Bridgeport Music, Inc. v. Universal-Mca Music Pub.

• Decision Date: 21 October 2009
• Docket Number: No. 08-5273.,No. 08-5266.,No. 08-5264.,No. 08-5272.,No. 08-5265.,No. 08-5269.,No. 08-5263.,No. 08-5270.,No. 08-5261.,No. 08-5260.,No. 08-5255.,No. 08-5254.,No. 08-5257.,No. 08-5268.,No. 08-5262,No. 08-5258.,No. 08-5259.,No. 08-5256.,No. 08-5271.,No. 08-5267.,08-5254.,08-5255.,08-5256.,08-5257.,08-5258.,08-5259.,08-5260.,08-5261.,08-5262,08-5263.,08-5264.,08-5265.,08-5266.,08-5267.,08-5268.,08-5269.,08-5270.,08-5271.,08-5272.,08-5273.
• Citation: 583 F.3d 948
• Parties: BRIDGEPORT MUSIC, INC., et al., Plaintiffs-Appellees, v. UNIVERSAL-MCA MUSIC PUBLISHING, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

583 F.3d 948

BRIDGEPORT MUSIC, INC., et al., Plaintiffs-Appellees, v. UNIVERSAL-MCA MUSIC PUBLISHING, INC., et al., Defendants-Appellants.

No. 08-5254.

No. 08-5255.

No. 08-5256.

No. 08-5257.

No. 08-5258.

No. 08-5259.

No. 08-5260.

No. 08-5261.

No. 08-5262

No. 08-5263.

No. 08-5264.

No. 08-5265.

No. 08-5266.

No. 08-5267.

No. 08-5268.

No. 08-5269.

No. 08-5270.

No. 08-5271.

No. 08-5272.

No. 08-5273.

United States Court of Appeals, Sixth Circuit.

Argued: October 8, 2009.

Decided and Filed: October 21, 2009.

ARGUED: Russell J. Frackman, Mitchell, Silberberg & Knupp LLP, Los Angeles, California, for Appellants. Richard S. Busch, King & Ballow, Nashville, Tennessee, for Appellees. ON BRIEF: Russell J. Frackman, Marc E. Mayer, Mitchell, Silberberg & Knupp LLP, Los Angeles, California, Philip M. Kirkpatrick, Dickinson Wright, Nashville, Tennessee, for Appellants. Richard S. Busch, King & Ballow, Nashville, Tennessee, for Appellees.

Before: MARTIN, GUY, and McKEAGUE, Circuit Judges.

OPINION

RALPH B. GUY, JR., Circuit Judge.

Ten Universal-affiliated defendants, all record and music publishing companies, have appealed a second time from the district court's decision to deny the defendants' request that attorney fees be imposed as a condition of granting plaintiffs' motions to voluntarily dismiss without prejudice the twenty cases at issue pursuant to Fed.R.Civ.P. 41(a)(2). We remanded the matter after the first consolidated appeal "for a more detailed order specifically addressing the [defendants'] request for reasonable terms and conditions relating to the dismissal of [plaintiffs'] complaints." Bridgeport Music, Inc. v. Universal-MCA Music Publishing, Inc., 481 F.3d 926, 927-28 (6th Cir.2007). Reviewing the orders entered after remand, we reject defendants' contention that the district court abused its discretion either by failing to provide specific reasons for its decision, or by deciding not to impose attorney fees as a condition of dismissal under Rule 41(a)(2). The judgments are affirmed.

I.

The claims involved in this appeal were originally asserted in a single action filed in May 2001 by the related entities Bridgeport Music, Southfield Music, Westbound Records, and Nine Records, alleging 500 separate counts of copyright infringement and various state law claims against approximately 800 defendants relating to the use of samples in new rap recordings. As many of our decisions have chronicled, the district court severed that action into 477 separate actions in August 2001-106 of which were brought against one or more of the Universal-affiliated defendants. In February 2002, after a period of intensive litigation, the district court stayed the proceedings in all but ten of the cases. While those first ten cases were vigorously litigated and appealed— including motions for attorney fees by prevailing defendants under 17 U.S.C. § 505—the rest of the cases were stayed except for a brief period to allow for settlement discussions in early 2003.¹

The district court lifted the stay with respect to approximately 100 of the remaining cases in 2004—including the twenty cases at issue—for the limited purpose of allowing the exchange of written discovery. Specifically, the stay was lifted as to four of the twenty cases in March 2004, and as to the other sixteen cases in September 2004. Written discovery was exchanged in some of those cases, and plaintiffs offered to dismiss a number of the cases with prejudice under Rule 41(a)(1). Defendants would not stipulate to the dismissals, however, apparently because the district court had ruled in other Bridgeport cases that a voluntary dismissal with prejudice would not establish prevailing-defendant status for the purpose of seeking attorney fees. See Bridgeport Music, Inc. v. London Music, U.K., 345 F.Supp.2d 836 (M.D.Tenn.2004), aff'd 226 Fed.Appx. 491 (6th Cir.2007) (affirming but expressly declining to decide whether voluntary dismissal with prejudice satisfied prevailing-party test).

On various dates between December 2004 and May 2005, plaintiffs filed motions to dismiss each of the twenty cases without prejudice and asked that the parties be ordered to bear their own costs and fees. Defendants opposed the motions and requested that the district court either (1) dismiss the complaints with prejudice and an explicit designation of defendants as "prevailing parties," or (2) dismiss the complaints without prejudice on the condition that plaintiffs be ordered to pay defendants' reasonable attorney fees and costs. Without holding a hearing or articulating its reasons, the district court entered twenty cursory orders granting plaintiffs' motions for voluntary dismissal without prejudice and stating that the parties would bear their own costs and fees.

Defendants appealed, and this court concluded that the district court's failure to articulate any reasons for its decision precluded appellate review for abuse of discretion. Vacating the judgments, the matter was remanded "for a more detailed order specifically addressing the [defendants'] request for reasonable terms and conditions relating to the dismissal of [plaintiffs'] complaints." 481 F.3d at 931. This court expressly noted, however, that the decision to remand was not meant to imply that the district court was wrong on the merits.

On remand, the cases were referred to a magistrate judge who was familiar with the litigation. Defendants filed a motion seeking attorney fees as a condition of dismissal under Rule 41(a)(2). Plaintiffs responded in opposition, and further briefing was provided with specific case-by-case analysis. After a full hearing, the magistrate judge recommended that the defendants' motions be denied. The magistrate judge, who noted his involvement in the litigation since its inception, observed that neither plaintiffs nor defendants had been particularly prompt, brief, or clear when dealing with the discovery requests and responses. After identifying some of the factors to be considered, the magistrate judge explained as follows:

The Magistrate Judge has closely reviewed each of the individual twenty cases and finds that Defendants should not be designated as prevailing parties and should not be awarded payment of attorneys' fees and costs incurred in defending the dismissed actions. The Magistrate Judge fully understands that each case is separate and fees and costs could be awarded in any one of them. However, the Magistrate Judge does not find distinguishing factors in any of these twenty cases. Contrary to the Defendants' contentions, prior to the Rhyme Syndicate decision in July 2004, Bridgeport had a reasonable basis for bringing these actions. [Bridgeport Music, Inc. v. Rhyme Syndicate Music, 376 F.3d 615 (6th Cir.2004)]. Additionally, whether any use was de minim is was not raised in any successful motion for summary judgment. Further, in terms of any delay in dismissing these actions, neither side has covered themselves in glory when requesting and responding to discovery. Both sides could have acted quicker and spent less in prosecuting and defending these cases. Therefore, neither party has convinced the Magistrate Judge who is to blame for any delay. Also, while the Defendants repeat their defense mantra of "Bridgeport knew of the existence of prior licenses," the Magistrate Judge notes that the licenses themselves and the literally dozens of entities involved in their creation, ownership, and licensing of each composition make it difficult to determine who owns what without significant discovery taking place for clarification. Further, there was a lengthy stay in discovery in these actions. Additionally, Bridgeport's costs benefit analysis reasoning is a reasonable explanation for dismissal and there is no concrete evidence provided by the Defendants that Bridgeport's litigation strategies were inappropriate. In fact, the Defendants took a firm position that they would litigate the cases. Lastly, while Defendants' supposition that they would have been the prevailing parties had the litigation continued is certainly possible, it is still mere speculation. As such, when reviewing the factors to be considered, the Magistrate Judge finds that the Defendants are not clearly prejudiced by these dismissals. Therefore, Defendants are not entitled to a designation as prevailing parties nor are they entitled [to] an award of attorney fees.

The Magistrate Judge would note that the argument over fees should not become a secondary litigation that becomes more complex and expensive than the original litigation. The amount of resources the parties and the Court spent litigating over fees has now likely consumed more time and money than the original litigation. Undoubtedly there will be another trip to the Sixth Circuit by whoever loses this round of litigation. At some point, everyone is entitled to relief from more litigation after the dismissal of the original case at issue.

Defendants interposed objections, arguing—as they do now—that the magistrate judge failed to provide a sufficiently specific and detailed order, misapplied the legal standard, and clearly erred in considering and weighing the facts and circumstances of each case. The district court, in separate orders, overruled defendants' objections, adopted the magistrate judge's report and recommendation, and denied defendants' motion for attorney fees in each of the twenty cases at issue. These consolidated appeals followed.

II.

When an answer or a motion for summary judgment has been served, and not all of the parties who have appeared will stipulate to dismissal, "an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." FED.R.CIV.P. 41(a)(2) (2007).² Unless the order states otherwise, a dismissal under Rule 41(a)(2) is without prejudice. Id. A district court's decisions with respect to a motion for voluntary dismissal under Rule 41(a)(2) are reviewed for abuse of...