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Marshak v. Treadwell

February 4, 2010

LARRY MARSHAK, PLAINTIFF,
v.
FAYE TREADWELL, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Debevoise, Senior District Judge

OPINION

On September 7, 2007, this Court held a group of individuals and entities associated with Plaintiff Larry Marshak -- along with Mr. Marshak himself (collectively "Contempt Respondents") -- in contempt for violating an injunction prohibiting them from marketing "The Drifters," a legendary singing group that first rose to prominence in the 1950s. As part of that ruling, the Court awarded reasonable attorneys' fees and costs accrued in connection with the contempt proceeding to Defendants Faye Treadwell, Treadwell's Drifters, Inc., and The Drifters, Inc. (collectively "Defendants"). Mr. Marshak and the others who were held in contempt moved for reconsideration of that ruling, which the Court denied on February 13, 2008. They then sought review from the Court of Appeals for the Third Circuit, which affirmed this Court's ruling and remanded for an accounting of the profit derived by those individuals and entities from their wrongful actions in marketing "The Drifters," along with the award of attorneys' fees and costs accrued in connection with the contempt proceeding.*fn1

Following remand, this Court on August 19, 2009 entered an Order releasing $92,023.34 in funds deposited by the Contempt Respondents to counsel for the Defendants as payment for attorneys' fees and costs accrued in connection with the contempt proceeding prior to October 1, 2007.*fn2 Defendants now move for attorneys' fees and costs accrued from that date until April 30, 2008. The Contempt Respondents oppose that Motion on the grounds that (1) the Court's grant of attorneys' fees applied only to the Motion for Contempt and the requested fees include unrelated work done after that Motion was granted, and (2) the Motion for Fees is untimely. In the alternative, the Contempt Respondents contend that the attorneys' fees claimed by Defendants' counsel are excessive.

For the reasons set forth below, Defendants' Motion for Attorneys' Fees and Costs expended from October 1, 2007 to April 30, 2008 will be denied. The pending Motion does not request reimbursement for the attorneys' fees and costs accrued in obtaining the September 7, 2007 ruling holding the Respondents in contempt; those expenses were recompensed through the Court's August 19, 2009 Order releasing the funds previously deposited by the Contempt Respondents. The current Motion for Attorneys' Fees and Costs is based on the successful efforts of Defendants' counsel in opposing a Motion for Reconsideration of the ruling holding the Respondents in contempt. The Court denied the Motion for Reconsideration on February 13, 2008, but Defendants did not file the fee petition on which the pending Motion for Attorneys' Fees is based until March 17th of that year -- a delay of 33 days. This district requires that such petitions be submitted within 30 days. United Auto Workers Local 259 v. Metro Auto Ctr., 501 F.3d 283, 286 (3d Cir. 2007) (holding that Local Civil Rule 54.2 is a standing order of this Court and extends the time within which a request for attorneys' fees must be filed from 14 to 30 days). Thus, the petition was untimely, and the Defendants may not recover attorneys' fees and costs for their efforts in opposing the Motion for Reconsideration.

I. BACKGROUND

The facts of this case center on a long-running and vitriolic dispute between Defendant Faye Treadwell, widow of the late music executive George Treadwell, and Plaintiff Larry Marshak, a promoter of various doo-wop groups, over the rights to use the trademark of "The Drifters." Mr. Marshak, who obtained the federal trademark to "The Drifters" in 1978, sued Ms. Treadwell for infringing on that mark in the late 1990s. Ms. Treadwell counterclaimed to invalidate the trademark, claiming that it had been obtained by fraud and was infringing on her senior common-law rights. In 1999, this Court granted judgment as a matter of law in favor of Ms. Treadwell and enjoined Mr. Marshak and his company, RCI Management, Inc. ("RCI"), from marketing "The Drifters" anywhere in the United States. See Marshak v. Treadwell, 58 F.Supp.2d 551 (D.N.J.1999). Mr. Marshak sought review of that decision from the Court of Appeals for the Third Circuit, which affirmed. See Marshak v. Treadwell, 240 F.3d 184 (3d Cir. 2001).

A. Contempt Proceeding

The Court's 1999 injunction should have driven Mr. Marshak out of the business of promoting "The Drifters." In an effort to frustrate that judgment, however, Mr. Marshak and the other Contempt Respondents undertook an elaborate series of reorganizations aimed at obscuring his activities and avoiding the injunction. In essence, the Contempt Respondents created several different companies and continued to market "The Drifters" through those entities with the help of members of his family and various other individuals.*fn3 In order to put a halt to those activities, Ms. Treadwell requested that this Court hold the Respondents in contempt. On September 7, 2007, the Court did so, holding that the injunction was enforceable against parties other than Mr. Marshak and RCI -- specifically, the companies and individuals connected to Mr. Marshak that had continued to market "The Drifters" after the 1999 injunction was issued -- pursuant to Federal Rule of Civil Procedure 65(d). On September 25, 2007, the Court entered a Supplementary Order awarding Defendants attorneys fees and costs for their efforts in obtaining a judgment of contempt against the Respondents. The Contempt Respondents moved for reconsideration of those Orders, which the Court denied on February 13, 2008. Following that decision, he timely sought review from the Court of Appeals.

In a ruling issued on July 2, 2009, the Court of Appeals affirmed this Court's holding that the individuals and entities that had continued to market "The Drifters" after the 1999 injunction was issued could be held in contempt pursuant to Federal Rule of Civil Procedure 65(d). In doing so, the Court of Appeals noted that even if those individuals and entities were not employees or agents of Mr. Marshak or RCI, they were "guilty of aiding or abetting or acting in concert with a named defendant or his privy in violating the injunction," and thus could properly "be held in contempt." Id. at *5 (quoting Savarese v. Agriss, 883 F.2d 1194, 1209 (3d Cir.1989)).*fn4

With respect to the remedy for that contempt, however, the Court of Appeals reversed this Court's ruling limiting Defendants' recovery to reasonable attorneys' fees and holding that they were not entitled to a full accounting of the profits derived by the Contempt Respondents from their activities in continuing to market "The Drifters" after the issuance of the 1999 injunction. In doing so, the Court of Appeals acknowledged that Defendants had failed to prove that they suffered damages due to the continued infringement, but ruled that an accounting was necessary to deter the Contempt Respondents from future violations of the injunction. Id. at *12-13. Moreover, the Court of Appeals held that Ms. Treadwell's actions in waiting five years, despite the fact that she knew that the Contempt Respondents were continuing to infringe on her trademark, after that Court's affirmance of the injunction before filing a Motion for Contempt did not result in sufficient prejudice to the Contempt Respondents to alleviate the need for an accounting and damages award. Id. at *13-14. Based on those holdings, the Court of Appeals (1) affirmed this Court's finding of contempt against the Contempt Respondents contained in the September 7, 2007 Order, (2) affirmed the award of attorneys' fees and costs contained in the September 25, 2007 Supplementary Order, and (3) remanded for an accounting of all profits derived from the violation of that injunction by Mr. Marshak and his associates after this Court's issuance of the injunction was affirmed on February 9, 2001. Id. at *14.

As discussed above, this Court implemented the mandate of the Court of Appeals on August 19, 2009 by awarding $92,023.34 in attorneys' fees and costs.*fn5 That amount reflects the expenditures made in connection with obtaining the September 7, 2007 Order holding the Respondents in contempt and the September 25, 2007 Supplementary Order awarding fees for that effort. Thus, the Court's previous fee award, which was affirmed by the Court of Appeals, has been satisfied.

B. Reconsideration Proceeding -- October 1, 2007 through April 30, 2008

The pending Motion for Attorneys' Fees and Costs relates to later efforts by the Defendants to defeat a Motion for Reconsideration of the Court's September 7 and 25, 2007 Orders. Those efforts culminated in success on February 13, 2008, when the Court issued an Opinion and Order denying the Respondents' request for reconsideration and reiterating the fee award -- first issued in the September 25, 2007 Supplementary Order -- for work performed by Defendants' counsel in obtaining the judgment of contempt.

Importantly, the Court's February 13, 2008 Order did not contain an award of attorneys' fees or costs for the work performed by Defendants' counsel after October 1, 2007 in opposing the Motion for Reconsideration. Defendants filed a petition for those fees and costs on March 17, 2008. Five days before they did so, however, the Contempt Respondents appealed this Court's ruling denying their Motion for Reconsideration of the September 7 and 25, 2007 Orders. Because that appeal would directly affect the Defendants' eligibility for an award of attorneys' fees and costs related to the Motion for Reconsideration (such fees could not have been awarded if the Order denying ...


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