Arizona Skydiving Holdings, LLC v. Skydive Phoenix, Inc.
703 F. App'x 579
| 9th Cir. | 2017Background
- Skydive Phoenix, Inc. appealed the district court’s denial of its request for attorneys’ fees after losing a Lanham Act/unfair competition suit.
- Skydive Phoenix argued the case was “exceptional” under the Lanham Act and sought fees under 15 U.S.C. § 1117(a).
- It also sought state-law attorney fees under Arizona statute A.R.S. § 12-341.01, arguing the dispute arose from contractual relationships among company owners.
- The district court denied both fee requests; Skydive Phoenix appealed, arguing the court failed to apply Octane Fitness factors and misapplied the state-law contract inquiry.
- The Ninth Circuit reviewed both denials for abuse of discretion and considered intervening precedent (SunEarth) clarifying the Octane Fitness totality-of-the-circumstances test.
- The Ninth Circuit affirmed: the record did not show the case was exceptional under the Lanham Act, nor did the unfair competition claim arise solely from a contract such that A.R.S. § 12-341.01 fees were appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Lanham Act claim was an "exceptional" case warranting fees | Skydive: district court failed to apply Octane Fitness factors; case was exceptional | Respondent: the case did not demonstrate frivolousness, bad motive, or objective unreasonableness | Affirmed — not exceptional under Octane/SunEarth totality test |
| Whether district court abused discretion by not applying SunEarth guidance | Skydive: SunEarth required consideration of Octane factors and court did not do so | Respondent: even without SunEarth, record lacks factors supporting exceptionality | Affirmed — no abuse of discretion in denying fees |
| Whether plaintiff may recover attorney fees under A.R.S. § 12-341.01 | Skydive: dispute arose from contract among owners, so statute permits fees | Respondent: unfair competition claim exists independent of contract | Affirmed — claim did not arise out of contract for § 12-341.01 purposes |
| Burden of proof for fee awards | Skydive: burden on losing party? | Respondent/Court: burden remains on fee-seeking party to show exceptionality | Affirmed — fee seeker must prove exceptional circumstances |
Key Cases Cited
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (U.S. 2014) (sets totality-of-the-circumstances test for exceptional cases)
- SunEarth, Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179 (9th Cir. 2016) (applies Octane Fitness to Lanham Act and clarifies factors)
- Classic Media, Inc. v. Mewborn, 532 F.3d 978 (9th Cir. 2008) (earlier, narrower approach to exceptional-case requirement)
- Harris v. Maricopa Cty. Superior Court, 631 F.3d 963 (9th Cir. 2011) (test for whether a claim arises out of a contract)
- Joshua David Mellberg LLC v. Will, 96 F. Supp. 3d 953 (D. Ariz. 2015) (elements and independence of unfair competition claim)
- Perry v. Ronan, 234 P.3d 617 (Ariz. Ct. App. 2010) (contract as factual predicate vs. essential basis for suit)
- Med. Protective Co. v. Pang, 740 F.3d 1279 (9th Cir. 2013) (standard of review for state-law attorney fee awards)