3:15-cv-00866-SB 

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

David H. Madden 

Mersenne Law 

9600 S.W. Oak Street 

Suite 500 

Tigard, Oregon 97223 

(503)679-1671 

ecf@mersenne.com 

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

COBBLER NEVADA, LLC, 

Plaintiff 

v. 

Thomas GONZALES, 

Defendant 

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Civil Action No.: ........... 3:15-cv-00866-SB 

DEFENDANT’S REPLY IN SUPPORT 

OF MOTION FOR AWARD OF COSTS 

AND ATTORNEY FEES TO 

PREVAILING PARTY 

DEFENDANT’S REPLY

Plaintiff’s procedural flailing continues to generate unusual questions of law that simply 

do not arise in ordinary, good-faith litigation, where a plaintiff has a grievance and 

merely seeks an opportunity to present its evidence to a finder of fact and obtain a 

judgment on the merits. This time, the question is whether a defendant who has 

obtained an order dismissing a claim against him with prejudice, has “prevailed” in any 

way, or whether the plaintiff’s subsequent “voluntary” dismissal of other claims 

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

somehow vacates the court’s previous order and causes it to become a legal nullity. 

The obvious logical answer to the latter question is “no:” if a plaintiff could do 

this, then every plaintiff who suffers a dismissal with prejudice before an answer is filed 

could submit such a voluntary dismissal and re-file its action, exactly in its original, 

deficient form, and experience no ill consequences. Perhaps it would be a foolish waste 

of time and money for a legitimate litigant, but for a party whose counsel represents 

(inconsistently) that “this case is not about whether or not there was infringing activity” 

(Plaintiff’s Response in Opposition to Fees, doc. #48, p. 3) and “money has never been 

a goal of plaintiff in this action”, id. at 4, this outcome would allow it to pick its 

opponent’s pocket of costs and legal fees at least twice. (Presumably, the “two 

dismissal rule,” Fed. R. Civ. P. 41(a)(2), would prevent subsequent larcenies.) 

In addition, Plaintiff’s “cut and run” tactic (if successful) would give it an 

unassailable veto over the Court before which it chose to appear, and whose assistance 

it solicited and received. Plaintiff would no doubt be delighted to obtain control of 

another portion of its litigation business – it could bring even more of the process “in 

house” and operate with even less scrutiny – but it would be a remarkable and 

unprecedented abdication of power for the Court to go along. 

DEFENDANT IS THE PREVAILING PARTY

Plaintiff’s opposition to Defendant’s fee petition centers around the incorrect premise 

that Defendant failed to rebuff plaintiff’s challenge, “irrespective of the precise reason 

for the court’s decision.” CRST Van Expedited, Inc. v. EEOC, 587 U.S. ___ (2016). 

COBBLER NEVADA, LLC claims that it “is still free to seek relief against Gonzales under 

the Copyright Act,” (doc. #48 at 5) and relies on Cadkin v. Loose, 569 F.3d 1142 (9th

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

Cir., 2009) for the proposition that this purported freedom prevents Defendant from 

obtaining prevailing-party fees. 

Plaintiff’s reliance is misplaced. In Cadkin, the plaintiffs’ first complaint 

(containing copyright claims) was dismissed with leave to amend, then their second 

complaint (also containing copyright claims) was dismissed with leave to amend, then 

they filed and subsequently voluntarily dismissed a third complaint containing no 

copyright claims while yet another motion to dismiss was pending. Unlike Defendant 

GONZALES, the defendants in Cadkin never obtained a ruling on the merits of any of 

the copyright claims against them. 

Cadkin would control if Plaintiff had dismissed its case voluntarily while 

Defendant’s 12(b)(6) motion was pending – i.e., at some time before the Court’s order 

of 8 June 2016 (doc. #39). It did not do so, choosing instead to force Defendant to pay 

for his counsel to fight – and then fight again – the question whether an Internet 

subscriber, without more, can be liable for indirect copyright infringement. Plaintiff’s 

tardiness and the entry of the order in Defendant’s favor moves the present question 

into a different realm, that of collateral estoppel (a.k.a. issue preclusion). 

Collateral Estoppel Bars Plaintiff from Re-Litigating Its IndirectInfringement Claim Against Defendant 

Issue preclusion bars relitigation of issues adjudicated in an earlier 

proceeding if three requirements are met: 

(1) the issue necessarily decided at the previous proceeding is identical 

to the one which is sought to be relitigated; 

(2) the first proceeding ended with a final judgment on the merits; and 

(3) the party against whom collateral estoppel is asserted was a party or 

in privity with a party at the first proceeding. 

Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 (9th Cir. 

2006), quoting Kourtis v. Cameron, 419 F.3d 989, 994 (9th Cir.2005). 

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

At first blush, the “final judgment on the merits” prong would seem to doom 

Defendant’s position, but: 

[t]o be “final” for collateral estoppels purposes, a decision need not 

possess “finality” in the sense of 28 U.S.C. § 1291. A “final judgment” 

for purposes of collateral estoppel can be any prior adjudication of an 

issue in another action that is determined to be “sufficiently firm” to be 

accorded conclusive effect. 

Luben Industries, Inc. v. U.S., 707 F.2d 1037 (9th Cir., 1983) 

This principle was employed in Alzheimer’s Inst. of Am. v. Eli Lilly & Co., 128 

F.Supp. 3d 1249, 1254 (N.D. Cal. 2015), to permit defendant Eli Lilly to rely on an 

holding against plaintiff Alzheimer’s Institute in a patent infringement suit against a 

different defendant, which decided that the Institute’s failed action there was 

“exceptional” within the meaning of 35 U.S.C. § 285, thus entitling the other defendant 

to attorney’s fees. In that case, Alzheimer’s Inst. of Am. v. Avid Radiopharmaceuticals, 

940 F.Supp.2d 740, the judge had found: 

[o]n both factual and legal grounds, this action was objectively 

unreasonable. The deception, the planning, the execution of the 

scheme and the motivation of AIA [and others] ... were hardly common 

or ordinary. Indeed, their conduct was rare and beyond common 

decency. They were motivated by ego and greed. Bringing this action 

was nothing more than a perpetuation of the conspiracy.... Such 

conduct should not be rewarded and without consequences. 

(as related in Alzheimer’s v. Eli Lilly, 128 F.Supp. 3d 1249, 1254) 

Eli Lilly was awarded its attorney fees based in part on Alzheimer Institute’s failure 

to defeat the “exceptional case” holding in Alzheimer’s v. Avid, despite its full and fair 

opportunity to litigate the matter there. 

The present situation is far more compelling: Defendant seeks to use an order in 

his own favor, issued by the same court before which Plaintiff had a full and fair 

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

opportunity to litigate its position, to support his claim for fees for prevailing in the 

very same litigation1. There is perfect identity of parties, and the issue that is precluded 

is identical to the one Defendant advocated for successfully. 

Plaintiff’s assertion that it could proceed against Defendant in a new copyrightinfringement action is simply wrong. It cannot charge him again with contributory 

infringement. And as to direct infringement, even if COBBLER concocted new 

allegations against GONZALES that it failed to present when the Court invited it to do 

so, the Court is aware of the significant Rule 11 problems COBBLER’s counsel would 

face in rekindling that claim. 

Defendant is unquestionably the prevailing party on the indirect claim, and that 

status supports the present request for fees and costs. 

AWARDING ATTORNEY FEES TO GONZALES IS FAIR AND APPROPRIATE

Amid its lengthy rehash of grievances against GONZALES and his counsel (which, it 

should be recalled, have already been dismissed as inadequate to state a claim), Plaintiff 

seems to suggest that awarding fees and costs to Defendant would somehow be unfair 

or unreasonable. For example, Plaintiff points out that Defendant could have gotten off 

cheap, merely by executing a Stipulated Consent Judgment. This offer was made to Mr. 

Gonzales while he was still unrepresented, and it is not surprising that Plaintiff neglects 

to include the SCJ referred to in the email attached as Exhibit 2 to its Opposition. 

However, the same document was presented to undersigned counsel in Plaintiff’s email 

of 21 December 2015; both the email and the proposed SCJ are attached as Exhibits to 

this Reply. Note that Plaintiff’s supposed “reasonable” settlement requires Mr. Gonzales 

 

1

 Of course, prevailing-party fees in copyright cases are not subject to the Patent Act’s more stringent 

“exceptional case” standard. 

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

to admit liability for a federal crime he did not commit: 

3. Thomas Gonzales, formerly identified as DOE24.21.136.125, is the proper named defendant in this 

case liable under plaintiff’s claims. 

[...] 

6. Thomas Gonzales has fully reviewed the Complaint 

and the allegations of the Complaint and specifically 

admit plaintiff’s investigations identifying the IP 

address used by the defendant, were accurate, in 

particular in accurately identifying the 67.189.7.71 IP 

address as the IP address used by defendant to 

download and distribute plaintiff’s motion picture 

identified with the Complaint. 

Exhibit 2 

The Court may be aware that Plaintiff (and other clients of Plaintiff’s counsel) have 

obtained similar stipulated consent judgments against others threatened in virtually 

identical lawsuits. But it is not unreasonable for a wrongly-accused party to refuse such 

an overreaching agreement; in fact, this appears to be exactly what the U.S. Supreme 

Court had in mind when it stated: 

When a litigant – whether plaintiff or defendant – is clearly correct, the 

likelihood that he will recover fees from the opposing (i.e.

unreasonable) party gives him an incentive to litigate the case all the 

way to the end. [...] The copyright holder with no reasonable 

infringement claim has good reason not to bring suit in the first 

instance (knowing he cannot force a settlement and will have to 

proceed to judgment)[.] 

Kirtsaeng v. Wiley, 579 U.S. ___ at p. 7 (2016) 

Defendant was prepared to litigate this matter all the way to the end, and has only 

been deprived of the opportunity to prevail on all counts by Plaintiff’s inability to state a 

valid direct-infringement cause of action against him. 

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Defendant’s Reply in Support of Motion for Award of Costs & Fees 

CONCLUSION

Defendant GONZALES was carelessly and wrongly accused by Plaintiff, despite its 

representation that it intended to “ensure that [its] investigations are complete and 

proper [...] before a defendant is named.” Plaintiff’s Motion for Leave to Issue FRCP 45 

Subpoena, doc. #8. Gonzales successfully defended himself and obtained a clear ruling 

on a theretofore murky question: whether someone who pays for an Internet 

connection, but does not actively encourage or materially contribute to any infringing 

activity, can be liable for contributory copyright infringement. He is a vulnerable 

individual who spent much and risked more to stand up to a bully, and he obtained a 

legal ruling in his favor clarifying copyright law for the benefit of all Oregon residents. 

He should not be forced to bear both the economic and non-economic costs of doing 

so, when there is explicit statutory support and endorsement from the Supreme Court 

for shifting those costs to the party responsible for them. 

17 August 2016 

Date David H. Madden, SBN OR080396 

Attorney for Defendant Thomas GONZALES 

Mersenne Law 

9600 S.W. Oak Street 

Suite 500 

Tigard, Oregon 97223 

dhm@mersenne.com 

(503)679-1671 

Case 3:15-cv-00866-SB Document 50 Filed 08/17/16 Page 7 of 8
3:15-cv-00866-ST Certificate of Service

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a true and correct copy of the document entitled: 

DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR AWARD OF COSTS AND 

ATTORNEY’S FEES TO PREVAILING PARTY 

was served upon the parties listed below on the date indicated, 

 by following state law for serving a summons in an action brought in courts of 

general jurisdiction where the district court is located or where service is made: 

 by delivery of a true copy of the document to the party to be served; 

 by delivering a true copy of the document to the dwelling house or usual place 

of abode of the person to be served, to any person 14 years of age or older 

residing in the dwelling house or usual place of abode of the person to be 

served; 

 by leaving a true copy of the document during working hours at an office 

maintained by the party to be served for the conduct of business, with the person 

who is apparently in charge; 

 by mailing a true copy of the document to the party by first class mail and by any 

of the following: certified, registered, or express mail with return receipt 

requested; 

 by delivering a copy of the document to the individual personally; 

 by leaving a copy of the document at the individual’s dwelling or usual place of 

abode with someone of suitable age and discretion who resides there; 

 by delivering a copy of the document to an agent authorized by appointment or by 

law to receive service of process; 

 by electronic filing notification (PACER); or

 other: courtesy copy by electronic mail to crowell@crowell-law.com 

Carl D. Crowell, Esq. 

Crowell Law 

943 Liberty Street S.E. 

P.O. Box 923 

Salem, Oregon 97308-0923 

Attorney for Plaintiff COBBLER NEVADA LLC 

17 August 2016 

Date David H. Madden 

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