The Rocket Docket

Court Examines Attorney's Fees Award in Cybersquatting Case

In Flexible Benefits Council v. Feltman, 2009 WL 1351653 (E.D.Va. 2009), the Court granted Plaintiff's request for an award of statutory damages, attorney's fees, and costs based on Defendants' misconduct under 15 U.S.C. 1125(a)(the Lanham Act) and 15 U.S.C. 1125(d)(the Federal Anticybersquatting Consumer Protection Act). The Court awarded costs under 15 U.S.C. 1125(a)(3), attorney's fees under 15 U.S.C. 1117(a),and $20,000 in statutory damages under 15 U.S.C. 1125(d). The award of costs and attorney's fees was based on the fact that Defendants' conduct rose to the level of exceptional circumstances showing both willful and deliberate infringement and bad faith, and that such an award was within the Court's discretion given the circumstances.

Plaintiff The Flexible Benefits Council was incorporated in 1981 as "Employers Council on Flexible Compensation," a non-profit which promoted flexible benefits compensation programs through lobbying. Defendant Feltman was responsible for Plaintiff's management and operations between 1985 and July 2007. Feltman purposefully let Plaintiff’s corporate charter lapse in retaliation for Plaintiff’s allegations that Feltman had stolen millions from it. Feltman did not inform Plaintiff of this until March 31, 2008, after which Feltman and Defendant Hawk had formed a new company called "Employers Council on Flexible Compensation, Ltd.", applied to the United States Patent & Trademark Office for marks identical to those of Plaintiff, and set up a website at ecfc.com which was nearly identical to Plaintiff’s. Plaintiff filed for reinstatement on April 10, 2008 but was unable to reinstate under its former name and instead chose “The Flexible Benefits Council” although it kept its old website, “ecfc.org.” Plaintiff sued Defendants on a number of legal theories. Defendants admitted liability for trademark infringement and cybersquatting which left the Court to decide Plaintiff’s requests for two of the types of damages available: attorney’s fees and costs, and statutory damages.

15 U.S.C. 1117(a) provides for the possibility of an award of attorney’s fees to the prevailing party “in exceptional cases.” “An ‘exceptional case’ warranting attorney's fees is one that involves malicious, fraudulent, willful or deliberate conduct.” Flexible Benefits Council v. Feltman, 2009 WL 1351653, *3 (E.D.Va. 2009) (citing Scotch Whisky Ass'n v. Majestic Distilling Co., 958 F.2d 594, 599 (4th Cir.1991) cert. denied, 506 U.S. 862 (1992)). “Such conduct can occur during the infringement itself or during the course of litigation regarding the infringement.”  Id.at *4.

The Fourth Circuit has a slightly higher standard for attorney’s fees than other circuits and also requires bad faith on the defendant’s part for an award of attorney’s fees.  Id.  at *3. Once a determination of exceptional circumstances is made, the court then has discretion to determine “whether awarding attorney’s fees is warranted given the circumstance of the case.”  Id.  After thoroughly examining Defendants’ conduct both during the infringement and during the litigation, the Court found that this was an exceptional case in which Defendants’ demonstrated willful and deliberate misconduct and bad faith and that in the Court’s discretion, the circumstances of the case weighed in favor of an award of attorney’s fees.

Rocket Docket Refuses to Adopt “Compelled Self-publication” as Sufficient to Satisfy Publication Element of Defamation Claim

In Wynn v. Wachovia Bank, N.A., 2009 WL 1255464 (E.D. Va. 2009), the United States District Court for the Eastern District of Virginia was faced with a case in which a Wachovia Bank employee (who was also a Wachovia customer) was terminated based on allegations of issuing an invalid check on her Wachovia personal checking account, abandoning her employment at Wachovia when the invalid check was brought to her attention, and using unauthorized paid time off (PTO).  Plaintiff, Ms. Kimberly W. Wynn, denied the allegations, instead alleging she knew nothing about the invalid check and only took PTO at the direction of her supervisor while the matter involving the invalid check was resolved.  According to Plaintiff, while she was awaiting Wachovia’s resolution of the invalid check, she was terminated.

Online Tool Can Assist Attorneys in Determining Reach of Federal Subpoenas

Fed. R. Civ. 45(b)(2) provides that a federal subpoena "may be served at any place:  (A) within the district of the issuing court; (B) outside that district but within 100 miles of the place specified for the deposition, hearing, trial, production, or inspection; (C) within the state of the issuing court if a state statute or court rule allows service at that place of a subpoena issued by a state court of general jurisdiction sitting in the place specified for the deposition, hearing, trial, production, or inspection; or (D) that the court authorizes on motion and for good cause, if a federal statute so provides."  Now, there is an online tool that can assist attorneys in determining the reach of a federal subpoena. 

Costs of “Metadata Extraction” and Electronic Processing of Documents Not Awardable Taxable Expenses

In Fells v. Virginia Dep’t of Trans., 2009 WL 866178 (E.D. Va. 2009), Plaintiff Frankie Fells, Sr., sued his former employer, defendant Virginia Department of Transportation, claiming unlawful discrimination against him on the basis of race, in violation of 42 U.S.C. § 2000e, et seq. On October 28, 2008, the Rocket Docket issued a memorandum final order granting defendant's motion for summary judgment, based on the applicable statute of limitations. The Court denied plaintiff's motion for reconsideration. 

On November 4, 2008, defendant submitted a bill of costs, to which plaintiff objected on November 18, 2008. Defendant responded to the objection on November 25, 2008. On February 11, 2009, the Clerk issued a notice of taxing costs, and on February 23, 2009, the Clerk taxed costs in the amount of $1,739.60 against plaintiff. This amount included costs for depositions and copies of medical records, which were not contested.  Defendant then filed a Motion for Costs asking the Court to review the Clerk's denial of costs in the amount of $15,741.50, which defendant paid for processing electronic data. Specifically, defendant paid this amount to a contractor for “electronic records initial processing, Metadata extraction, [and] file conversion.”  These efforts were the first steps to creating a database that would facilitate discovery, but defendant abandoned the project after plaintiff did not provide terms to limit the scope of the data. Defendant sought to recover those initial electronic processing costs by claiming that they were taxable expenses under 28 U.S.C. § 1920(4), specifically comparing such costs to the expressly recoverable costs of copying and exemplification of records.

A Corporate Officer may be Held Liable as an “Employer” under the Fair Labor Standards Act

In Zegarra v. Marco Polo, Inc., 2009 WL 143428 (E.D. Va. 2009), Plaintiff Vivian Zegarra (“Plaintiff”) filed suit against Defendants for minimum wage and overtime hours violations of the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 201 et seq.  More specifically, Defendants, based in the Northern Virginia area, employed Plaintiff from late March 2007 until late May 2008. During the time period relevant to the Complaint, Mr. Pestana owned, and served as the principal officer of, MP and MP Caterers (collectively, the “Corporate Defendants”). He exercised significant control over the day-to-day operations at the Corporate Defendants, including the power to hire, fire, and set wages and compensation for employees. Plaintiff's Complaint contained two counts: Count I, for violation of FLSA minimum wage and overtime requirements, against Defendants, and Count II, for breach of contract, against the Corporate Defendants. Under the FLSA, Plaintiff sought to recover unpaid compensation, liquidated damages, interest, and attorney's fees and expenses. Under her breach of contract claim, pled in the alternative, Plaintiff asked for damages in the amount of unpaid compensation.  Defendants moved to dismiss the claims against defendants MP Catering and Pestana.