                                                                                                                           Opinions of the United
2002 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-19-2002

SNA Inc v. Karlsen
Precedential or Non-Precedential: Non-Precedential

Docket No. 01-4313




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Recommended Citation
"SNA Inc v. Karlsen" (2002). 2002 Decisions. Paper 518.
http://digitalcommons.law.villanova.edu/thirdcircuit_2002/518


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                                                 NOT PRECEDENTIAL

                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT
                           __________

                          No. 01-4313
                           __________

                       RICHARD F. SILVA;
                            SNA INC.

                               v.

                        DOUGLAS KARLSEN
                    t/a TURBINE DESIGN INC.
                     a/k/a DOUGLAS JAWORSKI

                   (E. D. Civil No. 97-cv-03793)

                           SNA, INC.;
                   SILVA ENTERPRISES LIMITED

                               v.

                 PAUL ARRAY; HORIZON UNLIMITED

                  (E. D. Civil No. 97-cv-07158)

               Douglas Karlsen, Turbine Design, Inc.,
               Paul Array and Horizon Unlimited, Inc.,
                                               Appellants
                           __________

        ON APPEAL FROM THE UNITED STATES DISTRICT COURT
            FOR THE EASTERN DISTRICT OF PENNSYLVANIA
          D.C. Civil Nos. 97-cv-03793 and 97-cv-07158
           District Judge: The Honorable Marvin Katz
                           __________

                      Argued July 23, 2002
                           __________

      Before: SLOVITER, NYGAARD, and BARRY, Circuit Judges

                (Opinion Filed: August 19, 2002)
                          ____________


Martin A. Pedata, Esquire (Argued)
1335 Saratoga Street
DeLand, Fl 32724

Attorney for Appellants


Kenneth J. Benton, Esquire (Argued)
Terry E. Silva, Esquire
Silva & Associates
1429 Walnut Street, Suite 900
Philadelphia, PA 19102

Attorneys for Appellees
                          ____________

                            OPINION
                          ____________


BARRY, Circuit Judge
     Defendants Douglas Karlsen, Paul Array, and the companies they operate (Turbine
Design, Inc., and Horizon Unlimited, respectively), appeal the District Court’s award of
attorneys fees and related costs to plaintiffs Richard Silva and the companies he operates,
SNA, Inc., and Silva Enterprises, Ltd. The District Court had jurisdiction under 15
U.S.C. 1117 ("Lanham Act"), which permits a district court to award attorneys fees in
trademark infringement cases. We have jurisdiction under 28 U.S.C. 1291 and will
affirm.

                                I.
     The facts underlying this contentious litigation are well known to the parties, and
will only be reviewed here as is relevant to the particular issue raised. Plaintiffs filed
their complaint in 1997, alleging breach of contractual obligations, defamation, civil
conspiracy, and trademark, trade dress, and trade secret infringement. In 1999, the
District Court ruled on plaintiffs’ motion for a preliminary injunction, largely denying the
requested relief but enjoining defendants Horizon Unlimited and Array from using a
particular web site domain name that infringed upon plaintiffs’ trademark. After a bench
trial, the District Court made the injunction permanent, ruling in favor of plaintiffs on
some of their claims, including contractual breach, civil conspiracy, and some trademark
infringement, and granting compensatory and punitive damages on the civil conspiracy
claim. See SNA, Inc. v. Array, 51 F. Supp. 2d 554 (E.D. Pa. 1999) ("Array I"). We
affirmed the District Court’s judgment on the merits, directing plaintiffs to renew their
fee application before the District Court. SNA, Inc. v. Karlsen, 259 F.3d 717 (3d Cir.
2001) (tbl.) ("Karlsen")
     Plaintiffs initially moved for attorneys fees under the Lanham Act on June 23,
1999. On July 6, 1999, the District Court dismissed the motion "without prejudice to
renew with sufficient information for the court to determine the reasonableness of the
fees, specifically the time spent on unsuccessful claims that are distinct from successful
claims and documentation of the time spent." Plaintiffs renewed their motion on July 21,
1999, but on September 7, 1999, the District Court again dismissed the motion without
prejudice to renew following the determination of the merits appeal to this Court. That
dismissal also required further identification of "legal fees actually paid by plaintiffs to
the attorney . . . ." A third motion for fees was filed on June 30, 2000, but was again
dismissed without prejudice, as it apparently did not satisfactorily comply with the
District Court’s September 7 order.
     Plaintiffs’ fourth motion, filed on August 31, 2001, was granted by the District
Court on November 5, 2001. The District Court awarded $213,341.50 in attorneys fees
and $81,792.39 in costs, including costs for travel to and from depositions and for
transcripts. Defendants timely appealed.

                               II.
     Defendants’ first argument concerns the timeliness of plaintiffs’ fourth motion for
attorneys fees, the one that was ultimately successful. They suggest that because that
fourth motion was filed more than ten days after final judgment on the merits, more than
ten days after the Court denied the initial motion for fees, and more than ten days from
the date on which the last order denying attorneys fees was entered, it was untimely under
both Fed. R. Civ. Proc. 59(e) and Local Rule 7.1(g) of the Eastern District of
Pennsylvania. We disagree.
     It is utterly specious to suggest, as defendants apparently suggest, that a motion
dismissed without prejudice must nevertheless then be refiled within the initial relevant
time period. Moreover, we reject, at least in the circumstances of this case where the
judgment on the merits did not deal with fees, that the motion for fees was one to alter the
judgment and, thus, subject to the ten day rule. In any event, we affirmed that judgment
and directed that the fees thereafter be addressed by the District Court. We saw no
jurisdictional impediment then, and see none now. And, as a matter of common sense, we
will not require a district court to finally resolve a motion denied without prejudice, even
if that motion is inadequately supported, only to be told that when the appropriate support
is submitted, it comes "too late."

                               III.
     Next, defendants argue that attorneys fees are not permitted because plaintiffs did
not suffer monetary damages as a result of defendants’ Lanham Act violations. This
Court has not, however, required a showing of money damages before attorneys fees may
be awarded. In Ferrero U.S.A. v. Ozak Trading, Inc., 952 F.2d 44, 49-50 (3d Cir. 1991),
a case invoked by defendants, we reversed an award of attorneys fees where the District
Court had neglected to explain its finding that the case was "exceptional" under 1117.
We recognized that some courts considered the absence of damages "relevant" to the fee
award determination, and that it might indeed "bear[] on the appropriateness of the
attorneys’ fees award." 952 F.2d at 47, 49. Nevertheless, because, unlike here, the
"liability issue was a close one" and because there, unlike here, there was "no evidence
demonstrating bad faith on the part of [defendant] so as to make this case exceptional,"
id. at 49, attorneys fees were not warranted.
     The District Court, in awarding fees, relied on our recent decision in Securacomm
Consulting, Inc. v. Securacomm Inc., 224 F.2d 273 (3d Cir. 2000). Although we did not
there explicitly address whether damages are required before fees can be awarded, we
affirmed the fee award even absent an award of damages. Further, we noted that an
award of attorneys fees is an equitable matter, and that we look to all the circumstances of
the case in determining whether such fees should be granted. Id. at 281. We specified
that the "culpable conduct" that might ground a fee award "may be broader than willful
infringement"; indeed, no "successful plaintiff whose claim is based on another form of
infringement will necessarily be precluded from receiving attorney’s fees." Id. at 280.
Accordingly, the absence of damages is not fatal to a claim of attorneys fees and the
District Court did not err in awarding fees here.

                               IV.
     Finally, defendants argue that the motion for fees did not comply with this Court’s
requirements as set out in Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator
and Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) ("Lindy I") and Lindy Bros.
Builders, Inc. of Philadelphia v. American Radiator and Standard Sanitary Corp., 540
F.2d 102 (3d Cir. 1976) ("Lindy II"). They argue, as well, that the fee award was
excessive.
     These arguments are unavailing. First, assuming the applicability in whole or in
part of the Lindy cases, a district court is required to determine a reasonable hourly fee
and a reasonable number of hours worked by the attorney. The District Court here
explained specifically how it did so. Moreover, under Hensley v. Eckerhart, 461 U.S. 424
(1983), a fee award for unsuccessfully litigated claims may be inappropriate. Here, the
District Court discounted the award by one-third, based on its finding not only that legal
services for unsuccessful claims should not be awarded, but also that services for
successful claims on issues for which fees are generally not awarded (i.e., civil conspiracy
and defamation) should be excluded as well. Indeed, the District Court’s order denying
the first motion for fees specifically requested that briefing distinguish between
successful and unsuccessful claims. The District Court also excluded hours where it was
unclear how much time the primary attorney had in fact expended relative to her
associates. And, to the extent that defendants argue that certain items were but should not
have been considered and that the District Court did not sufficiently distinguish among
the defendants vis-a-vis fees, we reject that argument. While certainly the District Court
could have been more explicit, we are confident, given the District Court’s lengthy
experience with and intimate knowledge of this litigation, that its conclusion as to the
appropriate amount of fees to be awarded was not an abuse of discretion.

                                V.
     For the foregoing reasons, the District Court’s order of November 5, 2001 will be
affirmed.

TO THE CLERK OF THE COURT:
     Kindly file the foregoing Opinion.
                              /s/ Maryanne Trump Barry________________
                              Circuit Judge
