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Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 16-10363

Non-Argument Calendar

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D.C. Docket No. 1:11-cv-02278-WSD

EARTHCAM, INC., a Delaware corporation,

 Plaintiff – Counter Defendant –

Appellant,

versus

OXBLUE CORPORATION, a Georgia corporation,

CHANDLER MCCORMACK, individually,

JOHN PAULSON, individually,

BRYAN MATTERN, individually,

Defendants-Counter Claimants –

Appellees,

RICHARD HERMANN,

 Defendant.

________________________

Appeals from the United States District Court

for the Northern District of Georgia

________________________

(September 27, 2016)

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Before TJOFLAT, HULL, and MARCUS, Circuit Judges.

PER CURIAM:

The issues raised in this appeal are whether the District Court erred in 

awarding appellee attorney’s fees under Georgia’s offer of settlement statute, 

O.C.G.A. § 9-11-68, in a case involving federal question claims and pendant state 

law claims, and if not, whether the Court abused its discretion in determining the 

amount of appellee’s attorney’s fees and expenses. For the reasons stated in the 

District Court’s dispositive order, which appears in the appendix, we find no error 

in the Court’s application of § 9-11-68. Nor do we find abuse of discretion in the 

amount the Court awarded appellee.

AFFIRMED.

APPENDIX

OPINION AND ORDER

This matter is before the Court on Defendants OxBlue Corporation, Chandler 

McCormack, Bryan Mattern and John Paulson's (together, "OxBlue") Motion for 

Attorneys' Fees and Expenses Pursuant to FRCP 54(d), L.R. 54.2 and O.C.G.A. § 9-11-

68 [311] ("Motion"), and Plaintiff EarthCam. Inc.’s ("EarthCam") Additional Adverse 

Submissions in Response to the OxBlue Defendants' Motion for Attorneys' Fees and 

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Expenses [322] (the "Additional Adverse").1

I. BACKGROUND2

On August 1, 2013, OxBlue served an offer of compromise (the "Offer") to 

EarthCam in accordance with O.C.G.A. § 9-11-68(a). (See Mot. at Ex. A). 

EarthCam did not respond to the Offer within 30 days of service. (Id at Ex. B). 

OxBlue, therefore, deemed the Offer rejected under O.C.G.A. § 9-11-68(c). (Id. at

1).

On September 22, 2014, the Court entered an Order [292] granting OxBlue's

Motion for Summary Judgment on all of EarthCam's claims. EarthCam thus did

not recover anything in this action, and, on March 31, 2015, judgment was entered

in favor of OxBlue [309]. On April 30, 2015, EarthCam filed its Notice of Appeal

[313] from the judgment in this case.

On April 14, 2015, OxBlue filed its Motion seeking attorneys' fees and

expenses under O.C.G.A. § 9-11-68. OxBlue argues that, because EarthCam did

______________________

1 EarthCam filed, on May 1, 2015, its Response in Opposition to Defendants'

Motion for Attorneys' Fees and Expenses [316]. The arguments set out in this response are 

included in the Additional Adverse.

2 The Court here recites only those facts pertinent to OxBlue's Motion. A full explanation 

of the facts of this case is laid out in the Court's Order granting the OxBlue Defendants' Motion 

for Summary Judgment. (September 22, 2014, Order [292]).

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not recover at least "75 percent of [OxBlue]’s offer of settlement," OxBlue "[is] 

entitled to recover reasonable attorneys' fees and expenses incurred by [OxBlue] 

from the date of the rejection of the offer of settlement through the entry of 

judgment[.]" O.C.G.A. § 9-1 l-68(b)(l). EarthCam opposes the Motion on the 

grounds that: (1) O.C.G.A. § 9-11-68 conflicts with federal law and therefore 

should not be applied; (2) OxBlue's Motion is "premature under the plain 

language" of O.C.G.A. § 9-11-68; and (3) if the Court applies O.C.G.A. § 9-11-68, 

the application should be limited in scope, taking into account the varied federal 

and state claims and counterclaims in this action. (Resp. [316] at 1-2). 

II. DISCUSSION

A. Applicability of O.C.G.A § 9-11-68 in Federal Court 

The Court first addresses whether O.C.G.A. § 9-11-68 applies to this case. 

EarthCam argues that Fed. R. Civ. P. 68 ("Rule 68") preempts O.C.G.A. § 9-11-

68. (See Resp. at 3-7). The Court disagrees.

Under the Erie3 doctrine, a federal court adjudicating state law claims must 

apply state substantive law and federal procedural law. See Gasperini v. Ctr. for 

Humanities, Inc., 518 U.S. 415, 427 (1996). This rule applies also where a federal 

court decides supplemental state law claims. Lundgren v. McDaniel, 814 F.2d 

_______________

3

 Erie R. Co. v. Tompkins. 304 U.S. 64 (1938).

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600, 605 (11th Cir. 1987); see also United Mine Workers of Am. v. Gibbs, 383 U.S. 

715, 726 (1966) (indicating that the Erie doctrine applies to supplemental state 

claims litigated in federal courts); Mace v. Van Ru Credit Corp., 109 F.3d 338, 346 

(7th Cir. 1997) (holding that in reviewing a state claim pursuant to supplemental 

jurisdiction, federal courts apply state substantive law and federal procedural law). 

In the Eleventh Circuit, to determine whether state or federal law should be 

applied to a particular issue, the Court must engage in a multi-part analysis. See 

Wheatlev v. Moe's Sw. Grill LLC. 580 F. Supp. 2d 1324, 1327 (N.D. Ga. Sept. 30,

2008). "The first step is for the court to determine whether state and federal law 

conflict with respect to the disputed issue." Id (citing Esfeld v. Costa Crociere, 

S.PA.. 289 F.3d 1300, 1306 (11th Cir. 2002)). "If no conflict exists, then the 

analysis need proceed no further, for the court can apply state and federal law 

harmoniously to the issue at hand." Esfeld, 289 F.3d at 1306-1307. If the laws 

conflict, the Court must determine whether a congressional statute or Federal Rule 

of Civil Procedure addresses the disputed issue. Wheatlev, 580 F. Supp. 2d at 

1327 (citing Hanna v. Plumer, 380 U.S. 460,469-70 (1965)). "If a federal statute 

or rule does directly cover the disputed issue, the court is to apply federal law. If 

no federal statute or rule is on point, then the court must determine whether federal

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judge-made law, rather than state law, should be applied." Id (internal quotation

marks and citations omitted).

In Tanker Mgmt., Inc. v. Branson, 918 F.2d 1524, 1528 (11th Cir. 1990), the

Eleventh Circuit applied a "direct collision" test to determine whether a Florida

statute similar to O.C.G.A. § 9-11-68 conflicted with Rule 68:

Appellant's argument in favor of Rule 68 fails initially because Rule 68 

is not in "direct collision" with the portion of F.S.A. § 45.061 applicable 

in this case. Rule 68 concerns only interest and offers of judgment, 

while the Florida statute concerns attorney's fees, offers of judgment 

and settlement offers. Thus, the circumstances here are similar to those 

in Walker v. Armco Steel Corp., 446 U.S. 740 [(citations omitted)] 

(1980), in which the Court in a diversity action was asked to determine 

whether the federal court should follow state law or, alternatively, Fed. 

R. Civ. P. 3 in deciding when an action is commenced for the purpose of 

tolling the state statute of limitations. In the course of holding that 

Oklahoma law controlled, the Court stated: "'[T]he scope of the Federal 

Rule [is] not as broad as the losing party urge[s], and therefore, there 

being no Federal Rule which cover[s] the point in dispute, Erie 

command[s] the enforcement of state law.'" 446 U.S. 740, 750 

[(citations omitted)] (1980) (citing Hanna v. Plumer, 380 U.S. 460, 472 

[(citations omitted)] (1965)).

Tanker, 918 F.2d at 1528.

In Wheatlev, the Court applied Tanker to determine that "Rule 68 and 

O.C.G.A. § 9-11-68 are not in 'direct collision' with one another. Rule 68 is 

available only to a party defending against a claim, whereas O.C.G.A. § 9-11-68 is 

available to both plaintiffs and defendants." 580 F. Supp. 2d at 1328. The Court 

also determined that the two provisions differ in allowing recovery of costs as well

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as in allowing the offeror to place conditions on the acceptance of an offer of 

settlement. Id. at 1328-29. The Court noted that "Rule 68 authorizes offers of 

judgment, not offers of settlement, as is the case with O.C.G.A. § 9-11-68." Id at 

1328. The Court determined that O.C.G.A. § 9-11-68 "creates a substantive right 

to attorney's fees ...." Id at 1329. Because the law is substantive and "does not 

conflict with federal law or rule or procedure, the Court is bound to apply it to this 

case." Id.

EarthCam argues that Tanker is not controlling, because it concerns the 

application of a Florida statute to purely state law claims. While Tanker concerned 

the application of a Florida statute, EarthCam concedes the statute is similar to 

O.C.G.A. § 9-11-68. (See Resp. at 4). More importantly, while the holding of 

Tanker is not controlling in this case, the Court is required to apply Tanker's 

"direct collision" analysis.4 In Wheatlev, the Court conducted this analysis with 

respect to O.C.G.A. § 9-11-68, and found that it did not conflict with Rule 68.

___________________

4

 Because the Court is required to apply the "direct collision" analysis as it is applied in 

Tanker, the Court rejects EarthCam's argument that the Court should apply the purportedly 

narrower standard articulated in Gil de Rebollo v. Miami Health Ass'ns, Inc., 137 F.3d 56, 65 

n.5 (1st Cir. 1998). EarthCam concedes that the Eleventh Circuit's interpretation of the "direct 

collision" standard is binding on the Court. (Resp. at 6). Indeed, the Eleventh Circuit recently 

reaffirmed the approach it took in Tanker. See Menchise v. Senterfitt, 532 F.3d 1146, 1152 

(11th Cir. 2008).

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EarthCam has not offered a compelling reason for the Court not to apply this 

precedent. The fact that both Tanker and Wheatlev were "pure diversity case[s]," 

(Resp. at 5), does not change the analysis. The Erie doctrine applies—and the 

analysis is identical—where the Court has supplemental jurisdiction over the state 

law claims. See Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., PA, 

781 F.3d 1245, 1259 (11th Cir. 2015) ("It is well established that... the Erie 

doctrine also applies to pendent state claims litigated in federal courts." (internal 

quotations omitted)).

Accordingly, because O.C.G.A. § 9-11-68 is substantive, and because it does 

not conflict with Rule 68, O.C.G.A. § 9-11-68 must be applied.

B. Timeliness of OxBlue's Motion

EarthCam next argues that OxBlue's Motion "is premature under the plain 

language of the statute." (Resp. at 2). O.C.G.A. § 9-11-68(d) states, in relevant 

part, that "if an appeal is taken from [the] judgment, the court shall order payment 

of such attorney's fees and expenses of litigation only upon remitter affirming such 

judgment." EarthCam cites two cases, Hall v. 84 Lumber Co., No. CV409-057, 

2012 WL 1058875, at *1 (S.D. Ga. Mar 28, 2012) and Wheatlev, 580 F. Supp. 2d 

at 1325, in support of its argument that the determination of attorneys' fees and

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expenses must wait until EarthCam's appeal is concluded. Neither case is 

controlling, and neither case is directly on point.

In Hall, the Southern District of Georgia determined that an award of 

attorneys' fees under O.C.G.A. § 9-11-68 was premature because the court "ha[d] 

yet to enter any final judgment." 2012 WL 1058875, at *1. The Hall court's 

conclusion that an award of attorneys' fees was premature was "reinforced by the 

requirement that a court may only order payment of fees and expenses after either 

the judgment has been affirmed on appeal or the time to file an appeal has lapsed." 

Id. The Hall court, however, did not directly address whether an award of 

attorneys' fees is premature if a final judgment has been entered.

In Wheatlev, the Court noted, in passing, that it had "reserved ruling on 

Defendants' motion until a final disposition was reached by the Eleventh Circuit." 

580 F. Supp. 2d at 1325. The Court did not address its reasons for reserving 

ruling, and did not address the issue whether a ruling on a motion for attorneys' 

fees under O.C.G.A. § 9-11-68 is premature prior to a disposition on appeal.

The parties have not cited, and the Court is unable to find, any controlling 

cases on this issue. The statute states that "the court shall order payment. . . only 

upon remitter affirming such judgment." O.C.G.A. § 9-11-68(d). The plain 

language of the statute bars the Court from ordering payment until its judgment is

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affirmed. The statute does not preclude OxBlue from filing its Motion, and does

not preclude the Court from ruling on it before EarthCam's appeal is concluded. In

the absence of controlling precedent, the Court concludes it is permitted to rule on

OxBlue's motion, but not require payment until EarthCam's appeal is concluded.

C. Challenge to Specific Fee and Expense Amounts under O.C.G.A. § 9-

11-68

Finally, EarthCam argues that the attorneys' fees and expenses for which 

OxBlue seeks to be reimbursed should be reduced because: (1) the attorneys' fees 

claimed include "substantial time on work related to the federal question claims" 

(EarthCam's copyright infringement and Computer Fraud and Abuse claims, and 

OxBlue's copyright infringement and Lanham Act claims); (2) the attorneys' fees 

claimed "include work on Defendant Richard Hermann's motion for summary 

judgment on Count VI of EarthCam's complaint that Mr. Hermann agreed he 

would absorb"; and (3) the attorneys' fees claimed include charges for nonlitigation work, which OxBlue's counsel agreed to exclude.5 (Additional Adverse 

at 2-3). The Court considers these arguments separately.

____________________

5 EarthCam advances additional arguments in the body of the Additional Adverse, 

which the Court also considers in this Order.

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1. Federal Question Claims Work 

The claims asserted by EarthCam in this case rest on claimed intrusions by

OxBlue into Plainitff s computer system to wrongfully obtain information about

EarthCam products. On this set of facts, EarthCam asserted federal and state law

claims based on the alleged intrusions and claimed resulting damages. These

claims, the Court found, failed and were dismissed. EarthCam now seeks to

deconstruct the claims alleged to support its argument that a substantial portion of

the attorneys' fees and expenses claimed by OxBlue were for defending

EarthCam's summary judgment motion on its federal claims. OxBlue argues that

the interrelationship of EarthCam's federal and state claims resulted in all of the

work performed to litigate the federal claims on summary judgment applying

equally to litigation of EarthCam's state law claims, thus allowing OxBlue to claim

all of the fees and expenses it incurred in this matter from September 1, 2013, to

that date judgment was entered in OxBlue's favor on all claims. Put another way,

OxBlue argues that all work performed was required for the state law and federal

law claims in this case and because no work applied to the federal claims alone, all

of the attorneys' fees and expenses charged are reasonable under O.C.G.A.

§ 9-11-68. The amount for which OxBlue is allowed to be compensated under

O.C.G.A. § 9-11-68 is between these two outlier positions.

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It is impossible to reconstruct the time allocated to each different claim in a 

case like this where federal and state claims, arising from the same essential 

operative facts, substantially overlap and where the litigation activity benefits 

advocacy on both sets of claims. In the Court's practice and judicial experience in 

cases like these, the better approach is to evaluate what legal services and expenses 

would have been incurred if EarthCam had not asserted its federal claims, and 

relied only on its state law causes of action. Considering the contentiousness of 

this litigation, the level of legal services and fees to litigate the federal claims only 

moderately added to the litigation activity required in this action after September 

1, 2013, and thus a substantial portion of the attorneys' fees and legal services 

claimed by OxBlue were incurred to litigate state law-based claims.

OxBlue's "we are entitled to all the award we claimed" approach itself 

ignores that it necessarily incurred some attorneys' fees and expenses that were 

required solely because of the federal law claims EarthCam asserted. The Court 

agrees that arguments in pleadings relating to EarthCam's federal claims, drafting 

of a discussion of the legal claims asserted, and a discussion of the facts relating to 

the federal claims were activities uniquely required by the fact federal claims were 

asserted. These activities must reasonably be deducted from the attorneys' fees 

claims OxBlue asserts.

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The Court reviewed the annotated statements attached to EarthCam's 

Additional Adverse and the arguments set out by both parties. Based on this 

review and applying the Court's litigation and judicial experience in assessing 

attorneys' fees and expenses in civil litigation, the Court concludes that OxBlue's 

attorneys' fees and expense claim should be reduced by $23,000 to reflect work 

reasonably allocated to its litigation of only the federal claims asserted in this 

action.

2. Hermann Summary Judgment Motion Attorneys' Fees and

Expenses

EarthCam argues that the Consent Order entered in this action on March 31, 

2015, precludes an award of attorneys' fees and expenses incurred by Defendant 

Hermann's separate counsel. The Court is satisfied that the charges EarthCam 

challenges were related to OxBlue's litigation of the claims in which it was 

involved, and EarthCam's request to exclude them is denied.

3. Smith Fees

OxBlue agrees it is not entitled to be compensated for services performed by 

Ms. Smith on March 3, 4 and 14, 2014. EarthCam's request to exclude these fees, 

in the amount of $1,065.00, is granted.

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4. Gregory's Travel Expenses

EarthCam contends OxBlue is not entitled to be compensated for the work 

and travel performed by an attorney for OxBlue who was employed in OxBlue's 

counsel's Jacksonville, Florida office. EarthCam argues that "clients often do not 

pay for travel time even for trips required by litigation events such as out-of-state 

depositions." (Additional Adverse at 16). OxBlue represents that Gregory's travel 

and work was specific to this case and Gregory was assigned to perform it because 

it was efficient and cost effective to do so. EarthCam's argument, nitpicking at 

best, does not provide any basis to exclude the amount claimed for Gregory's 

work.

5. Pre-September I, 2013

Finally, EarthCam seeks to reduce OxBlue's claim for two transcripts of 

depositions taken in August 2013, and one meal consumed in August 2013, before 

OxBlue's demand under O.C.G.A. § 9-11-68 was deemed rejected. OxBlue states 

that it is "not seeking to recover attorneys' fees and expenses that occurred in 

August 2013," and does not specifically oppose the reduction of the transcript and 

meal expense. (Reply [323] at 13). The amounts, totaling $6,931.85, are required 

to be deducted from OxBlue's claim for expenses.

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III. CONCLUSION

For the foregoing reasons,

IT IS HEREBY ORDERED that Defendants OxBlue Corporation, 

Chandler McCormack, Bryan Mattern and John Paulson's (together, "OxBlue") 

Motion for Attorneys' Fees and Expenses Pursuant to FRCP 54(d), L.R. 54.2 and 

O.C.G.A. § 9-11-68 [311] is GRANTED IN PART AND DENIED IN PART, as 

stated in this Order. After applying the deductions required by this Order, OxBlue is 

awarded attorneys' fees and expenses in the total amount of $292,611.17.

IT IS FURTHER ORDERED that enforcement of this judgment is stayed 

until Plaintiff EarthCam, Inc.'s appeal to the Eleventh Circuit is concluded.

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