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Law Firms Win Attorney Fees in ‘Exceptional’ IP Case

August 9, 2018 | Posted in : Contingency Fees / POF, Expenses / Costs, Fee Award, Fee Entitlement, Fee Request, Hourly Rates / Hourly Billing

A recent Daily Business Review story by Raychel Lean, “Billing Rates: This Miami Just Help Win a Nearly $1M Fee Award for Benihana Suit,” reports that federal Judge Paul Engelmayer in the Southern District of New York found that Aventura-based restaurant company Benihana Inc. was entitled to nearly $937,000 in attorney fees and costs for work between 2014 and 2018 by Stearns Weaver Miller Alhadeff & Sitterson in Miami and Clarick Gueron Reisbaum in New York.

The case was a trademark infringement counterclaim launched by Benihana Inc. and its sister company, Noodle Time Inc., against New York-based restaurant chain Benihana of Tokyo LLC, Keiko Aoki, the widow of Benihana’s founder, and former Benihana director Takanori Yoshimoto.  It’s one of nine different pieces of litigation between Benihana Inc. and Benihana of Tokyo that have played out since 2010, when BOT sued BI in Delaware over a separate trademark dispute.

Benihana Inc. and Benihana of Tokyo stem from the same founder, Rocky Aoki, now deceased, but the entities parted ways in 1995 and split their trademark licenses geographically.  In this case, BI claimed that information on BOT’s website violated the Lanham Act as it allegedly misled the public into believing it had the right to operate Benihana restaurants worldwide, which it does not.

The New York-based judge, Engelmayer, awarded $866,488.72 in fees for four years of litigation and $70,216.52 in costs — a figure 25 percent shy of what Benihana Inc. had requested.  In order to qualify for the nearly $1 million fee and cost award, the court had to find that the case was “exceptional.” 

Two factors in particular caught the judge’s attention.  First, Richard Feldman, the lawyer who originally filed the case, testified on June 6, 2017, that Aoki had directed him on numerous occasions that “it was her strategy for BOT to challenge and contest the validity of (the agreement between BOT and BI), whether there was merit to those challenges or not,” according to the July 25 opinion.  Feldman was able to testify against his former client after the two had a falling out and Aoki sued him for malpractice, rendering their attorney-client privilege obselete.  According to Feldman, Aoki’s plan was to “drive up BI’s litigation costs even by means of legally unjustified conduct.”  Second, Engelmayer pointed out that opening statements of Benihana Inc. and Benihana of Tokyo at trial were “lopsided” in strength.”  Immediately after opening statements, BOT backed out of the trial, and the case settled.

A total of 10 Stearns Weaver employees worked on the case.  Shareholder Alan H. Fein, who’s worked at the firm for almost 40 years, spent the most  time and charged the highest rate. Fein billed $625 per hour at the beginning of the case and $795 by the end.  Clarick Gueron Reisbaum brought six attorneys in on the case, of whom partner Nicole Gueron, who has been featured on the New York Super Lawyers list every year since 2011, was paid the most at $595 to $640 per hour.

Benihana of Tokyo balked at these costs and petitioned the court to consider cutting any potential fee award in half, arguing that Stearns Weaver did not try the case efficiently and that its rates were too high.  It also argued that Stearns Weaver had too many senior lawyers working on the case, but Benihana Inc. pointed out that some lawyers had began as associates and were partners by the time the case was over.

Engelmayer sided with Benihana Inc.  “This matter surely required at all stages the expenditure of substantial time by senior lawyers.  And Mr. Fein’s knowledge of the controversy, client, adversary and governing agreement was unparalled,” the opinion said.