Opinion
01 CV 7406 (JG).
November 9, 2004
RONALD W. MEISTER, ESQ., Cowan, Liebowitz, Latman, P.C., New York, New York, Attorney for Plaintiff.
CHRISTIAN CHADD TAYLOR, ESQ., Kirkland Ellis, LLP, Chicago, Illinois, Attorney for Defendant.
MEMORANDUM AND ORDER
Plaintiff Merkos L'Inyonei Chinuch, Inc. ("Merkos") has moved for an order adjudging defendant Otsar Sifrei Lubavitch, Inc. ("Otsar") in contempt of a preliminary injunction enjoining Otsar from infringing Merkos's copyright. For the reasons set forth below, the motion is granted.
A. Procedural History
1. The Preliminary Injunction
Merkos is a not-for-profit religious corporation in the business of, among other things, printing and distributing religious books. It operates as the publishing arm of the Chabad-Lubavitch Hasidic community. Among its publications is the Siddur Tehillat Hashem, a traditional Hebrew prayer book with an English translation. Translated in 1978 by Rabbi Nissen Mangel and referred to here as the "Merkos Siddur," plaintiff's publication is widely regarded as the authoritative and most respected Siddur in the Lubavitch movement of Hasidic Judaism. It received the approval of Rabbi Menachem Mendel Schneerson, the chief Lubavitcher rebbe until his death in 1994. The Merkos Siddur has gone through more than a dozen printings and has generated sales exceeding $3.5 million.
Otsar is also a publisher of religious books. Its sole shareholder, Jakob Reich, is a discharged former employee of Merkos. In approximately September of 2001, Otsar published its own version of the Siddur Tehillat Hashem ("Otsar's First Siddur"). Its English translation of the Hebrew prayers was virtually identical to Merkos's translation. As a result, Merkos filed the complaint in this case on November 5, 2001, alleging, inter alia, copyright infringement.
At Merkos's request, on November 9, 2001, then-District Judge Reena Raggi issued a temporary restraining order enjoining Otsar from infringing Merkos's copyright in the Merkos Siddur. The terms of the restraint were as follows: Otsar, its principals and agents were prohibited from "directly or indirectly infringing plaintiff's copyright in its Hebrew-and-English-language prayer book entitled `Siddur Tehillat Hashem' and from copying, reproducing, publishing, selling, distributing, marketing, promoting, advertising, importing or otherwise disposing of any infringing volumes of Siddur Tehillat Hashem in any manner, or permitting others to perform such acts." (Order of November 9, 2001, at 1-2.) In an oral decision on March 25, 2002, made after an evidentiary hearing, Judge Raggi converted the restraint into a preliminary injunction.
Otsar appealed. It contended on appeal that the Merkos Siddur was not copyrightable, that Merkos did not hold the copyright even if it was, that Otsar's First Siddur did not infringe because it made only "fair use" of the Mangel translation and because of the "idea-expression merger" doctrine, and that federal courts do not have jurisdiction to resolve this religious dispute between Merkos and Otsar. On November 25, 2002, the Second Circuit affirmed. See Merkos L'Inyonei Chinuch, Inc. v. Otsar Sifrei Lubavitch, Inc., 312 F.3d 94 (2d Cir. 2002).
2. The Initiation of These Contempt Proceedings
Beginning on November 19, 2003, Merkos held its annual international five-day conference of Lubavitch representatives, which was attended by more than 1,500 such representatives from around the world. Among other things, the annual conference serves as an opportunity for its attendees to purchase prayer books for themselves and their congregations.
On November 17, 2003, Merkos learned that Otsar had published a new edition of the Siddur (referred to here as "Otsar's Second Siddur" or "Second Siddur"), and was intending to solicit orders for it at the conference. Because, according to Merkos, Otsar's Second Siddur was yet another infringing work, Merkos moved on November 19, 2003, for an order directing Otsar to show cause why it should not be adjudicated in contempt of the preliminary injunction and why it should not be barred from advertising or selling its new edition.
After an emergency hearing two days later, on November 21, 2003, I found a palpable risk of irreparable harm to Merkos. Merkos had demonstrated, at least preliminarily, that the Second Otsar Siddur contained only de minimis changes to the text of the Merkos Siddur. For its part, Otsar called as a witness Rabbi Eli Cohen, who testified that the Second Siddur was created "at a really very, very intense speed" after the publication and sale of Otsar's First Siddur was enjoined. (Tr. of November 21, 2003, at 28.) However, whereas Rabbi Cohen was billed by Otsar's counsel as the person "who did the actual translation" to produce the challenged Second Siddur ( id. at 6), he testified otherwise. The principal translator, according to Rabbi Cohen, was Rabbi Mende Spalter, who did not testify at the November 21, 2003 hearing.
At the conclusion of that hearing, I concluded that Otsar had displayed, at the very least, an astonishing absence of diligence in its effort to comply with the injunction, having proceeded to publication of a new text containing only minor differences as compared to the infringing text. I observed that Otsar was already constrained by the preliminary injunction, and thus the restraining order sought by Merkos (directed specifically to the new edition) was arguably superfluous. Because the November 21 hearing had been expedited in light of the imminent conference of Lubavitch representatives from around the world, the case was adjourned for ten days, to December 1, 2003, for a more plenary hearing on Merkos's application for an adjudication of contempt and for a preliminary injunction directed specifically to the new text. In the meantime, I enjoined Otsar from selling its Second Siddur.
The hearing was adjourned because Otsar's counsel successfully sought to be relieved, and successor counsel did not file a notice of appearance until January 29, 2004. On that date, new counsel for Otsar asked for an additional, lengthy, adjournment to prepare for the hearing. Counsel also sought an opportunity to file a brief in opposition to the motion. Both requests were granted.
Although the docket sheet reflects the Notice of Appearance being filed on January 30, 2004, it was actually filed in Court on January 29, 2004. ( See Tr. of January 29, 2004, at 2.)
Otsar's new counsel's pre-hearing submissions sought to reframe the issues to be addressed at the hearing. Whereas the purposes of the hearing were to determine (1) whether Otsar had committed contempt by publishing the Second Otsar Siddur; and (2) whether the existing preliminary injunction ought to be extended to apply to the Second Siddur, Otsar's prehearing memoranda sought to challenge the validity of the preliminary injunction it was charged with violating. Specifically, Otsar's March 4, 2004 "Memorandum in Opposition to Merkos's Motion (sic) to Show Cause" ("Otsar Memo."), sought to convert the contempt proceeding into "a new case involving a new translation to which Judge Raggi's preliminary injunction cannot apply." (Otsar Memo. at 3.) In other words, under the guise of addressing the question whether the preliminary injunction ought to be extended to explicitly prohibit publication of Otsar's Second Siddur, Otsar sought to challenge the validity of the existing injunction. ( Id. at 2) (arguing that the contempt motion requires exploration of "several substantial new issues of law and fact not considered by the Court when it entered the injunction.")
For reasons set forth on the record at the outset of the evidentiary hearing, which was held on April 21, 2004, I rejected that effort, and limited the hearing to the question whether Merkos could establish that Otsar's publication of its Second Siddur constituted a contempt of the preliminary injunction. ( See Tr. of April 21, 2004 ("Hearing Tr."), at 2-3.)
These findings, as well as any factual findings stated elsewhere in this memorandum and order, are based on the entire record in the case, and particularly on the testimony and other evidence adduced in connection with the hearings on November 21, 2003, and April 21, 2004.
After Otsar was preliminarily enjoined from distributing its First Siddur, Reich set out to create another version even as he appealed the preliminary injunction. He used as a translator Rabbi Spalter, a translator of Judaic works for approximately eight years who had worked principally for Otsar. Reich asked Spalter to prepare a new translation of the Siddur, telling him about the injunction.
The Second Otsar Siddur, which makes the audacious claim that the first was "well received," once again infringes Merkos's copyright. It copies the Merkos Siddur extensively, with only minor changes, such as global substitutions of "G-D" for "L-ord," "Avraham" for "Abraham" and "Yitzhak" for "Isaac." Numerous narrative footnotes are simply copied verbatim. Words left untranslated in the copyrighted Siddur remain untranslated in Otsar's second infringing version. Bracketed words and phrases are copied exactly. And the layout and page numbering of the protected work has been copied to such an extent that it is almost impossible to distinguish between the two versions simply by examining a page of text. ( See generally Reply Decl. of Ronald Meister of March 16, 2004 ("Meister Reply Decl."))
Second Siddur, at xi. Otsar's Second Siddur is reproduced as Exhibit L to the Declaration of James E. Marina In Support of Otsar's Opposition to Merkos' Motion for Preliminary Injunction and for Contempt.
Rabbi Spalter's testimony about the preparation of the Second Otsar Siddur served only to confirm that Otsar violated the preliminary injunction. Spalter testified that he first prepared a "sample of a few pages" for Reich, using the Merkos Siddur "as a reference." (Hearing Tr. at 52.) According to Spalter, Reich rejected the sample as not "good enough," so Spalter had to start over. ( Id. at 51.) Reich allegedly told Spalter to "use Birnbaum's Siddur as a reference where I needed it." ( Id. at 18, 51-52.) That is when, according to Spalter, "Birnbaum became center stage to" him. ( Id. at 51.)
The Birnbaum Siddur is a 1949 translation of the Ashekenaz Siddur by Philip Birnbaum.
Spalter repeatedly asserted that he created a "new translation," looking to Birnbaum only after Spalter himself had translated a particular phrase of the Hebrew prayers into English. ( Id. at 20, 60, 61.) Then, according to Spalter, he would "[see] what Birnbaum had to say about" that phrase, and then perhaps consult other similar prayer book translations, the Metsudah Weekday Siddur and the Complete Artscroll Siddur. ( Id. at 61.) Spalter also testified that he used the Alclay Hebrew-English Dictionary, the American Heritage Dictionary and Roget's Thesaurus, as well as the computer program Microsoft Bookshelf. ( Id. at 22.) Finally, according to Spalter, the Merkos Siddur played only a limited role in the new translation. Spalter would consult it only after he translated the prayers, for two purposes: (1) to be sure his own translation was not the same as the Merkos Siddur's translation; and (2) to see if the Merkos Siddur conveyed a different "intent," in which case Spalter would rewrite his own translation to express the Merkos intent in other words. ( Id. at 24.) This latter event occurred, Spalter testified, only five percent of the time. ( Id. at 25.)
If the text was the same as the Merkos Siddur, Spalter claimed, he would then check to see if his identical translation had the "backup" of other translations that were also identical to the Merkos Siddur. (Hearing Tr. at 24.)
I find that Rabbi Spalter testified falsely about his methodology. The evidence before me permits only one reasonable inference — the Second Siddur was not the result of a "new translation" that used Birnbaum as a guide, but a cynical, unsuccessful effort to mark up the Merkos Siddur with enough superficial changes to circumvent the injunction.
First, numerous narrative footnotes — not source citations, as to which Merkos claims no protection, but text — are simply copied verbatim in Otsar's Second Siddur. ( See Meister Reply Decl., Ex. A.) None of those notes even appears in Birnbaum's Siddur. Otsar's facile argument that Merkos claims no copyright protection for the narrative material in those footnotes ( see Hearing Tr. at 81-88) is meritless.
Second, Spalter's testimony cannot be squared with the results of his work. Throughout the Second Otsar Siddur, his "new translation" is strikingly similar to the Merkos Siddur. Even accounting for the fact that literal translation of Hebrew text will inevitably produce some similarities, Spalter's testimony that he and Mangel (the translator of the Merkos Siddur) happened to alight by coincidence, on such strikingly similar translations defies credulity. Indeed, when pressed, even Spalter abandoned such a claim, and his backfilling explanation helped to destroy his credibility, as described below.
Specifically, Spalter was questioned about a representative passage from the Second Otsar Siddur. The version of the passage, together with the version of the same passage from Merkos Siddur is set forth below:Second Otsar Siddur Merkos Siddur Kruvim Ophanim, kruvim ophanim
They then call to one another in unison, without delay; Then they call to one another in unison without delay: Three times declaring holy, His glory fills the entire earth. Thrice holy, His glory fills the whole earth! Like a mighty sound resembling the roar of surging waters, Like a mighty sound, like the roar of surging waters, face the ascending in thundering noise The facing the ascend in a thundering noise To catch a fleeting glimpse. Swift as an arrow shot from a bow, To catch a fleeting glimpse. Swift as an arrow shot from a bow, To every place they are dispatched, they hasten zealously. To every place they are sent, they hasten with zeal. They utter in every language: Blessed be His glory In every tongue they utter: Blessed be His glory From the place of His abode — which is indeed everywhere. From the place of His abode — which is everywhere! The heavenly hosts all thunder praise in awe: All the heavenly hosts thunder praise in awe: His kingdom's renown is declared in every generation. The renown of His kingship is declared from generation to generation. (Meister Reply Decl., Ex. E.) Like virtually every passage from the Second Otsar Siddur, this one was obviously copied from the Merkos Siddur, with some minor cosmetic changes. Comparison with the Birnbaum version refutes Spalter's testimony that he used Birnbaum as his principal guide.When questioned about the foregoing passage, Spalter abandoned the position that the striking similarities between his allegedly new translation and the Merkos translation were coincidence, that is, the result of two scholars (Mangel and Spalter) performing literal translations of identical Hebrew text. Perhaps recognizing that such a position strains credulity, Spalter offered the following explanation: after making his own translation, he would compare it to the Merkos Siddur and, if he felt they were saying the same thing, he would edit his own translation to make it more like the Merkos Siddur. ( See Hearing Tr. at 65.) Thus, even though Otsar and Spalter claim that the point of the new translation was not to copy the Merkos Siddur ( id. at 18-19), Spalter explained the obvious similarities between the text of Merkos Siddur and that of the Second Otsar Siddur with the implausible (and somewhat incomprehensible) claim that he independently created a new (presumably different) translation, only to change it to look like the very same text that Otsar was forbidden from copying.
Though he was present at the hearing, Reich chose not to testify. The inference I draw from the testimony and the exhibits received at the two evidentiary hearings is that Reich, in essence, asked Spalter to make some changes to the original Otsar Siddur, which was virtually an exact copy of the Merkos Siddur, in the hope that those changes might afford him a defense when Merkos sought to bar publication of Otsar's Second Siddur.
Otsar's unpersuasive denial that it essentially copied the Merkos Siddur is supplemented by a newly-minted claim that the Merkos Siddur is itself essentially the copy of the Birnbaum Siddur. The legal significance of this allegation is not clear to me, as a challenge to the originality of the copyrighted work scarcely constitutes a defense to violating a court order prohibiting the copying of the work. In any event, the claim is entirely without merit. Otsar itself, in connection with promoting its offending work, has lauded the Merkos Siddur translated by Mangel as the trailblazing translation of the Siddur. Indeed, in the more than 25 years since the Mangel translation was completed, it has received nothing but praise for its originality and brilliance. As Otsar's own witness, Rabbi Spalter, testified, Mangel was a "pioneer" in translating Lubavitch works, including the Siddur, and his translations are held in the highest esteem in the Lubavitch community. (Hearing Tr. at 41.)
One other aspect of Spalter's testimony deserves mention. Despite his efforts, Spalter did not receive credit as the translator in the Publisher's Foreword to the Second Otsar Siddur. He was lauded for lesser tasks he performed in connection with the book, including his translation of Torah sections, but not for the translation of the Siddur's text. He testified at the hearing that he requested that he not receive such credit, as he was concerned about the "controversy that was involved" in the work. (Hearing Tr. at 79.) Spalter understood that Otsar's Second Siddur amounts to nothing more than a copy of the Merkos Siddur in flimsy disguise, and he took steps to disavow responsibility for it. The Second Siddur's innumerable similarities to the Mangel translation, that is, to the Merkos Siddur, compel the conclusion, and I find, that Rabbi Spalter started with the Merkos Siddur and made some minor changes in a transparent effort to avoid a finding that the injunction was violated. The starting point for the Second Otsar Siddur was indeed the Merkos Siddur, and efforts were made to change enough of it so that Otsar could raise some sort of defense to this very motion, which Reich no doubt anticipated.
C. Legal Conclusions
1. Liability
To establish contempt, a "movant must establish that (1) the order the contemnor failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable manner." King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995).
The preliminary injunction Otsar is accused of violating is clear and unambiguous. As set forth above, it prohibits Otsar from "directly or indirectly infringing plaintiff's copyright in its Hebrew-and-English-language prayer book entitled `Siddur Tehillat Hashem' and from copying, reproducing, publishing, selling, distributing, marketing, promoting, advertising, importing or otherwise disposing of any infringing volumes of Siddur Tehillat Hashem in any manner, or permitting others to perform such acts."
Otsar's violation of the preliminary injunction has been proven clearly and convincingly. The parties disagree about the degree of similarity necessary to a finding of infringement. Otsar contends that Merkos must prove the Second Otsar Siddur to be "substantially similar," which, in the context of translations of a work in the public domain, "means that the works must have a very high degree of similarity." (Otsar's Post-Hr'g Mem. at 1.) Any lesser standard, Otsar contends, "would give Merkos too expansive of a monopoly over English translations of" the Siddur. ( Id.) Merkos argues that a quantum of copying that is "more than de minimis" is sufficient. (Pl.'s Post-Hr'g Mem. at 5.) I believe plaintiff has the better of this argument. The defendant's contention fails to accommodate the fact that the process of translation is not the equivalent of converting temperatures from Fahrenheit into Celsius. As Judge Raggi commented earlier in this case, "[t]he translation of prayers . . . involves partly the precision of science but partly the sensitivity and spirit of art. Behind the words that are found in the Hebrew and the words that are used in the English are shades of meaning and subtlety that cannot be labeled as functional." (Tr. of March 25, 2002, at 12.)
My resolution of the parties' dispute over the applicable standard is unnecessary. As discussed above, I find that Otsar's Second Siddur is substantially, indeed overwhelmingly, similar to the Merkos Siddur.
Finally, Otsar has not diligently attempted to comply with the injunction. The sole shareholder of Otsar is Jakob Reich. He is an experienced and sophisticated publisher. At his deposition in October of 2002, he flatly refused to answer an unobjectionable question about whether Otsar was planning a Second Siddur. Barely a month later, he suddenly unveiled the already-published Second Siddur at the Merkos-sponsored conference of Lubavitch representatives, obviously hoping to gain advantage from the last-minute revelation of Otsar's plan to market another Siddur.
Reich's silence at the hearing on this contempt motion is difficult to fathom. Though the burden is Merkos's, it has presented evidence that Reich (1) sought to hide the fact that Otsar was planning a new Siddur; (2) commissioned others to prepare the Second Siddur, which plainly was copied, with few revisions, from the Merkos Siddur; (3) hid the new publication from his own attorney in this case; and (4) had the new volume published without expending any effort to ensure that it did not violate the preliminary injunction. In those circumstances, Reich's decision not to testify fortifies my finding and conclusion that he sought only to circumvent the injunction, not to comply with it. Indeed, I find that Otsar's contempt was willful.
2. The Appropriate Sanctions
Monetary sanctions for civil contempt are awarded to compensate a plaintiff for injury caused by past noncompliance or to prevent continued disobedience. See Manhattan Indus., Inc. v. Sweater Bee By Banff, Ltd., 885 F.2d 1, 5 (2d Cir. 1989). Although sanctions for contempt must be remedial and compensatory, rather than punitive, id., they are not limited to the recovery of the contemnor's ill-gotten gains and the award of attorneys' fees — a fine may be imposed "to force a contemnor to conform its conduct to a court's order." Chere Amie, Inc. v. Windstar Apparel, Corp., 175 F. Supp.2d 562, 567 (S.D.N.Y. 2001).
Here, there is no evidence that Otsar received any revenues from its offending publication of the Second Siddur. Accordingly, the sanction for Otsar's contempt shall not include compensation to Merkos for Otsar's noncompliance, although Merkos may request permission to prove such compensatory damages at the upcoming trial of its claim for a permanent injunction.
I conclude that a fine is an appropriate means of coercing Otsar's compliance with the preliminary injunction. The conduct leading up to the publication of the Second Siddur leaves me with the firm belief that the in terrorem effect of the injunction itself, that is, the prospect of contempt proceedings upon noncompliance, is an insufficient incentive for Otsar to obey the preliminary injunction. Accordingly, Otsar is directed to pay a $10,000 fine to the Clerk of the Court by no later than December 3, 2004. Any future violation of the preliminary injunction (or of a permanent injunction, should one be entered) will likely produce higher penalties in an enhanced effort to further coerce compliance.
Otsar's violation of the preliminary injunction was willful. It made no good faith effort to comply with the Court's order. Accordingly, attorneys' fees are properly awarded, and I hereby direct Otsar to pay Merkos's attorneys' fees in prosecuting the contempt motion. The parties are directed to confer on the amount of those fees and to let the Court know by December 3, 2004, if an agreement can be reached on that issue (without prejudice to Otsar's right to appeal the award itself). In the absence of agreement, the issue will be resolved outside the presence of the jury when the case is called for trial on the question whether the injunction ought to be made permanent.
So Ordered.