United States District Court, E.D. Pennsylvania
Better Bakery has moved for an award of $450, 000 in
attorney's fees pursuant to Rule 54(d)(2) of the Federal
Rules of Civil Procedure. For the following reasons, I will
deny the motion in its entirety.
fall of 2011, Sweet Street approached Better Bakery proposing
that the two collaborate in an effort to produce a new
pretzel sandwich product. The parties entered into a
Confidentiality and Nondisclosure Agreement (the
“NDA”) on November 2, 2011 and began a
relationship of collaboration for the purpose of producing
the pretzel sandwich. The parties communicated and exchanged
information on how best to produce the product to the desired
specifications. Sometime after entering into the NDA, Sweet
Street believed that the two parties had entered into an oral
exclusive requirements contract related to the design,
manufacture, and supply of the pretzel sandwiches.
working relationship between Better Bakery and Sweet Street
turned sour in 2012. In March of that year, Brian Freeman of
Better Bakery was “refusing to communicate” with
Sweet Street's CEO, Sandy Solmon. Solmon,
“frustrated that her months of effort and collaboration
with [Better Bakery] had been wasted, ” sent an email
to two Sweet Street employees stating that she wanted Brian
Freeman of Better Bakery to “suffer.” In the
summer of that year, Sweet Street discovered that Better
Bakery had produced its own pretzel sandwich and had been
selling that product at Sam's Club, Costco, Wal-Mart, and
BJ's stores. Sweet Street, believing it had protectable
intellectual property rights in the pretzel sandwich it had
been developing with Better Bakery, brought suit against its
former collaborating partner.
54(d)(2) of the Federal Rules of Civil Procedure provides
that, except under some conditions, within fourteen days
after entry of judgment the prevailing party may file a
motion claiming “attorney's fees and related
nontaxable expenses.” Fed.R.Civ.P. 54(d)(2)(A) and
(B)(i). The motion must “specify the judgment and the
statute, rule, or other grounds entitling the movant to the
award” and “state the amount sought or provide a
fair estimate of it.” Id. at (B)(ii) and
(iii). The opposing party must be given an opportunity to
state its objections to the motion. Id. at (C).
Sweet Street's claims II, III, and IV of the complaint
were dismissed on January 1, 2013. See Document #24,
Sweet St. Desserts, Inc. v. Better Bakery, LLC, Civ.
A. No. 12-6115, 2013 WL 81385 (E.D. Pa. Jan. 7, 2013).
Thereafter, summary judgment was granted in favor of Better
Bakery on all of Sweet Street's remaining claims on July
23, 2015. See Sweet St. Desserts, Inc. v. Better Bakery,
LLC, 2015 U.S. Dist. LEXIS 95913 (E.D. Pa. Jul. 23,
2015). Better Bakery's counterclaims against Sweet Street
were then dismissed with prejudice on February 18, 2016.
See Document #85. Better Bakery timely filed its
Motion to Recover Attorney's fees, now before the court,
on March 3, 2016. Sweet Street has responded. In its motion,
Better Bakery argues that four separate grounds entitle it to
an award of attorney's fees: (1) 28 U.S.C. § 1927;
(2) the Lanham Act; (3) 12 Pa.C.S.A § 5305(1); (4) and
the court's inherent power to sanction.
Better Bakery is the Prevailing Party.
Street does not dispute that Better Bakery is the prevailing
party in this case. In determining the prevailing party, the
Third Circuit examines whether the plaintiff achieved some of
the benefit sought by the party bringing the suit. Tyler
v. O'Neil, 112 F.App'x 158, 161 (3d Cir. 2004).
Where, as here, a defendant has successfully defended against
a plaintiff's substantial claims and a judgment has been
entered accordingly, the defendant is generally considered
the prevailing party for Purposes of Rule 54(d)(1).
Id. (citing Russian River Watershed Protection
Comm. v. City of Santa Rosa, 142 F.3d 1136, 1144 (9th
Cir. 1998). The fact that Better Bakery dismissed its
counterclaims does not mean that it cannot be the prevailing
party. In fact, Judge Friendly of the Second Circuit rejected
this view and held that the defendant is the prevailing
party, despite an adverse judgment on its counterclaims.
See Scientific Holding Co. v. Plessy Inc., 510 F.2d.
15, 28 (2d Cir. 1974).
Recovery of Attorneys' Fees Under 28 U.S.C. §
Bakery first asserts that it has a right to recover
attorney's fees under 28 U.S.C. § 1927, which
Any attorney or other person admitted to conduct cases in any
court of the United States or any Territory thereof who so
multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy
personally the excess costs, expenses, and ...