Opinion
1:23-CV-00263-RP
07-09-2024
ALEXANDER STROSS, Plaintiff v. MORRIS GLASS COMPANY, INC., KERRY MORRIS, JULIE MORRIS, Defendants
THE HONORABLE ROBERT PITMAN UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
DUSTIN M. HOWELL UNITED STATES MAGISTRATE JUDGE
Before the Court is Plaintiff Alexander Stross's Motion for Costs and Attorney's Fees, Dkt. 28. After reviewing these filings, the relevant caselaw, and the parties' responses, the undersigned recommends granting the motion.
I. BACKGROUND
Alexander Stross is an accomplished professional photographer who focuses on architectural and landscape photography. Dkt. 1, at 2. Stross alleges that Defendant Morris Glass Company, Inc. featured one of his photographs on its website without Stross's authorization. Id. After Defendants received Stross's notice of copyright infringement, the parties began to negotiate. Stross demanded a payment of $10,000 within ten days and threatened a lawsuit. Dkt. 29, at 2. Defendants offered to mediate on two occasions, id., but Stross refused because he says the costs of mediation were prohibitive, Dkt. 30, at 3. Defendants made settlement offers of $500 and $2000, both of which Stross rejected. Id. Stross sued for copyright infringement on March 10, 2023. Dkt. 1.
On June 7, 2023, counsel for Morris Glass sent an email to Stross with the following language: “I have authority to offer your client $7,500 for a full settlement of the pending action. This offer is being made pursuant to Rule 68 of the Federal Rules of Civil Procedure. If this offer is not accepted, I will seek to recover my fees, costs, and expenses pursuant to Rule 68 and Section 505 of the Copyright Act.” Dkt. 22-2, at 1.
On June 21, 2023, Stross filed a Notice of Acceptance of Morris Glass's Offer of Judgment, in accordance with Rule 68. Dkt. 15, at 1. Stross also noted that because Morris Glass's “offer neither states that costs are included nor specifies an amount for costs, Plaintiff hereby provides notice that he seeks accrued costs in addition to the amount stated in Defendants' offer.” Id. Morris Glass responded that this constituted a rejection and a counteroffer, not an acceptance of its Rule 68 offer. Dkt. 16, at 1. Stross then filed a Motion to Enforce Judgment, Dkt. 18.
The undersigned recommended that the Court grant Stross's Motion to Enforce Judgment, Dkt. 24, which the Court adopted, Dkt. 26. In its Final Judgment, the Court ordered that Stross “is entitled to file a motion for costs, including attorneys' fees.” Id. at 1. Stross subsequently filed a Motion for Costs and Attorney's Fees, Dkt. 28, which is before the undersigned for consideration.
II. LEGAL STANDARDS
An award of attorney's fees is entrusted to the “sound discretion” of the district court. Tex. Com. Bank Nat'l Ass'n v. Cap. Bancshares, Inc., 907 F.2d 1571, 1575 (5th Cir. 1990). Even so, “[i]t remains important ... for the district court to provide a concise but clear explanation of its reasons for the fee award.” La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 329 (5th Cir. 1995) (emphasis omitted).
In a civil action for copyright infringement, a 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” including an “award of reasonable attorney's fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. The Fifth Circuit uses a two-step process to calculate recoverable attorneys' fees. Heidtman v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999). First, courts use the lodestar method to calculate an appropriate fee award by multiplying the number of hours reasonably spent on the case by an appropriate hourly rate in the community for such work. Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 (5th Cir. 2006). The party seeking fees is “charged with the burden of showing the reasonableness of the hours billed and, therefore, [is] also charged with proving that [its attorney(s)] exercised billing judgment.” Id. “The court should exclude all time that is excessive, duplicative, or inadequately documented [and] [t]he hours surviving this vetting process are those reasonably expended in litigation.” Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). While plaintiff's counsel need not record in great detail how each minute of their time was expended, they should identify the general subject matter of their time expenditures. Hensley v. Eckerhart, 461 U.S. 424, 437 n.12 (1983).
After calculating the lodestar, the court may decrease or enhance the amount based on the relative weights of the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989). The Fifth Circuit has instructed that “of the Johnson factors, the court should give special heed to the time and labor involved, the customary fee, the amount involved and the result obtained, and the experience, reputation and ability of counsel.” Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).
III. DISCUSSION
A. Whether Attorney's Fees Are Warranted
Section 505 of the Copyright Act states that a court “may ... award a reasonable attorney's fee to the prevailing party.” 17 U.S.C. § 505; Fogerty v. Fantasy, Inc., 510 U.S. 517, 519 (1994). “[A]ttorney's fees to the prevailing party in a copyright action is the rule rather than the exception and should be awarded routinely.” Virgin Records Am., Inc. v. Thompson, 512 F.3d 724, 726 (5th Cir. 2008). Still, “recovery of attorney's fees is not automatic.” Id. Rather, “[i]t is a matter of the district court's discretion.” Bell v. Eagle Mountain Saginaw Indep. Sch. Dist., 27 F.4th 313, 326 (5th Cir. 2022).
Stross takes issue with this recitation of the rule, arguing that Federal Rule of Civil Procedure 68 mandates fees and eschews the standards articulated in Fogerty, 510 U.S. at 517, and Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 179 (2016). Because the undersigned determines that attorney's fees are appropriate in any case, the undersigned will not decide whether Rule 68 displaces Fogerty and Kirtsaeng.
Defendants argue that attorney's fees are not appropriate in this case. See Dkt. 29, at 4 (“Considering the above factors, this Court should exercise its discretion and deny Plaintiff's request for attorney's fees because on balance, the relevant considerations do not favor Plaintiff.”). But that argument is a nonstarter. The Court has already found that Stross is entitled to costs and attorney's fees. See Dkts. 24 & 26. That conclusion comports with Supreme Court precedent. See Marek v. Chesny, 473 U.S. 1, 6 (1985) (“[I]f the offer does not state that costs are included and an amount for costs is not specified, the court will be obliged by the terms of the Rule [68] to include in its judgment an additional amount which in its discretion ... it determines to be sufficient to cover the costs.”).
Even were that not the case, the undersigned would nevertheless recommend that attorney's fees be granted. The Supreme Court has directed that courts use “several nonexclusive factors to inform a court's fee-shifting decisions: frivolousness, motivation, objective unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence.” Kirtsaeng, 579 U.S. at 202 (quotation omitted). The undersigned concludes that each factor weighs in favor of awarding Stross attorney's fees. Stross's action was not frivolous, as Defendants themselves admit. See Dkt. 29, at 5 (“Defendants do not deny that Plaintiff presented a colorable claim for copyright infringement.”). Upon reviewing the record as a whole, the undersigned concludes that Stross was properly motivated by a desire to vindicate his rights under the Copyright Act. The undersigned also finds that Stross was not objectively unreasonable in vindicating those rights. Finally, the undersigned concludes that attorney's fees are necessary to advance considerations of compensation and deterrence.
Under the mandatory costs rule in Marek, and alternatively under the multifactor test in Kirtsaeng, the undersigned finds that awarding costs and attorney's fees to Stross is appropriate under the circumstances.
B. Whether the Amount of Hours Billed is Unreasonable and Excessive
Stross requests attorney's fees totaling $21,030.96 and costs in the amount of $672.00, for a total of $21,702.96. Those fees encompass 58 hours spent on the following tasks:
(1) researching the background facts of the case and the procedural posture and preparing, drafting, and filing Plaintiff's Complaint; (2) engaging in numerous settlement discussions with Defendants' counsel, including back-and-forth analysis of liability and damages in this case; (3) drafting Plaintiff's initial disclosures and Rule 26(f) report and meeting and conferring with opposing counsel regarding the same; (4) propounding a first set of written discovery on Defendants, including drafting and serving requests for admission, interrogatories, and requests for production; (5) propounding a second set of written discovery on Defendants, including drafting and serving requests for production; (6) responding to two sets of written discovery from Defendants and gathering information from client related to the same; (7) drafting and filing acceptance of a Rule 68 offer of judgment; (8) replying to Defendant's Response to Acceptance of Offer of Judgment and research related thereto; (9) preparation of a motion to enforce the Rule 68 offer of judgment, and a reply in support thereof, with research related thereto; (10) preparation of a motion for costs and attorney's fees and two declarations in support.Dkt. 28, at 4-5 (cleaned up).
Defendants argue that 58 hours is “excessive given the simple nature of this case in which liability was not disputed.” Dkt. 29, at 9. But many of the hours that Defendants object to are of their own creation. For example, the time spent briefing a motion to enforce the Rule 68 offer of judgment was caused by Defendants' position that its offer did not include costs-a position rejected by ten federal courts of appeals. Dkt. 24, at 3-4 n.1.
The undersigned also rejects Defendants' argument that “[t]he fees incurred after the offer of judgment could have been avoided altogether had Plaintiff accepted Defendants' offer of judgment on the terms Defendant intended.” Dkt. 29, at 9. As the undersigned has already explained at length, “where a Rule 68 offer does not reference costs, a party may accept that offer and later seek costs in addition to the amount offered.” Dkt. 24, at 3. Stross was under no obligation to accept Defendants' interpretation of their Rule 68 offer, which stands in opposition to both Supreme Court precedent and a nationwide consensus of circuit courts.
After reviewing the billing records submitted by Stross, see Dkt. 28, at 7-19, the undersigned finds that the 58 hours spent on this case was reasonable.
C. Whether the Rates Charged by Stross's Attorneys Are Reasonable
Finally, Defendants argue that the rates charged by Stross's attorneys are unreasonable. Stross is represented by R. Buck McKinney and Amini & Conant, LLP. Id. at 5. Mr. McKinney has almost 32 years of experience as an entertainment lawyer and litigator and has spent the past 28 years of his practice primarily focusing on both entertainment and intellectual property matters. Id. Mr. McKinney charged $425.00 per hour for his work on this case. Id. at 10. The 2015 Hourly Fact Sheet produced by the Texas State Bar reflects median rates for intellectual property lawyers in 2015 of $365 per hour, and fees for attorneys in the Central Texas area with over 25 years of experience at $300 per hour. Id. at 8.
Stross was also represented by associate counsel Allison Steele, whose practice focuses on entertainment and intellectual property law. Id. at 5. Ms. Steele graduated law school in 2022, and therefore has-at most-two years of experience as an attorney. Id. at 41. Ms. Steele charged $290.00 per hour for her work on this case. Id. at 9. Based on the 2015 Hourly Fact Sheet, the median rate for an attorney with 3 to 6 years of experience in Central Texas is $214 per hour. Id. at 36.
The 2015 Hourly Fact Sheet does not have data for attorneys with 2 or fewer years of experience in the Central Texas area; however, rates for the surrounding areas range from $175 to $225. Dkt. 28, at 36.
Though Mr. McKinney's and Ms. Steele's are higher than the rates suggested by the State Bar's 2015 data, McKinney notes in his declaration that the Court should still find the rates to be reasonable, considering that data is now 9 years old. See Dkt. 28, at 8. The undersigned agrees and finds that the rates charged are reasonable for McKinney and Steele are reasonable for attorneys of their level of skill and experience, area of practice, and location. See Resolution Tr. Corp. v. Tassos, 764 F.Supp. 442, 443 (S.D. Tex. 1990) (“A federal district court may fix attorneys' fees on the basis of affidavits and may even do so on its own experience without any testimony.”).
Accordingly, the undersigned finds that Stross's suggested lodestar amount of $21,030.96 is reasonable. Neither party argues for an upward or downward departure from this amount based on the Johnson factors. The undersigned therefore recommends that the District Judge award the full lodestar amount.
IV. RECOMMENDATION
In accordance with the foregoing discussion, the undersigned RECOMMENDS that the District Court grant Stross's Motion for Attorney's Fees, Dkt. 28, and award Stross, to recover from Defendants, $21,030.96 in attorney's fees and $672.00 in costs.
V. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987). A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).