Quincy Bioscience, LLC v. Ellishbooks ( 2020 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19‐1799
QUINCY BIOSCIENCE, LLC,
Plaintiff‐Appellee,
v.
ELLISHBOOKS, et al.,
Defendants‐Appellants.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:17‐cv‐08292 — Sharon Johnson Coleman, Judge.
____________________
DECIDED JULY 22, 2020
____________________
Before FLAUM, RIPPLE, and WOOD, Circuit Judges.
PER CURIAM. After our decision on the merits, Quincy Bio‐
science, LLC v. Ellishbooks, 957 F.3d 725 (7th Cir. 2020), we lat‐
er granted Quincy Bioscience, LLC’s (“Quincy”) motion for
sanctions. The order directed Quincy to submit a statement
of its costs and fees incurred in the case within fourteen days
and gave the appellants (collectively “Ellishbooks”) fourteen
days to raise any objections. Quincy has submitted its state‐
ment and requests $50,059.50 in attorneys’ fees. Ellishbooks
2 No. 19‐1799
has responded in opposition and also seeks confirmation
that sanctions were not imposed against its attorney, Robert
DeWitty. Quincy sought, and was granted, leave to file a
sur‐reply to counter Ellishbooks’s assertion that the sanc‐
tions were imposed only against Ellishbooks, and not its
counsel.
The underlying facts are fully set forth in our merits
opinion, see Quincy Bioscience, LLC, 757 F.3d at 726–28, and
we therefore only briefly summarize them here. Quincy filed
suit against Ellishbooks alleging that it violated the Lanham
Act, 15 U.S.C. §§ 1114, 1125, and various state laws when it
engaged in the unauthorized and unlawful sale of Quincy’s
dietary supplements bearing the Prevagen® trademark.
Quincy successfully sought a default judgment, and, after a
prove‐up hearing the district court awarded Quincy
$480,968.13 plus costs. The court also permanently enjoined
Ellishbooks from infringing upon Quincy’s trademark and
selling stolen products bearing the Prevagen® mark. We af‐
firmed, concluding that Ellishbooks’s arguments on appeal
were meritless. Quincy then moved for sanctions under Fed‐
eral Rule of Appellate Procedure 38. We granted the motion
because Ellishbooks’s arguments “had virtually no likeli‐
hood of success” on appeal and because it appeared that El‐
lishbooks had attempted to draw out the proceedings for as
long as possible. Quincy Bioscience, LLC v. Ellishbooks, 961
F.3d 938, 941 (7th Cir. 2020) (per curiam).
Quincy submitted a timely statement seeking a total of
$50,059.50 in attorneys’ fees for the time that attorneys Jona‐
than J. Krit and Sanjay S. Karnik had spent litigating the ap‐
peal. Ellishbooks filed a timely response, objecting to time
spent on mediation and the request for sanctions, time du‐
No. 19‐1799 3
plicated by the two attorneys, and time spent performing
legal research for specific rules. Ellishbooks also sought con‐
firmation that the attorneys’ fees were imposed against the
appellants and not their attorney, Robert W. DeWitty, or his
law firm. Quincy then moved to file a sur‐reply addressing
the scope of the sanctions award, and we granted the mo‐
tion.
We first address the scope of the sanctions award. Ellish‐
books argues that because the court’s opinion never referred
to Mr. DeWitty nor explicitly awarded sanctions against him
or his law firm, the sanctions award should be limited to El‐
lishbooks. We cannot accept this argument. We granted
Quincy’s motion for sanctions, and in that motion Quincy
repeatedly requested that the court award sanctions against
the appellants and their counsel. Further, the opinion cited
actions by counsel as support for granting the motion. The
sanctions were awarded against both Ellishbooks and
Mr. DeWitty.
Next Ellishbooks argues that the court should not award
attorneys’ fees for time “directed to efforts occurring outside
1
the appeal brief or oral proceeding before this Court.” We
have indicated that fees awarded as a sanction should be
limited to the time spent defending the appeal and should
not include time spent after the litigant has won in this
court. See, e.g., Wachovia Sec., LLC v. Loop Corp., 726 F.3d 899,
910 (7th Cir. 2013) (awarding fees “expended in defense of”
appeal); Blockley v. Work Ctr., Inc., No. 99‐1421, 2000 WL
973625, at *2 (7th Cir. July 11, 2000) (unpublished) (describ‐
ing “just damages” as “the reasonable attorneys’ fees … in‐
1 App. R. 63 at 2.
4 No. 19‐1799
curred in defending the appeal” (internal quotation marks
omitted)). The Supreme Court similarly has described Rule
38 as giving appellate courts authority to award “expenses”
that are “caused by a frivolous appeal.” Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 407 (1990). And the Ninth Cir‐
cuit has explicitly held that a sanction award should not en‐
compass fees spent preparing the motion for sanctions. See
Blixseth v. Yellowstone Mountain Club, LLC, 854 F.3d 626, 631
(9th Cir. 2017).
Ellishbooks argues that fees for time spent in four catego‐
ries of work should be excluded: mediation proceedings,
sanctions proceedings, researching specific rules, and com‐
2
munications with Counsel Press. We believe that Quincy’s
fees should be limited to work defending the appeal. We is‐
sued our opinion resolving the appeal on April 24, 2020; we
therefore will exclude attorneys’ fees requested for time on
or after April 24, 2020. Subtracting these entries from each
attorney’s requested time results in a total reduction of
$5730.00 ($3120.00 from Mr. Krit’s entries and $2610.00 from
Mr. Karnik’s entries).
Ellishbooks also argues that some of counsel’s time en‐
tries are duplicative of each other, but the entries it identifies
do not appear unnecessary. For example, both attorneys re‐
viewed the notice of appeal and a court order; both attorneys
2 In support of its arguments, Ellishbooks cites only a bankruptcy deci‐
sion, In re Thompson, 520 B.R. 713 (Bankr. E.D. Wis. 2014), in which the
court declined to award attorneys’ fees under 28 U.S.C. § 1927 because
the creditor had not “unreasonably and vexatiously multipl[ied] the pro‐
ceedings by [its] conduct in this case,” including participating in a failed
mediation. Thompson has no application here.
No. 19‐1799 5
took part in drafting and filing two status reports; and both
attorneys either reviewed or responded to email from op‐
posing counsel. It is not clear that counsel’s work was dupli‐
cative. These entries will not be excluded.
Ellishbooks also submits that the court should exercise its
discretion and limit its liability to a much smaller amount
than the requested fees because it is a “very small entity,”
3
with “essentially no assets.” But as Quincy points out, El‐
lishbooks provides no support for its claim of insolvency.
There is no basis for a reduction of an award on this basis.
It is therefore ordered that sanctions are awarded against
both the appellants and Mr. DeWitty in the amount of
$44,329.50.
3 App. R. 63 at 4.