Court Opinion

ID: 9945899
Source: CourtListenerOpinion
Date Created: 2024-02-28 19:02:16.877091+00
Date Added: 2024-06-11T14:23:14.214288
License: Public Domain

USCA11 Case: 23-11662   Document: 29-1     Date Filed: 02/28/2024   Page: 1 of 10

                                                  [DO NOT PUBLISH]
                                  In the
                 United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                               No. 23-11662
                         Non-Argument Calendar
                         ____________________

        AFFORDABLE AERIAL PHOTOGRAPHY, INC.,
                                Plaintiﬀ-Counter Defendant-Appellee,
        versus
        TRENDS REALTY USA CORP,
        JOHN ABDELSAYED,

                            Defendants-Counter Claimants-Appellants,

        CORNELIUS MCGINNIS, et al.,

                          Third Party Defendants-Counter Defendants.
USCA11 Case: 23-11662     Document: 29-1      Date Filed: 02/28/2024    Page: 2 of 10

        2                     Opinion of the Court                 23-11662

                            ____________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                     D.C. Docket No. 9:21-cv-81331-AMC
                           ____________________

        Before ROSENBAUM, GRANT, and ANDERSON, Circuit Judges.
        PER CURIAM:
               Affordable Aerial Photography, Inc. (“AAP”), filed a com-
        plaint alleging that John Abdelsayed and Trends Realty USA Cor-
        poration (“Defendants”) committed copyright infringement by dis-
        playing AAP’s copyrighted photograph on their website. More
        than a year later, with litigation ongoing, AAP filed a motion to
        voluntarily dismiss the case without prejudice under Federal Rule
        of Civil Procedure 41(a)(2), and without being ordered to pay at-
        torney’s fees to Defendants. After a hearing, and over Defendants’
        objections, the district court granted the motion and entered an or-
        der dismissing the case without prejudice, imposing taxable costs,
        and attaching a condition that AAP, if it refiled its case, must pay
        Defendants’ reasonable attorney’s fees incurred defending this
        case.
               Nearly two months after the dismissal order, Defendants
        filed a motion claiming that, notwithstanding the district court’s
        order, they were entitled to immediate recovery of their reasona-
        ble attorney’s fees on two grounds. First, they argued that Rule 68,
        Fed. R. Civ. P., mandated attorney’s fees because AAP did not
USCA11 Case: 23-11662     Document: 29-1      Date Filed: 02/28/2024    Page: 3 of 10

        23-11662              Opinion of the Court                        3

        accept Defendants’ December 2021 offer to settle the case, and that
        offer was more favorable than the “judgment obtained.” And sec-
        ond, they maintained that they were “prevailing party[s]” under
        the Copyright Act’s cost-shifting provisions, see 17 U.S.C. §§ 505,
        1203(b)(5).
               The district court denied the motion for attorney’s fees. The
        court reasoned that Defendants should have raised these argu-
        ments in connection with the motion to voluntarily dismiss, and
        that Defendants had not established any prejudice. As a result, the
        court declined to “comment on the merits of Defendants’ untimely
        raised theories.” The court then rejected Defendants’ motion for
        reconsideration, reasoning that “by continuing to seek an entitle-
        ment to attorneys’ fees, Defendants are in essence requesting the
        Court to change the conditions of its Order granting Plaintiff leave
        to voluntarily dismiss this action.”
               Defendants appeal, raising procedural and substantive argu-
        ments. We conclude that, even assuming they properly raised their
        arguments for attorney’s fees in the district court, Defendants are
        not entitled to fees under Rule 68 or as a “prevailing party” under
        the Copyright Act. So we affirm the district court’s denial of their
        motion. See Waldman v. Conway, 871 F.3d 1283, 1289 (11th Cir.
        2017) (“We may affirm on any ground supported by the record,
        regardless of whether that ground was relied upon or even consid-
        ered below.”).
USCA11 Case: 23-11662         Document: 29-1        Date Filed: 02/28/2024         Page: 4 of 10

        4                         Opinion of the Court                       23-11662

                                               I.
               The proper interpretation of Rule 68 presents a legal ques-
        tion, so we review it de novo. Jordan v. Time, Inc., 111 F.3d 102, 105
        (11th Cir. 1997). We review any underlying factual findings for
        clear error. Id.
                Rule 68 of the Federal Rules of Civil Procedure provides that
        if a timely pretrial offer of settlement is not accepted and “the judg-
        ment that the offeree finally obtains is not more favorable than the
        unaccepted offer, the offeree must pay the costs incurred after the
        offer was made.” Fed. R. Civ. P. 68(a), (d). “The plain purpose of
        Rule 68 is to encourage settlement and avoid litigation.” Marek v.
        Chesny, 473 U.S. 1, 5 (1985). Recoverable “costs” under Rule 68
        include “all costs properly awardable under the relevant substan-
        tive statute or other authority,” including attorney’s fees. Id. at 9.
        “When a proper Rule 68 offer is made and the other requirements
        of the rule are met, the district court must award costs measured
        from the time the offer was served.” Jordan, 111 F.3d at 105 (em-
        phasis added).
               By its plain terms, according to the Supreme Court, Rule 68
        applies only where the plaintiff “has obtained a judgment for an
        amount less favorable than the defendant’s settlement offer.” Delta
        Air Lines, Inc. v. August, 450 U.S. 346, 351 (1981). 1 Because the

        1 Defendants’ briefing parses the key words in Rule 68(d)—“judgment,” “ob-

        tain,” and “favorable”—as if they were matters of first impression, but fails to
        account for or even address the Supreme Court’s controlling decision in Delta
        Air Lines, Inc. v. August, 450 U.S. 346 (1981).
USCA11 Case: 23-11662      Document: 29-1      Date Filed: 02/28/2024      Page: 5 of 10

        23-11662               Opinion of the Court                          5

        judgment must be “obtain[ed]” by the “offeree” following an offer
        to have “judgment . . . taken against [the defendant],” the Court
        reasoned, “it follows that a judgment ‘obtained’ by the plaintiff is
        also a favorable one.” Id. at 351–52. Thus, the effect of Rule 68 is
        to reduce “some of the benefits of victory if [the plaintiff’s] recov-
        ery is less than the offer.” Id. at 352.
               But Rule 68(d) is “simply inapplicable” in cases where “it was
        the defendant that obtained the judgment.” Id.; id. at 354 (Rule 68
        “does not apply to judgments in favor of the defendant”); see La.
        Power & Light Co. v. Kellstrom, 50 F.3d 319, 333 (5th Cir. 1995) (“If a
        plaintiff takes nothing . . . Rule 68 does not apply.”). Thus, “a non-
        settling plaintiff does not run the risk of suffering additional bur-
        dens that do not ordinarily attend a defeat.” Delta Air Lines, 450
        U.S. at 352. Rather, when a plaintiff loses, “the trial judge retains
        his [or her] Rule 54(d) discretion” to award costs to the prevailing
        party. Id. at 354; see Fed. R. Civ. P. 54(d).
               Here, Rule 68 does not apply because AAP did not obtain a
        judgment in its favor. See Delta Air Lines, 450 U.S. at 351–52. A
        voluntary dismissal without prejudice does not alter the legal rela-
        tionship between the parties or award the plaintiff any relief. It
        simply permits the “moving party to file those claims again.” Mesa
        v. United States, 61 F.3d 20, 22 (11th Cir. 1995). As Defendants note,
        “AAP secured no affirmative relief whatever.” In fact, Defendants
        view themselves as prevailing parties. But even assuming the judg-
        ment was effectively in Defendants’ favor, Rule 68 “does not apply
        to judgments in favor of the defendant.” Delta Air Lines, 450 U.S. at
USCA11 Case: 23-11662      Document: 29-1      Date Filed: 02/28/2024      Page: 6 of 10

        6                      Opinion of the Court                  23-11662

        354. Because the district court’s dismissal without prejudice was
        not a judgment in AAP’s favor “for an amount less favorable than
        the defendant’s settlement offer,” Rule 68 does not authorize or
        mandate Defendants’ recovery of reasonable attorney’s fees. Id. at
        351–52.
               Defendants warn that Rule 41 will be “used as an escape
        hatch by abusive litigants to circumvent Rule 68’s consequences”
        by seeking a “late-stage” dismissal in the face of an impending ad-
        verse ruling. But their premise is misguided because an adverse
        judgment against the plaintiff does not trigger Rule 68, as the Su-
        preme Court has made clear. See Delta Air Lines, 450 U.S. at 352,
        354. Besides that, a plaintiff cannot act unilaterally after the oppos-
        ing party has served an answer or a motion for summary judgment,
        but instead must obtain a dismissal order from the district court.
        See Fed. R. Civ. P. 41(a)(2). And the court, after “weigh[ing] the
        relevant equities,” may deny the request, if the defendant would
        suffer clear legal prejudice, or it may dismiss the case, “imposing
        such costs and attaching such conditions to the dismissal as are
        deemed appropriate.” Unites States v. $70,670.00 in U.S. Currency,
        929 F.3d 1293, 1300 (11th Cir. 2019) (quotation marks omitted); see
        Fed. R. Civ. P. 41(d) (authorizing the imposition of costs where a
        plaintiff refiles an action previously dismissed voluntarily).
               Here, the district court, following briefing and a hearing,
        found that Defendants would suffer no legal prejudice from a dis-
        missal without prejudice because their counsel was pro bono or on
        a contingency arrangement, and that the other factors favored
USCA11 Case: 23-11662         Document: 29-1          Date Filed: 02/28/2024         Page: 7 of 10

        23-11662                   Opinion of the Court                                 7

        granting the motion, subject to certain conditions. Defendants
        have not timely appealed that ruling, or otherwise plainly or prom-
        inently argued on appeal that the district court erred in granting
        AAP’s motion for voluntary dismissal.2 So they have abandoned
        any arguments in that regard. See Berry v. Crestwood Healthcare LP,
        84 F.4th 1300, 1313 (11th Cir. 2023) (“A party abandons an issue
        when she makes only passing references to it, references it as mere
        background to main arguments, or buries it within other argu-
        ments.”).
                                               II.
               We review de novo the legal question whether a given set of
        facts “suffice[s] to render a party a ‘prevailing party.’” Royal Palm
        Props., LLC v. Pink Palm Props., LLC, 38 F.4th 1372, 1375 (11th Cir.
        2022). The Copyright Act permits courts to award “reasonable at-
        torney’s fee[s] to the prevailing party.” 17 U.S.C. §§ 505, 1203(b)(5).
        “Prevailing party” is a “legal term of art” that “retains its legal

        2 Defendants’ notice of appeal, dated May 16, 2023, is not timely to appeal the

        order administratively closing the case, entered January 6, 2023. See Bowles v.
        Russell, 551 U.S. 205, 214 (2007) (“[T]he timely filing of a notice of appeal in a
        civil case is a jurisdictional requirement.”). While the 30-day time limit may
        be extended by the timely filing of certain post-judgment motions, see Fed. R.
        App. P. 4(a)(1)(A), (4)(A), motions for attorney’s fees under Rule 54 qualify
        only “if the district court extends the time to appeal under Rule 58,” Fed. R.
        App. P. 4(a)(4)(A)(iii). Because Defendants never requested, and the district
        court never granted, such an extension under Rule 58, any appeal of the un-
        derlying order of dismissal is untimely.
USCA11 Case: 23-11662       Document: 29-1       Date Filed: 02/28/2024      Page: 8 of 10

        8                       Opinion of the Court                    23-11662

        meaning across different fee-shifting statutes.” Royal Palm, 38 F.4th
        at 1377.
                The “prevailing party determination” is different for plain-
        tiffs and defendants, in recognition of their differing litigation ob-
        jectives. Beach Blitz Co. v. City of Miami Beach, Fla., 13 F.4th 1289,
        1297 (11th Cir. 2021). “A plaintiff seeks a material alteration in the
        legal relationship between the parties. A defendant seeks to pre-
        vent this alteration to the extent it is in the plaintiff’s favor.” CRST
        Van Expedited, Inc. v. E.E.O.C., 578 U.S. 419, 431 (2016); see id. at 422.
        (“The touchstone of the prevailing party inquiry must be the ma-
        terial alteration of the legal relationship of the parties.” (quotation
        marks omitted)). Thus, a defendant may obtain prevailing-party
        status “whenever the plaintiff’s challenge is rebuffed, irrespective
        of the precise reason for the court’s decision.” Id. Importantly,
        though, “the rejection of the plaintiff’s attempt to alter the parties’
        legal relationship must be marked by judicial imprimatur.” Beach
        Blitz, 13 F.4th at 1298 (quotation marks omitted).
               Here, Defendants cannot show that they were prevailing
        parties because “a dismissal without prejudice places no judicial im-
        primatur on the legal relationship of the parties, which is the touch-
        stone of the prevailing party inquiry.” $70,670.00 in U.S. Currency,
        929 F.3d at 1303 (quotation marks omitted). That’s because “[a]
        voluntary dismissal without prejudice renders the proceedings a
        nullity and leaves the parties as if the action had never been
        brought.” Id. (quotation marks omitted). The order of dismissal
        does not prevent AAP from refiling its claims. And even assuming
USCA11 Case: 23-11662          Document: 29-1         Date Filed: 02/28/2024          Page: 9 of 10

        23-11662                   Opinion of the Court                                  9

        future action by AAP may be unlikely or now barred by the statute
        of limitations, those facts are irrelevant because the court did not
        rebuff or reject AAP’s claims on any grounds. See Beach Blitz, 13
        F.4th at 1298 (“[T]he rejection of the plaintiff’s attempt to alter the
        parties’ legal relationship must be marked by judicial imprima-
        tur.”); $70,670.00 in U.S. Currency, 929 F.3d at 1303 (stating that,
        even if refiling was unlikely after a voluntary dismissal without
        prejudice, “[w]hat matters is that the claimants have not obtained
        a final judgment rejecting the government’s claim” (cleaned up)).
                 CRST did not “abrogate the requirement of ‘judicial impri-
        matur’ for prevailing defendants,” as Defendants claim. While
        CRST abrogated any requirement that judicial action be “on the
        merits” for a defendant to prevail, 578 U.S. at 421, 431–32, our post-
        CRST precedent makes clear that “the rejection of the plaintiff’s at-
        tempt to alter the parties’ legal relationship must be marked by ju-
        dicial imprimatur.” Beach Blitz, 13 F.4th at 1298 (quotation marks
        omitted). And because a voluntary dismissal without prejudice un-
        der Rule 41(a)(2) “places no judicial imprimatur on the legal rela-
        tionship of the parties,” Defendants do not qualify as prevailing par-
        ties. 3 $70,670.00 in U.S. Currency, 929 F.3d at 1303.

        3 We decline to consider Defendants’ argument, raised for the first time in its

        reply brief, that the costs and conditions imposed in the order of dismissal suf-
        ficed to render them prevailing parties. Herring v. Sec’y, Dep’t of Corr., 397 F.3d
        1338, 1342 (11th Cir. 2005) (“As we repeatedly have admonished, arguments
        raised for the first time in a reply brief are not properly before a reviewing
        court.” (cleaned up)).
USCA11 Case: 23-11662    Document: 29-1      Date Filed: 02/28/2024   Page: 10 of 10

        10                   Opinion of the Court                23-11662

                                      III.
              In sum, and for the foregoing reasons, we affirm the denial
        of Defendants’ motion for attorney’s fees.
              AFFIRMED.