Overhauser v. Bell, No. 18-1368 (7th Cir. 2018)Annotate this Case
Bell sued Vacuforce for copyright infringement, accusing it of publishing his photograph of the Indianapolis skyline on its website without a license. Vacuforce hired attorney Overhauser. The parties quickly settled; the federal lawsuit was dismissed with prejudice. Overhauser then moved to recover attorney fees from Bell, arguing that because the settlement produced a dismissal with prejudice, Vacuforce was the “prevailing party” for purposes of fees under the Copyright Act, 17 U.S.C. 505. The district court denied Overhauser’s as motion frivolous and misleading and ordered monetary sanctions against Overhauser: one under Federal Rule of Civil Procedure 11 and another under 28 U.S.C. 1927. The Seventh Circuit affirmed the sanctions, rejecting an argument that a party can “prevail” for purposes of a fee-shifting statute by paying a settlement and obtaining a dismissal with prejudice. The district court did not abuse its discretion by imposing the section 1927 sanction. “Objective bad faith” will support such a sanction. A lawyer demonstrates objective bad faith when she “pursues a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound.” The district court found that Overhauser’s legal contentions were baseless and that he failed to disclose the proper factual foundation necessary to evaluate his legal argument.