Cesari S.R.L. v. Peju Province Winery L.P.

Background

After a four-day bench trial, the court had awarded Cesari S.R.L. $666,214 in profits disgorged from Peju Province Winery L.P. and Peju Family Operating Partnership L.P. Cesari then moved under Section 35(a) of the Lanham Act for more than $1.7 million in attorney’s fees, nearly $300,000 in costs, and prejudgment and post-judgment interest. Peju Province Corporation had previously been dismissed by stipulation.

Attorney’s Fees

The court held that this was an “exceptional” trademark case, meaning it stood out because of the strength of a party’s legal position or the unreasonable way the case was litigated. The court emphasized that Peju continued using the LIANA mark after an earlier Trademark Trial and Appeal Board ruling that found a likelihood of confusion with Cesari’s LIANO mark. The court also relied on Peju’s unsuccessful positions concerning issue preclusion, the statute of limitations, the effect of the earlier ruling, and laches.

Because the case was exceptional, the court determined that Cesari could receive reasonable attorney’s fees. But the court limited the award to $666,214. It explained that Cesari had not shown actual lost sales, had focused on obtaining disgorged profits rather than an injunction, and sought fees roughly four times larger than the recovery. The court therefore concluded that shifting more than the disgorged profits to Peju would not be equitable. The court awarded $666,214 in attorney’s fees without conducting a detailed hour-by-hour review.

The court also noted that lead counsel’s hourly rates were within the range approved in the district, but said that the requested 15 percent “success fee” was not shown to be tied to success in the litigation and should not be shifted to Peju. It further stated that administrative work should not be billed at a full attorney rate when a legal assistant could have performed it.

Interest

The court did not award prejudgment interest. Cesari had not sought or received actual damages, and the court concluded that Cesari had not been deprived of the use of Peju’s profits before those profits were awarded. Adding prejudgment interest would therefore impose an unwarranted penalty on top of the disgorgement and fee awards. The court held that Cesari was entitled to post-judgment interest under 28 U.S.C. § 1961.

Costs and Expert Witness Fees

The court held that recoverable costs were limited to the categories listed in 28 U.S.C. §§ 1821 and 1920, subject to the Southern District of New York’s local rules. It rejected requests for investigation costs, shipping, legal research, copying and other expenses that were not taxable under those provisions. It awarded $14,661.97 in costs, including $40 for one day of expert testimony, $8,562.15 for allowable deposition transcripts, $327.91 in service costs, $4,095.76 for certain hearing transcripts, $1,236.15 for trial-related printing and copying, and $400 in filing fees.

Separately, under Federal Rule of Civil Procedure 26, the court awarded $2,697.75 for additional time spent by Cesari’s damages expert responding to discovery, including time attributable to defense counsel’s late arrival, preparation of an errata sheet, and travel time at half the hourly rate. The court denied the remaining disputed expert and travel-related requests.

Disposition

The court granted in part and denied in part Cesari’s motion. It awarded $666,214 in attorney’s fees, $14,661.97 in costs, $2,697.75 in expert witness fees under Rule 26, and post-judgment interest. The clerk was directed to enter judgment for Cesari, terminate the pending motion, and close the case.