Beastie Boys v. Monster Energy Co.

• Decision Date: 15 June 2015
• Docket Number: No. 12 Civ. 6065(PAE).,12 Civ. 6065(PAE).
• Parties: BEASTIE BOYS, et al., Plaintiffs, v. MONSTER ENERGY COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

112 F.Supp.3d 31

BEASTIE BOYS, et al., Plaintiffs,

v.MONSTER ENERGY COMPANY, Defendant.

No. 12 Civ. 6065(PAE).

United States District Court, S.D. New York.

Signed June 15, 2015.

Kevin Ronald Puvalowski, Paul Wendell Garrity, Theodore Conrad Max, Valentina Shenderovich, Sheppard, Mullin, Richter & Hampton, LLP, Thomas Mckee Monahan, Storch Amini & Munves, P.C., New York, NY, for Plaintiffs.

Collin James Peng–Sue, Marcia Beth Paul, Davis Wright Tremaine LLP, Kevin Ronald Puvalowski, Sheppard, Mullin, Richter & Hampton, LLP, Linda Marie Dougherty, S. Reid Kahn, Tanya Claire Pohl, Adam M. Cohen, Dana Michelle Susman, Kane Kessler, P.C., New York, NY, for Defendant.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:

This decision resolves a post-trial application for attorneys' fees and costs. Between May 27 and June 5, 2014, the Court presided over a jury trial in which the hip-hop group the Beastie Boys and affiliated plaintiffs¹ (collectively, the "Beastie Boys") pursued claims against Monster Energy Company ("Monster"), the beverage company. The jury found for the Beastie Boys on all claims—for copyright infringement in violation of the Copyright Act, 17 U.S.C. § 101 et seq., and false endorsement in violation of the Lanham Act, 15 U.S.C. § 1051 et seq. —and awarded a total of $1.7 million in damages. On December 4, 2014, the Court denied Monster's post-trial motion for judgment as a matter of law.

Now pending is the Beastie Boys' motion for an award of fees and costs under § 505 of the Copyright Act and § 1117 of the Lanham Act. For the reasons that follow, the Court finds that the Beastie Boys are entitled to recover fees in connection with Monster's willful copyright infringement, although not in connection with Monster's violation of the Lanham Act. Considering all relevant circumstances, the Court finds that an award of $667,849.14 in fees—substantially less than the award of $2,385,175.50 sought by the Beastie Boys—is warranted.

The Court also holds that the Beastie Boys are entitled to costs, but under Local Rule 54.1 leaves to the Clerk of Court the tabulation, in the first instance, of such costs.

This decision proceeds in four parts. First, the Court recaps the pertinent background of this case. Second, the Court addresses the Beastie Boys' claims of entitlement to fees under the Copyright Act and the Lanham Act. Third, the Court explains the amount of its fee award. Fourth, the Court addresses the Beastie Boys' application for costs.

I. Background

The Court assumes familiarity with this case's history, including the Court's December 4, 2014 Opinion denying Monster's post-trial motions. See Dkt. 182, reported at Beastie Boys v. Monster Energy Co., 66 F.Supp.3d 424 (S.D.N.Y.2014) [hereinafter Beastie Boys ]. The history most relevant to the pending fee application follows.

A. Factual Background

On May 5, 2012, Monster hosted a promotional event called the "Ruckus in the Rockies," which consisted of a snowboarding competition and an after-party. See Trial Transcript ("Tr.") 1092–93. The performers at the after-party included Zach Sciacca, a disc jockey ("DJ") who records and performs under the name "Z–Trip." Tr. 356, 954, 964–65, 1096–99. In 2011, Z–Trip had entered into an agreement with the Beastie Boys to create a remix of some of their songs to promote the group's then-upcoming album, "Hot Sauce Committee Part II." Tr. 194–96, 278–79, 356–57, 954–58, 969. The remix was entitled "Beastie Boys All–Access Megamix" (the "Megamix"). See Tr. 429–30. Under the agreement, Z–Trip did not obtain any rights to the underlying Beastie Boys songs. See Tr. 278–79, 306, 358–59, 973, 975–76.

Soon after the 2012 Ruckus in the Rockies, Monster's regional marketing director, Nelson Phillips, oversaw the creation of a recap video with highlights from the event. Tr. 1114–16. The video promotes Monster's brand and its energy drinks. For the video's soundtrack, Phillips used excerpts of the Megamix that include portions of five Beastie Boys songs; these songs are the background music to approximately 80% of the four-minute video. Tr. 1114–15. The video also contains text referring to the band and one of its three members, Adam Yauch, a/k/a "MCA," who had died days before the Ruckus event.

See PX 211. Monster did not obtain, and never attempted to obtain, permission from the Beastie Boys or their management to use the Beastie Boys' music or names in the promotional video. See, e.g., Tr. 121–22, 256, 875–76, 1115–16, 1173, 1316–17. Phillips later testified that he believed that Z–Trip had provided legally sufficient authorization for him to use the Megamix, including the underlying Beastie Boys' songs, in the video. Tr. 1115–16, 1170. Phillips testified that Z–Trip had conveyed this authorization to him orally during the after-party, see Tr. 369–70, 456–57, 496, and again through a short email exchange in which Phillips sent the video to Z–Trip for "approv[al]," and Z–Trip responded, "Dope!," see Tr. 1119, 1121. Z–Trip firmly denied giving any such authorization, or telling anyone at Monster that he had any rights to the Beastie Boys' music. See Tr. 369–70, 456–57, 496.

On May 9, 2012, Monster posted the promotional video on its website, YouTube channel, and Facebook page. See Tr. 307, 531, 1119–21, 1124–26, 1266. Monster also sent press releases to various snowboarding magazines and websites to promote the video. Tr. 1126–29. The following month, Monster received a letter from counsel for the Beastie Boys, which stated that Monster did not have permission to use the Beastie Boys' music in the video. Tr. 1129, 1269. Phillips then removed the video from Monster's YouTube channel. Tr. 1130. He later edited the video, to replace the music and remove the references to the Beastie Boys, and then reposted it. Tr. 1130–31, 1277. As of August 2012, the video had been viewed 13,341 times. Tr. 1275–76.

B. Procedural History

On August 8, 2012, the Beastie Boys filed suit against Monster in this District. Dkt. 1. The Complaint brought claims of copyright infringement in violation of the Copyright Act and false endorsement in violation of the Lanham Act.

On October 4, 2012, Monster filed an Answer. Dkt. 5. Monster denied almost every factual allegation in the Complaint or stated that it lacked knowledge sufficient to enable it to form a belief as to its truth. Monster also raised 12 affirmative defenses. Several sought to deflect responsibility for any infringement onto Z–Trip. In this vein, the Answer asserted that (1) Monster had received permission from Z–Trip to use the Beastie Boys' music; (2) in using the band's music in its video, Monster had reasonably relied on Z–Trip's apparent authority as an agent for the Beastie Boys; and (3) any injury to the Beastie Boys was due not to Monster but instead to a breach of contract or fraud by Z–Trip. Id at 13.

The following day, October 5, 2012, Monster brought a third-party Complaint against ZTrip. Dkt. 9. Monster alleged that Z–Trip had caused any damage to the Beastie Boys for which Monster might be found liable by (1) contracting with Monster to allow it to make unrestricted use of the Megamix, and (2) fraudulently leading Monster to believe that Z–Trip had authority to license the Beastie Boys' recordings contained in the Megamix. Id. ¶¶ 12–23, 28–33.

On August 1, 2013, after discovery, Z–Trip moved for summary judgment on Monster's claims against him. Dkt. 36–38. The Beastie Boys filed a memorandum supporting Z–Trip's motion. Dkt. 39.

On November 4, 2013, the Court granted summary judgment in favor of Z–Trip on both of Monster's third-party claims. See Dkt. 51, reported at Beastie Boys v. Monster Energy Co., 983 F.Supp.2d 338 (S.D.N.Y.2013) [hereinafter Z–Trip ]. As to the breach of contract claim, the Court held that, based on the informal, "sparse," and "fleeting" communications between Phillips and Z–Trip, "a reasonable juror could not find an offer, sufficiently clear acceptance, or consideration ... let alone all three," and thus no contract between Monster and Z–Trip could be found. Id. at 348, 350. And even assuming that Phillips and Z–Trip had entered into some form of contract, it would have taken "an heroic effort of explication" and "flout[ed] common sense" to interpret the contract to include a license to use the Beastie Boys' music in the video. Id. at 351. As to Monster's fraud claim, the Court found the record devoid of evidence that Z–Trip had acted with fraudulent intent or that Monster had reasonably relied on Z–Trip's representations. Id. at 351–53. The Court stated that it had been reckless for Monster "to delegate to Phillips alone the responsibility by which Monster was to acquire, for commercial exploitation, various intellectual [property] rights presumptively belonging to an iconic band." Id. at 352. "Monster's reliance on Phillips to protect its interest in these matters was perforce unreasonable." Id. at 353.

Trial on the Beastie Boys' claims against Monster commenced on May 27, 2014. At the final pretrial conference on May 22, 2014, Monster, for the first time, conceded liability as to the copyright infringement claims. See Dkt. 141, at 48. Accordingly, the issues litigated at trial were liability for the Lanham Act claim, and damages as to both the Copyright and Lanham Act claims. During the eight-day trial, the parties called a dozen witnesses, including four experts. See Dkt. 149–63.

On June 5, 2014, the jury returned its verdict. See Dkt. 147. On the Copyright Act claims, the jury found that each of Monster's 10 acts of infringement had been willful and awarded a total of $1.2 million in statutory damages and, alternatively, a total of $1 million in actual damages. Id. at 2. On the Lanham Act claim, the jury found Monster liable, found that it had engaged in intentional deception, and awarded the Beastie Boys $500,000 in damages. Id. at 4. The jury also found that Monster had acted in bad faith in causing the false endorsement. Id.

On December 4, 2014, the Court issued a...