Opinion ID: 783938
Heading Depth: 3
Heading Rank: 1

Heading: District court opinion and judgment in the Instant Action

Text: 27 In a January 23, 2002 Opinion, the district court ruled in Storey's favor on the res judicata issue, holding that Cello was barred from reasserting its claims in the arbitration proceedings. Storey, 182 F.Supp.2d at 362. The district court reasoned that the dismissal of the First Action [was] `with prejudice' and that [t]he relief Cello sought in the arbitration proceeding was precisely the relief Cello had sought in the First Action — transfer of the registration to the domain name `cello.com' from Storey to Cello — for precisely the same reasons — the alleged confusion between Cello's mark `Cello' and `cello.com.' Id. The district court rejected Cello's argument that Cello brought the arbitration proceedings because Storey engaged in a `new act of cybersquatting' when his attorneys wrote the September 25th Letter. Id. The district court concluded that [t]he September 25th Letter was not an act of `cybersquatting' and rather was simply a reassertion by Storey of his rights to the domain name that had been confirmed by the dismissal of the First Action `with prejudice.' Id. at 363. In sum, [t]he September 25th Letter was not a new transaction creating a new claim, for Cello had already given up any claim to rights in the domain name in question. Id. 28 The district court also imposed sanctions against both Cello and its counsel, appellants Herrick, Feinstein LLP and Odin, Feldman & Pittleman, P.C. (collectively, the Sanctioned Counsel), listing eight factual assertions or denials that were lacking evidentiary support or unwarranted on the evidence, and five legal arguments or defenses not objectively reasonable and without reasonable basis in law. See id. at 366-69. It also held that Cello filed its answer and defenses with the improper purpose of harassing Storey, causing unnecessary delay, and needlessly increasing litigation costs. See id. at 369. Finally, the district court concluded that `unusual circumstances' exist that warrant the award to Storey of reasonable attorney's fees and costs incurred as the result of the Rule 11 violations. Id. 29 On February 15, 2002, the district court entered judgment for Storey on the merits and ordered that all right, title and interest in the domain name `cello.com' be and hereby is vested in plaintiff Lawrence Storey, and that ... [NSI] is directed to transfer ownership of the domain name `cello.com' to plaintiff Lawrence Storey within 30 days. As Rule 11 sanctions, the district court ordered Cello and the Sanctioned Counsel, jointly and severally, to pay $18,000 in attorneys' fees plus the costs of the district court action.