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Manhattan Review LLC v. Yun

United States Court of Appeals for the Second Circuit

October 23, 2018, Argued; March 25, 2019, Decided

No. 17-4046-cv

Opinion

 [*151]  Per Curiam:

Plaintiffs-Appellants [**2]  Manhattan Review LLC ("Manhattan Review") and Joern Meissner ("Meissner") appeal the judgment of the district court (Kaplan, J.; Francis, M.J.) granting attorneys' fees and costs to Defendants-Appellees Manhattan Enterprise Group LLC, d/b/a Manhattan Elite Prep ("Manhattan Enterprise"), and Christopher Kelly ("Kelly") pursuant to section 505 of the Copyright Act, 17 U.S.C. § 505, and section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a). A separate summary order filed simultaneously with this opinion addresses the balance of Plaintiffs-Appellants' arguments on appeal. This opinion addresses Plaintiffs-Appellants' argument that Defendants-Appellees do not meet the definition of a "prevailing party" under section 505 of the Copyright Act or section 35(a) of the Lanham Act. We reject that argument and hold that Defendants-Appellees do meet the definition of a "prevailing party" under those provisions.

Background

This appeal concerns litigation over the corporate status of Manhattan Review, a test preparation business formed by Meissner and Defendant-Appellee Tracy Yun ("Yun") in March 2005. See Manhattan Review LLC v. Yun ("Manhattan Review I"), No. 16 Civ. 102, 2016 U.S. Dist. LEXIS 108760, 2016 WL 6330474, at *1 (S.D.N.Y. Aug. 15, 2016), report and recommendation adopted, 2016 U.S. Dist. LEXIS 155072, 2016 WL 6330409 (S.D.N.Y. Oct. 26, 2016). In 2011, after a falling-out between Yun and Meissner, Yun allegedly formed Manhattan [**3]  Enterprise as a competitor to Manhattan Review. See Manhattan Review LLC v. Yun ("Manhattan Review II"), No. 16 Civ. 102, 2017 U.S. Dist. LEXIS 54620, 2017 WL 1330334, at *1 (S.D.N.Y. April 10, 2017), report and recommendation adopted, 2017 U.S. Dist. LEXIS 114720, 2017 WL 3034350 (S.D.N.Y. July 17, 2017). In operating Manhattan Enterprise, Yun allegedly used Manhattan Review's assets and intellectual property, including trademarks and copyrighted test preparation materials, without Meissner's consent. In December 2011, Yun also filed a Certificate of Cancellation of Manhattan Review's status as an LLC with the Delaware Secretary of State.

In March 2012, Meissner, individually and derivatively on behalf of Manhattan Review, sued Yun and Manhattan Enterprise in New York state court on various state law claims. The court initially dismissed Meissner's derivative claims due to the outstanding Certificate of Cancellation, holding that Meissner could not sue on behalf of Manhattan Review given its cancelled status. Seeking to rehabilitate those claims, Meissner filed a Certificate of Correction with the Delaware Secretary of State, challenging the validity of Yun's Certificate of Cancellation. After obtaining a Certificate of Good Standing for Manhattan Review, Meissner filed a motion to vacate the state court's dismissal of the derivative claims. [**4]  The state court denied that motion on the ground that Meissner had not shown that issuance of the Certificate of Good Standing effected a nullification of the Certificate of Cancellation.3

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919 F.3d 149 *; 2019 U.S. App. LEXIS 9449 **; 2019 U.S.P.Q.2D (BNA) 101762

MANHATTAN REVIEW LLC and JOERN MEISSNER, derivatively on behalf of MANHATTAN REVIEW LLC, Plaintiffs-Appellants, -v.- TRACY YUN, MANHATTAN ENTERPRISE GROUP LLC, d/b/a MANHATTAN ELITE PREP, and CHRISTOPHER KELLY, Defendants-Appellees.1

Prior History: Plaintiffs-Appellants Manhattan Review LLC and Joern Meissner appeal the district court's judgment granting attorneys' fees and costs to Defendants-Appellees Manhattan Enterprise Group LLC and Christopher Kelly pursuant to section 505 of the Copyright Act, 17 U.S.C. § 505, and section 35(a) of the Lanham Act, 15 U.S.C. 1117(a) [**1] . Each of those provisions authorizes the district court to award fees to the "prevailing party" in a lawsuit. Plaintiffs-Appellants sued Defendants-Appellees for violations of the Copyright and Lanham Acts, but Defendants-Appellees obtained a dismissal of Plaintiffs-Appellants' complaint on collateral estoppel grounds. We hold that Defendants-Appellees meet the definition of "prevailing party" under both fee-shifting provisions. Accordingly, the judgment of the district court is AFFIRMED.

Manhattan Review LLC v. Yun, 765 Fed. Appx. 574, 2019 U.S. App. LEXIS 8815 (2d Cir. N.Y., Mar. 25, 2019)Manhattan Review LLC v. Yun, 2017 U.S. Dist. LEXIS 201017 (S.D.N.Y., Dec. 2, 2017)

CORE TERMS

prevailing party, Copyright Act, Lanham Act, district court, recommendation, amended complaint, Cancellation, magistrate judge, attorney's fees

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Copyright Law, Damages, Types of Damages, Costs & Attorney Fees, Trademark Law, De Novo Review, Questions of Fact & Law, Attorney Fees & Expenses, Basis of Recovery, Statutory Awards