Cunningham v. Douglas

• Decision Date: 09 August 1934
• Docket Number: No. 2903.,2903.
• Citation: 72 F.2d 536
• Parties: CUNNINGHAM et al. v. DOUGLAS et al.
• Court: U.S. Court of Appeals — First Circuit

72 F.2d 536 (1934)

CUNNINGHAM et al. v. DOUGLAS et al.^*

No. 2903.

Circuit Court of Appeals, First Circuit.

August 9, 1934.

Edmund A. Whitman, of Boston, Mass., for appellants.

Cedric W. Porter, of Boston, Mass. (George P. Dike and Macleod, Calver, Copeland & Dike, all of Boston, Mass., on the brief), for appellees.

Before BINGHAM, WILSON and MORTON, Circuit Judges.

WILSON, Circuit Judge.

This is an appeal by the defendants from a decree against them in a copyright infringement suit. We shall refer to the parties as plaintiff and defendant, as they are described in the complaint. The only questions presented by the appeal are: (1) Whether the District Judge committed prejudicial error, after dismissing the original complaint, in allowing an amended bill to be filed bringing in an additional party plaintiff; and (2) whether the amounts awarded by the District Court for damages and costs, $5,000 for the former and $1,500 for the latter, are in either, or in both cases, so clearly excessive as to amount to an abuse of judicial discretion.

The copyrighted matter consisted of a short story under the title, "Klu Klux," written by the plaintiff, Douglas. It was published in the American Mercury Magazine for March, 1928. The copyright relied on was taken out by the publisher of that magazine, American Mercury, Inc., covering its entire contents. Shortly after publication, the publisher of the magazine executed an assignment of the rights in the story, "Klu Klux," to the plaintiff, Douglas. The original complaint was brought by him alone. The defendant objected that Douglas could not maintain the suit, on the ground that a copyright is indivisible, and inasmuch as the copyright in question covered the entire number of the magazine, it could not be split up, and therefore the attempted assignment to Douglas of the copyright in his story was ineffective to vest in him exclusive rights in the story in question, or to empower him to bring suit for infringement of the copyright. On motion to dismiss, the facts fully appearing on the face of the original bill, the District Judge sustained the defendant's contention and granted the motion to dismiss.

The plaintiff accepted this ruling and filed a motion to be allowed to file an amended bill, which was annexed to the motion, in which the American Mercury, Inc., was joined as coplaintiff with Douglas, and reforming the allegations of the bill accordingly. A hearing was had on this motion, but from this point there was apparently some misunderstanding as to the nature of the motion. The order of the District Court was that the plaintiff be allowed to amend the bill. The defendant's third assignment of error is that the District Court erred "In allowing the plaintiff's motion to amend the bill."

Though the action of the District Court did not strictly follow the plaintiff's motion, both parties at the hearing were present in court. All further proceedings were on the new amended bill. The order of the District Court allowing it to be filed was on May 16, 1933. The final hearing on the amended bill was not had until November, 1933, and it was held without objection by the defendants, except as to the power of the District Court to join another plaintiff by amendment. We think it was within the power of the sitting justice in equity to permit the amended bill to be filed, both parties being present in court. Equity Rule 37 (28 USCA § 723) provides that: "Any person may at any time be made a party if his presence is necessary or proper to a complete determination of the cause." As it does not appear that the defendants have suffered any prejudice thereby, they take nothing under the assignment of error.

Amounts awarded as damages, or allowed as counsel fees, in copyright cases, where no actual damage is shown, it is true, are within the discretionary powers of the court, except as limited by the Copyright Act, but any such award is subject to review when there has been a clear abuse of judicial discretion. "When invoked as a guide to judicial action, it judicial discretion means a sound discretion, that is to say, a discretion exercised not arbitrarily or willfully, but with regard to what is right and equitable under the circumstances and the law, and directed by the reason and conscience of the judge to a just result." Langnes v. Green, 282 U. S. 531, 541, 51 S. Ct. 243, 247, 75 L. Ed. 520.

As the considerations on which it rests are often of a rather subtle character and difficult to present in a printed record, and as there is a wide field for individual judgment and difference of opinion in such matters, the burden of showing that there has been an abuse of the discretionary power of the court may be a heavy burden on one seeking to show an abuse of that power; but when that burden is sustained, a judgment resting thereon will be revised on appeal. See Langnes v. Green, supra, at page 541 of 282 U. S., 51 S. Ct. 243; Commonwealth v. Murphy, 282 Mass. 593, at page 598, 185 N. E. 486; Newton v. Consolidated Gas Co., 259 U. S. 101 and 105, 42 S. Ct. 438, 66 L. Ed. 844.

The statute relating to damages in this class of cases (17 USCA § 25), omitting such parts of this section as have no application to this case, provides:

"If any person shall infringe the copyright in any work protected under the copyright laws of the United States such person shall be liable: * * * (b) To pay to the copyright proprietor * * * in lieu of actual damages and profits such damages as to the court shall appear to be just, and in assessing such damages the court may, in its discretion, allow the amounts as hereinafter stated omitting certain specific exceptions, and such damages shall in no other case exceed the sum of $5,000 nor be less than the sum of $250, and shall not be regarded as a penalty. * * *"

The amounts "hereinafter stated" are found in four subparagraphs under paragraph (b), of which the second provides that:

"In the case of any work enumerated in section 5 of this title, except a painting, statute, or sculpture, $1 for every infringing copy made or sold by or found in the possession of the infringer or his agents or employees."

Section 5 of the Copyright Act (17 USCA § 5) includes both periodicals and newspapers.

However, not every infringement of a copyright by a publication in a newspaper, where no actual damages are shown, requires an award "in lieu of actual damages" of the arbitrary amount stated in paragraph second under section 25 (b), viz., $1 for every infringing copy of the newspaper made or sold by or found in the possession of the publisher.

In the first place, if no actual damages are shown, unless the publication is after personal notice of the copyright, and except in the special cases enumerated under paragraph (b), the damages are limited to $5,000; and, secondly, while Congress has arbitrarily fixed $250 as the minimum damage that may be allowed in such cases, any judgment in excess of the minimum amount fixed by the statute must first, and in all cases, be "just." (Italics supplied.)

The Supreme Court, in interpreting this section of the statute in Westermann Co. v. Dispatch Co., 249 U. S. 100, 106, 39 S. Ct. 194, 195, 63 L. Ed. 499, said:

"Both parties recognize that under the proofs the damages must be assessed under the alternative provision requiring the infringer, in lieu of actual damages and profits, to pay such damages as to the court shall appear to be just, etc. The fact that these damages are to be `in lieu of actual damages' shows that something other than actual damages is intended — that another measure is to be applied in making the assessment. There is no uncertainty as to what that measure is or as to its limitations. The statute says, first, that the damages are to be such as to the court shall appear to be just; next, that the court may, in its discretion, allow the amounts named in the appended schedule, and finally, that in no case shall they be more than $5,000 nor less than $250, except that for a newspaper reproduction of a copyrighted photograph they shall not be more than $200 nor less than $50. In other words, the court's conception of what is just in the particular case, considering the nature of the copyright, the circumstances of the infringement and the like, is made the measure of the damages to be paid, but with the express qualification that in every case the assessment must be within the prescribed limitations, that is to say, neither more than the maximum nor less than the minimum. Within these limitations the court's discretion and sense of justice are controlling." (Italics supplied.)

In the present case the copyrighted story was published by the defendant company as an article of news with headlines on the front page of the Sunday edition of the newspaper, the Boston Post. In the District Court the plaintiff's counsel agreed that it was published innocently by the defendant, the Post Publishing Company. The admission that it was published innocently by the principal also includes in effect an admission that Cunningham, the employee and agent of the publishing company, in gathering data for and writing special feature stories, had no knowledge that the story had been copyrighted. If the suit had been against the publishing company alone, it could not have defended on the issue of damages on the ground that it had published the story ignorant of the fact that it had been copyrighted, if it was shown that Cunningham knew it was copyrighted matter.

Fletcher's Cyc. of Corp. vol. IV, § 2215; Suit v. Woodhall, 113 Mass. 391; Distilled Spirits, 11 Wall. 356, 20 L. Ed. 167; Curtis Co. v. United States, 262 U. S. 215, 222, 43 S. Ct. 570, 67 L. Ed. 956; Schneider v. Thompson (C. C. A.) 58 F.(2d) 94, 96.

It may be urged that the admission in court should be construed only to cover the innocence in fact of the publishing company; but the defendant Cunningham testified that he had never read the story published in the...