Unpublished Disposition, 869 F.2d 1497 (9th Cir. 1987)

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US Court of Appeals for the Ninth Circuit - 869 F.2d 1497 (9th Cir. 1987)

GOLDFINGER HAWAII, INC., a Hawaii corporation, Plaintiff-Appellee,v.POLYNESIAN RESOURCES, INC., a corporation, Daniel Foxman, anindividual, Defendants-Appellants.

Nos. 87-2640, 87-1833.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 12, 1988* .Decided Feb. 16, 1989.

Before FLETCHER, BEEZER, and O'SCANNLAIN, Circuit Judges.


The appellants, Polynesian Resources, Inc. ("PRI") and its president and sole stockholder, Daniel Foxman, appeal the district court's judgment in favor of the appellee, Goldfinger Hawaii, Inc. ("Goldfinger"), in a suit for the willful infringement of copyright. The appellants claim that the district court erred in admitting the testimony of three "surprise" witnesses, that the awards of damages and attorneys' fees were too high, and that the court's finding as to Foxman's personal liability was erroneous. We affirm.

* Both Goldfinger and PRI are in the business of selling gold charms of Hawaiian design. Foxman is the sole owner of PRI. In 1978 and 1979, Goldfinger copyrighted two charms, known as "whale with baby" and "smiling puffed whale." In 1981, Goldfinger learned that PRI was selling identical charms. Goldfinger notified PRI and Foxman of their apparent copyright infringement, and Foxman agreed to help locate the source of the infringing charms.

In August 1985, Goldfinger purchased more infringing charms from a PRI franchise in Honolulu. In response to Goldfinger's inquiry, Foxman identified Rafi Ohanes, a Los Angeles wholesaler, as the manufacturer. Goldfinger sued PRI and Foxman for copyright infringement and for false advertising to gain a trade advantage in interstate commerce under the Lanham Act, 15 U.S.C. § 1125(a) (1982).

On May 21, 1987, Goldfinger filed its pretrial statement. Under Hawaii local rule 235-7, this statement was to contain the names of all witnesses to be called, except those called for purposes of impeachment or rebuttal. The statement indicated, inter alia, that Ronald Fromm would testify as to the manufacture of the charms by the defendants, and that Foxman would be called as an adverse witness regarding his knowledge of the copyright infringement. On June 15, 1987, the court entered the final pretrial order, which stated that the " [w]itnesses have been named." On June 16, 1987, Goldfinger filed a witness list containing the same names as the pretrial statement.

A bench trial was held beginning on June 23, 1987. The parties had stipulated to the copyrights and to the defendants' sale of infringing goods. Issues to be tried included the scope of willful infringement, whether PRI itself manufactured the goods, and Foxman's personal liability.

Foxman testified that PRI had not manufactured infringing goods. To impeach this testimony, Goldfinger called three of PRI's ex-employees: Kawamoto, Tamura, and Hiromoto. These witnesses established that Foxman had knowledge of PRI's large-scale manufacture of infringing charms. PRI objected vigorously to the admission of "surprise" witnesses whom it could not rebut in time. The district judge granted a half-day continuance to allow PRI to prepare to cross-examine, and explained his decision to admit the testimony:

[T]he [c]ourt notes that plaintiff just learned of these witnesses recently, [Foxman] took the Fifth Amendment with respect to a number of the pertinent questions; it would be very prejudicial to the plaintiff not to allow these witnesses to testify, and the defendant really was not surprised by their testimony because they're the employees of the defendant so that the nondisclosure of them was not prejudicial to the defendant.

The court found that PRI and Foxman had willfully violated Goldfinger's copyrights by manufacturing charms and possibly by purchasing them from Ohanes. In either case, Foxman had knowledge. The court awarded statutory damages of $30,000 for each violation, since actual damages were not determinable. The court also awarded attorneys' fees to Goldfinger, on the grounds that PRI and Foxman acted in bad faith by manufacturing the charms. See Cooling Systems and Flexibles, Inc. v. Stuart Radiator, Inc., 777 F.2d 485, 493 (9th Cir. 1985). The court declined to adjudicate the Lanham Act claim on its merits, because Goldfinger had withdrawn its claim for monetary damages and because injunctive relief would have duplicated a state court consent judgment.

On December 23, 1987, the court issued an order granting $12,520.94 in attorneys' fees and $1,410.01 in costs to Goldfinger. The court applied the "lodestar" method of hours multiplied by the prevailing community rate. The hourly rates for Goldfinger's attorneys were slightly lower than their requests; the number of compensated hours was cut by 25 percent because of the unsuccessful Lanham Act claim.

PRI and Foxman appeal on several grounds. We have jurisdiction over this timely appeal of a final judgment under 28 U.S.C. § 1291 and Fed. R. App. P. 4(a) (1). The admissibility of evidence and the award of attorneys' fees are reviewed for abuse of discretion. Mitchell v. Keith, 752 F.2d 385, 392 (9th Cir.), cert. denied, 472 U.S. 1028 (1985). To reverse, we must have a definite and firm conviction that the district court committed a clear error of judgment. Fjelstad v. American Honda Motor Co., 762 F.2d 1334, 1337 (9th Cir. 1985). We review the judge's findings of fact for clear error, and his award of statutory damages for abuse of discretion. Kamar Int'l v. Russ Berrie & Co., 829 F.2d 783, 784, 786 (9th Cir. 1987).


The appellants claim that the admission of three witnesses not listed in any of the pretrial documents was an abuse of discretion. Pretrial orders are case management tools governed by Fed. R. Civ. P. 16. "The order following a final pretrial conference shall be modified only to prevent manifest injustice." Id. at 16(e). Listing of witnesses in pretrial filings is not required under Rule 16, but is required under Hawaii local rule 235-7, with the exception of impeachment or rebuttal witnesses.

Goldfinger called the three witnesses to respond to testimony elicited from an adverse witness called as part of Goldfinger's case-in-chief, regarding an issue the parties reasonably knew would arise. Rebuttal evidence is evidence introduced by a plaintiff to meet new facts brought out in a defendant's case-in-chief. Morgan v. Commercial Union Assurance Cos., 606 F.2d 554, 555 (5th Cir. 1979); see United States v. Perry, 550 F.2d 524, 531-32 (9th Cir.), cert. denied, 431 U.S. 918; 434 U.S. 827 (1977). Impeachment evidence is evidence attacking the credibility of a witness. See Fed.R.Evid. 607. A party may impeach the credibility of its own witness. Id. The testimony of these witnesses was impeachment testimony not required to be disclosed by local rule in the pretrial statement.1  Cf. Long v. Laramie County Community College Dist., 840 F.2d 743, 750 (10th Cir.), cert. denied, 109 S. Ct. 73 (1988).

PRI argues that the testimony of the three witnesses was a planned part of Goldfinger's case-in-chief to prove manufacture, and that its admission ensured a "trial by ambush." Goldfinger admits that it expected Foxman to deny manufacture. Relying on the letter but not the spirit of the local rule, Goldfinger had witnesses ready to prove manufacture. Admission of the testimony was not reversible error, however.

First, the witnesses were not covered by the local rule, and admission of the testimony thus cannot reasonably be questioned as a rule violation. Second, we give wide latitude to judges to modify pretrial orders at their discretion.2  Admittedly, a pretrial order is intended to be a firm guide to the trial; surprise is not welcomed. See United States v. Lummi Indian Tribe, 841 F.2d 317, 320-21 (9th Cir. 1988). However, the "decision whether a witness not named in the pretrial order may testify is a 'matter [ ] peculiarly within the trial court's discretion.' " Brick Masons Pension Trust v. Industrial Fence & Supply, Inc., 839 F.2d 1333, 1340 (9th Cir. 1988) (quoting Forro Precision, Inc. v. International Business Machines Corp., 673 F.2d 1045, 1058 (9th Cir. 1982), cert. denied, 471 U.S. 1130 (1985)). "The court may permit witnesses to testify who have not been mentioned in the pretrial order unless the testimony is offered in bad faith or would unfairly prejudice an opposing party." Brick Masons, 839 F.2d at 1340.

Although Goldfinger did not do PRI any favors, there is no evidence of bad faith. The trial judge was in by far the best position to assess the situation, and he found no bad faith. Nor were PRI and Foxman unfairly prejudiced. The testimony was undoubtedly harmful to them, and directly contributed to the court's award of heavy damages and attorneys' fees. The appellants have not shown, however, that the short notice they received prevented them from proving the testimony false. They generally allege that they were unable to secure rebuttal witnesses, but make no showing that they would have been able to prove that PRI did not manufacture the charms or that Foxman did not know of the manufacture. In any case, they were on notice that manufacture was an issue, and had the opportunity to secure necessary evidence. In fact, the court found the equities to weigh in Goldfinger's favor; Goldfinger would have been unfairly prejudiced if the testimony had not been admitted.


The appellants also allege error in the factual findings that Foxman had knowledge of the manufacturing of the charms. Goldfinger points to uncontradicted evidence of Foxman's sole ownership and control of PRI, and to copyright law holding an owner contributorily or vicariously liable for infringement under such circumstances. See, e.g., Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 434-38 (1984); Sygma Photo News, Inc. v. High Society Magazine, Inc., 778 F.2d 89, 92 (2d Cir. 1985). The evidence strongly supports the finding of personal liability against Foxman; there was no clear error.

The appellants also urge error in the findings that Foxman knew of all styles of charms, and that Foxman never instructed a mainland supplier of charms not to send infringing charms. There is no manifest error here either. The evidence supported Foxman's liability.


The appellants argue that the award of damages was excessive. They admit that copyright damages may have a punitive aspect, but argue that since their actual damages could not have exceeded $5,000, the punishment was excessive. This argument is meritless. The appellants' conclusions as to actual damages are merely speculative. The court may consider punitive goals in awarding damages for infringement of copyright. F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233 (1952); Kamar Int'l, 829 F.2d at 786; 17 U.S.C. § 504 (1982). PRI's poor recordkeeping did not permit accurate determination of actual damages. The court could have awarded $50,000 per violation under 17 U.S.C. § 504(c) (2). An award of $30,000 per violation was not an abuse of discretion.


The appellants contest the award of attorneys' fees, arguing first that since one of the two claims did not prevail, the fees should have been reduced by one-half, not by one-quarter. We decline to adopt this simplistic mathematical conclusion. The district court cited Moore v. Jas. H. Matthews & Co., 682 F.2d 830, 838 (9th Cir. 1982), in its analysis. The court did not discuss each of the twelve factors listed in Moore, but it clearly considered the relative time spent, and other relevant factors in its decision to weight the Lanham Act claim at 25 percent of the case. There was no abuse of discretion.

The appellants also offer the affidavit of a Honolulu attorney of allegedly similar qualifications as Goldfinger's Beverly Hills, California attorney, Michael Painter, as evidence that the rate of $175 awarded to Painter was too high. The Honolulu attorney charges $135 per hour. The district court determined the $175 rate to be a reasonable one in Honolulu " [b]ased upon the affidavits of counsel, and this court's general experience of prevailing rates for litigation services in this judicial district...." We see no reason to reverse his determination.


Goldfinger seeks an award of attorneys' fees and double costs for having to defend a frivolous appeal. Under Ninth Circuit rule 39-1.6, a party requesting attorneys' fees on appeal "shall include in its opening brief a short statement of the authority pursuant to which the request will be made." The trial court awarded fees pursuant to 17 U.S.C. § 505. Goldfinger bases its request solely on Fed. R. App. P. 38, however.

We may award attorneys' fees as just damages. See 28 U.S.C. § 1912; Fed. R. App. P. 38. "A frivolous appeal is defined as one in which the result is obvious, or where the appellants' claims are utterly meritless." International Union of Bricklayers v. Martin Jaska, Inc., 752 F.2d 1401, 1406 (9th Cir. 1985). We decline to award fees because the appellants' legal claim regarding the admission of evidence is not the type of utterly frivolous abuse of the appellate process that we have found to merit an exception to the American Rule. See, e.g., Kalgaard v. Commissioner, 764 F.2d 1322, 1324 (9th Cir. 1985); Hatch v. Reliance Ins. Co., 758 F.2d 409, 416 (9th Cir.), cert. denied, 474 U.S. 1021 (1985).


The district court's admission into evidence of the testimony of three witnesses not listed in Goldfinger's pretrial statement was not an abuse of discretion. The court's factual findings regarding Foxman's personal liability were not clearly erroneous. The awards of statutory damages for copyright infringement and of attorneys' fees were not abuses of discretion. We do not find the appeal frivolous. The judgment of the district court is affirmed.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3


The appellants also contest the admission for impeachment purposes of a tape recording not listed in the pretrial statement as an exhibit. This claim is legally indistinguishable from that regarding the witnesses


The appellants argue that there was no finding of manifest injustice to Goldfinger under Fed. R. Civ. P. 16(e). The judge's oral comments were a satisfactory equivalent to the formal amendment of the pretrial order