Little Giant Ladder Systems, LLC. v. Tricam Industries, Inc.

Background

The court had previously granted Tricam summary judgment on Wing’s state and federal false-advertising claims, and judgment was entered. Tricam then moved for attorneys’ fees and nontaxable costs. Wing moved to stay, or delay, the fee ruling until its appeal was resolved. Tricam also filed a bill of costs seeking $31,727.44. The Clerk awarded Tricam $15,870.20, and Tricam asked the court to review that cost judgment.

Motion to Stay

The court denied Wing’s motion to stay. It concluded that deciding the fee request immediately was more efficient than waiting a year or more for the appeal. The court also noted that it would deny the fee motion, allowing any challenge to that ruling to be addressed with the pending appeal.

Attorneys’ Fees

Under the Lanham Act and Minnesota’s false-advertising statute, a prevailing defendant may receive attorneys’ fees only in an exceptional case. The court described that standard as requiring circumstances such as a claim being groundless, unreasonable, vexatious, or pursued in bad faith.

The court found that this was not an exceptional case. It emphasized that Tricam’s summary-judgment victory rested on a narrow basis: after the court excluded testimony from Wing’s expert Hal Poret, Wing lacked enough evidence to show that the ANSI-conformance statement on its ladders was important to consumers’ purchasing decisions. The court stated that admitting Poret’s testimony would have created a fact dispute on that issue, while another expert’s testimony created a fact dispute about whether Tricam’s ANSI-conformance statements were literally false. The court also identified several novel or substantially unsettled legal questions concerning Wing’s claims. It therefore concluded that Wing’s claims were not groundless, unreasonable, vexatious, or pursued in bad faith, and denied Tricam’s motion for attorneys’ fees and nontaxable costs.

Review of Costs

The Clerk had awarded all requested transcript and printing-disbursement costs, $160 of the $248.40 requested for witnesses, and none of the $15,768.84 requested for certain electronic-discovery copying costs. Tricam’s review motion sought an additional $88.40 in witness mileage and $3,327.84 for producing documents as single-page TIFF files and with optical character recognition, or OCR, which makes image-based text searchable.

Wing did not oppose the additional $88.40 in witness costs. It opposed the electronic-discovery costs, arguing that the work was done for the parties’ convenience rather than because a court order or agreement required that production format. The court reviewed the Clerk’s decision anew. It explained that federal law generally allows a prevailing party to recover costs, but limits recoverable costs to those listed in 28 U.S.C. § 1920. That statute allows copying costs when the copies were necessarily obtained for use in the case, and the party seeking costs must prove that the costs were actually incurred, reasonable, and necessary.

The court found that the parties had agreed that each would produce electronically stored information as searchable TIFF files, even though they had not put that agreement into a formal electronic-discovery protocol or court order. Based on the parties’ communications and statements, the court concluded that their decision not to seek a formal order was at least partly based on their shared understanding about the production format. It therefore treated the $1,646.04 TIFF-production cost and the $1,681.80 OCR cost as recoverable copying costs under § 1920(4). The court also awarded the uncontested $88.40 in additional witness mileage.

Order

The court ordered that: (1) Wing’s motion to stay was denied; (2) Tricam’s motion for attorneys’ fees and nontaxable costs was denied; (3) Tricam’s motion to review the cost judgment was granted; and (4) an additional $3,416.24 in costs was taxed against Wing.