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finding that attorney's fees between $100-$375 per hour were reasonable in a copyright infringement suit
Summary of this case from ZEE v. GREENIDGEOpinion
01 Civ. 10135 (SAS)
October 23, 2003
Megha Bhouraskar, Esq., Poppe Bhouraskar, LLP, New York, New York, for Plaintiffs
Ivan S. Kavrukov, Esq., Wendy E. Miller, Esq., Cooper Dunham LLP, New York, New York, for Cinram
OPINION AND ORDER
I. INTRODUCTION
Plaintiffs Arclightz and Films Pvt. Ltd. ("Arclightz") and Enzo Pictures Ltd. ("Enzo"), respectively the producer and distributor of the Indian motion picture Asoka, have asserted that defendants Cinram International, Inc., Cinram Video Centre and The Amazing Video Centre ("Cinram") infringed their rights by duplicating, renting and selling unauthorized copies of Asoka. On June 2, 2003, this Court entered summary judgment for Cinram. Cinram now seeks to recover attorney's fees and costs against plaintiffs pursuant to the Copyright Act of 1976, 17 U.S.C. § 505 and against plaintiffs' counsel, Poppe Bhouraskar LLP, pursuant to 28 U.S.C. § 1927. II. FACTS
See Second Amended Verified Complaint ("Compl.").
The following facts are undisputed, unless otherwise indicated.
A. The Parties
Arclightz, an Indian corporation in the business of producing and distributing motion pictures, is the producer of Asoka. Pursuant to a "Distribution Agreement" between Arclightz and Enzo, executed on October 5, 2001, Enzo (a British corporation) has an exclusive license "to commercially distribute, exhibit, market, advertise, publicize, derive revenue from and otherwise exploit" the film in all formats worldwide except in India, Bhutan, Nepal, and Bangladesh, where Arclightz retained the local rights. Cinram, a Canadian Corporation, is a producer, manufacturer and distributor of DVDs.
See Compl. ¶¶ 5-6.
Distribution Agreement, Ex. 3 to 3/24/03 Declaration of Pramod S. Maniar, director of Asoka ("Maniar Decl.").
See id. ¶ 13; see also Cinram Answer at ¶ 13.
B. The Piracy
Asoka was released theatrically in the United States on October 26, 2001. Authorized Asoka DVDs were not slated for release until February 2002. However, between October 27, 2001, and November 14, 2001, an investigator employed by Plaintiffs entered Video Palace and purchased one unauthorized copy of Asoka on DVD and one on VHS. At that time, the film was only available for viewing in theaters. On November 21, 2001, under the supervision of the United States Marshal's Service, Plaintiffs' representatives entered Video Palace, Inc., a New York corporation engaged in the wholesale and retail sales of music and motion pictures, and seized 21 VHS copies and 10 DVD covers of Asoka (the actual DVDs having been rented at the time of the seizure). Video Palace has conceded liability for infringing the Asoka copyright, but has provided no information about the source of the pirated DVDs. The parties agree that there is no evidence connecting Cinram to Video Palace, and specifically "of any shipments of DVDs from or for Cinram to any defendant."
See Compl. ¶ 29.
See 1/28/03 Statement of Undisputed Facts in Support of Plaintiffs' Motion for Summary Judgment and Sanctions Against Cinram International Inc.; Cinram Video Centre; and the Amazing Video Centre Under Local Rule 56.1 ("Pl. 56.1 Stmt. (Cinram) ¶ 5.
See 7/21/03 Declaration of Megha Bhouraskar, counsel for Plaintiffs, in Support Of Plaintiffs' Motion For Statutory Damages, Attorneys' Fees and Costs Against Video Palace, Inc.; "M. Pervez", Individually and D/B/A "Video Palace" ("Bhouraskar Damages Decl.") ¶ 7.
See PI. 56.1 Stmt. (Cinram) ¶ 5.
See Bhouraskar Damages Decl. ¶ 10; Compl. ¶ 10.
See 2/26/03 Declaration of Gerald J. McMahon, courtsel to Video Palace, conceding liability ("McMahon Decl.") ¶ 3.
Arclightz and Films Pvt. Ltd, v. Video Palace Inc., 67 U.S.P.Q.2d 1152, 1154 (S.D.N.Y. 2003).
Plaintiffs learned that the infringing DVD was made using a Toolex DVD mold, which produced DVDs with retainer rings with an outside diameter of 25 millimeters. Cinram's plant produced DVDs with 25 millimeter retaining rings for a brief time, but discarded those molds and switched to 22 millimeter molds well before Asoka was theatrically released. Plaintiffs learned from Alpha Sweden, a supplier of such molds to Cinram, that Cinram had begun receiving 22 millimeter replacement molds in January 2002 through June 2002; such information proved erroneous, though, as the true dates of mold replacement were January 2001 to June 2001. The DVD that was purchased at Video Palace did have one significant identifying characteristic: the code "IFPI 6066" was printed on its mirror band (the shiny metallic inner ring of a DVD). Previously, the International Federation of Phonographic Industries ("IFPI") had assigned Cinram all four-digit source identification codes beginning with the digits "60."
See 10/30/02 Expert Report of Robert Freedman, Ex. K to 7/18/03 Declaration of Megha Bhouraskar in Opposition to the Cinram Defendants' Application for Attorneys' Fees and "Posts ("Bhouraskar Opp. Decl."); 5/1/02 Letter from Ivan Kavrukov to Megha Bhouraskar, Ex. E to Bhouraskar Opp. Decl.
See 2/7/03 Declaration of Adam Dlugosz, Engineering Manager of Cinram's Canadian DVD manufacturing plant, Ex. M to Bhouraskar Opp. Decl.
See 2/6/03 Declaration of Leslie Clarke, Service Manager for Alpha Sweden (Clarke Decl.), Ex. L to Bhouraskar' Opp. Decl., 11 3.
See PI. 56.1 Stmt. (Cinram) ¶ 9.
C. The Litigation
Plaintiffs brought duplicate actions against Cinram for infringement of Asoka in the U.S. District Courts for the Southern and Eastern Districts of New York. Eastern District Magistrate Judge Gold directed the parties to stipulate to dismissal of the Eastern District complaint, and granted Cinram leave to file a motion to dismiss that complaint if no agreement was reached by June 6, 2002. Plaintiffs agreed to send Cinram a proposed stipulation of dismissal by the morning of June 5, 2002; instead; plaintiffs sent their proposal late in the afternoon of June 6, 2002, after Cinram had prepared and filed a motion to dismiss the Eastern District complaint. Cinram repeatedly sought access to the infringing Asoka DVDs in plaintiffs' possession. Finally, after the Court directed plaintiffs to produce the DVDs, Cinram inspected them and determined that it could not have made the DVDs. Cinram advised plaintiffs no less than four times in April and May of 2002 that it did not make and could not have made the infringing DVDs.
See 7/7/03 Memorandum in Support of the Cinram Defendants' Application for an Award of their Attorneys' Fees and Expenses ("Cinram Mem.") at 2.
See id. See also Civil Docket for Case #: l:01-cv-07643-CBA-SMG ("Eastern District Docket"), Ex. 1 to 7/7/03 Declaration of Cindy Yang, counsel for Cinram ("Yang Decl."), docket entry 31.
See 6/6/02 Letter to Ivan Kavrukov, Ex. 2 to Yang Decl.; 6/7/02 Letter to Megha Bhouraskar, Ex. 3 to Yang Decl. Plaintiffs do not rebut Cinram's assertion that plaintiffs agreed to send a proposed stipulation by June 5; however, plaintiffs do contest the hours billed by Cinram's counsel in drafting the motion to dismiss, stating that "a motion to dismiss was completely unnecessary when the parties had agreed to consolidate the 2 matters in the Southern District via Stipulation."See Bhouraskar Opp. Decl. ¶ 18(C).
See 2/19/02 Letter to Megha Bhouraskar, Ex. 4 to Yang Decl.; 4/3/02 Letter to Megha Bhouraskar, Ex. 5 to Yang Decl.
See Cinram Mem. at 3; 4/17/02 Letter to Megha Bhouraskar, Ex. 8 to Yang Decl.
See Ex. 8 to Yang Decl; 5/1/02 Letter to Megha Bhouraskar, Ex. 9 to Yang Decl.; 5/9/02 Letter to Megha Bhouraskar, Ex. 10 to Yang Decl.; 5/20/02 Letter to Megha Bhouraskar, Ex. 11 to Yang Decl.
After the close of discovery, the parties filed cross motions for summary judgment. On June 2, 2003, this Court dismissed all of plaintiffs' claims against Cinram. Cinram now seeks recovery of its costs and attorney's fees jointly and severally against plaintiffs and their attorneys, Poppe Bhouraskar, LLP.
See Arclightz, 67 U.S.P.Q.2d at 1159.
III. LEGAL STANDARD
Under the Copyright Act of 1976, a prevailing party may be awarded costs, including reasonable attorney's fees, at the discretion of the District Court. Moreover, an attorney "who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct."
See 17 U.S.C. § 505.
28 U.S.C. § 1927.
IV. DISCUSSION
1. Legal Standard
A. Attorney's Fees
The Copyright Act of 1976 (the "Copyright Act"), 17 U.S.C. § 505, provides in relevant part that in any copyright infringement action, the court "may . . . award a reasonable attorney's fee to the prevailing party as part of the costs." The Supreme Court has held that attorney's fees should be equally available to prevailing plaintiffs and prevailing defendants. Attorney's fees should be awarded to the prevailing party, not "as a matter of course, " but "only as a matter of the court's discretion. "
See Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994).
Id. at 533-34.
In Fogerty, the Supreme Court highlighted a list of non-exclusive factors to guide the district court's exercise of discretion in awarding fees, including "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." However, "such factors may be used only `so long as [they] are faithful to the purposes of the Copyright Act.'" The primary objective of the Copyright Act is to "encourage the production of original literary, artistic, and musical expression for the good of the public." This objective is promoted by discouraging infringement as well as by the successful defense of copyright infringement actions.
Id. at 533 n. 19 (quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986)).
Matthew Bender Co., Inc., v. West Publ'g Co., 240 F.3d 116, 120-21 (2d Cir. 2001) (quoting Fogerty, 510 U.S. at 534).
Fogerty, 510 U.S. at 524.
See id. at 526.
The Second Circuit has held that, of the factors enumerated by the Supreme Court, "objective unreasonableness" should be accorded "substantial weight." Several courts in this Circuit have awarded attorneys' fees to prevailing defendants solely upon a showing that the plaintiff's position was objectively unreasonable, even without a showing of bad faith or frivolousness. However, the mere fact that a defendant obtains summary judgment does not necessarily mean that the plaintiff's position was frivolous or objectively unreasonable. "To hold otherwise would establish a per se entitlement to attorney's fees whenever [a summary judgment motion is] resolved against a copyright plaintiff."
Matthew Bender. 240 F.3d at 120-21.
See Adsani v. Miller, No. 94 Civ. 9131, 1996 WL 531858 at *13 (S.D.N.Y. Sep. 19, 1996) (collecting cases holding that objective unreasonableness is sufficient to support a fee award); Littel v. Twentieth Century Fox Film Corp., No. 89 Civ. 8526, 1996 WL 18819 at *3-4 (S.D.N.Y. Jan. 18, 1996) (awarding — prevailing defendants attorney's fees based on objective unreasonableness of plaintiffs' claims); Screenlife Establishment v. Tower Video, Inc., 868 F. Supp. 47, 52 (S.D.N.Y. 1994) (same).
See Littel , 1996 WL 18819 at *3.
CK Company v. Burger King Corp., No. 92 Civ. 1488, 1995 WL 29488 at *1 (S.D.N.Y. Jan. 26, 1995).
The emphasis on objective unreasonableness is firmly rooted in the admonition that an award of attorneys' fees must comport with the purposes of the Copyright Act. "As such, the imposition of a fee award against a . . . [party] with an objectively reasonable litigation position will generally not promote the purposes of the Copyright Act." However, where a plaintiff's case is devoid of legal or factual basis," [f]ailing to award attorneys' fees to defendants in such situations would invite others to bring similarly unreasonable actions without fear of any consequences. Under the circumstances of [such a] case, and `to advance considerations of compensation and deterrence,' defendants must be compensated for being forced to defend against such a baseless action."
Matthew Bender. 240 F.3d at 122.
Earth Flag Ltd, v. Alamo Flag Co., 154 F. Supp.2d' 663 668 (S.D.N.Y. 2001) (quoting Fogerty, 510 U.S. at 533 n. 19).
2. Analysis
a. Objective Unreasonableness
In its opinion of June 2, 2003 denying plaintiffs' motion for summary judgment against Cinram, this Court wrote:
In the face of undisputed physical evidence that Cinram lacked the capacity to produce the infringing DVDs, Plaintiffs have put forward no evidence to indicate that Cinram replicated those DVDs. Nonetheless, in support of their motion for summary judgment, Plaintiffs point to seven "undisputed" facts that they believe compel judgment in their favor. Far from demonstrating that judgment for Plaintiffs as a matter of law is appropriate, these "facts" do not even create a material issue of fact requiring a trial:
• First, Plaintiffs say that the IFPI code "60" on the infringing DVD is assigned to Cinram.
• Second, Plaintiffs say that the dimensions of the Asoka DVD are "similar if not the exact same" as Cinram's DVDs.
• Third, the Asoka DVD was replicated on a Toolex machine, and Cinram owned and used a Toolex machine.
• Fourth, Plaintiffs assert that the sample Cinram DVD produced to Plaintiffs bore the mastering code "L387", which was assigned to Cinram's Mexican plant, rather than the Canadian plant that allegedly made the Asoka DVD.
• Fifth, Plaintiffs claim that Cinram owns an interest in a DVD authoring plant in California that uses the same software as was used to create the Asoka DVD.
• Sixth, at the time the Asoka DVD was replicated, Cinram did not have any policies or procedures for verifying the copyrights of films given to Cinram for replication.
• Seventh, "Cinram hires a substantial number of `seasonal employees' each fall . . . for the December/holiday high volume of manufacturing and distribution, and releases these employees in January of the following year," and "[t]wo out of five of the `Shift Managers' for Cinram have Indian/Pakistani names."
As a preliminary observation, none of these "facts" concretely links Cinram to the Asoka DVD. Rather, each alleged "fact, " if true, supports the inference that Cinram could have made the DVD. But it is not enough to show that Cinram could have produced the DVD; presumably, a number of DVD replicators could have produced it. Rather, Plaintiffs are obliged to produce evidence that Cinram did replicate the DVD. Thus, even if all of these facts were true and undisputed, they would not be sufficient to establish a prima facie case of copyright infringement. Notably, for example, Plaintiffs have no explanation for how Cinram obtained a digital copy of their film. The only allegation is that Cinram employed seasonal employees, two of whom had "Indian/Pakistani names." Plainly, this fact cannot support _ the inference that Cinram had access to an original digital version of the film.
Second, even if these seven facts viewed in a vacuum — could support inferences sufficient to establish a prima facie case, those inference cease to be reasonable when viewed alongside the undisputed evidence that Cinram was physically incapable of producing the Asoka DVD.
Finally, the undisputed evidence demonstrates that several of these alleged "facts" are simply false. The second fact — that the dimensions of the discs are similar if not identical — is untrue for the reasons discussed above. The fourth fact — that mastering code "L387" was assigned to Cinram Mexico rather than Cinram Canada — is also false. The code "L387" is used exclusively by Cinram's Canadian plant. Finally, the fifth fact — that Cinram owns an interest in a California authoring plant — is false too. Although Cinram did have an interest in such a plant, it divested that interest in August 2001, prior to the time the Asoka DVD was allegedly replicated.
The only fact that Plaintiffs cite in support of their case that carries any real weight is the presence of the mold code "IFPI 6066" on the Asoka DVD. It is undisputed that Cinram was assigned an IFPI mold code beginning with the digits "60." However, Jiri Vondrak, General Manager of Cinram's Canadian plant, declared that Cinram has never used the code "6066, " and always used — when it used IFPI codes — the code "IFPI 6000". Plaintiffs have no evidence to rebut this fact. In addition, as noted above, the IFPI code on the Asoka DVD was put in a different place on the DVD (mirror band versus clear plastic band) and using a different process (printing versus embossing) than Cinram uses on its DVDs. Finally, the undisputed evidence is that, although Cinram was assigned IFPI codes beginning with "60", there was nothing to prevent anyone else from forging Cinram's code. The IFPI mold code therefore cannot create a triable issue of fact.
An example drives the point home. If a house were robbed and the telltale evidence was a message, written by the robber on the home's walls, that said "Cinram was here, " then Cinram would be an excellent first suspect. But, upon learning that the message was written in someone else's handwriting and that Cinram had an ironclad alibi, the "Cinram was here" sign would not permit even the inference that Cinram might be the robber. At best, it would permit the inference that someone was trying to throw the police off the trail.
Cinram did not replicate the Asoka DVD. It had neither the technological means nor is there evidence that it had access to a digital original, of the film that would have been necessary to do so. An IFPI code that amounts to nothing more than a "Cinram was here" sign, and that is inconsistent with Cinram's own IFPI codes, cannot create an inference that raises a triable issue of fact. Thus, judgment in favor of Cinram is required as a matter of law.
Arclightz, 67 U.S.P.Q.2d at 1158-59 (citations omitted).
Although an adverse judgment as a matter of law does not amount to a per se inference that the claim was objectively unreasonable, the consistent lack of evidentiary support for plaintiffs' claims against Cinram supports a finding that plaintiffs' actions, in fact, were objectively unreasonable. From their speculative Complaint to their extremely optimistic motion for summary judgment, plaintiffs indeed built their case on little more than "supposition and innuendo".
See CK Company, 1995 WL 29488 at *1.
Arclightz, 67 U.S.P.Q.2d at 1156.
Plaintiffs attempt to justify their conduct with the assertion that "Plaintiffs [sic] conduct was objectively reasonable because Plaintiffs relied on their copyrights, and technical analysis and comparison of the "ASOKA" discs to the Cinram discs, and on the information provided by suppliers of equipment to Cinram, and on the information provided (and not provided) by Cinram." However, plaintiffs' loose working definition of reasonability is nothing more than ipse dixit. Nor do plaintiffs' proffered examples of how their conduct was "objectively reasonable" carry the day.
Plaintiffs' Memorandum of Law in Opposition to the Cinram Defendants' Application for Attorneys' Fees and Experises ("Opp. Mem.") at 5.
Plaintiffs claim to have "relied on their copyrights". Presumably, plaintiffs mean to suggest that, as the bona fide owners of the copyright to Asoka, they are entitled to protect their rights against infringers through litigation. Such rights are indeed granted to plaintiffs under the Copyright Act of 1976; however, nothing in that Act gives any copyright owner the right to "enforce" its rights against defendants who never infringed them. Absent evidence proving Cinram's connection to the piracy of Asoka, plaintiffs' ownership of the copyright is without import.
Id.
This tidbit is offered by plaintiffs in an apparent attempt to distance themselves from the "objectively unreasonable" plaintiffs in a case cited by Cinram in its Memorandum. See Video-Cinema Films. Inc. v. Cable New Network, Inc., 66 U.S.P.Q.2d 1473 (S.D.N.Y. 2003) (where plaintiff, after watching televised obituaries for an actor, which included clips from a film featuring the actor, purchased the rights to the original film in an elaborate plot to win damages from defendant television stations who had shown footage of the film in news broadcasts about the actor's death). However, a party's behavior need not be as despicable as that of the Video-Cinema plaintiff to result in an award of attorney's fees under 17 U.S.C. § 505. Plaintiffs' behavior will suffice.
Plaintiffs' attempt to wring objective reasonability out of their "technical analysis and comparison" of the Asoka discs with discs produced by Cinram likewise carries no weight. As this Court has previously noted, plaintiffs' assertions that the dimensions of the discs are "similar if not identical" and that Cinram used the IFPI code "6066" are simply untrue. Furthermore, plaintiffs' reliance on its expert reports is misplaced. The expert hired by plaintiffs to determine that the IFPI number "60" was assigned to Cinram pointedly advised plaintiffs that " [i]ndependent verification of the IFPI Code of 6066 should be conducted to determine if the numbering sequence was used by Cinram". However, as noted in this Court's disposition of plaintiffs' motion for summary judgment, plaintiffs could not produce any evidence to rebut Cinram's position that it never used the code "6066" on any of its DVDs. Plaintiffs failed to follow the advice of their own expert, who quite reasonably counseled prudence. As a result, their professed "reliance" on such advice is meaningless.
Opp. Mem. at 5.
See Arclightz, 67 U.S.P.Q.2d at 1159.
Expert Report of Lydell Wall, Ex. C to Bhouraskar Opp. Decl., at 3.
See Arclightz, 67 U.S.P.Q.2d at 1159.
Plaintiffs also note that they relied on the information provided by "suppliers of equipment to Cinram". This assertion, which refers to information gleaned from companies that supplied DVD molds to Cinram, does provide some circumstantial evidence that Cinram had the capability, at some point, of producing discs similar to the infringing Asoka DVDs. However, the only concrete evidence plaintiffs could produce establishing conclusively that Cinram was capable of producing the infringing discs in 2001, the information Leslie Clarke of Alpha Sweden sent plaintiffs' attorneys, proved untrue, and Clarke reversed himself after plaintiffs filed their motion for summary j udgment.
Opp. Mem. at 5.
See Clarke Decl. ¶ 3.
Finally, plaintiffs blame their conduct on "the information provided (and not provided) by Cinram." This argument seems primarily to rest on plaintiffs' assertion that Cinram was less cooperative than it could have been in producing information about its operating equipment. It is true that litigation need not be abandoned precipitously at the first hint that a defendant possesses evidence controverting the plaintiff's case-in-chief. However, before zealous pursuit of a claim is justified, the claim must itself be objectively reasonable, and plaintiffs' was not. Assuming, arguendo, that Cinram was slow to cooperate, plaintiffs retain responsibility to show that their case is objectively reasonable, and they have not done so.
Opp. Mem. at 5.
See 7/18/03 Declaration of Mark Burton, Associate Executive Producer of Asoka ("Burton Decl."), ¶ 4.
See Friedgood v. Axelrod, 593 F. Supp. 395, 397 (S.D.N.Y. 1984) (plaintiff's attorney "was not required to disbelieve his own client and dismiss the case just because in the afternoon before the evidentiary hearing, defendants' attorney showed him unauthenticated photographs and blueprints casting doubt on the integrity of the representations made by his client to him").
Plaintiffs' protestations notwithstanding, I find that plaintiffs' claims are objectively unreasonable. An award of attorney's fees is consistent with the purposes of the Copyright Act.
b. Amount of Damages
Having determined that attorney's fees for Cinram are warranted in this case, the Court now turns to the amount of such an award. Under the Copyright Act, 17 U.S.C. § 505, the Court must determine a "reasonable" award. The starting point of the attorney's fee calculation is the "lodestar" method, under which fees are determined by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. The fee application must be supported by contemporaneous time records that "specify, for each attorney, the date, the hours expended, and the nature of the work done." In addition to the amount of work, the award should reflect the skill of the attorneys and the results achieved.
See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983);Cohen v. Haven Bd. of Police Comm'rs, 638 F.2d 496, 505 (2d Cir. 1980).
New York State Ass'n for Retarded Children. Inc. v. 711 F.2d 1136, 1148 (2d Cir. 1983).
See N.A.S. Import. Corp. v. Chenson Enterprises, Inc., 968 F.2d 250, 254 (2d Cir. 1992).
I have reviewed the time records for Cinram's attorneys. I have also reviewed the hourly rates charged by these attorneys. I conclude that the hourly rates charged for the attorneys' time are reasonable.
See Fee Invoices for work done by Cooper Dunham LLP on behalf of Cinram ("Fee Invoices"), Ex. 1 to 7/3/03 Declaration of Wendy E. Miller, counsel for Cinram ("Miller Decl.").
Fifteen individuals billed time spent working on this case.See Miller Decl. ¶ 4; Schedule of Fees Billed ("Fee Schedule"), Ex. 2 to Miller Decl. Ivan Kavrukov and Wendy Miller, were the two partners principally involved in this case; Mr. Kavrukov billed $360.00 per hour for 237.1 hours, while Ms. Miller billed $310.00 per hour for 0.5 hours and $320.00 per hour for 158.3 hours. See Miller Decl. ¶ 4. Other attorneys, law clerks and paralegals billed as follows: Norman H. Zivin, $415.00 per hour for 0.4 hours; Christopher C. Dunham, $360.00 per hour for 1.3 hours; Deepro R. Mukerjee, $175.00 per hour for 31.7 hours and $190.00 per hour for 30.9 hours; Jason S. Marin, $230.00 per hour for 0.3 hours; Arian R. Baryalai, $175.00 per hour for 0.5 hours; Aude Gerspacher, $175.00 per hour for 5.2 hours; Naresh Sritharan, $175.00 per hour for 9.2 hours; Cindy Yang, $175.00 per hour for 107.8 hours; Jeanie Joe, $65.00 per hour for 2.1 hours; Christina J. Widenhouse, $80.00 per hour for 0.4 hours and $90.00 per hour for 4.5 hours; Joseph B. Gross, $130.00 per hour for 2.2 hours; Kenneth B. Collins, $80.00 per hour for 0.4 hours; and Yancy Fleetwood, $95.00 per hour for 5.1 hours. See Fee Schedule.
Plaintiffs claim that some of Cinram's itemized attorney's fees are unreasonable and should not be included in a fee award. Plaintiffs' argument on this issue rests mainly on a perceived overstaffing of the case on the part of Cinram's attorneys, and on Cinram's pursuit and abandonment of a motion to dismiss plaintiffs' claims. However, Cinram's itemized fees are neither excessive nor unnecessary such that a fee reduction is appropriate. Rather, Cinram's attorneys acted appropriately in delegating work to less expensive associate counsel and paralegals, and in vigorously pursuing their client's interests. Although Cinram eventually abandoned a pending motion to dismiss, which relied principally on an effort to show that plaintiffs did not own a lawful copyright in Asoka, it acted prudently throughout its pursuit of the matter. Not only did Cinram appropriately seek and receive leave from the Court to file such a motion and conduct additional discovery, but upon learning that such a motion was unlikely to succeed, Cinram informed the Court that it would not pursue the motion. Had plaintiffs, in contemplating whether to file their complaint against Cinram (and to pursue the claim following the close of discovery), exercised such discretion and prudence, the savings in fees for each party, and in time for this Court, would have been considerable. Thus, Cinram is awarded $171, 137.00 in attorney's fees.
See Opp. Mem. at 17-18; Burton Decl. ¶ 5, ¶¶ 44-49.
See Burton Decl. ¶¶ 44-46.
See 5/29/03 Letter to the Court, Ex. 4 to 7/29/03 Supplemental Declaration of Wendy Miller, counsel for Cinram"-("Miller. Supp. Decl.").
B. Costs
The Copyright Act allows the District Court, in its discretion, to award costs. The Court may also rely on Rule 54(d) of the Federal Rules of Civil Procedure, which states that "costs other than attorney's fees shall be allowed as of course to the prevailing party unless the court otherwise directs." The categories of costs allowable under the Copyright Act and Rule 54 are the same. Traditionally, "although not required to do so, courts routinely award costs to the prevailing party in copyright cases." Neither party treats costs in this suit as a separate issue from that of attorney's fees. I have reviewed Cinram's attorneys' expense records, and find them to be reasonable in light of the demands of this litigation. I therefore find plaintiffs liable to Cinram for its expenses in the amount of $10, 714.47.
National Football League v. PrimeTime 24 Joint Venture, 131 F. Supp.2d 458, 484 (S.D.N.Y. 2001). See also United States Media Corp. v. Edde Entm't Corp., No. 94 Civ. 4849, 1998 WL 401532 at *7 (S.D.N.Y. July 17, 1998) ("The weight of authority indicates that the `full costs' referred to in the Copyright Act are nothing more than the costs allowable under 28 U.S.C. § 1920.");In Design v. K-Mart Apparel Corp., No: — 87 Civ. 8397, 1996 WL 4122 at *7 (S.D.N.Y. Jan. 3, 1996); Data Gen. Corp. v. Grumman Sys. Support Corp., 825 F. Supp. 361, 366-67 (D. Mass. 1993) (" 28 U.S.C. § 1920 defines the `costs' that may be awarded under more general authority, such as . . . Fed.R.Civ.P. 54 and, in this case, § 505 of the Copyright Act."), aff'd, 36 F.3d 1147 (1st Cir. 1994).
National Football League, 131 F. Supp.2d at 484 (quoting Antenna Television, A.E. v. Aegean Video, Inc., No. 95 CV-2328, 1996 WL 298252, at *14 (E.D.N.Y. Apr. 23, 1996)).
See generally Pl. Mem. at 5-6, Opp. Mem at 2-3 —
See Fee Invoices; Miller Decl. ¶ 2.
C. Liability of Counsel under Section 1927
1. Legal Standard
Under 28 U.S.C. § 1927, counsel may be found liable for excessive costs. That section provides:
[a]ny attorney or other person admitted to conduct cases in any court of the United States . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorney's fees reasonably incurred because of such conduct.
"Section 1927 authorizes the imposition of sanctions when `there is a clear showing of bad faith on the part of the attorney.'" Bad faith may be inferred "only if actions are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose such as delay." Bad faith conduct may include pursuing "frivolous contentions, " "frivolous motions, " or "intentionally dilatory" conduct. Moreover, if at any point it becomes apparent that counsel will not be able to prove any element essential to his claims, he has "an obligation not to further multiply the proceedings."
Schlaifer Nance Co., Inc. v. Estate of Andy Warhol, 194 F.3d 323, 336 (2d Cir. 1999) (quoting Shafii v. British Airways. PLC, 83 F.3d 566, 571 (2d Cir. 1996); accord Oliveri v. Thompson. 803 F.2d 1265, 1273 (2d Cir. 1986) ("Although our precedents have not always made this bad-faith requirement clear . . . we hold today that an award made under § 1927 must be * supported by a finding of bad faith.").
Salovaara v. Eckert, 222 F.3d 19, 35 (2d Cir. 2000) (quoting Shafii, 83 F.3d at 571); accord Schlaifer Nance. 194 F.3d at 336-38. See also In re 60 East 80th Street Equities. Inc., 218 F.3d 109, 115 (2d Cir. 2000); Hudson Motors Partnership v. Crest Leasing Enters., 845 F. Supp. 969, 979 (E.D.N.Y. 1994) ("a court may infer intent from a total lack of factual or legal basis for a suit") (citing Knorr Brake Corp. v. Harbil, Inc., 738 F.2d 223, 226-27 (7th Cir. 1984)).
Dow Chemical Pacific Ltd, v. Rascator Maritime S.A., 782 F.2d 329, 345 (2d Cir. 1986) (citations omitted).
Browning Debenture Holders' Committee v. DASA Corp., 560 F.2d 1078, 1088 (2d Cir. 1977).
Nemeroff v. Abelson, 620 F.2d 339, 350 (2d Cir. 1980).
Burger-Moss v. Steinman, 127 F.R.D. 452, 454 (S.D.N.Y. 1989).
Section 1927, though, "should be construed `narrowly and with great caution,' so as not to stifle zealous advocacy." Furthermore, "even where the statutory standard is met, § 1927 by its terms (`may be required') confides an award of fees against counsel to the Court's discretion."
Zen Continental Co., Inc. v. Intercargo Insurance Company. 151 F. Supp.2d 250, 265 (S.D.N.Y. 2001) (quotingNone v. C.I.R., 774 F.2d 570, 574 (2d Cir. 1985)).
Id. at 265-66 (emphasis in original).
2. Analysis
Throughout the instant litigation, plaintiffs have proceeded on mere "supposition and innuendo". The factual basis for plaintiffs' claims against Cinram, shaky from the start, has been soundly rebutted by Cinram. However unimpressive their legal acumen, though, plaintiffs' attorneys' conduct does not rise to the level of a "clear showing of bad faith on the part of the attorney.'"
Arclightz. 67 U.S.P.Q.2d at 1156.
See id. . 1157-59.
Schlaifer Nance. 194 F.3d at 336.
Sanctions under section 1927 are usually reserved for cases of egregious attorney misconduct or failure to satisfy basic standards of practice. In this case, plaintiffs' attorneys, Poppe Bhouraskar, LLP, did not act so egregiously as to warrant such sanctions. Fatal weakness of a claim does not carry an inference that the claim was prosecuted "for an improper purpose. "
See, e.g., 60 E. 80th St. Equities, Inc., 218 F.3d at 117 (affirming sanctions against attorney who accused Bankruptcy Court of "judicially sanctioned grand larceny" and "fundamental ignorance"); Warner Bros. Inc. v. Dae Rim Trading, Inc., 877 F.2d 1120, 1127-28 (2d Cir. 1989) (imposing sanctions against attorney who appealed without representing any party to a final decision, who attempted to introduce evidence in appellate brief that was never part of the lower court record, and who cited numerous unreported proceedings for legal support); Patsy's Brands Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 222 (2d Cir. 2003) (approving District Court's grant of sanctions under section 1927 where counsel "acknowledge[d] the improper purpose in stating that one of his motives in making a motion to sanction the Plaintiff was to apply pressure on Plaintiff and its counsel to produce some billing records that Spinnell was endeavoring to obtain after the discovery deadline had passed) (internal quotation omitted); Novak v. National Broadcasting Company, Inc., 779 F. Supp. 1428, 1428 (S.D.N.Y. 1992) (imposing sanctions against pro se plaintiffs who misbehaved throughout trial, referring to defense counsel as "Laurel and Hardy"); ACLI Government Securities, Inc. v. Rhoades, 907 F. Supp. 66, 71 (S.D.N.Y. 1995) (imposing sanctions against attorney who repeatedly defied orders of Court who claimed without citation that an issue was "well-settled by applicable legal principles", and who had "made suspect representations to this Court in other matters before it").
United States Media Corp., 1998 WL 401532 at *28.
Plaintiffs built their case on the physical attributes of the infringing Asoka DVD. The presence of the IFPI code "6066" on the DVD, combined with affirmation by IFPI itself that the number "60" had been assigned to Cinram, created a plausible, if ultimately untrue, factual basis for plaintiffs' claims. Furthermore, plaintiffs' attorneys might justifiably have been confused by the discrepancy between the information provided by Alpha Sweden regarding shipments of molds which could have been used to make the infringing DVD, and Cinram's conflicting assertions. Although such confusion apparently arose out of a mere clerical error on Alpha Sweden's part, the issue remained murky until February 6, 2003, one day after plaintiffs filed their motion for summary judgment.
See Arclightz, 67 U.S.P.Q.2d at 1157-59.
See 4/22/02 Letter from Trevor Albery, Senior Legal Advisor of Anti-Piracy Litigation for the International Federation of the Phonographic Industry ("IFPI") to Megha Bhouraskar, Ex. D to Bhouraskar Opp. Decl.
See Clarke Decl. ¶ 3.
See id.
Cinram focuses on its repeated production of technical specifications and diagrams, and plaintiffs' refusal to drop their suit in light of such evidence, to support its claim that plaintiffs' attorneys "failed to make a reasonable inquiry into the facts and rebuffed Cinram's repeated efforts to bring the facts to light." However, the erroneous statement by Alpha Sweden, had plaintiffs' attorneys accepted it as true, might reasonably have called into question the veracity of Cinram's evidence. Even when faced with compelling evidence controverting their claims, counsel need not "roll over and play dead, withdrawing all opposition" to their adversary's contentions, so long as the positions advocated by counsel are still tenable.
Cinram Mem. at 3, 10; Yang Decl. Exs. 8-11.
Baker v. Urban Outfitters. Inc., 254 F. Supp.2d 346, 360-61 (S.D.N.Y. 2003). Of course, if counsel realize that they will not be able to prove the essential elements of their claim, they have "an obligation not to further multiply the proceedings." See also Burger-Moss, 127 F.R.D. at 454.
Although the claims pressed by plaintiffs' attorneys were objectively very weak, their conduct was not so improper as to warrant an award of sanctions. Plaintiffs and their attorneys relied far too heavily on inference and supposition, but their honest confusion about Cinram's ability to make the infringing DVD merely suggests poor judgment and indifferent research, not bad faith. Accordingly, I decline to hold plaintiffs' attorneys jointly and severally liable for the attorney's fees and costs awarded to Cinram.
V. CONCLUSION
Cinram's motion for attorney's fees and costs is granted. Cinram's motion for sanctions against plaintiffs' attorneys, Poppe Bhouraskar, LLP, is denied. Plaintiffs are liable for $171, 137.00 as a reasonable attorney's fee and $10, 714.47 in costs, for a total of $181, 841.47.