Iberia Foods Corp. v. Latinfood U.S. Corp.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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IBERIA FOODS CORP., et al.,

Plaintiffs,

Memorandum and Order

v. 20-CV-3009(KAM)(RLM)

LATINFOOD U.S. CORP., et al.,

Defendants.

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KIYO A. MATSUMOTO, United States District Judge:

The plaintiffs in this trademark infringement action

voluntarily dismissed the case pursuant to Federal Rule of Civil

Procedure 41(a)(1)(A)(i). The defendants thereafter filed a

motion to recover their costs, including attorneys’ fees,

pursuant to Federal Rule of Civil Procedure 41(d)(1), and

asserting the plaintiffs’ purported bad faith in pursuing their

claims. The plaintiffs filed a cross-motion for attorneys’ fees

and costs, asserting the defendants’ purported bad faith. For

the reasons herein, the defendants’ motion is DENIED, and the

plaintiffs’ motion is DENIED.

Background

This case was initiated July 7, 2020 by four

plaintiffs: Iberia Foods Corporation (“Iberia”); North Shore

Bottling Company, Inc.; Brooklyn Bottling of Milton, New York,

Inc.; and International World Foods Corporation (collectively,

“Plaintiffs”). (See generally ECF No. 1, Complaint.)

Plaintiffs named three defendants: Latinfood U.S. Corporation

(“Latinfood”); J. Wilson International, Inc.; and Wilson

Zuluaga. (Id.) The parties subsequently stipulated to J.

Wilson International, Inc.’s dismissal (ECF No. 26, Stipulation

and Order of Partial Dismissal), leaving Latinfood and Wilson

Zulaga and the only remaining defendants (together,

“Defendants”).

Plaintiffs alleged that Iberia had an exclusive

agreement with Bavaria, S.A. (“Bavaria”), a corporation based in

Colombia that is not a party in this action, to distribute

Bavaria’s Pony Malta brand beverages in certain states in the

United States. (ECF No. 30, Amended Complaint (“Am. Compl.”), ¶

16.)1 Pony Malta beverages are non-alcoholic carbonated

beverages that are manufactured in Colombia, and they are

popular with the Colombian community in the United States. (Id.

¶¶ 16-17, 23.) Bavaria obtained United States trademarks for

the Pony Malta brand in 1990 and in 2011. (Id. ¶¶ 24-26.) At

some point thereafter, the trademarks were canceled, although

Pony Malta products were still sold in the United States. (Id.

¶¶ 28-29.)

1 Plaintiffs originally also brought claims based on beverages bearing the HIT

trademark, but those claims were subsequently settled (ECF No. 19, Order of

Partial Settlement), and Plaintiffs filed an amended complaint focused solely

on the Pony Malta brand.

Plaintiffs alleged that despite their exclusive

agreement with Bavaria to sell Pony Malta beverages in certain

parts of the United States, Defendants engaged in the

unauthorized sale of Pony Malta beverages within the same

territory. (Id. ¶¶ 38-39.) According to Plaintiffs, the Pony

Malta versions sold by Defendants were allegedly “gray market

goods”: goods authorized for sale outside the United States that

were being sold in the United States without authorization from

the manufacturer. (Id. ¶ 43.)

Upon filing their complaint in July 2020, which

brought claims for alleged violations of the federal Lanham Act

as well as state law claims, Plaintiffs sought an ex parte

temporary restraining order to prohibit Defendants from selling

the alleged gray market beverages. (ECF No. 3, Unsigned Order

to Show Cause.) The court ordered Plaintiffs to serve the

motion on defense counsel, and the next day, the court held a

hearing, with both parties present by telephone, to hear

argument on the proposed temporary restraining order. (See July

8, 2020 ECF Minute Entry & Dkt. Order.) Based on the

representations made by Defendants’ counsel during the hearing,

including that Plaintiffs had previously brought similar claims

against Defendants in New York State court, and issues regarding

Plaintiffs’ entitlement to injunctive relief, the court denied

the motion for a temporary restraining order. (Id.)

Thereafter, Plaintiffs moved for a preliminary

injunction, and Defendants indicated their intent to file a

motion to dismiss the case. (See ECF No. 31, Declaration in

Support of Preliminary Injunction; Oct. 30, 2020 ECF Dkt.

Order.) While the motion for a preliminary injunction was

pending, and before the motion to dismiss was filed, Plaintiffs

notified the court that Defendants “provided [Plaintiffs’

counsel] with an email chain which appeared to indicate that

persons unknown at Bavaria were working directly [with

Defendants] to sell the [allegedly gray market Pony Malta

beverages] for distribution in the” states where Plaintiffs

claimed to have the exclusive right to sell Pony Malta

beverages. (ECF No. 42, Letter, at 2.) Based on this new

information, Plaintiffs voluntarily dismissed the case pursuant

to Federal Rule of Civil Procedure 41(a)(1)(A)(i). (ECF No. 44,

Notice of Voluntary Dismissal.)

Following Plaintiffs’ voluntary dismissal, Defendants

moved for attorneys’ fees and costs against Plaintiffs. (ECF

No. 48, Motion for Attorneys’ Fees; see ECF No. 48-1, Memorandum

in Support (“Def. Mem.”); ECF No. 53, Reply in Support (“Def.

Reply”).) Plaintiffs filed a cross-motion for attorneys’ fees

and costs. (ECF No. 50, Cross Motion for Attorneys’ Fees; see

ECF No. 51, Memorandum in Support (“Pl. Mem.”); ECF No. 54,

Reply in Support (“Pl. Reply”).)

Legal Standards

“If a plaintiff who previously dismissed an action in

any court files an action based on or including the same claim

against the same defendant, the court [] may order the plaintiff

to pay all or part of the costs of that previous action[.]”

Fed. R. Civ. P. 41(d)(1). Pursuant to this Rule, the Second

Circuit has held that “a district court [is] free, in its

discretion, to award attorneys’ fees as part of costs.”

Horowitz v. 148 S. Emerson Assocs. LLC, 888 F.3d 13, 25 (2d Cir.

2018). The purpose of awarding a party costs and fees after the

opposing party dismisses one action, only to bring a second one

based on the same claims, is to “to serve as a deterrent to

forum shopping and vexatious litigation.” Id. (quoting Andrews

v. America’s Living Centers, LLC, 827 F.3d 306, 309 (4th Cir.

2016)).

When attorneys’ fees are not explicitly authorized by

a statute or rule (such as Rule 41(d)(1)), the traditional

“‘American Rule’ is that the prevailing party in federal court

litigation generally cannot recover attorneys’ fees[.]” Dow

Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 344 (2d

Cir. 1986). One exception to this traditional rule is that “the

court does have the power to award attorneys’ fees to a

successful litigant when his opponent has commenced or conducted

an action ‘in bad faith, vexatiously, wantonly, or for

oppressive reasons.’” Id. (quoting F.D. Rich Co. v. United

States ex rel. Industrial Lumber Co., 417 U.S. 116, 129 (1974)).

To qualify for this bad faith exception to the “American Rule,”

there must be “‘clear evidence’ that the challenged actions

‘[were] entirely without color and [were] taken for reasons of

harassment or delay or for other improper purposes[.]’” Id.

(quoting Weinberger v. Kendrick, 698 F.2d 61, 80 (2d Cir.

1982)); see also Kerin v. U.S. Postal Serv., 218 F.3d 185, 195

(2d Cir. 2000) (“[W]here the decision to initiate or defend a

lawsuit was meritless and made for improper purposes, a fee

award may be proper.”).

Discussion

Defendants seek to recover approximately $30,000 they

spent defending the first case Plaintiffs brought against them

in New York state court, and $150,000 they spent defending this

action in federal court, although Defendants did not submit

contemporaneous time sheets supporting these fees. (See Def.

Mem. at 1.) Plaintiffs seek to recover approximately $40,000 in

fees spent on this case, based on Defendants’ purported delay in

turning over the document that ultimately persuaded Plaintiff to

voluntarily dismiss the case. (See Pl. Mem. at 28, 30.) The

court will address each of these requests for fees in turn.

I. Defendants’ Motion for Attorneys’ Fees for the First

State Court Action

Defendants seek the attorneys’ fees and costs expended

defending the first action Plaintiffs filed in state court,

pursuant to Federal Rule of Civil Procedure 41(d), which permits

a court to “order the plaintiff to pay all or part of the costs

of th[e] previous action” where “a plaintiff who previously

dismissed an action in any court files [a second] action based

on or including the same claim against the same defendant[.]”

Fed. R. Civ. P. 41(d)(1). A court may award attorneys’ fees as

part of these “costs.” Horowitz, 888 F.3d at 25.

First, Defendants’ motion for attorneys’ fees ignored

this court’s order to file the contemporaneous attorney time

entries showing the hours worked and the fees billed by their

attorneys. It is well-settled that a “party seeking an award of

fees should submit evidence supporting the hours worked and

rates claimed.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).

Here, Defendants apparently preferred to engage in a two-step

process, in which the court would first determine their

entitlement to an award of attorneys’ fees, and then would make

a separate determination as to the amount of fees. (See Def.

Reply at 18-19.) Such an approach would ordinarily be

permissible; however, in this case, when setting a briefing

schedule for the parties’ cross-motions for attorneys’ fees, the

court specifically directed that any “request for attorneys’

fees and costs should be supported by contemporaneous time

entries and documentation of costs[.]” (ECF Dkt. Order Dec. 18,

2020.) The purpose of having the parties submit this

documentation in support of their respective motions was so that

the court could immediately determine the reasonableness of the

requested fees if the court determined that awarding fees was

appropriate. Defendants ignored this Order.

Second, on the merits, the court declines to exercise

its discretion to award Defendants attorneys’ fees for the prior

lawsuit, for the reasons that follow.

It is undisputed that, before this action was filed in

this court in July 2020, Plaintiffs raised substantially similar

allegations against one of the Defendants, Latinfood, by filing

a complaint in February 2020 in Kings County Supreme Court in

New York. (ECF No. 50-1, Declaration of Jeffrey C. Ruderman

(“Ruderman Decl.”), ¶¶ 2, 9.) Although the factual allegations

in the first state court case were similar to those alleged in

this case, the claims that were brought in state court were all

state law claims. (Id. ¶ 9.) The state court complaint was

served upon Latinfood on March 2, 2020, and shortly thereafter,

the New York courts were closed due to the global COVID-19

pandemic. (Id. ¶ 10.) When the state court reopened in May

2020, Latinfood filed a motion to dismiss the complaint. (Id. ¶

11.) On July 7, 2020, before the motion to dismiss had been

decided, Plaintiffs filed a notice of discontinuance in the

state court, and filed a new complaint (and a request for a

temporary restraining order) in this court. (Id. ¶¶ 19-20.)

The complaint in this court asserted federal claims pursuant to

the Lanham act (in addition to the same state law claims), and

added additional Defendants. (Id. ¶¶ 12-13.)

Defendants’ argument in favor of attorneys’ fees

for the state court case focuses on the language of Rule

41(d)(1). Defendants argue that this situation “falls squarely

within the plain language of” the Rule, because Plaintiffs

dismissed the state court case and then filed this case. (Def.

Mem. at 6.) Defendants are correct that Rule 41(d)(1) applies

to this situation. However, the plain language of the Rule does

not mandate an award of costs or attorneys’ fees. Rather, it

provides that a court may award costs (including fees) for the

first action, “in its discretion.” Horowitz, 888 F.3d at 25.

Attorneys’ fees should be awarded “as a deterrent to forum

shopping and vexatious litigation,” and should target litigants

who “file complaints and quickly dismiss them, perhaps in

reaction to initial unfavorable rulings, or hoping for a

subsequent case assignment to a judge they view as more

favorable.” Id. at 25-26.

Here, there is no indication that Plaintiffs’ decision

to discontinue the state court action in order to file in

federal court was “forum shopping,” either “in reaction to

initial unfavorable rulings,” or in the hope of a “more

favorable” judicial assignment. There were no decisions issued

by the state court judge in the first action, unfavorable or

otherwise. The parties never appeared before the state court,

and Latinfood’s motion to dismiss was never decided. (Ruderman

Decl. ¶¶ 7-8.) This case is thus readily distinguishable from

Horowitz, a Second Circuit case upon which Defendants rely

extensively. In Horowitz, the Second Circuit affirmed the

district court’s award of attorneys’ fees where the plaintiff

had filed a second case in federal court shortly after the

Georgia state court, which was hearing the plaintiff’s first

case, “denied the [plaintiff’s request for a temporary

restraining order] and at the same time suggested that [the

plaintiff]’s filing of that [first] action interfered with [a

separate] state action in New York in violation of that court’s

. . . order.” 888 F.3d 13, 17–18. Conversely, no such

skepticism was ever expressed by the state court here that would

have triggered Plaintiffs to forum shop.

Further, the decision to litigate in federal court

appears to have been made following a good faith recognition

that federal claims should be added to the complaint, based on

new information. Plaintiffs’ counsel has declared under penalty

of perjury that he only came to believe that Defendants were

selling gray market goods that originated with Bavaria (rather

than counterfeit goods) after Latinfood filed an affidavit in

support of its motion to dismiss in state court, which described

the process by which Latinfood obtained the Pony Malta beverages

it sold. (Ruderman Decl. ¶¶ 11-12.) This caused Plaintiffs’

counsel to want to add, inter alia, a claim pursuant to Section

43 of the Lanham Act, which provides a cause of action against a

person who sells goods using a “false designation of origin”

that “is likely to cause confusion . . . as to the origin,

sponsorship, or approval of [the] goods . . . .” 15 U.S.C. §

1125(a)(1)(A). Though Plaintiffs could have brought their

Lanham Act claims in state court, Plaintiffs decided in good

faith that such claims were more properly heard in federal

court, because federal courts more regularly deal with Lanham

Act claims. (Ruderman Decl. ¶ 16.)

The court appreciates Defendants’ frustration with

having to litigate in two separate forums. In instances, not

appliable here, where it is shown that a plaintiff dismissed one

case in order to forum shop, seek an advantage, or drive up the

cost of litigation, the court would be inclined to grant fees to

the defendant. However, there is no evidence of that in this

case. Defendants have not pointed to any particular act of bad

faith by Plaintiffs, or any advantage that Plaintiffs were

attempting to obtain by re-filing in federal court. And, the

prejudice to Defendants was likely minimal. Although Latinfood

expended resources on a motion to dismiss in state court, the

work done on that motion was not wasted. Defendants note that

Plaintiffs’ federal court complaint contained only

“insignificant” changes as compared to their state court

complaint (Def. Mem. at 8), which means that Defendants could

likely have re-used much of their motion to dismiss in this

case. See Pelczar v. Pelczar, No. 16-cv-55 (CBA), 2017 WL

3105855, at *2 (E.D.N.Y. July 20, 2017) (Rule 41(d)(1) “has been

interpreted in this Circuit to include payment of attorney’s

fees as ‘compensation for work done in the first action that

cannot be used in a second existing or contemplated action[.]’”)

(quoting Hintergerger v. Catholic Health Sys., No. 08-cv-952

(WMS), 2012 WL 1965435, at *1 (W.D.N.Y. May 31, 2012)).

Accordingly, the court respectfully declines to

exercise its discretion to award attorneys’ fees and costs to

Defendants for the state court action, because this court does

not find that Plaintiffs were forum shopping or acting in bad

faith when they chose to discontinue the state court action in

order to file a complaint in federal court.

II. Defendants’ Motion for Attorneys’ Fees for the Instant

Federal Action

Where a plaintiff files two similar cases, Rule

41(d)(1) only authorizes a court to award costs for the

“previous action.” Fed. R. Civ. P. 41(d)(1). Thus, in order

for Defendants to recover fees for this second, federal action,

they cannot rely on Rule 41(d)(1); rather, they must establish

the exception to the general rule that each part bears its own

costs, by showing “clear evidence” that this case was litigated

“in bad faith, vexatiously, wantonly, or for oppressive

reasons.” Dow Chem. Pac. Ltd., 782 F.2d at 344.

Defendants argue that Plaintiffs’ Lanham Act claims

were brought in bad faith, because Plaintiffs did not have a

registered trademark for the Pony Malta brand, and Plaintiffs

were merely one of several distributors of the brand in the

United States (as were Defendants, because Latinfood was a

“longstanding, senior distributor” of the brand). (Def. Mem. at

11-12.) There is no “clear evidence,” however, that Plaintiffs’

claims were not, at least, colorable. On the contrary,

Plaintiffs have provided evidence to demonstrate the basis of

their claims: a distribution agreement between Plaintiffs and

Bavaria, covering the time period from March 2019 through August

2021, which stated that Plaintiffs would acquire Pony Malta

products from Bavria “in order to resell them exclusively in the

Territory of Florida – New York and New Jersey in USA . . . .”

(Ruderman Decl., Ex. 2, at 2.)

Defendants do not dispute that they were also selling

Pony Malta beverages in the territory over which Plaintiffs

believed they had an exclusive right. Rather, Defendants argue

that Plaintiffs did not actually have an exclusive right,

because Defendants obtained the beverages they sold from Bavaria

(through a company called Two-Way Solutions), with the right to

sell them in the same territory. (See Def. Mem. at 11.) But

the question now is not Defendants’ liability; the question is

Plaintiffs’ knowledge at the time Plaintiffs filed suit. Based

on Plaintiffs’ agreement with Bavaria, it was reasonable for

Plaintiffs to conclude that they had the exclusive right to sell

Pony Malta beverages in Florida, New York, and New Jersey.

Another entity selling gray market Pony Malta beverages in that

territory could have been, under circumstances that caused

confusion to consumers, liable under the Lanham Act. See Zino

Davidoff SA v. CVS Corp., 571 F.3d 238, 242 (2d Cir. 2009).

Defendants contend that they “repeatedly relayed” to

Plaintiffs their position that they were also authorized to sell

Pony Malta beverages in the same territory. (Def. Reply at 5.)

But the only evidence Defendants offer in support are emails

dated in October 2020, which is several months after Plaintiffs

filed this action in July 2020. (See id. at 4-5.) Defendants

also seem to suggest that Plaintiffs should have dropped their

case in response to the arguments made in Defendants’ motion to

dismiss (which was filed in state court), or in response to the

motion to dismiss that was contemplated in this court. Merely

because a defendant has a viable legal defense does not mean the

plaintiff’s claims were brought in bad faith. Any motion to

dismiss would have been limited to Plaintiffs’ allegations, and

not evidence offered by Defendants. And, again, the only

evidence Defendants point to in support of their conclusory

assertion that Plaintiffs’ claims were brought in bad faith is

evidence that was disclosed after Plaintiffs’ second case was

filed. That evidence ultimately caused Plaintiffs to

discontinue this action, but Defendants apparently failed to

provide any evidence to Plaintiffs sooner than November 2020.2

Defendants also argue that Plaintiffs lacked standing

to enforce any Pony Malta trademark rights, because Plaintiffs

did not own the trademark, and the distribution agreement did

not provide Plaintiffs the right to enforce the trademark. (See

Def. Mem. at 12.) Upon a review of the distribution agreement,

it appears that Defendants are correct that, although Plaintiffs

could have reasonably believed they had an exclusive right to

2 Defendants also argue that Plaintiffs’ amended complaint was supported by

“no evidence.” (Def. Reply at 7.) A complaint need not be supported by

evidence, only plausible allegations, as a plaintiff generally will not have

access to evidence that is in a defendant’s possession until the parties

engage in discovery.

distribute the Pony Malta products, nothing in the agreement

purported to give Plaintiffs the right to enforce Pony Malta’s

trademark rights. (See generally Ruderman Decl., Ex. 2.)

Plaintiffs counter that their claims were not for trademark

infringement pursuant to Section 32 of the Lanham Act, but

rather, were brought under Section 43 of the Lanham Act, which

provides a cause of action for unfair competition related to

goods with a “false designation of origin.” 15 U.S.C. §

1125(a)(1). Plaintiffs contend that their rights under Section

43 are broader, and there was no requirement that the they owned

a registered trademark to bring suit. (See Pl. Mem. at 21.)

Second Circuit case law interpreting the standing

requirement for Section 43 claims appears to be somewhat sparse.

What is clear, however, is that Plaintiffs’ arguments with

regard to standing are colorable, and it does not appear that

their claims were brought in bad faith. In support of their

argument that they had standing to bring their claims pursuant

to Section 43 of the Lanham Act, Plaintiffs rely on, inter alia,

a case in which the First Circuit held that “one who may suffer

adverse consequences from a violation of [Section 43] has

standing to sue regardless of whether he is the registrant of a

trademark.” Quabaug Rubber Co. v. Fabiano Shoe Co., 567 F.2d

154, 160 (1st Cir. 1977).

Moreover, Defendants rely on a case from this District

in which the late Judge David G. Trager found that a plaintiff

did not have standing under Section 32 of the Lanham Act to

bring a claim for trademark infringement because the relevant

contract between the plaintiff and the owner of the trademark

“fail[ed] to grant exclusive enforcement rights to plaintiff.”

Krasnyi Oktyabr, Inc. v. Trilini Imports, 578 F. Supp. 2d 455,

466 (E.D.N.Y. 2008); (see Def. Mem. at 12). However, in that

case, Judge Trager actually found that the “plaintiff had

standing under Section 43 based on pleadings that false

designation of defendants’ product is likely to cause plaintiff

to suffer a loss in sales.” Krasnyi Oktyabr, 578 F. Supp. 2d at

466. Thus, this case relied upon by Defendants actually

supports Plaintiffs’ position that they had standing to bring

Section 43 claims based on what they alleged was unfair

competition, even without an assignment of the right to enforce

the Pony Malta mark. It is evident, then, that Plaintiffs’

claims were not baseless. Rather, Plaintiffs had a good faith

belief, supported by case law, that they had standing to sue

under Section 43 of the Lanham Act.

Defendants also raise Plaintiffs’ decision to seek an

ex parte temporary restraining order at the outset of the case.

The court agrees that Plaintiffs’ decision to do so appears

overly aggressive in retrospect. Federal Rule of Civil

Procedure 65(b) directs that such an order may only be entered

without notice to the adverse party if “specific facts . . .

clearly show that immediate and irreparable injury, loss, or

damage will result to the movant before the adverse party can be

heard in opposition.” Fed. R. Civ. P. 65(b)(1)(A). Given the

fact that the first state action had been filed several months

earlier, without Plaintiffs seeking a temporary restraining

order, the court is skeptical that it was necessary for

Plaintiffs to seek an immediate prohibition in this case.

Nonetheless, the court does not find that Plaintiffs’ decision

to do so rises to the level of litigating in bad faith. Based

on the distribution agreement Plaintiffs had with Bavaria, it

was reasonable for Plaintiffs to believe that Defendants were

selling gray market goods in their exclusive territory, which

could have damaged Plaintiffs’ business.

Ultimately, when Defendants provided Plaintiffs with a

document in November 2020 showing that they had legitimately

obtained the Pony Malta beverages from Bavaria for sale in the

same territory, Plaintiffs voluntarily dismissed this action.

Had Plaintiffs been interested only in harassing Defendants for

purposes of a settlement, they could have pressed on, and forced

Defendants to fully brief their intended motion to dismiss.

Instead, Plaintiffs dropped the case. That belies bad faith.

Accordingly, Defendants’ motion for attorneys’ fees is

denied.

III. Plaintiffs’ Motion for Attorneys’ Fees

Plaintiffs brought a cross-motion for attorneys’ fees,

arguing that Defendants prolonged the litigation by sitting for

months on the evidence that would have resolved this matter

sooner. (See Pl. Mem. at 27-28.) According to Plaintiffs,

Defendants did not provide their evidence showing that

individuals at Bavaria were facilitating Defendants’ sale of

Pony Malta products until November 2020, despite Plaintiffs

making clear in July 2020 that such evidence would cause them to

rethink the lawsuit if it were provided by Defendants, and an

order by Magistrate Judge Roanne L. Mann for the parties to turn

over any evidence that may be relevant to settlement prior to a

settlement conference in August 2020. (Id.) Defendants argue

that the actual evidence they ultimately proffered, which were

emails between an employee at Bavaria and an employee with

Latinfood’s distributor, were dated October 2020, and thus could

not have been proffered any earlier than that. (See Def. Reply

at 16-18.)

The same standard that applied to Defendants’ motion

for attorneys’ fees for this action also applies to Plaintiffs’

motion. In order to obtain attorneys’ fees, Plaintiffs must

point to “clear evidence” that Defendants acted in “bad faith.”

Dow Chem. Pac. Ltd., 782 F.2d at 344.

In response to Defendants’ argument that the emails

they proffered were not available until October 2020, Plaintiffs

argue that if Defendants “were secure in their position that

Bavaria always authorized Defendants’ sale of Pony Malta goods

in the U.S., then a confirmation from Bavaria in July 2020 or

some other proof would have been in order.” (Pl. Reply at 5.)

The court agrees that it would have been preferable for

Defendants to obtain this proof from Bavaria sooner, but it does

not find that Defendants failure to do so was in bad faith.

Plaintiffs have not pointed to any specific discovery

obligations that Defendants violated, nor any specific

affirmative duty Defendants had to obtain any documents that

were not already in its possession.

Accordingly, Plaintiffs’ motion for attorneys’ fees

is denied.

Conclusion

For the foregoing reasons, Defendants’ motion for

attorneys’ fees is DENIED, and Plaintiffs’ cross-motion for

attorneys’ fees is likewise DENIED. The court declines to

exercise its discretion to award Defendants fees pursuant to

Federal Rule of Civil Procedure 41(d)(1). Further, neither

party has made a sufficient showing of bad faith on the part of

the other party, and so the court declines to depart from the

traditional rule that the parties pay their own costs in this

action.

SO ORDERED.

Dated: Brooklyn, New York

April 26, 2021

/s/

Hon. Kiyo A. Matsumoto

United States District Judge