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Nelson-Ricks Cheese Co., Inc. v. Lakeview Cheese Co., LLC

United States District Court, D. Idaho

November 27, 2018

NELSON-RICKS CHEESE COMPANY, INC., an Idaho corporation, Plaintiff,
v.
LAKEVIEW CHEESE COMPANY, LLC, a Nevada limited liability company, Defendant.

          MEMORANDUM DECISION AND ORDER

          David C. Nye, U.S. District Court Judge

         I. INTRODUCTION

         Pending before the Court is Defendant Lakeview Cheese Company LLC's (“Lakeview”) Motion for Attorney's Fees Pursuant to Award of Judgment. Dkt. 96. 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 decide the Motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons set forth below, the Court finds good cause to GRANT the Motion.

         II. BACKGROUND

         On January 31, 2018, Lakeview filed a Motion for Summary Judgment on Nelson-Ricks Cheese Company, LLC's (“NRCC”) claims of trademark infringement. On July 12, 2018, the Court issued a Decision granting Lakeview's Motion. Dkt. 94. The same day, the Court entered Judgment in favor of Lakeview. Dkt. 95.

         In its Decision, the Court found that Lakeview's unintentional use of NRCC's word mark “Nelson-Ricks Creamery Company” (“the Mark”) located on an unlinked and inaccessible webpage did not constitute trademark infringement.

         In making this determination, the Court noted that while it was true that the Mark appeared on Lakeview's webpage (and as was later discovered, in a picture on a packing sheet) it was not used in commerce, did not cause any confusion in the marketplace, and did not result in any damages. Simply put, NRCC did not meet any of the required elements to establish a valid trademark claim.

         Following the Court's decision and judgment in favor of Lakeview, Lakeview moved for its attorney fees in defending this action. Dkt. 96. NRCC opposes Lakeview's Motion.

         III. LEGAL STANDARD

         Federal Rule of Civil Procedure 54 governs the award of attorneys' fees and provides as follows:

(A) Claim to Be by Motion. A claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages.
(B) Timing and Contents of the Motion. Unless a statute or a court order provides otherwise, the motion must:
(i) be filed no later than 14 days after the entry of judgment;
(ii) specify the judgment and the statute, rule, or other grounds entitling the movant to the award;
(iii) state the amount sought or provide a fair estimate of it; and
(iv) disclose, if the court so orders, the terms of any agreement about fees for the services for which the claim is made.

Fed. R. Civ. P. 54(d)(2). After determining that a basis exists for a proper award of attorney fees, the Court must calculate a reasonable fee award. Hensley v. Eckerhart, 461 U.S. 424, (1983). Generally, the Court utilizes the “lodestar figure, ” which multiplies the number of hours reasonably expended on the litigation by a reasonable hourly rate. Id. The Court can then adjust the lodestar figure if necessary, based upon the factors set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir.1975), that have not been subsumed in the lodestar calculation. See Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 982 (9th Cir. 2008).

         IV. ANALYSIS

         In this case, Lakeview asserts that the Court can properly award attorney's fees under the Lanham Act and Idaho Code § 12-121. Although the framework and analysis are similar under both provisions, the Court will address each in turn.

         A. Lanham Act

         Under the Lanham Act, the Court may “in exceptional cases . . . award reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a).

         The United States Supreme Court has defined an “exceptional case” worthy of attorney fees as follows:

[A]n “exceptional” case is simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances. As in the comparable context of the Copyright Act, “‘[t]here is no precise rule or formula for making these determinations,' but instead equitable discretion should be exercised ‘in light of the considerations we have identified.'”

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554, (2014) (internal citations omitted) (emphasis added).

         First, there can be little doubt that this case stands out with respect to NRCC's legal position. While it is true that the Mark appeared on a website[1] connected with Lakeview-a company that no longer had a right to use the Mark-the history of what lead to this lawsuit is extremely relevant.

         Prior to 2012, Nelson-Ricks Creamery Company (“Creamery”), a now defunct business entity, owned facilities in Salt Lake City, Utah, and Rexburg, Idaho. Creamery also owned certain intellectual property including both the “Banquet” and “Nelson Ricks Creamery” brand names of cheese. In 2012, Lakeview purchased both the Salt Lake City facility and the Banquet brand from Creamery. The sale included the transfer of Creamery's www.banquetcheese.com website to Lakeview. Importantly, the sale also included a limited license allowing Lakeview to make use of the Nelson ...


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