Court Opinion

ID: 9948222
Source: CourtListenerOpinion
Date Created: 2024-03-06 18:01:37.273032+00
Date Added: 2024-06-11T14:29:20.112575
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                         MAR 6 2024
                                                                       MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

BILL GAEDE; NILA GAEDE, husband and              No.   23-35217
wife,                                                  23-35531

                Plaintiffs-Appellants,           D.C. No. 3:22-cv-00380-YY

 v.
                                                 MEMORANDUM*
MICHAEL DELAY; ANASTASIA
BENDEBURY; BIOSPINTRONICS, LLC,

                Defendants-Appellees.

                   Appeal from the United States District Court
                            for the District of Oregon
                   Youlee Yim You, Magistrate Judge, Presiding

                             Submitted March 6, 2024**

Before: BENNETT, BADE, and COLLINS, Circuit Judges.

      In these consolidated appeals, Plaintiffs-Appellants Bill and Nila Gaede

appeal from the district court’s final judgment dismissing the case with prejudice,

and they challenge the district court’s order denying their motion for leave to file a

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
second amended complaint, as well as the district court’s order awarding attorney’s

fees to Defendants-Appellees. “We review the denial of leave to amend for an

abuse of discretion, but we review the question of futility of amendment de novo.”

Wochos v. Tesla, Inc., 985 F.3d 1180, 1197 (9th Cir. 2021) (quoting United States

v. United Healthcare Ins. Co., 848 F.3d 1161, 1172 (9th Cir. 2016)). We review

the award of attorney’s fees for abuse of discretion. Cadkin v. Loose, 569 F.3d

1142, 1147 (9th Cir. 2009) (“A district court abuses its discretion when its decision

is based on an inaccurate view of the law or a clearly erroneous finding of fact.”

(citation omitted)). We have jurisdiction under 28 U.S.C. § 1291, and we affirm in

part and reverse in part.

      1.     Courts “should freely give leave [to amend] when justice so requires.”

Fed. R. Civ. P. 15(a). But a district court does not abuse its discretion by denying

leave to amend if the “amendment would be futile or the plaintiff has failed to cure

the complaint’s deficiencies despite repeated opportunities.” AE v. County of

Tulare, 666 F.3d 631, 636 (9th Cir. 2012). Reviewing the proposed amendments

de novo, Wochos, 985 F.3d at 1197, the district court properly denied leave to file a

second amended complaint given the insufficiency of the proposed amendments.

As the district court noted, “Plaintiffs’ proposed amendments to the complaint

continue to reflect claims over ‘ideas’ and not copyrightable original expression of

those ideas.” Indeed, the Gaedes concede in their opening brief that the ideas that

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they wish to protect “are not patentable” and are “not protected by Title 17 U.S.C.

because, as it stands today, copyright only protects the expressions of the ideas.”

See 17 U.S.C. § 102(b) (“In no case does copyright protection for an original work

of authorship extend to any idea, procedure, process, system, method of operation,

concept, principle, or discovery, regardless of the form in which it is described,

explained, illustrated, or embodied in such work.”). Accordingly, the proposed

amendments to their copyright claim would be futile. See AE, 666 F.3d at 636.

      In the alternative, the Gaedes argue that the “idea-expression dichotomy”

under copyright law is unconstitutionally vague and violates the Equal Protection

Clause of the Fourteenth Amendment. They acknowledge that they did not make

this argument before the district court but argue that they were not allowed an

opportunity to do so. They do not explain, however, why they could not have

included this claim in their proposed second amended complaint. “A party

normally may not press an argument on appeal that it failed to raise in the district

court.” One Indus., LLC v. Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1158

(9th Cir. 2009). We therefore decline to address this argument in the first instance.

      The Gaedes also contend that the district court erred when it found that the

proposed amendments to their unfair competition claim under the Lanham Act

would be futile. In the proposed second amended complaint, the Gaedes cite

Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), to support

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their assertion that Defendants-Appellants “repackage[d] intellectual property as

their own” in violation of 15 U.S.C. § 1125(a)(1)(A). In that case, the Supreme

Court explained that, under § 1125 of the Lanham Act, the phrase “origin of

goods” refers to “the producer of the tangible product sold in the marketplace” and

is “incapable of connoting the person or entity that originated the ideas or

communications that ‘goods’ embody or contain.” Id. at 31–32. The Court also

noted that individuals do not “face Lanham Act liability for failing to credit the

creator of a work,” and the Lanham Act should not be read “as creating a cause of

action for, in effect, plagiarism.” Id. at 36 (emphasis omitted). In sum, the

Lanham Act was “not designed to protect originality or creativity,” and is not

concerned with “the author of any idea, concept, or communication.” Id. at 37

(emphasis omitted). Because the Gaedes assert that “[t]he issue before the [district

court] was that plaintiff Bill Gaede is the originator of the theory,” and that “[t]he

defendants are not the originators of the ideas contained in [the services they sell

on the internet],” the district court correctly concluded that the proposed

amendments would be futile.

      Therefore, the district court did not abuse its discretion by denying leave to

amend because the proposed second amended complaint would have been futile.

AE, 666 F.3d at 636.

      2.     The district court abused its discretion by awarding $15,080 in

                                           4
attorney’s fees to Defendant-Appellee Biospintronics, LLC. First, the district court

acted within its discretion by finding that a fees award was warranted under

17 U.S.C. § 5051 because the claims in the complaints were “objectively

unreasonable, if not frivolous.” As explained above, it is a basic tenet of both

copyright law and the Lanham Act that neither protects an “idea” or “discovery.”

See 17 U.S.C. § 102(b); Dastar, 539 U.S. at 32–37. The Gaedes’ repeated efforts

to assert such claims could reasonably be characterized as “unreasonable, if not

frivolous.” See Love v. Associated Newspapers, Ltd., 611 F.3d 601, 614–15

(9th Cir. 2010) (listing factors relevant to awarding attorney’s fees).

      Second, the district court thoroughly explained its basis for finding that the

rates billed were reasonable, and it properly applied the relevant standards under

our case law. See Range Rd. Music, Inc. v. E. Coast Foods, Inc., 668 F.3d 1148,

1155 (9th Cir. 2012).2 The district court properly made “specific findings” on

counsel’s hourly rate based on his experience and as compared to the billing rates

of other attorneys practicing in his geographic area. Transgo, Inc. v. Ajac

      1
          Section 505 of the Copyright Act provides: “In any civil action under this
title, the court in its discretion may allow the recovery of full costs by or against
any party other than the United States or an officer thereof. Except as otherwise
provided by this title, the court may also award a reasonable attorney’s fee to the
prevailing party as part of the costs.”
        2
          Contrary to the Gaedes’ assertion, pro bono counsel may recover attorney’s
fees. Indeed, “[a]ttorneys’ fees are recoverable by pro bono attorneys to the same
extent that they are recoverable by attorneys who charge for their services.” Legal
Voice v. Stormans Inc., 757 F.3d 1015, 1017 (9th Cir. 2014).

                                          5
Transmission Parts Corp., 768 F.2d 1001, 1027 (9th Cir. 1985).

      But the district court abused its discretion in finding the billed hours

submitted by counsel were reasonably attributed to work performed for

Biospintronics, LLC. The Gaedes challenge the reasonableness of the hours billed

because, they argue, some of this time reflects work performed for pro se

Defendants-Appellees Michael DeLay and Anastasia Bendebury, rather than

Biospintronics, LLC, and therefore this time should not have been included in the

lodestar analysis. We agree. Although Biospintronics, LLC’s only members are

DeLay and Bendebury, nothing in the motion for attorney’s fees or the supporting

declarations shows that counsel billed only for the hours spent advising

Biospintronics, LLC. Although the district court acknowledged that Biospintronics

“bears ‘the burden of documenting the appropriate hours expended in the

litigation,’ and [is] required to ‘submit evidence in support of those hours

worked,’” United Steelworkers of Am. v. Ret. Income Plan for Hourly-Rated Emps.

of Asarco, Inc., 512 F.3d 555, 565 (9th Cir. 2008) (quoting Gates v. Deukmejian,

987 F.2d 1392, 1397 (9th Cir.1992)), it did not distinguish counsel’s time advising

Bendebury and DeLay on their pro se motions to dismiss, from counsel’s time

advising those individuals, as members of Biospintronics, LLC, for the purpose of

advising the entity.

      Indeed, Bendebury and DeLay acknowledge that after the first amended

                                          6
complaint was filed, counsel “took on the full burden of advising Defendants’ legal

strategy and on the specifics of their motions practice,” and “[w]ith his guidance,

Defendants prepared a motion to dismiss the [first amended complaint].” These

events occurred before counsel appeared on behalf of Biospintronics, LLC. Thus,

it is unclear whether counsel’s motion for attorney’s fees improperly included fees

for time spent advising Bendebury and DeLay as individuals.

      Because Biospintronics, LLC failed to sufficiently “document[] the

appropriate hours expended in the litigation” on its behalf, rather than on behalf of

all Defendants, id., the district court abused its discretion in finding that the hours

billed were reasonable. We therefore reduce the attorney’s fees award to

Biospintronics, LLC to $7,930, because $7,1503 in fees were incurred before

counsel appeared on behalf of Biospintronics, LLC.

      AFFIRMED IN PART and REVERSED IN PART.

      3
        $500 hourly rate multiplied by hours billed from March 25, 2022 to August
8, 2022.

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