Opinion ID: 745282
Heading Depth: 3
Heading Rank: 2

Heading: Reasonableness of the Amount of Attorney's Fees Awarded

Text: 110 It is well-established law that a party entitled to attorney's fees as a prevailing party on a particular claim, but not on other claims in the same lawsuit, can only recover attorney's fees incurred in defending against that one claim or any related claims. See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 434-35, 103 S.Ct. 1933, 1939-40, 76 L.Ed.2d 40 (1983); Ackerman v. Western Elec. Co., Inc., 860 F.2d 1514, 1520 (9th Cir.1988). Indeed, as the Supreme Court commented in Hensley: 111 In some cases a plaintiff may present in one lawsuit distinctly different claims for relief that are based on different facts and legal theories. In such a suit, even where the claims are brought against the same defendants ... counsel's work on one claim will be unrelated to his work on another claim ... The congressional intent to limit awards to prevailing parties requires that these unrelated claims be treated as if they had been raised in separate lawsuits, and therefore no fee may be awarded for services on the unsuccessful claim. 112 Hensley, 461 U.S. at 434-35, 103 S.Ct. at 1940; see also Smith v. Robinson, 468 U.S. 992, 1006-07, 104 S.Ct. 3457, 3465-66, 82 L.Ed.2d 746 (1984); Schwarz v. Sec. of Health & Human Services, 73 F.3d 895, 903 (9th Cir.1995) (affirming the district court's decision to refuse to award fees incurred on claims for which attorney's fees were not available where the course and conduct about which she [plaintiff] complained [in these other claims] ... were entirely distinct and separate from the claims upon which fees were awarded). 113 In the instant case, ERG's second amended complaint raised twelve causes of action. Exercising its discretion, the district court decided that attorney's fees should only be awarded to Genesis for those fees Genesis incurred in defending against ERG's two copyright claims based on the Inflatimation Elf and Soldier costumes. Those two copyright claims alleged that Genesis employees had distributed to third parties advertising materials and brochures depicting ERG-made costumes without ERG's authorization or consent. The crux of these claims, therefore, was whether such unauthorized distributions ever took place. The crux of the overall litigation and the other causes of action, on the other hand--besides the derivative copyright infringement claim--was whether an agency relationship existed between Genesis and ERG. In addition, all of the other causes of action--except for the derivative copyright claim--involved completely different legal theories and questions. Further, the mere fact that the Inflatimation claims were a part of this overall case and involved the same parties does not mean that these claims arose from the same course and conduct as the other claims. See Schwarz, 73 F.3d at 903. As should be readily apparent, therefore, the Inflatimation claims presented distinctly different claims for relief that are based on different facts and legal theories from the other causes of action in the overall litigation. See Hensley, 461 U.S. at 434, 103 S.Ct. at 1940. Accordingly, under the rule requiring segregation of attorney's fees, id. at 434-35, 103 S.Ct. at 1939-40, the district court should not have awarded Genesis any attorney's fees incurred in doing work on these other claims. 114 The district court's original order regarding attorney's fees and its amended order reflect the district court's awareness of these principles. The district court even noted that it had the discretion to ask Genesis to submit its detailed time records or original bills so that the appropriate segregation could occur. The district court declined to impose such a requirement in the instant circumstances, however. Instead, the district court relied exclusively on the declaration submitted by Genesis's counsel detailing the hours spent on the Inflatimation claims to conclude that $95,075.75 in attorney's fees had been incurred in defending against the Inflatimation claims. 115 The Supreme Court has detailed a district court's obligations pursuant to the requirement that attorney's fees be awarded only for time spent on allowable claims as follows: 116 There is no precise rule or formula for making these determinations. The district court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success. The court necessarily has discretion in making this equitable judgment. This discretion, however, must be exercised in light of the considerations we have identified. 117 Hensley, 461 U.S. at 436-37, 103 S.Ct. at 1941. In line with the Supreme Court's directive, we have held that a district court can abuse its discretion in certain circumstances by not requiring the party requesting attorney's fees to submit any materials besides summaries of the time expended to litigate a matter. See Intel v. Terabyte Int'l, Inc., 6 F.3d 614, 623 (9th Cir.1993). Given the instant circumstances, we feel that the district court abused its discretion by concluding that the summaries submitted in conjuction with the declaration of Genesis's counsel were sufficient to determine exactly how many hours Genesis spent solely defending against the Inflatimation claims. Indeed, in these circumstances, we believe that the district court erred in not requiring Genesis to submit its original time records and billing statements so that ERG--and the district court--could determine whether the fees being claimed were truly for time spent in defending against the Inflatimation claims. See Intel, 6 F.3d at 623. 118 In making its determination that $95,075.75 should be awarded as attorney's fees to Genesis for defending against the Inflatimation claims, the district court relied on the declarations submitted by Genesis's attorney and the billing summaries submitted in conjunction therewith. Genesis provided the district court with one chart summarizing all of the time spent and the fees incurred in defending against all three of ERG's copyright claims--the two Inflatimation claims and the derivative copyright claim--and with a second chart summarizing the time spent exclusively on the Inflatimation claims. According to these summaries, over $70,000 in legal fees were incurred by Genesis in defending solely against the Inflatimation claims from September, 1992 to September, 1993. Given the facts surrounding this case, this amount is so surprising that the district court abused its discretion by not requiring Genesis to submit its original time records and billing statements so that the district court could determine if the claimed attorney's fees were incurred solely for the Inflatimation claims and not for other unrelated causes of action. 119 In September, 1992, Genesis told ERG that regardless of whether the unauthorized distributions complained of in ERG's Inflatimation claims had ever taken place, such allegedly violative acts would no longer occur since all of Genesis's advertising materials containing the allegedly unauthorized depictions of ERG-made costumes had been exhausted. Thus, to Genesis, the issue had become moot by this time. Based on this view, Genesis informed ERG that it would stipulate to the fact that ERG would no longer be harmed--if ERG had ever been--by such distributions. Accordingly, by September, 1992, most of the force behind ERG's two Inflatimation copyright claims had all but disappeared. That this is true is further evidenced by the fact that ERG stopped pursuing these claims after its motion for a preliminary injunction was taken off calendar by the district court on September 17, 1992 on the ground that there was no threat of further harm to ERG from such distributions. 12 120 Despite this turn of events, ERG still included these two claims in its subsequently filed first and second amended complaints. As a result, Genesis deemed it necessary--out of an appropriate abundance of caution--to prepare for the possibility that ERG would once again attempt to vigilantly prosecute these claims at some point. Given the fact that the Inflatimation claims had lost most of their force since ERG would no longer suffer any such harm, however, it is clear that by September, 1992, there was no real reason for Genesis to conduct anything more than cursory legal and factual preparations regarding these two Inflatimation claims. Consequently, we are skeptical that Genesis could have spent over $70,000 in legal fees on these two claims from September, 1992 to September, 1993. 121 Genesis's claimed $70,000 in legal fees incurred post-September, 1992 is also notable due to the fact that these two copyright claims involved very simple legal and factual issues. Indeed, as was mentioned before, the entire Inflatimation claims revolved around the simple and easily discoverable--especially for Genesis--factual issue of whether Genesis employees had distributed any advertising materials depicting ERG's costumes without ERG's authorization. Extensive discovery was not necessary to answer this question. Nor was extensive travel necessary. Of even more import, by September of 1992, Genesis had all the information it needed--it knew that the materials had been distributed at one time, and it knew that they were no longer being distributed. Accordingly, Genesis's claim that it spent over $70,000 in legal fees on these claims alone after September, 1992 should have at least raised some suspicions such that the district court should have required Genesis to submit its original billing records. 122 These suspicions should have been heightened even more by a comparison of this $70,000 figure with the amount of attorney's fees that Genesis claimed it expended in defending against the derivative copyright infringement suit. As our earlier discussion reveals, the derivative copyright claim involved infinitely more complex and intricate factual and legal issues than ERG's two Inflatimation copyright claims. Indeed, it is principally for this reason that the district court decided not to award any attorney's fees at all to Genesis or Aerostar for defending against the derivative copyright claim, even though both parties were statutorily entitled to such fees. 123 Given this context, it should come as quite a surprise that, according to the prepared declaration and billing summaries submitted by Genesis to the district court, the entire amount of attorney's fees incurred by Genesis in defending against the derivative copyright action was only $43,343.75. In other words, after September, 1992--by which time the Inflatimation copyright claims had really lost all of their force and legitimacy--Genesis apparently spent almost twice as much money defending against the unsubstantiated Inflatimation copyright claims as it ever expended for its defense of the novel and complex derivative copyright lawsuit. 124 In light of the forgoing, the district court abused its discretion by not requiring Genesis to submit its original time records and billing statements. Absent such records and absent a summary of the total amount of attorney's fees incurred by Genesis in defending against all of ERG's causes of action between September, 1992 and September, 1993, the district court could not properly ensure that the attorney's fees it was granting to Genesis were solely for fees related to the Inflatimation copyright claims. In sum, because this overall litigation involved numerous other claims for which attorney's fees were not awarded--almost all of which contained more complicated factual and legal questions than the Inflatimation copyright claims--and because the amount of attorney's fees Genesis claimed were incurred to defend solely against the Inflatimation claims was so high, the district court abused its discretion by not requiring the submission of more detailed billing records. See Intel, 6 F.3d at 623. As a result, we vacate the district court's award of $95,075.75 in attorney's fees to Genesis and remand the case to the district court for further consideration. 13