Quincy Bioscience, LLC v. Ellishbooks

Citation: Not availableDocket: 19-1799

Court: Court of Appeals for the Seventh Circuit; July 22, 2020; Federal Appellate Court

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Quincy Bioscience, LLC filed a lawsuit against Ellishbooks for violating the Lanham Act and state laws through the unauthorized sale of its Prevagen® dietary supplements. Quincy obtained a default judgment in its favor, resulting in a monetary award of $480,968.13 and a permanent injunction against Ellishbooks. Following an appeal where Ellishbooks's arguments were deemed meritless, Quincy sought sanctions under Federal Rule of Appellate Procedure 38, which were granted due to the lack of success in Ellishbooks's appeal and perceived attempts to prolong the proceedings.

Quincy requested $50,059.50 in attorneys' fees for the appeal, which Ellishbooks contested, arguing against certain billed hours and seeking clarification that sanctions applied only to Ellishbooks and not its attorney, Robert DeWitty. The court clarified that sanctions were awarded against both Ellishbooks and DeWitty, as the motion for sanctions explicitly requested this. Additionally, the court noted that fees should only cover time spent directly related to the appeal, excluding post-judgment activities.

Wachovia Sec. LLC v. Loop Corp. demonstrates that fees incurred in defending an appeal are compensable, as noted by the Seventh Circuit. Similarly, the Supreme Court in Cooter, Gell v. Hartmarx Corp. affirms that appellate courts can award expenses stemming from frivolous appeals under Rule 38. However, the Ninth Circuit in Blixseth v. Yellowstone Mountain Club, LLC has ruled that sanctions awards should not include fees for preparing the motion for sanctions. 

Ellishbooks contends that fees for mediation, sanctions proceedings, specific rule research, and communications with Counsel Press should be excluded. The ruling limits Quincy’s fees to those directly related to defending the appeal and excludes any fees incurred after April 24, 2020, leading to a reduction of $5,730.00 from the requested amounts of $3,120.00 and $2,610.00 from Mr. Krit and Mr. Karnik, respectively. 

Ellishbooks also claims some time entries are duplicative; however, the court finds the identified entries necessary and thus will not exclude them. Furthermore, despite Ellishbooks arguing for a reduction in fees due to its status as a small entity with few assets, Quincy refutes this claim, pointing out the lack of evidence for insolvency. Consequently, the court orders sanctions against both the appellants and Mr. DeWitty in the total amount of $44,329.50.