Antitrust Law Daily Wrap Up, ADVERTISING—S.D. N.Y.: Hair removal business awarded attorney fees in negative Internet posts suit, (Apr 6, 2016)

By Linda O’Brien, J.D., LL.M.

A laser hair removal business was entitled to an award of attorney fees in its action against a competitor for posting anonymous negative reviews of the company’s business on Internet consumer forums, the federal district court in New York City has ruled (Romeo & Juliette Laser Hair Removal, Inc. v. Assara I LLC, April 5, 2016, Cote, D.).

Romeo & Juliette Laser Hair Removal, Inc. operates a laser hair removal business in New York City. In February 2006, attorney Will Shuman and two others founded Assara I LLC to operate a competing laser hair removal business. Shortly afterward, a series of negative comments about Romeo & Juliette’s business appeared on Internet consumer forums. The posts were from anonymous users who claimed to have used its services.

After investigation, some of the posts were linked to employees of Shuman and Assara. In January 2008, Romeo & Juliette filed suit against Shuman and Assara, asserting claims for unfair competition under the Lanham Act, trademark infringement, and defamation. In February 2016, the court granted the plaintiff’s motion for summary judgment and found the defendants liable for all claims. Romeo & Juliette then moved for attorneys’ fees and costs.

The Lanham Act authorizes an award of attorneys’ fees to prevailing parties in exceptional cases, such as in instances of fraud or bad faith. According to the court, Shuman and Assara denied for many years that they were responsible for the negative reviews posted on the Internet and only admitted responsibility when forced to respond to the plaintiff’s motion for summary judgment. To gather its evidence, the plaintiff engaged the services of an investigator to conduct discovery of Internet service providers, a burdensome and time-consuming task made necessary by the defendants’ bad-faith litigation tactics. The evidence revealed that Shuman himself was responsible for some of the derogatory anonymous posts. Therefore, the plaintiff was entitled to reasonable attorneys’ fees under the Lanham Act, the court concluded.

Although the plaintiff requested attorneys’ fees of over $335,000, the court determined that an award should be limited to work relating to the plaintiff’s motion for summary judgment. The court noted that the plaintiff was partly responsible for the delay and complexity of the case by abandoning several of its legal claims and claims for monetary damages. Since the discovery and motion for summary judgment forced the defendants’ partial admission, fees and costs relating to that motion were the most relevant. Accordingly, upon review of the plaintiff’s billing statements, the court concluded that an award of $30,000 for attorneys’ fees was warranted.

The case is No. 1:08-cv-00442-DLC-FM.

Attorneys: David K. Fiveson and Claudia G. Jaffe (Butler, Fitzgerald, Fiveson & McCarthy, P.C.) for Romeo & Juliette Laser Hair Removal, Inc. Will Shuman, pro se, and for Assara I LLC.

Companies: Romeo & Juliette Laser Hair Removal, Inc.; Assara I LLC

Cases: Advertising NewYorkNews