Manhattan Review LLC v. YUN
919 F.3d 149
2d Cir.2019Background
- Manhattan Review LLC (formed by Meissner and Yun) alleged Yun formed a competitor, Manhattan Enterprise, after a falling-out and used Manhattan Review's IP and assets without consent; Yun filed a Certificate of Cancellation for Manhattan Review in Delaware.
- Meissner sued in state court; derivative claims were dismissed because the Certificate of Cancellation left Manhattan Review without capacity to sue; Meissner sought but failed to show the Certificate of Good Standing nullified the cancellation.
- Meissner and Manhattan Review filed federal suit asserting copyright and Lanham Act claims; prior state-court rulings on corporate capacity were not mentioned in the federal complaints.
- Defendants moved to dismiss the federal Second Amended Complaint on collateral-estoppel grounds; the magistrate judge and district court dismissed the claims, concluding the state-court determination foreclosed Plaintiffs' capacity to sue.
- Defendants sought attorneys’ fees under 17 U.S.C. § 505 and 15 U.S.C. § 1117(a); the magistrate judge awarded fees and costs and the district court adopted the recommendation; Plaintiffs appealed only the fee award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants are "prevailing parties" for fee awards under the Copyright Act and Lanham Act | Plaintiffs: a prevailing party must obtain relief on the merits | Defendants: dismissal on collateral estoppel fulfills the defendant's objective and materially alters the parties' legal relationship | Court: Defendants are prevailing parties because dismissal on collateral estoppel made Plaintiffs incapable of suing (material alteration) |
| Whether a non-merits dismissal can support fee awards | Plaintiffs: prevailing-party status requires merits relief | Defendants: CRST allows non-merits dismissals to suffice | Court: CRST controls; defendant need not win on merits to be prevailing party |
| Applicability of prior forum-non-conveniens precedent (Dattner) | Plaintiffs: analogies to Dattner undermine prevailing-party finding | Defendants: forum-non-conveniens differs because plaintiff there could refile elsewhere immediately | Court: Dattner inapposite; here plaintiff cannot immediately refile and must seek relief in Delaware Chancery Court |
| Whether collateral estoppel dismissal is judicially sanctioned material alteration | Plaintiffs: dismissal on collateral estoppel is not the required judicially sanctioned change | Defendants: the dismissal is a court order altering legal relations | Court: Held that the dismissal is a judicially sanctioned material alteration sufficient for prevailing-party status |
Key Cases Cited
- Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep't of Health & Human Res., 532 U.S. 598 (holding that a prevailing party must cause a judicially sanctioned "material alteration of the legal relationship of the parties")
- CRST Van Expedited, Inc. v. EEOC, 136 S. Ct. 1642 (holding a defendant need not obtain merits judgment to be a prevailing party)
- Garcia v. Yonkers Sch. Dist., 561 F.3d 97 (discussing prevailing-party standard under fee-shifting statutes)
- Dattner v. Conagra Foods, Inc., 458 F.3d 98 (forum non conveniens dismissal and prevailing-party analysis)