Patrick E. Higginbotham, Circuit Judge:
Coalition for Better Government and Darleen Jacobs challenge the reasonableness of the district court's award of attorney's fees to Alliance for Good Government for federal trademark infringement under the Lanham Act. Jacobs also argues that she was improperly joined post-judgment. We affirm.
Our two prior opinions detail the relevant background.
Coalition appealed, and we affirmed the district court's summary judgment but modified its injunction to restrain only Coalition's
On remand, the district court instructed Alliance to file a new motion for attorney's fees, separating fees in accordance with our judgment and including any demand for fees related to the appeals "not inconsistent with [our] judgment," which had affirmed the exceptional nature of the case. Alliance argued that its work on the word mark claim was "inextricably intertwined with work" on the composite mark claim, so it was unable to fully disentangle fees related to each claim. Instead, it proposed a 10% across-the-board reduction of fees to estimate for time spent on the word mark claim, and a $1,500 reduction to account for the claims it voluntarily dismissed. Alliance also moved to join Darleen Jacobs, a principal of Coalition, because it had learned during post-judgment discovery that Coalition lacked resources to pay the fee award.
The district court joined Jacobs as a third party to the case, required that Alliance serve her with the court's order, and gave Jacobs two weeks to respond to Alliance's motion. Jacobs opposed Alliance's motion for fees, but the district court ultimately found it appropriate to hold her directly liable. The district court agreed with Alliance's efforts to modify the fee award in accordance with our second opinion, rejected Coalition's objections, and awarded Alliance $148,006.15 in fees.
Both Jacobs and Coalition appealed. Jacobs argues that the district court's order joining her was improper. And both challenge the reasonableness of the district court's fee award.
As the Supreme Court explained in Nelson v. Adams USA, Inc., a court adding a party post-judgment must afford that party due process.
The facts here mirror those in Nelson, with key exceptions. In both cases, the prevailing party was awarded attorney's fees and subsequently sought to join an individual in a leadership role within the opposing party entity out of fears the party itself did not have sufficient assets to pay the fee award.
Jacobs next argues that she is not liable as an individual under the Lanham Act.
The Lanham Act authorizes the award of "reasonable attorney fees to the prevailing party" in "exceptional cases."
The Federal Circuit in turn has affirmed imposition of fee awards under the Patent Act against individuals who were not party to the underlying litigation when their conduct contributed to the court's decision to award attorney's fees.
We affirmed the district court's determination that this case is exceptional because Coalition litigated in an unreasonable manner, including presenting meritless defenses at the summary judgment stage, filing an unsupported laches defense, meritless counterclaim, and a meritless motion to dismiss, and behaving unreasonably during discovery by insisting on proceeding with depositions even after the district court granted summary judgment on Alliance's federal trademark infringement claim and Alliance dismissed its other claims.
Both Appellants argue that the fee award is unreasonable. We review the reasonableness of a fee award under the Lanham Act for abuse of discretion.
The Appellants raise three challenges to the fee award. They first argue the district court had no authority to award any fees related to the two appeals because only our Court has that authority. The Federal Circuit has interpreted the Patent Act's fee-shifting provision as allowing district courts to "award fees for the entire case, including any subsequent appeals" because neither the text "nor its legislative history distinguishes between awarding attorney fees in the district court and in the appellate court."
The district court's decision to award fees for further litigation of the attorney's fee award did not contravene the mandate rule. On remand, a lower court "must implement both the letter and spirit of [our] mandate, and may not disregard [our] explicit directives."
Finally, the Appellants argue the district court did not consider their objections to Alliance's fees motion. We disagree. The district court considered each of these objections and provided reasons for rejecting them. The Appellants make no argument that the district court's rulings on any of these objections were improper, and we find no abuse of discretion.
The Appellants append a First Amendment argument similar to one raised in the prior two appeals, arguing that the imposition of an attorney fee award would violate their free speech. This argument rests on the premise that trademark restrictions should not apply to Coalition because it is engaged in political speech, a challenge to the injunction itself. Coalition first raised this argument during its original appeal of the district court's grant of summary judgment. The Alliance I panel declined to examine the First Amendment issue then because it had not been preserved or ruled on below, relying on the doctrine that "an appellate court, in reviewing a summary judgment order, can only consider those matters presented to the district court."
The dissent argues that this decision was clearly erroneous and so our panel is not bound by law of the case. We disagree. The clearly-erroneous exception for law-of-the-case doctrine applies only in "extraordinary circumstances."
James L. Dennis, Circuit Judge, dissenting:
The majority strains at gnats but swallows a camel.
This is the third appeal in this case. I regret that I was not assigned to participate in the first appeal. See All. for Good Gov't v. Coal. for Better Gov't (Alliance I), 901 F.3d 498, 506 (5th Cir. 2018). If I had taken part, I would have worked to persuade the court that applying the Lanham Act to the noncommercial political speech of Coalition for Better Government is contrary to the Act and violates the First Amendment. And had the Alliance I panel correctly held that Coalition's pure political speech cannot be enjoined under the Lanham Act, this litigation would have terminated, averting two additional and flawed decisions that followed Alliance I. See All. for Good Gov't v. Coal. for Better Gov't (Alliance II), 919 F.3d 291 (5th Cir. 2019); All. for Good Gov't v. Coal. for Better Gov't, No. CV 17-3679, 2020 WL 1503533, at *1 (E.D. La. Mar. 30, 2020).
It is not too late to correct Alliance I's serious statutory and constitutional error, however; under our precedents "the law of the case" is not an inexorable command. We need not adhere to a former decision if it was clearly erroneous and doing so would work a manifest injustice. E.g., Schwartz v. NMS Indus., Inc., 575 F.2d 553, 554-55 (5th Cir. 1978); United States v. Vahlco Corp., 895 F.2d 1070, 1072-73 (5th Cir. 1990). In my view, that exception to the rule applies here. Alliance I and Alliance II were predicated on a patent error, i.e., that the Lanham Act can be constitutionally applied to the noncommercial political speech of a political organization, such as the political endorsements made by Coalition in this case.
Alliance for Good Government (Alliance) and Coalition for Better Government (Coalition) are New Orleans-based nonprofit corporations whose principal activity is the vetting and endorsement of political candidates vying for local and state offices. Their missions and work can only be described as political. Neither organization offers or advertises commercial goods or services. And the speech in which they engage—purely political speech—is at the core of the First Amendment's protections. See Arizona Free Enter. Club's Freedom Club PAC v. Bennett, 564 U.S. 721, 734, 131 S.Ct. 2806, 180 L.Ed.2d 664 (2011) ("[T]he First Amendment has its fullest and most urgent application to speech uttered during a campaign for political office." (internal quotation marks omitted)).
Conversely, the Lanham Act, 15 U.S.C. § 1051, et seq. ("the Act")—the statute that Alliance alleges Coalition violated—exclusively regulates commercial activity and commercial speech.
Nevertheless, in the first appeal in this case, see Alliance I, 901 F.3d at 506, this court committed serious error by holding Coalition's speech subject to injunction under the Lanham Act, and thus infringing on Coalition's First Amendment freedom of political expression.
Although a prior panel's rulings in a case typically bind a subsequent panel under the law-of-the-case doctrine, our decision in Alliance I, as noted above, was manifestly erroneous, and adhering to it now works a clear injustice. Thus, this panel's hands are not tied by that decision. See Vahlco Corp., 895 F.2d at 1072-73 (applying this exception to the law-of-the-case doctrine where (1) a ruling in a prior appeal in the same litigation was "clearly in error," and (2) it "would be manifestly unjust" to follow that prior decision; accordingly, the previous decision "does not establish the law of the case and is not binding on the Court in the present appeal"). This panel should thus correct this court's error in Alliance I by vacating each judgment based on that error and remanding for a judgment of dismissal with prejudice with respect to Alliance's Lanham Act claim against Coalition.
Remedying the foundational flaw in Alliance I would of course obviate the need to reach the subsequent mistakes by the district court that generated the present appeal. But because the majority chooses not to correct the foundational error of Alliance I, I must also address the errors committed by the district court in its decision following the remand of the case to it after Alliance II. In Alliance II, a panel affirmed in part the district court's award of attorneys' fees to Alliance. Our mandate in Alliance II instructed the district court only to adjust downward its $68,237.25 award of attorneys' fee to Alliance on remand. Instead, the district court awarded additional fees for time Alliance spent litigating the two appeals and its motion for attorneys' fees, resulting in a total award to Alliance of $148,006.15. The court then sua sponte joined Coalition's attorney, Darleen Jacobs, as a party to the case and, purporting to act pursuant to the Lanham Act's fee-shifting provision, 15 U.S.C. § 1117(a), held her personally liable for the full $148,006.15 fee award. In so doing, the district court plainly violated the mandate rule, the fundamental requirement that on remand a district court can do one thing and one thing only—scrupulously implement this court's mandate. See, e.g., United States v. Matthews, 312 F.3d 652, 657 (5th Cir. 2002); Tollett v. City of Kemah, 285 F.3d 357, 364 (5th Cir. 2002).
In sum, this court's decision in Alliance I to hold Coalition liable under the Lanham Act for noncommercial political speech was clearly erroneous and following it now will result in manifest injustice. Thus, this panel is not bound by that errant determination and should correct it by vacating judgments based thereon and directing the district court to dismiss Alliance's Lanham Act claim with prejudice. See Schwartz, 575 F.2d at 554-55 (explaining "that `the law case doctrine' is not an inexorable command" and need not be adhered to when a prior "decision was clearly erroneous and would work a manifest injustice"). Moreover, even if this court continues to mistakenly adhere to Alliance I, the district court committed multiple errors on remand from Alliance II that would necessitate reversal. Because the majority fails to rectify this court's error in Alliance I and because it ratifies the district court's errors on remand, I respectfully dissent.
The overriding problem in this case is that the Lanham Act plainly does not reach the noncommercial political speech in which Coalition engages and holding otherwise curtails important First Amendment free speech guarantees.
Start with the text. The Act defines "commerce" as "all commerce" that Congress "may lawfully regulate." 15 U.S.C. § 1127. Its purpose, inter alia, is to "secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers." Two Pesos, Inc. v. Taco Cabana Inc., 505 U.S. 763, 774, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (internal quotation marks omitted).
Section 43(a) of the statute, which addresses false and misleading descriptions of unregistered marks, states in part that:
15 U.S.C. § 1125(a). The provision is meant to protect "against a myriad of deceptive commercial practices." Seven-Up Co., 86 F.3d at 1383 (emphasis added) (quoting Res. Dev. v. Statue of Liberty-Ellis Island Found., 926 F.2d 134, 139 (2d Cir. 1991)). Unsurprisingly, we have "previously determined that § 43(a) ... only applies to commercial speech." TMI, Inc. v. Maxwell, 368 F.3d 433, 436 n.2 (5th Cir. 2004) (citing Procter & Gamble Co., 242 F.3d at 547). The provision's legislative history supported our conclusion. See Seven-Up Co., 86 F.3d at 1383 n.6. (citing 134 Cong. Rec 31,851 (Oct. 19, 1988) (statement of Rep. Kastenmeier) (commenting that the reach of Section 43(a) "specifically extends only to false and misleading speech that is encompassed within the `commercial speech' doctrine developed by the United States Supreme Court")); see also Procter & Gamble Co., 242 F.3d at 547 n.13 (same).
At issue in this case is § 32(1) of the Act, which covers infringement of registered marks. 15 U.S.C. § 1114(1). Section 32(1) creates a cause of action when trademark infringement occurs "in connection with the sale, offering for sale, distribution, or advertising of any goods or services" and
Based on the similar language between §§ 43(a) and 32(1), courts have concluded that claims under the two provisions have the same elements, with the exception that § 32(1) applies solely to registered marks. See Lamparello v. Falwell, 420 F.3d 309, 312-13 (4th Cir. 2005); cf. Margreth Barrett, Finding Trademark Use: The Historical Foundation for Limiting Infringement Liability to Uses "In the Manner of A Mark", 43 WAKE FOREST L. REV. 893, 942-43 (2008) ("While the statutory language of sections 32(1)(a) and 43(a) differs, the provisions are generally understood to impose the same standard for infringement."). "To prevail under either cause of action, the trademark holder must prove:
Lamparello, 420 F.3d at 313 (alterations in original). Significantly, both provisions require that actionable infringement be "in connection with" goods or services in a manner likely to cause confusion to consumers. Compare 15 U.S.C. § 1125(a) (use of mark "in connection with any goods or services"), with id. § 1114(1) (use of mark "in connection with the sale, offering for sale, distribution, or advertising of any goods or services"). "This is commonly described as the commercial use requirement." Utah Lighthouse Ministry, 527 F.3d at 1052.
In light of this requirement, the clear majority of circuits to have considered whether the Act applies to any noncommercial speech have determined that it does not. See Bosley Med. Inst., Inc., 403 F.3d at 676-77 (construing § 32(1)); Taubman Co., 319 F.3d at 774 (same); Farah, 736 F.3d at 541; Utah Lighthouse Ministry, 527 F.3d at 1052-54; Porous Media Corp., 173 F.3d at 1120; cf. S.F. Arts & Athletics, Inc., 483 U.S. at 566, 107 S.Ct. 2971 (Brennan, J., dissenting); Radiance Found., Inc., 786 F.3d at 322.
In the instant case, Coalition's use of its emblem certainly was not "in connection" with commercial activity. Coalition exists solely to engage in the endorsement of candidates for public office. As the district court recognized, "[p]eople are not buying products here." Because these entities' activities are not commercial in nature, the Lanham Act simply does not apply to this case.
Applying the Lanham Act in the manner the Alliance I panel did was also clearly inconsistent with Congress's intent in enacting the statute. Congress specifically recognized the constitutional problems of creating liability for free speech and sought to avoid doing so. See Radiance Found., Inc., 786 F.3d at 321; see also
It is well established that commercial speech—that is, speech that does "no more than propose a commercial transaction," Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 66, 103 S.Ct. 2875, 77 L.Ed.2d 469 (1983)—is accorded only a "measure of First Amendment protection." Indeed, "the government may freely regulate" misleading commercial speech, the very speech that the Lanham Act was meant to target. Florida Bar v. Went For It, Inc., 515 U.S. 618, 623-24, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995). By contrast, free speech protections are at their zenith in the context of political speech precisely because such speech is at the heart of the values embodied in the First Amendment. See McIntyre v. Ohio Elecs. Comm'n, 514 U.S. 334, 346, 115 S.Ct. 1511, 131 L.Ed.2d 426 (1995) ("Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution. The First Amendment affords the broadest protection to such political expression in order to assure the unfettered interchange of ideas for the bringing about of political and social changes desired by the people." (cleaned up)). Extending liability under the Lanham Act to noncommercial political speech risks eroding the First Amendment's safeguards for political expression.
Because Coalition only used its emblem in the context of political speech, the Lanham Act simply and obviously cannot be applied to its speech. Thus, the Alliance I panel's decision to impose on Coalition liability under the Act was clearly erroneous.
Beyond the fundamental error in Alliance I that has infected the entire litigation, the district court's missteps on remand from Alliance II raise their own set of problems. Foremost among them, the able district court acted outside the narrow ambit of our mandate. In Alliance II, we directed the district court to undertake only one action on remand: reducing and reallocating its attorneys' fee award to Alliance. 919 F.3d 291. Rather than heeding our mandate, the district court (1) increased its fee award by awarding to Alliance fees incurred for time spent on the appeals in Alliance I & II and in prosecuting its motion for attorneys' fees, (2) sua sponte joined Jacobs as a party, and (3) held Jacobs personally liable for the total augmented award. A brief summary of this case's lengthy procedural history makes manifest the district court's error.
At the outset of the litigation, Alliance claimed that both Coalition's "word mark"—its trade name, Coalition for Better Government—and its "composite mark"—its emblem—infringed on Alliance's marks. The district court agreed, enjoining Coalition from using both its trade name and emblem. Coalition appealed, and this court concluded that only Coalition's emblem, and not its trade name, violated the Lanham Act. The Alliance I panel thus modified the district court's injunction to restrain only Coalition's use of the emblem. See 901 F.3d at 514.
During the pendency of the first appeal, the district court determined that the case was "exceptional" within the meaning of the Lanham Act's attorneys' fees provision, 15 U.S.C. § 1117(a), and thus awarded Alliance, as the prevailing party, $68,237.50 in attorneys' fees. Coalition appealed, and this court, in the second appeal in this matter, affirmed the conclusion that the case warranted an award of attorneys' fees. Alliance II, 919 F.3d at 297.
The Alliance II panel noted, however, this court's earlier determination in Alliance I that Alliance had prevailed only on its emblem claim. Hence, in Alliance II, "we remand[ed] for the district court to reassess the amount of fees" to omit work that furthered Alliance's trade-name claim from its fee calculation. Id. at 293. Specifically, our mandate called only for the district court "to account for billed time for claims on which Alliance did not prevail, and to adjust the fee award accordingly." Id. at 298. We gave no indication that the
In failing to hew to the constraints we imposed on remand, the district court violated the well-established mandate rule. That rule "provides that a lower court on remand must implement both the letter and spirit of the [appellate court's] mandate." Tollett, 285 F.3d at 364 (internal quotation marks omitted) (alterations in original). Notably, the mandate rule extends both to those matters "decided expressly or by necessary implication" by the appeals court. DeJoria v. Maghreb Petroleum Expl., S.A., 935 F.3d 381, 394 (5th Cir. 2019). A district court is "without power to do anything which is contrary to either the letter or spirt of the mandate construed in the light of the opinion of [the] court deciding the case." Id. (alterations in original) (internal quotation marks omitted).
The Supreme Court's decision in Briggs v. Pa. R.R. Co., 334 U.S. 304, 305, 68 S.Ct. 1039, 92 L.Ed. 1403 (1948), is instructive on how a district court can run afoul of the mandate rule. In that case, a jury returned a verdict of $42,500 in favor of the plaintiff, but the district court granted a post-verdict motion to dismiss the case for lack of jurisdiction. Id. The appellate court, however, reversed and directed that the district court, in accordance with the jury's verdict, enter judgment for the plaintiff. Id. On remand, despite the fact that the appellate court's mandate "made no provision for interest," the district court entered judgment and "added to the verdict interest from the date the [jury returned its verdict] to the date of the judgment." Id. The Supreme Court determined that it was "clear that the interest was in excess of the terms of the mandate and hence was wrongly included" by the district court. Id. at 306, 68 S.Ct. 1039. Briggs thus stands for the proposition that a district court violates the mandate rules where it takes actions on remand that the appeals court "made no provision for," thereby exceeding the "terms of the [appellate] mandate." Id.
Tollett v. City of Kemah presented very similar facts to the present appeal, and our decision there underscores the district court's error. 285 F.3d at 364. In Tollett, a district court awarded $5,000 in sanctions against the defendant city and two of its employees. The amount of the award was purportedly to compensate the plaintiff for attorneys' fees and court costs incurred in connection with the sanctioned entities' discovery abuses. On appeal, the plaintiff conceded that the quantum of the sanctions was not supported by proof of reasonable fees and costs. Thus, this court vacated the award and "remand[ed] for a redetermination and assessment of reasonable attorney's fees and costs." Id. at 362 (emphasis omitted).
But on remand the district court imposed sanctions and attorneys' fees against not only the city but also the city's counsel, while dropping the fees it had previously assessed against the city's employees. Id. at 363. The city and its attorney appealed, contending that the district court violated the mandate rule. We agreed, explaining that it was "clear from our opinion" in the first appeal "that the district court was not to redetermine ... whether, and against whom, sanctions should be imposed. The opinion expressly directed the district court only to determine the proper amount to impose as ... sanctions." Id. at 365. Accordingly, we, once again, vacated the sanctions and fee award. Id. at 366; see Doe v. Chao, 511 F.3d 461, 466-67 (4th Cir. 2007) (holding that district court violated the mandate rule when the appeals court's mandate called only for reconsideration of award of attorneys' fees for work performed
Here, too, the import of our directive to the district court on remand was "clear": it was only to reevaluate its attorneys' fee calculation in order to award Alliance fees solely for time spent on the emblem claim, thereby reducing its earlier award. The "necessary implication" of our mandate was that the district court was barred from doing anything other than reducing the fee award. DeJoria, 935 F.3d at 394. Venturing beyond our delimited directive, the district court sua sponte joined Jacobs as a party to the case; held her personally liable; and awarded additional attorneys' fees against Coalition and Jacobs for Alliance's prosecution of both appeals and its motion for attorneys' fees, causing the fee award to mushroom to over $148,000. But as in Tollett, our directive to the district court "was not to redetermine ... against whom sanctions should be imposed," nor was it to augment the sanctions. See id. at 365.
Coalition is therefore correct that the district court's order was directly contrary to our mandate. The majority, however, fails to mention this argument, characterizing Jacobs and Coalition as merely contending that the district court was an "improper forum" for considering appellate attorneys' fees. See Maj. Op. at 668-69 n.54. True, Coalition made that assertion in its briefing on appeal, but it also expressly objected to the district court's award of appellate attorneys' fees on a second basis; Coalition explained that the district court's decision is inconsistent with Alliance II because in that appeal we ordered the district court only to recalculate attorneys' fees to account for the claim on which Alliance prevailed, and, as Coalition states in its brief, "[n]othing in" our "opinion address[ed]" appellate attorneys' fees.
Because Coalition adequately raised the issue of the district court's compliance with the mandate rule, and because the district court did not faithfully apply our mandate in Alliance II, I cannot agree with the majority's endorsement of the decision to join attorney Jacobs as a party to the case or to award Alliance additional attorneys' fees for time incurred in litigating the two appeals and its fees motion.
Regrettably, in holding Jacobs personally liable for the award of attorneys' fees, this court becomes the first to my knowledge to sanction such liability against a party's counsel under the Lanham Act's fee-shifting provision, 15 U.S.C. § 1117(a). Indeed, the Federal Circuit, in construing that the Patent Act's identically-worded fee-shifting provision, has expressly held that the provision cannot be used to impose liability for attorneys' fees on a party's counsel. Phonometrics, Inc., 64 F. App'x at 222 ("Section 285 is a fee shifting statute that in exceptional cases may require the losing party to reimburse the prevailing party its attorney fees. Sheraton[, the prevailing party,] has provided us with no legal basis for entering a fee award against the losing party's attorney
That no court has previously permitted imposing attorneys' fees against a party's counsel under the Lanham Act and that the Federal Circuit has held that imposing such fees on an attorney is not authorized by the Patent Act is unsurprising in light of the text of the statutes' attorneys' fees provisions, which both read: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a); 35 U.S.C. § 285. Notably absent from the provisions is any explicit authorization to impose attorneys' fees against a party's counsel. "When a fee-shifting statute that authorizes the courts to award attorneys' fees to prevailing parties does not mention an award against the losing party's attorney, the appropriate inference is that an award against attorneys is not authorized." Healey, 947 F.2d at 624. Section 1117(a) thus "stands in contrast to other sections and [Federal] Rules [of Civil Procedure] that expressly provide for the imposition of sanctions against attorneys," id., such as 28 U.S.C. § 1927, which empowers courts to order "[a]ny attorney" who "multiples the proceedings in any case unreasonably and vexatiously" to pay the costs and attorneys' fees incurred because of their conduct, and Rule 11(b), which authorizes district courts to award sanctions against "attorney[s]" for misconduct in an array of circumstances. The availability of these traditional—and effective— tools to discipline wayward behavior by counsel means that courts will not be hampered in their ability to police proceedings without applying § 1117(a) against a litigant's counsel; similarly, these well-established provisions ensure that parties can recover costs incurred as a result of opposing counsel's unprofessional conduct.
Further underscoring that Jacobs cannot be held liable for the award of attorneys' fees under § 1117(a) for her representation of Coalition is that, even in cases where courts have imposed attorneys' fees personally on individuals who were not party to the underlying litigation, they have done so not against a party's counsel; rather, attorneys' fees have been assessed against individuals who served as a company's president, owner, or sole shareholder when that individual's conduct caused the case to be "exceptional" under a proper interpretation of the Lanham or Patent Acts. See, e.g., Mach. Corp. of Am. v. Gullfiber AB, 774 F.2d 467, 475 (Fed. Cir. 1985) (holding that an individual who was "not a proper party to" the claims for violation of the Patent Act "may be assessed fees under § 285 [of the Patent Act] if his conduct supports a finding that the case is exceptional" (citing Hughes v. Novi American, Inc., 724 F.2d 122 (Fed. Cir. 1984)); Iris Connex, LLC v. Dell, Inc., 235 F.Supp.3d 826, 852-53 (E.D. Tex. 2017) (imposing attorneys' fees against a company that filed a meritless patent-infringement suit and holding the owner of the company jointly liable for the fees where the owner was the "driving force behind th[e] litigation" and was "responsible" for making the case exceptional). Indeed, the majority states that its decision to hold Jacobs personally liable is rooted in the notion that "[a]n officer is individually liable for any tortious conduct that he committed in connection with his corporate duties." Maj. Op. at 666 (internal quotation marks omitted). But the principle of imposing liability for attorneys' fees not only on the business that is the party to the case but also on the individual who stands behind that business and directs its conduct has no application to an attorney representing her client; attorneys initiate and prosecute cases at the behest of their
In sum, Coalition and Jacobs may not be held liable for anything in this case because no Lanham Act claim arises from Coalition's noncommercial political speech, and, independently of that, no Lanham Act defendant's counsel may be cast for attorneys' fees under the Act's fee-shifting provision.
Bereft of authority under the Lanham Act to impose fees directly on Jacobs, the district court's decision resembles an attempt to pierce Coalition's corporate veil. But during the proceedings in the district court, Alliance never attempted to pierce Coalition's corporate veil; in fact, its motion for attorneys' fees makes no mention
Accordingly, the district court was without authority under the Lanham Act to hold Jacobs directly and personally liable for attorneys' fees, did not invoke any other source of authority to hold Jacobs liable in her capacity as an attorney, and could not and did not make the findings necessary to pierce Coalition's corporate veil.
* * *
In conclusion, this court's decision in Alliance I does violence to the text of the Lanham Act by expanding the statute into territory it was never intended to reach— noncommercial and political speech—and, worse yet, authorizes applying the Act in a manner that invades constitutionally-protected political speech and will embroil federal courts in local political disputes. Alliance I and the tainted rulings it spawned must therefore be corrected to prevent Coalition from suffering an injustice in this case and, more broadly, to reform this court's Lanham Act caselaw to avert chilling the speech of other organizations and individuals that likewise engage only in political speech. Accordingly, this panel should recall the mandates in Alliance I and II, vacate all judgments imposing liability under the Lanham Act on Coalition for its political speech, and instruct the district court to dismiss Alliance's Lanham Act claim with prejudice. For these reasons and those set forth above, I respectfully dissent.
Second, and as explained in more detail infra, Alliance I's application of the Lanham Act to Coalition's noncommercial political speech infringes on First Amendment free speech rights. Again, the Alliance I panel necessarily had to interpret the Lanham Act in order to impose liability under it on Coalition. But applying the Lanham Act in this way directly conflicts with this court's "obligat[ion] to construe the statute to avoid constitutional problems if it is fairly possible to do so." Boumediene v. Bush, 553 U.S. 723, 787, 128 S.Ct. 2229, 171 L.Ed.2d 41 (2008) (cleaned up). A reading of the Act that limits its reach to commercial speech and, moreover, precludes it from touching purely political speech is not only "fairly possible" but is the only plausible interpretation of the statute. Accordingly, the Alliance I panel failed to uphold its duty to read the Act in a manner that avoids raising constitutional doubts.
Third, even assuming Coalition did not preserve in the district court its defenses to an injunction under the Lanham Act, it nevertheless pressed those arguments on appeal in Alliance I, and the Alliance I panel therefore erred in failing to apply the plain-error standard of review to Alliance's unpreserved arguments. Decades ago, "our Court ... adopted the practice of reviewing unpreserved error in a civil case using the plain-error standard of review." Crawford v. Falcon Drilling Co., Inc., 131 F.3d 1120, 1123 (5th Cir. 1997); see also Sec. & Exch. Comm'n v. Life Partners Holdings, Inc., 854 F.3d 765, 783 (5th Cir. 2017) ("We review unpreserved challenges in civil cases for plain error."); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc) (plain error applies to a party's failure to timely file written objections to a magistrate judge's report and recommendation), superseded by statute on other grounds, 28 U.S.C. § 636(b)(1). Under this standard, which is identical to plain-error review in the criminal context, the court "must determine (1) if there was error, (2) if that error was plain, (3) if the error affects substantial rights, and (4) whether allowing that error to stand seriously affects the fairness, integrity, or public reputation of judicial proceedings." Crawford, 131 F.3d at 1123-24 (adopting the four-prong plain-error test as articulated in United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 123 L.Ed.2d 508, (1993)).
Considering the first prong of the test, it was error to extend the Lanham Act to noncommercial political speech because doing so, as detailed infra, violates the statute, which applies only to commercial speech, and tramples on free speech rights. Second, this legal error was plain. We have previously held that several of the statute's provisions—including a provision pertaining to unregistered trademarks that is analogous to the provision protecting registered trademarks at issue here— apply only to commercial speech. See Seven-Up v. Coca-Cola Co., 86 F.3d at 1383 & n.6; Procter & Gamble Co., 242 F.3d at 547 & n.13. And even if no Fifth Circuit decision squarely holds that the particular provision of the Lanham Act invoked here is limited to commercial speech, the "absence of circuit precedent does not prevent the clearly erroneous application of statutory law from being plain error." United States v. Brown, 316 F.3d 1151, 1158 (10th Cir. 2003) (cleaned up) (quoting United States v. Evans, 155 F.3d 245, 252 (3d Cir. 1998)). The obviousness of the error in the district court's interpretation of the Lanham Act is evident from the Act's text, its legislative history, and the need to give the Act a construction that does not conflict with the First Amendment. It is also underscored by the near uniform holdings of our sister circuits that the Act does not reach noncommercial speech. Cf. United States v. Garza, 706 F.3d 655, 662-63 (5th Cir. 2013) (error was clear or obvious because, although "this court had not [yet] definitively answered" the question presented, the caselaw on the issue among all five of our sister circuits was "uniform"). Third, the error affected Coalition's substantial rights. To affect substantial rights, the error generally must be "prejudicial; it must affect the outcome of the proceedings." Crawford, 131 F.3d at 1125 (quoting United States v. Calverley, 37 F.3d 160, 164 (5th Cir. 1994) (en banc), abrogated in part on other grounds by Johnson v. United States, 520 U.S. 461, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997)). Obviously, the mistake in applying the Lanham Act to Coalition's noncommercial political endorsements affected the outcome of the case—indeed, was dispositive of the case— because Coalition would not have been liable for violating the Act had the statute been construed properly. Thus, the error that confronted the Alliance I panel was plain and affected Coalition's substantial rights. The Alliance I panel therefore had the discretion to notice and correct the error, and it should have done so because holding Coalition liable for violating the Lanham Act by its political speech muzzles the political organization's free speech rights, chills the speech of other political entities, and inappropriately calls upon federal courts to referee state and local political disputes, all of which "seriously affect the fairness" and "public reputation of judicial proceedings." Crawford, 131 F.3d at 1123 (quoting Olano, 507 U.S. at 732, 113 S.Ct. 1770).