[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
____________________ SEPT. 27, 2001
THOMAS K. KAHN
No. 00-10370 CLERK
____________________
D. C. Docket No. 98-08122-CV-KLR
GENE D. LIPSCHER and
ROBERT E. KEHOE, JR.,
Appellants,
versus
LRP PUBLICATIONS, INC., a
foreign corporation, and
JOANNE FIORE,
Defendants-Appellees.
_______________
No. 00-10387
_______________
D. C. Docket No. 98-08122-CV-KLR
LAW BULLETIN PUBLISHING
COMPANY, an Illinois Company,
Plaintiff-Appellant,
versus
LRP PUBLICATIONS, INC., a
foreign corporation, and
JOANNE FIORE,
Defendants-Appellees.
____________________
No. 00-10654, 00-11461
____________________
D. C. Docket No. 98-08122-CV-KLR
LAW BULLETIN PUBLISHING
COMPANY, an Illinois Company,
Plaintiff-Appellee,
versus
LRP PUBLICATIONS, INC., a
foreign corporation, and
JOANNE FIORE,
Defendants-Appellants.
______________________________
Appeals from the United States District Court
for the Southern District of Florida
______________________________
(September 27, 2001)
2
Before BIRCH, MARCUS and WOOD, JR.*, Circuit Judges.
WOOD, JR., Circuit Judge:
These appeals, which were consolidated for argument and decision in this
court, arise out of a lawsuit filed by Law Bulletin Publishing Company (“Law
Bulletin”) against LRP Publications, Inc. (“LRP”) and Joanne Fiore, an employee
of LRP. Law Bulletin is an Illinois company which publishes and sells the Cook
County Jury Verdict Reporter and the Illinois Jury Verdict Reporter, both of which
are newsletters summarizing individual jury verdicts. Law Bulletin maintains a
computerized database of this information which customers can search online for a
fee. LRP publishes national statistical and historical jury verdict materials
including the Personal Injury Valuation Handbook. The Handbook is a nine-
volume set compiling statistical information which allows an attorney to calculate
a statistical range of potential jury verdicts for different types of personal injuries.
LRP maintains a computerized database of its information, which is made available
to customers through the online legal research companies Westlaw and Lexis, as
well as on CD-ROM. LRP also offers a telephone service which allows customers
*
Honorable Harlington Wood, Jr., U.S. Circuit Judge for the Seventh Circuit,
sitting by designation.
3
to call in search requests to be performed by LRP employees. Fiore was employed
by LRP until 1998 and served as the Florida registered agent for LRP.1
In November 1997, Law Bulletin filed suit against LRP and Fiore, alleging
that LRP surreptitiously obtained subscriptions to Law Bulletin’s verdict reporters
by posing as a Florida law firm named “Fiore and Cohen” and then used the
information from the newsletters as its basis for reporting jury verdicts from
Illinois. According to Law Bulletin’s complaint, in April 1993, LRP requested a
subscription to Law Bulletin’s Illinois Jury Verdict Reporter. Law Bulletin,
recognizing LRP as a competitor and a suspected data pirate, responded to the
subscription request by a letter dated May 20, 1993. The letter noted that Law
Bulletin was “already aware of concerns expressed by others in the industry that
your company may be engaging in various forms of misconduct.” Given these
concerns, Law Bulletin sought assurances from LRP, stating in its letter “[i]f you
are willing, however, to confirm that you would like to obtain our publication for
your personal information only, and not for the purpose of copying, reproducing,
or remarketing any portion of the publication or the selected information which it
contains, I would be happy to enroll you as a subscriber.” LRP did not reply to the
1
Because Fiore was an employee of LRP, for convenience we often refer to
defendants collectively as “LRP.”
4
letter, and no subscription was entered. Sometime thereafter, Law Bulletin entered
into two separate subscription agreements with “Fiore and Cohen,” an entity2
which, unbeknownst to Law Bulletin, operated out of LRP’s Florida satellite
office. Law Bulletin alleges that LRP’s reporting of Illinois jury verdicts was
based entirely on the information obtained through the Fiore subscriptions.
The suit, which was originally filed in state court in Cook County, Illinois,
was removed by the defendants in December 1997 to the United States District
Court for the Northern District of Illinois. In January 1998, the court ordered the
case transferred to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a).
Law Bulletin’s complaint alleged causes of action for breach of contract
(Count 1); violations of both the Illinois Consumer Fraud Act, 815 ILL. COMP.
STAT. 505/2, and the Uniform Deceptive Trade Practices Act, 815 ILL. COMP.
STAT. 510/2, (Count 2); violations of the Lanham Act, 15 U.S.C. § 1125, (Count
3); and common law unfair competition (Count 4). On June 18, 1998, the district
court granted partial summary judgment in favor of LRP, dismissing Counts 2 and
4 based on a finding that they were preempted by the Copyright Act of 1976, 17
U.S.C. § 301. The district court denied LRP’s motion for summary judgment on
2
While listed in West Group’s online legal directory, the complaint asserts
that Fiore and Cohen is not an actual law firm. The rolls of the Florida bar show
Fiore as a non-practicing attorney.
5
Law Bulletin’s contract claim, holding that it was not preempted. As discovery
progressed on the remaining claims, the district court recognized that “special
problems” exist when competitors are engaged in a lawsuit “because it often
appears that part of the strategy is to find out what the competitor is doing and
using that for your economic advantage in the future.” Therefore, in July 1998, the
district court limited discovery to matters relating only to liability, staying
discovery on matters relating to damages. On October 16, 1998, the district court
granted in part LRP’s motion for a protective order pursuant to Fed. R. Civ. P.
26(c). The October 16 order granted a protective order “as to [LRP]’s use of third-
party jury verdict publications,” based on a finding that the allegations in the
complaint dealt only with LRP’s improper use of Law Bulletin’s jury verdict
publications.
The matter was ultimately bifurcated, and, on March 1, 1999, the parties
began a jury trial as to liability on Law Bulletin’s breach of contract and Lanham
Act claims. At the close of Law Bulletin’s evidence, the court entered a directed
verdict under Fed. R. Civ. P. 50(a) in favor of LRP on the Lanham Act claims.
LRP rested without presenting evidence. The only question before the jury was
whether the defendants had breached two form subscription agreements Fiore had
6
signed. Both subscription agreements contained a provision entitled “Law
Bulletin’s Copyright Recognized,” which provided in part,
We will not make any copies of any reports or disks for which this
subscription is for, recognizing that the Law Bulletin Publishing
Company has a copyright interest in each. Under no circumstances
will we furnish any copies, or any of the information contained
therein, in bulk form to any third-party, and we will not computerize,
record, reproduce or re-market any portion of the publication or the
selected material which it contains.
The jury determined LRP had breached the subscription agreements, and the court
entered judgment in favor of Law Bulletin as to liability on the breach of contract
claim.
A second round of discovery began as to damages. The district court, upon
motion by LRP and Fiore, determined that, under Florida law, Law Bulletin could
not proceed against both LRP, the principal, and Fiore, LRP’s agent. Law Bulletin
filed a notice of intent to proceed against LRP, and Fiore was removed as a
defendant. Once again, discovery disputes arose between the parties. After
numerous motions and a hearing, the district court held that information relating to
LRP’s profits and other sensitive financial information was not discoverable.
A jury trial on the issue of damages was scheduled to begin January 18,
2000. On November 1, 1999, LRP moved for summary judgment as to damages.
The district judge heard oral argument on the motion on December 15, and issued a
7
written ruling granting LRP’s motion on December 23. According to the district
court, Law Bulletin advanced two damage theories, seeking to recover damages
based on its actual lost subscription sales and LRP’s profits. The district court
found that each of these theories failed as a matter of law. Because Law Bulletin
had succeeded in proving liability, the district court awarded Law Bulletin nominal
damages in the amount of $1.00.
Law Bulletin filed a timely appeal, Case No. 00-10387, challenging the
dismissal of its state law and Lanham Act claims, the nominal damage award, and
the district court’s failure to order injunctive relief.3 LRP filed a timely cross-
appeal, Case No. 00-10654, arguing the district court erred in refusing to dismiss
Law Bulletin’s breach of contract claims based on either Copyright Act preemption
or public policy grounds and in denying LRP’s request for attorney’s fees and costs
as a prevailing party under the Lanham Act. On March 1, 2000, the district court
entered an order granting Law Bulletin’s request for costs under Fed. R. Civ. P.
54(d)(1). LRP appeals this order in Case No. 00-11461. The attorneys who
represented Law Bulletin in the district court, Robert Kehoe, Jr. and Gene
3
Law Bulletin’s notice of appeal also challenges the district court’s award of sanctions
against it and its trial attorneys for violation of a discovery protection order. Law Bulletin does
not separately address the issue in its brief, but rather adopts the joint pro se brief filed by its
trial attorneys in Case Nos. 00-10370 and 00-10371. We will, therefore, include Law
Bulletin’s claims on this issue in our discussion of Case Nos. 00-10370 and 00-10371.
8
Lipscher, have also filed pro se appeals, Case Nos. 00-10370 and 00-10371,
challenging sanctions the district court ordered against them personally for
violation of a discovery protective order.
A. Case No. 00-10387
1. Preemption of State Law Claims
Law Bulletin contends the district court erred in dismissing Counts 2 and 4
based on a finding that they were preempted by § 301 of the Copyright Act, 17
U.S.C. § 301. Law Bulletin claims the district court misconstrued its complaint in
characterizing Counts 2 and 4 as resting solely on a “reverse passing off” theory.
Law Bulletin asserts that these counts also encompassed claims of “acquisition
misconduct” by LRP which are not preempted by the Copyright Act. Law Bulletin
does not challenge the district court’s finding of preemption with respect to Law
Bulletin’s “reverse passing off” claims in Counts 2 and 4. We believe Law
Bulletin adequately pled claims of acquisition misconduct in its complaint by
alleging LRP violated state law by “obtain[ing] a subscription to the Verdict
Reporter by false pretense, knowing that [Law Bulletin] was willing to provide
defendant LRP with a subscription only upon the safeguards described in Exhibit B
[May 20, 1993 Letter].”
9
We review the district court’s preemption determination de novo. Irving v.
Mazda Motor Corp., 136 F.3d 764, 767 (11th Cir. 1998). The Copyright Act
expressly preempts
legal or equitable rights [under state law] that are equivalent to any of
the exclusive rights within the general scope of copyright as specified
by section 106 in works of authorship that are fixed in a tangible
medium of expression and come within the subject matter of
copyright as specified by sections 102 and 103.
17 U.S.C. § 301(a). In Crow v. Wainwright, 720 F.2d 1224, 1225-26 (11th Cir.
1983), this court recognized a two-part test to be applied in copyright preemption
cases. Preemption occurs if the rights at issue (1) “fall within the ‘subject matter
of copyright’ set forth in sections 102 and 103" and (2) “are ‘equivalent to’ the
exclusive rights of section 106.” Id.
On appeal, the parties agree the verdict reporters are not copyrightable.
However, because the matter was decided on summary judgment, the district court
assumed the verdict reporters satisfied the first prong based on the allegations in
the complaint that the newsletters report “information in original editorial
authorship that not only includes the selection, coordination, and arrangement of
data that is of interest and importance to the trial bar but also includes substantial
narrative authorship as to the reporting of the underlying events.” In any event,
10
we find that the first prong of the preemption test is met. The legislative history to
§ 301(a) states,
As long as a work fits within one of the general subject matter
categories of sections 102 and 103, the bill prevents the States from
protecting it even if it fails to achieve Federal statutory copyright
because it is too minimal or lacking in originality to qualify, or
because it has fallen into the public domain.
H.R. REP. No. 94-1476, at 131 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5747.
As other circuits have recognized,
one function of § 301(a) is to prevent states from giving special
protection to works of authorship that Congress has decided should be
in the public domain, which it can accomplish only if “subject matter
of copyright” includes all works of a type covered by sections 102 and
103, even if federal law does not afford protection to them.
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1453 (7th Cir. 1996) (emphasis in
original); see also Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 849-50
(2d Cir. 1997). As the Supreme Court has noted, “it is beyond dispute that
compilations of facts are within the subject matter of copyright.” Feist Publ’ns,
Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 345 (1991). Therefore, even if
Law Bulletin’s publications are not copyrightable, they are nevertheless within the
subject matter of copyright.
We turn then to the second prong of the preemption test to determine
whether Law Bulletin’s acquisition misconduct claims encompass rights which are
11
equivalent to the exclusive rights of § 106. As this circuit has recognized, “the
[Copyright] Act ‘preempts only those state law rights that may be abridged by an
act which, in and of itself, would infringe one of the exclusive rights provided by
federal copyright law.’” Foley v. Luster, 249 F.3d 1281, 1285 (11th Cir. 2001)
(quoting Computer Assoc. Int’l, Inc. v. Altai, Inc., 982 F.2d 693, 716 (2d Cir.
1992)). The exclusive rights under the Copyright Act include the right to
reproduce the copyrighted work, to prepare derivative works, and to distribute
copies to the public. See 17 U.S.C. § 106. We employ an “extra element” test
such that “if an extra element is required instead of or in addition to the acts of
reproduction, performance, distribution or display, in order to constitute a state-
created case of action, then the right does not lie within the general scope of
copyright and there is no preemption.” Foley, 249 F.3d at 1285.
As previously noted, the complaint alleged that LRP “obtained a
subscription to the Verdict Reporter by false pretense, knowing that [Law Bulletin]
was willing to provide defendant LRP with a subscription only upon the safeguards
described in Exhibit B [May 20, 1993 Letter].” The safeguards set out in the May
20, 1993 letter are as follows:
If you are willing, however, to confirm that you would like to obtain
our publication for your personal information only, and not for the
purpose of copying, reproducing, or remarketing any portion of the
publication or the selected information which it contains, I would be
12
happy to enroll you as a subscriber. Please return a signed copy of
this letter as confirmation of your agreement to these terms and we
will add you to the subscription rolls.
Clearly the rights Law Bulletin is attempting to protect in its acquisition
misconduct claims are copyright rights. Furthermore, obtaining access to a work is
a necessary condition to copying it. There is no extra element which would
remove Law Bulletin’s acquisition misconduct claims from the general scope of
copyright. The district court did not err in determining that Counts 2 and 4 of Law
Bulletin’s complaint were preempted.
2. Lanham Act Claims
Law Bulletin next argues that the district court erred in entering judgment
pursuant to Fed. R. Civ. P. 50(a) in favor of LRP on the Lanham Act claims. We
review a Rule 50(a) judgment de novo. Johnson Enters. of Jacksonville, Inc. v.
FPL Group, Inc., 162 F.3d 1290, 1308 (11th Cir. 1998). In our review,
we consider all the evidence in the light most favorable to the
nonmoving party, and independently determine whether the facts and
inferences point so overwhelmingly in favor of the movant . . . that
reasonable people could not arrive at a contrary verdict. . . . If the
nonmoving party failed to make a showing on an essential element of
his case with respect to which he had the burden of proof, then the
entry of judgment as a matter of law is appropriate.
Id. (internal quotations and citations omitted).
13
Count 3 of Law Bulletin’s complaint alleged violations of both 15 U.S.C. §
1125(a)(1)(A) (“false designation of origin”) and 15 U.S.C. § 1125(a)(1)(B) (“false
advertising”). With respect to its false designation of origin claim, Law Bulletin
asserts a “reverse passing off” theory, i.e., that LRP falsely held out its database as
the product of its nationwide network of researchers when in fact the Illinois data
had been pirated from Law Bulletin.4 To prevail on a false designation of origin
4
In its brief on appeal, Law Bulletin contends the district court erroneously
precluded its second false designation of origin claim, that Law Bulletin’s database
consists of repackaged versions of cases taken from a number of regional reporters,
by limiting discovery to evidence relating to LRP’s use of Law Bulletin’s materials
and issuing a protective order as to LRP’s use of third-party jury verdict
publications. This claim is actually a challenge to the October 16, 1998 protective
order, and we, therefore, review for abuse of discretion. McCarthy v. Barnett Bank
of Polk County, 876 F.2d 89, 91 (11th Cir. 1989). Law Bulletin asserts that the
district court “misconstrued the complaint as pleading only LRP’s piracy from Law
Bulletin” and not from third-party publishers. However, Law Bulletin itself, in its
response to LRP’s second motion for a protective order, described its complaint as
raising
two distinct claims against the defendant:
1) the defendant has pirated the plaintiff’s material (in violation of the
subscription contract) and is remarketing the plaintiff’s material as the
defendant’s own workproduct (in a scheme of reverse palming off).
2) the defendant falsely advertises its national jury verdict product
(which it markets in Illinois in competition with the plaintiff) as being
the workproduct of LRP’s own researchers and something that they
have verified with all participating trial lawyers. In short, the
defendant represents its goods to be of a certain source and quality,
when that is not the case because the defendant assembles its database
by pirating material from publishers all across the county [sic], just as
it has from the plaintiff.
14
claim, a plaintiff must show it was either actually or likely to be damaged by the
fact that the defendant used a “false designation of origin, false or misleading
description of fact, or false or misleading representation of fact, which [wa]s likely
to cause confusion, or to cause mistake, or to deceive . . . as to the origin,
sponsorship, or approval of his or her goods, services, or commercial activities by
another person.” See 15 U.S.C. § 1125(a)(1)(A).5
The district court correctly granted judgment pursuant to Rule 50(a) on Law
Bulletin’s “reverse passing off” claim because Law Bulletin failed to present any
evidence as to the likelihood of confusion, an essential element of the claim. Law
Clearly, by Law Bulletin’s own interpretation, its “reverse passing off” claim as
presented in the complaint dealt only with the misuse of its own publication not
with LRP’s alleged piracy from third parties. The district court’s limitation of
discovery was not an abuse of discretion, and the district court’s Rule 50(a)
judgment on the “reverse passing off” claim cannot be reversed based on Law
Bulletin’s lack of discovery argument.
5
Law Bulletin contends the district court erroneously believed proof of
actual confusion, rather than just the likelihood of confusion, was required.
Contrary to Law Bulletin’s assertions, the record does not clearly indicate that the
district court applied the wrong standard; in fact, a review of the entire record
supports a finding that the district court correctly understood actual confusion was
not an element of the “reverse passing off” claim. At the time the district court
ruled on the “reverse passing off” claim, counsel for Law Bulletin expressly
informed the court “the standard in the Lanham Act is not that there was actual
confusion by [sic] the likelihood of confusion.” In any event, because our de novo
review reveals that judgment as a matter of law is appropriate, any alleged error by
the district court is irrelevant.
15
Bulletin, citing Johnson v. Jones, 149 F.3d 494 (6th Cir. 1998), asserts that the
likelihood of confusion is inherent given a showing that a defendant held out a
plaintiff’s product to be its own. Generally, courts in this circuit consider the
following factors in assessing the likelihood of consumer confusion in Lanham Act
trademark claims: (1) type of mark; (2) similarity of mark; (3) similarity of the
products the marks represent; (3) similarity of the parties’ retail outlets and
customers; (5) similarity of advertising media; (6) defendant’s intent; and (7)
actual confusion. Frehling Enters., Inc. v. Int’l Select Group, Inc., 192 F.3d 1330,
1335 (11th Cir. 1999). While we agree with the Johnson court’s observation that a
“reverse passing off” claim is “slightly different from the run-of-the-mill Lanham
Act case,” 149 F.3d. at 503, nothing in Johnson supports a conclusion that the
factors set out in Frehling Enterprises must be completely disregarded. In fact,
while noting that the factors dealing with the relationship between the plaintiff’s
and defendant’s marks were irrelevant, the Johnson court considered the similarity
of products, the similarity in marketing channels, and the similarity in customers.
149 F.3d at 503. As Law Bulletin notes, the determination of likelihood of
confusion is a question of fact. E. Remy Martin & Co., S.A. v. Shaw-Ross Int’l
Imports, Inc., 756 F.2d 1525, 1529 (11th Cir. 1985). Nevertheless, Law Bulletin
does not point to any evidence presented at trial which would show the likelihood
16
of confusion other than the fact that LRP held out Law Bulletin’s product as its
own, a factor which will be present in any “reverse passing off” claim. Given this
lack of evidence on an essential element, judgment as a matter of law is
appropriate.
Law Bulletin’s false advertising claim challenged two statements found in
LRP’s promotional material. The first statement was that LRP’s database was
“continuously updated by [its] national network of researchers.” The second was,
“All cases are verified with all participating attorneys.” To succeed on its false
advertising claim, Law Bulletin must show that it was or was likely to be damaged
by the fact that LRP used a false representation of fact in commercial advertising
which misrepresented “the nature, characteristics, qualities, or geographic origin
of” its goods, services, or commercial activities. See 15 U.S.C. § 1125(a)(1)(B).
In its motion for judgment as a matter of law, LRP asserted that Law Bulletin
failed to present evidence of two essential elements – falsity and materiality. We
need not address materiality, because we find Law Bulletin failed to present any
evidence which would support a finding of falsity, and therefore, judgment as a
matter of law is appropriate.
With respect to the first statement, that LRP’s database was “continuously
updated by [its] national network of researchers,” Law Bulletin contends a jury
17
could have found that LRP’s updating was done by lifting case information from
publications of Law Bulletin and other third-party publishers. As support, Law
Bulletin points to the testimony of LRP President Kenneth Kahn who stated Law
Bulletin publications were “processed as a part of putting together [LRP’s]
database,” as well as the fact that content taken from Law Bulletin’s publications
could be found in LRP’s database as available on Westlaw. In its reply brief, Law
Bulletin states, “the reality is that LRP merely repackaged what it obtained from
other publishers through false pretenses.” There was, however, no evidence to that
effect. There was no evidence LRP did not maintain a national network of
researchers. Law Bulletin produced as an exhibit at trial a copy of one of Law
Bulletin’s publications that had been found in LRP’s files with highlighting and
handwritten notations on it, and Kahn agreed, pursuant to questioning, that LRP
possessed other copies of Law Bulletin publications in a similar manner and these
copies exhibited similar markings. However, the testimony at trial was that LRP
did not just take the newsletters and key the entries into its computer system.
Moreover, the questioning of Kahn by Law Bulletin’s counsel highlighted several
examples of cases in which discrepancies existed between the information as
reported in Law Bulletin’s publications and LRP’s versions. Law Bulletin failed to
18
present evidence which, if believed, would show LRP’s database was not
continuously updated by a nationwide network of researchers.
The second statement, “All cases are verified with all participating
attorneys,” appears only in advertisements for LRP’s Personal Injury Valuation
Handbook. As Law Bulletin concedes on appeal, there was no evidence presented
at trial showing LRP failed to verify any of the cases in the Handbook. Law
Bulletin instead asserts there was a jury question as to whether the statement
applied only to the Handbook or to LRP’s entire database. There was no evidence,
however, from which a reasonable jury could conclude that the “All cases are
verified” statement applied to the entire database. The advertisement upon which
Law Bulletin most heavily relies is an advertisement for the Handbook which
states, “With the handbooks you will have the most comprehensive nationwide
database of personal jury verdicts, continuously updated by [LRP]’s national
network of researchers. All cases are verified with all participating attorneys.”
Even though, as Law Bulletin points out, “[t]he statement about verification comes
immediately after a statement about the database” (emphasis in original), the
verification statement is a new and separate sentence. The statement was not used
19
in promotional material for LRP’s other products.6 Law Bulletin presented no
evidence linking the “All cases are verified” statement to anything other than the
Handbook and has, therefore, failed to show that the second statement was false.
Because both challenged statements are literally true and Law Bulletin put on no
evidence to show the advertisements actually misled, deceived, or confused the
consuming public, the district court correctly granted judgment as a matter of law
on the false advertising claims.
Alternatively, Law Bulletin contends the Rule 50(a) judgment should be
reversed because the district court erroneously restricted discovery, and as a result,
Law Bulletin did not have a fair chance to marshal evidence that would have been
sufficient to support its Lanham Act claims. Law Bulletin asserts LRP’s
“aggressive tactics and dilatory compliance successfully precluded Law Bulletin
from deposing a single current LRP employee.” Because of discovery disputes, the
district court repeatedly extended the deadline for completing discovery. In the
end, discovery was left open until the trial date, Monday, March 1, 1999. At a
motions hearing on the afternoon of February 26, 1999, the parties addressed
6
The testimony at trial made it clear that LRP’s database itself was not
available for sale, but several other products, including the CD-ROM, were created
using the database and sold. Further testimony showed that only a portion of
LRP’s database was accessible through the online research companies.
20
depositions of one former and several current LRP employees which were opposed
by LRP. At the hearing, the district judge overruled LRP’s objections, stating,
“Well, we are going to trial on Monday. Take the depositions tomorrow. And I
don’t want anyone complaining they didn’t get discovery.” Law Bulletin did not
move for a continuance at the hearing, but on appeal characterizes the district
court’s resolution as “an unrealistic mandate.” On the morning of trial, counsel for
Law Bulletin informed the court that the deposition of the former employee had
been taken on the evening of February 26. However, counsel went on to state that
no depositions had been taken of current LRP employees. Counsel requested that
Law Bulletin be allowed to depose Joanne Fiore and Kenneth Kahn during breaks
in the trial. The district judge responded that that would be fine, if the parties
could work it out, but asked Law Bulletin, “Did you not think I was serious about
my trial date? Did you wait too long?” Counsel for LRP then proceeded to detail
the disputes the parties engaged in following the February 26 hearing regarding the
depositions. The district judge interrupted, stating, “I don’t want to hear any more
of this really. I never should have let the discovery remain open until today. I just
don’t know what’s going on in this case, but we’re going to try it and get this case
off the docket.” LRP responded that it was ready to do that. The record does not
indicate any response from Law Bulletin.
21
Law Bulletin contends it was an abuse of discretion for the district court not
to postpone the trial to allow time for these depositions and other discovery. See
Patterson v. United States Postal Serv., 901 F.2d 927, 929 (11th Cir. 1990)
(“Matters pertaining to discovery are committed to the sound discretion of the
district court and, therefore, we review under an abuse of discretion standard.”).
As previously noted, Law Bulletin did not request a continuance either at the
hearing or on the morning of trial; however, Law Bulletin asserts that in light of the
district court’s statements, any request for a continuance would have been futile.
We do not believe the district court’s failure to continue the trial sua sponte
constitutes an abuse of discretion. Discovery had been left open until the day of
trial. At the time the district judge resolved the final discovery disputes on
February 26, Law Bulletin did not inform the court that it was “unrealistic” to
expect the depositions to be completed before trial. Law Bulletin never indicated
that it was not prepared to go to trial on March 1; in fact, it was Law Bulletin
which proposed taking the Fiore and Kahn depositions during breaks in the trial.
The district court’s Rule 50(a) judgment on Law Bulletin’s Lanham Act claims is
affirmed.
3. Denial of Injunctive Relief
22
Law Bulletin further contends that the district court erred in failing to
address its request for injunctive relief. In response, LRP asserts Law Bulletin
abandoned its initial prayer for injunctive relief as set out in the complaint by
failing to “develop and press” (emphasis in original) the issue before the district
court. Counsel for Law Bulletin alluded to injunctive relief several times during
the disputes which arose in the second round of discovery. At the hearing on
LRP’s motion for summary judgment as to damages, counsel for Law Bulletin
stated,
We have several forms of remedy that we’re seeking. One is money
damages, the other is injunctive relief. The motion today does not
address the subject of injunctive relief, and I will not be talking about
that. But, rather, this motion is seeking to enter partial summary
judgment on one portion of the remedy aspect of the case.
The district court did not address injunctive relief in its order granting LRP’s
motion for summary judgment as to damages. However, following the order on
the summary judgment motion, the district judge entered a Final Judgment which
read as follows:
. . . Considering this Court’s Order Granting the Defendant’s motion,
an entry of Final Judgment is appropriate.
THE COURT has considered the pertinent portions of the
record and being otherwise fully advised, it is hereby
ORDERED AND ADJUDGED that FINAL JUDGMENT IS
HEREBY ENTERED on behalf of the Plaintiff. Plaintiff shall recover
nominal damages in the amount of $1.00.
23
The Clerk of the Court shall CLOSE this Case and DENY all
pending motions as MOOT.
We are satisfied that this order was indeed a final order, and therefore, appellate
jurisdiction exists under 28 U.S.C. § 1291. Following the entry of the district
court’s order, Law Bulletin did not seek clarification as to the status of its prayer
for injunctive relief or move to alter or amend the judgment. Therefore, we find
that Law Bulletin abandoned its request for injunctive relief, and we will not
address the matter on appeal.
4. Damages
Finally, Law Bulletin challenges the district court’s nominal damage award.
The district court granted summary judgment in favor of LRP on the damage issue,
awarding Law Bulletin damages in the amount of $1.00. The parties agree Florida
substantive law governs. Law Bulletin argues it is entitled to recover expectation
damages which it characterizes as lost profits on the sales Law Bulletin could have
made absent LRP’s misconduct. Law Bulletin asserts that its damages should be
measured by multiplying its standard fee for an online search by the number of
searches conducted on the Illinois portion of LRP’s database during the applicable
time period.7 In order to recover expectation damages, Law Bulletin must show
7
This theory is based on Law Bulletin’s contention, as articulated at the
December 15, 1999 hearing on the summary judgment motion, that, other than
24
the following: (1) it sustained losses as a proximate result of LRP’s breach of
contract, (2) the loss is not remote, contingent, or conjectural and the damages can
be proven with reasonable certainty, and (3) the damages were reasonably
foreseeable to LRP at the time the contracts were made. See Frenz Enters., Inc. v.
Port Everglades, 746 So.2d 498, 504 (Fla. Dist. Ct. App. 1999). The district court
held that Law Bulletin failed to satisfy any of the three elements. Because the
district court decided the damage issue on a motion for summary judgment, we
review de novo. Skurstenis v. Jones, 236 F.3d 678, 681 (11th Cir. 2000).
Under Florida law, “[i]n order to recover for lost future profits, a party must
prove income and expenses of the business for a reasonable time prior to the
alleged breach. If the party presents evidence only of gross receipts or fails to
prove expenses with some specificity,” an award of damages cannot stand.
Clayton v. Howard Johnson Franchise Sys. Inc., 954 F.2d 645, 652 (11th Cir.
1992) (citations omitted). “[T]he evidence must establish lost profits with
reasonable certainty such that an impartial and prudent mind would be satisfied.”
Id. (citations omitted). The only evidence Law Bulletin presented to show lost
LRP, Law Bulletin is “the only game in town” with respect to online Illinois jury
verdict information. Therefore, Law Bulletin asserts “if the defendant had not
pirated and repackaged our Illinois data, that those customers who wanted to do
searches related to Illinois data would, by necessity, have had to come to the
plaintiff.”
25
profits was the affidavit of Jeffery Bope, Executive Vice President of Law Bulletin.
Bope’s affidavit stated that, prior to 1999, Law Bulletin charged $40 per search for
its online service. The fee was raised to $50 in 1999. Online customers also paid a
general access fee which Bope characterized as “nominal” and, therefore, not
included in Law Bulletin’s damage claim. Bope stated that, at the time in question,
Law Bulletin had the capability to handle all of the searches that were conducted
on LRP’s Illinois database without any additional expense to Law Bulletin.8 Bope
asserted the entire $40-$50 search fee would have constituted additional net profit
to Law Bulletin. Law Bulletin did not present any evidence of past income or
expenses for its online business. Law Bulletin refused to turn over income and
expense information for its entire company based on the assertion that such was
irrelevant. While the jury verdict segment represented only a small portion of Law
Bulletin’s business, the deposition testimony was that Law Bulletin did not keep
separate information regarding net profits from the jury verdict searches. In
opposing summary judgment, Law Bulletin did not produce any evidence of
historical income or expenses relating to the jury verdict product, instead choosing
to rely solely on the generalizations presented in Bope’s affidavit. This evidence is
8
Because discovery as to LRP’s actual sales was limited by the district court,
Law Bulletin based its damage claim on projections of LRP’s sales.
26
not sufficient under Florida law to create a genuine issue of material fact as to lost
profits. Summary judgment is appropriate.
Law Bulletin further asserts the district court erred in granting summary
judgment while there were discovery motions pending. The pending motions,
however, dealt only with Law Bulletin’s attempt to obtain discovery from LRP.
As previously discussed, it was Law Bulletin’s failure to produce evidence relating
to its own income and expenses which defeated its damage claim. The discovery
requested in the pending motions would not have produced a genuine issue of
material fact, and therefore, the district court did not err in granting summary
judgment while the motions were pending. See Ernie Haire Ford, Inc. v. Ford
Motor Co., 260 F.3d 1285, 1290 n.2 (11th Cir. 2001).
B. Case No. 00-10654
On cross-appeal, LRP argues that the district court erred in holding that Law
Bulletin’s contract claim was not preempted by the Copyright Act. In its June 18,
1998 order on LRP’s motion for summary judgment, the district court
characterized the contract claim as an alleged breach of an agreement occasioned
by the delivery of copyrighted materials. While it is clear that Law Bulletin did not
have a copyright right in the material at issue, applying the principles of copyright
27
preemption set forth in our discussion of Case No. 00-10387 and a de novo
standard of review, we affirm the ruling of the district court.
Because the material at issue is within the subject matter of copyright,
resolution of this issue hinges on the equivalency prong of the preemption test.
LRP asserts that, because the subscription agreements dealt only with copying and
redistribution of the materials, Law Bulletin’s contract claim is preempted. LRP
points out that the clause at issue was entitled “Law Bulletin’s Copyright
Recognized,” a fact which LRP asserts demonstrates a clear attempt to circumvent
federal copyright law by utilizing state law to enforce a self-created “copyright.”
However, the mere fact that Law Bulletin misrepresented its interest in the material
as a “copyright” does not alter the fact that, through its breach of contract claim,
Law Bulletin sought to enforce rights created by a simple two-party contract, not
copyright rights. As the Seventh Circuit has stated, claims involving two-party
contracts are not preempted because contracts do not create exclusive rights, but
rather affect only their parties. ProCD, 86 F.3d at 1454-55; but see, Wrench LLC
v. Taco Bell Corp., 256 F.3d 446, 457 (6th Cir. 2001) (“If the promise amounts
only to a promise to refrain from reproducing, performing, distributing or
displaying the work, then the contract claim is preempted.”). We find the Seventh
Circuit’s reasoning to be persuasive. As the ProCD opinion recognizes, courts
28
generally read preemption clauses to leave private contracts unaffected. ProCD, 86
F.3d at 1454-55 (citing American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995)).
The subscription agreements do not remove any information from the public
domain, and the rights created by the agreements are not exclusive rights. The
rights sought to be enforced in Law Bulletin’s breach of contract claim are not
equivalent to the exclusive rights of § 106, and, in order to succeed on its claim,
Law Bulletin needed to show an extra element, the existence of a valid contract
between the parties. The district court was correct in holding that Law Bulletin’s
breach of contract claim was not preempted.
LRP further contends that the district court should have dismissed the
contract claim based on public policy grounds. This argument fails as well. The
subscription agreements do not remove any information from the public domain.
Anyone is free to collect and disseminate the information on jury verdicts in
Illinois. While LRP cites cases involving breaches of confidentiality agreements,
the subscription agreements in the present case are not invalidated merely because
the information is publicly available. See Aronson v. Quick Point Pencil Co., 440
U.S. 257 (1979) (holding royalty contract enforceable even though federal law
offered no protection against third-party use of intellectual property).
29
Finally, LRP argues it was entitled to attorney’s fees and expenses as a
prevailing party under the Lanham Act.9 Under the Lanham Act, “[t]he court in
9
LRP also contends the district court erred in denying its requests for
attorney’s fees pursuant to the court’s inherent powers, Fed. R. Civ. P. 11, and 28 U.S.C. §
1927. We review for abuse of discretion. Chambers v. NASCO, Inc., 501 U.S. 32,
55 (1991) (court’s inherent powers); Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 405 (1990) (Rule 11 sanctions); McMahan v. Toto, 256 F.3d 1120, 1128 (11th
Cir. 2001) (28 U.S.C. § 1927 sanctions). While LRP recognizes this correct
standard of review in its Statement of the Standard of Review, its entire argument
on the issue in its opening brief is as follows:
C. The District Court Erred by Denying LRP’s Other Requests for
Attorneys’ Fees and Costs.
LRP also requested attorneys’ fees and costs pursuant to 28
U.S.C. § 1927 and the district court’s inherent powers. Additionally,
Rule 11 applies given Law Bulletin’s failure to prove it suffered any
injury or damage. [citations omitted]
LRP respectfully requests that this Court reverse the district
court’s decisions and remand with instructions for the district court to
further consider the amount of attorneys’ fees and expenses to which
LRP is entitled.
LRP’s reply brief addresses only Rule 11 sanctions. Therefore, LRP has waived an
appellate challenge to the denial of sanctions under 28 U.S.C. § 1927 or the court’s
inherent powers by failing to make any attempt to show an abuse of discretion by
the district court on these issues. See Denney v. City of Albany, 247 F.2d 1172,
1182 (11th Cir. 2001). With respect to Rule 11 sanctions, LRP does not discuss
the district court’s analysis on the issue. Under the abuse of discretion standard,
“we must affirm unless we at least determine that the district court has made a clear
error of judgment, or has applied an incorrect legal standard.” Maiz v. Virani, 253
F.3d 641, 662 (11th Cir. 2001) (internal quotations and citations omitted). LRP
fails to show the district court’s refusal to award Rule 11 sanctions was either a
clear error of judgment or the result of the application of an erroneous legal
standard, and we, therefore, affirm.
30
exceptional cases may award reasonable attorney fees to the prevailing party.” 15
U.S.C. § 1117(a). Following the district court’s grant of judgment as a matter of
law on Law Bulletin’s Lanham Act claims, LRP moved for attorney’s fees under
15 U.S.C. § 1117(a).10 The district court denied LRP’s motion, finding LRP failed
to make a showing that the case was an exceptional one.
“Although a case may rise to the level of exceptionality, the decision to
grant attorney fees remains within the discretion of the trial court.” Burger King
Corp. v. Pilgrim’s Pride Corp., 15 F.3d 166, 168 (11th Cir. 1994). We will affirm
unless the district court made a clear error of judgment or applied an incorrect legal
standard. Maiz, 253 F.3d at 662. LRP first claims the district court incorrectly
applied a “bad faith” standard in refusing to award Lanham Act fees when the
correct standard was “something less than bad faith.” In its order, the district court
stated, “[A]bsent a showing of fraud or bad faith, attorneys’ fees are generally not
awarded under [15 U.S.C. § 1117(a)]. Lone Star Steakhouse & Saloon, Inc. v.
Longhorn Steaks, Inc., 106 F.3d 355, 363 (11th Cir. 1997); Safeway Stores, Inc. v.
Safeway Discount Drugs, Inc., 675 F.2d 1160 (11th Cir. 1982).” The Lone Star
10
While an exceptional case is characterized as one in which “the acts of
infringement can be characterized as ‘malicious,’ ‘fraudulent,’ ‘deliberate,’ or
‘willful,’” the legislative history to the Lanham Act makes it clear that attorney’s
fees are also available to prevailing defendants in “exceptional” cases. H.R. REP.
No. 93-524 (1974), reprinted in 1974 U.S.C.C.A.N. 7132, 7133.
31
Steakhouse case, in which a prevailing defendant sought Lanham Act fees,
repeated the general rule, “[E]xceptional cases are those where the infringing party
acts in a ‘malicious,’ ‘fraudulent,’ ‘deliberate,’ or ‘willful’ manner.” 106 F.3d at
363 (internal quotations and citations omitted). The Safeway case, which dealt
with the denial of Lanham Act attorney’s fees to a prevailing defendant, held such
an award “should be made only in exceptional circumstances and on evidence of
fraud or bad faith.” 675 F.2d at 1169.
LRP asserts that the Eleventh Circuit has not expressly analyzed the
applicability of a “something less than bad faith” standard to Lanham Act cases in
which the defendant prevails and urges this panel to adopt this more lenient
standard. While some circuits require an unqualified showing of bad faith,
irrespective of which party prevails, other circuits have allowed prevailing
defendants to recover Lanham Act fees upon a showing of “something less than
bad faith.” See Scotch Whisky Ass’n v. Majestic Distilling Co., Inc., 958 F.2d
594, 599 (4th Cir. 1992) (collecting cases); see also Door Sys., Inc. v. Pro-Line
Door Sys., Inc., 126 F.3d 1028, 1032 (7th Cir. 1997) (“between good faith as a safe
harbor and deliberateness as an automatic basis for awarding fees is the category of
oppressive suits, fairly described as exceptional, in which the case for an award of
fees to the defendant is compelling”). We believe that under Safeway, the correct
32
standard in the Eleventh Circuit is fraud or bad faith. However, given the district
court’s express findings, LRP’s claim would fail, even under the more lenient
standard. We therefore leave the determination as to the continued validity of
Safeway to another case.
LRP contends that Law Bulletin’s Lanham Act claims utterly lacked merit.
The district court, however, found Law Bulletin presented enough evidence to
withstand LRP’s numerous motions to dismiss and to warrant a trial. It was LRP’s
arguments in support of its motion for Lanham Act fees that the district court
labeled as “wholly without merit.” LRP further asserts that Law Bulletin
improperly prosecuted the case as a part of a “competitive ploy” to advance Law
Bulletin’s Strategic Business Plan. In its motion for Lanham Act fees, LRP
characterized this “competitive ploy” as evidence of bad faith and an attempt “to
improperly harass Defendant LRP by seeking competitive information.” The
district court rejected these arguments, finding Law Bulletin had not brought the
case in bad faith or for purposes of harassing LRP. LRP fails to show the district
court abused its discretion in finding that Law Bulletin’s claims did not completely
lack substance or in holding that the suit was not part of a “competitive ploy” by
Law Bulletin. LRP cites no other factors which could support a finding of
33
exceptionality. The district court’s denial of LRP’s request for Lanham Act fees is
affirmed.
C. Case No. 00-11461
LRP contends that the district court erred by awarding costs to Law Bulletin
as a prevailing party under Fed. R. Civ. P. 54(d)(1)11 and asks this panel to remand
the case with instructions for the district court to award Rule 54(d) costs in favor of
LRP. “We review the factual findings underlying a district court’s determination
regarding prevailing party status for clear error. Whether the facts as found suffice
to render the plaintiff a ‘prevailing party’ is a legal question reviewed de novo.”
Fireman’s Fund Ins. Co. v. Tropical Shipping & Constr. Co., Ltd., 254 F.3d 987,
1012 (11th Cir. 2001) (internal quotations and citations omitted).
We note at the outset that LRP’s argument on this issue is strikingly
underdeveloped. LRP provides no rationale for its request that costs be awarded in
its favor. As the district court noted in response to LRP’s motion for Rule 54
costs, LRP is the non-prevailing party under Rule 54 and there is no discretion for
an award of fees to a non-prevailing party. LRP argues that a plaintiff who
11
Rule 54(d)(1) provides, “Except when express provision therefor is made
either in a statute of the United States or in these rules, costs other than attorneys’
fees shall be allowed as of course to the prevailing party unless the court otherwise
directs.”
34
receives only nominal damages is not necessarily entitled to Rule 54 costs and
asserts, without support or analysis, that the district court erred by holding that
Law Bulletin was the prevailing party. The definition of a “prevailing party” is
well-established in this circuit.
To be a prevailing party [a] party need not prevail on all issues to
justify a full award of costs, however. Usually the litigant in whose
favor judgment is rendered is the prevailing party for purposes of rule
54(d). . . . A party who has obtained some relief usually will be
regarded as the prevailing party even though he has not sustained all
his claims. . . . Cases from this and other circuits consistently support
shifting costs if the prevailing party obtains judgment on even a
fraction of the claims advanced.
Head v. Medford, 62 F.3d 351, 354 (11th Cir. 1995) (internal quotations and
citations omitted). As the district court correctly noted, the jury returned a verdict
in favor of Law Bulletin as to liability, and while the damage award was nominal,
the district court entered final judgment in Law Bulletin’s favor as to damages.
The district court did not err in finding Law Bulletin to be the prevailing party for
Rule 54 purposes.
We turn next to LRP’s contention that a prevailing party who recovers only
nominal damages is “not necessarily entitled to its costs” under Rule 54. LRP cites
only one case which is at all on point and that case expressly recognizes that the
decision to reduce or deny Rule 54 costs based on the fact the prevailing party
obtained only a nominal victory is within the “substantial discretion” of the district
35
court. Richmond v. Southwire Co., 980 F.2d 518, 520 (8th Cir. 1992). LRP makes
no attempt to show the district court abused its discretion in refusing to reduce or
deny costs in favor of Law Bulletin, and our independent review reveals no abuse
of discretion. The district court’s award of costs in favor of Law Bulletin is
affirmed.
D. Case Nos. 00-10370 and 00-10371
On January 15, 1999, the district court sanctioned Law Bulletin and its legal
counsel Kehoe and Lipscher for failing to return documents subject to the October
16, 1998 protective order granted by the district court. The protective order was
issued by the district court following a dispute between the parties concerning the
scope of a subpoena duces tecum. The protective order narrowed the scope of the
subpoena to documents that related specifically to LRP’s use of Law Bulletin’s
jury verdict publications. The district court noted that documents involving LRP’s
dealings with third parties were protected under the order.
Approximately a month after the district court issued the protective order,
LRP’s bank, First Union, produced ninety-eight documents at the request of Law
Bulletin’s counsel. On December 1, 1998, LRP learned of First Union’s
production. Believing that many of the documents produced were protected by the
court order, LRP demanded their immediate return. Law Bulletin did not
36
immediately return the documents and instead asked LRP for time to investigate
which documents were in violation of the protective order. LRP found this
response to be unacceptable and, on December 3, 1998, notified Law Bulletin that
if the documents were not returned by overnight mail it would seek immediate
relief from the district court. On December 4, 1998, LRP moved for an order
compelling the immediate return of the protected documents and for sanctions
against Law Bulletin and its counsel.
On December 9, 1998, the district court convened an emergency hearing on
LRP’s motion. At the conclusion of the hearing, the court ordered Law Bulletin to
turn over the documents produced by First Union for an in camera inspection.
After the inspection, the district court ruled that ninety-two of the ninety-eight
documents were clearly subject to the court’s protective order and that Law
Bulletin’s failure to return the documents was a direct violation of the order. The
court construed LRP’s motion for sanctions as falling under Fed. R. Civ. P.
37(b)(2) and awarded LRP its reasonable attorney’s fees, costs, and expenses in
connection with the motion. The court expressly found that, under the
circumstances, it was not necessary to hold either Law Bulletin or its counsel in
contempt. Appellants filed a motion to vacate, alter, or amend the sanctions order,
which the district court denied. LRP submitted a petition for fees and expenses in
37
the amount of $25,126.24. The district court found LRP’s requested amount to be
unreasonable and imposed sanctions in the amount of $7,960.24 against Law
Bulletin, Lipscher, and Kehoe, jointly and severally.
In their pro se brief on appeal, which was adopted by Law Bulletin, Lipscher
and Kehoe submit three arguments. First, they contend the district court
committed legal error when it construed the ambiguous protective order as being
unmistakably clear. Second, they assert the district court abused its discretion
under Rule 37 because their failure to return the documents had been “substantially
justified” and the award of sanctions would be “unjust” under the circumstances.
Finally, they argue that the court erred when it invoked Rule 37 as authority to
issue sanctions in this situation because, they contend, Rule 37 applies only upon
failure to make court-ordered discovery, not in cases involving noncompliance
with a protective order.
We begin by addressing appellants’ third argument. The question of
whether Rule 37(b)(2) allows for sanctions for violations of protective orders is a
matter of first impression in this circuit.12 Appellants contend both the plain
12
Without expressly analyzing whether Rule 37(b) applied, the Ninth Circuit,
in Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 784 (9th Cir.
1983), held that failure to comply with the terms of a protective discovery order
exposed both the party and its counsel “to liability under Rule 37(b)(2) for the
resulting costs and attorney’s fees.” See also United States v. Nat’l Med. Enters.,
38
language and the context of Rule 37 demonstrate that the rule does not authorize
fee shifting in disputes over Rule 26(c) protective orders. LRP submits the district
court properly awarded sanctions under Rule 37(b)(2) pointing out that although
the rule does not specifically provide for sanctions in this situation, the language of
the Advisory Committee Notes to Rule 37 shows that the rule was intended to
include the type of protective order issued in this case.
Rule 37(b)(2) does not mention Rule 26(c) protective orders, but rather
states that it applies when a party “fails to obey an order to provide or permit
discovery, including an order made under subdivision (a) of this rule or Rule 35, or
if a party fails to obey an order entered under Rule 26(f).” To support the district
court’s ruling, LRP points to the Advisory Committee Notes on the 1970
Amendments to Rule 37, which read in part as follows:
The scope of Rule 37(b)(2) is broadened by extending it to include
any order “to provide or permit discovery,” including orders issued
under Rules 37(a) and 35. Various rules authorize orders for
discovery – e.g., Rule 35(b)(1), Rule 26(c) as revised, Rule 37(d). . . .
Rule 37(b)(2) should provide comprehensively for enforcement of all
these orders.
LRP argues that the Advisory Committee Notes’ reference to Rule 26(c)
encompasses Rule 26(c) protective orders. However, the Notes refer to Rule 26(c)
Inc., 792 F.2d 906 (9th Cir. 1986) (upholding grant of sanctions under Rule 37(b)
for violation of a protective order).
39
only in connection with rules authorizing “orders for discovery” (emphasis
added). Under Rule 26(c), “[i]f the motion for a protective order is denied in
whole or in part, the court may, on such terms and conditions as are just, order that
any party or other person provide or permit discovery.” This type of order clearly
qualifies as an order “for discovery” under Rule 26(c). In contrast, a Rule 26(c)
protective order is not “an order to provide or permit discovery,” and therefore,
such orders do not fall within the scope of Rule 37(b)(2). See Fed. R. Civ. P.
37(b)(2); see also Coleman v. Am. Red Cross, 23 F.3d 1091, 1098-99 (6th Cir.
1994) (Ryan, J. dissenting) (stating that Rule 37(b) has “nothing to do with
protective orders” or Rule 26(c)).
Because the district court did not invoke its inherent powers in awarding the
sanctions, we need not speculate as to whether these powers could justify the
sanctions in this case. See Peterson v. BMI Refractories, 124 F.3d 1386, 1395 n.5
(11th Cir. 1997). Similarly, while monetary sanctions in the form of attorney’s
fees are proper upon a finding of contempt, see Abbott Labs. v. Unlimited
Beverages, Inc., 218 F.3d 1238, 1242 (11th Cir. 2000), the district court expressly
declined to find appellants in contempt. Therefore, the district court’s order
granting attorney’s fees, costs, and expenses against Law Bulletin, Lipscher, and
40
Kehoe must be reversed, and we need not address appellants’ other arguments on
this point.
E. Conclusion
For the reasons stated above, the district court’s order granting sanctions
against Law Bulletin, Lipscher, and Kehoe is REVERSED, and this issue is
REMANDED to the district court for further proceedings consistent with this
opinion. The district court is AFFIRMED on all other issues. The parties shall
bear their own costs.
41