Opinion
Civil Action 21 Civ. 11209 (JLR) (SLC)
10-17-2023
LEONG FRANCISCO PAULO, Plaintiff, v. AGENCE FRANCE PRESSE; GETTY IMAGES U.S., INC.; GETTY IMAGES INC.; JOHN DOES 1-100; AND XYZ CORPORATIONS 1-100, Defendants.
TO THE HONORABLE JENNIFER L. ROCHON, UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
SARAH L. CAVE, UNITED STATES MAGISTRATE JUDGE.
I. INTRODUCTION
Plaintiff Leong Francisco Paulo (“Leong”), a Portuguese photojournalist, brought this action against Agence France Presse (“AFP”), a French news agency, Getty Images Inc., a Delaware corporation, and Getty Images (U.S.), Inc. (“Getty US”), a New York corporation (together, the “Getty Defendants,” and, with AFP, “Defendants”), alleging that Defendants' use of thousands of his photographs constituted copyright infringement and violations of copyright management information (“CMI”) under the Copyright Act, 17 U.S.C §§ 501, 1202, et seq. (the “Act”). (ECF No. 52 ¶¶ 1, 6-8, 232-60). Adopting the undersigned's report and recommendation, the Honorable Jennifer L. Rochon granted Defendants' motion to dismiss on forum non conveniens and personal jurisdiction grounds and conditionally dismissed the action. See Paulo v. Agence France-Presse, No. 21 Civ. 11209 (JLR) (SLC), 2023 WL 2873257 (S.D.N.Y. Jan. 19, 2023) (“Paulo I”), adopted by, 2023 WL 2707201 (S.D.N.Y. Mar. 30, 2023) (“Paulo II”). (See ECF Nos. 90; 96). Defendants now move for an award of attorneys' fees and costs under Section 505 of the Act, 17 U.S.C. § 505 (“Section 505”), 28 U.S.C. § 1919 (“Section 1919”), and Federal Rule of Civil Procedure 41(d)(1). (ECF No. 98 (the “Motion”)).
The Court employs Leong's preferred name in the First Amended Complaint (the “FAC”). (ECF No. 52 at 1; id. ¶ 27).
Defendants also request that the Court require Leong to post a bond pending appeal, which he has now withdrawn, thus mooting that request. (ECF Nos. 99 at 28-30; 110).
For the reasons set forth below, I respectfully recommend that the Motion be DENIED.
II. BACKGROUND
A. Factual Background
The Court incorporates by reference the factual background set forth in Paulo I and Paulo II, and employs the same defined terms set forth in those decisions. See Paulo II, 2023 WL 2707201, at *1-4; Paulo I, 2023 WL 2873257, at *1-9.
Unless otherwise indicated, all internal citations and quotation marks are omitted from case citations in this Report and Recommendation.
B. Procedural History
On December 30, 2021, Leong filed the original complaint (the “Complaint”), which sought a declaratory judgment against AFP as to the copyright ownership of the Leong Photographs pursuant to the Act and Portuguese law, asserted copyright infringement and CMI claims against all Defendants, and asserted contributory and vicarious copyright infringement and CMI claims against AFP only. (ECF No. 1 ¶¶ 87-152). On March 14, 2022, Defendants filed a motion to stay this action, citing the pendency of the Second Portuguese Proceeding, which was then scheduled for trial in April 2022. (ECF Nos. 28; 29 at 4, 9 (the “Stay Motion”)). Following a conference with the parties on June 14, 2022, the Court permitted Leong to file an amended complaint, set a briefing schedule for Defendants' motion to dismiss, and denied the Stay Motion as moot. (ECF No. 45). On July 15, 2022, Leong filed the FAC. (ECF No. 52).
On January 19, 2023, the Court issued Paulo I, recommending that Judge Rochon grant Defendants' motion to dismiss (ECF No. 53) and conditionally dismiss the FAC pursuant to the doctrine of forum non conveniens, and that the claims against AFP be dismissed for lack of personal jurisdiction. See Paulo I, 2023 WL 2873257, at *1, 30. On March 30, 2023, Judge Rochon adopted that recommendation in full, granted Defendants' motion to dismiss, and dismissed the action pursuant to the doctrine of forum non conveniens, conditioned on Defendants' agreement to:
(1) accept service in Portugal; (2) submit to the jurisdiction of the Lisbon District Court's Labour Division and/or Intellectual Property Division; (3) waive any statute of limitations defense that may have arisen since the filing of this action; (4) toll the statute of limitations as to Leong's claims under the Act and permit Leong to move to reopen this action and reassert those claims in the event that a Portuguese court were to decline to hear such claims; and (5) agree that Leong is not precluded from arguing that Clause 7 created a license that he rescinded.Paulo II, 2023 WL 2707201, at *14. Judge Rochon also dismissed the action “as to AFP for lack of personal jurisdiction.” Id. Although Leong filed a notice of appeal, the Second Circuit subsequently granted his motion to withdraw the appeal. (ECF Nos. 104; 110).
On April 14, 2023, Defendants filed the Motion (ECF Nos. 98-101); on May 8, 2023, Leong filed an opposition (ECF Nos. 105-108); and, on May 15, 2023, Defendants filed a reply. (ECF No. 109).
III. DISCUSSION
A. Legal Standards
1. Section 505
Pursuant to Section 505 of the Act, a district court may in its discretion “award a reasonable attorney's fee to the prevailing party.” 17 U.S.C. § 505. The Supreme Court has interpreted the term “prevailing party . . . in a consistent manner” across “various fee-shifting statutes.” CRST Van Expedited, Inc. v. E.E.O.C., 578 U.S. 419, 422 (2016) (citing Buckhannon Bd. & Care Home, Inc. v. W.Va. Dep't of Health & Hum. Res., 532 U.S. 598, 602-03 & n.4 (2001)). For a party to be “prevailing” under this uniform standard, there must have been a “judicially sanctioned change in the legal relationship of the parties.” Buckhannon, 532 U.S at 605; see Dattner v. Conagra Foods, Inc., 458 F.3d 98, 101 (2d Cir. 2006) (per curiam) (recognizing Buckhannon's prevailing party standard is generally applicable to federal fee-shifting statutes and rules). Because “[t]here is no indication that Congress intended that defendants should be eligible to recover attorney's fees only when courts dispose of claims on the merits,” however, the Supreme Court has also recognized that attorneys' fees may be awarded “when claims were dismissed for nonmerits reasons” if the plaintiff's claim was “frivolous, unreasonable, or groundless.” CRST, 578 U.S. at 432-33. The standards for interpreting the phrase “are generally applicable in all cases in which Congress has authorized an award of fees to a prevailing party[,]” Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983), including Section 505. See Manhattan Rev. LLC v. Yun, 919 F.3d 149, 152 (2d Cir. 2019) (applying standard for interpreting “prevailing party” to application for fees under Section 505).
As explained in Austin v. Saul, aspects of Hensley that are not implicated here have been abrogated by the Supreme Court's decision in Texas State Tchrs. Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782 (1989) and superseded by the Prison Litigation Reform Act. No. 19 Civ. 604 (JM (WVG), 2021 WL 5494686, at *2 n.1 (S.D. Cal. Jan. 14, 2021) (noting that Hensley was “abrogated on other grounds by Texas, ” and that “[s]ome courts have also noted that Hensley has been superseded, in part, by the Prison Litigation Reform Act. As this case does not involve prisoner litigation, this statutory change is irrelevant to the current analysis.”).
“Fee awards” under Section 505 “are not ‘automatic' or given ‘as a matter of course.'” Beastie Boys v. Monster Energy Co., 112 F.Supp.3d 31, 39-40 (S.D.N.Y. 2015) (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994)). Rather, an award under Section 505 “should encourage the types of lawsuits that promote” the Act's aims of “encouraging and rewarding authors' creations while also enabling others to build on that work.” John Wiley & Sons, Inc. v. Kirtsaeng, No. 08 Civ. 7834 (DLC), 2016 WL 7392210, at *2 (S.D.N.Y. Dec. 21, 2016) (quoting Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 205 (2016) (“Kirtsaeng II”).
In the same case in 2013, the Supreme Court held that “the ‘first sale' doctrine applies to copies of a copyrighted work lawfully made abroad,” reversing a judgment in favor of the plaintiff and remanding the case. Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519, 525-26 (2013). On remand, the district court denied the defendant's motion for attorneys' fees, which the Second Circuit affirmed, 654 F.3d 210 (2d Cir. 2011), leading to the ruling in Kirtsaeng II and another remand for further consideration of the prevailing party's fee application. 579 U.S. at 200, 210.
In Kirtsaeng II, the Supreme Court provided “additional guidance” in the form of “governing standards [and] principles” for district courts to apply to fee applications under Section 505. 579 U.S. at 203. The Court explained that district courts should give “substantial weight . . . to the objective (un)reasonableness of a losing party's litigating position,” but noted that this factor “can be only an important [one] in assessing fee applications-not the controlling one.” Id. at 203, 205, 207-08. Thus, a finding that the losing party's position was reasonable should not “raise[] a presumption against granting fees” or become a dispositive factor in the analysis. Id. at 209. Rather, the district court must take into account “all other relevant factors,” id. at 210, including “the frivolousness of the non-prevailing party's claims or defenses,” “the party's motivation,” and the goals of “compensation and deterrence.” Bryant v. Media Right Prods., Inc., 603 F.3d 135, 144 (2d Cir. 2010) (citing Fogerty, 510 U.S. at 534 n.19); see Boesen v. United Sports Publ., Ltd., No. 21-1029-cv, 2022 WL 457281, at *1 (2d Cir. 2022) (summary order) (listing Fogerty factors). The court may also consider “conduct other than the legal and factual positions that caused the non-prevailing party ultimately to fail.” TCA Television Corp. v. McCollum, No. 15 Civ. 4325 (GBD) (JCF), 2017 WL 2418751, at *9 (S.D.N.Y. June 5, 2017), adopted by, 2018 WL 2932724 (S.D.N.Y. June 12, 2018).
2. Section 1919
Although “[t]he prevailing rule in the federal courts is that dismissal of a case for want of jurisdiction deprives a court of the power to assess costs,” Congress has carved out an exception to this rule in 28 U.S.C. § 1919, which provides that “[w]henever any action or suit is dismissed in any district court . . . for want of jurisdiction, such court may order the payment of just costs.” Correspondent Servs. Corp. v. JVW Inv., Ltd., No. 99 Civ. 8934 (RWS), 2004 WL 2181087, at *14 (S.D.N.Y. Sept. 29, 2004) (quoting 28 U.S.C. § 1919), aff'd sub nom. Correspondent Servs. Corp. v. First Eq. Corp. of Fla., 442 F.3d 767 (2d Cir. 2006); see Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990) (noting that Section 1919 permits district courts to “award costs after an action is dismissed for want of jurisdiction”), superseded on other grounds by Fed. R. Civ. P. 11, as amended; Bridgewater Operating Corp. v. Feldstein, 346 F.3d 27, 30 n.4 (2d Cir. 2003) (per curiam) (same). Determining whether “just costs” should be awarded under Section 1919 is a matter committed to the discretion of the district court. JVW Inv., 2004 WL 2181087, at *15. Courts have generally refrained from including attorneys' fees in an award of costs under Section 1919 absent “extraordinary circumstances” such as evidence that the plaintiff engaged in “fraud or trickery [] upon [the] Court” or that the defendants “suffered financial burden or hardship” in defending against the action. Barron's Educ. Series, Inc. v. Hiltzik, 987 F.Supp. 224, 226 (E.D.N.Y. 1997) (declining to award attorneys' fees under Section 1919); see JVW Inv., 2004 WL 218087, at *15 (noting that “[t]hose courts to have considered the question have held that attorney's fees may not be included in the ‘just costs' awarded under Section 1919 absent a showing of extraordinary circumstances”).
Federal Rule of Civil Procedure 41(d)(1) provides that “[i]f 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: (1) may order the plaintiff to pay all or part of the costs of that previous action.” For an award under Rule 41(d)(1), the second action must be “predicated on the same facts,” even if the “two actions involve different theories of recovery or distinct forms of relief.” Cotiviti, Inc. v. Deagle, 501 F.Supp.3d 243, 255 (S.D.N.Y. 2020) (quoting Horowitz v. S. Emerson Assocs. LLC, 888 F.3d 13, 23-24 (2d Cir. 2018)). A defendant is not required to “show bad faith on the part of the plaintiff in order to recover costs.” Loubier v. Modern Acoustics, Inc., 178 F.R.D. 17, 22 (D. Conn. 1998). The purpose of this rule is “to serve as a deterrent to forum shopping and vexatious litigation.” Horowitz, 888 F.3d at 25. The Second Circuit has noted that, among “[t]he targets of deterrence under the rule” are “litigants . . . that 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 26. District courts have discretion “to award attorneys' fees as part of costs” under Rule 41(d)(1). Id. at 25. Awards under Rule 41(d)(1) are often limited to “compensation for work that cannot be used in a second . . . action.” Cotiviti, 501 F.Supp.3d at 255; see Pelczar v. Pelczar, No. 16 Civ. 55 (CBA) (LB), 2017 WL 3105855, at *2 (E.D.N.Y. July 20, 2017) (noting that courts within the Second Circuit have interpreted Rule 41(d)(1) to limit award to compensation to work that cannot be used in later action); Adams v. N.Y. State Educ. Dep't, 630 F.Supp.2d 333, 346 (S.D.N.Y. 2009) (limiting award of fees and costs under Rule 41(d)(1) to work that could not be re-used in later action).
B. Application
1. Defendants are not entitled to attorneys' fees and costs under Section 505.
a. Prevailing parties
To support their argument that they are prevailing parties, Defendants invoke the language of the Supreme Court in CRST that a “defendant may prevail even if the court's final judgment rejects the plaintiff's claim for a nonmerits reason.” (ECF No. 99 at 11 (quoting CRST, 578 U.S. at 431). From CRST they jump to decisions holding that defendants dismissed for lack of personal jurisdiction were prevailing parties within the meaning of Section 505. (Id. at 11-12 (citing Megna v. Biocomp Labs. Inc., 225 F.Supp.3d 222, 224-25 (S.D.N.Y. 2016) and GC2 inc. v. Int'l Game Tech., 391 F.Supp.3d 828, 858-59 (N.D. Ill. 2019)). Leong responds that “the legal relationship between the parties has not been materially altered, and the parties will continue to litigate all substantive issues of [his] claims and any defenses” in the Portuguese court, which the Court determined was “the more convenient forum.” (ECF No. 105 at 14). Because Paulo II dismissed the action with conditions and “contemplate[es] further action in Portugal and potentially before this Court,” he contends that the dismissal “cannot be considered a final order that would support a determination that Defendants are the prevailing parties.” (Id. at 15).
As detailed above, Paulo II conditionally dismissed this action on forum non conveniens grounds, instructing the parties to return to a Portuguese court in the first instance, and, in the alternative, dismissed AFP for lack of personal jurisdiction. See Paulo II, 2023 WL 2707201, at *14. The Second Circuit previously explained that a dismissal on the ground of forum non conveniens “does not” constitute a “judicially sanctioned change in the legal relationship of the parties” within the meaning of Buckhannon. Dattner, 458 F.3d at 102-03 (applying Buckhannon standard for interpreting “prevailing party”). Rather, such a dismissal “is a non-merits based decision akin to dismissal for lack of personal jurisdiction.” Id. at 102; see Am. Dredging Co. v. Miller, 510 U.S. 443, 454 n.4 (1994) (noting that “forum non conveniens is not a substantive right of the parties, but a procedural rule of the forum”). “A dismissal on the ground of forum non conveniens does not, after all, immunize a defendant from the risk of further litigation on the merits of a plaintiff's claims; it merely provides that another forum ‘would be the most convenient and best serve the ends of justice.'” Dattner, 458 F.3d at 103 (quoting Iragorri v. Int'l Elevator, Inc., 243 F.3d 678, 680 (2d Cir. 2001) (per curiam)).
This precedent compels the Court to conclude that Defendants are not prevailing parties in this case. As indicated by the five conditions Judge Rochon imposed on dismissal of this action, Leong is not only “free to pursue his claims against the [D]efendants in” Portugal, Dattner, 458 F.3d at 103, he retains the ability to return to this forum if the Portuguese courts are unable or unwilling to adjudicate his claims under the Act. See Paulo II, 2023 WL 2707201, at *14. “[B]ecause it remains to be seen which party will, in fact, prevail on the merits, [D]efendants have not yet achieved a judicially sanctioned change in the legal relationship of the parties so as to be considered ‘prevailing' under” Section 505. Dattner, 458 F.3d at 103.
In trying to cast doubt on whether Dattner remains controlling after CRST, Defendants misapply Second Circuit authority. (ECF No. 109 at 6). To the contrary, the Second Circuit has expressly declined to state that CRST has eliminated the precedential value of Dattner. In Manhattan Review LLC v. Yun-the case Defendants misapply-the Second Circuit recognized the holding in Dattner “that a defendant who had obtained a dismissal on forum non conveniens grounds was not a prevailing party because the plaintiff could pursue his claims against the defendant in another forum.” 919 F.3d 149, 153 (2d Cir. 2019). The Second Circuit then explained that, “[w]hatever the ongoing vitality of that holding in the wake of CRST, it ha[d] no application to the circumstances” where the plaintiff “cannot immediately re-file suit,” but needed to seek leave of a state court to “remove the impediment to its ability to sue.” Id. Accordingly, “[t]he circumstances of a forum non conveniens dismissal, following which a plaintiff can immediately proceed in a more convenient forum, [were] therefore inapposite.” Id. The Court also notes that CRST applied the prevailing party standard in Buckhannon, the same authority on which the Second Circuit relied in Dattner to hold that defendants dismissed on forum non conveniens grounds were not prevailing parties. See CRST, 578 U.S. at 422 (citing Buckhannon); Dattner, 458 F.3d at 101 (applying Buckhannon standard). Furthermore, courts in the Second Circuit since CRST have continued to cite Buckhannon as good authority for the prevailing party standard under various fee-shifting statutes, including Section 505. See, e.g., Lamberty v. Ct. State Police Union, No. 21-1275, 2022 WL 319841, at *3 (2d Cir. Feb. 3, 2022) (summary order) (citing Buckhannon and holding that defendants who “failed to show that they secured a judicially sanctioned change in the parties' relationship” were “prevailing parties”); Larach-Cohen v. Banks, No. 19 Civ. 7623 (LTS) (SDA), 2022 WL 16540807, at *5 (S.D.N.Y. Oct. 8, 2022) (citing Buckhannon and holding that plaintiffs who had not alleged that they had “received a favorable decision on the merits in administrative proceeding” were not “prevailing parties”), adopted by, 2022 WL 16541045 (S.D.N.Y. Oct. 28, 2022); Beata Music LLC v. Danelli, No. 18 Civ. 6354 (JGK), 2022 WL 1471031, at * (S.D.N.Y. May 10, 2022) (same). Accordingly, the Court finds that Dattner remains controlling authority that compels the conclusion that Defendants are not prevailing parties.
The alternative dismissal of AFP on personal jurisdiction grounds does not alter the Court's conclusion, because that ruling “did not immunize [D]efendants from the risk of further litigation on the merits of [Leong's] claims and it remains to be seen which party will prevail on the merits.” Buccellati Holding Italia SPA v. Laura Buccellati, LLC, No. 11 Civ. 7268 (PGG) (GW), 2013 WL 6223596, at *2 (S.D.N.Y. Dec. 2, 2013) (“Buccellati I”), adopted by, 2014 WL 1325748 (S.D.N.Y. Mar. 17, 2014) (“Buccellati II”). As Chief Judge Swain explained in Fashion Television LLC v. APT Satellite Co., dismissal “for lack of personal jurisdiction does not preclude [a] [p]laintiff from asserting its claim in a proper jurisdiction,” such that “the legal relationship between the parties has not been conclusively altered.” No. 17 Civ. 5413 (LTS) (SN), 2018 WL 4300526, at *4 (S.D.N.Y. Sept. 10, 2018). Leong remains free to assert his claims against AFP in Portugal-or any other forum in which AFP is subject to personal jurisdiction-and, therefore, AFP “is not a prevailing party within the meaning of” Section 505. Id. (citing Dattner, 458 F.3d at 103).
Because “prevailing party” status is a necessary condition of an award under Section 505, I respectfully recommend that the Defendants' request for attorneys' fees and costs under this provision be denied. See Fashion Television, 2018 WL 4300526, at *4 (denying request for attorneys' fees because defendants failed to demonstrate that they were “prevailing parties”); Buccellati I, 2013 WL 6225396, at *3 (same); Mawere v. Citco Fund Servs., (USA) Inc., No. 09 Civ. 1342 (BSJ) (DF), 2011 WL 6779319, at *10 (S.D.N.Y. Sept. 16, 2011) (recommending denial of award of costs as to claims with respect to which defendants were not prevailing parties), adopted by, 2011 WL 6780909 (S.D.N.Y. Dec. 27, 2011).
b. Remaining factors
Defendants' failure to establish that they are prevailing parties within the meaning of Section 505 renders it unnecessary to reach the other non-exclusive factors, “frivolousness, motivation, objective unreasonableness[,] . . . and the need in particular circumstances to advance considerations of compensation and deterrence.” Fogerty, 510 U.S. at 534 n.19. Briefly, the Court observes that the grounds Defendants raised for dismissal of the FAC did not attack the merits of Leong's claims (see ECF No. 54 at 2), which, accordingly, the Court did not consider. Thus, the Court is not prepared to find that claims that remain the subject of litigation that will now proceed in Portugal are objectively unreasonable. Cf. BWP Media USA, Inc. v. Gossip Cop Media, LLC, No. 13 Civ. 7574 (KPF), 2015 WL 321877, at *5 (S.D.N.Y. Jan. 26, 2015) (where claims were subject of unresolved circuit split, explaining that the court was “not prepared to state that a claim [was] objectively unreasonable”). Similarly, while Judge Rochon declined to afford deference to Leong's choice of this District as the forum in which to bring his claims because it was suggestive of forum shopping, see Paulo II, 2023 WL 2707201, at *7, the Court has not made any findings that Leong's claims were themselves frivolous or based on an improper motive. See TCA Television, 2017 WL 2418751, at *14 (declining to find improper motive where plaintiffs made frivolous “subsidiary” arguments but claims themselves were not frivolous). Finally, given the unique circumstances of this action-which involves copyright claims by “[a] Portuguese photographer who worked in Portugal and entered into an employment agreement that designated Portuguese law and a Portuguese court for resolution of all disputes with his employer . . . Paulo I, 2023 WL 2873257, at *14-the Court perceives at best a minimal likelihood that an award of attorneys' fees would deter other photographers from asserting claims under the Act. See Insurent Agency Corp. v. Hanover Ins. Co., No. 16 Civ. 3076 (LGS) (JLC), 2020 WL 86813, at *7 (S.D.N.Y. Jan. 8, 2020) (recommending denial of Section 505 fees where it was “not so obvious [] that there [was] a need for deterrence" in the circumstances presented), adopted by, 2020 WL 1080774 (S.D.N.Y. Mar. 6, 2020). Thus, the remaining factors balance against imposing an award of attorneys' fees under Section 505. See Boesen v. United Sports Pubs., Ltd., No. 21-1029-cv, 2022 WL 457281, at *2 (2d Cir. Feb. 15, 2022) (summary order) (affirming denial of fees under Section 505 and explaining that “the weighing of factors is paradigmatically within a district court's discretion").
2. Defendants are not entitled to recover costs under Section 1919.
As set forth above, dismissal “for want of jurisdiction" is a prerequisite for an award of costs under Section 1919. 28 U.S.C. § 1919. The conditional dismissal of this action on forum non conveniens grounds in Paulo II, however, did not constitute a dismissal for lack of jurisdiction. As the Second Circuit has recognized,
Forum non convenien[s] does not raise a jurisdictional bar but instead involves a deliberate abstention from the exercise of jurisdiction . . . While such abstention may appear logically to rest on an assumption of jurisdiction, . . . it is as merits-free as a finding of no jurisdiction.Monagasque de Reassurances S.A.M. v. NAK Naftogaz of Ukr., 311 F.3d 488, 498 (2d Cir. 2002) (quoting In re Minister Papandreou, 139 F.3d 247, 255-56 (D.C. Cir. 1998)); see Strategic Value Master Fund, Ltd. v. Cargill Fin'l Servs. Corp., 421 F.Supp.2d 741, 752 (S.D.N.Y. 2006) (granting conditional dismissal on forum non conveniens grounds “without first establishing subject matter jurisdiction”); see also Sinochem Int'l Corp. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 432 (2007) (explaining that district courts may dispose of an action on forum non conveniens grounds without first reaching subject matter and personal jurisdiction questions). Accordingly, the conditional forum non conveniens dismissal in Paulo II does not warrant an award of costs under Section 1919.
That the claims against AFP-only-were also dismissed for lack of personal jurisdiction does not alter the Court's conclusion. The balance of the discretionary factors-which are comparable to those under Section 505, as Defendants acknowledge (ECF No. 99 at 22)-similarly weigh against awarding costs under Section 1919. See Correspondent Servs. Corp., 2004 WL 2181087, at *15 (“In determining whether extraordinary circumstances might permit an award of attorneys' fees” under Section 1919, “the courts thus have found it appropriate to consider the financial burden or hardship suffered by a party” as well as “[t]he parties' conduct”).
Defendants place undue reliance on Lenahan Law Offices, LLC v. Hibbs, No. 04 Civ. 6376 (CJS), 2004 WL 2966926, at *7 (W.D.N.Y. Dec. 22, 2004), where the court dismissed the claims against the defendant for lack of personal jurisdiction and awarded costs under Section 1919 without analysis of the discretionary factors.
Therefore, I respectfully recommend that Defendants' request for costs under Section 1919 be DENIED.
3. AFP may not recover costs under Rule 41(d)(1).
Defendants invoke Rule 41(d)(1) as the basis for their request for €42,548.22 for “fees incurred in the voluntarily dismissed” Second Portuguese Proceeding. (ECF No. 99 at 27). Defendants contend that they are entitled to this award because “AFP litigated the Second Portuguese [Proceeding] for years only for [Leong] to withdraw it on the eve of trial, without any reasonable justification other than forum shopping.” (Id. at 28). Leong opposes Defendants' request, arguing that the Federal Rules of Civil Procedure do not apply to a foreign proceeding and, in any event, allow AFP to recover, at most, its court costs but not attorneys' fees. (ECF No. 105 at 27).
As noted above, Rule 41(d) allows for the recovery of the costs where the plaintiff has “previously dismissed an action in any court” and then “files an action based on or including the same claim against the same defendant[.]” Fed.R.Civ.P. 41(d). The parties fail to provide any controlling authority supporting their respective interpretations of the rule-for Defendants, that “any” includes foreign courts, and for Leong, that “any” excludes foreign courts. (Compare ECF No. 105 at 27 with ECF No. 109 at 14). The Court thus begins with the “longstanding principle of American law,” that Congress, in most legislative action, “is primarily concerned with domestic conditions.” EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 248 (1991), superseded by statute on other grounds as stated in Landgraf v. Usi Film Prods., 511 U.S. 244 (1994) (quoting Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285 (1949)). The Supreme Court has recognized this “commonsense notion” that Congress ordinarily intends statutes to have only domestic application. Smith v. U.S., 507 U.S. 197, 204 n.5 (1993). Thus, absent a clear statement of “the affirmative intention of the Congress” for a statute to apply extraterritorially, Benz v. Compania Naviera Hidalgo, S.A., 353 U.S 138, 147 (1957), federal courts ordinarily do not interpret statutes to reach conduct that is “the primary concern of a foreign country.” Foley Bros., 336 U.S. at 286; see Pharaohs GC, Inc. v. U.S. Small Bus. Admin., No. 20 Civ. 665, 2020 WL 3489404, at *5 (W.D.N.Y. June 26, 2020) (interpreting “any business concern” to be limited to domestic, nor foreign, entities), aff'd 990 F.3d 217 (2d Cir. 2021). On the other hand, federal courts have often seen Congress's use of the phrase “any” as an indication of intent for the statute “to sweep broadly to reach all varieties of the item referenced.” Cohen v. J.P. Morgan Chase Co., 498 F.3d 111, 117 (2d Cir. 2007); see United States v. Gonzales, 520 U.S. 1, 5 (1997) (citing dictionary definition of “any” and concluding that “[r]ead naturally, the word ‘any' has an expansive meaning, that is, ‘one or some indiscriminately of whatever kind'”). For the word “any” in a statute to warrant an expansive application, however, the surrounding statutory language and other relevant legislative context must support it. See Gonzales, 520 U.S. at 11 (adopting expansive interpretation of “any other term of imprisonment” after determining that “other language in [the statute] reinforce[d] [that] conclusion”) (emphasis added); Cohen, 498 F.3d at 118 (explaining that “any” must “not [be] interpreted in the abstract but in the context of surrounding language”); Perez v. Jupada Enters., Inc., No. 10 Civ. 3118 (JMF), 2012 WL 3042928, at *1 (S.D.N.Y. July 25, 2012) (finding that broad interpretation of “any civil action filed in a district court of the United States under rule 23 of the Federal Rules of Civil Procedure” was appropriate absent indication of intended narrow application and was “consistent with one of Congress's main purposes in enacting” the statute); see also Nixon v. Mo. Mun. League, 541 U.S. 125, 132 (2004) (explaining that “‘any' can and does mean different things depending upon the setting”).
Here, neither Rule 41(d) nor the Advisory Committee notes contain any reference to foreign law, let alone an indication that the Rule was intended to permit recovery of costs of a “previously dismissed” action in a foreign court. See Fed.R.Civ.P. 41(d); see generally Fed R. Civ. P. 41 advisory committee's notes. At least one other statute that includes the phrase, “in any court,” has been interpreted to be limited to domestic courts. In Small v. U.S., the Supreme Court held that the phrase “convicted in any court” in 18 U.S.C. § 922(g)(1) referred “only to domestic courts, not to foreign courts.” 544 U.S. 385, 394 (2005). The Court did so based on “the reasons for disfavoring an inference of extraterritorial coverage from a statute's total silence,” as well as the “assum[ption]” that, in the absence of contrary “statutory language, context, history, or purpose,” Congress intended that the statute “appl[y] domestically, not extraterritorially.” Id. at 390-91. The Court finds that a similar conclusion is warranted for Rule 41(d), which contains no indication that the Advisory Committee even considered, let alone intended, extraterritorial application. The surrounding language elsewhere in Rule 41 also refers to proceedings occurring “[s]ubject to” other provisions within the Federal Rules of Civil Procedure as well as “any federal- or state-court action,” suggesting that the Advisory Committee intended only domestic actions to be included in those “previously dismissed . . . in any court” for which costs could be awarded under Rule 41(d). See, e.g., Fed.R.Civ.P. 41(a)(1)(A) (referring to “Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal statute”); Fed.R.Civ.P. 41(a)(1)(B) (“But if the plaintiff previously dismissed any federal- or state-court action based on or including the same claim, a notice of dismissal operates as an adjudication on the merits”). The combination of the presumption against extraterritoriality with the absence of an indicated intent for costs in foreign courts to be recoverable and the surrounding language elsewhere in Rule 41 compels the conclusion that the phrase “in any court” does not include foreign courts. Accordingly, I respectfully recommend that AFP's request for an award of costs incurred in the Second Portuguese Proceeding be DENIED.
Even if the Court were to conclude that an award of costs that AFP incurred in the Second Portuguese Proceeding was permitted under Rule 41(d), the Court notes that Defendants' submissions lack a categorical breakdown, let alone documentary support (e.g., invoices or receipts) for the individual costs incurred. (See ECF No. 100 ¶ 17 (providing only “Costs” of €5613.61 incurred in Second Portuguese Proceeding)). This lack of supporting documentation provides a further ground for denial of the request for costs under Rule 41(d)(1). See Reynolds v. OneWest Bank, FSB, No. 11 Civ. 81 (CR), 2011 WL 5357503, at *6 (D. Vt. Nov. 7, 2011) (denying request for costs under Rule 41(d) where defendant failed to submit evidence of its expenditures); see also Hanson v. Litton Loan Serv., LP, No. 04 Civ. 568 (WWE) (HBF), 2004 WL 7339574, at *6 (D. Conn. Dec. 16, 2004) (deferring requests for costs under Rule 41(d) until defendant submitted supporting documentation), adopted by, Order, Hanson v. Litton Loan Svc LP, et al., No. 04 Civ. 568 (D. Conn. Jan. 12, 2005), ECF No. 46; Hinfin Realty Corp. v. The Pittston Co., 212 F.R.D. 461, 464 (E.D.N.Y. 2002) (denying request for costs under Rule 41(d) without prejudice pending refiling of application with supporting documentation).
IV. CONCLUSION
For the reasons set forth above, I respectfully recommend that the Motion be DENIED.
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NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen (14) days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), (d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Rochon.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), (d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).