Opinion
Case No.: 3:15-cv-01879-BEN-BLM
12-21-2018
FLOWRIDER SURF, LTD., a Canadian corporation, and SURF WAVES, LTD., a company incorporated in the United Kingdom, Plaintiffs, v. PACIFIC SURF DESIGNS, INC., Defendant.
ORDER:
1) DENYING DEFENDANT'S MOTION FOR ATTORNEYS FEES WITHOUT PREJUDICE; and
2) DENYING AS MOOT PLAINTIFF'S EX PARTE APPLICATION FOR ORDER DENYING DEFENDANTS MOTION FOR ATTORNEYS FEES.
[Doc. Nos. 246, 248]
Presently before the Court is Defendant Pacific Surf Designs, Inc. ("PSD" or "Defendant") Motion for Attorneys' Fees (Doc. No. 246) and Plaintiff's Ex Parte Application for Order Denying Defendant's Motion for Attorney's Fees and Bill of Costs without Prejudice (Doc. No. 248). Defendant's Motion requests an award of $1,696,975 total in fees and expenses. (Doc. No. 246 at 25.) Plaintiff's ex parte Application for Order requests the Court deny Defendant's Motion for Attorney's Fees and Bill of Costs, or alternatively, stay ruling on the Motion pending the Federal Circuit's ruling on Plaintiff's appeal. The Court finds the matter suitable for decision without oral argument pursuant to Civil Local Rule 7.1(d)(1).
Plaintiffs FlowRider Surf, Ltd. ("FlowRider") and Surf Waves, Ltd. ("Surf Waves"), wholly owned subsidiaries of Whitewater West Industries, Ltd. ("Whitewater") (collectively, "Plaintiffs"), are in the water-park rides industry. FlowRider is the exclusive global licensee of U.S. Patent No. 6.491,589 (the "'589 Patent") entitled, "Mobile Water Ride Having Sluice Slide-Over Cover." (Doc. No. 1, Compl. ¶ 9.) Surf Waves owns U.S. Patent No. 8,088,016 (the "'016 Patent") entitled, "Half-Pipe Water Ride." (Id. ¶ 12.) PSD competes with Plaintiffs in the water-park rides industry.
On August 24, 2015, Plaintiffs commenced this patent infringement action alleging PSD willfully infringed the '589 and '016 Patents. (Id.) This Court dismissed the '589 Patent on May 25, 2017 for lack of subject matter jurisdiction. (Doc. No. 222.) On January 17, 2018, after inter partes review of the '016 Patent, the Patent Trial and Appeal Board ("PTAB") issued its Final Written Decision pursuant to 35 U.S.C. § 318(a) and 38 C.F.R. § 42.73. (Doc. No. 230-1, Ex. A.) In the decision, the PTAB found all the "asserted" claims (1-5 and 7-20) to be unpatentable. As a result of the PTAB's decision, the '016 Patent is essentially unenforceable in this proceeding. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143 (2016) ("[A] decision to cancel a patent [in an IPR] normally has the same effect as a district court's determination of a patent's invalidity.)
Claim 6 of the '016 Patent was not sought as an Asserted Claim. (See Doc. No. 214-1 at 2-3.)
On May 7, 2018, based on the decision of the PTAB finding Plaintiff's patent unenforceable, this Court entered judgment for the Defendant. Plaintiff, on May 16, 2018, filed a Notice of Appeal to the Federal Circuit. (Doc. No. 241.)
Plaintiff seeks appellate review of this Courts May 8, 2018 judgment and May 26, 2017 Order granting PSD's Motion to Dismiss U.S. Patent 6,491,589. (Doc. Nos. 240, 222.) --------
On May 22, 2018, PSD filed its Motion for attorney's fees and expert expenses. (See Doc. No. 246.) PSD asks this Court to award it attorneys' fees in the amount of $1,675,000 and expert expenses of $21,975. (Doc. No. 246 at 2.) Plaintiff filed a Response in opposition on June 11, 2018. (Doc. No. 255.) PSD filed a redacted Reply in support on June 18, 2018 and an unredacted Reply in support on July 11, 2018. (Doc. Nos. 265, 269.)
Plaintiff also filed an ex parte Application for Order denying PSD's Motion for Attorney's Fees and Bill of Cost's without prejudice or alternatively, stay the proceedings pending decision of Plaintiff's appeal to the Federal Circuit. (Doc. No. 248.) PSD filed a Response in opposition on May 31, 2018. (Doc. No. 249.) Plaintiff filed a Reply in opposition to Defendant's Bill of Costs on June 7, 2018. (Doc. No. 250.)
Plaintiff argues that the Motion should be denied without prejudice or, alternatively, deferred via stay because Plaintiff has appealed the judgment and order to the Federal Circuit. (Doc. No. 255, at 8-25.)
When an appeal on the merits is filed, a district court has discretion to rule on a claim for fees, defer its ruling on the motion, or deny the motion without prejudice and direct a new filing period for filing after the claim has been resolved. See Fed. R. Civ. P. 54(d), advisory committee's note (1993 amendments). In some circumstances, it can be beneficial to address a motion for attorneys' fees shortly after the resolution of the action. As the Advisory Committee noted with respect to the 1993 amendments to Federal Rule of Civil Procedure 54(d):
Prompt filing affords an opportunity for the court to resolve fee disputes shortly after trial, while the services performed are freshly in mind. It also enables the court in appropriate circumstances to make its ruling on a fee request in time for any appellate review of a dispute over fees to proceed at the same time as review on the merits of the case.
However, "[p]articularly if the claim for fees involves substantial issues or is likely to be affected by the appellate decision, the district court may prefer to defer consideration of the claim for fees until after the appeal is resolved." Fed. R. Civ. P. 58, advisory committee's note (1993 amendments). District courts have exercised their discretion to defer ruling on a motion for attorneys' fees, or to deny the motion without prejudice to being renewed following disposition of the appeal. e.g., Harrell v. George, No. 11-cv-253, 2012 WL 5906659, at *1-2 (E.D. Cal. Nov. 26, 2012); Century 21 Real Estate LLC v. Century Surety Co., No. CIV 03-53, 2007 WL 625916, at *1 (D. Ariz. Feb. 26, 2007) (citing CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) ("A district court has inherent power to control the disposition of the causes on its docket in a manner which will promote economy of time and effort for itself, for counsel, and for litigants. The exertion of this power calls for the exercise of a sound discretion.")).
Moreover, the district court also has discretionary power to stay proceedings, sua sponte, in its own court as well. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); Crown Cent. Petroleum Corp. v. Dep't of Energy, 102 F.R.D. 95, 98 (D. Md. 1984) ("A federal court has inherent power to stay, sua sponte, an action before it." (citing Landis, 299 U.S. at 254-55)); Rice v. Astrue, C/A No. 4:06-cv-02770-GRA, 2010 WL 3607474, at *2 (D.S.C. Sept. 9, 2010) ("Court possesses the authority to hold a motion in abeyance if resolution of a pending matter will help clarify the current issues or make currently disputed issues moot."). The power to stay is "incidental to the power inherent in every court to control the disposition of the causes of action on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis, 299 U.S. at 254; Air Line Pilots Ass'n v. Miller, 523 U.S. 866, 879 N.6 (1998); Leyva v. Certified Grocers of Cal., Ltd. 593 F.2d 857, 863-64 (9th Cir. 1979) (finding a court may proceed in a manner that is "efficient for its own docket and the fairest course for the parties ..."). In exercising this judgment, the court must "rest on considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). In doing so, the Court must weigh competing interests and maintain an even balance. Id.
In the present case, Plaintiff argues that "given the nature of the appeal and the basis for PSD's Motion, it is apparent that the appellate court's decision could have an impact on this Court's determination of whether this is an 'exceptional' case," as well as this Court's prior Order for dismissal and judgment. (See Doc. No. 255.) While PSD does not contest that this Court has the discretion to stay or dismiss the Motion, it argues that the record clearly reflects Plaintiffs' bad conduct and demonstrates their counsel's actions exceeded the bounds of "zealous advocacy" thereby warranting the imposition of sanctions. Denying PSD's Motion or staying the proceedings until after the Federal Circuit decides the appeal only delays the inevitable and allows Plaintiffs to continue to perpetrate the aforementioned actions causing harm to PSD. (See Doc. No. 269.)
Upon full consideration of the briefs, this Court DENIES WITHOUT PREJUDICE the Motion for Attorneys' Fees, but grants PSD leave to renew its motion following the disposition of this matter on appeal. PSD's Motion contends that PSD is entitled to fees and expenses based on Plaintiff's pursuit of bad faith litigation tactics that are plainly exceptional and sanctionable, entitling it to its reasonable attorneys' fees expended in addressing the '016 Patent pursuant to 35 U.S.C. § 285, its reasonable attorneys' fees expended in addressing the '589 Patent pursuant to 28 U.S.C. § 1927, and its attorneys' fees, expert fees, and non-taxable costs for this action pursuant to the Court's inherent authority. (Doc. No. 246 at 15-16.) Given the nature of the appeal and the basis for PSD's Motion, it is apparent that the appellate court's decision could have an impact on this Court's determination of whether this is an "exceptional" case.
The Court determines that it would be most efficient to consider a motion for attorneys' fees after the appeal has been resolved. Dismissal allows the parties an opportunity to argue the merits of the motion in light of the appellate disposition, should PSD choose to renew its motion. A renewed motion must be filed within 14 days of the date the appeal is resolved.
The Court further DENIES AS MOOT Plaintiff's ex parte Application for an Order denying Defendant's Motion for Attorney's Fees.
IT IS SO ORDERED. DATED: 12/21, 2018
/s/_________
Hon. Roger T. Benitez
United States District Court