Joshua David Mellberg LLC v. Will
4:14-cv-02025
| D. Ariz. | Mar 24, 2021Background
- Plaintiffs Joshua David Mellberg, LLC and related entities (JDM) sued; defendants included The Impact Partnership (Impact) and Individual Defendants Jovan Will, Tree Fine, Fernando Godinez, and Carly Uretz. Multiple claims and counterclaims (trade secrets/misappropriation, breach of confidentiality/contracts, Lanham Act false-advertising counterclaim) were litigated in Arizona, with overlapping related litigation in Georgia.
- After summary judgment and related rulings, three fee motions were filed: JDM sought fees from Impact under the Lanham Act; Individual Defendants and Impact each sought attorneys’ fees and non-taxable costs under Arizona law (A.R.S. § 12-341.01 and other statutes). JDM also moved to strike certain declaration statements.
- The court granted JDM’s Motion to Strike: statements in declarations about settlement discussions were stricken based on Rule 408 and Arizona public policy protecting settlement confidentiality.
- The court denied JDM’s request for Lanham Act (15 U.S.C. § 1117) fees, holding the counterclaim was not an "exceptional" case under Octane Fitness/SunEarth standards.
- The court granted in part the fee motions of the Individual Defendants and Impact under A.R.S. § 12-341.01, applying local-rule reasonableness factors, disallowing or reducing certain block-billed, overlapping, or unrelated entries, and applying a 30% reduction to the calculated fee figures.
- Awards: Individual Defendants received a total of $452,108.47 (fees + non-taxable costs). Impact received a total of $1,394,418.82 (fees + non-taxable costs). JDM recovered nothing on its fee motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to strike settlement-related declaration statements | Mellberg: statements disclose settlement negotiations and are inadmissible under FRE 408 | Defendants: statements were relevant for other purposes (bias, delay, etc.) | Granted: court struck the settlement-discussion statements citing FRE 408 and Arizona policy protecting settlement confidentiality |
| JDM's Lanham Act fee motion (15 U.S.C. §1117) | Mellberg: Impact’s Lanham counterclaim was baseless and objectively unreasonable — case is "exceptional" under Octane Fitness | Impact: counterclaim was legally and factually reasonable to pursue | Denied: court found Impact had a reasonable basis; totality of circumstances did not make the case "exceptional" |
| Individual Defendants’ fees under A.R.S. § 12-341.01 | Individual Defs: claims against them arose from contracts/confidentiality agreements; they prevailed and are entitled to fees | JDM: some contract claims meritorious; fees should be limited; overlap with other litigation | Granted in part: court found defendants prevailed on contract-based claims, disallowed/reduced certain entries, applied adjustments and a 30% reduction; awarded $452,108.47 total |
| Impact’s fees under A.R.S. § 12-341.01 (and related theories) | Impact: JDM’s claims arose from/centered on contracts and trade-secret theory, were not meritorious, and fees are proper | JDM: claims did not arise from contract in a way that supports fees; mixed results after summary judgment | Granted in part: court found claims arose from contract/interwoven, reduced certain entries and overall fees by 30%; awarded $1,394,418.82 total |
Key Cases Cited
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (Supreme Court standard for "exceptional" case fee awards under Lanham Act)
- SunEarth, Inc. v. Sun Earth Solar Power Co. Ltd., 839 F.3d 1179 (9th Cir. en banc) (apply totality-of-the-circumstances preponderance standard for Lanham Act fee requests)
- Testa v. Village of Mundelein, Ill., 89 F.3d 443 (9th Cir.) (definition of prevailing party)
- Hashimoto v. Dalton, 118 F.3d 671 (9th Cir.) (prevailing on a significant claim suffices for prevailing-party status)
- Associated Indemnity Corp. v. Warner, 143 Ariz. 567 (Ariz. 1985) (district court discretion in awarding fees under A.R.S. § 12-341.01 and relevant factors)
- Modular Mining Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz. 515 (Ariz. Ct. App.) (contract and trade-secret claims interwoven; supports fee awards where factual/legal development overlaps)
- Skydive Arizona, Inc. v. Hogue, 238 Ariz. 357 (Ariz. Ct. App. 2015) (claims are "interwoven" when they arise from same facts and require same factual/legal development for fee award analysis)