USCA1 Opinion
United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
____________________
No. 95-2289
STAR FINANCIAL SERVICES, INC., d/b/a STAR MORTGAGE,
Plaintiff, Appellee,
v.
AASTAR MORTGAGE CORP., a/k/a ASTAR MORTGAGE CORP.,
Defendant, Appellant.
_____________________
No. 96-1323
STAR FINANCIAL SERVICES, INC., d/b/a STAR MORTGAGE
Plaintiff, Appellant,
v.
AASTAR MORTGAGE CORP., a/k/a ASTAR MORTGAGE CORP.
Defendant, Appellee.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
___________________
____________________
Before
Torruella, Chief Judge,
___________
Stahl and Lynch, Circuit Judges.
______________
____________________
Philip X. Murray with whom Lorusso & Loud was on brief for Aastar
________________ ______________
Mortgage Corp.
Gary E. Lambert with whom Lambert & Ricci, P.C. was on brief for
_______________ ______________________
Star Financial Services, Inc.
____________________
July 16, 1996
____________________
STAHL, Circuit Judge. Star Financial Services,
STAHL, Circuit Judge.
_____________
d/b/a Star Mortgage ("STAR") brought an action against Aastar
Mortgage Corporation ("AASTAR") alleging, inter alia, service
_____ ____
mark infringement and unfair trade practices. A jury agreed
that AASTAR had unlawfully infringed on STAR's service mark
under both federal and Massachusetts law. Nonetheless, it
awarded no damages on the infringement claims. Based upon
the finding of infringement, the jury also returned a verdict
in favor of STAR on the unfair practices claim, Mass. Gen. L.
ch. 93A 2 and 11.
Following trial, the court permanently enjoined
AASTAR from any future reference to itself as "AASTAR" and
ordered certain additional remedial action. Pursuant to
Mass. Gen. L. ch. 93A 11, the court also awarded fees to
STAR's attorneys. Shortly thereafter, the court found AASTAR
to be in civil contempt for violating the injunction and
awarded attorneys' fees and costs to STAR stemming from the
contempt proceedings.
Both parties appeal. AASTAR contends that the
district court erred in denying its motion for judgment as a
matter of law, denying its request for a trial continuance,
holding AASTAR in civil contempt and awarding attorneys'
fees. STAR appeals the court's reduction in the requested
amount of attorneys' fees. Addressing these contentions in
-2-
2
turn (providing facts as necessary), we affirm the district
court in all respects.
I.
I.
__
Denial of Motion for Judgment As a Matter of Law
Denial of Motion for Judgment As a Matter of Law
________________________________________________
A. Standard of Review
______________________
AASTAR argues that STAR failed to produce evidence
sufficient to establish service mark infringement1 by a
preponderance of the evidence and, thus, the court should
have granted its motion for judgment as a matter of law
pursuant to Fed. R. Civ. P. 50(a) & (b).2 We review the
court's denial of the Rule 50 motion de novo, examining the
__ ____
evidence in the light most favorable to the nonmovant, STAR.
Golden Rule Ins. Co. v. Atallah, 45 F.3d 512, 516 (1st Cir.
____________________ _______
1995). "[W]e may not consider the credibility of witnesses,
resolve conflicts in testimony, or evaluate the weight of the
evidence." Wagenmann v. Adams, 829 F.2d 196, 200 (1st Cir.
_________ _____
1987). Reversal of the denial of the motion is warranted
"only if the facts and inferences 'point so strongly and
____________________
1. Although the parties and the district court referred to
this case as a "trademark" infringement case, it is really a
dispute over a "service mark." The difference between the
two, however, is not relevant to our discussion, see Boston
___ ______
Athletic Ass'n v. Sullivan, 867 F.2d 22, 23 n.1 (1st Cir.
______________ ________
1989), and we will refer to the case as one of "service mark
infringement" while considering both trademark and service
mark cases in our discussion. See id.
___ ___
2. For the first time on appeal, AASTAR requests a new
trial. Because it did not timely request this relief below
as Fed. R. Civ. P. 59(b) requires, AASTAR may not now obtain
this relief.
-3-
3
overwhelmingly in favor of the movant' that a reasonable jury
could not have reached a verdict against that party."
Atallah, 45 F.3d at 516 (quoting Acevedo-Diaz v. Aponte, 1
_______ ____________ ______
F.3d 62, 66 (1st Cir. 1993)). Thus, we present the facts in
the light most favorable to STAR as the jury could have found
them.
B. Facts
_________
STAR is in the business of "mortgage originating";
it receives information from individuals seeking real estate
mortgage loans, completes applications with that information,
and then searches the secondary market for a lender willing
to offer the mortgage sought. STAR has operated throughout
Massachusetts since its incorporation in 1993.
In January 1994, STAR registered its service mark
(which it had used since the time of its incorporation) with
the Massachusetts Secretary of State. At that time, STAR
also applied for, and eventually received, a federal
registration of the mark. The mark consisted of the word
"STAR" in bold, capital letters with a five-point star symbol
in the upper portion of the letter "R" and the word
"MORTGAGE" in smaller capital letters beneath the word
"STAR."
STAR used the mark in all of its advertising. It
spent about $2,000 per month (of its $5,000 monthly
advertising budget) for advertisements in the Suburban Real
_____________
-4-
4
Estate News ("The Suburban"), a free publication about real
___________ ____________
estate issued in several regional editions (e.g., north,
____
west, south) and distributed throughout Massachusetts.
STAR's advertisements in The Suburban typically touted, inter
____________ _____
alia, access to various mortgage programs, favorable interest
____
rates, low closing costs, timely credit approval and low down
payments.
In May 1994, AASTAR commenced offering mortgage
originating services in the Massachusetts area. It also
placed advertisements in The Suburban that, like STAR's
_____________
advertisements, promised a variety of mortgage programs,
favorable interest rates, low closing costs and timely
approvals. These advertisements typically would include a
"closing cost certificate" to be clipped out, entitling the
bearer to a $500.00 credit toward closing costs.
AASTAR's advertisements contained the business name
"AASTAR MORTGAGE CORP." in bold, capital letters. Its first
advertisement in The Suburban depicted a five-point star
____________
symbol superimposed over the first "A" in "AASTAR." At one
time, AASTAR's business cards also depicted the star symbol
in that same letter, but eventually the symbol was moved to
the third and last "A" in "AASTAR."
STAR's president, Jay Austin, noticed AASTAR's
advertisement in a May 1994 edition of The Suburban. He then
____________
wrote various letters to AASTAR's officers, informing them of
-5-
5
his registered mark, requesting them to cease business
operations under the "AASTAR" name and advising them to take
various remedial actions. AASTAR did not respond.
Actual customers confused the two mortgage
originating companies. In November 1995, a STAR customer who
had already completed an application walked into the STAR
office with a copy of The Suburban and asked why she was not
____________
offered the rate advertised. Austin explained that AASTAR,
not STAR, was advertising that rate. On another occasion, a
customer who had completed an application at STAR returned to
its office with AASTAR's closing-cost coupon and, believing
the advertisement was for STAR's services, asked for the $500
credit. On yet a different occasion in July 1994, a customer
had almost completed an application when she presented the
STAR loan originator with AASTAR's $500 coupon. The loan
originator explained that the customer had confused the two
companies, and after conferring with a supervisor, credited
the customer the $500.
Potential customers also confused the two
companies. Austin would call individuals who had placed an
initial call to STAR to inquire into its services; several
times during these follow-up calls, the individual would
indicate that he or she had "already" completed an
application with STAR. When the person's name did not appear
in STAR's records, Austin would call again to inquire if the
-6-
6
person was "sure" the application was with STAR; the response
would be affirmative. Austin would then inquire if it was
with "AASTAR" or "STAR"; at this point the person would
indicate, "oh, it was AASTAR."
C. Discussion
______________
The purpose of trademark laws is to prevent the use
of the same or similar marks in a way that confuses the
public about the actual source of the goods or service.
DeCosta v. Viacom Int'l, Inc., 981 F.2d 602, 605 (1st Cir.
_______ __________________
1992), cert. denied, 509 U.S. 923 (1993). Confusion about
_____ ______
source exists when a buyer is likely to purchase one product
in the belief she was buying another and is thus potentially
prevented from obtaining the product she actually wants. Id.
___
To prevail in an action for trademark (or service
mark) infringement, the plaintiff must establish: "1) that he
uses, and thereby 'owns,' a mark, 2) that the defendant is
using that same or a similar mark, and 3) that the
defendant's use is likely to confuse the public, thereby
harming the plaintiff." Id. at 605. The harm caused by the
___
confusion may be attributable the defendant's appropriation
of the plaintiff's goodwill (perhaps leading to sales
diversion), or the reduction in the value of the mark by
virtue of the association of the plaintiff with the
defendant's own "bad" name (so-called "reverse confusion").
See id. at 608.
___ ___
-7-
7
AASTAR contends that STAR has failed to prove
"likelihood of confusion," an essential element of a
trademark infringement claim under both Massachusetts and
federal law. See Astra Pharmaceutical Prods., Inc. v.
___ ___________________________________
Beckman Instruments, Inc., 718 F.2d 1201, 1205 (1st Cir.
__________________________
1983); Pignons S.A. de Mecanique de Precision v. Polaroid
________________________________________ ________
Corp., 657 F.2d 482, 486-87 (1st Cir. 1981). We require
_____
evidence of a "substantial" likelihood of confusion -- not a
mere possibility -- and typically refer to eight factors in
making the assessment:
(1) the similarity of the marks; (2) the
similarity of the goods [or services];
(3) the relationship between the parties'
channels of trade; (4) the relationship
between the parties' advertising; (5) the
classes of prospective purchasers; (6)
evidence of actual confusion; (7) the
defendant's intent in adopting the mark;
(8) the strength of the plaintiff's mark.
Astra, 718 F.2d at 1205. None of these factors is
_____
necessarily controlling, but all of them must be considered.
Id.; Pignons S.A., 657 F.2d at 487-92. AASTAR attacks the
___ ____________
evidence as to each factor.
1. Similarity of the marks
___________________________
A jury plainly could infer from the evidence that
the designations "STAR MORTGAGE" and "AASTAR MORTGAGE"
(including the star symbols) were sufficiently similar such
that prospective purchasers might be confused about the
source of the services desired. While AASTAR emphasizes the
-8-
8
dissimilarity of some individual features of the
designations, a jury could supportably find that the total
effect of the two -- including similarity in pronunciation --
was to create a probability of confusion.
2. Similarity of the services
______________________________
AASTAR admits that both companies offered the same
services. Thus, this factor indisputably indicates a
likelihood of confusion.
3., 4., 5. Relationship between the parties'
___________ ____________________________________
advertising, the parties' channels of trade, and the classes
_____________________________________________________________
of prospective purchasers.3
_________________________
The parties both advertised in The Suburban, thus
_____________
providing evidence of overlap in their advertising strategies
and targets. AASTAR attempts to minimize this evidence by
pointing to the undisputed evidence that it advertised in
many publications in which STAR did not; it asserts that
thus, the parties "did not compete" in those particular
advertising channels. This argument, however, is premised
upon the unsupportable assumption that because some of the
advertising channels differed, distinct classes of consumers
____________________
3. We often analyze these three factors together, and we
find it appropriate to do so here. Equine Technologies, Inc.
_________________________
v. Equitechnology, Inc., 68 F.3d 542, 546 n.5 (1st Cir.
_____________________
1995).
-9-
9
were reached and the relevant consuming public would view
mortgage-originating advertisements in only one source, and
hence, would not be confused.
The evidence, however, supports a finding that STAR
and AASTAR targeted the same classes of prospective
purchasers in the same geographical areas, regardless of the
particular advertising channels employed. This evidence,
combined with the fact that both companies advertised in the
same publication, would allow a jury to view these three
factors (channels of advertising, trade, and classes of
purchasers) in STAR's favor.
AASTAR additionally argues that the trial evidence
established that mortgage-shoppers are highly sophisticated
and exercise great care in choosing a mortgage (often a one-
time purchase) and thus, the likelihood of confusion is
minimal. While this argument is not without force, a jury
could find that this evidence did not overwhelm the bulk of
other evidence suggestive of confusion.
6. Actual Confusion
____________________
AASTAR concedes that STAR presented evidence that
the companies' names actually confused consumers about the
source of the services sought. AASTAR challenges the weight
of this evidence, however, arguing that it was presented by
"biased" STAR employees. AASTAR also complains that most of
the purportedly confused customers were not identified.
-10-
10
These arguments, however, properly belong before the fact
finder; our review of the record reveals that a jury
reasonably could have credited the testimony regarding actual
confusion in favor of STAR.4
7. Intent
__________
AASTAR makes much of the fact that there was no
evidence that it adopted its business name in "bad faith,"
i.e., with the intent to take advantage of STAR's goodwill
____
and promotion efforts. Evidence of bad intent, however,
while potentially probative of likelihood of confusion, is
simply not required in a trademark infringement case;
moreover, "a finding of good faith is no answer if likelihood
of confusion is otherwise established." President and
______________
Trustees of Colby College v. Colby College-New Hampshire, 508
_________________________ ___________________________
F.2d 804, 811-12 (1st Cir. 1975).
8. Strength of the Mark
________________________
AASTAR contends that there was little evidence
regarding the strength of STAR's service mark and that the
evidence that was presented showed that the mark was weak.
____________________
4. AASTAR also resurrects its frustrations about
difficulties it experienced in discovery of witnesses and
documents needed by it to attack the weight of the testimony
about confusion. While we agree with the district court that
STAR was less than forthcoming in meeting its discovery
obligations, the court adequately addressed the problem by
precluding STAR from presenting certain witnesses and by
providing an adverse inference instruction about one
customer. In the end, AASTAR's discovery arguments are
irrelevant to the weight a jury could give the evidence
before it (on proper instructions).
-11-
11
In assessing a mark's strength, the trier of fact considers
evidence of the length of time the mark has been used, its
renown in the plaintiff's field of business, and the
plaintiff's actions to promote the mark. Equine
______
Technologies, Inc. v. Equitechnology, Inc., 68 F.3d 542, 547
__________________ _____________________
(1st Cir. 1995). The relevant evidence presented here was
that STAR's mark was in use in the relevant market area for
over two years at the time of trial, and that STAR expended
several thousand dollars per month in advertising.
Even assuming that this evidence constitutes small
support for this factor (and, in fact, STAR admitted at oral
argument before this court that the mark was not very
strong), "the strength of the mark is but one of eight
factors to be considered in analyzing the likelihood of
confusion issue" and sufficient evidence of other factors
will sustain a finding of likelihood of confusion. Id. at
___
546.
In conclusion, we cannot say that a reasonable jury
could not have reached a verdict for STAR based upon a
consideration of all of the factors. A jury could
supportably find that the marks and services were very
similar, the targeted consumers were the same, and there was
actual confusion as to the source of the mortgage services.
A jury also could have given little relative weight to the
less-supported factors of intent and strength of the mark.
-12-
12
While the evidence supporting a substantial likelihood of
confusion may not have been overwhelming, it was adequate;
the court did not err in denying the motion for judgment as a
matter of law, and we will not disturb the jury's verdict.
II.
II.
___
Denial of Trial Continuance
Denial of Trial Continuance
___________________________
AASTAR contends that the court abused its
discretion in refusing to grant its motion to continue the
trial. On the first day of trial, AASTAR filed a motion
entitled "DEFENDANT'S MOTION TO CONTINUE TRIAL OR, IN THE
ALTERNATIVE, MOTION IN LIMINE." In that motion, AASTAR urged
that a continuance was warranted because STAR failed to
produce a witness for deposition despite the court's order to
do so, and because STAR was effectively "stonewalling"
discovery.
AASTAR's continuance motion also requested the
alternative relief of preclusion of testimony by certain
witnesses and preclusion of testimony by Austin relating to
certain previously unproduced documents. The record shows
that the court granted the "alternative relief" -- the motion
in limine -- and that indeed, the witnesses in question did
not testify.
AASTAR now complains that Austin was "allowed to
testify unrestricted" and attempts to assign error to the
court's refusal to grant the continuance. We are unpersuaded
-13-
13
for two reasons. First, having received the alternative
relief it requested, AASTAR cannot now complain that the
court did not grant the continuance. Second, while Austin
was allowed to testify about various documents that may have
fallen within the in limine order, the record reveals no
objection by AASTAR on this basis during Austin's testimony.
On the contrary, in response to the trial judge's careful
inquiries, AASTAR indicated that it had no objection to most
of the documents introduced through Austin.5
In sum, we find AASTAR's contention that the court
erred in denying its request for a trial continuance to be
without merit.
III.
III.
____
The Civil Contempt Finding
The Civil Contempt Finding
__________________________
After the jury returned its verdict on November 30,
1995, the district court issued a permanent injunction,
reflected in the following exchange:
THE COURT: In view of the jury's
verdict, the defendant Aastar Mortgage
Corporation, its agents, servants,
employees, and all other persons acting
in concert therewith, are hereby
permanently enjoined from continuing to
do business under the name and style of
Aastar Mortgage Corporation with two A's
before the style, Aastar Mortgage
Corporation with one A before the style,
____________________
5. As to the documents that AASTAR did object to (but not on
the grounds of the in limine order), one was precluded on
hearsay grounds, and another was admitted with an adequate
limiting instruction.
-14-
14
and they shall not in the future . . .
for so long as the plaintiff Star
Financial Services shall possess the
trademark Star Mortgage, either federal
or state, use the letters S-T-A-R in
their name in any combination with any
other word. Further, they shall in no
form or fashion use a logo or depiction
of a five pointed star in relation to any
of those words. Fourth, they shall in no
fashion refer to themselves as formerly
Aastar Mortgage in either of its
capacities. . . .
[I]n addition, Aastar Mortgage shall
take all reasonable efforts to recall,
terminate advertisements with the
infringing marks and logos. . . .
MR. MURRAY [Counsel for AASTAR]:
Your Honor, may I be heard on one other
thing?
. . . .
There are presently several loans and
consumers about to close within the next
week where the paperwork has been
submitted on HUD forms and things like
that. In light of the fact that there's
no damage that's been found that relates
to the plaintiffs in this case relative
to the use of that name, the defendants,
in order to provide no harm to the
consumer, would like to be able to close
those loans with the understanding that
there would be no publication and no
advertising relative to --
THE COURT: Any forms that are out
of Aastar's office, either now before HUD
or any lending institution, they are not
in my requirement of use of best efforts,
they do not have to recall any consumer
forms. No more forms go out with the
word Aastar starting now. Tomorrow
morning no form, no paper goes out of
that office using Aastar, single or
double A's, using the star or using the
word S T A R.
That's the order of the Court.
-15-
15
About one week after the injunction issued,
employees at AASTAR sent name-change facsimiles to several
mortgage lenders. These notices displayed the "AASTAR" logo
(containing a star symbol in the third "A") in large, bold
letters at the top of the page, and thereafter stated, "WE'VE
CHANGED OUR NAME; WE ARE NOW KNOWN AS: AACTION MORTGAGE
CORP.; PLEASE CORRECT YOUR RECORDS." STAR's counsel
immediately notified AASTAR's counsel about the notices, and
AASTAR ceased using them. Over one month later, after it had
moved and argued for attorneys' fees from the underlying
action, STAR filed a motion for civil contempt stemming from
the use of the facsimiles. The court then held an
evidentiary hearing on that motion.
At the hearing, employees of AASTAR (now AACTION)
admitted to transmitting the facsimiles, but professed a
belief that such notices were in compliance with the court's
order, as modified. Specifically, they stated that the
notices were sent only to lenders with loans in progress, and
explained that "their interpretation" of the injunction was
that the court only ordered them to "do the best that they
could" with respect to pending loans. One witness indicated
that he thought he could "go a little further" than the
court's injunction by informing lenders (that, he said, were
processing loans that were "out of AASTAR's control") of the
name change with the facsimiles. When queried by the court,
-16-
16
however, all of the witnesses acknowledged that they
understood the court's order -- specifically, "no paper goes
out of that office using Aastar" -- and that the notices fell
within that language.
In explaining its ruling on the motion, the court
acknowledged AASTAR's substantial efforts to comply with the
injunction, but stated that the wording of the order was
clear and unambiguous and that if there were any doubts,
clarification or modification from the court should have been
sought. The court found that AASTAR, "in an effort to
preserve the goodwill to which [it] had no right,"
deliberately disobeyed the order. Having found a "clear and
undoubted disobedience," the court held AASTAR in civil
contempt, and ordered it to pay attorneys' fees to STAR (in
the amount of $750) as well as costs associated with bringing
the contempt proceeding.
On appeal, AASTAR contends that the civil contempt
finding was "unfair" because the injunction was overly broad,
ambiguous, and impossible to comply with. We disagree. As a
preliminary matter, we note that nothing in the record
indicates that AASTAR objected to the breadth of the
injunction, or complained of impossibility of compliance
either before, during or after the contempt proceeding.
AASTAR raises these issues for the first time on appeal in
its effort to avoid the contempt citation, and it does not
-17-
17
argue that it continues to suffer from the purported
overbreadth. Thus, we will discuss the issues of the breadth
and ability to comply only insofar as they relate to the
civil contempt adjudication.
Next, we agree with the district court that the
injunctive order was not ambiguous. See 11A Charles A.
___
Wright et al., Federal Practice and Procedure 2960 (1995)
_______________________________
(explaining that, in civil-contempt proceeding, the court
must find that the order was clear and unambiguous). The
court ordered AASTAR to cease all use of the trade name
"AASTAR" or its star logo, to refrain from referring to
itself as "formerly Aastar Mortgage," and to use its best
efforts to recall or cancel advertising with the infringing
mark. In response to AASTAR's inquiry about pending loans
and already-submitted paperwork, the court explained that any
such paperwork was not within its requirement to use best
____
efforts to recall. The court completed its injunctive order
_________________
with the following unequivocal language: "No more forms go
out with the word Aastar starting now. Tomorrow morning no
form, no paper goes out of that office using Aastar." That
directive was clear.
Based on the evidence, we conclude that the court
supportably found that AASTAR deliberately and unjustifiably
disobeyed the injunction. AASTAR's employees testified that
they did not intend to violate the injunction, and that they
-18-
18
transmitted the facsimiles in the belief that that conduct
was in compliance with the order. Such assertions are
unavailing, however, because good faith, or the absence of
willfulness, does not relieve a party from civil contempt in
the face of a clear order. McComb v. Jacksonville Paper Co.,
______ ______________________
336 U.S. 187, 191 (1949) (explaining that "[a]n act does not
cease to be a violation of a law and of a decree merely
because it may have been done innocently"); Morales-Feliciano
_________________
v. Parole Bd. of P.R., 887 F.2d 1, 5 (1st Cir. 1989), cert.
___________________ _____
denied, 494 U.S. 1046 (1990).
______
While good faith will not excuse civil contempt,
impossibility of compliance does constitute a defense. See
___
Morales-Feliciano, 887 F.2d at 5. Here, however, even
_________________
assuming the injunction was overbroad, AASTAR has not shown
how its particular conduct stems from the impossibility of
compliance with the order. Rather, the evidence plainly
shows that AASTAR's employees voluntarily chose to transmit
the offending facsimiles.
As the district court correctly admonished, if
AASTAR was confused about the scope of the order or felt that
it was unable to comply, it should have sought relief from
the court. See McComb, 336 U.S. at 192 (stating that "if
___ ______
there were extenuating circumstances or if the decree was too
burdensome in operation . . . [the contemnors] could have
petitioned the District Court for a modification,
-19-
19
clarification or construction of the order"). Instead of
seeking help or information from either the court or its
attorney, AASTAR's employees "undertook to make their own
determination of what the decree meant" and thereby "acted at
their peril." Id.
___
For the above reasons, we uphold the district
court's adjudication of civil contempt.
IV.
IV.
___
Attorneys' Fees Award
Attorneys' Fees Award
_____________________
The district court awarded attorneys' fees to STAR
because of the jury's verdict on the Massachusetts unfair
practices claim. See Mass. Gen. L. ch. 93A, 11. AASTAR
___
argues that the court erred by awarding attorneys' fees for
two reasons: (1) the court erroneously instructed the jury
that, even if it found no actual damages, it must award a
minimum statutory damage of $25.00, and (2) because no
damages were "actually" found, recovery of attorneys' fees is
precluded. STAR contends that the court erred awarding less
than the amount it requested.
A. Propriety of Attorneys' Fees Award
__ __________________________________
STAR prevailed on its unfair practices claim under
Mass. Gen. L. ch. 93A, 2 and 11. Section 11 provides, in
part:
If the court finds in any action
commenced hereunder, that there has been
a violation of [ch. 93A 2], the
petitioner shall, in addition to other
_____________________
-20-
20
relief provided for by this section and
____________________________________
irrespective of the amount in
controversy, be awarded reasonable
attorneys' fees and costs incurred in
said action.
Mass. Gen. L. ch. 93A, 11 (emphasis added). Another
provision in that section states:
[The complainant], if he has not suffered
any loss of money or property, may obtain
. . . an injunction if it can be shown
that the . . . unfair method of
competition, act or practice may have the
effect of causing such loss of money or
property.
Id.
___
The court instructed the jury that a statutory
minimum of $25 must be awarded if it finds that an unfair
practice has occurred under Sections 2 and 11 of Mass. Gen.
L. ch. 93A.6 Accordingly, the jury awarded $25 in damages
on that claim, even though it awarded nothing on the
infringement claims. AASTAR contends that because the jury's
verdict indicates that STAR had not been harmed by AASTAR's
conduct, attorneys' fees are precluded under state law
precedent. We disagree.
We note first that because AASTAR failed to object
to the "statutory damages" instruction, our review of that
issue, if it were necessary for our decision, would be
____________________
6. There does not, in fact, appear to be a minimum statutory
damages provision in the statutes at issue in this case. Cf.
___
Mass. Gen. L. ch. 93A 9(a) (providing, in some cases, for
minimum damages award of $25).
-21-
21
seriously limited. Putting aside that issue for now, we find
even assuming that the jury had not awarded any damages on
the unfair practices claim, attorneys' fees still would be
warranted in light of the grant of injunctive relief.
Section 11 provides that a prevailing claimant is
entitled to attorneys' fees "in addition to other relief
provided for by this section and irrespective of the amount
in controversy." Mass. Gen. L. ch. 93A, 11. The Supreme
Judicial Court of Massachusetts has interpreted that language
to mean that "relief solely in the form of attorneys' fees
may not be had" but rather, "a plaintiff must be entitled to
relief in some other respect in order to be entitled to an
award of attorneys' fees." Jet Line, 537 N.E.2d at 115.
________
Accordingly, courts have awarded attorneys' fees not only
when damages were awarded, but also where, as here, the
prevailing plaintiff received injunctive relief only. See
___
Jillian's Billiard Club of Am., Inc. v. Beloff Billiards,
_______________________________________ _________________
Inc., 619 N.E.2d 635, 639 (Mass. Ct. App. 1993), review
____ ______
denied, 625 N.E.2d 1369 (Mass. 1993); Informix, Inc. v.
______ ______________
Rennell, No. 931265, 1993 WL 818555, at * 5 (Mass. Super.
_______
Ct., Sept. 27, 1993); see also Advanced Sys. Consultants Ltd.
___ ____ ______________________________
v. Engineering Planning and Management, Inc., 899 F. Supp.
___________________________________________
832, 833-34 (D. Mass. 1995); cf. Levy v. Bendetson, 379
___ ____ _________
N.E.2d 1121, 1126 (Mass. Ct. App. 1978) (reversing attorneys'
-22-
22
fees award where party received no relief under Section 11
"either by way of damages or injunction or otherwise").
In support of its position, AASTAR cites the
following language from Jet Line: "A plaintiff suing under
_________
11, however, cannot recover attorneys' fees for merely
identifying an unfair or deceptive act or practice. Under
11, that unfair or deceptive conduct must have had some
___________________
adverse effect upon the plaintiff, even if it is not
_____________________________________________________________
quantifiable in dollars." 537 N.E.2d at 115 (emphasis
_________________________
added). Given the context of Jet Line, however, we find it
________
inappropriate to interpret that language as AASTAR seeks. In
Jet Line, the court remanded the attorneys' fees issue
_________
because of a question regarding liability on the underlying
_________
claim; it also appears that, while actual damages may have
been questionable, the plaintiff did not request injunctive
relief. See generally, id.
___ _________ ___
Moreover, the language in Jet Line is not
__________
necessarily inconsistent with an award of attorneys' fees to
a plaintiff that receives injunctive relief only. Section 11
provides for injunctive relief where the unfair practice "may
have the effect of causing . . . loss of money or property."
Mass. Gen. L. ch. 93A, 11. Surely a demonstrated risk of
future actual loss constitutes an unquantifiable "adverse
effect" within the meaning of Jet Line. To hold otherwise
________
would discourage victims of unfair trade practices from
-23-
23
seeking legal redress until after actual loss of money or
property occurred, even where the victim demonstrates a risk
of such loss.
B. The Amount of the Award
__ _______________________
The court awarded only $18,000 of STAR's requested
$35,153.25 in attorneys' fees, representing some 240 hours of
work by trial counsel and his associate attorney. In ruling
on the fee application, the court, citing Heller v.
______
Silverbranch Constr. Corp., 382 N.E.2d 1065, 1071 (Mass.
___________________________
1978), found that, while STAR's attorneys did not spend an
unreasonable amount of time on the action, "it ought not be
compensated at the rate that the attorneys charge." The
court stated, "[i]t does seem to this Court that a rate of
$175 per hour for the services . . . would overcompensate
[STAR] in view of the . . . relative simplicity . . . of the
matter." The court continued, "[t]herefore, the fair value
of the services to the plaintiff is, in this case, not the
$35,000 . . . sought by the plaintiffs, but $27,000."
The court then reduced the award by an additional
$9,000 to $18,000, explaining that it had considered "factors
that are implicit in the duty of attorneys to the Court"
including:
the approach that the attorney took to
the litigation; the care with which
settlement was evaluated and discussed
with the other side; the prompt and
lawyer-like preparation of the case for
trial, or its alternative; the faithful
-24-
24
[sic] requirement imposed upon counsel
for full and forthcoming discovery.
In light of these factors, the court observed that
STAR's counsel had been deficient in two respects: first,
after obtaining a very early trial date, counsel departed for
a hunting trip having not delegated the authority to handle
case preparation or settlement; second, on the eve of trial,
counsel took it upon himself to remove a witness from his
proposed witness list despite the court's order to produce
that witness, and then failed, during trial, to be
"faithfully forthcoming with respect to appropriate discovery
of the witness," also despite a clear court order. The court
also opined that even though the conduct of STAR's counsel
was not "unethical," it was "less than what the Court is
entitled to obtain from the attorneys who practice at its
bar." The court concluded that counsel's deficiencies
"stunted the time necessary for discussion of settlement" and
found "very questionable" counsel's unavailability to discuss
settlement at all times prior to trial, given that the
dispute was essentially over damages.
Massachusetts law controls the attorneys' fees
question here. Peckham v. Continental Casualty Ins., 895
_______ __________________________
F.2d 830, 841 (1st Cir. 1990). Our review is plenary to the
extent STAR argues that the court's reasons for the fee
reduction were erroneous as a matter of law. See Lipsett v.
___ _______
Blanco, 975 F.2d 934, 942 (1st Cir. 1992). To the extent
______
-25-
25
STAR challenges the court's determination that the case fits
factually within a legally acceptable reduction theory, we
review for abuse of discretion. See id. at 942 n.7; see also
___ ___ ___ ____
id. at 937 ("[B]ecause determination of the extent of a
___
reasonable fee necessarily involves a series of judgment
calls, an appellate court is far more likely to defer to the
trial court in reviewing fee computations than in many other
situations.").
While there is no "pat formula" for computing a fee
award under Massachusetts law, Peckham, 895 F.2d at 830, the
_______
amount awarded should be determined by what the "services
were objectively worth," Heller, 382 N.E.2d at 1071. In
______
making this calculation, the court may consider a variety of
factors, including: the amount of time expended, the
complexity of the legal and factual issues, the quality of
the attorneys' services, the amount of damages and the
results secured. Peckham, 895 F.2d at 841; Linthicum v.
_______ _________
Archambault, 398 N.E.2d 482, 488 (Mass. 1979). No single
___________
factor is necessarily dispositive of the services' worth.
See Cummings v. National Shawmut Bank, 188 N.E. 489, 492
___ ________ ______________________
(Mass. 1934). In the end, the court's calculation is
"largely discretionary," Linthicum, 398 N.E.2d at 488, and an
_________
appellate court should "defer to any thoughtful rationale and
decision developed by a trial court and . . . avoid extensive
-26-
26
second guessing." Grendel's Den, Inc. v. Larkin, 749 F.2d
___________________ ______
945, 950 (1st Cir. 1984).
STAR first attacks the court's initial reduction
from the requested $35,153.25 to $27,000. STAR contends that
this reduction resulted from "mathematical error" because the
court erroneously assumed that counsel charged $175/hr. for
all of his work, when in fact, most of it was charged at
___
$150/hr. (while the associate attorney's work was charged at
the rate of $125/hr.). STAR asserts that because only 10.75
hours were charged at $175/hr., the court should have
deducted only about $260 (representing the approximate
difference between 10.75 billed at $175/hr. and at $150/hr.),
rather than the $8,153.25 that it did.
Upon careful review of the record, we are
unpersuaded by STAR's assertion of "mathematical error."
STAR's position assumes that the court, when declining to
award at the $175/hr. rate for trial counsel, necessarily
intended instead to award for his work at the $150/hr. rate.
We find, however, that the numbers simply do not support this
underlying assumption.7
____________________
7. STAR's request for some $35,000 in fees, which the court
found excessive, reflected about 164 hours of work by trial
counsel (some hours at the $150/hr. rate, others at the
$175/hr. rate), and about 82 hours of work by associate
counsel (at a $125/hr. rate), for a total of approximately
246 hours. Simple division of the awarded amount ($27,000)
by the hours expended (246) reveals that the court did not
find even a $150/hr. rate reasonable for this case, not to
mention the $175/hr. rate. Thus, STAR's argument that the
-27-
27
Moreover, when STAR clearly laid out this precise
argument to the district court in the form of a motion to
amend or make additional findings under Fed. R. Civ. P.
52(b), the court considered and denied the motion, stating:
"The findings are fully adequate under both state and federal
law." A fair conclusion from the record is that although the
court found that counsel had in fact expended the claimed
amount of time on the case, the simplicity of the case
rendered the fees excessive and warranted a reduction for
over-lawyering. Thus, we affirm the court's initial
reduction from $35,000 to $27,000.
STAR also contends that the court erred in its
additional fees reduction, from $27,000 to $18,000. STAR
argues that the articulated reasons for that reduction are
insupportable as a matter of law and on the facts of this
case. In particular, STAR asserts that when its counsel
informed the court of his planned hunting trip, the court
stated that it would "respect" those plans. STAR contends
that it was error to then "punish" counsel for taking his
vacation and being unavailable to handle any developments in
____________________
court erroneously based its award on its belief that the
higher rate was excessive does not support its implied
conclusion that the court must have found the $150/hr. rate
to be reasonable. Rather, it appears that the court found
both rates excessive, and adjusted the amount accordingly.
STAR has not argued that the court erred in its apparent
finding that even the $150/hr. rate was excessive or that the
court otherwise erred in calculating the lodestar.
-28-
28
the case.8 STAR argues that no reduction should result from
its deletion of a witness because it ultimately produced the
witness (albeit on the last day of trial) and because the
court opined that the witness would not have given testimony
favorable to AASTAR in any event. STAR argues finally that
"stunting the time necessary for discussion of settlement" is
an impermissible factor to be considered in an attorneys'
fees award.
The district court reduced the attorneys' fees
award from $27,000 to $18,000 because it found that STAR's
counsel had not fulfilled his obligations in trial
preparation, negotiation and discovery. These
considerations, including "the stunting of time necessary for
discussion of settlement," plainly reflect upon the "quality
of work performed," one of the factors to be considered in
calculating the fee award. See Heller, 382 N.E.2d at 629.
___ ______
We have no difficulty finding that an attorney's competence
extends to her compliance with obligations to the court,
which may ultimately affect the value of services to her
client. Thus, the court did not err in citing these reasons
in determining the "objective worth" of counsel's services.
____________________
8. We find most unpersuasive STAR's additional assertion
that, had counsel not taken his planned vacation, he would
have "necessarily" spent more time preparing the case which,
in turn, would have resulted in additional attorneys' fees.
-29-
29
We also uphold the district court's determination
that the facts of this case merit the reduction.9 As to
STAR's assertion that the court first "respected" counsel's
vacation plans but then "punished" him for it, we note that
the court respected counsel's plans only insofar as they
affected the trial date; in no manner did the court indicate
that counsel was otherwise excused from his trial obligations
while he was on the hunt. With regard to counsel's failure
to produce a witness, in defiance of the court's order, we
think that whether or not the witness ultimately would have
helped AASTAR is irrelevant to counsel's initial discovery
obligation. Finally, we reject STAR's assertion that the
court penalized counsel for not settling the case; rather,
the court found that counsel's deficiencies in performance
hindered the opportunity for settlement, thus negatively
___________
reflecting upon his services. We cannot say that the court
abused its broad discretion in making these determinations.
Therefore, we affirm the district court's
attorneys' fees award in all respects.10
IV.
IV.
___
____________________
9. While STAR argues that the reasons for the fee reduction
were erroneous, it does not argue that the degree of the
reduction was unreasonable.
10. The court ordered AASTAR to pay costs "in the amount
prayed for," which was $2,588.24, and AASTAR has not opposed
the amount of that request. Thus, we will not disturb the
costs award to STAR in the amount of $2,588.24.
-30-
30
Conclusion
Conclusion
__________
For the foregoing reasons, we affirm the fee award
______
and judgment of the district court.
-31-
31
