Moonbug Entertainment Limited v. Babybus Network Technology Co., Ltd

Background

Moonbug and Treasure Studio were the plaintiffs, and Babybus was the defendant. Babybus asserted counterclaims based on Moonbug’s notices to YouTube under the Digital Millennium Copyright Act, alleging that the notices improperly sought removal of Babybus’s videos. Babybus initially asserted one federal counterclaim under 17 U.S.C. § 512(f) and two California unfair-competition counterclaims. After Moonbug filed motions challenging those claims, Babybus amended its pleading and asserted additional California claims involving alleged interference with its economic relationships and its contractual relationship with YouTube.

The court previously granted Moonbug’s special motion to strike the California claims under California’s anti-SLAPP statute. The court found that Babybus’s argument that the notices were unprotected commercial speech lacked support and that the state-law counterclaims were preempted by the Copyright Act. The earlier order also held that Moonbug was entitled to attorneys’ fees and costs under the anti-SLAPP statute and could request them by motion.

Fee request and objections

Moonbug requested $173,522.85. The request covered 72.48 hours related to the original anti-SLAPP counterclaims, 139.39 hours related to the amended counterclaims, work on the fee motion and reply, and $25.20 in costs. Moonbug excluded more than 100 hours that it identified as involving issues unrelated to the anti-SLAPP motions, including the federal counterclaim and other defenses.

Babybus agreed that Moonbug could recover reasonable fees for both anti-SLAPP motions and did not challenge the hourly rates. Babybus instead disputed the number of compensable hours, argued that Moonbug had not negotiated the fee dispute in good faith, and objected to work it viewed as unnecessary, excessive, duplicative, overstaffed, or inadequately described in the billing records.

Court’s analysis

The court rejected Babybus’s argument that Moonbug had failed to negotiate in good faith. The court found that Moonbug had offered to accept $96,152, provided its billing records after Babybus requested them, and had excluded substantial amounts from its request. The court found no basis to reduce the award for the meet-and-confer process.

The court held that Moonbug could recover fees for work on issues “inextricably intertwined” with the anti-SLAPP motions. Although work devoted solely to Babybus’s federal counterclaim or defenses was not compensable, the state and federal counterclaims shared factual and legal issues concerning Moonbug’s notices to YouTube. The court therefore allowed fees for work addressing those overlapping issues.

The court agreed with Babybus that Moonbug’s reply brief supporting its first motion was unnecessary because Babybus had already informed Moonbug that it would file an amended pleading. The court excluded 10.11 hours for that work. The court rejected Babybus’s other proposed reductions concerning the fee-on-fee request, use of a percentage-of-pages method, research into opposing counsel’s prior fee awards, staffing, and alleged duplication.

The court did find that the billing records used vague or similar descriptions for compensable and noncompensable work. Because those entries made it difficult to verify Moonbug’s categorization, the court imposed a 5% reduction for block billing. The court approved Moonbug’s $25.20 request for costs.

Disposition

Judge Edward M. Chen granted Moonbug’s motion for attorneys’ fees, with modifications. The court reduced the anti-SLAPP-motion fee request by $5,941.14 for the unnecessary reply brief, reduced the resulting amount by 5% for block billing, and awarded $112,635.57 for the anti-SLAPP work. It awarded the full $49,022.75 requested for work on the fee motion and reply, plus $25.20 in costs, for a total award of $161,683.52. The order disposed of Docket No. 72.