section 6259(a)—the fee-shifting provision under the California Public Records Act—see Beth v. Garamendi (1991) 232 Cal.App.3d 896, 901-902; Pacific Merchant Shipping Assn. v. Board of Pilot Comm’rs (2015) 242 Cal.App.4^th 1043, 1056.  The Reporters Committee for Freedom of the Press has a nice summary of public record act fee-shifting provisions among the various U.S. states in an Internet post found at www.rcfp.org/open-government-sections/a-attorney-fees.

            BLOG HAT TIP—Carter C. White, supervising attorney for the King Hall Civil Rights Clinic, U.C. Davis School of Law, provided us with notice of this decision and sent along wishes that he hoped everyone associated with this blog is well during the pandemic.  We can report that we are, hat tipping him and hoping he is doing well, too.

Celebrities, SLAPP: Where Denied SLAPP Motion Was Not Frivolous, Plaintiffs Successfully Defending Against Motion Were Not Entitled To Fees

Determination Of Frivolousness Of SLAPP Motion Is Within Discretion Of Trial Court, But 2/1 DCA’s Partial Reversal Of Trial Court’s Denial Was Further Evidence That SLAPP Motion Was Not Frivolous.

            In Oldman v. Bates, Case No. B296539 (2d Dist., Div. 1 March 27, 2020) (unpublished), Kurt Oldman and Dieter Hartmann were hired by Tyler Bates and Tyler Bates Music, Inc. to assist in composing music for the movie Guardians of the Galaxy Vol. 2.  Disputes arose after the project was complete.

            Oldman and Hartmann sued – alleging six causes of action stemming from their claims that Bates had falsely promised to list them on the cue sheet such that they would receive 15 percent of the writer’s share of royalties in perpetuity, and that they would receive “Additional Music By” credit on the film.

            Bates SLAPPed back – arguing that all acts undertaken in relation to the creation of the film are protected activities because films are expressive works subject to First Amendment protections, and that Oldman and Hartmann could not establish the required probability they would prevail on their claims.  When the trial court denied Bates’ SLAPP motion – determining the conduct at issue was related to contractual fulfillment, not free speech - Oldman and Hartmann moved for fees claiming the SLAPP motion was frivolous and without merit.  However, the trial court denied the fee request – finding the motion was not entirely frivolous or solely intended to cause unnecessary delay.  All parties appealed.

            As to the SLAPP motion, the 2/1 DCA partially reversed – finding Bates’ failure to acknowledge Oldman’s and Hartmann’s creative contributions through an “Additional Music By” credit to be protected activity as the dispute arose out of artistic disputes about the level of contribution to the film score, not out of a contractual dispute.  Additionally, the 2/1 DCA found that Oldman and Hartmann had failed to meet their burden of showing a probability they would prevail on the “Additional Music By” claims as their opposition to the SLAPP motion focused on the cue sheet and did not address their “Additional Music By” claims.

            Finally, as to the attorney fees, the 2/1 DCA affirmed.  Code Civ. Proc. § 425.16(c)(1) requires an award of fees and costs to a prevailing plaintiff if the SLAPP motion is frivolous or made for the purpose of causing unnecessary delay – a determination made within the trial court’s discretion.  The 2/1 DCA found no abuse of discretion – especially given they partially reversed the trial court’s denial of the SLAPP motion.

Celebrities, Employment, Taxation: 2017 Tax Amendments Do Not Allow Tax Reporter To “Expense” Attorney’s Fees Expended In A Sexual Harassment/Abuse Nondisclosure Settlement

“Weinsten Tax” Meant To Disincentivize Sexual Perpetrators/Harassing Employers From Trying To Prevent Reporting By Victims.

            As a response to some sexual harassers/abusers requiring use of confidentiality agreements to silence victims, Congress in December 2017 amended the Tax Code in what has been dubbed the “Weinstein tax.”

            Several bloggers indicate the repercussions of this.

            Section 162(q) of the Tax Cuts and Jobs Act of 2017 disallows the deduction of any sexual harassment or abuse settlement and attorney’s fees related to such a settlement or payment if “such a settlement or payment is subject to a nondisclosure agreement.”  Going further in that same section, attorney’s fees related to such a non-disclosure agreement are not deductible as a business expense by the harasser/abuser/employer after December 22, 2017.  This means that the Act applies after adjusted gross income is calculated. Before that calculation, this “penalty” provision removes from income any attorneys’ fees paid “in connection with any action involving a claim of unlawful discrimination.” Under the Act, plaintiffs are not taxed on the attorneys’ fees recovered from an unlawful-discrimination lawsuit, while defendants cannot include the settlement and fees as an itemized deduction.

            Recently, based on some ambiguous “under this chapter” language, the IRS clarified that “recipients of settlements or payments related to sexual harassment or sexual abuse, whose settlement or payment is subject to a nondisclosure agreement, are not precluded by section 162(a) from deducting attorney’s fees related to the settlement or payment, if otherwise deductible.”   This means that the tax liability rests with the employer (given these situations most frequently occur in an employment setting).

            California itself has passed new laws relating to nondisclosure agreements.  Under Code of Civil Procedure section 1001, a claimant cannot be silenced in California from disclosing factual information concerning actionable behavior, although the claimant can keep his/her identity confidential.  Pursuant to Government Code section 12964.5, it is an unlawful employment practice to require an employee to sign a nondisclosure agreement that denies a claimant the right to disclose information about actionable conduct. 

Celebrities: President Trump Receives $292,052.33 In Attorney’s Fees Under Texas Anti-SLAPP Statute For Defensing Stormy Daniels In Her Defamation Lawsuit

District Judge Reduced Fee Request By 25%.

            We can now report that the district judge in Stephanie Clifford v. Donald J. Trump, Case No. CV18-06893-SJO (FFMx) (C.D. Cal. Dec. 11, 2018 order) has finally decided what attorney’s fees are recoverable by President Trump’s attorneys in the defamation lawsuit brought by Stormy Daniels.   President Trump had earlier prevailed on an anti-SLAPP motion under Texas law against the suit, because the district judge found that his tweets were rhetorical hyperbole and protected First Amendment opinions. Texas, like California, has a mandatory SLAPP fee-shifting provision in favor of the SLAPP-ing defendant.

            President Trump had sought $389,403.11 in attorney’s fees. The district court did find that the Texas anti-SLAPP statute could encompass acts during the course of the entire litigation, given that they are related to work on the defamation claim. It did find that the claimed hourly rates of $307.60 for associates to $841.64 for partners were reasonable in nature.

            However, the district judge did reduce the fee request by 25%, bringing the fee award to $292,052.33. He did so for two major reasons: (1) the defense could have used more highly qualified associates rather than partners to do some work; and (2) excessive work on some tasks had to be discounted.

Celebrities, Prevailing Party: Plaintiff Model/Actor Winning $1.123 Million In Unauthorized Likeness Case Was Improperly Denied Prevailing Party Fees Under Civil Code Section 3344

Despite Plaintiff Not Winning Multi-Millions More Being Claimed, Appellate Court Believed He Should Get Prevailing Party Fees.

            Co-contributor Mike was a little surprised by this one, given how prevailing party determinations in mixed cases are usually governed by a deferential abuse of discretion standard. However, that often depends on the facts of the case, with the appellate court in Olive v. General Nutrition Centers, Inc., Case No. B279490 (2d Dist., Div. 4 Nov. 2, 2018) (published) giving plaintiff a nice win on appeal such that he was declared the prevailing party and entitled on remand to seek what we would think are significant attorney’s fees in this status.

            In an unauthorized likeness case by a plaintiff model/actor, where liability was conceded, damages was the contested item in this matter. Plaintiff won $1.123 million under Civil Code section 3344, which does have a prevailing party fee-shifting provision under subdivision (a). The trial judge determined no one prevailed because (1) plaintiff sought much, much larger profits and emotional distress damages (actually, $12 million to $36 million) but only received $1.123 million; (2) GNC recommended only damages of $4,800 in total; and (3) the jury did not accept either party’s recommendation. So, between $4,800 and $23.5 million, no one prevailed.

            The appellate court disagreed, remanding such that plaintiff can be awarded prevailing party fees in the discretion of the lower court. It reasoned that failure to obtain the “most lucrative portion of sought-after damages” was not a disqualifying factor, such that plaintiff did garner the “greater relief” compared to the paltry amount which defendant thought was offered. Big win for a plaintiff who now gets to seek, we would think, significant fees.

            BLOG OBSERVATION—We do not usually comment on the end result of a decision, but this one does not “smell” like an abuse of discretion. It appears that the appellate court compared the defense recommendation to what the plaintiff ultimately achieved, but this does not take into account the huge damages plaintiff really wanted as far as determining the true prevailing party calculus at the conclusion of the day. Just sayin’ ….., given we can comment once and a while on decisions.

Attorney’s Fees/Celebrities: Company Owned By Aspiring Presidential Candidate Ordered By Florida Judge To Pay $300K In Attorney’s Fees

An Attorney’s Fees Award Just In Time For Our Political Silly Season.

      Somehow we managed to miss this recent attorney’s fee award involving the business of a certain aspiring political candidate, reality show host, and real estate developer.   

      The Miami Herald reported on July 22, 2016, that a judge in a Miami Dade courtroom ordered nearly $300K be paid in attorney’s fees “over a lawsuit related to unpaid bills brought by a local paint store against the Trump National Doral Miami golf resort.” 

     We surmise from the newspaper report that Trump National Doral Miami played hardball, because the case involved a mere $34K in unpaid bills for paint that had been sold to it.  The Paint Spot had a lien against the resort property, and the judge had ordered foreclosure against the resort.   “All because, according to the lawsuit, Trump allegedly tried to stiff The Paint Spot on its last payment of $34,863 on a $200,000 contract for paint used in the renovation of the home of golf’s famed Blue Monster two years ago.” 

     The resort’s inability to out, out The Paint Spot reinforces a theme of our blog:  attorney’s fees often become the tail that wags the dog, as they come to overshadow the petty stakes involved in many a lawsuit.

     The Paint Store’s intrepid counsel must have had the matter on a contingency, because the judge “tacked on a 75 percent ‘risk’ fee, partly because the store’s lawyers took the risk that they would never be paid if they lost.”

       Hat Tip to Catherine Campbell, co-contributor Marc’s spouse, who brought the July 22, 2016 article in the Miami Herald to our attention.

In The News . . . . Warner/Chappell Music Seeks $613,000 In Attorney’s Fees From Losing Opponent In Led Zeppelin Copyright Infringement Case

 

Much Publicized Case Involved “Stairway To Heaven.”

    May 6, 1937.  The burning LZ 129 Hindenburg.  Library of Congress. 

     Warner/Chappell Music defeated a copyright infringement case by the trustee for the late writer of a song called “Taurus,” with the suit claiming that Led Zeppelin copied a small part of the song in their iconic song “Stairway to Heaven.”  Now, the defense is seeking $613,471 in fees (with additional costs bringing the total tally to almost $800,000) from the other side, claiming litigation misconduct by the losing plaintiff’s attorney.  This request is one of the larger ones which has cited in its discussion the U.S. Supreme Court’s recent decision in Kirtsaeng v. John Wiley & Son (discussed in our June 16, 2016 post), which clarified the factors to use in determining whether a fee award was justified because a case was “exceptional” within the meaning of the federal copyright fee-shifting statute.

Intellectual Property, POOF!, Celebrities: Ninth Circuit Affirms Summary Judgment In Favor Of Madonna, Producer Of The Song “Vogue,” And Others Based on De Minimis Copyright “Copying”

 

However, Attorney’s Fees Award For The Material Girl And Other Defendants Reversed Because Plaintiff’s Theory Was Not Objectively Unreasonable.

  Source:  Wikipedia, Article “Madonna.”  Author: Olavtenbroek.   Creative Commons Attribution-Share Alike 3.0 Unported license.

    Well, VMG Salsoul, LLC v. Madonna Ciccone, Nos. 13-57104/14-55837 (9th Cir. June 2, 2016) (published) does involve the “Material Girl” Madonna, the producer of her song “Vogue,” and others who were accused of copyright infringement in the form of using a .23-second horn segment from a previous song known as “Love Break.”  The district court granted summary judgment to the defendants based on the conclusion that the copying was de minimis such that it did not constitute copyright infringement based on treatise commentary and district court decisions—even though the Sixth Circuit had come to an opposite conclusion (namely, there is no such this as de minimis copying for infringement purposes).   The district court also awarded attorney’s fees to the defense under the copyright fee-shifting statute, 17 U.S.C. § 505.  [For purposes of section 505,  “[A]ttorney’s fees are to be awarded to prevailing parties only as a matter of the court’s discretion.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). “In deciding whether to award fees under the Copyright Act, the district court should consider, among other things: the degree of success obtained on the claim; frivolousness; motivation; objective reasonableness of factual and legal arguments; and need for compensation and deterrence.” Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 889 (9th Cir. 1996).]

    The Ninth Circuit, in a 2-1 opinion, affirmed the summary judgment, but all judges agreed the fee award had to be vacated.  Given that the Sixth Circuit was the only circuit court decision on the issue and that this circuit had endorsed plaintiff’s theory of infringement, the suit could not be held to be objectively unreasonable in nature—even if the Ninth Circuit departed from its sister appellate court’s conclusion.  So, the fee award went POOF! on appeal.

In The News . . . . Pharrell/Robin Thicke Might Not Owe Attorney’s Fees For Losing “Blurred Lines” Copyright Case And Fifth Circuit Court Of Appeals Issues Interesting Decision On Attorney’s Fees Recoupment By Counsel Representing

 

Pharrell and Thicke Tentative Fee Decision.

     On March 14, 2016, U.S. District Judge John A. Kronstadt (C.D. Cal.) orally announced a tentative decision that Pharrell Williams and Robin Thicke should not have to pay Marvin Gaye’s family $3.5 million in legal fees despite the fact they lost a copyright infringement case. The district judge was not persuaded the case was exceptional because the suit by Pharrell/Thicke seeking a noninfringement ruling was not filed or prosecuted in bad faith. This was just a tentative decision, with the motion being taken under submission for a ruling down the line.

Perishable Agricultural Commodities Act Fee Recovery By Special PACA Trust Counsel In Bankruptcy Case.

     We didn’t know this, but lawyers having specialization under the Perishable Agricultural Commodities Act (PACA), legislation with heightened protections in favor of sellers of perishable agricultural commodities vis-à-vis buyers, are called members of the “broccoli bar.”

Commons.  Attribution:  Fir0002/Flagstaffotos.Wikimedia

     The Fifth Circuit in In re Delta Produce, L.P., No. 14-51079 (5^th Cir. Mar. 11, 2016) issued an interesting decision about the priority of an attorney’s claim to seek fee recovery for successfully obtaining PACA trust fund moneys for sellers over the sums held in the trust for the benefit of sellers. Basically, moneys owed to perishable good sellers are conferred special trust status with bankruptcy superpriority over any other creditors of buyers (even banks with blanket liens). In a word, Delta Produce recognized that attorneys successfully pursuing claims against PACA trusts on behalf of sellers cannot claim fee recoupment from the trust, absent sellers’ consent, absent retention as a bankruptcy professional (which would mean they would look to the bankruptcy estate rather than the trust, but with some recovery probably assured as a priority administrative claim from the b.k. estate), or absent a contractual fee clause allowing for recovery from the trust in the sales clause between the underlying parties.

In The News . . . . Original Lead Singer of “The Village People” Gets Fees And Expenses For Prevailing In Copyright Suit

 

At Stake Were Rights In Songs, Including “YMCA.”

    This one will stir up memories for a lot of you readers around the age of co-contributors Marc and Mike, probably like us watching “The Village People” perform on Saturday Night Live.

    Victor Willis, the original lead singer of “The Village People,” prevailed in a copyright case by which he recovered partial rights to the disco group’s songs, including the unforgettable “YMCA.”  On September 16, 2015, U.S. District Judge Barry Ted Moskowitz (S.D. Cal.) awarded Mr. Willis $527,000 in fees and $3,000 in expenses, reasoning that he prevailed and had achieved a high degree of success in the case.

    Contrary to the opening line of “YMCA” which states “young man, there’s no need to feel down,” Mr. Willis cannot be feeling that down about his fee/expenses award recently granted by the district judge.

IN THE NEWS . . . . $1.9 Million In Fees Assessed Against Plaintiff In Unsuccessful Patent Infringement Case And Dov Charney Loses Effort To Obtain Advancement Of Defense Fees In His Standstill Proceeding Fight Against American Apparel

 

N.D. Cal. District Judge Orders Segan LLC To Pay $1.9 Million Under Octane Fitness/Highmark.

    Last week, N.D. Cal. District Judge Vince Chhabria ordered Segan LLC to pay $1.9 million in fees to Zynga, Inc. for Segan’s filing of a “totally unreasonable” patent infringement suit over character icons that can interact with websites.  He found the case was “exceptional” for purposes of fee-shifting under Octane Fitness/Highmark.

Delaware Chancellor Rules Dov Charney Not Entitled To Advancement Of Defense Fees In Standstill Proceeding Fight With American Apparel.

    Last Friday, in Charney v. American Apparel, Inc., C.A. No. 11098-CB (Memorandum Opn. filed 9/11/15, accessible on this link), Delaware Chancellor Bouchard nixed Dov Charney’s request for advancement of the defense fees he has incurred in a Standstill Proceeding dispute with American Apparel, Inc.  Among other things, Chancellor Bouchard determined that advancement was not required under American Apparel’s Indemnification Agreement because the Standstill Proceeding did not implicate any use or abuse of power by Mr. Charney as a fiduciary within the meaning of indemnification provisions.

News, Celebrities . . . . Plaintiff Losing Patent Infringement Suit Against Justin Timberlake And Britney Spears Get Socked With Octane Fitness Fees

 

$755,925.86 Is Total Fee/Costs Award Against Large Audience Display.

    As we have discussed in many posts, the U.S. Supreme Court decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014) has been a real game changer as far as increasing the case-by-case discretion conferred on district judges to determine if a case is exceptional for purposes of awarding fees against a losing patent infringement litigant.

    Recently, U.S. District Judge Manuel L. Real decided that Large Audience Display should reimburse Justin Timberlake and Britney Spears for attorney’s fees and costs in defending a patent infringement suit.  He found that the case was exceptional under Octane Fitness, with the final tally looking like this:  $733,414.34 in fees and $22,511.52 in costs, for a total of $755,925.86.

Intellectual Property, Celebrities: S.D.N.Y. District Judge Awards $667,849.14 In Attorney’s Fees Out Of $2.4 Million Request To Beastie Boys Based On Willful Copyright Infringement Win Against Monster Energy Company

 

 

No Basis For Fees Under Lanham Act “Exceptional Case” Fee Shifting, With Fee Reductions Made For Partner Heavy Staffing, Inefficiencies, Unsuccessful Work Effort, And The Fee-Shifting Policy Underlying Copyright Act.

 

     Beastie Boys sued Monster Energy Company for copyright and trademark (false endorsement) infringement against Monster Energy Company, the maker of the Monster energy drinks. BB won a $1.7 million jury verdict, after the jury found willful copyright and trademark infringement. BB then sought to recover a little shy of $2.4 million for its use of a “Cadillac” litigation team after voluntarily trimming $100,000 from the request.

     U.S. District Judge Paul A. Engelmayer, in Beastie Boys v. Monster Energy Company, 12 Civ. 6065 (PAE) (S.D.N.Y. Doc. 216, filed June 15, 2015), awarded BB $667,849.14 in fees under 17 U.S.C. § 505 (the copyright fee-shifting provision which allows a fee award consistent with the purposes underlying the Copyright Act).

     Under section 505, District Judge Engelmayer found that Monster’s overall conduct was not objectively unreasonable except for its failure to concede copyright infringement until the brink of trial—which drove up BB’s fees. He found the case to be close, but did credit the jury’s willful copyright infringement finding by observing that even recklessness could be a proper predicate for a fee award.

     The district judge determined, however, that the case was not an “exceptional” one to justify a fee award under 15 U.S.C. § 1117(a), the Lanham Act fee-shifting provision. Using the U.S. Supreme Court’s reasoning from the patent area in Octane Fitness, he determined that the defense positions were not unreasonable in nature.

     Although finding impressive lawyering on both sides, District Judge Engelmayer made a wholesale 30% reduction mainly for partner-heaving staffing, especially at the pre-trial stage—after all, BB’s “Cadillac” litigation firm billed 2.5 times as many partner hours as associate hours. He then reduced the request another 20% for time spent on unsuccessful work efforts. Then, consistent with the charge to award fees under section 505 as necessary to vindicate copyright rights, the district judge then sliced 50% from the remaining amount.

     Here are some poignant observations made in the fee award: “The court's review of Sheppard Mullin’s bills suggests that the Beastie Boys opted to pay for, and received, the Cadillac Escalade, not the Honda Civic.   It was the Beastie Boys’ prerogative to commission or approve such staffing. But the issue for this court is whether it is reasonable to shift the resulting fees to Monster. … Here, plaintiffs’ case could similarly have been pursued with leaner, less-partner-heavy staffing.”

First General Motors Car:  1908 Cadillac.  Library of Congress.

In The News . . . . Judge Orrick Grants SLAPP Fee Recovery To Steve Wynn Opponent, Lateral Partner Shifts, 2014 U.S. Top Law Firm Revenues Shows Gap With Smaller Firms, Law School Admissions Down, And Postgraduate Law Firm Debt Soars Based On 2012-2013 St

 

$390,149.63 In Fees/$32,231.23 In Costs Is SLAPP Recovery To Wynn Opponent.

     After defendant James Chanos won a SLAPP motion against well-known resort developer Steve Wynn/Wynn Resorts, he moved to recoup $538,043 in attorney’s fees and $52,656.23 in costs. U.S. District Judge William H. Orrick of the Northern District of California allowed $390,149.63 in fees and $32,231.23 in costs to Mr. Chanos. He did allow high hourly rates of $645 - $1,085 for associates – partners in the Bay area, but did reduce high paralegal requested rates, reduced overall fees by 25% for block billing, and reduced an expert’s fees 50% for lack of detail. (Wynn v. Chanos, Case No. 14-cv-04329-WHO (N.D. Cal. Dkt. No. 66, June 19, 2015 Order Granting In Part and Denying In Part Motion For Attorneys’ Fees.)

Lateral Partner Statistics For 2014 And Success Rate Opinion.

     According to The American Lawyer, over 2,700 AmLaw 200 law firm partners switched firms in 2014, representing between 4-5% of all partners on the AmLaw list. Adam S. Weiss of The Lateral Lawyer Group has opined that many, if not most, of lateral partner candidacies fail notwithstanding the lack of hard statistics on this topic.

Revenue Gaps Between U.S. Large and Smaller Law Firms Widen In 2014.

     According to data collected by Citi Private Bank’s Law Firm Group for 2014, a field of 15-20 U.S. firms law dominates the law market, with revenues rising close to 6.6% (due in large part to M&A and bankruptcy work). However, 2014 revenue only rose 4% for 170 other surveyed law firms.

2014 Law School Admissions At Lowest Level Since 1974, But Incentives Are Helping Some Law Schools.

     A 1/5/14 Wall Street Journal article reports that the roughly 38,000 students who entered the nation’s law schools in 2014 represented the smallest first-year class since 1974, when there were 53 fewer ABA-accredited schools. However, certain law schools have seen a surge in admissions after reducing tuition or are offering in-state grants to defray some of the tuition burdens.

Wanna Know Average 2013 U.S. Law School Tuition/Fees And 2012 Law School Debt? Here You Go.

     According to the ABA for 2014, the average tuition and fees for private law schools were $41,985, compared with $25,574 in 2003. For 2012 law school graduates, the average debt among borrowers was $84,600 attending public schools and $122,158 for those in private schools.

Prevailing Party/Section 998/Section 1717/Reasonableness Of Fees/Celebrities: $125,000 Fee Award To Landlord Under Section 1717 Affirmed, Rejecting Defense Challenges To 998 Rejection Arguments

 

However, “Prevailing” Landlord Did Not Garner 998 Postoffer Expert Fees or Get More Fees, In Case Implicitly Founded “Over Litigated” By Lower Court—With Landlord Trying To Get $365,000-$387,000 In Fees.

     If you have followed us over the years (we thank you for those that have, hoping we have provided some insights, or welcome you newcomers to the blog), we have stressed that litigation is frequently an activity for the well heeled, notwithstanding civil rights and consumer fee-shifting statutes to the contrary. Especially in civil cases involving litigants under a contract, the litigation costs can way outstrip the amounts at issue (or, even more precisely, the amounts eventually awarded) in a particular case.

     Slayton v. Ruscha, Case No. B251188 (2d Dist., Div. 1 Nov. 21, 2014) (unpublished) is a classic illustration of these principles, so enjoy--followers of our blog and newcomers.

     In this one, a landlord and long-term tenant under a commercial lease, artist Edward Ruscha, got involved in a litigation maelstrom. Landlord sued for premises damages/unpaid rent of $635,000, with tenant paying for $86,004 in unpaid rent but then counterclaiming for $30,000 in relation to a security deposit. Then, we got some 998 offers. Tenant offered to pay $100,000 to Landlord and dismiss the cross-complaint (total value $130,000), but Landlord rejected it because he had about $110,000 in pre-offer attorney’s fees. Landlord then sent his own 998 offer for $345,000 to resolve it all, an offer not accepted by Tenant.

     Speed ahead to trial. Landlord recovered $30,000 on his complaint and defeated Tenant’s $30,000 cross-complaint.

     Next up were dueling motions for recovery of attorney’s fees and costs—after all, what else was left? Landlord requested fees somewhere between $364,000-$387,000 based on our reading of the opinion, which does not reveal what Tenant requested.

     The trial court determined that Landlord, under a lease fees clause, was the prevailing party because he beat Tenant’s $100k 998 offer—he recovered $30,000, beat Tenant’s cross-complaint to the tune of $30,000, and had about $110,000 in pre-offer fees. However, the trial judge only awarded Landlord $125,000 in fees and $22,479 in costs, denying Landlord’s request for recovery of post-offer expert witness fees.

     Both sides appealed, although the whole megillah was affirmed on appeal.

     Under Civil Code section 1717, the prevailing party determination was a discretionary one based on the overall results in the matter, even though no one really shined. Landlord did beat Tenant’s $100k 998 offer based on the math calculated by the trial judge (described above)—so he could be determined to prevail on a discretionary call basis. However, Tenant made a creative argument that the $110k in pre-offer costs had to be reduced by two thirds (the reduction in the eventual 1717 award to the request of Landlord). Nope, said the 2/1 appellate panel, Landlord could never know what a trial judge might do later on such that the $110k in actual fees known to him at the time was the correct standard in gauging whether the 998 offer was beat or not.

     Landlord was properly denied post-offer expert fees, given that he recovered nowhere close to his $345,000 998 offer. Discretionary call by the trial judge, and one affirmed on appeal.

     As far as Landlord’s claim that the fee award was too low, the appellate court—although eloquently—gave short shrift to this argument, given that the lower court implicitly found the matter was “over litigated.”

     So, the fee wagon did drive this case and we are not sure the litigants were overjoyed with the “end results” on either side of the matter.

     BLOG BONUS:  Pacific Standard Time at the Getty interview with Ed Ruscha.

In The News . . . . New York District Judge Orders Figure Skater Oksana Baiul To Pay At Least $35,000 In Fees To NBC Affiliates For Bringing Frivolous Suit

 

     The Orange County Register’s “Celebrity Watch” reports that U.S. District Judge Katherine Forrest ordered figure skater Oksana Baiul to pay at least $35,000 in legal fees to NBC Universal Media and NBC Sports Network for bringing a frivolous suit last year. The district judge indicated Ms. Baiul made “wild claims” for tens of millions of dollars in lost profits after accidentally being mentioned in publicity about a show she did not skate in.

In The News . . . . Halle Berry Ordered To Pay $300,000 In Attorney’s Fees To Ex-Boyfriend Gabriel Aubry For Child Custody Dispute Expenses

 

     Recently, Oscar-winning actress Halle Berry, who probably did not feel very adored, was ordered by a Los Angeles family law judge to pay her ex-boyfriend Gabriel Aubry—pursuant to an agreement between the two sides--$300,000 in attorney’s fees to cover the costs of their child custody dispute. She also was ordered to pay Mr. Aubry $16,000 per month to support their daughter and to pay her daughter’s tuition, although the parties agreed to split health care expenses.

Celebrities/Prevailing Party/Special Fee Shifting Statute: Plaintiff’s Dismissal Of Complaint Without Prejudice Due to Defense Standing Challenge Triggers Fee Exposure Under Cal Right To Publicity Statute

 

“Reverse” Unity of Interest Argument Did Not Dictate Different Result.

     Civil Code section 3344.1, California’s right to publicity statute, does contain a mandatory fee-shifting clause in favor of the prevailing party, with attorney’s fees and costs being the carrot for such a party. The next case involves an interesting procedural situation in a case brought by a plaintiff licensing deals with respect to the publicity rights of deceased actress Bette Davis. So, without further ado, here we go.

     In CMB Brands LLC v. Stop Staring! Designs LLC, Case No. B234118 (2d Dist., Div. 7 Aug. 20, 2012) (unpublished), CMB--a company that negotiates licensing deals involving publicity rights of Ms. Davis--dismissed a first action without prejudice after defendant--a party selling dresses with code products incorporating the phrase “bdavis”--challenged CMG’s standing to sue in a summary judgment motion. CMG then filed a new action, but adding Ms. Davis’s estate and heirs as new plaintiffs. The new action was partially resolved when defendant accepted new plaintiffs’ offer to compromise, even though (and importantly) CMG was not a party to the compromise offer. The trial court then awarded defendant $118,518.75 in attorney’s fees and $2,325 in costs as the prevailing party in the first action, prompting an appeal by CMG.

     Fee/costs award affirmed, in a 3-0 panel decision of the Second District, Division 7.

     Although section 3344.1 has no express definition of “prevailing party,” case law has established a practical test should be utilized, focusing on which party realized its objectives in the litigation. (Gilbert v. National Enquirer, Inc., 55 Cal.App.4th 1273, 1277 (1997).) The lower court did not abuse its discretion in awarding fees/costs to defendant because the sequence of events showed that the defense had won its standing challenge even though the first action was dismissed without prejudice. Notwithstanding that CMG could refile a new action, defendant still prevailed under the previously dismissed complaint. (Cf. Coltrain v. Shewalter, 66 Cal.App.4th 94, 107 (1998) [voluntary dismissal of an action while a SLAPP motion pending means the defense ordinarily will be the prevailing party].)

     Plaintiff then tried to stretch the “unity of interest” principle applicable to routine costs awards to the pickle it was in, arguing that CMG actually was unified in interest with the new plaintiffs that succeeded in a settlement of the second action. The problem here is that this principle only operates under a statute that was repealed long ago and only applies to a multi-defendant situation involving routine costs, not a factual scenario involving multi-plaintiffs--and especially one plaintiff in the group not a party to the subsequent settlement which had lost in a prior action.

In The News . . . . Kim Kardashian’s Attorney In Kris Humphries Divorce Says Her Firm Already Has Spent $250,000 On The Case

 

Divorce “Boondoggle” Likely Will Not End Until Sometime in 2013.

     As reported today by Timothy Mangan in the “People” section of The Orange County Register, Kim Kardashian’s attorney told a judge in the Kris Humphries divorce action that her firm had already spent $250,000 on the case in the wake of Mr. Humphries’ attorneys wanting to interview Ms. Kardashian’s mother and current boyfriend Kanye West before setting a trial in the matter. The judge apparently expressed the belief that the well-publicized divorce case will likely last into 2013. Mr. Mangan ended his story this way: “And so it goes.”  Requiescat in pace, Kurt Vonnegut.

In the News/Celebrity Fees -- Halle Berry’s Baby Daddy Requests $500,000 In Attorney’s Fees

. . . And $20,000/Month In Child Support For Sharing Time With Daughter Nahla

     As reported by Nancy Dillon in a May 4, 2012 post in the NYDailyNews.com, Halle Berry’s baby daddy Gabriel Aubry requested a Los Angeles judge to award him $500,000 in attorney’s fees and $20,000 in monthly child support in proceedings involving their custody sharing of time with daughter Nahla. He claims needing this monthly child support amount in order to properly care for his daughter. Ms. Berry has asked permission to move Nahla to Paris with new fiance, French actor Olivier Martinez (once touted as the French “Brad Pitt”), inspired in part to avoid paparazzi stalking (with France supposedly having stronger laws against paparazzi interference). The fee/child support requests were postponed because Mr. Aubry did not have his papers in order, it was reported.

In The News . . . . What Has Lindsay Lohan Spent On Legal Fees In Last Few Years?

 

Only the Oracles May Know, But We Do Have a Reported Estimate!

     As reported in a February 2, 2012 post at Huffpost Celebrity, Lindsay Lohan--and who better to post on--has gotten a lot of publicity on numerous matters in the past few years. However, some of the matters have required both civil and criminal lawyers to handle them. No one knows the price tag, but attorney Vikki Ziegler has estimated her attorneys’ costs to be at least hundreds of thousands of dollars and likely over a million. Attorney Joey Jackson was quoted as saying a $250,000 base was involved. Zowie, Batman!

Celebrities/Special Fee Shifting Statute: Orthopedic Surgeon Did Prevail In Commercial Name Misappropriation Case So That $320,000 Fee Award Was Proper

 

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.

Family Law: Second District, Division Two Upholds Fee Award in Family Court Involving TV Costar of Two and a Half Men

 

Who “Won” is Irrelevant Here.

     Often, the Court’s retelling of the facts gives us more than an inkling of the ending.

     Here, the statement of facts begins:

”Jon and Sarah have both had acting careers, though their career paths diverged widely.  As a costar in the TV show Two and a Half Men, Jon’s career soared.  In contrast, Sarah’s career stalled; it appears her last acting job was in 2005.” 

     If after reading this poignant beginning, you guessed that the Court of Appeal would uphold the award of attorney’s fees in favor of Sarah, you guessed right. In re Marriage of Jon and Sarah Trigger Cryer, Case No. B222906 (Second District, Div. 2 August 29, 2011) (certified for publication).

     On appeal, the Court reviewed whether the family court abused its discretion by declining to order a more severe reduction of child support and whether it erred by denying a request for accounting or trust for child support funds (it did not).  Because the Court also found that the ordered attorney’s fees awards were proper, we post.

     The outcome regarding attorney’s fees was largely ordained by the standard of review:  “[a]n award of fees and costs in a dissolution or related family law proceeding is a matter left to the trial court’s sound discretion, and absent ‘a clear showing of abuse, its determination will not be disturbed on appeal.’” 

     Two points (well, maybe one) are worth comment. 

     First, Jon Cryer actually won a motion below – but the trial court awarded fees against him in that proceeding.  The Court of Appeal reminds us that, for some purposes,  “the issue of who ‘won’ the motion is irrelevant.  Although an order modifying a support order may include an award of attorney fees to the prevailing party (see section 3652), such an award is proper only if a section 2030 needs-based award is not warranted.”  Thus, for some purposes – to wit, whether a needs-based award is warranted – being the prevailing party is irrelevant.

     The second point, which may not be worth reporting on (but which caught our eye), is that Sarah Trigger Cryer argued that the child support obligation of $10,000 per month only constituted around 3 percent of her ex’s income at the time.  Jon also submitted an income and expense declaration listing average monthly income of $474,861, based on a three-year average cash flow, but Sarah claimed that Jon’s monthly income as of 2009 was actually $791,666.

     BLAWG BONUS:  Jon Cryer is a graduate of The Bronx High School of Science.

In The News . . . . Ahhrnold Does Not Want To Pay Maria’s Divorce Fees, San Bernardino Director Wins Fees In Discrimination Suit, and New Study Shows That Barely Half of Attorney’s Fees In Forest Service Cases Go To Environmental Groups

 

Schwarzenegger-Shriver Divorce Heats Up.

     In a July 21, 2011 post by Jill Stewart at laweekly.com, Arnold Schwarzenegger, in recently filed dissolution papers, has balked at paying any divorce attorney’s fees to Maria Shriver. His attorney indicated that both sides should pay for their own attorney’s fees in the pending dissolution action.

San Bernardino Public Employee Plaintiff Awarded Over $530,000 in Fees.

     Melissa Pinion-Whitt, in a July 22, 2011 article in San Bernardino/Inland Empire’s The Sun, reports that San Bernardino County Superior Court Judge Frank Gafkowski (who sits in Joshua Tree) awarded Edward C. Norton, San Bernardino City Unified School District’s maintenance and operations director, $535,129 in fees and costs after he won a harassment/retaliation lawsuit against the District and top administrator earlier this month.

Environmental Groups Do Not Get All Attorney’s Fees Awarded in Forest Service Cases.

     In a new study authored by M.J. Mortimer and R.W. Malmsheimer--which was published in the September 2011 issue of the Journal of Forestry--these researchers studied Equal Access to Justice Act (EAJA) fees paid by the Forest Service between 1999 and 2005. According to the study, the Service paid out $6,137,584 during that period, but only $3.2 million (52%) went to the prevailing environmental groups in the 14 cases, contrasted with commodity groups, law firms, attorneys, and individuals garnering about $1.4 million and with $1.5 million going to unlisted recipients.

     EAJA is a federal fee-shifting statute which allows citizens, nonprofits, and others to collect fees when they prevail in court cases and show the government’s position was not “substantially justified.” The income received by the environmental groups from the Forest Service was a tiny percentage of total revenues for the groups, debunking the myth that environmental groups get rich off of these cases. The authors of the study were also unable to conclude that the availability of EAJA fees caused more frequent filing of lawsuits of this ilk.

     More details on this study are available for reading at a July 22, 2011 release at the Center for Biological Diversity’s website, which we thank for the informative release.

In The News . . . . Mel Gibson Asked To Reimburse A Lot Of Oksana’s Fees And City Of Laguna Wood Hit With Substantial Fee/Expert Expense Award In Eminent Domain Case

Lawyers Requesting Over $1.5 Million More in Gibson Dissolution Proceeding.

     As reported in a January 27, 2011 post by the TMZ staff, Oksana Grigorieva’s lawyers are asking Los Angeles County Superior Court Judge Scott Gordon--the same judge who heard the McCourt case--to order Mel Gibson to pay substantial attorney’s fees on top of $500,000 in fees previously awarded so that Oksana can fight it out in court. Her current lawyers are asking for $1.2 million in fees for work performed since September 2010, another firm is asking for $250,000, a third lawyer wants $163,000 for one month’s work, and other lawyers/firms are requesting hundreds of thousands more. Judge Gordon has yet to rule on the latest requests.

City of Laguna Woods Ordered to Pay Raintree Realty $851,005.94 In Eminent Domain Lawsuit.

     Claire Webb, in a January 26, 2011 post in the on-line version of The Orange County Register, reports that a superior court judge on January 22 ordered the City of Laguna Woods to pay $851,005.94 in attorney’s fees and expert expenses to property owner Raintree Realty in eminent domain proceedings related to the acquisition of the City Hall Building after a jury verdict in Raintree’s favor. The superior court judge found Raintree’s final demand for compensation reasonable while the city’s final offer was adjudged to be unreasonable in nature. However, the judge disallowed $49,911 in travel expenses. In our category “Eminent Domain,” we have explored two recent cases discussing the comparative final demand approach factors used in granting/denying fee/litigation expense awards. See People ex rel. Dept. of Transportation v. Acosta, 178 Cal.App.4th 762 (2009) [discussed in our October 26, 2009 post]; Tracy Jt. Unified School Dist. v. Pombo, 189 Cal.App.4th 889 (2010) [discussed in our October 30, 2010 post]. Looks like City will appeal, which may well produce another decision in the eminent domain jurisprudential arena.

Celebrities/SLAPP: Pageant Is Seeking To “SLAPP” Beauty Queen’s Lawyer’s Lawsuit

Case Arises Out of Settlement Reached With Former Miss California USA Carrie Prejean.

     Seems like lots of controversy as well as lawsuits arise out of beauty queen pageants. Also seems like celebrity lawsuits result in a lot of SLAPP motions. The next “in the news” item is no exception.

     As reported by a January 17, 2011 post in The Beverly Hills Courier, a law firm defending the Miss California USA pageant has moved in Los Angeles County Superior Court to “SLAPP” a lawsuit brought by an attorney who represented Carrie Prejean, a Miss California USA stripped of her title putatively because she missed scheduled appearances and failed to repay a breast implant loan. The lawsuit basically alleges that Ms. Prejean’s attorney reduced his attorney’s fees in exchange for the pageant maintaining the secrecy of a settlement between the pageant and the beauty queen, where Ms. Prejean received nothing but her attorney received $110,000 in fees as part of the settlement. (Rumor has it that the case settled largely because the pageant officials had a sex tape of Ms. Prejean – see Larry King interview.)

     The hearing on the motion is scheduled for February 17, so we assume that there will be a follow-up post unless matter, too, is confidentially resolved.

Celebrities: Lucasfilm Tentatively Ordered To Pay Nearly $1.3 Million In Attorney’s Fees To Winning Lawyers In Pregnancy Discrimination Case

Plaintiff Had Won $113,830 In Compensatory Damages From a Jury Earlier.

     As reported by Gary Klien and Erin Sherbert in respective January 13, 2011 posts of the Marin Independent Journal and SF Weekly, Marin County Superior Court Judge Lynn O’Malley Taylor tentatively ruled on Thursday, January 13 that Lucasfilm Ltd. should pay nearly $1.3 million (out of a requested $1.5 million) in attorney’s fees to the lawyers who won a pregnancy discrimination suit against the company. Plaintiff won $113,830 in past economic losses after a lengthy jury trial. The fees apparently were awarded under California’s private attorney general statute, with Judge Taylor observing that plaintiff’s lawyers risked hundreds of hours on a difficult case. A Lucasfilm spokesperson said the company will appeal the jury verdict and the fee ruling if the tentative stands. One blogger noted that the lawyers gained fees that were ten times the amount of the compensatory award, which is frequently the case in civil rights cases.

In The News/Retainer Agreements: L.A. Superior Court Judge Allows Spector Challenge To Criminal Retainer Agreement To Proceed Before A Jury

 

Criminal Defense Attorney Robert Shapiro’s Summary Judgment Bid Rejected.

     As reported by Adam Popescu in a December 17, 2010 online post of the Beverly Hills Courier, noted criminal defense attorney Robert Shapiro’s firm had a retainer agreement to provide legal services to now imprisoned, music producer Phil Spector. Mr. Shapiro claims that the retainer was a nonrefundable $1 million arrangement, while Mr. Spector has sued claiming that he was taken advantage of and that the $1 million should be refunded to him. (It was reported that Mr. Shapiro has said that his firm put in the equivalent of $186,000 in hours on the Spector case.) Recently, Los Angeles County Superior Court Judge Malcolm Mackey denied Mr. Shapiro’s firm’s summary judgment motion bid, ruling that the case should go the jury because there were factual issues for it to resolve.

     BLAWG Bonus:  We note that Phil Spector’s birthday is just around the corner, as he was born on Christmas day.

In The News . . . . Speculation Swirls About Whether Frank McCourt Will Sue Bingham McCutchen For Malpractice, Seeking Recovery Of Fees Incurred In His Battle With Ex-Wife Jamie

 

The National Law Journal Article Elicits Views from Malpractice Experts.

     In a December 13, 2010 article by Amanda Bronstad on The National Law Journal website, some attorneys and at least one law professor opined on whether Frank McCourt has viable malpractice theories against Bingham McCutchen, his attorneys charged with drafting a 2004 marital settlement property agreement to memorialize that the Los Angeles Dodgers had been “transmuted” into his separate property rather than being community property shared with ex-wife Jamie McCourt.

     Earlier this year, Los Angeles County Superior Court Judge Scott Gordan invalidated the 2004 agreement relied on by Mr. McCourt.

     There are estimates that each side in the McCourt legal battle spent $10-20 million each. Some of the legal experts surveyed in the article expressed the opinion that the legal fees paid by Mr. McCourt--whether his own or any fees that he is ordered to pay to Jamie McCourt--would be a large recoverable component in any malpractice case.

     We will be keeping up on this one when and if it develops.

In The News . . . . Will Ferrell And Larry David Hit With $600,000 Adverse Fee Award In Lost Securities Arbitration

Two Claimants Also Held Liable for $22,500 in “Discovery Abuses.”

     Larry Hagman, who played the infamous J.R. on the T.V. show Dallas, sued Citigroup for securities trading claims, garnering an award of $1.1 million in compensatory damages and $10 million in punitive damages to be donated to charities of his choice.

     Other actors have not fared as well as Mr. Hagman when it comes to suing in this area.

     Recently, as reported in a November 18, 2010 post on forbes.com, visible funny man Will Ferrell and Curb Your Enthusiasm’s Larry David had securities claims against Bear Stearns/J.P. Morgan for unauthorized/unsuitable securities purchases dismissed in an arbitration by the Financial Industry Regulatory Authority. But there was a big ouch associated with the dismissal. Messrs. Ferrell and David had to reimburse J.P. Morgan for $600,000 of its attorney’s fees. Also, these two gentlemen also were found liable for $22,500 in “discovery abuses,” although we are unclear if this was assessed against them personally, their attorneys, or both.

     Looks like J.R., by far, did the best in prosecuting his claims for unauthorized securities trading.

In The News . . . . Chuck Yeager Hit With $275,596 In Attorney's Fees In Right Of Publicity Suit

Award is Mentioned in Recent California Lawyer Article.

     As reported by Matthew Heller in an article in the October 2010 edition of the California Lawyer, iconic test pilot Chuck Yeager has brought some right of publicity lawsuits, obtaining mixed results. However, Mr. Heller notes that retired Air Force Major General Yeager lost a suit against some memorabilia collectors, now owing them attorney's fees of $275,596 as a result of the loss. The judgment creditors apparently have filed a notice of lien in another case he has against AT&T which is steaming towards a projected trial later this year.

     The reason for the award, we surmise, is because California's right-of-publicity statute has a fee-shifting provision that mandates an award of fees to the prevailing party. (Civ. Code, § 3344(a).)

     Mr. Heller's article is aptly titled, "The Rights Stuff."