Opinion
CV-00-5827 (CPS)
September 3, 2003
MEMORANDUM AND ORDER
Plaintiff Susan Nicholson Hofheinz brought this action against defendants AMC Productions, Inc. ("AMC") and Rainbow Media Holdings, Inc. for alleged violations of her rights under the Copyright Act of 1976, 17 U.S.C. § 101 et seq.; the Lanham Act, 15 U.S.C. § 1125(a); California's publicity rights statute, California Civil Code § 3344.1; and state law of contract and unfair competition. This Court granted summary judgment dismissing the complaint, after having denied plaintiff's motions for a temporary restraining order and a preliminary injunction. Defendants now move for an award of costs and attorneys pursuant to Rule 54(d) of the Federal Rules of Civil Procedure, 17 U.S.C. § 505, and California Civil Code § 3344.1(a). For the reasons set forth below, defendants are entitled to an award of attorneys fees incurred in the defense of plaintiff s copyright and state law claims and are directed to provide documentation of their costs and attorneys fees, including any fee agreement and contemporaneous attorneys time sheets, within 20 days from the date of this decision. What follows are the findings of fact and conclusions of law on which this determination is based, as required under Rule 54(d)(2)(c)) of the Federal Rules of Civil Procedure.
That rule states in relevant part that, when determining a motion for an award of attorneys fees: "The court shall find the facts and state its conclusions of law as provided in Rule 52(a)." Fed.R.Civ.P. 54(d)(2)(C). Rule 52(a), in turn, provides in relevant part that "the court shall find the facts specially and state separately its conclusions of law thereon. . . . It will be sufficient if the findings of fact and conclusions of law are stated orally and recorded in open court following the close of the evidence or appear in an opinion or memorandum of decision filed by the court." Fed.R.Civ.P. 52(a).
BACKGROUND
The underlying facts of this case are more fully set forth in this Court's Memoranda and Orders denying plaintiff s request for a preliminary injunction, Hofheinz v. RMC Productions, Inc., 147 F. Supp.2d 127 (E.D.N.Y. 2001) (hereinafter the "PI Opinion"), aff'd by summary order. No. 01-7060 (2d Cir. May 20, 2002), and granting defendants' motion for summary judgment, Hofheinz v. AMC Productions, Inc., No. 00-CV-5827 (E.D.N.Y. Apr. 21, 2003) (hereinafter the "SJ Opinion"), familiarity with which is assumed. What follows is a brief summary of the facts as heretofore determined with additional relevant facts taken from the submissions of the parties in connection with the present motion.Plaintiff is the widow of the late James Nicholson, one of the principals of American International Pictures ("AIP"). AIP produced and released hundreds of motion pictures during its existence from 1954 to 1980 and helped establish the monster and teenage motion picture genres. Plaintiff holds the copyrights to some of these motion pictures and negotiated and executed a licensing agreement with defendants for the use of clips from certain films for use in defendants' documentary about AIP and two of its principals, Mr. Nicholson and Sam Arkoff, entitled "It Conquered the World! The Story of American International Pictures" (the "Documentary"), originally intended to be broadcast solely on cable television. In order to render the Documentary eligible for certain industry awards, defendants undertook to theatrically exhibit the Documentary for a total of eight days in September 2000. Defendants attempted to negotiate a modification of the licensing agreement with plaintiff to encompass theatrical distribution of the Documentary, and after several weeks of negotiation, plaintiff sent defendants a proposed modification to the license agreement (the "First Modification") granting the requested theatrical license, under a cover letter which read in part: "Please review the enclosed First Modification to Film Clip License Agreement. If it meets with your approval, please execute it and send copies to me for my signature." Defendants executed the proposed modification and sent it back to plaintiff, who never signed it.
Theatrical exhibition for seven consecutive days is a prerequisite for awards of the Academy of Motion Picture Arts and Sciences.
Plaintiff also claims copyright in several photographs of her late husband and in posters and models depicting characters from AIP films. Defendants contacted plaintiff in January 2000 to convey that they contemplated using photographs of Nicholson in the Documentary; plaintiff responded by sending approximately twenty photographs of Nicholson, including those at issue in this litigation. Defendants later returned the photographs without comment.
Defendants exhibited the Documentary theatrically on September 18 and September 22-28, 2000, in order to make it eligible for industry awards. Plaintiff was one of the guests invited to the opening night "celebrity screening," and on September 4, 2000, she requested that defendants put an additional twenty guests on the screening's guest list. Plaintiff saw a tape of the Documentary on September 15, 2000 and, apparently displeased with its portrayal of her late husband, notified defendants that she considered the Documentary infringing and that she refused to grant any theatrical exhibition rights unless the Documentary was re-edited in accordance with her wishes. This litigation ensued.
On September 27, 2000, the penultimate day of the seven-day theatrical run of the Documentary, plaintiff filed her first complaint in this action and, by order to show cause, applied for a temporary restraining order and preliminary injunction seeking to restrain defendants from theatrically exhibiting the Documentary and to compel them to deliver to plaintiff all copies of the Documentary. The complaint alleged infringement of plaintiff's copyrights in the AIP films, a Lanham Act violation, breach of contract, and unfair competition. Arguments were heard on September 28, 2000. at which plaintiff asserted that the theatrical exhibition of the Documentary scheduled for that evening would irreparably harm her, even though she was willing to negotiate a license for theatrical exhibition. She denied that the "First Modification" had been an offer of a license for theatrical exhibition and maintained that it was ineffective because she had not executed it. Citing an apparent lack of irreparable harm, I denied plaintiff's application for a temporary restraining order and signed an order, returnable on October 26, 2000, requiring defendants to show cause why a preliminary injunction should not issue pending the trial of this matter. In subsequent correspondence between the parties, defendants represented that they had no plans to exhibit the Documentary in theaters after September 28, 2000, and had no film copies of the Documentary in their possession. In light of these facts and the admittedly valid license for plaintiff's clips in cable exhibitions of the Documentary, defendants questioned the need for proceeding with plaintiff s request for a preliminary injunction. Plaintiff responded by reiterating the position that the First Modification was never agreed to by the parties, that a preliminary injunction was necessary because defendants could not be trusted to refrain from further theatrical exhibitions, and that the Documentary also infringed plaintiff s copyrights and state law rights of publicity by including the photographs of her late husband.
Plaintiff filed an amended complaint on October 20, 2000, asserting her claims relating to the photographs of her late husband and images and models related to AIP films. Also on that date, plaintiff filed a notice of motion for a preliminary injunction, returnable on October 26, 2000, seeking to enjoin defendants from exhibiting the Documentary in any medium. In light of these new submissions and to allow for full preparation, the hearing on the application for a preliminary injunction was adjourned to December 18, 2000. The application was denied in the PI Opinion, in which I found that plaintiff was unlikely to overcome defendants' assertion of fair use, and noted that all of plaintiff's claims appeared to be fully remediable by an award of damages. Plaintiff appealed my ruling on her application for a preliminary injunction to the Court of Appeals, which affirmed in an unpublished summary order. Hofheinz v. AMC Productions et al., No 01-7060 (2d Cir. May 20, 2002). In particular, the Second Circuit found that this Court had not abused its discretion in weighing the fair use factors with respect to plaintiff's copyright claim, nor in finding that plaintiff had failed to show irreparable harm on her right of publicity claim. Id. at 2-3.
On June 20, 2002, the court of appeals awarded costs to defendants in the amount of $2,652.13; plaintiff has not yet paid these costs. These costs are not an element of the fees and costs claimed in this motion and will not be included in any award of fees and costs by this Court.
During discovery in this action, several disputes arose in which defendants accused plaintiff of abusive tactics. On one occasion, plaintiff's counsel brought plaintiff's licensing agent to a deposition in which an AMC executive was questioned concerning licenses for other films not owned by plaintiff, leading defense counsel to terminate the deposition on grounds that plaintiff was "fishing" for confidential information concerning defendants' licensing practices. Defendant also alleges that plaintiff s counsel revealed to plaintiff and third parties certain confidential documents, including licenses of clips not owned by plaintiff, to plaintiff and her licensing agent in violation of a protective order. Plaintiff denies the allegation, points out that it is raised in defendants' memorandum of law and is thus unsworn, argues that it is speculative and lacking in factual basis, and asserts that the use of these documents in support of plaintiff s brief on summary judgment was permissible under the terms of the protective order. Despite plaintiffs protestations, plaintiff's own declaration in support of her motion for summary judgment, sworn to be made on personal knowledge, refers to and analyzes these confidential documents, belying any argument that they were not revealed to her. The legal significance of these facts are dealt with more fully below in my conclusions of law.
Upon being petitioned for a ruling on the propriety of plaintiff s conduct of the deposition, Magistrate Judge Azrack initially offered to continue the deposition in her courtroom but later ruled against allowing the deposition to continue.
Meanwhile, plaintiff was pressing similar claims — ultimately unsuccessfully — against various defendants in two lawsuits in the Southern District of New York. In Hofheinz v. AE Television Networks et al., 146 F. Supp.2d 442 (S.D.N.Y. 2001) (hereinafter "Hofheinz II"), Judge Sweet granted summary judgment for defendants on plaintiff's claim that they had infringed her copyright by showing a clip from "It Conquered the World" in a biography of Peter Graves, who starred in the film. Judge Sweet concluded that defendants had made fair use of the clip. Similarly, in Hofheinz v. Discovery Communications, Inc., 60 U.S.P.Q.2d 1845 (S.D.N.Y. 2001) (hereinafter "Hofheinz III"), Judge Baer relied substantially on this Court's ruling on plaintiff s application for a preliminary injunction in granting summary judgment for defendant, finding that its use of clips from plaintiff's copyrighted films in a documentary-style program on the history and development of the horror film genre was fair.
In the SJ Opinion, I granted defendants' motion for summary judgment on all plaintiff's claims, finding that their use of plaintiff's film clips was fair, that her Lanham Act claims were without merit, and that her state law claims were preempted or not available under the statutes she invoked, I also treated plaintiff s attempt to change her theory of the case at the summary judgment stage to include claims she had not pled as a motion to amend the complaint and denied that motion. A judgment dismissing the complaint was entered on April 30, 2003.
Defendants now move for an award of costs and attorneys fees pursuant to Rule 54(d) of the Federal Rules of Civil Procedure, 17 U.S.C. § 505, and California Civil Code § 3344.1(a).
DISCUSSION
With respect: to a motion for attorneys fees, the Federal Rules of Civil Procedure provide in relevant part:
Unless otherwise provided by statute or order of the court, [a] motion [for attorneys' fees] must be filed no later than 14 days after entry of judgment; must specify the judgment and the statute, rule, or other grounds entitling the moving party to the award; and must state the amount or provide a fair estimate of the amount sought. . . . The court may determine issues of liability for fees before receiving submissions bearing on issues of evaluation of services for which liability is imposed by the court. . . . The provisions of [this Rule] do not apply to claims for fees and expenses as sanctions for violations of these rules or under 28 U.S.C. § 1927.
Fed.R.Civ.P. 54(d)(2). Plaintiff first argues that defendants' motion does not give a "fair estimate of the amount sought" and should therefore be summarily denied and that this defect cannot be cured because the 14-day time limit has passed. However, as plaintiff herself notes in her brief, the defendants' memorandum of law states:
The accumulated defense costs in this action between September 2000 and April 2003 have been in the region of U.S. $600,000.00, virtually all of which were devoted to the defense of the plaintiffs copyright and California statutory "right of publicity" claims. Should the Court grant the within motion, defendants will submit contemporaneous documentation evidencing the precise amount of fees and costs for which reimbursement is being sought.
(Defs.' Mem. at 15 n. 7.) Although this statement does not appear in the notice of motion or an accompanying affidavit, it does constitute a "fair estimate" of defendants' claim for fees, and plaintiff has notice of the amount as evidenced by her discussion of the above-quoted passage in her brief. Her technical objections to the statement — e.g., that the words "fair estimate" are not used, and that the term "costs" is distinct from the term "attorneys' fees" — are petty and unpersuasive. In light of the fact that plaintiff clearly has notice of the amount claimed and the Federal Rules' admonition that they be "construed and administered to secure the just, speedy, and inexpensive determination of every action," Fed.R.Civ.P. 1, I find that defendants' motion, while perhaps not technically perfect, is satisfactory for purposes of Rule 54(d)(2).
The latter objection is particularly disingenuous in light of the fact that defendants filed a bill of costs in the amount of $3,969.65 on May 30, 2003, and plaintiff filed her objection on June 11, 2003, more than two weeks prior to the date of her memorandum in opposition to the present motion.
Moving on to the substance of defendants' motion, they claim attorneys fees under two statutes. The first applies to plaintiff s right of publicity claim, brought under California Civil Code § 3344.1. That statute states in relevant part: "The prevailing party or parties in any action under this section shall also be entitled to attorneys' fees and costs." Cal. Civ. C. § 3344.1(a)(1); see also Cairns v. Franklin Mint Co., 115 F. Supp.2d 1185, 1187 (C.D. Cal. 2000), aff'd 292 F.3d 1139, 1156 (9th Cir. 2002) (awarding attorneys fees to prevailing defendant in a § 3344.1 case). "State statutes providing for awards of attorneys' fees and costs ordinarily apply to state law claims made in a federal court." Christensen v. Kiewit-Murdock Inv. Corp., 815 F.2d 206, 214 (2d Cir. 1987); see also Cotton v. Slone, 4 F.3d 176, 180-81 (2d Cir. 1993) ("The same principle applies in the context of pendent jurisdiction: it is the source of the right sued upon, and not the ground on which federal jurisdiction over the case is founded, which determines the governing law." (internal quotation marks omitted)). In light of the statute's mandatory language, defendants are entitled to an award of attorneys fees in connection with their defense on this claim.
Defendants also claim attorneys fees for their defense of plaintiff's copyright claims. The relevant federal statute states:
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.17 U.S.C. § 505. The Supreme Court recently interpreted this provision in Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). Rejecting a dual standard for attorneys fees in copyright actions, the Court held:
[D]efendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement. . . . [A] successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of a copyright.Id. at 527. Fees are to be awarded as a matter of the district court's discretion based on factors including, but not necessarily limited to, "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." Id. at 534 n. 19. These and other factors are to be weighed in a manner "faithful to the purposes of the Copyright Act," to wit.: "enriching the general public through access to creative works." Id. at 527, 534 n. 19.
In light of Fogerty, the court of appeals has held that "objective reasonableness is a factor that should be given substantial weight in determining whether an award of attorneys' fees is warranted," because "the imposition of a fee award against a copyright holder with an objectively reasonable litigation position will generally not promote the purposes of the Copyright Act." Matthew Bender Co., Inc. v. West Pub. Co., 240 F.3d 116, 121-22 (2d Cir. 2001). This is because such attorney fee awards may chill litigation of close cases, preventing the clear demarcation of the boundaries of copyright law. See id., Fogerty, 510 U.S. at 527. A finding of objective reasonableness does not necessarily preclude an award of attorneys fees, however. Matthew Bender, 240 F.3d at 122. In particular, "if a party's conduct is unreasonable, a district court has the discretion to award fees . . . [t]hus, bad faith in the conduct of the litigation is a valid ground for an award of fees." Id. at 124-25 (internal citations omitted).
Here, plaintiff's conduct of the litigation brings her motivation into question. The facts set forth above, including the timing and content of plaintiff s demands for provisional remedies, her threats to withdraw her license unless the Documentary was re-edited, and her use of discovery to collect information concerning defendants' licensing fees with other copyright holders, all demonstrate that plaintiff's ultimate goal was to influence the content of the Documentary to present her late husband in a more favorable light and to leverage the largest possible licensing fee from defendants. Such uses of copyright litigation directly threaten the purposes of the Copyright Act, by chilling the creation and dissemination of creative critical works. If plaintiff believed that the Documentary was inaccurate, disrespectful, or otherwise unfair with respect to her late husband, her remedy is to create additional works refuting the Documentary, not to engage in a pattern of private censorship through frivolous assertion of unrelated copyright claims. Plaintiff's conduct of this litigation thus favors an award of attorneys fees to defendants.
In light of the exclusion from Rule 54(d)(2) of fees and expenses to be awarded as sanctions for violation of the Federal Rules of Civil Procedure, I do not consider defendants' allegations of discovery violations for any other purpose in connection with this motion.
Furthermore, plaintiff's positions throughout this litigation have been objectively unreasonable. She asserted irreparable harm in arguing for provisional remedies even while she stated her desire to arrive at a financial settlement. She alleged infringement even though she had granted a license for cable exhibition of many of the allegedly infringed works. Her arguments on the fair use factors were largely spurious. In particular, her argument that the existence of a market for film clips supported her claim that the Documentary harmed the market for her copyrighted works was rejected by three district courts, including this Court, as circular. Furthermore, her argument, raised on summary judgment and again in opposition to the present motion, that the Documentary cannot be considered "scholarly" because it contains factual errors, is simplistic at best and, if approved, would severely chill nearly all works of scholarship or criticism, not to mention the fact that the argument has nothing whatever to do with the Documentary's use of her copyrighted works. In short, plaintiff's arguments throughout this litigation have been largely frivolous and objectively unreasonable. This is not a close case, and since encouraging copyright holders to litigate claims of this sort would negatively impact the creation of new works of commentary and criticism, such claims are appropriately deterred by assessment of attorneys fees. Conversely, encouraging the creators of works of commentary and criticism to litigate the fair use defense in cases of this sort by compensating them for their legal expenses will enrich the public by increasing the supply and improving the content of commentary and criticism. I conclude that the purposes of the Copyright Act would be advanced by an award of attorneys fees in this case and that defendants are entitled to recover such fees incurred in connection with their defense on plaintiff's copyright claims.
Defendants do not request, and thus shall not recover, attorneys fees related to their defense on plaintiff s Lanham Act claim.
Moving on to the amount of the fee award, Rule 54 provides for an initial determination of a parties' entitlement to recover costs and attorneys fees, with a subsequent determination of the size of the award. Fed.R.Civ.P. 54(d)(2); Williams v. Crichton, 891 F. Supp. 120, 122 (S.D.N.Y. 1994) (McKenna, J.). Defendants have established their entitlement to attorneys fees and must now establish the amount of that entitlement by submitting contemporaneous documentation. In accordance with Rule 54(d)(2)(B), defendants shall also disclose the terms of any agreement with respect to fees to be paid in connection with the defense of plaintiff s copyright and state law claims. In determining the size of the award, the Court will "consider the amount of work, the skill employed, damages at issue, and the result achieved." Oboler v. Goldin, 714 F.2d 211, 213 (2d Cir. 1983). Following Judge McKenna's example, I direct defendants to submit documentation of their costs and attorneys fees, including attorney time sheets, within 20 days from the date of this decision. Williams, 891 F. Supp. at 122. Plaintiff shall have 20 days to respond. Id.
CONCLUSION
For the foregoing reasons, defendants are entitled to an award of attorneys fees incurred in their defense on plaintiff s copyright and state law claims, but not on plaintiff's Lanham Act claims. Defendants are directed to serve and file appropriate documentation to establish the amount of the award within 20 days of the date of this opinion. Plaintiff is directed to file any response within 20 days of service of such documentation. The matter is scheduled for argument before the undersigned on October 16, 2003, at 4:30 p.m.The Clerk is directed to furnish a filed copy of the within to all parties and to the magistrate judge.
SO ORDERED.