Court Opinion

ID: 71029
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:11:06+00
Date Added: 2024-06-11T12:36:10.287018
License: Public Domain

United States Court of Appeals,

                              Eleventh Circuit.

                                   No. 95-4424.

 MCA TELEVISION LTD. a Delaware Corporation, Plaintiff-Appellee,

                                          v.

             C. Elvin FELTNER, Jr., Defendant-Appellant.

                J. Clifford Curley, et al., Defendants.

                               July 26, 1996.

Appeal from the United States District Court for the Southern
District of Florida. (No. 93-14213-CIV-EBD), Edward B. Davis,
Judge.

Before COX and BARKETT, Circuit Judges, and BRIGHT*, Senior Circuit
Judge.

     BARKETT, Circuit Judge:

     C. Elvin Feltner, Jr., appeals from a $9 million judgment

against   him   in   favor   of     MCA    Television    following    a   non-jury

copyright infringement trial.             Feltner contends that the judgment

must be reversed because the district court (1) lacked subject

matter    jurisdiction,      (2)    erred      in   finding   that   he   breached

licensing agreements when he failed to pay licensing fees that had

become due under those agreements, and, finally (3) erred in

calculating damages.      We affirm.

                             Factual Background

     MCA owns syndicated television programs and Feltner owns

television stations.      MCA and Feltner entered into an agreement in

which MCA licensed Feltner to show certain programs, such as

"Kojak" and "The A Team."          When Feltner failed to pay fees that had

     *
      Honorable Myron H. Bright, Senior U.S. Circuit Judge for
the Eighth Circuit, sitting by designation.
become due, MCA suspended his right to televise its programs.

Notwithstanding the suspension, Feltner continued to televise the

MCA programs.     MCA sued Feltner claiming 900 separate acts of

copyright infringement;        one for each unauthorized program that

Feltner aired.    The district court found for MCA, awarded $10,000

pursuant to statute for each of the 900 unauthorized programs

aired, and entered a $9 million judgment against Feltner.

                                Discussion

       Feltner initially asserts that the district court lacked

subject matter jurisdiction because this cause did not "arise

under" the Copyright Act.      17 U.S.C. § 501 et seq.    Feltner argues

that this case involves a breach of contract claim and that the

federal district court therefore did not have jurisdiction.              We

disagree and find that the court had subject matter jurisdiction

over   MCA's   claim   under   the   Copyright   Act.   See   Sullivan   v.

Naturalis, 5 F.3d 1410, 1413 (11th Cir.1993).

       Feltner next asserts that the district court erred in finding

that he breached the licensing agreements when he failed to pay the

licensing fees. The licensing agreements provided that, if Feltner

failed to pay the licensing fees, MCA could terminate Feltner's

right to broadcast MCA programs.       Feltner does not dispute that he

failed to pay the fees.        He argues, rather, that MCA waived its

right to terminate the licensing agreements because MCA treated

prior termination letters merely as collection letters to induce

payment.   We conclude that the district court's factual finding

that MCA did not waive its right to terminate the licensing

agreements was not clearly erroneous.
       Finally, Feltner argues that the district court erred in its

calculation of damages in various ways, only some of which we find

necessary     to     discuss       here.       Initially,    we   reject         Feltner's

assertion that the district court erred in finding that Feltner

acted "willfully" in infringing MCA's copyright, which resulted in

a higher statutory damages determination. Section 504(c)(1) of the

Copyright Act, 17 U.S.C. § 504(c), provides that the copyright

owner may elect to recover, instead of actual damages and profits,

an award of statutory damages "in a sum of not less than $500 or

more   than       $20,000"       for   each    infringement.      See       17   U.S.C.    §

504(c)(1) (1996).               Section 504(c)(2) provides for an enhanced

damages award if the infringement was willful and for a reduced

award if the infringement was innocent. One commentator has stated

that "[i]t seems clear that as here used "willfully' means with

knowledge     that        the    defendant's     conduct    constitutes          copyright

infringement."           3 Nimmer on Copyright (1990), § 14.04[B], 14-58-60

(emphasis added).

        We    note       that,     although     the   district    court      found   that

Feltner's infringements of MCA's copyrights were "willful, not

innocent, in nature," the district court awarded damages of $10,000

per    airing,      an     amount      which   did    not   require     a    finding      of

willfulness.         In any event, the district court's finding that

Feltner acted willfully was not clearly erroneous.                          As the court

pointed out, Feltner knew that MCA's revocation of his stations'

license      to     air     MCA     programs     prevented     him    from       lawfully

broadcasting them.              As such, Feltner knew his conduct constituted

copyright infringement.
      Feltner      also     argues    that    the    district       court   erred   in

calculating damages because it awarded damages for each episode

broadcast,   as    opposed    to     each    series,      as   a   separate   "work."

Although the federal Copyright Act allows for damages based on each

"work," see 17 U.S.C. § 504(c)(1) (providing that "the copyright

owner may elect, at any time before final judgment is rendered, to

recover,   instead    of    actual     damages      and    profits,    an   award   of

statutory damages for all infringements involved in the action,

with respect to any one work            ") (emphasis added), it does not

define the term "work."

     The circuits that have defined "work" have held that "separate

copyrights are not distinct "works' unless they can "live their own

copyright life.' "        Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d
1106 (1st Cir.1993);        Robert Stigwood Group, Ltd. v. O'Reilly, 530
F.2d 1096, 1105 (2nd Cir.1976);              Walt Disney Co. v. Powell,             897
F.2d 565, 569 (D.C.Cir.1990).              This test focuses on whether each

expression has an independent economic value and is, in itself,

viable. 11 F.3d at 1116, 530 F.2d at 1105, 897 F.2d at 568.

     Feltner      asserts    that    the    industry      practice     is   to   enter

contracts for television series, not individual episodes of series,

and that no one would purchase and air just one episode of a

series.    He argues that, for these reasons, an individual episode

of a series does not have independent value, is not "commercially

viable," and therefore is not a "work" under the test adopted by

the First, Second, and D.C. Circuits.

     Although we agree with the test adopted by other circuits in

defining a "work," we find that Feltner has failed to meet it here.
Indeed, in Gamma, the First Circuit rejected the same argument

Feltner now makes.       Gamma involved a video rental store, Ean-Chea,

that reproduced and rented unauthorized videotape copies. 11 F.3d

at 1108.     The district court found that Ean-Chea infringed the

copyrights of four episodes of a Chinese language television series

owned by Gamma.         In calculating statutory damages, the district

court gave Gamma a single award, concluding that although Ean-Chea

had infringed upon the copyrights in four separate episodes of the

series, these episodes constituted only one work based in part on

the fact that Gamma sells or rents only complete sets of the series

to video stores.          Id. at 1115.          The First Circuit reversed,

reasoning that

     [a] distributor's decision to sell or rent complete sets of a
     series to video stores in no way indicates that each episode
     in the series is unable to stand alone. More significant for
     present purposes is the fact that (1) viewers who rent the
     tapes from their local video stores may rent as few or as many
     tapes as they want, may view one, two, or twenty episodes in
     a single sitting, and may never watch or rent all of the
     episodes;    and (2) each episode in the [ ] series was
     separately produced.

Id. at 1117.

     Similarly,     the       decision   of   a   distributor   of   television

programs to sell television series as a block, rather than as

individual shows, in no way indicates that each episode in a series

is unable to stand alone.          Each episode was produced independently

from the other episodes and each was aired independently from

preceding and subsequent episodes. Moreover, each episode, and not

each series, was individually copyrighted by MCA.

      Along the same lines, we reject Feltner's argument that each

episode    was   part    of   a   "collective     work."   Section   504(c)(1)
provides that "all parts of a compilation ... constitute one work."

The Copyright Act defines "compilation" as

     a work formed by the collection and assembling of preexisting
     materials or of data that are selected, coordinated, or
     arranged in such a way that the resulting work as a whole
     constitutes an original work of authorship.         The term
     "compilation" includes collective works.

17 U.S.C. § 101 (emphasis added).              A "collective work" is "a work,

such as a periodical issue, anthology, or encyclopedia, in which a

number of contributions, constituting separate and independent

works in themselves, are assembled into a collective whole."                    Id.

     Feltner    points       to   a   clause    in    the   licensing   agreements

referring to anthologies and argues that each series at issue here

is an anthology.      We are not persuaded.            InTwin Peaks Productions,

Inc. v. Publications International, Ltd., 996 F.2d 1366 (2nd

Cir.1993),     the    Second      Circuit      addressed     the   issue   of   the

appropriate    unit    for    determining       statutory     copyright    damages.

There, Publications International had published a book containing

a detailed discussion of the plots of eight episodes of the

television show "Twin Peaks."            Publications International argued,

as Feltner does here, that, although each episode of "Twin Peaks"

was individually copyrighted, it constituted a single work under

section 504 of the Copyright Act. The Second Circuit rejected this

argument, stating that "[t]he author of eight scripts for eight

television episodes is not limited to one award of statutory

damages just because he or she can continue the plot line from one

episode   to   the    next    and     hold   the     viewers'   interest   without

furnishing a resolution."             Id. at 1381.

     Feltner's argument is not as strong as that rejected by the
Second Circuit in Twin Peaks.            Whereas "Twin Peaks" involved a

series of eight shows with a plot that linked the shows together

into one cohesive story, the programs at issue here—"The A Team"

and "Kojak"—are series with individual plots in each episode.

Thus,    the   district     court    properly   awarded    damages   for   each

television episode, rather than for each series, broadcast as a

separate "work."

         Finally, Feltner asserts that the district court erred in

calculating damages because it awarded damages for multiple airings

of the same episode.         He argues that, under the Copyright Act,

statutory damages are based on each "work" infringed, rather than

each infringement, see 17 U.S.C. § 504(c), and that if the same

episode is aired three times, only one work has been infringed, not

three. MCA responds that Feltner did not properly place this issue

before the district court for determination and that, as a result,

we cannot reach the merits of the issue.            We agree with MCA.

        Section 504(c)(1) provides that "the copyright owner may elect

... an award of statutory damages for all infringements involved in

the action, with respect to any one work...." (emphasis added).

The Fifth Circuit summarized the effect of section 504(c)(1):

     Under this section, the total number of "awards" of statutory
     damages (each ranging from $500 to $20,000) that a plaintiff
     may recover in any given action depends on the number of works
     that are infringed and the number of individually liable
     infringers, regardless of the number of infringements of those
     works. So if a plaintiff proves that one defendant committed
     five separate infringements of one copyrighted work, that
     plaintiff is entitled to only one award of statutory damages
     ranging from $500 to $20,000. And if a plaintiff proves that
     two different defendants each committed five separate
     infringements of five different works, the plaintiff is
     entitled to ten awards, not fifty.

Mason    v.    Montgomery    Data,    Inc.,   967 F.2d 135,   143-44   (5th
Cir.1992);    see also Walt Disney Company v. Powell, 897 F.2d 565,

569 (D.C.Cir.1990).

     In this case, however, the district court determined that the

parties had failed to raise the issue of whether multiple airings

of the same episode were included within the 900 broadcasts of MCA

programs that Feltner agreed he aired after MCA had withdrawn

Feltner's license.    The district court concluded that the parties

had agreed in the pretrial stipulation that, if Feltner were found

liable for copyright infringement, the number of works infringed

was 900, one for each of the programs Feltner aired after MCA

withdrew Feltner's license.

     Rule 16.1E of the Local Rules of the Southern District of

Florida instructs parties to file a Joint Pretrial Stipulation no

later than five days prior to the pretrial conference.           Rule 16.1E

provides that "[t]he pretrial stipulation shall contain ... [a]

concise statement of issues of law which remain for determination

by the court."      Rule 16.1G further provides that "the pretrial

stipulation   ...   will   control   the   course   of   the   trial."   We

previously have stated that we owe great deference to the trial

judge's interpretation and enforcement of pretrial stipulations.

See West Peninsular Title Co. v. Palm Beach County, 41 F.3d 1490,

1493 (11th Cir.1995).

     In this case, Feltner and MCA agreed in their joint pretrial

stipulation that "[e]ach [of Feltner's] telecasts without MCA's

authority—totalling at least 900 in number—constitutes a separate

act of copyright infringement."       In the statement of uncontested

facts, the parties agreed that Feltner's stations "continued to
telecast MCA's programs after April 13, 1992 [the date MCA withdrew

Feltner's license to telecast the programs], on a total of at least

900 separate occasions."       In the "statement of issues of law which

remain for determination," the parties did not list as a remaining

issue whether multiple airings of a single episode of a program

infringed one work or multiple works.          The parties merely stated

generally that "what statutory damages shall be awarded in favor of

MCA under § 504(c) of the Copyright Act" remained to be determined.

Thus, despite agreeing to the fact that 900 acts of copyright

infringement had occurred, nowhere in the pretrial stipulation did

Feltner alert the district court to the specific legal issue of

whether the 900 infringements might include multiple broadcasts of

the same program that did not constitute separate "works" under

section 504(c).

     Moreover, Feltner presented no evidence at trial that the 900

"separate act[s] of copyright infringement" he stipulated to in the

pretrial stipulation involved less than 900 infringements under

section   504(c)   due   to   multiple   airings   of   the    same    program.

Feltner failed even to raise this issue until his closing argument.

As the district judge properly pointed out after announcing his

findings, closing argument simply was too late to raise a new legal

issue for the first time.         See Fehlhaber v. Fehlhaber, 681 F.2d
1015, 1030 (5th Cir. Unit B 1982) ("[A]n argument first raised in

a postjudgment motion is simply too late.").

     In   light    of   the   pretrial   stipulation    in    this    case,   the

deference we give a district court in interpreting a pretrial

stipulation, and Feltner's failure to offer evidence at trial on
the   issue,   we   find    that       the   district    court      did   not   err   in

interpreting the pretrial stipulation as not placing in issue the

number of works infringed.             Although Feltner now argues on appeal

that 900 acts of copyright infringement is not the same as 900

works under section 504(c), the time to raise this issue was in the

issues of law section of the pretrial stipulation, or, at the very

latest, during his case at trial.              Because Feltner failed to raise

the issue there, he cannot now raise it here.

      Trial courts cannot be expected to try an issue that the

parties have not placed before it. Accordingly, the district court

did not err in refusing to reopen the case after it had announced

its findings to hear evidence on an issue not identified in the

pretrial stipulation.           Accordingly, the district court's judgment

is AFFIRMED.

      BRIGHT, Senior Circuit Judge, dissenting:

      The district court assessed Feltner $9,000,000 in statutory

damages—$10,000 for each of the 900 occasions on which MCA's

programming was improperly aired.                Because I believe that the

district court incorrectly assessed statutory damages for each

infringement (including repeat showings) rather than for each work

(i.e. individual episode) infringed, I would remand the case to the

district court for a correct determination of damages.

      The court's opinion correctly observes that the text of

section   504(c)(1)        of    the    Copyright       Act   and    the    case      law

interpreting that Act make clear that the statute allows only one

award of statutory damages for each                 work infringed.             Section

504(c)(1) provides:
     the copyright owner may elect, at any time before final
     judgment is rendered, to recover, instead of actual damages
     and profits, an award of statutory damages for all
     infringements involved in the action, with respect to any one
     work,....

17 U.S.C. § 504(c)(1) (emphasis added).1       See Mason v. Montgomery

Data, Inc., 967 F.2d 135, 143-44 (5th Cir.1992) ("So if a plaintiff

proves that one defendant committed five separate infringements of

one copyrighted work, that plaintiff is entitled to only one award

of statutory damages....");      Walt Disney Co. v. Powell, 897 F.2d
565, 569 (D.C.Cir.1990) ("Both the text of the Copyright Act and

its legislative history make clear that statutory damages are to be

calculated according to the number of works infringed, not the

number of infringements.")

     This court, however, finds this established legal standard

inapposite     because   of   statements   included   in   the   pretrial

stipulation.     The majority observes that Feltner presented no

evidence at trial that the 900 "showings" he stipulated to in the

pretrial stipulation amounted to less than 900 "works" due to

multiple telecasts of the same program. The majority contends that

because Feltner failed to raise this issue until after the close of

the evidence, he became estopped from raising the issue in the

     1
      The legislative history of section 504 provides:

          A single infringer of a single work is liable for a
          single amount ..., no matter how many acts of
          infringement are involved in the action and regardless
          of whether the acts were separate, isolated, or
          occurred in a related series.

     H.R.Rep. No. 1476, 94th Cong., 2d Sess., at 162 (1976),
     reprinted in 1976 U.S.C.C.A.N. 5659, 5778.
district court and from asserting error in that regard on appeal.2

The majority decision represents an erroneous interpretation of the

pretrial stipulation, unjustly shifts the burden of establishing

damages      from   the   plaintiff   to   the   defendant,    and    awards    the

plaintiff damages to which it is not entitled under the law.

       First, the issue of damages was properly before the district

court.        One of the remaining issues of law specified by the

pretrial stipulation was "what statutory damages shall be awarded

in favor of MCA under § 504(c) of the Copyright Act."                As developed

above, section 504(c) provides for one award of statutory damages

per work infringed.          The first question subsumed in this issue is

thus what constitutes a "work" under the Copyright Act.                  Although

this       sub-issue   was   not   specifically    raised     in   the   pretrial

stipulation, the district court, and indeed this court on appeal,

properly addressed it as a necessary aspect of the statutory

damages       claim.      Having    resolved     this   initial      question   by

determining that each episode constituted a work, the inquiry

shifted to how many works had been infringed.             The district court,

however, held that this second sub-issue had not been properly

raised.      To my mind, there exists no basis for determining that the

pretrial stipulation raised the first sub-issue but not the second.

Both are subsumed by the issue "what statutory damages shall be

awarded in favor of MCA under § 504(c) of the Copyright Act."

       2
      Feltner argues on appeal that he was surprised by the
sudden close of the trial and that the district court erred by
denying him the opportunity to present evidence on the issue of
damages. Although this claim is not the basis of my dissent, I
believe the majority should have addressed this alleged
irregularity in the proceedings before summarily stating that
Feltner "failed to offer evidence" on the damages issue.
     Second, the plaintiff, MCA, bears the burden of establishing

its right to damages. Once the district court determined that each

episode constituted a "work," it was MCA's obligation to establish

the number of different episodes improperly aired.                MCA did not

carry this burden by the pretrial stipulation, and the district

court plainly erred in finding otherwise. The pretrial stipulation

stated   only    that   there   had   been   900   unauthorized    telecasts.

Contrary to the opinion of the court, at no point did the pretrial

stipulation state the number of "works" infringed, nor did it

provide the number of different episodes involved.3           Although 900

may have been a convenient number, it was not the correct number of

"works."4    It was MCA's obligation to establish the number of works

infringed.      The district court should not have determined MCA's

failure to fully develop its damages claim in a manner favorable to

MCA and detrimental to the defendant.

     3
      In fact, what constituted a work was an issue before the
district court and indeed before this court on appeal. MCA
contended that each episode constituted a work, while Feltner
maintained that each television series was a single work. Since
the number of different episodes was irrelevant under Feltner's
version of the case, he had no reason to develop those facts at
trial. Once the district court determined that each episode
constituted a work and announced that it would use the 900
infringements established by the pretrial stipulation as the
basis of its award, Feltner argued that several of the showings
were of the same episodes and thus constituted multiple
infringements of a single work. See Tr. of Decision at 13-18.
The district court held that the argument came too late and
refused to accept evidence on the point.
     4
      During the hearing at which the district court orally made
its judgment, the district court allowed Feltner to put evidence
into the record concerning the number of the 900 showings which
were repeat broadcasts of the same episodes. Feltner's
statements indicated that at least 300 showings were repeats.
See Tr. of Decision at 15-17. At $10,000 per infringement this
amounts to over $3,000,000 in excess damages.
     In my view, a court should hold a party to the language of the

stipulation and nothing more.        Feltner stipulated only to 900

telecasts of copyrighted material without MCA's authority, not to

900 works.    Furthermore, the issues of law raised in the pretrial

stipulation    concerned   the   amount   of   statutory   damages   to   be

awarded.      The $9,000,000 award is grossly unfair under these

circumstances.    I dissent and would remand for a proper assessment

of statutory damages based on each work shown to be infringed.