The Vineyard House, LLC v. Constellation Brands U.S. Operations, Inc.

Background

The court had previously ruled after a trial in favor of Constellation Brands U.S. Operations, Inc. (Constellation) and against The Vineyard House, LLC (TVH) in both the main declaratory-relief action and a second action involving TVH’s alleged trademark infringement. Constellation then moved for attorneys’ fees and reimbursement of expert-witness fees.

Attorneys’ Fees

Under the Lanham Act, a court may award reasonable attorneys’ fees to the prevailing party in an “exceptional case.” The court explained that an exceptional case is one that stands out because of the weakness of a party’s legal or factual position or because the case was litigated unreasonably.

The court concluded that this was an exceptional case. It stated that TVH did not have a legitimate claim and that its trial theories lacked a legal or factual foundation. The court relied on findings including Constellation’s ownership of incontestable trademarks involving “TO KALON,” warnings from the Patent and Trademark Office, evidence concerning use of the term, the lack of historical evidence connecting the Baldridge Parcel to grape growing, and the conduct of Mr. Nickel, whose actions the court treated as the same as TVH’s actions.

Constellation sought $190,517.30 for the second action and $2,570,164 for work on the main action after the preliminary-injunction order, for a subtotal of $2,760,681.30. The court deducted $7,326.41 for unsuccessful settlement efforts, $41,470.19 for unsuccessful opposition to TVH’s motion to amend, $102,500.00 for work on the fee motion, and $10,000.00 for excessive research concerning the bill of costs. It then applied an additional ten-percent reduction. The resulting attorneys’ fee award was $2,339,446.23.

Expert Fees

Constellation also sought $20,981 for expert fees associated with four depositions, including preparation and deposition time. The court held that Federal Rule of Civil Procedure 26(b)(4)(E) required reimbursement for the experts’ time spent responding to discovery but did not require reimbursement for deposition preparation time.

The court awarded $11,681.00, representing 16.33 hours that three experts actually spent in depositions. It found the experts’ hourly rates reasonable.

Disposition

The court granted in part Constellation’s motion and awarded $2,339,446.23 in attorneys’ fees and $11,681.00 in expert fees, for a total of $2,351,127.23. The order stated that the award was less than the full amount requested and terminated the fee motions. The court also granted Constellation’s motion to seal.

Judge Yvonne Rogers issued the order.