Court Opinion

ID: 2801829
Source: CourtListenerOpinion
Date Created: 2015-05-19 17:01:18.319621+00
Date Added: 2024-06-11T11:37:12.850388
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

VICTORIA RYAN,                           Nos. 12-17810
                  Plaintiff-Appellee/         13-15061
                   Cross-Appellant,
                                            D.C. No.
                 v.                     5:06-CV-04812-
                                              PSG
EDITIONS LIMITED WEST, INC., a
California corporation; ARTSELECT,
INC.,                                      OPINION
              Defendants-Appellants/
                     Cross-Appellees.

      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
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.
               RYAN V. EDITIONS LTD. WEST                    3

                         COUNSEL

Michael A. Painter (argued), Isaacman, Kaufman & Painter,
P.C., Los Angeles, California, for Defendants-
Appellants/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
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 awarding Ryan
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
                  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).
6              RYAN V. EDITIONS LTD. WEST

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
                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 ELW generally
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
8              RYAN V. EDITIONS LTD. WEST

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
               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 expressly preempts 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).
10             RYAN V. EDITIONS LTD. WEST

       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, NIMMER ON COPYRIGHT, § 14.10[B] (rev. ed. 2012).
Several courts have considered whether to award fees under
                RYAN V. EDITIONS LTD. WEST                    11

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 fee-
shifting 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
12             RYAN V. EDITIONS LTD. WEST

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 law permitting enforcement 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
               RYAN V. EDITIONS LTD. WEST                    13

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 attorney fees, 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
14                RYAN V. EDITIONS LTD. WEST

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).

    Because California 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 of the 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, 17 Cal. App. 4th 296, 299–300 (1993); Xuereb, 3 Cal. App. 4th
at 1344–45; see also 3250 Wilshire Blvd. Bldg. v. W.R. Grace & Co.,
990 F.2d 487, 489 (9th Cir. 1993).
                RYAN V. EDITIONS LTD. WEST                     15

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
contradictory positions. 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
16                RYAN V. EDITIONS LTD. WEST

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).
                 RYAN V. EDITIONS LTD. WEST                          17

    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.
18              RYAN V. EDITIONS LTD. WEST

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-and-
desist 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 cease-
and-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.
               RYAN V. EDITIONS LTD. WEST                   19

     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.
20              RYAN V. EDITIONS LTD. WEST

    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 twenty percent was 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
                RYAN V. EDITIONS LTD. WEST                    21

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 ELW destroyed 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
22             RYAN V. EDITIONS LTD. WEST

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
               RYAN V. EDITIONS LTD. WEST                    23

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,
24                RYAN V. EDITIONS LTD. WEST

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))).
               RYAN V. EDITIONS LTD. WEST                   25

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.