Antitrust Law Daily Wrap Up, ADVERTISING—W.D. Tex.: Prevailing party denied attorney’s fees in non-exceptional Lanham Act case, (Oct 8, 2013)

By Jody Coultas, J.D.

Eastman Chemical Company was not entitled to attorney’s fees in a Lanham Act false advertising case it filed against PlastiPure, Inc. because the case was not exceptional, the federal district court in Austin has held (Eastman Chemical Company v. PlastiPure, Inc., October 4, 2013, Sparks, S.). Eastman was entitled to costs.

Eastman alleged PlastiPure made false and misleading statements about Eastman’s plastic resin product Tritan leaching chemicals capable of causing estrogenic activity when subjected to various stressors.

A jury found in favor of Eastman on the Lanham Act claim and the court entered judgment in favor of Eastman granting certain injunctive relief and directing Eastman to submit a motion for attorney’s fees and a bill of costs. Eastman’s motion sought approximately $3.8 million in fees and expenses.

Attorney’s fees. Eastman was not entitled to attorney’s fees, according to the court. The Lanham Act provides for an award of reasonable attorney’s fees in exceptional cases. Exceptional cases are malicious, fraudulent, deliberate, or willful. Eastman argued that the case was exceptional because the jury found that PlastiPure’s conduct was willful. However, a jury finding of willfulness does not bind the trial court in determining whether this case is exceptional. Based on the evidence presented at trial, reasonable jurors could have found either side’s scientific testing to be flawed and sided with the other party. Eastman’s complete inability to prove any damages, such as lost sales, at trial also suggested that the case was not exceptional. There was nothing exceptional about the discovery disputes and litigation tactics in this case.

Costs. Regardless of whether a case is deemed exceptional, the Lanham Act provides a prevailing plaintiff both actual damages and the costs of the action.

The court reduced Eastman’s bill of costs by the amount of costs taxed for subpoena service. Eastman used a private process server to serve fifty-seven subpoenas in this case, and sought to recover costs in the amount the United States Marshal’s Service would have charged for service of the same subpoenas. Private process server fees are not properly taxable as costs.

Eastman was awarded fees for deposition transcripts necessarily obtained for use in the case, but the court declined to allow Eastman to tax as costs both paper transcripts and video recordings of the same depositions where the videos were not used at trial and costs of transcripts from hearings held by the court prior to trial.

PlastiPure’s request that the court decline to award any costs on equitable grounds was denied by the court. The Fifth Circuit has not openly endorsed any specific criteria for denying costs based on equitable ground, and there is a strong presumption in favor of awarding costs.

The case is No. A-12-CA-057-SS.

Attorneys: Eleanor Ruffner (Fritz Byrne Head and Harrison, PLLC) for Eastman Chemical Company. Chris Reynolds (Reynolds Frizzell Black Doyle Allen & Oldham) and Robert G. Hargrove (Hays & Owens) for PlastiPure, Incorporated. Bryan D. Lauer and Ray N. Donley (Scott, Douglass & McConnico, L.L.P.) for CertiChem, Incorporated.

Companies: Eastman Chemical Company; PlastiPure, Inc.; CertiChem, Incorporated

Cases: Advertising TexasNews