Court Opinion

ID: 5120667
Source: CourtListenerOpinion
Date Created: 2021-10-22 21:00:39.735367+00
Date Added: 2024-06-11T08:22:18.610113
License: Public Domain

USCA11 Case: 21-11168    Date Filed: 10/22/2021   Page: 1 of 11

                                         [DO NOT PUBLISH]
                          In the
         United States Court of Appeals
               For the Eleventh Circuit

                 ____________________

                        No. 21-11168
                 Non-Argument Calendar
                 ____________________

WARREN TECHNOLOGY, INC.,
                                            Plaintiff-Appellant,
versus
UL LLC,

                                                    Defendant,

TUTCO, LLC,

                                          Defendant-Appellee.
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2                      Opinion of the Court                21-11168

                     ____________________

           Appeal from the United States District Court
               for the Southern District of Florida
               D.C. Docket No. 1:18-cv-21019-UU
                    ____________________

Before JORDAN, NEWSOM, and GRANT, Circuit Judges.
PER CURIAM:
        Warren Technology, Inc. and Tutco LLC are competitors in
the unitary heater manufacturing market. Both were previously
sued, along with UL LLC, a safety-standards organization, in a con-
sumer class action. In that class action, consumers alleged that the
companies had engaged in deceptive trade practices by falsely
claiming that their heaters complied with UL standard 1995, which
applies to heaters. The district court held that the plaintiffs had
failed to state a claim and dismissed the class action. See Koski v.
Carrier Corp., 347 F. Supp. 3d 1185, 1195 (S.D. Fla. 2017). In par-
ticular, the Koski court held that the consumers had failed to allege
facts demonstrating that Warren and Tutco had made false repre-
sentations giving rise to liability under the Florida Deceptive and
Unfair Trade Practices Act, Fla. Stat. § 501. Instead, the court
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3                      Opinion of the Court                21-11168

concluded, the complaint alleged only that UL had mistakenly cer-
tified the heaters as compliant. Koski, 347 F. Supp. 3d at 1195.
       Following Koski, Warren sued Tutco under the Lanham
Act, 15 U.S.C. § 1125(a), and the FDUTPA. Warren alleged that
Tutco had misrepresented that its heaters complied with UL stand-
ard 1995 and that Tutco’s misrepresentations caused Warren dam-
age in the form of lost profits. The district court dismissed War-
ren’s claims with prejudice. After the court dismissed the case,
Warren circulated a letter to members of the heater industry claim-
ing that heaters like Tutco’s were unsafe.
        Warren appealed the district court’s dismissal of its action
against Tutco, and we affirmed. See Warren Tech., Inc. v. UL LLC,
962 F.3d 1324, 1329 (11th Cir. 2020). After prevailing on appeal,
Tutco moved to transfer consideration of attorneys’ fees to the dis-
trict court, and we granted Tutco’s motion. The district court re-
ferred the matter to a magistrate judge, who recommended that
the district court award Tutco its attorneys’ fees. Although the dis-
trict court did not adopt the magistrate judge’s report in its en-
tirety, it did adopt the attorneys’ fees award. Warren appeals the
district court’s fee-award order.
       To resolve this case, we must answer two questions: first,
whether the district court abused its discretion in holding that this
was an “exceptional case” for the purposes of awarding attorneys’
fees under the Lanham Act; and second, whether the district court
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4                           Opinion of the Court                        21-11168

abused its discretion in awarding attorneys’ fees under the
FDUTPA. 1
                                         I
        We start with the Lanham Act question. The Lanham Act
states that in a suit based on 15 U.S.C. § 1125(a), “[t]he court in ex-
ceptional cases may award reasonable attorney fees to the prevail-
ing party.” 15 U.S.C. § 1117(a). We have held that an exceptional
case is “simply one that stands out from others with respect to the
substantive strength of the party’s litigating position (considering
both the governing law and the facts of the case) or the unreason-
able manner in which the case was litigated.” Tobinick v. Novella,
884 F.3d 1110, 1117 (11th Cir. 2018) (quoting Octane Fitness, LLC
v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014)). But “[a]
case will not qualify as exceptional under the Lanham Act merely

1 We review a district court’s decision to award attorneys’ fees for abuse of
discretion. Tobinick v. Novella, 884 F.3d 1110, 1116 (11th Cir. 2018). “A dis-
trict court abuses its discretion if it applies an incorrect legal standard,
applies the law in an unreasonable or incorrect manner, follows improper
procedures in making a determination, or makes findings of fact that are
clearly erroneous.” Id. at 1116 (quoting United States v. Toll, 804 F.3d 1344,
1353 (11th Cir. 2015)); see United States v. Perry, ___ F.4th ___, 2021 WL
4448600, at *5 (11th Cir. Sept. 29, 2021) (“abuse of discretion . . . means we will
not reverse unless the ruling is ‘manifestly erroneous’” (citation omitted)).
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5                       Opinion of the Court                  21-11168

because one side has zealously pursued or defended its claim, espe-
cially on an issue with no directly controlling precedent.” Id. at
1119. Ultimately, whether a case is exceptional is “[b]ased on the
totality of the record.” Id. at 1118 (alteration in original).
       In Tobinick, we held that a district court did not abuse its
discretion when it “identified a number of elements of th[e] case
that made it ‘not run-of-the-mill.’” Id. at 1119 (quoting Octane Fit-
ness, 572 U.S. at 554). Although we placed little weight “on the fact
that [the plaintiff] continued litigating his case even in the face of a
number of adverse rulings” because the issue there was novel, we
concluded that the district court “was well within its discretion to
find [the plaintiff’s] manner of litigating his suit made it an excep-
tional case supporting an attorneys’ fees award under the Lanham
Act.” Id. at 1119.
        Here, the district court relied on several facts in concluding
that the case was exceptional. First, the court noted that Warren’s
case had many weaknesses. Second, like the district court in To-
binick, the court here focused on the manner in which Warren lit-
igated the case. In particular, the district court observed that War-
ren engaged in “sharp litigation tactics” and that the letter circu-
lated by Warren, taken together with the other facts, made this “an
exceptional case that stands out from the others.” Although the
district court held that there was insufficient evidence to show that
Warren brought the case in bad faith or for an improper purpose,
it held that the totality of the circumstances made the case excep-
tional.
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6                       Opinion of the Court                 21-11168

        Warren argues that the district court erred in finding that its
case had weaknesses because there was no binding circuit prece-
dent foreclosing its Lanham Act claim. The district court did not
abuse its discretion on this score. Although Warren is correct that
no binding Eleventh Circuit precedent controlled the disposition of
its claims, the theory underlying Warren’s Lanham Act claim had
been previously undermined in a related case, Koski.
        As already explained, in Koski, consumers had claimed that
Warren and Tutco made misrepresentations by displaying the UL
1995 standard even though their heaters weren’t compliant. Here,
Warren sued Tutco for the very same reason. But in both cases,
the reviewing courts concluded that it was UL, not the companies
themselves, that certified the heaters; accordingly, the courts in
both cases dismissed the claims for the same reason. Warren as-
serts that the court in Koski never held that the consumers had no
claim. But the Koski court did hold that the complaints failed be-
cause they didn’t allege that the manufacturer defendants—includ-
ing Tutco—were “responsible for any misrepresentations in the
certification labels.” Koski, 347 F. Supp. 3d at 1195. Just like the
consumers’ complaint in Koski, Warren’s complaint here alleges
that UL certified Tutco’s heaters. So, just as in Koski, there is no
allegation that Tutco made any misrepresentation when it
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7                         Opinion of the Court                      21-11168

displayed the UL standard. 2 Accordingly, Warren’s claim failed for
exactly the same reason that the claim in Koski failed.
        Furthermore, the district court relied on other weaknesses
pointed out by the magistrate judge. The magistrate judge ob-
served that “Warren was unsuccessful on essentially every substan-
tive motion that was filed in the case” and that Warren continued
to litigate even after the district court “expressed doubt about
whether Warren would be able to amend its pleadings to state a
claim.”
        Nor did the district court err, as Warren asserts, in relying
on the letter circulated by Warren to the heater industry. The
court recognized that, by itself, the letter was insufficient to render
the case exceptional. But the court didn’t consider the letter in iso-
lation. The letter was probative of Warren’s litigation strategy, and
the district court considered it—as was appropriate—among the
totality of the circumstances. See Octane Fitness, 572 U.S. at 554.
       Because the district court applied the correct legal standard,
and did so in a reasonable way, we hold that it did not abuse its
discretion.3

2In Warren’s first appeal, we observed that the required allegations under the
Lanham Act and the FDUTPA are similar and held that “[b]ecause all of War-
ren’s claims against . . . Tutco are based upon the same allegation of falsity,
they fail for want of a misrepresentation or a deceptive act.” Warren Tech.,
962 F.3d at 1327–29.
3 The district court’s decision here is consistent with our unpublished deci-
sions. In Domond v. PeopleNetwork APS, we held that the district court
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8                         Opinion of the Court                      21-11168

                                      II
        The district court also awarded Tutco attorneys’ fees under
the FDUTPA. The FDUTPA states that “[i]n any civil litigation
resulting from an act or practice involving a violation of this
part . . . the prevailing party, after judgment in the trial court and
exhaustion of all appeals, if any, may receive his or her reasonable
attorney’s fees and costs from the nonprevailing party.” Fla Stat.
§ 501.2105(1). Tutco was the prevailing party here.
       Once the district court determines that a party is a prevailing
party under FDUTPA, it has discretion to award attorneys’ fees af-
ter considering various equitable factors, including:
       (1) the scope and history of the litigation;

didn’t abuse its discretion in finding a case exceptional when the plaintiffs’
claim was baseless and they threatened to keep litigating unless they were paid
off. 750 F. App’x 844, 848 (11th Cir. 2018); see also Off Lease Only, Inc. v.
Lakeland Motors, LLC, 846 F. App’x 772, 775 (11th Cir. 2021) (holding that the
district court did not abuse its discretion in finding a case exceptional where
the plaintiff didn’t respond to the defendant’s motion for attorneys’ fees, the
plaintiff failed to heed repeated warning about the shortcomings of its claim,
the plaintiff’s claim was weak, and the plaintiff failed to provide supporting
evidence at summary judgment).
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9                      Opinion of the Court                 21-11168

      (2) the ability of the opposing party to satisfy an award
      of fees;

      (3) whether an award of fees against the opposing
      party would deter others from acting in similar cir-
      cumstances;

      (4) the merits of the respective positions—including
      the degree of the opposing party’s culpability or bad
      faith;

      (5) whether the claim brought was not in subjective
      bad faith but frivolous, unreasonable, groundless;

      (6) whether the defense raised a defense mainly to
      frustrate or stall;

      (7) whether the claim brought was to resolve a signif-
      icant legal question under FDUTPA law.

Humane Soc’y of Broward Cnty., Inc. v. Fla. Humane Soc’y, 951
So. 2d 966, 971–72 (Fla. Dist. Ct. App. 2007) (citing Rosen v. Rosen,
696 So.2d 697, 700–01 (Fla. 1997)).
       After considering each of the factors listed in Humane Soci-
ety, the district court agreed with all but one of the magistrate
judge’s findings. The magistrate judge had earlier found that “es-
sentially every factor favors a fee award to Tutco, or is neutral”
and, accordingly, that “it would be equitable to the parties for the
Court to exercise its discretion to award Tutco its attorneys’ fees
under FDUTPA.”
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10                     Opinion of the Court                 21-11168

        Echoing her Lanham Act analysis, the magistrate judge con-
cluded that the scope and history of the litigation favored awarding
Tutco fees due to Warren’s lack of litigation success and the weak-
ness of its case. She determined that ability to pay only slightly
favored Tutco given its failure to present convincing evidence of
Warren’s financial viability. She found that the deterrence factor
was neutral. And she concluded that there was evidence of bad
faith and that Warren’s was groundless. She skipped the sixth fac-
tor as irrelevant and held that the seventh factor favored Tutco be-
cause the case didn’t resolve a significant legal question under
FDUTPA law.
        Reviewing the magistrate judge’s recommendation, the dis-
trict court held that although there was insufficient evidence to find
the fourth factor, bad faith, the other factors weighed in favor of
awarding Tutco attorneys’ fees.
       Warren now asserts that the factors on which the district
court relied are neutral at worst and, in fact, cut in its favor. War-
ren argues that it didn’t litigate unreasonably, that Tutco presented
no evidence that Warren could pay fees, that it’s claims weren’t
groundless, and that the case resolved a significant FDUTPA legal
question.
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11                      Opinion of the Court                 21-11168

       Even granting that Warren’s characterization of the factors
may not be unreasonable, the district court had discretion in bal-
ancing the factors, Humane Soc. of Broward Cnty., 951 So. 2d at
971, and we do not find that the court applied the factors in an un-
reasonable manner when it found that several of them favored
awarding Tutco attorneys’ fees. Because the district court consid-
ered the Humane Society factors, and applied them reasonably, we
hold that it did not abuse its discretion. See In re Rasbury, 24 F.3d
159, 168 (11th Cir. 1994) (“As we have stated previously, the abuse
of discretion standard allows a range of choice for the district court,
so long as that choice does not constitute a clear error of judg-
ment.”(quotation omitted)).
                               * * *
      The district court did not abuse its discretion in awarding
Tutco attorneys’ fees under the Lanham Act and the FDUTPA. Ac-
cordingly, we AFFIRM.