Opinion
CV 03-3732 LGB (PLAx)
November 20, 2003
ORDER GRANTING DEFENDANT THIRD STORY MUSIC'S MOTION TO TAX ATTORNEY'S FEES
I. INTRODUCTION
Defendant Third Story Music, Inc. ("Defendant") moves to tax attorney's fees incurred in a copyright action brought by Plaintiffs Michael Robinson, et al. ("Plaintiffs"). For the reasons set forth below, Defendant's motion is granted, and attorney's fees and costs in the amount of $20,299.90 are awarded to Defendant.
This case arises from Plaintiffs' allegations that a recent hit song, "All I Have," contains music from a song by Plaintiff Robinson in 1977, "Very Special," and that this music was appropriated by Defendant without permission. The copyright to "Very Special" was registered in 1977 by William Jeffery and Lisa Peters.
II. PROCEDURAL BACKGROUND
Plaintiffs filed their Complaint in Alameda Superior Court on February 11, 2003. The action was removed to the United States District Court for the Northern District of California on March 6, 2003, and was transferred to the Central District of California on May 19, 2003.
While Plaintiffs' Complaint does not cite the Copyright Act, it appears to assert a copyright co-authorship or co-ownership claim under the Copyright Act, found in Title 17 of the United States Code. Plaintiffs' Complaint is generally unwieldy and unclear, and also brings claims for negligence, violations of civil rights, quantum meruit, and "disparagement of prospective economic opportunty (sic)" without providing adequate or consistent factual allegations. The factual allegations appear instead to support a claim for co-ownership of a musical work under the Copyright Act.
The Court granted Defendant's Motion to Dismiss, Motion for More Definite Statement, and Motion to Strike ("Defendant's Motion to Dismiss") on June 18, 2003, striking the entire Complaint and granting Plaintiffs leave to file an amended complaint within twenty days. Plaintiffs failed to do so, and the Court dismissed the action without prejudice on July 15, 2003.
Defendant filed this motion to tax attorney's fees on July 2.9, 2003. This motion is based on 17 U.S.C. § 505, which allows recovery of costs and of attorney's fees by a prevailing party in a copyright action, at the discretion of the court. Defendant seeks recovery of $23,462.40. This includes attorney's fees in the amount of $23,087.50, transportation costs in the amount of $214.90, and service of process costs in the amount of $160.00. Defendant has already recovered taxable costs in the amount of $389.14.
The Court issued Defendant an Order to Show Cause on September 15, 2003 regarding Defendant's failure to specify which attorney hours were spent on the copyright claim only, and Defendant's failure to provide information to support the reasonableness of its attorney billing rates. The Court received Defendant's Response to the Order to Show Cause on September 29, 2003. Defendant asserts that no more than 1.5 hours were spent exclusively on non-copyright claims, and provides information such as prevailing market rates in order to show the reasonableness of its attorney billing rates.
III. LEGAL STANDARDS
A. Award of Attorney's Fees and Costs
With narrow exceptions, "the American rule requires each party to bear its own attorney fees absent contrary contractual or statutory provisions." Miller-Wohl Co. v. Commissioner of Labor Industry, 694 F.2d 203, 204 (9th Cir. 1982). 17 U.S.C. § 505 provides statutory authorization of an award of attorney's fees in cases under the Copyright Act.
According to 17 U.S.C. § 505, "in any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs." Thus, in this case the Court may use its discretion to award costs to either party, and to award attorney's fees to a prevailing party.
1. Prevailing party
Pursuant to Local Rule 54-2.2, "the defendant is the prevailing party when the proceeding is terminated by court-ordered dismissal or judgment in favor of defendant." In addition, Federal Rule of Civil Procedure 41(b) states, "For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against the defendant. Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits." The Ninth Circuit has ruled under the Copyright Act that dismissal of a complaint without a determination on the merits can make the defendant the prevailing party. See Corcoran v. Columbia Broadcasting System, Inc., 121 F.2d 575, 576 (9th Cir. 1941).
2. Discretion of the Court
The language of 17 U.S.C. § 505 is that "the court in its discretion may" award costs; the Supreme Court has held that in copyright actions, "attorney's fees are to be awarded to prevailing parties only as a matter of the court's discretion." Fogerty v. Fantasy. Inc., 510 U.S. 517, 534 (1994).
Giving guidance to the lower courts in the use of their discretion, the Supreme Court has approved the consideration of certain nonexclusive factors, 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,'" so long as these factors are faithful to the purposes of the Copyright Act. Id. at 534 n. 19 (quotingLieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3d Cir. 1986)).
The Ninth Circuit has noted that the factors in Lieb are "not exclusive and need not all be met;" awards to prevailing defendants are within a court's discretion if they further the purposes of the Copyright Act. Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996). Courts have awarded costs for copyright claims based on a single factor, such as objective unreasonableness. See Williams v. Crichton, 891 F. Supp. 120 (S.D.N.Y. 1994); Budget Cinema v. Watertower Assocs., 81 F.3d 729 (7th Cir. 1996).
The Supreme Court identified several purposes of the Copyright Act which may be the basis of a fee award and are not addressed by the enumerated factors, including "`promoting broad public availability of literature, music, and the other arts,'" and stimulating artistic creativity. Fogerty, 510 U.S. at 526-27 (quoting Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975)). In order to serve the purposes of the Copyright Act, the Supreme Court stated that "defendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them." Fogerty, 510 U.S. at 527.
In claims under the Copyright Act, a certificate of registration is prima facie evidence of the validity of the copyright. 17 U.S.C. § 410(c). The evidentiary weight accorded to the certificate is within the discretion of the court. Id. Under 17 U.S.C. § 412, no damages may be awarded for infringement of copyright of an unpublished work commenced before its registration.
Under Local Rule 7-12, failure to file required papers "may be deemed by the Court consent to the granting or denial of the motion."
B. Amount of Attorney's Fees and Costs
17 U.S.C. § 505 authorizes payment of "reasonable" attorney's fees. "Reasonable" fees suggests that the figure should not include a penalty.Crescent Publ'g Group, Inc. v. Playboy Enters., 246 F.3d 142, 151 (2d Cir. 2001). The actual billing arrangement provides a strong indication of what private parties believe a "reasonable" fee would be.Id.
When determining the reasonable attorney's fee, the Ninth Circuit calculates the "lodestar" figure by multiplying "the number of hours reasonably expended on the litigation . . . by a reasonable hourly rate."Cairns v. Franklin Mint Co., 292 F.3d 1139, 1157 (9th Cir. 2002) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). In calculating the lodestar there are two critical questions: (1) whether a reasonable hourly rate has been charged and (2) whether the amount of time spent on the case was reasonably necessary.
The reasonable hourly rate corresponds to the prevailing market rate in the relevant community, considering the experience, skill, and reputation of the attorney in question. Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1985),
To demonstrate that the amount of time spent on the case was reasonable, the party must present more than simple records demonstrating the time actually spent on the case. Sealy, Inc.v. Easy Living, Inc., 743 F.2d 1378, 1385 (9th Cir. 1984). Counsel must demonstrate that the time actually spent was reasonably necessary to the effective prosecution or defense of the claims. Id. at 1385 n. 4.
Courts have held under other fee recovery statutes that litigation expenses such as "necessary travel" are integrally related to the work of an attorney and can be recovered. Wheeler v. Durham City Board of Education, 585 F.2d 618, 623 (4th Cir. 1978). In addition; pursuant to Local Rule 54-4.2, fees for service of process are taxable as costs.
IV. ANALYSIS
1. Prevailing party
A. Award of attorney's fees and costs
Here, Defendant is a prevailing party for the purposes of attorney's fees because Defendant obtained court-ordered dismissal of Plaintiff's Complaint. Although the dismissal was without prejudice, underCorcoran a defendant can be the prevailing party, even if the plaintiff can later bring the same cause of action. Corcoran, 121 F.2d at 576. Here, the action was dismissed because Plaintiff failed to amend its Complaint; Plaintiff also failed to make a proper or timely reply to any of Defendant's motions. Like the defendant inCorcoran, Defendant can be treated as the prevailing party because of the time and effort Defendant was required to expend in the defense of this action, even though Plaintiffs may later bring the same cause of action. Id.
2. Discretion of the Court
Here, awarding attorney's fees would be faithful to the purposes of the Copyright Act. As set forth below, Plaintiffs' suit was objectively unreasonable in its factual and legal components, one of the factors identified by the Supreme Court in Fogerty. Fogerty, 510 U.S. at 534 n. 19. Awarding fees in this case would deter further objectively unreasonable claims, also in compliance with the factors in Fogerty, Id. In addition, awarding fees to Defendant would promote broad public availability of music and encourage meritorious copyright defenses, in accordance with the purposes of the Copyright Act.Id. at 527.
As noted by Defendant, Plaintiff Robinson claims to have authored or co-authored "Very Special" in 1977. However, the copyright to "Very Special" was registered in 1977 by William Jeffery and Lisa Peters. The certificate of registration is prima facie evidence of the validity of the copyright under 17 U.S.C. § 410, and the amount of evidentiary weight accorded to the certificate is within the discretion of the Court. The registration of the copyright occurred in 1977 and Plaintiffs raised no challenge until the filing of their Complaint, giving the Court reason to accord evidentiary weight to the certificate of registration and to find Plaintiffs' allegations objectively unreasonable.
The Court finds Plaintiffs' Complaint further objectively unreasonable because prior to the commencement of an infringement action, Plaintiffs should have registered or attempted to register the work at issue with the Copyright Office in order to recover statutory damages, in accordance with 17 U.S.C. § 412. Plaintiffs never attempted to register their own copyright, never before asserted ownership or authorship of the song, and never before filed any action, even though Plaintiff Robinson allegedly composed part or all of the song in 1977.
Awarding fees to Defendant would further fulfill the purposes of the Copyright Act by promoting broad public availability of music and encouraging meritorious copyright defenses. Successful defense of the copyright claim at issue promotes public availability of the songs "Very Special" and "All I Have," and encourages others to make meritorious defenses of their rights when sued for copyright co-authorship or co-ownership.
Finally, Plaintiffs failed to file any opposition to Defendant's Motion to Tax Attorney's Fees as Costs. Under Local Rule 7-12, the Court may deem failure to file required papers consent to the granting or denial of the motion. This failure to file is consistent with Plaintiffs' late filing of their opposition to the earlier motion to transfer, and their failure to amend their Complaint, resulting in its dismissal. Based on Plaintiffs' failure to file any opposition, the objective unreasonableness of Plaintiffs' suit, and the purposes of the Copyright Act, the Court in its discretion finds that the award of costs and attorney's fees to Defendant is proper.
B. Amount of Attorney's Fees and Costs
Defendant seeks to recover $23,462.50 in expenses. These expenses include $17,987.50 in attorney's fees for the services of Martin Keleti, $5,100.00 in attorney's fees for the services of Evan Cohen, $214.90 in transportation costs, and $160.00 in service of process costs.
1. Attorney's fees under Copyright Act
The Copyright Act's fee award provisions apply only to copyright claims. In its Motion to Tax Attorney's Fees as Costs, Defendant did not distinguish between costs associated with Copyright Act claims and costs associated with other claims in the Complaint. In its Response to the Court's September 15, 2003 Order to Show Cause, Defendant asserts that not more than 1.5 hours were spent exclusively in the defense of non-copyright claims. Defendant includes the declarations of S. Martin Keleti and Evan S. Cohen, attorneys for Defendant, to support the assertion that not more than 1.5 hours were spent on non-copyright claims. The Court has reviewed Defendant's Response, and finds that all of Plaintiffs' claims are essentially claims for copyright co-ownership or co-authorship. Any "non-copyright" claims brought by Plaintiffs are either improperly labeled or inseparable from copyright law. Thus, since Defendant seeks attorney's fees based on the Copyright Act, the 1.5 hours spent exclusively on non-copyright claims will be removed from Defendant's attorney's fee request, as discussed below.
2. Reasonableness of attorney's fees
Appendix A to Defendant's Motion to Tax Attorney Fees indicates that S. Martin Keleti spent 71.95 hours in defense of this action, and indicates how Mr. Keleti spent these hours. According to Defendants in their Response to the Court's Order to Show Cause, not more than one and one-half hours were spent in defense of exclusively non-copyright claims. The Court finds that the remaining 70.45 hours spent were reasonably necessary to the defense of this action, with two exceptions. The billing record indicates that Mr. Keleti spent at least 14 hours researching and drafting Defendant's Motion to Transfer between March 10 and March 14, 2003, and spent 14.75 hours on Defendant's Motion to Dismiss between March 10 and April 2, 2003. Given that Mr. Keleti has been litigating copyright matters for at least 12 years, it was not reasonably necessary for Mr. Keleti to spend more than 10 hours on each Motion. Thus, the number of hours Mr. Keleti reasonably spent defending the action are reduced to 61.70 hours from the requested 71.95 hours.
Appendix A to Defendant's Motion to Tax Attorney Fees indicates that Evan S. Cohen spent 17 hours in defense of this action, and indicates how Mr. Cohen spent these hours. The Court finds that these hours spent were reasonably necessary to the defense of this action, with the exception of the 4 hours spent on March 10, 2003, when Mr. Cohen researched Defendant's Motion to Transfer and prepared his Declaration regarding transfer. Given the amount of time Mr. Keleti also spent on researching and drafting Defendant's Motion to Transfer, it was not reasonably necessary for Mr. Cohen to spend more than 1 hour on this research. In addition, because Mr. Cohen is an experienced partner, it was not reasonably necessary for him to spend more than 1 hour drafting his declaration. Thus, the number of hours Mr. Cohen reasonably spent defending the action are reduced to 15 hours from the requested 17 hours.
The requested billing rate for S. Martin Keleti is $250.00 an hour. Mr. Keleti's Declaration and Defendant's Response to the Court's Order to Show Cause indicate that Mr. Keleti's hourly rate is reasonable based on his experience and the market rate in the relevant community.
The requested billing rate for Evan Cohen is $300.00 an hour. Defendant's Response to the Court's Order to Show Cause indicates that Mr. Cohen's hourly rate is also reasonable based on his experience and the market rate in the relevant community.
3. Transportation and personal service costs
Defendant seeks recovery of the costs of travel to Alameda County, where Plaintiffs originally filed their Complaint. Defendant incurred transportation costs in the amount of $214.90 when its attorney, S. Martin Keleti, traveled to Alameda County to file its Notice of Removal and inspect the filed Complaint. This travel appears to be integrally related to the attorney's work on behalf of Defendant, and thus recovery of this litigation expense is proper.
Defendant also asks for the recovery of $160.00 for service of process on Plaintiffs of the Court's Order of Dismissal. Because such costs are taxable as costs under Local Rule 54-4.2, Defendant's recovery of these costs is proper.
V. CONCLUSION
For the foregoing reasons, Defendant's Motion to Tax Attorney's Fees as Costs is GRANTED. Attorney's fees in the amount of $19,925 and costs in the amount of $374.90 are awarded to Defendant, for a total of $20,299.90.
61.70 hours for Mr. Keleti at a rate of $250 an hour equals $15,425.00. 15 hours for Mr. Cohen at a rate of $300 an hour equals $4,500.00. This totals $19,925.00.
IT IS SO ORDERED.