Horror Inc. v. Miller

• Decision Date: 26 September 2022
• Docket Number: 3:16-cv-1442 (SRU)
• Parties: HORROR INC. and MANNY COMPANY, Plaintiffs, v. VICTOR MILLER, Defendant.
• Court: U.S. District Court — District of Connecticut

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HORROR INC. and MANNY COMPANY, Plaintiffs, v. VICTOR MILLER, Defendant.

No. 3:16-cv-1442 (SRU)

United States District Court, D. Connecticut

September 26, 2022

RULING ON MOTION FOR ATTORNEYS' FEES

Stefan R. Underhill United States District Judge.

In 1979, a film producer and his production company Manny Company (“Manny”) hired defendant Victor Miller (“Miller”) to write a screenplay for a horror film. At the time, Miller was paid just $9,282. Over time the film, Friday the 13th, earned tens of millions of dollars for Manny and its successors, including Horror Inc. In 2016, Miller sought to reclaim ownership of the screenplay by using a procedure set forth in Section 203(a) of the Copyright Act. Plaintiffs Manny and Horror Inc. brought suit to keep Miller from getting his fair share. They lost at summary judgment and lost again on appeal to the United States Court of Appeals for the Second Circuit. Miller now moves for attorneys' fees pursuant to the Copyright Act, 17 U.S.C. § 505, and the California anti-SLAPP statute, Cal. Civ. Proc. Code § 425.16(e). For the following reasons, the motion is granted in part and denied in part.

I. Background

Horror Inc. and Manny Company sued Miller, seeking a declaratory judgment Miller had written the screenplay for the film Friday the 13th as a work for hire, and that Miller never had authorship rights authorizing him to terminate Manny Company's copyright. See Summary Judgment Ruling, Doc. No. 73, published at Horror Inc. v Miller, 335 F.Supp.3d 273 (D. Conn. 2018). I granted summary judgment in favor of Miller. On September 30, 2021, the Second Circuit affirmed the judgment. See generally Doc. No. 90, published at Horror Inc. v. Miller, 15 F.4th 232 (2d Cir. 2021). The Court presumes the parties' familiarity with the other relevant facts and procedural history of the case, set out more fully in this Court's summary judgment ruling.

II. Standard of Review^[1]

Under Section 505 of the Copyright Act, “[i]n any civil action under [Title 17],” a district court may “award a reasonable attorney's fee to the prevailing party,” including (as here) to a prevailing party represented on a contingency basis and to a prevailing defendant. 17 U.S.C. § 505; Blanchard v. Bergeron, 489 U.S. 87, 93 (1989); Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 202 (2016).

The movant bears the burden of demonstrating its entitlement to a fee award and the reasonableness of the award sought. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). “[N]o precise rule or formula” determines the appropriateness of awarding attorneys' fees or the amount of fees to award; rather, the Court must exercise “equitable discretion.” Fogerty v.Fantasy, Inc., 510 U.S. 517, 534 (1994); Kirtsaeng, 579 U.S. at 202. The Court retains discretion to award none, some, or all of the claimed fees. Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 190 (2d Cir. 2008) (“Arbor Hill”).

III. Discussion

A. Whether Miller Can Receive Section 505 Fees

Neither party address two important threshold issues: whether the Court can award Copyright Act fees in light of the fact that Plaintiffs brought a copyright claim under the Declaratory Judgment Act, 28 U.S.C. § 2201, and whether the Court may award Section 505 fees in connection with a termination rights action. I will address each issue.

First, the Declaratory Judgment Act does not contain a fee-shifting provision, and the Second Circuit has not addressed whether a defendant that defeated a declaratory judgment claim may seek fees under 17 U.S.C. § 505. Hello I Am Elliot, Inc. v. Sine, 2021 WL 1191971, at *7 n.5 (S.D.N.Y. Mar. 30, 2021) (observing same). At least one other circuit court has considered the question, concluding that a defendant defeating a declaratory judgment action concerning the scope of a copyright may pursue fees under Section 505. Doc's Dream, LLC v. Dolores Press, Inc., 959 F.3d 357, 363 (9th Cir. 2020). The Ninth Circuit reasoned, inter alia, that the suit arose under the Copyright Act and that “[t]he fee-shifting provision of § 505 applies to ‘any civil action under' the Copyright Act.” Id. (quoting 17 U.S.C. § 505). That reasoning is appropriate here, too.

In this action, Plaintiffs' stated in their complaint that this action “arises under” the Declaratory Judgment Act, 28 U.S.C. § 2201, and the Copyright Act, 17 U.S.C. §§ 101 et seq. Compl., Doc. No. 1, at ¶ 7. More accurately, however, Plaintiffs brought their copyright claim under the Declaratory Judgment Act. Id. at ¶ 34 (“Horror and the Manny Company hereby request a declaration of this Court under the provisions of 28 U.S.C. § 2201, setting forth the respective rights and other legal relations of Plaintiffs and Miller.”). Nevertheless, an action “arises under” the Copyright Act in the Second Circuit if “the complaint is for a remedy expressly granted by the Act” or the “complaint . . . asserts a claim requiring construction of the Act.” T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir. 1964). Plaintiffs brought suit to resolve whether Miller had the right to terminate Horror's interests in and to the Friday the 13th screenplay, pursuant to 17 U.S.C. § 203, and to adjudicate whether Miller's termination notices were valid. Compl., Doc. No. 1, at ¶ 33. Plaintiffs' suit thus implicated both prongs of the T.B. Harms test.

Second, courts customarily associate Section 505 fee-shifting with infringement actions. E.g., Fogerty, 510 U.S. at 519 (“The Copyright Act of 1976, 17 U.S.C. § 505, provides in relevant part that in any copyright infringement action ‘the court may . . . award a reasonable attorney's fee to the prevailing party as part of the costs.'”) (quoting 17 U.S.C. § 505) (emphasis added). This interpretation is supported by the caption of Section 505, “Remedies for infringement: Costs and attorneys' fees,” which suggests that the provision may not apply where there are no allegations of infringement. 17 U.S.C. § 505 (emphasis added). But statutory “headings and titles are not meant to take the place of the detailed provisions of the text” and cannot “limit or undo the plain meaning of the text.” Brotherhood of R.R. Trainmen v. Balt. & Ohio R.R. Co., 331 U.S. 519, 528-29 (1947). The plain language of the statute authorizes the court to award attorneys' fees “[i]n any civil action under this title,” Title 17 of the United States Code. 17 U.S.C. § 505 (emphasis added). Accord Mallon v. Marshall, 268 F.Supp.3d 264, 265 (D. Mass. 2017) (rejecting the proposition that the statute heading limits Section 505 to infringement actions).

I have determined that this action arises under the termination rights provision of the Copyright Act, 17 U.S.C. § 203, and Title 17 of the United States Code plainly incorporates Section 203. Thus, at risk of stating the obvious, this action arising under Section 203 is an action under Title 17. Therefore, like others before me, I have no trouble concluding that Section 505 applies to the termination rights declaratory judgment action at bar. See, e.g., Ennio Morricone Music Inc. v. Bixio Music Group Ltd., 2019 WL 7483871, at *3 (S.D.N.Y. Dec. 16, 2019), report and recommendation adopted sub nom. Ennio Moricone Music Inc. v. Bixio Music Group Ltd., 2020 WL 58235 (S.D.N.Y. Jan. 6, 2020) (reaching the merits of a termination rights fee application without questioning whether fees may be awarded in the first place); accord Markham Concepts, Inc. v. Hasbro, Inc., 2021 WL 5161772 (D.R.I. Nov. 5, 2021); Scorpio Music (Black Scorpio) S.A. v. Willis, 2015 WL 5476116, at *5 (S.D. Cal. Sept. 15, 2015); see also 4 Nimmer on Copyright § 14.10[B][1][b] (2022).

Accordingly, Section 505 provides a legal basis for Miller's request for fees.

B. Entitlement to Fees

As a threshold matter, the Court may only award a reasonable attorney's fee to a prevailing party. 17 U.S.C. § 505. A party prevails if there is a “judicially sanctioned change in the legal relationship of the parties” favoring that party, including an “enforceable judgmen[t] on the merits.” CRST Van Expedited, Inc. v. E.E.O.C., 578 U.S. 419, 422 (2016). The standard applies equally to a prevailing plaintiff or defendant. Id. Here, Miller was awarded summary judgment on the merits and judgment was affirmed on appeal. Doc. No. 73; Doc. No. 90; Doc. No. 96 (taxing costs of the appeal in favor of Miller). As the prevailing party, Miller is eligible to recover reasonable fees.

Having determined that Miller is eligible, I next decide whether to award fees. To do so, I consider several nonexclusive factors endorsed by the Supreme Court in Fogerty: “frivolousness, motivation, objective unreasonableness[,] and the need in particular circumstances to advance considerations of compensation and deterrence,” in light of the objectives of the Copyright Act to promote public access to creative works. Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 202-04 (2016) (quoting Fogerty, 510 U.S. at 534 n.19). Here, the factors favor a fee award.

1. Plaintiffs' Claims Were Objectively Unreasonable But Not Frivolous

Plaintiffs argue that this case raises a “‘novel and unsettled question of copyright law'” for which “an award of attorney's fees on the basis of purported unreasonableness is not warranted.” Opp'n, Doc. No. 94, at 14 (quoting Lotus Dev. Corp v. Borland Int'l, Inc., 140 F.3d 70, 72 (1st Cir. 1998) (cited with approval by Matthew Bender & Co. v. W. Pub. Co., 240 F.3d 116, 122 (2d Cir. 2001))). I disagree. For the reasons set forth in this Court's summary judgment order and in the Second Circuit's ruling on appeal, Plaintiffs' claims were lacking “legal and factual support” and were therefore “objectively unreasonable.” Viva Video, Inc. v. Cabrera, 9 Fed.Appx. 77, 80 (2d Cir. 2001). I...