United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

EDAPS CONSORTIUM, a business entity

under Ukrainian law,

Plaintiff,

 v.

SERGIY G. KIYANICHENKO, AKA

SERGIY G. KYANYCHENKO, an individual,

and DOES 1 through 50, inclusive,

Defendants. /

No. C 05-01931 WHA

ORDER DENYING MOTION 

FOR ATTORNEY’S FEES AND

VACATING HEARING

INTRODUCTION

After prevailing on his motion for judgment on the pleadings, defendant Sergiy G.

Kiyanichenko moves for attorney’s fees pursuant to the Lanham Act, 15 U.S.C. 1117. This

order finds exceptional circumstances do not exist to justify an award under that statute. The

Court therefore DENIES defendant’s motion.

STATEMENT

Plaintiff EDAPS Consortium filed its complaint on May 10, 2005. The complaint

accused defendant of distributing written materials to Ukrainian government officials

containing false, derogatory, defamatory and libelous statements about plaintiff. Defendant

allegedly made other false, derogatory, defamatory, slanderous and libelous statements

Case 3:05-cv-01931-WHA Document 70 Filed 01/06/06 Page 1 of 3
United States District Court

For the Northern District of California

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regarding plaintiff in a document and during a press conference. Plaintiff sought relief for

(1) trade libel; (2) tortious interference with contract; (3) intentional interference with

prospective economic advantage; (4) negligent interference with prospective economic

advantage; (5) unfair business practices in violation of California Business & Professions Code

Section 17200 and (6) unfair competition in violation of the Lanham Act.

On August 18, 2005, the Court denied defendant’s motion to dismiss plaintiff’s

complaint on the basis of forum non conveniens. Defendant then moved to dismiss for lack of

subject-matter jurisdiction or, in the alternative, for judgment on the pleadings. On

November 1, 2005, the Court found an absence of federal-question jurisdiction given the lack of

connection between the alleged Lanham Act violation and California or the United States. The

Court, however, assumed subject-matter jurisdiction on the basis of diversity. The Court then

granted defendant’s motion for judgment on the pleadings. The order found that Ukranian law

controlled the parties’ dispute. Under Ukranian law, no basis for relief existed. Defendant now

moves for attorney’s fees under the Lanham Act.

ANALYSIS 

Under the Lanham Act, courts “in exceptional cases may award reasonable attorney fees

to the prevailing party.” 15 U.S.C. 1117(a). Although the statute does not define

“exceptional,” our circuit has found that “[w]hen a plaintiff’s case is groundless, unreasonable,

vexatious, or pursued in bad faith, it is exceptional, and the district court may award attorney’s

fees to the defendant.” Stephen W. Boney, Inc. v. Boney Services, Inc., 127 F.3d 821, 827 (9th

Cir. 1997).

Defendant argues that plaintiff instigated its lawsuit in bad faith. Defendant maintains

that the true motive of plaintiff’s action was to expose personal information about defendant

and create anti-government propaganda (Dicker Decl. ¶¶ 18–20). Other than defense counsel’s

conclusory statements to this effect, however, no evidence substantiates these allegations of bad

faith.

Defendant further argues that plaintiff’s case was groundless because plaintiff’s claims

had no effect on California or the United States. The November order did find federal-question

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United States District Court

For the Northern District of California

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jurisdiction absent for just this reason. Nevertheless, the Court is reluctant to conclude that

such a jurisdictional deficiency is exceptional. This is particularly so given that the Court’s

August order found plaintiff’s complaint sufficiently related to the United States to avoid forum

non conveniens. Moreover, the November order found jurisdiction was present, at least

presumptively, based on diversity. The ultimate basis for judgment against plaintiff was that

Ukranian law applied and such law did not allow for plaintiff’s requested relief. Again, this

was a primarily procedural determination, not a decision about the substance of plaintiff’s

claims. The November order did not foreclose the possibility that some avenue for plaintiff’s

relief might still exist, such as the Anti-Monopoly Committee. This order thus finds no

exceptional circumstances.

CONCLUSION

For the foregoing reasons, defendant’s motion for attorney’s fees is DENIED. Finding no

further argument necessary, the Court hereby VACATES the hearing on this motion.

IT IS SO ORDERED.

Dated: January 6, 2005 WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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