The case arose out of Carreon’s threats to sue the blogger (among others) over the use of the Charles-Carreon.com domain, which Carreon contended infringed upon the trademark in his own name. The blogger sued for declaratory relief that his use was protected by the First Amendment. After some ridiculous attempts to dodge service, Carreon offered to settle and stipulate to the declaratory relief, conceding that the use was protected speech. In doing so, Carreon failed to include any terms as to potential attorneys fees, which Satirical Chas’ lawyers — Public Citizen’s Paul Alan Levy and local counsel Cathy Gellis — promptly sought.
While the blogger’s attorneys sought a sum total of over $77,000, the court awarded a sizable portion of the fees. The court determined that Carreon’s failure to include a provision for attorneys fees in his offer of judgment left him vulnerable to a motion seeking such fees — a particularly inept oversight given that the motion for fees was made before Carreon filed his offer of judgment. The court then goes on to dismantle the balance of Carreon’s arguments. They’re too pitiful to merit discussion here.
The crucial part of the motion for attorneys fees, however, was whether the case was “exceptional” under the Lanham Act. The court found that, at the outset, it wasn’t an exceptional case, and Carreon could have made colorable arguments to defend himself.
But Carreon stayed true to his threat to make the litigation difficult. In addition to the ridiculous attempts to evade service, Carreon attempted to seek extensive discovery into the blogger’s background in an attempt to discredit his site as contributing little First Amendment value (or something), and that this attorneys were engaging in a pattern of trademark trolling by seeking declaratory relief against trademark holders issuing censorious, unmerited threats against critics. The court, in a tersely-worded order, had permitted some discovery, but warned Carreon that a “mini trial” on the case was insufficient to merit further discovery.
Carreon, taking this warning to heart, proceeded to subpoena the blogger’s attorneys (including Ken White at Popehat, who had helped to arrange legal counsel), sent written interrogatories to the blogger, and in his deposition of the blogger sought information about his political affiliations.
The court’s salient discussion:
While defendant’s threatened claims were not “exceptional” at the outset of this case, defendant’s actions throughout the litigation certainly transformed this case into an “exceptional” matter, deserving of an award of attorney fees. The Ninth Circuit has stated that “bad faith or other malicious conduct satisfies the exceptional circumstances requirement.” Boney, 127 F.3d at 827. Evidence supports a finding of malicious conduct during the course of this case. Defendant first went to great lengths, imposing unnecessary costs on plaintiff, to avoid service. Then, in response to this motion for attorney fees under the Lanham Act, defendant engaged in unnecessary, vexatious, and costly tactics in preparation of his opposition to the motion. […] Defendant’s serving of interrogatories and taking of plaintiff’s deposition amounted to a mini-trial on plaintiff’s motion for fees. Indeed, plaintiff incurred an additional $37,650.25 in fees and costs after his motion was filed. Despite this additional discovery, defendant has presented no evidence to support his initial contention that plaintiff’s attorney is on a mission to “turn Internet gripe sites into profit centers for him and Public Citizen Law Group.” […] Defendant has failed to show that his additional discovery efforts led to anything other than additional frustration for plaintiff and his attorneys. Accordingly, plaintiff’s efforts to respond to defendant’s litigation tactics merit the imposition of a fees award.
Lastly, the court declines to award the entire $70,000 sought, determining that only a (significant) portion of the fees were created when the case became “exceptional” by Carreon’s vexatious litigation tactics. In doing so, the court rejected Carreon’s claim that the attorneys are only entitled to $200:
Defendant insists that, if fees are to be awarded, they must be modest. He contends the only important document is the First Amended Complaint, and that document could not have required more than three hours for an experienced lawyer to complete. Thus, he concludes, at
most an attorney fee of $200 is warranted. Defendant nowhere explains how he arrived at this figure or why such an award would be appropriate and reasonable under the circumstances. Indeed, such an award would contemplate an hourly rate of less than $70, and would ignore all work related to the planning of the case, the drafting of any motions, or responding to defendant’s discovery requests. As there is no basis for defendant’s proposed award, it must be rejected.
Carreon had pledged (in his initial threats) to litigate the case up and down the appellate courts. With a judgment of this size, I suspect he’ll appeal — and potentially risk higher fees if the appeal fails.