In the case of Oasis Legal Finance Operating Company v. Chodes et al., the Northern District of Illinois issued an order for $100,000 in statutory damages, a transfer of domain, and a permanent injunction against the defendant. Months later the court awarded $3 million in attorney’s fees to the plaintiff. The road to this end was long and winding, but not for a lack of trying to move things along by the plaintiff and the court.
It all began when defendant, a fired/former CEO of Oasis Legal Financing (OLF), began calling his new venture Oasis Disability Group. His reasoning for using the word “oasis” was that he thought he “owned” OLF’s OASIS mark, even though the company had fired him. In response, OLG took him to court for statutory damages and had a straightforward time convincing the court of a likelihood of confusion and the potential for irreparable harm to OLF if an injunction were not issued.
The attorney’s fees award is where this case gets interesting. The Lanham Act states that only exceptional circumstances merit an award of attorney’s fees. Simply being wrong is not exceptional, and neither is having a bad case. My theory about huge awards — like this one — is that they are as much a punishment for obstreperous, obnoxious, frivolous conduct as they are reflective of the legal theories themselves. Here’s what the court had to say about the matter:
“The instant case is exceptional for both reasons. Plaintiff presented strong arguments in favor of all of its claims, and the court granted summary judgment in plaintiff’s favor. In contrast, defendants presented meritless arguments, including a slew of meritless affirmative defenses that defendants abandoned at summary judgment. Those facts alone make this an exceptional case. But defendants also litigated this case in an unreasonable manner. Defendants engaged in gamesmanship with improper discovery requests, completely failed to comply with Local Rule 56.1, and repeatedly ignored filing deadlines.”
One particularly cringeworthy move by the defense was arguing that the plaintiff’s attorney’s fees petition was entered too late and should be barred. This was simply untrue, as the court actually notified the defendant that the plaintiff had submitted its petition, and supporting documents, according to the Local Rule. The court literally issued instructions to the defendant on how to respond. Even after all that, defendants never filed a response of any kind. When it comes to unopposed attorney’s fees petitions, there’s a precedent for that (RK Co. v. Harvard Sci. Corp), and it didn’t bode well for defendant.
After reviewing the timesheets, and with no opposition, the court awarded the plaintiff what it was asking for: $3 million for three years of litigation.
This case is shocking on so many levels: It’s shocking that parties to a case worth $100,000 would run up a multimillion-dollar legal tab on the plaintiff’s side alone. It seems to me that the fees racked up on both sides of this litigation should have been a red flag to attorneys. If statutory damages are only $100,000 and fees are multiples of that, an attorney for defendant needs to be talking with the client about the likelihood of success, and what success looks like. Unfortunately, frank advice like that from an attorney is often perceived as a weakness, as opposed to an assessment that might be prudent to follow.
This award of fees, thirty times the amount of a judgment, shows not only that going forward with the litigation was poorly advised, but the way it was done in this case was fatal. There’s a perception that the best attorneys are bulldogs, who will never take no for an answer — and, regardless of circumstances, drive headlong into litigation. I’m suggesting that can be not only expensive and inappropriate, but self-destructive.
Mark S. Kaufman
Kaufman & Kahn
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