Court Opinion

ID: 2964598
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:28:05.124274+00
Date Added: 2024-06-11T15:01:51.746324
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                                 ____________________

        No. 96-2192

                                   MARTHA EDWARDS,

                                 Plaintiff, Appellee,

                                          v.

                                 RED FARM STUDIO CO.,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

                     [Hon. Ernest C. Torres, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                 Lynch, Circuit Judge,
                                        _____________

                      Aldrich and Bownes, Senior Circuit Judges.
                                          _____________________

                                 ____________________

            John D. Deacon, Jr. for appellant.
            ___________________
            Michael T.  Eskey with whom Lauren  E. Jones  and Jones Associates
            _________________           ________________      ________________
        were on brief for appellee.

                                 ____________________

                                    March 28, 1997
                                 ____________________

                      ALDRICH, Senior  Circuit Judge.  This  is an appeal
                               _____________________

            by Red Farm Studio Co., a successful defendant in a copyright

            infringement  case, from  the  court's denial  of  attorney's

            fees.    Concededly,  fees  are  discretionary,  the  statute

            reading as follows,

                           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  court  did award  defendant  partial

            costs.

                      Defendant  has  assumed  a heavy  burden,  but  not

            without justification.  We reverse.

                      A nationwide difference  of views  on this  subject

            led to the  case of Fogerty v.  Fantasy, Inc., 510  U.S. 517,
                                _______     _____________

            534  (1994), where  the Court  rejected the  so-called "dual"

            standard  rule.   "[P]revailing  plaintiffs [were]  generally

            awarded  attorney's  fees  as   a  matter  of  course,  while

            prevailing defendants  must show  that the original  suit was

            frivolous  or brought in bad faith."  510 U.S. at pp. 520-21.

            Rather, defendants are entitled to consideration "evenhandly"

            with plaintiffs.

                      The Court particularly criticized Breffort v. The I
                                                        ________    _____

            Had a Ball Co., 271 F. Supp. 623 (S.D.N.Y. 1967), saying, 
            ______________

                                         -2-

                           That   court  concluded   that  "the
                      considerations prompting an award of fees
                      to   a   successful  plaintiff   must  of
                      necessity  differ from  those determining
                      whether   a   prevailing   defendant   is
                      entitled  to such  an award."   Breffort,
                                                      ________
                      271 F.  Supp., at  627.  As  support, the
                      court stated:   "The purpose of an  award
                      of  counsel  fees  to a  plaintiff  is to
                      deter  copyright infringement. . . .   In
                      the  case  of  a   prevailing  defendant,
                      however,  prevention  of infringement  is
                      obviously not  a factor; and if  an award
                      is  to be  made at  all, it  represents a
                      penalty  imposed  upon the  plaintiff for
                      institution of a baseless,  frivolous, or
                      unreasonable suit, or  one instituted  in
                      bad faith."   Ibid.   As we  have already
                                    _____
                      explained,  supra,  at 527,  such  is too
                                  _____
                      narrow  a view  of  the  purposes of  the
                      Copyright   Act   because  it   fails  to
                      adequately  consider  the important  role
                      played by copyright defendants.

            510 U.S. at 532 n.18.

                      The  district  court  ruling  that   Fogerty  found
                                                           _______

            improper  was  that  the  defendant could  not  recover  fees

            because  it  had  not   "demonstrated  that  the  action  was

            frivolous  or was  instituted and  prosecuted in  bad faith."

            Fantasy,  Inc. v.  Fogerty,  984 F.2d  1524,  1532 (9th  Cir.
            ______________     _______

            1993).  The  Supreme Court  condensed this  to "frivolous  or

            brought in bad faith."

                      In  the case  at  bar1 there  were three  pertinent

            court proceedings.  On November 16, 1995, the court delivered

            an oral  opinion denying plaintiff Martha  Edwards' claims of

                                
            ____________________

            1.  The plaintiff also brought claims for breach of contract,
            violations of the Lanham Act and unfair competition.  None of
            these claims concerns us here.

                                         -3-

            copyright  infringement  on  six out  of  eight  works.2   On

            September  9, 1996, it  conducted a hearing  on cross motions

            for attorneys'  fees and  sanctions.  Except  for defendant's

            stating that it  was cited  in its memorandum,  there was  no

            mention of  Fogerty; both  counsel argued exclusively  on the
                        _______

            question of  unreasonableness.  The court  reserved decision.

            On  September 18, it delivered  an oral decision on copyright

            fees, Lanham Act fees, and Fed. R. Civ. P. 11 sanctions.

                      On  copyright,  our  only  issue,  the  court  gave

            reasonableness little attention.  It said,

                           The  Supreme  Court  in the  Fogerty
                                                        _______
                      case  identified some of the factors that
                      the   Court   ought   to    consider   in
                      determining   whether  to   exercise  its
                      discretion and award counsel fees.  Those
                      [sic], basically, there  are two  factors
                      that Fogerty identified.  One  is whether
                           _______
                      the  claim  could  be   characterized  as
                      frivolous    and    second,   what    the
                      Plaintiff's motive was, whether the claim
                      was brought in bad faith.

            This seems singular emphasis,  since Fogerty's point was that
                                                 _______

            these  extremes  were  no  longer  the  sole  factors  to  be

            considered.  510 U.S. at 534 n.19.3  The court proceeded,

                                
            ____________________

            2.  Defendant,  with apologies,  conceded an  inadvertence on
            the other two.  The court noted that "those claims turned out
            to be a pittance."

            3.  The Court listed  non-exclusive factors to  be considered
            by courts in making awards of attorney's fees including,

                           [F]rivolousness,         motivation,
                      objective  unreasonableness (both  in the
                      factual and legal components of the case)
                      and the need in  particular circumstances

                                         -4-

                           Here  the  Defendant  relies on  the
                      twenty year course of dealing between the
                      parties to establish  that the  Defendant
                      acted  properly  and  that the  Plaintiff
                      acted unreasonably and/or in bad faith in
                      bringing the copyright claims.

                      The  district  court  then   described  plaintiff's

            asserted   justification   for    bringing   suit,    namely,

            ambiguities.   Ambiguities  did not  win  the case,  but they

            defeated frivolousness and bad faith.

                           So   in   light  of   those  things,
                      although [I] found  for the Defendant for
                      a   variety   of   reasons,    I   cannot
                      characterize  the  Plaintiff's  copyright
                      claims as  being frivolous or  brought in
                      bad faith.

                           Therefore,  I  will  not  award  any
                      attorney's fees to the Defendant  for the
                      copyright claims.

                      Faced with this positive language,  plaintiff urges

            us to interpret liberally, arguing that,

                           Viewed  in  its proper  context, the
                      record  elsewhere   additionally  reveals
                      that while the court may have principally
                      articulated its conclusions at the moment
                      of    its    decision    in   terms    of
                      frivolousness,   it    used   that   term
                      interchangeably       with      objective
                      unreasonableness.

                      The "elsewhere,"  except in the  earlier hearing on

            September 9, is not conspicuous.   Plaintiff would have  been

            more   accurate   had   she   said  that   the   court   read

                                
            ____________________

                      to advance considerations of compensation
                      and deterrence.

            510 U.S. at 534 n.19 (citations omitted).

                                         -5-

            unreasonableness in terms of frivolousness.4   But manifestly

            Fogerty did not reject the dual rule in order to add a clone.
            _______

                      We  say this  particularly  because the  court held

            that an obligation  for fees was  not sparked by  plaintiff's

            unilaterally  rejecting a  practice between  the  parties, as

            artist  and publisher,  that plaintiff  had accepted  for two

            decades; the more  especially when her rejection was based on

            ambiguities  which,  in its  decision denying  liability, the

            court had said  she could not rely on because  it was she who

            had  created them.   This,  it seems  to us,  was inescapably

            highly unreasonable, if not  frivolous.  The court overlooked

            not only the  tenor of  the Fogerty opinion,  but its  above-
                                        _______

            quoted  footnote recognizing  "the important  role played  by

            copyright  defendants," --  preventing copyright  owners from

            restricting  rightful publications.    It used  too strict  a

            requirement,    acknowledged,     and    then    disregarded,

            unreasonableness, and reached a wrong result.

                                
            ____________________

            4.  For  good measure we note the  court's repetition of this
            equivalency when considering plaintiff's obligation  for fees
            for the Lanham Act claims (which the court granted, plaintiff
            having introduced no evidence),

                           The  factors  to  be considered  are
                      similar  to  those  applicable under  the
                      Copyright  Act  whether  the claims  were
                      frivolous or brought in bad faith.   What
                      it boils down to is whether the Plaintiff
                      acted   reasonably   in  bringing   these
                      claims.

                                         -6-

                      Ordinarily  we  would now  remand for  defendant to

            start over.  However,  plaintiff's claim was so poor  that we

            consider  it would  be an  abuse of  discretion not  to award

            fees; the only question should be the amount.  We reverse and

            remand  for that  purpose, cf.  Diamond Star  Bldg. Corp.  v.
                                       ___  _________________________

            Freed,  30 F.2d  503, 506  (4th Cir.  1994), to  the original
            _____

            judge.

                                         -7-