Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-15061/USCOURTS-ca9-13-15061-0/pdf.json

Parties Involved:
Artselect, Inc.
Appellee
Editions Limited West, Inc.
Appellee
Victoria Ryan
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

VICTORIA RYAN,

Plaintiff-Appellee/

Cross-Appellant,

v.

EDITIONS LIMITED WEST, INC., a

California corporation; ARTSELECT,

INC.,

Defendants-Appellants/

Cross-Appellees.

Nos. 12-17810

13-15061

D.C. No.

5:06-CV-04812-

PSG

OPINION

Appeal from the United States District Court

for the Northern District of California

Paul S. Grewal, United States Magistrate Judge, Presiding

Argued and Submitted

February 11, 2015—San Francisco, California

Filed May 19, 2015

Before: Michael Daly Hawkins, Richard A. Paez,

and Marsha S. Berzon, Circuit Judges.

Opinion by Judge Hawkins

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2 RYAN V. EDITIONS LTD. WEST

SUMMARY*

Copyright

The panel affirmed in part and vacated in part the district

court’s judgment in a copyright case.

The plaintiff prevailed on a contributory copyright

infringement claim against a publisher of her artwork, and the

district court awarded her attorney fees pursuant to a

fee-shifting provision contained in the parties’ publishing

contract.

Vacating in part, the panel held that the Copyright Act did

not bar enforcement of a contractual attorney fees provision

in this copyright-based litigation. Nonetheless, the district

court abused its discretion by categorically excluding the

majority of the plaintiff’s requested fees without explanation.

Affirming in part, the panel held that the district court did not

abuse its discretion in denying the plaintiff’s motion for

sanctions based on the defendant’s alleged spoliation of

evidence. The district court did not abuse its discretion in

interpreting the mandate from a prior appeal to exclude

damages from the issues at trial. The district court also did

not abuse its discretion in denying the plaintiff’s motion for

leave to amend.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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RYAN V. EDITIONS LTD. WEST 3

COUNSEL

Michael A. Painter (argued), Isaacman, Kaufman & Painter,

P.C., Los Angeles, California, for DefendantsAppellants/Cross-Appellees.

Richard A. De Liberty (argued), Santa Rosa, California, for

Plaintiff-Appellee/Cross-Appellant.

OPINION

HAWKINS, Circuit Judge:

After many years of litigation and several appeals to the

Ninth Circuit, artist Victoria Ryan prevailed on a contributory

copyright infringement claim against a publisher of her

artwork, Editions Limited West, Inc. (“ELW”). The district

court awarded Ryan attorney fees pursuant to a fee-shifting

provision contained in the parties’ publishing contract (the

“Agreement”). Both parties appeal.

The primary appeal, initiated by ELW, presents us with

an issue of first impression: Does the Copyright Act of 1976

preclude enforcement of a contractual attorney fees provision

in copyright-based litigation? On cross appeal, we are asked

whether the district court abused its discretion in calculating

the amount of fees to be awarded, excluding the issue of

damages from trial, or denying Ryan’s motion for sanctions

and motion for leave to amend her complaint.

We have jurisdiction under 28 U.S.C. § 1291. We

conclude the Copyright Act does not bar an award of attorney

fees under the circumstances but hold that the district court

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4 RYAN V. EDITIONS LTD. WEST

abused its discretion by categorically excluding the majority

of Ryan’s requested fees without adequate explanation. 

Therefore, we vacate the district court’s order awardingRyan

attorney fees and remand for further proceedings consistent

with this opinion. In all other regards, we affirm the rulings

of the district court.

FACTUAL BACKGROUND

Ryan is an artist working in pastel on paper. ELW is a

publisher of art posters. In 1995, Ryan and ELW executed

the Agreement under which ELW received a license to

publish a limited number of Ryan’s pastel artworks as

posters, and in exchange, ELW agreed to pay Ryan royalties. 

The Agreement also provides that “[i]n the event that

litigation is instituted with regard to this Agreement, the

prevailing party shall be entitled to its costs of the suit,

including reasonable attorney’s fees.”

In the years following Ryan and ELW’s execution of the

Agreement, the production and sale of derivative works of

art, such as canvas transfers, giclées, and wall murals, became

increasingly popular. Many of these derivative works are

produced through varying processes of transferring an art

image from a poster onto another medium. Although the

Agreement expressly granted ELW a license to produce and

sell posters of Ryan’s original works, it did not explicitly

address the subsequent use of those posters for the production

of derivative works.

Not long after derivative works began to rise in

popularity, Ryan began to notice that retailers were offering

canvas transfer and wall mural reproductions of her art for

sale. Believing that ELW (or, at a minimum, its posters) may

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RYAN V. EDITIONS LTD. WEST 5

be involved, Ryan contacted ELW to inquire about the

production and sale of these derivative works. After several

unsuccessful demands, Ryan initiated litigation.

PROCEDURAL HISTORY

Ryan filed her complaint against ELW in August 2006,

alleging that ELW was knowingly supplying the entity

ArtSelect, among others, with posters of Ryan’s artwork for

the purpose of creating derivative works in violation of the

Agreement, the Copyright Act, and California law. ELW

answered, denying Ryan’s allegations, and discovery

commenced.1

After the close of discovery, ELW filed a series of

motions for partial summary judgment. In its first motion,

ELW sought adjudication limiting the amount of Ryan’s

recoverable damages. Specifically, ELW argued that Ryan

had produced evidence of only one act of

infringement—ArtSelect’s sale of a canvas transfer of Ryan’s

pastel entitled Primavera I for which ArtSelect made $1.72

in profit. The district court held that Ryan was not entitled to

statutory damages or attorney fees under the Copyright Act

1 ELW also filed a counterclaim against Ryan for defamation, which

Ryan moved to strike under California’s anti-SLAPP statute on two

occasions. After succeeding on her second motion, the district court

awarded Ryan fees incurred in connection with that motion but denied her

request for fees incurred in connection with her first motion. As explained

in Section I.C. of this opinion, we vacate the district court’s award of

attorney fees and remand for the district court to recalculate its award

consistent with this opinion. In doing so, we also reopen the issue of

whether to award Ryan the reasonable attorney fees that she incurred in

connection with her first anti-SLAPP motion. See Manufactured Home

Cmtys., Inc. v. Cnty. of San Diego, 655 F.3d 1171, 1181 (9th Cir. 2011).

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and that if Ryan succeeded on the liability portion of the

infringement claims, her recoverable damages for those

claims would be limited to $1.72. In separate motions, ELW

sought and obtained summary judgment in its favor on all of

Ryan’s claims. Meanwhile, Ryan filed a competing motion

for summary judgment seeking a determination that she was

the prevailing party within the meaning of the Agreement

despite the fact that ELW obtained judgment in its favor on

all claims. The district court denied Ryan’s motion, and Ryan

appealed to this court.

In her first appeal before us, Ryan challenged the

summary judgment rulings along with several discovery

orders. Ryan v. Editions Ltd. W., Inc., 417 F. App’x 699 (9th

Cir. 2011) [hereafter Ryan I]. We affirmed the district court’s

discovery orders and grant of summary judgment on all

claims except the copyright infringement claims. Id. at 702. 

We reversed the grant of summary judgment on Ryan’s

contributory and vicarious copyright infringement claims

with the following instruction: “If the district court finds

ELW liable for contributory or vicarious copyright

infringement, it should reconsider whether Ryan is the

prevailing party under the broad language of the contract, and

whether she is entitled to a permanent injunction against

ELW.” Id. at 701.

The case returned to the district court on remand, and the

parties prepared for trial on Ryan’s copyright infringement

claims. Prior to the agreed-upon bench trial, Ryan filed a

motion seeking an award of sanctions based on ELW’s

alleged spoliation of evidence. The district court denied

Ryan’s motion, relying on the court’s earlier determination,

affirmed in Ryan I, that the majority of allegedly spoliated

documents were not relevant. The district court further found

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RYAN V. EDITIONS LTD. WEST 7

that Ryan had obtained any potentially relevant documents

from other sources and that her remaining allegations of

spoliation were speculative. In the same order, the district

court instructed the parties that the upcoming trial would be

limited to issues regarding ELW’s liability for vicarious or

contributory copyright infringement, Ryan’s entitlement to

injunctive relief, and Ryan’s status as the prevailing party

under the Agreement.

The parties proceeded to trial. On the final day of trial,

ELW’s president testified that ELW gave its clients

permission to create canvas transfers of its posters if the artist

in question did not have any restrictions in his or her

publishing contract with ELW. In contrast, in an earlier

deposition, ELW’s president had testified that ELWgenerally

would obtain express consent from its artists prior to

authorizing a client’s use of a poster for a canvas transfer. 

Based on this change in testimony, Ryan moved for leave to

amend her complaint to add a claim of fraud. The district

court denied Ryan’s motion.

After the bench trial concluded, the district court found in

favor of Ryan on her contributory copyright infringement

claim. Although the court found that Ryan failed to present

any evidence to “substantiate a claim to any portion of

ELW’s profits or any other damages award,” it held that Ryan

was entitled to injunctive relief. The district court also found

that Ryan was the prevailing party within the meaning of the

Agreement and ordered Ryan to submit supporting evidence

for a claim of attorney fees.

Ryan submitted the affidavit of her attorney as well as

contemporaneous billing logs, demonstrating fees in the

amount of $328,077.50 along with interest and costs. The

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requested fees represent the total fees incurred in prosecuting

all claims and appeals. The district court district court

awarded Ryan $51,363.81 in fees, which it believed

represented the amount associated with Ryan’s contributory

copyright infringement claim.

STANDARD OF REVIEW

We review the district court’s award of attorney fees for

abuse of discretion. Camacho v. Bridgeport Fin., Inc.,

523 F.3d 973, 977–78 (9th Cir. 2008). We review factual

findings for clear error and the interpretation of governing

legal principles de novo. Id. at 977. Whether copyright

preemption applies is a question of law subject to de novo

review. Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079,

1089 (9th Cir. 2005). We review a district court’s denial of

a motion for leave to amend and denial of a motion for

sanctions based on spoliation of evidence for abuse of

discretion. Campbell v. Bd. of Trs. of Leland Stanford Junior

Univ., 817 F.2d 499, 506 (9th Cir. 1987) (motion to amend);

Leon v. IDX Sys. Corp., 464 F.3d 951, 957–58 (9th Cir. 2006)

(motion for sanctions).

DISCUSSION

I. Attorney Fees.

To recover fees in the underlying litigation, Ryan was

required to demonstrate that a statute or contractual provision

permitted such an award. See Staton v. Boeing Co., 327 F.3d

938, 965 (9th Cir. 2003). Conceding that she was not entitled

to recover fees under the Copyright Act due to her failure to

timely register her copyright for Primavera I, see 17 U.S.C.

§ 412, Ryan sought and received an award of fees under the

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RYAN V. EDITIONS LTD. WEST 9

Agreement’s fee-shifting provision. In awarding Ryan fees

under the Agreement, the district court determined that the

Copyright Act does not preclude enforcement of the

Agreement’s fee-shifting provision, but determined that Ryan

was entitled to only a fraction of her requested fees.

Like the district court, we conclude that an award of

attorney fees under the Agreement was permitted under the

circumstances. However, the district court failed to provide

an adequate explanation for its reduction in the amount of

requested fees and impermissibly deducted categories of fees

on a pro rata basis.

A. Copyright Act Preemption.

The Copyright Act expresslypreempts all state law claims

where the plaintiff’s work “come[s] within the subject matter

of copyright” and the state law grants “legal or equitable

rights that are equivalent to any of the exclusive rights within

the general scope of copyright.” 17 U.S.C. § 301(a). 

Congress did not, however, preempt the field when it enacted

the Copyright Act. Foad Consulting Grp., Inc. v. Azzalino,

270 F.3d 821, 827 (9th Cir. 2001) (citing Morseburg v.

Baylon, 621 F.2d 972, 977–78 (9th Cir. 1980)). 

Consequently, claims are not preempted if they fall outside

the scope of § 301(a)’s express preemption and are not

otherwise in conflict with the Act. Id. The state law that is

the subject of our preemption analysis in this appeal is simply

the law that permits the execution and enforcement of

contractual fee-shifting provisions. See CAL. CODE CIV. P.

§ 1021; Xuereb v. Marcus & Millichap, Inc., 3 Cal. App. 4th

1338, 1341 (1992).

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1. Express Preemption under § 301(a).

To determine whether a claim falls within the Copyright

Act’s express preemption provision, we consider whether

(1) the work at issue falls within the scope of copyright

subject matter, and (2) the law at issue grants rights

equivalent to any of the exclusive rights within the scope of

copyright. Montz v. Pilgrim Films & Television, Inc., 649

F.3d 975, 979 (9th Cir. 2011). “To survive preemption, a

state cause of action must assert rights that are qualitatively

different from the rights protected by copyright.” Id. at 980. 

A state cause of action is “qualitatively different” when it

contains an additional element not required for a copyright

claim. Id.; Altera Corp., 424 F.3d at 1089; Summit Mach.

Tool Mfg. Corp. v. Victor CNC Sys., Inc., 7 F.3d 1434,

1439–40 (9th Cir. 1993).

“The [exclusive]rights protected under the Copyright Act

include the rights of reproduction, preparation of derivative

works, distribution, and display.” Altera Corp., 424 F.3d at

1089 (citing 17 U.S.C. § 106). In the event of infringement,

the Copyright Act provides for the recovery of actual or

statutory damages and a discretionary award of attorney fees

to the prevailing party in any civil action brought under the

Act. 17 U.S.C. §§ 504, 505. However, an award of fees

under the Act is not permitted if the copyright holder failed

to timely register the copyright and the infringement occurred

prior to the date of registration. Id. § 412.

Whether and to what extent the Copyright Act might

preempt state law bases for awarding attorney fees is a largely

unanswered question. See MELVILLE B. NIMMER & DAVID

NIMMER,NIMMERONCOPYRIGHT, § 14.10[B](rev. ed. 2012). 

Several courts have considered whether to award fees under

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alternative bases in copyright litigation, but those courts did

not consider the precise issue before us. See Harris Mkt.

Research v. Marshall Mktg. & Commc’ns, Inc., 948 F.2d

1518, 1526–27 (10th Cir. 1991) (awarding fees under

contractual provision in litigation involving both contract and

copyright claims but not addressing issue of preemption); X-It

Prods., LLC v. Walter Kidde Portable Equip., Inc., 227 F.

Supp. 2d 494, 539–40 (E.D. Va. 2002) (awarding fees

pursuant to court’s inherent authority where fees were

otherwise unavailable under Copyright Act but not

considering preemption).

On its face, a party’s right to enforce a contractual feeshifting provision against its contracting partner has little, if

anything, to do with the exclusive rights or subject matter of

copyright. ELW contends, however, that Ryan is not merely

enforcing a contractual right. Rather, she is seeking to

recover an additional remedy on her successful contributory

copyright infringement claim, and in this regard, her right to

enforce the provision intersects with the rights protected

under the Copyright Act.

Even accepting ELW’s contention, we conclude that the

Copyright Act does not preempt California law permitting the

enforcement of the Agreement’s fee-shifting provision. 

Indeed, we, along with our sister circuits, have long

recognized that a contractually-based claim generally

possesses the extra element necessary to remove it from the

ambit of the Copyright Act’s express preemption provision. 

See, e.g., Altera Corp., 424 F.3d at 1089 (“Most courts have

held that the Copyright Act does not preempt the enforcement

of contractual rights.”); ProCD, Inc. v. Zeidenberg, 86 F.3d

1447, 1454 (7th Cir. 1996) (“[A copyright] restrict[s] the

options of persons who are strangers to the author . . . A

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copyright is a right against the world. Contracts, by contrast,

generally affect only their parties; strangers may do as they

please, so contracts do not create ‘exclusive rights.’”).

The reasoning of these cases holds true here. California

law permitting contractual fee-shifting provisions does not

fall within the scope of § 301(a) and therefore is not

preempted by the express terms of the Copyright Act.

2. Conflict Preemption.

The Copyright Act also implicitly preempts laws that

conflict with the Act. See Foad Consulting Grp., 270 F.3d at

827 (state law enforceable “so long as state law does not

otherwise conflict with the Copyright Act”). Such a conflict

exists “where it is impossible for a private party to comply

with both state and federal requirements, or where state law

stands as an obstacle to the accomplishment and execution of

the full purposes and objectives of Congress.” English v.

Gen. Elec. Co., 496 U.S. 72, 79 (1990) (internal quotation

marks and citation omitted).

As it is not impossible for parties to comply with both the

Copyright Act and the California law giving effect to

contractual fee-shifting provisions, CAL. CODE CIV. P.

§ 1021, we must only decide whether the latter would

undermine the purposes of the Copyright Act.

California lawpermittingenforcement of the Agreement’s

fee-shifting provision does not “stand[] as an obstacle to the

. . . full purposes and objectives of Congress” in enacting the

Copyright Act, and § 412 specifically. Id. Congress

amended the Copyright Act in 1976 to provide copyright

protection for works prior to their publication and

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registration. Yet, as the legislative history explains, Congress

sought to encourage copyright holders to make a public

record of their rights before attempting to hold others liable

for the infringement of those rights. H.R. REP. NO. 94-1476,

at 158 (1976). Thus, Congress added § 412 to predicate the

recovery of “extraordinary remedies,” i.e., statutory damages

and attorneyfees, on timely registration even though statutory

protection and traditional remedies, i.e., actual damages and

injunctive relief, would be available regardless of timely

registration. Id.

The concern for having a public record of the copyright

at the time of infringement is not as acute when, as here, the

infringement claim involves two contracting parties. This is

not a case involving a copyright holder’s efforts to enforce its

rights against the world. It is a case involving one party to a

contract enforcing her rights against her contracting partner. 

Even absent public registration, there can be no question that

ELW knew of Ryan’s rights with regard to her artwork—

ELW itself needed a license from Ryan so that it could

lawfully reproduce her work in poster form. The enforcement

of the parties’ private agreement therefore poses no serious

obstacle to the public registration concern underlying § 412.

We recognize, however, that the result might be different

if this case involved a fee-shifting statute, rather than a

private agreement, that permitted a fee award where the

Copyright Act did not. Cf. San Francisco Culinary,

Bartenders, and Serv. Emps. Welfare Fund v. Lucin, 76 F.3d

295, 298 (9th Cir. 1996) (“If a litigant were permitted to

resort to a state statutory procedure to reach around ERISA’s

attorney’s fees provision for fees on an ERISA claim, the

purposes of the ERISA provision would be severely

undermined.”); Bldg. Innovation Indus., LLC v. Onken, 473

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F. Supp. 2d 978, 987–88 (D. Ariz. 2007) (Patent Act

provision allowing discretionary award of attorney fees to

prevailing party in extraordinary cases implicitly preempted

state statute providing for mandatory award of fees in an

action arising out of contract).

BecauseCalifornia law permitting contractual fee-shifting

provisions does not fall within the scope of § 301(a) or

conflict with the purpose of the Copyright Act, we determine

that the Copyright Act does not preempt enforcement of the

Agreement’s fee-shifting provision.2

B. Judicial Estoppel.

In addition to determining that the Copyright Act and

California law did not preclude an award of fees, the district

court found that Ryan was not judicially estopped from

requesting attorney fees under the Agreement based on her

earlier opposition to ELW’s request for fees and concession

that she was not entitled to fees under the Copyright Act. We

 

2

 California law similarly does not preclude an award of fees under the

circumstances. To the extent enforcement ofthe Agreement’s fee-shifting

provision is not precluded by the Copyright Act, it is also not precluded

by California Code of Civil Procedure § 1021. See Cnty. of Sacramento

v. Sandison, 174 Cal. App. 4th 646, 651 (2009) (explaining that in

determining whether state law bars enforcement of a contractual attorney

fees provision, “the question is whether the statutory attorney’s fees

provision expressly, or the policy of the statute implicitly, overrides the

freedom to contract for a different outcome”). Further, California courts

generally find that a fee-shifting provision applicable to claims “relating

to” a contract or claims that the contract “gives rise to” is broad enough

to encompass related tort and statutory claims. See, e.g., Palmer v.

Shawback, 17Cal. App. 4th 296, 299–300 (1993); Xuereb, 3Cal. App. 4th

at 1344–45; see also 3250 Wilshire Blvd. Bldg. v. W.R. Grace & Co.,

990 F.2d 487, 489 (9th Cir. 1993).

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find no error in this determination.

Judicial estoppel is an equitable doctrine that the court has

discretion to invoke to prevent a litigant from taking

contradictorypositions. Russell v. Rolfs, 893 F.2d 1033, 1037

(9th Cir. 1990). The doctrine is “intended to protect against

a litigant playing ‘fast and loose with the courts.’” Rockwell

Int’l Corp. v. Hanford Atomic Metal Trades Council,

851 F.2d 1208, 1210 (9th Cir. 1988). “The emphasis is not

on a hard and fast rule, but rather on prevention of

‘intentional self-contradiction . . . as a means of obtaining

unfair advantage.’” Arizona v. Shamrock Foods Co., 729 F.2d

1208, 1215 (9th Cir. 1984) (quoting Scarano v. Cent. R. Co.

of N.J., 203 F.2d 510, 513 (3d Cir. 1953)).

ELW has failed to demonstrate that Ryan took

inconsistent positions or that the district court abused its

discretion. Despite her concessions that she could not recover

statutory damages or fees under the Copyright Act, Ryan has

at all pertinent times maintained that she was entitled to

recover fees under the Agreement. She requested fees

pursuant to the Agreement’s fee-shifting provision in her

complaint. She later moved for summary adjudication that

she was the prevailing party under the Agreement and thus

entitled to recover the fees she incurred in connection with all

of her claims. And she opposed ELW’s motion for attorney

fees on the bases that ELW waived any right to fees by failing

to request them in its answer, properly substantiate its

request, or establish that it was the prevailing party.

In the absence of any clear evidence that Ryan took

inconsistent positions regarding her entitlement to fees, we

cannot say that the district court erred by declining to invoke

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the highly discretionary doctrine of judicial estoppel.3

C. Amount of Fees.

When calculating the amount of attorney fees to be

awarded in a litigation, the district court applies the lodestar

method, multiplying the number of hours reasonably

expended by a reasonable hourly rate. Hensley v. Eckerhart,

461 U.S. 424, 433 (1983). “By and large, the [district] court

should defer to the winning lawyer’s professional judgment

as to how much time he [or she] was required to spend on the

case.” Moreno v. City of Sacramento, 534 F.3d 1106, 1112

(9th Cir. 2008).

The district court may reduce the amount of requested

fees to reflect a party’s limited degree of success, Hensley,

461 U.S. at 436–37, to account for block billing, Welch v.

Metro. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007), or to

deduct those hours the court deems excessive, Moreno,

534 F.3d at 1112. However, the district court must provide

an adequate explanation for its fee calculation. Hensley,

461 U.S. at 437. While a somewhat cursory explanation may

be sufficient where the disparity between the requested fees

and the district court’s award is slight, “a more specific

articulation of the court’s reasoning is expected” where the

disparity is greater. Moreno, 534 F.3d at 1111.

3 ELW also contends that the district court failed to comport with local

rules regarding the motion practice for requesting attorney fees and failed

to conduct an evidentiary hearing on the parties’ intent regarding the

Agreement’s fee provision. ELW failed to raise these arguments before

the district court and has therefore waived them on appeal. See United

States v. Anekwu, 695 F.3d 967, 985 (9th Cir. 2012).

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Here, Ryan requested $328,077.50 in fees along with

annual interest and costs.4 The parties and district court

agreed that Ryan’s requested hourly rate was reasonable but

disagreed on the amount of reasonable hours expended. The

district court endeavored to reduce the amount of reported

hours to deduct all hours not specifically associated with

Ryan’s contributory copyright infringement claim. First, the

district court subtracted all hours associated with categories

other than the pretrial and trial phases. Next, the district court

subtracted three-quarters of the pretrial and trial phase fees to

reflect the fact that Ryan succeeded on one of her four claims. 

Finally, the district court subtracted another twenty percent

from the remaining amount to account for “block-billing and

interest improperly claimed,” arriving at the final awarded

amount of $51,363.81, approximately fifteen percent of the

requested amount.

1. Categorical Exclusion of Fees Associated with

Tasks Other Than Pretrial and Trial.

As explained in his affidavit offered in support of Ryan’s

fee request, Ryan’s attorney divided the requested fees into

five categories. The affidavit identifies the hours and fees

incurred in connection with each category. The supporting

billing log also contains a column, which identifies the

category to which each time entry belongs.

The district court eliminated all fees associated with four

of the five categories, explaining that the issue of fees for the

excluded categories was “moot” or the supporting

4 Ryan does not argue on appeal that the district court erred in its

calculation of recoverable costs. Therefore, we limit our inquiry to the

district court’s calculation of recoverable fees.

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information was “not sufficiently detailed to show that [the

fees] are specifically related to prosecution of the

contributory copyright infringement claim.” Importantly, the

district court eliminated all fees incurred in connection with

the Ryan I appeal and Ryan’s pre-litigation cease-and-desist

efforts.

The categorical elimination of these fees was error, as the

work associated with the Ryan I appeal and the cease-anddesist letter plainly involved prosecution of Ryan’s

contributory copyright infringement claim. Indeed, in Ryan

I, Ryan obtained a reversal of the district court’s earlier grant

of summary judgment on her infringement claims. And this

court reserved for the district court the determination of

whether to award fees associated with that appeal. Similarly,

the fees associated with Ryan’s cease-and-desist efforts were

also plainly related to the eventual prosecution of her

infringement claim, as the cease-and-desist letter specifically

demanded that ELW cease all infringing activity with third

parties. To the extent the Agreement’s fee-shifting provision

extends to pre-litigation activities, Ryan is entitled to recover

the reasonable fees incurred in connection with her ceaseand-desist efforts.

The district court certainly was permitted, and in fact

required, to analyze whether Ryan achieved only limited

success in the underlying litigation and how her requested fee

award should be reduced to account for her limited degree of

success. However, the district court erred by mechanically

excising entire categories of fees that undoubtedly involved

important work relating to Ryan’s prosecution of her

copyright infringement claim without meaningful

explanation. See Hensley, 461 U.S. at 436–38.

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On remand, the district court may in its discretion reduce

the requested hours and fees to comport with Ryan’s limited

success and to eliminate hours that the court finds are

excessive. There is no precise formula or methodology that

the district court is obligated to follow. Id. If certain hours

are clearly unrelated to Ryan’s contributory copyright claim

or associated issues, those hours may be eliminated. Id. But,

the district court must provide a more detailed explanation for

its reductions and must consider the interrelated nature of the

claims involved in the underlying litigation.

2. Pro Rata Reduction of Pretrial and Trial Fees.

The district court next reduced the amount of remaining

fees by three-quarters to reflect the fact that Ryan succeeded

on only one of the four claims asserted in her complaint. 

Again, we find that the district court erred by applying such

a mechanical approach to reducing Ryan’s requested fees.

Apportionment of fees on a pro rata basis may be

appropriate in limited circumstances. See Cairns v. Franklin

Mint Co., 292 F.3d 1139, 1157–58 (9th Cir. 2002). In most

cases, however, such apportionment fails to adequately

ensure that the fees awarded actually represent the fees

associated with the successful claims. Cf. Harris v. Maricopa

Cnty. Super. Ct., 631 F.3d 963, 972 (9th Cir. 2011). Pro rata

apportionment is particularly ineffective in a case, such as

this one, where the various claims asserted involve a common

set of facts and issues. See Hensley, 461 U.S. at 437–39. The

district court did not explain how a pro rata reduction would

appropriately reduce the fee award to account for Ryan’s

limited success in the action without unfairly eliminating fees

reasonably incurred in connection with her contributory

infringement claim.

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Given the highly interrelated nature of Ryan’s claims, a

pro rata reduction of fees was inappropriate. On remand, the

district court has discretion to select an adequate method for

reducing Ryan’s requested fees that balances Ryan’s

entitlement to fees as the prevailing party with her limited

success in the litigation as a whole.

3. Twenty-Percent Reduction for Block Billing and

Interest.

Finally, the district court reduced the remaining amount

of pretrial and trial phase fees by an additional twenty

percent, explaining that the reduction was meant to account

for “block-billing and interest improperly claimed before the

fee amounts were certain and vested.”

It was within the district court’s discretion to reduce the

requested fee amount to account for the potential inflation of

hours that may result from block billing and to account for

any improperly claimed interest. Welch, 480 F.3d at 948. 

But, the district court provided no explanation for the

determination that twentypercentwas the appropriate amount

to deduct, and failed to account for the fact that many of the

entries in Ryan’s billing log were not billed in block format. 

Absent such explanation, we are unable to adequately review

or sustain the district court’s action. Id.(unexplained, blanket

reduction for block billing inappropriate where not all time

entries were billed in block format); see also Chaudhry v.

City of Los Angeles, 751 F.3d 1096, 1111 (9th Cir. 2014)

(specific explanation required for reduction over ten percent).

Therefore, we vacate the district court’s across-the-board

twenty-percent reduction. On remand, the district court may

reduce the requested fee amount to account for block billing

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and improperly claimed interest, but it must “‘explain how or

why . . . the reduction . . . fairly balance[s]’ those hours that

were actually billed in block format” and how it determined

the percentage of reduction to apply. Welch, 480 F.3d at 948

(quoting Sorenson v. Mink, 239 F.3d 1140, 1146 (9th Cir.

2001)).

II. Motion for Sanctions Due to Spoliation.

We next consider whether the district court erred in its

pretrial ruling denying Ryan’s motion for sanctions based on

ELW’s alleged spoliation of evidence. We see no abuse of

discretion. Fjelstad v. Am. Honda Motor Co., Inc., 762 F.2d

1334, 1337 (9th Cir. 1985) (“The district court’s discretion

will not be disturbed unless we have a definite and firm

conviction that the court committed a clear error of judgment

in the conclusion it reached upon a weighing of the relevant

factors.” (internal quotation marks, alterations, and citation

omitted)).

Ryan had the burden of establishing spoliation by

demonstrating that ELWdestroyed documents and had “some

notice that the documents were potentially relevant to the

litigation before they were destroyed.” United States v.

Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002)

(internal quotation marks omitted). Upon a finding of

spoliation, the district court had discretion to impose

sanctions pursuant to its inherent power. Leon, 464 F.3d at

959; Fjelstad, 762 F.2d at 1338.

The district court identified the proper legal framework

with which to evaluate Ryan’s motion and denied the motion

because the documents were irrelevant, Ryan obtained them

from other sources, and the remaining claims of spoliation

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were speculative. In other words, the district court found that

Ryan failed to carry her burden of showing spoliation as to

some documents, and the record demonstrated that Ryan

suffered no prejudice as a result of ELW’s failure to preserve

other documents. These findings are adequate bases for

denying Ryan’s motion. See, e.g., Kitsap Physicians Serv.,

314 F.3d at 1001; Akiona v. United States, 938 F.2d 158, 161

(9th Cir. 1991) (spoliation sanctions not warranted absent

threshold showing of relevance).

III. Exclusion of Damages as Issue for Trial.

In the same order denying Ryan’s motion for sanctions,

the district court also ordered that the trial would be “limited

to the specific issues set forth by the Ninth Circuit for

remand,” which did not include reopening the issue of Ryan’s

damages. Although Ryan argued that the district court

erroneously found her damages were limited to $1.72, our

decision in Ryan I reversed the district court’s earlier order

only on the issue of copyright infringement liability and

reopened the issues of injunctive relief and attorney fees

based on the outcome of the remand proceedings. In all other

respects, we affirmed the district court.

Ryan I contains only one sentence relating to copyright

infringement damages: “Insofar as the district court found

that Ryan could not prove damages, we note that ArtSelect’s

profits from the infringement were at least partially caused by

ELW’s unauthorized license of Ryan’s works. See Mackie v.

Rieser, 296 F.3d 909, 911 (9th Cir. 2002).” Ryan I, 417 F.

App’x at 701. We interpret this statement to relate to

causation of damages rather than to the amount of damages,

as Ryan urges. Furthermore, Ryan has not suggested that she

has any evidence demonstrating additional infringing sales

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that would support an increased damages award and concedes

that she did not attempt to present such evidence at trial.

The district court did not abuse its discretion in

interpreting the mandate from Ryan I to exclude damages

from the issues for trial.

IV. Motion for Leave to Amend.

Finally, we consider whether the district court erred by

denying Ryan’s motion for leave to amend. The district court

had considerable discretion in deciding whether to grant

Ryan’s motion for leave to amend, which she filed at the

conclusion of the trial. Campbell, 817 F.2d at 506. The

district court was required to consider the “propriety of

[Ryan’s] motion to amend by ascertaining the presence of any

of four factors: bad faith, undue delay, prejudice to [ELW],

and/or futility.” Serra v. Lappin, 600 F.3d 1191, 1200 (9th

Cir. 2010) (quoting William O. Gilley Enters. v. Atl. Richfield

Co., 588 F.3d 659, 669 n.8 (9th Cir. 2009)).

The district court’s denial of Ryan’s motion is supported

by its findings of undue delay and prejudice. See Drew v.

Equifax Info. Servs., LLC, 690 F.3d 1100, 1111 (9th Cir.

2012). The district court specifically found that Ryan’s

failure to bring her motion prior to the close of trial was

unreasonable. Indeed, Ryan had asserted in the years leading

up to trial (including in her earlier appeal to this court) that

ELW lied about its authorization of canvas transfers and

routinely permitted its customers to reproduce its artists’

work.

Even if the trial garnered unexpected testimony from one

ELW executive that supported Ryan’s proposed fraud claim,

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the general facts and theories underlying that claim were

known to Ryan throughout the litigation. See id. (affirming

denial of leave to amend to assert new legal theory where

party seeking leave generally knew facts and theory earlier in

litigation); Royal Ins. Co. of Am. v. Sw. Marine, 194 F.3d

1009, 1016–17 (9th Cir. 1999) (same). Further, the district

court effectively found that granting Ryan’s motion would

result in prejudice when it recognized that granting the

motion would necessitate reopening discovery and

conducting a new trial. See Lockheed Martin Corp. v.

Network Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1990). 

Thus, the district court did not abuse its discretion in denying

Ryan’s motion for leave to amend.5

CONCLUSION

We affirm the district court’s pretrial order setting the

issues for trial and affirm its orders denying Ryan’s motions

for sanctions and for leave to amend. Although the district

court correctly determined that Ryan was entitled to attorney

5 Ryan also sought leave to amend on the basis that the parties tried the

issue of fraud by consent. In support, Ryan relies on her own rebuttal

testimony in which she discussed licensing additional works to ELW

under her allegedly false belief that ELW did not have a practice of

authorizing the use of its posters for production of canvas transfers. 

Ryan’s testimony does not establish the elements of fraud and according

to her counsel was offered merely to provide “context” as to why Ryan

was searching the Internet for canvas transfer reproductions of her work. 

Her testimony is not the type of evidence so clearly intended to introduce

the issue of fraud that is required to support an amendment under Rule

15(b). See Consol. Data Terminals v. Applied Digital Data Sys., Inc.,

708 F.2d 385, 396 (9th Cir. 1983) (Rule 15(b) should not be used to

permit amendments “to include issues which may be ‘inferentially

suggested by incidental evidence in the record.’” (quoting Cole v. Layrite

Prods. Co., 439 F.2d 958, 961 (9th Cir. 1971))).

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fees, the district court abused its discretion by categorically

excluding the majority of Ryan’s requested fees and failing

to provide an adequate explanation for its calculations.

AFFIRMED, in part, VACATED in part, and

REMANDED. Ryan is awarded her costs on appeal.

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