United States District Court, D. Idaho
MELALEUCA, INC., an Idaho corporation, and MELALEUCA CHINA WELLNESS PRODUCTS CO., LTD. a wholly-owned subsidiary of Melaleuca, Inc., Plaintiff,
KOT NAM SHAN, an individual, and SHAKLEE CORP., a Delaware corporation, Defendants.
MEMORANDUM DECISION AND ORDER
C. Nye, U.S. District Court Judge.
before the Court is Defendant Kot Nam Shan's
(“Kot”) Motion for Attorney Fees. Dkt. 78. Having
reviewed the record and briefs, the Court finds that the
facts and legal arguments are adequately presented.
Accordingly, in the interest of avoiding further delay, and
because the Court finds that the decisional process would not
be significantly aided by oral argument, the Court will
address the motion without oral argument. Dist. Idaho Loc.
Civ. R. 7.1(d)(2)(ii). For the reasons outlined below, the
Court finds good cause to DENY in PART and GRANT in PART
Kot's Motion for Attorney Fees.
factual background underlying this dispute is set forth in
the Court's previous Decision. Dkt. 74. The Court
incorporates that background in full by reference.
on February 26, 2018, Kot filed a Motion to Dismiss
Plaintiffs Melaleuca Inc. and Melaleuca (China) Wellness
Products Co., Ltd.'s (hereinafter referred to
collectively as “Melaleuca”) claims against him
on several grounds. Dkt. 47. The Court held oral argument on
this motion on March 23, 2018 and issued a Memorandum
Decision and Order on April 24, 2018. While it found that it
has personal jurisdiction over Kot concerning the 2010
Agreements, it ultimately dismissed all of Melaleuca's
claims against Kot on forum non conveniens grounds and
directed Melaleuca to refile those claims in China. Dkt. 74,
at 21. Kot then filed a Motion for Attorney Fees on May 8,
2018. Dkt. 78.
Court's subject matter jurisdiction is based on
diversity, Idaho state law applies. Clark v.
Podesta, No. 1:15-CV-00008-CWD, 2017 WL 4855845, at *2
(D. Idaho Oct. 26, 2017) (citing Chambers v. NASCO,
Inc., 501 U.S. 32, 34, (1991); Alyeska
Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S.
240, 260 n. 31 (1975)). Kot specifically requests attorney
fees under section 12-120(3) of the Idaho Code, which
provides as follows:
In any civil action to recover on an open account, account
stated, note, bill, negotiable instrument, guaranty, or
contract relating to the purchase or sale of goods, wares,
merchandise, or services and in any commercial transaction
unless otherwise provided by law, the prevailing party shall
be allowed a reasonable attorney's fee to be set by the
court, to be taxed and collected as costs.
Idaho Code section 12-120(3) “is a substantive law that
enlarges the rights of litigants in a commercial
transaction.” Boise Tower Assocs., LLC v.
Washington Capital Joint Master Trust Mortg. Income
Fund, No. 03-141-S-MHW, 2007 WL 4355815, at *2 (D. Idaho
Dec. 10, 2007). “[P]arties are not entitled to attorney
fees under an Idaho substantive statute that enlarges the
rights of litigants to a commercial dispute when the law
governing the contract denies litigants that right.”
Id. at *4.
China, litigation costs include court costs and party
expenses, but generally, attorney's fees are not included
in the latter. . . . Generally, in China, attorney's fees
are borne by the parties on their own accounts separately,
and neither party can get reimbursements from the
counterparty.” Xiao Jianguo and Tang Xin, Cost and
Fee Allocation in Civil Procedure: China National
Report, 4 Tsinghua China L. Rev. 43, 45 (2011). In an
earlier decision, the Court determined that “it will
apply Idaho law to the 2010 Agreements and Chinese law to the
2011 Agreements.” Dkt. 74, at 12. The Court also
determined that Chinese law would apply to Melaleuca's
claim of fraud in the inducement with regard to the 2011
Non-Competition Agreement. Consequently, Kot is not entitled
to fees-as related to litigation surrounding the 2011
Agreements-under Idaho Code section 12-120(3), because the
Chinese law governing the underlying contracts generally
denies such awards. Kot's Motion for Attorney Fees is
therefore DENIED in PART, as it relates to fees stemming from
litigation surrounding the 2011 Agreements.
leaves only Kot's request for attorney fees related to
the 2010 Agreements. While the Court has not reached the
merits of Melaleuca's claims regarding the 2010
Agreements, that does not automatically foreclose Kot's
request for fees. The Idaho Supreme Court has held that a
court may award attorney fees even when the case is dismissed
without prejudice and the court never reaches the merits of
the dispute. See Charney v. Charney, 356
P.3d 355, 360 (Idaho 2015). In Charney, the Idaho
Supreme Court stated:
[Defendant] argues that there was no final judgment,
apparently meaning that there was no decision on the merits.
In the Parkside Schools case, there was also no
decision on the merits. We still remanded the case so that
the defendant could request an award of attorney fees. . . .
Rule 54(a) . . . states: “A judgment shall state the
relief to which a party is entitled on one or more claims for
relief in the action. Such relief can include dismissal with
or without prejudice.” Thus, a judgment includes a
dismissal without prejudice. The rule also states, “A
judgment is final if either it has been certified as final
pursuant to subsection (b)(1) of this rule or judgment has
been entered on all claims for relief, except costs and fees,
asserted by or against all parties in the action.” A
dismissal of all claims for relief without prejudice would be
a final judgment. A final judgment in a civil action does not
require a decision on the merits; it would include a
dismissal of all claims for relief without prejudice.
Id. (discussing Parkside Sch., Inc. v. Bronco
Elite Arts & Ath., LLC, 177 P.3d 390 (Idaho ...