Janus Films, Inc. v. Miller
| Decision Date | 15 September 1986 |
| Docket Number | No. 1024,D,1024 |
| Citation | 801 F.2d 578 |
| Parties | JANUS FILMS, INC., Plaintiff-Appellee, v. Herbert MILLER d.b.a. Cable Films, Defendant-Appellant, Delta Communications, Ltd., a/k/a Delta Communications, Inc., Ann Baily, Executrix of the Estate of Mel Baily, Defendants. ocket 85-7707. |
| Court | U.S. Court of Appeals — Second Circuit |
Stuart A. White, Portland, Me., for defendants-appellants.
Jeffrey D. Ullman, New York City, N.Y. (Ullman & Holtzman, New York City, on brief), for plaintiff-appellee.
Before OAKES, NEWMAN, and WINTER, Circuit Judges.
This appeal presents what appear to be novel issues concerning the entry of judgment in litigation ended by a settlement. Among the questions raised is whether the judgment must reflect the fact that the settlement includes a confidential agreement between the parties that the judgment may be satisfied by payment of a lesser sum than the amount of the judgment. The appeal is brought by Herbert Miller d.b.a. Cable Films from a judgment of the District Court for the Southern District of New York (Robert J. Ward, Judge) in favor of plaintiff-appellee Janus Films, Inc. ("Janus"). For reasons that follow, we vacate the judgment and remand for entry of a revised judgment.
Janus sued Miller for copyright infringement. Janus alleged that it had acquired exclusive licenses to the copyrights in five literary works from which popular movies have been made. The films are "The Third Man," "The Thirty-Nine Steps," "The Lady Vanishes," "Bulldog Drummond Comes Back," and "Bulldog Drummond's Peril." The films are in the public domain, since the copyrights in them expired and were not renewed. The copyrights in the stories, however, were renewed and remain valid. Janus alleged that the movies are "derivative works," 17 U.S.C. Secs. 101, 103 (1982), and that, as the exclusive licensee of the copyrights in the underlying stories, it has, in effect, the exclusive right to authorize the distribution, performance, and display of the movies. See Filmvideo Releasing Corp. v. Hastings, 668 F.2d 91 (2d Cir.1981); G. Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469 (2d Cir.), cert. denied, 342 U.S. 849, 72 S.Ct. 77, 96 L.Ed. 641 (1951). Janus further alleged that Miller was distributing videocassettes of the films, thereby infringing Janus's rights.
Janus waived its claim for actual damages and elected to seek statutory damages. See 17 U.S.C. Sec. 504(c). Judge Ward thereupon granted Janus's motion to strike Miller's jury demand. See Oboler v. Goldin, 714 F.2d 211 (2d Cir.1983). A bench trial began on April 29, 1985. On the first day of the trial Janus introduced 85 exhibits to establish the basis for its claim of the exclusive right to prevent the unauthorized distribution of the five films. On the morning of the trial's second day counsel for the parties entered into settlement discussions. These resulted in an agreement reported in open court later that day. The settlement agreement, as stated by counsel for Janus, contained four elements: the defendant concedes liability "under the complaint"; judgment may be entered for statutory damages, attorney's fees, and costs in the total amount of $100,000 and with a permanent injunction that includes an obligation "for the turnover and/or destruction of all infringing copies of the work in defendant's possession"; the parties have entered into a separate, confidential agreement, to be placed under seal, regarding "the terms and conditions of collection" of the judgment; and the parties have made a separate agreement obliging Miller to cease distribution of other, unspecified films.
Judge Ward then interrogated the president of Janus, Saul J. Turell, and Miller under oath to confirm their understanding and acceptance of the terms of the settlement. Both acknowledged that the settlement had been correctly reported. Miller explicitly acknowledged that he was conceding liability "under the complaint." In open court Turell elaborated slightly on the separate agreement concerning collection, acknowledging that it provided for acceptance of "a lesser amount" in full satisfaction of the $100,000 judgment. In the sealed portion of the transcript Miller confirmed the details of the separate agreement, stating that it provided for payment of a sum considerably less than $100,000 in installments over an extended period of time. Judge Ward then stated that he would await the submission of a judgment.
One week later an article appeared in Variety, reporting facts about the settlement available from the public record of the court proceedings. The article referred to the $100,000 amount but made no mention of the agreement to accept payment of a "lesser" amount in full satisfaction. The article also made no mention of a settlement, stating, with some justification, that a $100,000 judgment had been "won" by Janus Films. Miller sent a copy of the article to Judge Ward, complained that it reported that a judgment "has been won," and pointed out the absence of a "formal written agreement signed with respect to the arrangements discussed for settlement in your court room." In subsequent correspondence to the Court, Miller endeavored to challenge the legal proposition that a holder of a copyright in an underlying work can prevent unauthorized distribution of a derivative work that has entered the public domain. He suggested that "perhaps it is time to set aside the pending settlement."
A few days later counsel for Janus submitted to the Court and opposing counsel a proposed judgment and noticed it for settlement on June 21. Thereafter Miller filed a notice of his dismissal of his counsel and later submitted pro se a motion to set aside the settlement and resume the trial. On June 21, Judge Ward denied the motion, noting that the settlement had been entered into voluntarily and that Miller had acknowledged his understanding of and agreement with its terms under oath. The same day Judge Ward entered the judgment in the form proposed by Janus.
The judgment initially recites the procedural steps leading up to its entry. Among the recitals is the following:
and the Court having determined, upon the suggestion of the parties, that plaintiff should have judgment against defendant for a permanent injunction pursuant to 17 U.S.C. sec. 502, and for statutory damages, attorneys' fees and costs pursuant to 17 U.S.C. sec. 504 in the total sum of $100,000, ...
The decretal provisions of the judgment (1) declare that the plaintiff has valid and enforceable exclusive rights in the five underlying literary works, including the right to authorize the distribution, performance, and display of the five films, (2) award $100,000 to the plaintiff, and (3) subject the defendant to two injunctions. The first prohibits Miller from distributing prints or videotapes of the five films or otherwise infringing plaintiff's exclusive rights. The second requires Miller to recall prints and videotapes of the five films from all persons who have possession of them by virtue of Miller's acts; Miller is also required to turn over to plaintiff's counsel all recalled articles received from third parties and all infringing articles still in Miller's possession.
On appeal, Miller, now represented by new counsel, seeks to have the judgment set aside on several grounds. He contends that the judgment is "inaccurate and incomplete," Brief for Appellant at 11, in that the $100,000 sum is not the amount he agreed to pay and the plaintiff agreed to accept, that the plaintiff's release to the press of what he calls an inaccurate version of the settlement justifies upsetting the settlement, that the declaratory provisions of the judgment "purport to be findings of fact and conclusions of law of the court upon contested issues of copyright validity and infringement which were not litigated," id. at 12, and that part of the injunctive relief exceeds the terms of the settlement.
At the outset, it will be useful to clarify the nature of the procedure that ended this litigation. In Miller's view, there was an agreement that contemplated the entry of a "consent judgment." Janus disputes this characterization. Its view of the matter is reflected in the language of the draft judgment it submitted to Judge Ward, reciting that the judge had "determined" that the plaintiff should have judgment against the defendant for a permanent injunction and $100,000. Janus thereby secured a judgment that can plausibly be read to mean that the judge, acting on the basis of the exhibits and the defendant's concession of liability, made his own determination that the plaintiff was entitled to an injunction and an award of $100,000. Resolving the dispute reflected by these differing views requires a review of the various means by which a lawsuit may be ended and the role of a trial judge in each circumstance.
Lawsuits may terminate either by adjudication or by agreement of the parties. In the case of an adjudication, the judge determines all aspects of the relief to be awarded and enters what has been called an "adjudicated judgment," Pettway v. American Cast Iron Pipe Co., 576 F.2d 1157, 1175 (5th Cir.1978), cert. denied, 439 U.S. 1115, 99 S.Ct. 1020, 59 L.Ed.2d 74 (1979). The wording of such a judgment is determined by the judge, who may draft it, accept the draft proposed by the winning party, or adopt portions of draft language proposed by any of the parties.
Lawsuits ended by agreement may either be dismissed by stipulation, Fed.R.Civ.P. 41(a)(1)(ii), or may culminate in a judgment. If dismissed by stipulation, the judge normally plays no role whatever, standing "indifferent" to the terms the parties have agreed to. See Heddendorf v. Goldfine, 167 F.Supp. 915, 926 (D.Mass.1958) (Wyzanski, J.). With some stipulated dismissals, such as class actions, court approval is required, Fed.R.Civ.P. 23(e), and the judge must determine...
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