good morning everyone and welcome to the th circuit judge wallace and i are very pleased to be sitting with judge last nick who sitting by designation from the western district of washington we're thrilled to be sitting with him and thank him for his help thank you very much good morning your honors my name is sharon your reus and i represent the appellant's collaborative continuing education council and kelly marie i would like to reserve three minutes for rebuttal may i please the court this case arises out of the district court's order denying appellants motion for an award of attorney's fees under the exceptional case provision of the lanham act after acceptance of the fifteen thousand dollars rule sixty eight dollars offer of judgment with respect to the prevailing party issue the district court erred for two principle reasons st appellants are the prevailing parties under the holding of for versus hobby by virtue of accepting the offer of judgment in for are the supreme court held that a nominal judgment of one dollar supported prevailing party status and here there was an acceptance of a fifteen thousand dollars judgment which is more than nominal and more than enough to convert the prevailing party status on the appellants and even of the judgeme let me make sure i understand you're relying i guess i'm buchanan right part of me so you're relying upon the supreme court case would be counted were primarily relying on for our vs hobby your honor but we don't believe that our canon precludes prevailing party status because in that case the actions taken by the defendants were only voluntary there was nothing that was judicially compelled as there was in our case where the defendants were forced to concurrence by justice scalia joined by judge thomas in those cases we can take just the majority opinion which they join but it has to be modified by the two concurring if they didn't co they wouldn't have a majority that's the way we had her put that according to our law so if you look at the scalia concurrence it's very clear that he says and that  he has a different analysis than the one that you've articulated in your brief and is far closer to what the district judge found in this case so assuming if you wouldn't mind using the analysis governing of the supreme court cases which all of the seem to agree is because on it as interpreted by one how we have to interpret the concurring opinion of justice scalia and justice thomas why can't we say that the district judge follows significantly that law we ought to affirm well your honor we did not proceed under the catalyst theory for our versus hobby is still a good law and it was not overruled by canon and in that case the plaintiffs sought seventeen million dollars in judges in damages and were only awarded one dollar that has been relied upon even in the recent case that we cited out of the district of arizona the gary vs carbon cycle arizona case where the court relied primarily on for a versus hobby also cited to the delta case for the proposition that by virtue of an offer of judgment in that case it was five thousand dollars and a two hundred and fifty dollars offer of judgment the defendants also structure that offer exclusive of fees and costs without an admission of liability similar to what happened here so in our case where the parties where the plaintiffs obtain an enforceable judgment it became judicially sanctioned once the enter of the order of judgment was entered by the court and if it's just the cost of litigation it isn't it they aren't losing they're working says in their concurrence i don't think so your honor no or i think what they said well one reason is because the fifteen thousand dollars was not the cost of litigation the offer of judgment was exclusive it of attorneys fees and costs and it represented damages that were sought by the plaintiffs so that's one point how do you do you mean it said that in the offer the offer was exclusive of fees and costs your honor i did say that yes it did say that without admission of liability and the defendants are the authors of their own offer they very well could have made it inclusive of fees and costs and they chose not to so as i understand it the th and th circuits have already held that rule sixty eight  judgments like you have here for being a prevailing party it seems like that's utility automation and grissom you barely mention i think you only mention one of those cases of barely mention them at all i'm not sure why because it seems like we would create a circuit split if we rolled for your opponents and you could've made a better or better point of that but is there some reason why you were shying away from those cases no there's not a reason for that your honor we do think that based on the holding of for our it appears that just by virtue of accepting an offer judgment that would create prevailing party status which is the threshold question that should have been reached by the district court before even touching the question of exceptionality or entitlement and that's what the  and eleven circuits have already held yes and your honor so with respect to that analysis the district court also erred because with respect to that determination of the threshold question of prevailing part status the district court applied a degree of success and litigation standard which would be applicable to the question of exceptionality under octane finesse but would not be applicable to the threshold question of whether the plaintiffs were prevailing parties in the litigation so even if you prevailed you'd still have to show that this is an exceptional case and i'm not sure what's wrong with the footnote one in the court's opinion saying that this is not an exceptional case because the court did not apply any of the factors that are laid out in octane fitness it did not give this court an opportunity to make a meaningful review of the record to see what the basis for that decision was it was just sort of an off handed decision against some explanation it doesn't give no explanation there's no analysis of the octane fitness factors and so do we have a case that says it's automatically an abuse of discretion to not go through every factor no your honor but it is not a lo for a meaningful opportunity for this court to review whether it was an abuse of discretion and making that determination what we are asking this court to do is to find as a matter of law that the plaintiffs were the prevailing parties and to remand it for to the district court for an analysis of the octane fitness factors to determine whether the case would be exceptional and there also we pointed out in our briefs your honour's that the district court relied on an accurate summary of the record and we pointed out that some of the actions for instance that were taken by the defendants with respect to corrective action was done after the filing of the complaint not before the filing of the complaint and after the service of the of a demand letter which is called to the just the court's attention did you have an opportunity to make the corrections if you're right and we would never be up here usually we call that waiver i understand that your honor we made a factual record before the district court and the district court made her conclusions in the order that we've i think that what it goes to your honor is the question of the standard of review that is applicable here in this court as to whether it be an abuse of discretion or whether the court would be able to  court to order her to reconsider all the factors including the correct factual record that we relied upon you know i think that's true but we do have we try to be fair with the district judge and not bring things up that weren't brought up to the district judge do you know do you have do you have some authority that in this case you can wait to get to the court of appeals not call it to the attention of the judge  so that the judge in the st instance can make corrections maybe even finding your favor well i i don't think that it is a correct characterization to say that we did not point it out to the district court judge i think that it was clearly laid out in the record before the district court judge and the district court judge relied on pre filing conduct for the purpose of finding that the conduct by the defendants was voluntary as opposed to compelled by the fi the complaint so you're asking for an opportunity to go back before judge bolton and do ask her to consider things that mean she's it highly experienced district court judge she's been there for over twenty years and didn't she isn't more than likely she looked at everything and came to this conclusion already i don't know if that's the case or not your honor and i don't think that we can draw that conclusion merely by looking at th e you know three or four line footnote in the decision i think as we said the threshold question the primary question before this court today is whether the plaintiffs were the prevailing party and whether judge bolton erred by making that determination using the wrong standard looking at the degree of success in litigation as opposed to looking at the results of obtained and also looking at the amount of the judgment which has you can actually get fees that you can't actually get a reversal in or a different outcome in less you can get over this exceptional case issue i'm just not sure what the point is of doing more work on prevailing party if you're going to lose anyway well there is a value to attaining prevailing party status and this and as we explained in our briefs we have two competitors in a very small market it's a very nice market where these are two of the principal people who are in this market and this case has been watched it is being watched by people who know what is going on in this particular industry and there is a value to obtaining prevailing party status i think you want us to say that your prevailing party even if it doesn't cause you to win this case that is correct and i have reserved three minutes for you thank you united states which was cited both by appellants and by police and it's our position that the appellant's did wave those arguments of raising these eras that judge bolton allegedly made in her decision in that case i'm very confused now because you are acting like the footnote doesn't even exist as far as i can tell you to your brief probably waives reliance on the footnote which helps you and so i'm very confused why instead of defending this footnote they are now sending th made an observation in that order that had if even if they were prevailing parties your honor that they would not have it would not be an exceptional case based on her analysis of the record and we abided by that decision and we did and now this and we should win it are maybe a reach it in the st instance but i don't see you ever saying she already ruled on this can you point me to anywhere in your brief because i'm worried about whether you waived a basis that we might be able to rule for you on what we're  sought extensive equitable relief they sought five hundred thousand dollars worth of statutory damages for star says it doesn't matter and it doesn't matter how big the judgement is it may be that there are a prevailing party but when you get to the analysis of how much they should get it should be zero because they didn't win very much but they i don't understand how you get to the idea that they're not a prevailing party because for ourselves it doesn't matter how much there are two other circuits that have already run this and we have a bunch of cases that talk about julian for ci not found to be prevailing parties and they did not get their fees that's also discretionary fee shifting statute seventeen dollars u s c five hundred and five so these are cases where you have to have a material alteration in the judicial sanction nation here the accepted offer judgment is judicial sanction whoever the relief afforded there in is not material in the context of the release that they sought which is what klamath states claim a state you have to look to see what is the context of the relief that the plaintiffs sought at the district court they sought a half a one million enforceable settlement is prevailing party i don't understand how this is not a judicially enforceable settlement they got money they didn't get nothing but you might later say even though they're prevailing the amount a few should be tiny or maybe even zero but i don't know how you're getting to where they're not prevailing at all the cases in this in this circuit are mixed it seems like there's two paradigms there's four cases where there's discretionary fee status more the court is given more discretion to determine prevailing party versus the statutes that have mandatory fee shifting like the equal access to justice the americans with disabilities act those kinds of cases where you have mandatory fee shifting it seems like this court and the district courts appliances citizens will more likely find prevailing party status there are numerous this were court decisions in this district that have been that just go to you after you figure out prevailing party status which seems like really a yes or no question based on whether they got a judicial enforceable judgement which they did they got context of what they saw what they saw was five million dollars that was a half one million dollars or under fifteen thousand dollars is a three percent seacoast was twelve five percent and the yet this court held no you're not prevailing parties when twelve five percent was paid over that was a major difference your that's the main part of your honor and what they sought by filing the lawsuit they sought extensive equable relief which was voluntarily given and that as as justice scalia actually said in damages so i mean you could argue later talking about the catalyst there and that catalyst theory your honor here is what allowed them to get most of their relief in this case most of the relief they got in this case from voluntary actions it's absent it's not in the four corners of the accepted offer a judgment that only has fifteen thousand dollars out of five hundred and fifty zero dollars sought your and with no mission of liability and under this court's precedent seacoast foods we have the fifty six dollars row music case and also some of the other circuits which i cited in our brief you have to have judicial teeth in the four corners they have the four corners they have the for the damages under the rule sixty eight offered that the court was able to enforce where a court said that's not a prevailing party's situation i believe in that was in the sequence food from the mistake and th believe seacoast foods is one of those we did have an offer of judgment which was accepted but so how do you get around the point that there was only one statute out of twelve that allowed for fees and there was no indication that that was the basis of the judgement well in our case we don't have any indication that was a judgement either we also have common law claims that were at issue here not just landed back claims in the plaintiff here had arizona common law claims also had land in that claim so we have the common law claim was overlapping with the conduct of the lan district in the robb decision if on the mistaken also has an accepted offer judgment where they stated that it's judicially sanction award is not in some way merit based it's simply a token payment by defendant sufficient to settle the litigation which is what we have here your hon that case it was a token payment sufficient to such a case i believe it's a rob decision your honor obvious cited on page thirty three dollars of the of the brief i believe that is a rd circuit case i don't have a thirty three a rd to eighty six i believe discretionary and it really doesn't matter in this analysis because in either case you still have to answer the threshold question of whether the plaintiff is the prevailing party the mandatory fishing it won't kick in same with discretionary fee shifting plaintiff has prevailed the other point that i would like to make is with respect to the material alteration the for our court held that a judgment for damages whether it's compensatory or nominal modifies the defendant's behavior by forcing the defendant to pay amounts that he otherwise would not have paid and that's exactly what occurred here and what the plaintiffs asked for in their complaint was minimum statutory damages up to the maximum  so i think that the pelleas counsel is conceded that there was a judicially sanction change this did occur by virtue of the offer of judgment that they made and because it gave the defendant's rights that they otherwise would not have had it did affect a material alteration of their legal relationship so i think that that it's clear that that the fact that the judgment was for fifteen thousand dollars has no bearing on the question of whether they should be prevailing parties or not and again with respect to the what the defendant refers to as voluntary action i think that it's clear that the actions that were taken after the complaint were filed and if your honour's will recall there was a june st two thousand and sixteen e mail from one of the defendants saying something to the effect that there was a federal complaint filed a few days ago we better get this book out of and i also would say with respect to the issue that we were discussing before with whether or not we brought these factual errors to the judge's attention there's no requirement there is no condition precedent to file a motion for reconsideration before we file an appeal of the order and we believe that that footnote actually is dicta it was and it was error for judge bolton to even reach the question of exceptionality because she applied the wrong analysis to the prevailing party question have i have some difficulty maybe maybe you can help me with this with justice scalia's statement in his concurring opinion something far less reasonable an award of attorney's fees when the merits of the plaintiff's case remain unresolved when for all one dollar knows the defendant only abandoned the fray because of the cost of litigation either financial or in terms of public relations would be too great in such a case it strikes me that they that that as from the supreme court opens directly the findings that were made by the district judge and why were her findings inconsistent with the supreme court mandate of how would look piskies well because number one we're not relying solely on so called voluntary action for purposes of prevailing party status your honor the canon case there was no request for damages they were only asking for the defendants to engage in certain conduct which the defendant voluntarily chose to do and then the plaintiff's move for attorney's fees in our case we sought damages we also sought injunctive relief my clients obtained nearly all of the injunctive relief that they had requested whether it was before the complaint was filed but most of it was after the complaint was filed and they also received more than the minimum statutory damages for the cybersquatting claim i believe i'm over my time thank you question thank you both sides for the arguments the case is admitted