K'OYITL'OTS'INA, LTD v. Gottschalk et al, No. 1:2019cv11309 - Document 67 (S.D.N.Y. 2020)
Court Description: OPINION & ORDER with respect to 60 Motion for Attorney Fees: Defendant's motion for attorneys' fees is denied and is granted for costs in the amount of $218.70. (Signed by Judge Louis L. Stanton on 11/12/2020) (ml)
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K&#039;OYITL&#039;OTS&#039;INA, LTD v. Gottschalk et al 'f7 b . ~~~IG'~, 1, ... LI 1 Doc. 67 L · USDC SD:\' \ · DOCuMENT ELECTRONICA'Li;Y FILED DOC#: ,, UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - -x I I'. l· 1 i DA TE F-IL_E_D_:__/..,../.;;;.,/,,.... )_ 2-_J_z_o i K' OYIT L' OTS ' INA , LTD. , Plaintiff , 19 Civ . 11309 - against - (LLS) OPINION & ORDER ROBERT GOTTSCHALK , Defendant. - - - - - - - - - - - - - - - - -x Defendant Robert Gottschalk moves for attorneys ' costs pursuant to this Court ' s August 7 , 2020 order , Rule of Civil Procedure 54(d) , and the parties ' fees and Federal Confidentiality and Non - Solicitation Agreement . For the following reasons , the motion is denied as to attorneys ' fees and granted as to costs . BACKGROUND Plaintiff K' oyitl ' ots ' ina , Ltd. (" K- Corp . ") sued its former employee Robert Gottschalk in the United States District Court for the District of Alaska , alleging that Gottschalk breached the parties ' Confidentiality and Non - Solicitation Agreement , tort i ously interfered with its prospective economic advantage , misappropriated its trade secrets under Alaska Stat . § 45 . 50 . 940 , violated the Computer Fraud and Abuse Act , 18 U.S . C . § 1030 , and violated the Stored Communications Act , 18 -1 Dockets.Justia.com U. S . C . § 2701 et seq . 1 Defendant Gottschalk moved for dismissal of al l claims on the ground the venue in Alaska was improper , or for its transfer to New York . Over plaintiff ' s opposition , the U. S . District Court in Alaska granted Gottschalk ' s motion . It stated : Here , the contract alleged to have been breached was the Confidentiality and Non - Solicitation Agreement . There were no negotiations leading up to the signing of this Agreement and defendant signed the Agreement in New York. While plaintiff signed the Agreement in Alaska , in considering where a substantial part of the events giving rise to plaintiff 's breach of contract claim occurred , the court focuses more on the acts of defendant and less on the acts of plaintiff . The contract was intended to be performed wherever defendant was as it governed his conduct , and at all relevant times , defendant was in New York or Massachusetts . As for the alleged breaches , one alleged breach , defendant ' s attendance at the pre - proposal conference and site v isit , occurred in Massachusetts . Plaintiff ' s breach of contract claim is also based on allegations that he copied or transferred plaintiff's trade secrets (such as client lists and pricing information ) from his Company laptop , he had his personal phone number changed to his previous work phone number , and he accessed h i s prior work email account without authorization . All of this conduct occurred somewhere other than Alaska . *** Here , the only event connected with Alaska that gave rise to plaintiff ' s breach of contract claim other than the alleged harm being felt in Alaska was K- Corp . al s o b r o u ght i ts cl aims fo r tortiou s int e rfe re nce with p ros p e c tive economi c a dvant ag e a nd misapp r opr i a tion of t ra d e secret s, a s well as a cl aim for t o rti ous i n te rfe renc e wi th an ex i s ting cont ra ct , again st Global Food Service LLC d/b/a GFS Group . Upon learning GFS was not involved in th is d i spute , K- Co r p . voluntarily di s mis s ed its claims against GFS pur s u a n t to Fede ra l Rul e o f Civil Pr oc e dure 41 (a) ( 1 ) (A) (i ) . - 2- that plaintiff signed the Agreement in Alaska. All the other events took place either in Massachusetts or New York. Because a substantial amount of the events giving rise to plaintiff ' s breach of contract claim did not occur in Alaska, venue in Alaska is not proper for this claim. K' oyitl ' ots'ina , Ltd. v . Gottschalk , (4:19-cv - 0030 - HRH) , 2019 WL 6257723 at *3 - 4 (D . Alaska Nov . 22, 2019) (emphasis in original) (footnote omitted). Because "all of the acts allegedly done by defendant that gave rise to these claims were done by defendant outside of Alaska ," id. at *5 , the Alaska court held that venue for all the claims , contract , tort and statutory , were improper in Alaska and transferred them to this Court in New York . After some developments here , plaintiff determined that voluntary dismissal of the case with prejudice was warranted and appropriate . (Its counsel ' s July 28 , 2020 letter to the Court, p . 3) . Mr. Gottschalk declined to so stipulate unless the stipulation recognized him as the prevailing party, and entitled to recover his costs and attorneys' fees (his counsel ' s July 30 , 2020 letter to the Court, p . 1) . On August 7 , 2020 this Court dismissed the complaint with prejudice pursuant to Federal Rule of Civil Procedure 4l(a) (2) and granted Gottschalk leave to move for costs, attorneys' and a declaration that he is the prevailing party . - 3- fees DISCUSSION Attorneys ' Fees and Costs Under the Agreement Gottschalk's claim for attorneys' fees is primarily based on the relevant provision in the parties' Confidentiality and Non - Solicitation Agreement, which states 5. COSTS & ATTORNEY'S FEES: In the event that either party breaches this Agreement , the prevailing party shall be entitled to its costs, including reasonable attorney ' s fees, from the other party, incurred as a result of such breach . Because this case was dismissed before a determination on the merits of K-Corp .' s breach claim , the Costs & Attorney ' s Fees provision's condition precedent -- that either party breached the Agreement -- has not been established. Accordingly, Gottschalk cannot recover fees or costs under the Agreement . See Amphenol Corp. v . Paul, 591 F. App'x 34 , 36 (2d ~ir. 2015) (summary order) (alteration in original) ("Interpreting the operative section of the IPA as a whole , see Postlewaite v . McGraw-Hill , Inc ., 411 F.3d 63, 67 (2d Cir . 2005 ) , we conclude that Paul would only have been obligated to reimburse Amphenol's attorney ' s fees ' in the event of a breach by [Paul],' see App'x at 46 . Having already determined that Amphenol did not sufficiently establish the condition precedent-~, a breach of contract by Paul-we accordingly conclude that Amphenol was not contractually entitled to attorney's fees ." ) . - 4- Attorneys ' Fees Under the Applicable Law Gottschalk contends that even if he cannot reco v er attorneys ' fees and costs under the Agreement , he can recover them under the applicable law . Neither Alaska nor Federal law allow Gottschalk to recover attorneys ' fees . However , he is entitled to costs under both bodies of law . If Alaska law were applied to Gottschalk ' s motion for attorneys ' fees as to the three claims K- Corp . brought under Alaska state law -- breach of contract , tortious interference with prospective economic advantage , and misappropriation of trade secrets 2 -- it would defer to private agreements o f the parties . Alaska law states "Except as otherwise prov ided by law or agreed to by the parties , the prevailing party in a civil case shall be awarded attorney ' s fees calculated under this rule . " Alaska R . Civ . P . 82(a) . Here the parties agreed to the specific contractual terms governing attorne y s ' fees , discussed above , under which Gottschalk does not recover attorneys ' fees for lack of an established breach of their agreement . 2 See Chri s ten se n v . Ki e wit - Murdock Inv . Corp . , 815 F . 2d 206 , 214 (2d Cir . 1 987) (citin g Alye s ka Pipe l i ne Ser v . Co . v . Wildern ess Soc ' y , 421 U. S . 240 , 259 n . 31 (1975)) ( " State statutes providing for awards of attorneys ' fees and cost s ordi na ri ly apply to s t a t e law cl a ims made in a f ede r al court . n ) . - 5- Gottschalk ' s motion for attorneys ' fees in his two federal statutory claims similarly fail . The Computer Fraud and Abuse Act , 18 U. S . C. § 1030 , does not speak to attorneys ' fees , 3 and while the Stored Communications Act does provide for "a reasonable attorney ' s fee and other litigation costs reasonably incurred " in 18 U. S . C. § 2707(b) , no such relief is appropriate in this case which was dismissed without any findings on its merits . Gottschalk ' s motion for attorneys ' fees is therefore den i ed . Costs Under the App l icable Law Both Alaska and Federal law grant costs to a prevailing party as a matter of course . Alaska Rule of Civil Procedure 79(a) states : (a) Allowance to Prevailing Party. Unless the court otherwise directs , the prevailing party is entitled to recover costs allowable under paragraph (f) that were necessarily incurred in the action . The amount awarded for each item will be the amount specified in this rule or , if no amount is specified , the cost actually incurred by the party to the extent this cost is reasonable . Paragraph (f) lists sixteen categories of allowable costs . Federal Rule of Civil Procedure 54(d) (1) states , in pertinent part : Some courts have found that attorneys ' statute as a part of the " loss . " 3 - 6- fees are recoverable under the (1) Costs Other Than Attorney's Fees. Unless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's feesshould be allowed to the prevailing party. The Second Circuit recently discussed how a voluntary dismissal with prejudice allows a defendant to satisfy the Supreme Court's definition of "prevailing party." In Buckhannon, the Supreme Court held that, to "prevail[ ]" for purposes of attorney's fees, a party (the plaintiff in that case ) must have gained through the litigation a "material alteration of the legal relationship of the parties." 532 U. S . at 604, 121 S . Ct. 1835 (internal quotation marks omitted). A voluntary dismissal of an action with prejudice works such alteration , because it constitutes "an adjudication on the merits for purposes of res judicata," Chase Manhattan Bank, N.A. v. Celotex Corp ., 56 F.3d 343, 345 (2d Cir. 1995 ) , and any action so dismissed could not be brought again . Carter v. 2014) Inc. Vill. of Ocean Beach, 759 F.3d 159, 165 (2d Cir . (omission in original) . Since dismissal of the complaint with prejudice bars K- Corp. from bringing its claims against Gottschalk again , he is the prevailing party in this action to the extent that he may recover costs. Both parties agree their proper amount is $218.70. CONCLUSION Defendant's motion for attorneys ' fees is denied and is granted for costs in the amount of $218.70 . So ordered. Dated : l~ New York , New York November 12, 2020 L . .Jctwai,rJ.. LOUIS L. STANTON U.S.D . J. -7-
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