United States District Court, D. Delaware
IN RE DEX MEDIA, INC., et al, Debtors.
DEX MEDIA, INC., Appellee. YELLOW PAGES PHOTOS, INC., Appellant, Adv. No. 16-51026-KG
WeMaryellen Noreika, United States District Judge
Yellow Pages Photos, Inc. ("YPPI") appeals from
several decisions entered in the chapter 11 cases of Dex
Media, Inc. and certain affiliated entities (together,
"Dex Media"). The first is YPPPs consolidated
appeal of (1) the Bankruptcy Court's January 19, 2017
Memorandum Opinion (Adv. D.I. 40) and Order (Adv. D.I. 41),
In re Dex Media, Inc., 564 B.R. 208 (Bankr. D. Del.
2017) ("Judgment on the Pleadings"), granting Dex
Media's Motion to Dismiss Yellow Pages Photos, Inc.'s
Counterclaims and for Judgment on the Pleadings (Adv. D.I.
31), and (2) the subsequent March 8, 2017 Declaratory
Judgment and Order (Adv. D.I. 55) ("Declaratory
Judgment"), specifying the declaratory relief granted in
the Judgment on the Pleadings. YPPI further appeals the January
30, 2018 Memorandum Opinion (Adv. D.I. 104) and Order (Adv.
D.I. 105) ("Fee Award"), awarding Dex Media
reasonable attorneys' fees in the amount of $504, 025.50
and costs of $2, 522.45. For the reasons set forth below, the
Court affirms the Judgment on the Pleadings, Declaratory
Judgment, and Fee Award.
litigation history between the parties, including Dex
Media's wholly owned subsidiary SuperMedia, LLC
("SuperMedia"), is significant in each of these
publishes yellow pages telephone directories and provides
print, mobile, and Internet advertising to small- and
medium-sized businesses. (DEX 560 ¶ 10). Years ago,
SuperMedia was the yellow pages publishing arm of Verizon,
operating under the name Verizon Directories Corp.
("Verizon Directories"). On November 12, 2001,
Verizon Directories agreed to license a total of 5, 000 stock
photographs from a Florida company then known as Yellow Pages
Photos, Inc. ("Old YPPI"), a company wholly owned
and operated by Trent Moore ("Moore"). Verizon
Directories, "on behalf of itself and all of its
affiliates," entered into a Service Contractor Agreement
with Old YPPI (the "License" or "License
Agreement"). (DEX 577). The License granted Verizon
Directories a "perpetual" right to use Old YPPPs 5,
000 images (the "Licensed Images") in any
"print, electronic or other medium that may be used by
Verizon Directories of directories without limit, ROYALTY
FREE." (DEX 589). In exchange, Verizon Directories paid
Old YPPI a total of $660, 000, the final installment of which
was paid in 2004. (DEX 658 ¶ 16).
License contained a transfer restriction, providing that
Verizon Directories "may not transfer these images to
other parties or individuals unless authorized by YPPI;
provided however, that Verizon Directories is authorized...
to utilize these photographs and images in the advertising
purchased by its customers . . . ." (DEX 590). The
License also contained an anti-assignment provision, which
stated that Old YPPI "shall not assign its rights nor
delegate its duties under this Agreement ... to any third
party without Verizon Directories' prior written
consent in each instance." (DEX 584 § 12).
November 2006, Moore changed the name of Old YPPI - the
Florida company that had licensed the images to Verizon
Directories - to AdMedia Systems, Inc. ("AdMedia").
(DEX 561 ¶ 13). At the same time, Moore created a second
Florida company and named it, confusingly, "Yellow Pages
Photos, Inc." ("YPPI"). (Id.).
Thereafter, AdMedia assigned its copyrights in the Licensed
Images to this new YPPI, despite the License's
anti-assignment provision. Moore did not inform anyone at
Verizon Directories (or its successors) that he had created a
second company called "Yellow Pages Photos, Inc."
or that AdMedia had assigned its copyrights to this new
company. (DEX 504-506). In November 2006, Verizon Directories
spun off its directory publication business into a public
company, Idearc Media Corp. ("Idearc"), which
succeeded to Verizon Directories' rights under the
License. (DEX 561, ¶ 14). In July 2007, Idearc and Moore
agreed to amend the License to clarify that Idearc's
contractors were authorized "users" of those
images. (YPPI Appx. 65-66).
March 31, 2009, Idearc filed for bankruptcy in the United
States Bankruptcy Court for the Northern District of Texas
(the "Idearc Bankruptcy"). (YPPI Appx. 5, ¶
14; 6, ¶ 16); In re Idearc Inc., 423 B.R. 138
(Bankr. N.D. Tex. 2009). Its Chapter 11 plan of
reorganization listed all contracts to which Idearc was a
party under its schedule of executory contracts. Idearc
assumed the License without objection from YPPI. (YPPI Appx.
6, ¶ 16). On December 31, 2009, Idearc emerged from
bankruptcy as SuperMedia LLC ("SuperMedia"), which
now enjoyed the right to use YPPI's images under the
License. (Id., ¶ 17).
four years later, on March 18, 2013, SuperMedia's parent
company, SuperMedia, Inc., commenced a pre-packaged Chapter
11 bankruptcy proceeding before The Honorable Kevin Gross in
the United States Bankruptcy Court for the District of
Delaware. (YPPI Appx. 7, ¶ 21). The Chapter 11 plan
contemplated a merger between SuperMedia, Inc. and Dex One
Corporation, with the merged entity called Dex Media;
SuperMedia would emerge from bankruptcy as an indirect,
wholly-owned subsidiary of Dex Media. (Id.). The
Bankruptcy Court confirmed SuperMedia's plan of
reorganization on April 29, 2013, and the plan went effective
the next day. (Id.). Since then, Dex Media has been
the holding company and indirect parent to SuperMedia. (YPPI
Appx. 7, ¶21;12, ¶39).
30, 2013, YPPI filed two claims against SuperMedia's
estate, both of which alleged that SuperMedia breached the
License and, as a result, infringed YPPPs copyrights.
YPPI's first claim was a motion for the allowance and
payment of an administrative expense claim that alleged that
the License was valid and enforceable and that SuperMedia
violated its transfer restriction during the
"administrative expense period" - the period
between when SuperMedia filed for bankruptcy protection
(March 18, 2013) and when it emerged from bankruptcy (April
29, 2013) (the "Administrative Expense Claim").
(DEX 9-14). YPPI's second claim was a Proof of Claim that
likewise alleged that the License was valid and enforceable
and that SuperMedia breached its transfer restriction but
that covered the time period before SuperMedia filed for
bankruptcy (the "Prepetition Claim"). (YPPI Appx.
the next three years, YPPI litigated its claims against
SuperMedia before the Bankruptcy Court, which, as the record
reflects, included two phases of fact and expert discovery,
dozens of discovery disputes, multiple dispositive motions,
two trials, and more than 40 hours of testimony (the
"SuperMedia Litigation"). The SuperMedia Litigation
was premised on YPPI's allegation that SuperMedia
"violated the transfer restriction set forth in the
License by transferring the Licensed Images to third
parties" and the third-party transferees used the images
without authorization. (DEX 601, ¶ 15; 13, ¶ 19).
One of the alleged third-party transferees was Dex Media.
(DEX 117-18; DEX 60; DEX 39 ("SuperMedia has transferred
copies of Yellow Pages' images to a number of unlicensed
third-parties ..., and there is evidence of the images being
used for at least one unlicensed publisher, SuperMedia's
affiliate Dex.")). YPPI maintained that the License was
a valid and enforceable contract, as both of its claims
hinged on the allegation that SuperMedia breached the
transfer restriction in the License. Specifically, YPPI
alleged that the License passed through the Idearc Bankruptcy
and that "Idearc Media's rights under the Agreement
and the License . . . vested in SuperMedia." (DEX 74-75,
¶ 11; see also YPPI Appx. 45, ¶ 11
("As successor to Idearc, SuperMedia, LLC remained
bound by the Agreement and the License with YPPI under all of
the terms and provisions of the License . . .")). YPPI
also sought to recover attorneys' fees under the License.
YPPI's Assumption Motion
filed a Motion to Compel Assumption or Rejection of Executory
Contract (the "Assumption Motion") before the
Bankruptcy Court. (DEX 1-8). In its Assumption Motion, YPPI
"maintain[ed] that the License is an executory contract
and, consequently, must be either assumed or rejected by the
Debtors as part of their bankruptcy case." (DEX 5,
¶ 18). On October 9, 2013, the Bankruptcy Court denied
the Assumption Motion, ruling that the "License is not
an executory contract." In re SuperMedia, Inc.,
2013 WL 5567838 (Bankr. D. Del. Oct. 9, 2013). The Bankruptcy
Court noted that "[f]or a contract to be executoiy,
there must be unperformed obligations on behalf of both
parties." Id. at *4. Here, once "delivery
of the images and the payments were completed nearly ten
years ago [in 2005], the parties ha[d] received the benefit
of their bargain" and no unperformed obligations
remained. Id. YPPI moved for reconsideration of the
denial of its Assumption Motion. (DEX 28-39). The Bankruptcy
Court denied that motion, reiterating its holding that the
License is not an executory contract. (DEX 40-42).
YPPI's Administrative Claim
April 9, 2014, the Bankruptcy Court commenced a three-day
bench trial on YPPI's Administrative Expense Claim. YPPI
introduced evidence of allegedly infringing advertising
videos that had been created for Dex Media by an outsourcer
called bieMedia. (DEX 155 at 15:6-10; DEX 158-59 at
18:22-19:22). YPPI argued that SuperMedia was responsible for
these infringing videos, arguing that bieMedia could only
have obtained copies of the Licensed Images used in the
videos from SuperMedia because, according to YPPI, it
"never sold any images to . . . outsourcer[s]" such
as bieMedia. (DEX 164 at 23:17-19). In an opinion dated
December 29, 2014, the Bankruptcy Court held that SuperMedia
breached the License by transferring YPPI's images to its
third-party contractors, but it did so
before SuperMedia filed for
bankruptcy protection. In re SuperMedia, Inc., 2014
WL 7403448, *13 (Bankr. D. Del. Dec. 29, 2014). The
Bankruptcy Court found no evidence of any such transfers
during the administrative expense period, (id, ),
and, therefore, denied YPPI's Administrative Expense
Claim. (Id. at * 19-*20). On February 11, 2015, YPPI
moved for reconsideration of the Bankruptcy Court's
denial of its Administrative Expense Claim. (DEX 218-223). In
that motion, YPPI again argued that SuperMedia had
"transferred the Licensed Images to Dex Media."
(DEX 221, ¶¶ 10, 13). The Bankruptcy Court denied
the motion for reconsideration, holding that there was no
evidence of a "deliberate physical transfer" of the
Licensed Images to Dex Media. Specifically, the Bankruptcy
Court held: "The transfer of the Licensed Images
resulted from the merger between SuperMedia, Inc. and Dex
One. It was the combining of operations between SuperMedia,
Inc. (SuperMedia's parent) and Dex One that created the
'transfer,' not a deliberate physical transfer.
[Thus] the merger between SuperMedia's parent and
DexMedia did not result in a transfer which would constitute
a tortious act." (DEX 224-25).
Rule 60(b) Decision
January 12, 2015, SuperMedia filed an adversary proceeding
formally objecting to YPPI's Prepetition Claim (discussed
below). (DEX 242-52). During discovery, it came to light that
YPPI had licensed its images to several outsourcers,
including bieMedia. (DEX 227-33). This was contrary to
Moore's prior testimony that YPPI had never licensed its
images to "outsourcers," and, therefore, if any
outsourcers were in possession of YPPI's images, they
must have come from SuperMedia. (DEX 164 at 23:17-19). On May
29, 2015, SuperMedia filed a Motion for Relief from Judgment
under Rule 60 of the Federal Rules of Civil Procedure and
sought sanctions against YPPI and its counsel for false
representations to the Bankruptcy Court ("Rule 60(b)
Motion"). (DEX 227). On September 3, 2015, the
Bankruptcy Court granted the Rule 60(b) Motion in part
("Rule 60(b) Opinion"), finding that YPPI
intentionally "hid" its license with bieMedia (and
a license with another outsource, ASEC) from both SuperMedia
and the Bankruptcy Court, and that YPPI and its counsel made
"deliberate misrepresentations and non-disclosures"
before, during, and after the April 2014 trial. (DEX
226-239). The Bankruptcy Court found "most
egregious" the fact that Moore "forcefully
testified under oath, testimony which profoundly affected the
Court's Opinion." (DEX 230). Based on these
findings, the Bankruptcy Court sanctioned YPPI and its
counsel, barring recovery for any alleged transfers to
bieMedia or other outsourcers whose licenses had been
concealed. (DEX 238). The Bankruptcy Court further awarded
$111, 679 to SuperMedia for its fees and costs in bringing
the Rule 60(b) Motion. (DEX 240-41).
Bankruptcy Court scheduled a trial on YPPI's Prepetition
Claim for November 2015. In July 2015, SuperMedia deposed
Moore and learned that the "Yellow Pages Photos,
Inc." that had filed claims in the Bankruptcy Court was
not the same entity that signed the
License. (DEX 271-72). The counterparty to the License was
Old YPPI, which had since changed its name to AdMedia.
(Id.). SuperMedia was granted leave to amend its
complaint in the adversary proceeding to assert that YPPI did
not have standing to enforce the License. Just before trial
began, YPPI filed a motion to join AdMedia as an
"alternatively pled creditor." (DEX 342-50). In a
separate post-trial opinion ("AdMedia Decision"),
the Bankruptcy Court denied that motion, holding that YPPI
acted with undue delay and in "bad faith," had
"deceived" the Court and SuperMedia by
"omitting from its filings facts essential for
adjudication of this case," and "actively
concealed" the fact that the YPPI before the Bankruptcy
Court was a different entity than the YPPI that had entered
into the License. (DEX 504; DEX 520; DEX 524).
October 23, 2015, shortly before the trial on YPPI's
Prepetition Claim began, YPPI filed an amended Proof of
Claim, raising a new theoiy of liability - the "failure
to assume" theory. (DEX 306-336) ("Amended Proof of
Claim"). As in the original Proof of Claim, the Amended
Proof of Claim continued to allege that the License was valid
and enforceable and that SuperMedia breached the transfer
restriction in the License. (DEX 316, ¶¶ 23-25). In
the alternative, however, YPPI now alleged that the License
was invalid and unenforceable because SuperMedia's
predecessor, Idearc, failed properly to assume the License
during its 2009 bankruptcy. (DEX 314, ¶¶ 17-18).
Specifically, YPPI alleged that Idearc breached the License
before the Idearc Bankruptcy, "failed to cure"
these breaches during its 2009 bankruptcy, and thus could not
assume the License when it exited bankruptcy. (Id.).
YPPI maintained, if Idearc did not properly assume the
License, then "any use or transfer of the
Licensed Images by SuperMedia at any point in
time has been a violation of Yellow Pages'
copyrights in the Licensed Images." (DEX 316, ¶
26). Prior to the November 2015 trial, however, YPPI
abandoned its "failure to assume" theoiy and,
instead, pressed forward with its original claim that the
License was a valid agreement that SuperMedia breached.
November 2015 trial of YPPI's Prepetition Claim focused
on the damages attributable to SuperMedia's pre-petition
breach of the License's transfer restriction. In an
attempt to establish the value of the YPPI images that
SuperMedia transferred to its contractors, YPPI introduced
evidence of "hundreds" of print advertisements
containing the Licensed Images, which had been published in
"Dex Media" directories. (Adv. No. 15-50044-KG,
D.I. 153, 11/15/15 Hr'g Tr. at 164:17-190:1). The
evidence that YPPI introduced included a yellow pages
directory published by Dex Media in 2015, which contained
print advertisements using YPPI images. (DEX 487 at
72:11-15). While YPPI cited the use of its images in print
advertisements as evidence of the images' value, YPPI
conceded that the use of its images in print advertisement -
including in the 2015 directory-was not an
infringing use. YPPI's counsel stated: "[W]e
don't dispute, of course, that they license[d] the images
and they were allowed to use them in printouts." (DEX
381 at 62:21-23; see also DEX 408 at 186:22
("I'm not saying the uses are infringing.")).
YPPI's principal, Moore, admitted the same thing while
testifying under oath: "I do not think that the print ad
is a violation of the license agreement." (DEX 415 at
269:7-17). Moore's testimony on this point was clear: Q.
"And SuperMedia was allowed to use your images in print
ads, correct?" A. "Yes, they were."
(Id. at 269:12-14).
April 4, 2016, the Bankruptcy Court handed down its
"final decision on the merits" of the SuperMedia
Litigation. In re SuperMedia LLC, 2016 WL 1367070
(Bankr D. Del. April 4, 2016) ("April 2016
Opinion"). The Bankruptcy Court held that YPPI could not
recover statutory damages or attorneys' fees under the
Copyright Act because it had failed to timely register its
copyrights. Id. at *4. The Bankruptcy Court further
held that YPPI could not recover attorneys' fees under
the License because AdMedia, not YPPI, was the real party to
the License. Id. YPPI was left with a claim for
actual damages based upon SuperMedia's unauthorized
transfers to its contractors. The Bankruptcy Court awarded
YPPI $303, 210 in actual damages. Id. at *9.
SuperMedia has paid that judgment in full.
Dex Media Litigation
April 29, 2016, less than a month after the Bankruptcy
Court's April 2016 Opinion, YPPI sued SuperMedia's
parent, Dex Media, in the United States District Court for
the Middle District of Florida, alleging that Dex Media
infringed YPPI's copyrights on the same 5, 000 images at
issue in the SuperMedia Litigation. On July 8, 2016, Dex
Media responded to that complaint by filing the instant
Adversary Proceeding in its pending Chapter 11 case before
Judge Gross (the "Dex Media Litigation"). (YPPI
Appx. 1-86). In its adversary complaint, Dex Media objected
to YPPI's claims against its estate and sought a
declaratory judgment that Dex Media "has not infringed
any of the Licensed Images . . . ." (YPPI Appx. 13-14,
¶ 43). Given the extensive overlap with the SuperMedia
Litigation, the Bankruptcy Court agreed to exercise
jurisdiction over the Adversary Complaint.
Motion for Judgment on the Pleadings
September 30, 2016, YPPI filed its Answer and Counterclaims
in the Dex Media Litigation, asserting copyright infringement
against Dex Media ("Counterclaims"). (YPPI Appx.
87-117). YPPI's Counterclaims were premised on the same
"failure to assume" theory that YPPI previously
raised, and abandoned, in the SuperMedia Litigation.
Specifically, in the Dex Media Litigation, YPPI alleged that
the License was "never effectively assumed in the Idearc
Bankruptcy Case" due to Idearc's failure to cure
existing breaches and, as a result, "no rights under the
[License] remained or otherwise inured to the benefit of
SuperMedia following the Idearc Bankruptcy confirmation
hearing." (YPPI Appx. 107-09, ¶¶ 36-45).
Counterclaims against Dex Media also relied on two
propositions that contradicted YPPPs representations during
the SuperMedia Litigation. First, whereas in the SuperMedia
Litigation, YPPI alleged that the License was a valid
agreement that had fully "vested in SuperMedia,"
(DEX 74-75, ¶ 11); in the Dex Media Litigation, YPPI
asserted that SuperMedia had "no rights" under the
License as of December 30, 2009. (YPPI Appx. 107-09,
¶¶ 36-45). Second, whereas in the SuperMedia
Litigation, YPPI represented that the use of YPPI's
images in print advertisements published in Dex Media
directories was not an infringing use; in the Dex Media
Litigation, YPPI alleged that those same print advertisements
infringed YPPI's copyrights. (YPPI Appx. 110, ¶ 51).
YPPI's Counterclaims in the Dex Media Litigation also
alleged that the License was an executory contract (YPPI
Appx. 105-06, ¶¶ 30-32), even though the Bankruptcy
Court twice held it was no longer executory as of 2005 in
ruling on the Assumption Motion.
November 3, 2016, Dex Media filed a Motion to Dismiss
YPPI's Counterclaims and for Judgment on the Pleadings
(the "Motion for Judgment"). (YPPI Appx. 406-510).
Dex Media advanced four grounds in support of its Motion for
Judgment: (1) YPPI's claims were barred by claim
preclusion or res judicata; (2) YPPI's claims
were barred by judicial estoppel; (3) YPPI's claims were
barred by collateral estoppel; and (4) YPPI failed to state a
claim upon which relief could be granted. (YPPI Appx.
January 19, 2017, the Bankruptcy Court entered the Judgment
on the Pleadings on three of the four grounds: claim
preclusion (res judicata), judicial estoppel, and
collateral estoppel. See Dex Media, 564 B.R. at
214-16. First, the Bankruptcy Court held that res
judicata applied because "the claims in both
actions are similar if not identical" such that
"[t]rying the Dex Media case would be a retrial of the
SuperMedia Litigation." Id. at 214. Second, the
Bankruptcy Court held that judicial estoppel barred
YPPI's claims in the Dex Media Litigation because they
were an "improper" attempt to "flip-flop"
on its positions on the validity of the License and the non-
infringing nature of print ads. Id. at 215. Lastly,
the Bankruptcy Court held that collateral estoppel barred
YPPPs claims in the Dex Media Litigation because they
depended on two elements essential to its Counterclaims: the
executory nature of the License, and a transfer of the
Licensed Images to Dex Media. The Bankruptcy Court stated,
"[i]t is abundantly clear that the Court adjudicated
both of these issues, and that the determination was
necessary to the court's decision." Id. at
216. Based on the foregoing, the Bankruptcy Court entered its
Memorandum Opinion and Order granting Judgment on the
Pleadings in favor of Dex Media. On January 30, 2017, YPPI
filed its notice of appeal of the Judgment on the Pleadings.
(Adv. D.I. 42).
Dex Media filed a "Certification of Counsel" and
proposed form of Declaratory Judgment on the basis that the
Bankruptcy Court failed to enter a judgment "in a
separate document" as required by Rule 58(a) of the
Federal Rules of Civil Procedure. (Adv. D.I. 49). YPPI
opposed entry of judgment, arguing that the deadline for
filing a motion for an award of attorneys' fees expired
on February 2, 2017, that Dex Media had missed the deadline,
and that the request for entry of the separate Declaratory
Judgment was a ploy to "reset the clock" so that
Dex Media could timely file a motion for attorneys' fees.
See Fed R. Civ. P. 54(d)(2)(B)(i) (a motion for
attorneys' fees "must ... be filed no later than 14
days after the entry of judgment."). On March 8, 2017,
the Bankruptcy Court entered the Declaratory Judgment. (Adv.
D.I. 55). On March 13, 2017, YPPI filed its notice of appeal
of the Declaratory Judgment. (Adv. D.I. 57).
The Fee Award
March 23, 2017, Dex Media submitted its Amended Motion for
Attorneys' Fees and Costs under Section 505 of the
Copyright Act. (Adv. D.I. 64). Prior to responding, YPPI was
permitted to take the deposition of not only the lead partner
representing Dex Media, but also one of the associates on the
Dex Media team. (Adv. D.I. 76 at ¶ 15; Adv. D.I. 81).
Following those depositions, YPPI submitted its opposition to
Dex Media's fee application. (Adv. D.I. 91). Dex Media
submitted its reply brief on June 26, 2017. (Adv. D.I. 94).
The Bankruptcy Court heard oral argument on Dex Media's
fee application on January 11, 2018. (Adv. D.I. 115).
January 30, 2018, the Bankruptcy Court issued its Memorandum
Opinion granting the Fee Award. (Adv. D.I. 104 & 105).
The Bankruptcy Court agreed with YPPI that "a court may
not award attorneys' fees as a matter of course but only
after making a 'particularized case-by-case
assessment.'" (Adv. D.I. 104 at 4 (quoting
Kirtsaeng v. John Wiley & Sons, Inc., 136 S.Ct.
1979, 1985 (2016))). Given the facts of this case, however,
the Bankruptcy Court was "convinced beyond near
certainty that YPPI's lawsuit against Dex Media was a
situation of 'objective unreasonableness.'"
(Id., (quoting Kirtsaeng, 136 S.Ct. at
1985)). In reaching this conclusion, the Bankruptcy Court
In its lawsuit YPPI is making claims contrary to its previous
representations to the Court in the SuperMedia action. For
instance, in the prior SuperMedia action, YPPI claimed that
the license was valid, enforceable and that print
advertisements were not infringement. In its new action, YPPI
instead claims that the License was not valid and therefore
SuperMedia and its affiliates and customers had no right to
use the License. There are other inconsistencies.
(Id.). The Bankruptcy Court further held that fee
shifting was warranted based upon considerations of
deterrence, finding that it is "very important for
SuperMedia to end YPPI's harassment."
(Id.). As the Bankruptcy Court found: "YPPI
filed the Dex Media lawsuit [in Florida] mere weeks after the
Court's ruling in the SuperMedia case. YPPI waited months
to serve Dex Media with the Complaint in the Florida Action.
The Complaint in the Florida Action also asserts positions
contrary to YPPI's claims in previous litigation.
Deterrence is therefore an important consideration."
(Id. at 4-5). To determine a reasonable fee award,
the Bankruptcy Court "reviewed the Dex Media
attorneys' time records - line by line."
(Id. at 9). "For each and every time record,
the [Bankruptcy] Court used its independent judgment to
approximate the time necessary for the dispute."
(Id.). Based on this analysis, the Bankruptcy Court
awarded Dex Media fees of $504, 025.50 and expenses of $2,
522.45 - a reduction of roughly 33% of the fees and expenses
Dex Media incurred, and paid, in defending against YPPI's
claims. (Id. at 11).
rendering its Fee Award, the Bankruptcy Court rejected
YPPI's contention that Dex Media could only recover fees
based upon the prevailing rates in the forum of the
litigation (Delaware), and not the forum in which its
attorneys practice (New York). (Id. at 5-6). In
rejecting this argument, the Bankruptcy Court found that
"the knowledge and expertise of [Dex Media's]
Non-Local Counsel was critical to Dex Media's success in
the litigation." (Id., at 7). The Bankruptcy
Court also rejected YPPI's contention that a fee award
would result in the "financial ruination" of
YPPI's business, finding that "YPPI has not
presented a clear record of its financial
circumstances." (Id. at 10). On February 1,
2018, YPPI appealed the Fee Award. (Adv. D.I. 107).
appeals are fully briefed. The Court did not hear oral
argument because the facts and legal arguments are adequately
presented in the briefs and the record, and the decisional