Records v. Nassar

• Decision Date: 23 July 2010
• Docket Number: Case No. 05-72126
• Citation: 729 F.Supp.2d 865
• Court: U.S. District Court — Eastern District of Michigan
• Parties: FHARMACY RECORDS, a/k/a Fharmacy Records Production Co., Fharm I Publishing Company, and Shelton Rivers, Plaintiffs, v. Salaam NASSAR, Curtis Jackson, Darrin Dean, Def Jam Recording, Ruff Ryders, Justin Combs Publishing, Universal Music Publishing, Universal Music & Video Distribution Corporation, Emi April, Inc., Soo Soo's Sweet Swisher Music, and Schlecter, Agents and Attorneys, Defendants.

729 F.Supp.2d 865

FHARMACY RECORDS, a/k/a Fharmacy Records Production Co., Fharm I Publishing Company, and Shelton Rivers, Plaintiffs,
v.
Salaam NASSAR, Curtis Jackson, Darrin Dean, Def Jam Recording, Ruff Ryders, Justin Combs Publishing, Universal Music Publishing, Universal Music & Video Distribution Corporation, Emi April, Inc., Soo Soo's Sweet Swisher Music, and Schlecter, Agents and Attorneys, Defendants.

Case No. 05-72126.

United States District Court,
E.D. Michigan,
Southern Division.

July 23, 2010.

729 F.Supp.2d 869

Gregory J. Reed, Stephanie L. Hammonds, Detroit, MI, for Plaintiffs.

Michael D. Socha, Daniel D. Quick, Leslie C. Schefman, Bloomfield Hills, MI, Deborah J. Swedlow, J. Michael Huget, Ann Arbor, MI, for Defendants.

OPINION AND ORDER OVERRULING PLAINTIFFS' OBJECTIONS TO MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION TO AWARD ATTORNEY'S FEES, ADOPTING REPORT AND RECOMMENDATION, AND GRANTING IN PART DEFENDANTS' MOTION FOR ATTORNEY'S FEES AND COSTS

DAVID M. LAWSON, District Judge.

Presently before the Court are the plaintiffs' objections to a report filed by Magistrate Judge Donald A. Scheer pursuant

729 F.Supp.2d 870

to an order entered by the undersigned to conduct appropriate hearings on a joint motion for attorney's fees and costs filed by the defendants. On August 15, 2008, 572 F.Supp.2d 869 (E.D.Mich.2008), the Court found that the defendants were entitled to attorney's fees and costs in some amount, but referred the matter to Judge Scheer for a report on "the amount of attorney's fees, costs, and expenses, if any, that should be awarded to the respective defendants, and to determine further whether the plaintiffs' attorneys ought to be personally accountable for any or all of those fees and expenses." Op. & Order, 572 F.Supp.2d at 882. On November 5, 2009, Judge Scheer filed his report recommending that the defendants' motion be granted in part, allowing some fees as requested, reducing some, disallowing others, and discussing expense reimbursement. Judge Scheer also recommended that the plaintiffs' attorney, Gregory J. Reed, should be held personally liable for the attorney's fees and some of the expert witness expenses. The plaintiffs filed timely objections to the report and recommendation, followed by two sets of repetitive supplemental objections. The defendants responded, and the matter is before the Court for de novo review.

In its previous order, the Court found that the defendants had shown that they were entitled to attorney's fees under the Copyright Act and as a result of discovery abuse by the plaintiffs. However, because the defendants did not make a proper showing that the amount of fees and costs they seek is reasonable, the Court engaged the services of Judge Scheer to address the details of the fee motion. The Court now reaffirms its determination that the defendants are entitled to attorney's fees under the Copyright Act, 17 U.S.C. § 505, and fees and costs under 28 U.S.C. § 1927 and, finding no merit in any of the plaintiffs' objections and agreeing with the findings and reasoning of the magistrate judge, adopts the recommendation as to the amounts and allocations.

I.

The facts of this case are set forth in detail in the Court's order granting the defendants' motion for summary judgment and motion to dismiss, see dkt. # 248, and they need not be repeated here. In brief summary, the plaintiffs brought suit alleging that defendant Salaam Nassar stole a rhythmic beat created by plaintiff Shelton Rivers, a.k.a. the "Ess Man." After Rivers made the beat, the Fharmacy plaintiffs acquired an interest in it and secured copyright protection. Later on, rap artist DMX released a song with a strikingly similar beat entitled "Shot Down." Many of the defendants were involved in the production of "Shot Down" and sales of the album on which it appeared. When the album went platinum, the plaintiffs sued. Their theory was that Nassar had access to Rivers's equipment, and he simply lifted the beat when Rivers wasn't looking.

The case involved a substantial amount of electronic and documentary discovery, but when the defendants began to test the plaintiffs' claims against the evidence, things quickly unraveled. Whether the plaintiffs spun the case out of whole cloth or simply tried to bolster weaknesses through chicanery remains unknown. What is certain is that the plaintiffs engaged in fabrication and spoliation of evidence, using one lie to cover up another. And it is also clear that counsel Gregory Reed played a key role.

The Court so found when it dismissed the plaintiffs' case and entered judgment in favor of the defendants on March 31, 2008, 248 F.R.D. 507 (E.D.Mich.2008). The forty-eight-page opinion recounted in detail multiple instances of discovery misconduct by the plaintiffs and their counsel and concluded that "the conduct of the

729 F.Supp.2d 871

plaintiffs and their attorney has been so egregiously improper and abusive that the ultimate sanction of dismissal is the only appropriate response." Op. & Order Granting Defs.' Mot. for Sum. J., 248 F.R.D. at 531. The Court found that the plaintiffs' complaint alleged a claim of unlawful "sampling" of a sound recording in violation of 17 U.S.C. § 114(b), the plaintiffs were unable to produce any evidence that the protected work and the accused work were identical, and the defendants were entitled to summary judgment on the merits of the claim. The Court also documented the disturbing conduct of the plaintiffs and their attorneys in the manipulation and destruction of evidence in the case, which resulted in termination sanctions.

On April 14, 2008, the plaintiffs filed a motion for relief under Rule 60 and a motion for reconsideration, followed by the plaintiffs' counsel's expedited motion for relief from judgment filed on August 8, 2008, yet one more motion for relief from the March 31, 2008 order filed on August 11, 2008, and a motion for recusal of the undersigned. Several defendants also moved for an award of attorney's fees and costs. The Court addressed these postjudgment motions on August 15, 2008, when it denied all of the plaintiffs' motions and referred the defendants' motion for attorney's fees to Magistrate Judge Donald A. Scheer for consideration. See Op. & Order [dkt. # 271]. The Court stated:

In the present case the Court has little trouble concluding that the plaintiffs and their counsel should be held jointly and severally liable for the defendants' costs and fees. An award is appropriate under both 17 U.S.C. § 505 and 28 U.S.C. § 1927; the Court need not resort to its inherent authority .... justice requires that the defendants be compensated for the distress in warding off a frivolous case.

Although section 505 does not expressly authorize an award from an attorney for a party, 28 U.S.C. § 1927 plainly does. A court may hold parties and their counsel jointly and severally liable under that statute for "multipl[ying] the proceedings in any case unreasonably and vexatiously." See 28 U.S.C. § 1927; Royal Oak Entertainment, LLC, 486 F.Supp.2d at 679. There likely is cause to hold attorney Gregory Reed accountable for at least a portion of the fees and expenses, and perhaps against Mr. Reed's co-counsel, Stephanie Hammonds, as well. Those issues will be referred to Magistrate Judge Donald A. Scheer to determine.

... The Court finds that the exhibits on which [the defendants' demands for attorney's fees] are premised do not furnish the level of detail that is required to determine the reasonableness of the fee requests.... These entries do not allow the Court to assess the amount of time spent on specific tasks by individual lawyers, and they do not furnish sufficient detail to permit a reasoned challenge by the plaintiffs or their attorneys. The defendants state in their brief that they are "willing to provide their billing records should the Court so desire, but given the conduct of Plaintiffs' counsel to date, they prefer that such a review occur in camera by the Court." ... The defendants correctly anticipate the need for further review, but they have not justified the need for in camera production. However unreasonably the plaintiffs and their counsel have behaved, they have not forfeited the right to examine the defendants' billing records.

The Court, therefore, will refer the defendants' attorney's fees motion to Magistrate Judge Donald A. Scheer to conduct a hearing in whatever manner he deems appropriate for the purpose of

729 F.Supp.2d 872

determining the amount of attorney's fees, costs, and expenses, if any, that should be awarded to the respective defendants, and to determine further whether the plaintiffs' attorneys ought to be personally accountable for any or all of those fees and expenses ....

Id. at 881-82.

The Court's August 15, 2008 opinion caused yet another flurry of motions on the part of the plaintiffs. The plaintiffs filed eight motions for reconsideration or relief from the ruling (dkts. # 277, 278, 285, 290, 291, 300, 306, 312), and followed them with two more motions to disqualify the undersigned judge. The first disqualification motion was assigned by random draw to Judge Stephen J. Murphy of this Court, who denied it on November 18, 2008, 2008 WL 4965337. Then, on December 4, 2008, the Court denied the rest of the plaintiffs' motions for reconsideration or relief from judgment and the remaining motion for disqualification. The Court continued referral of the motion for attorney's fees and costs to Judge Scheer, who, as noted earlier, issued his report and recommendation recommending award of attorney's fees and costs to the defendants on November 5, 2009. In the meantime, the court of appeals affirmed the dismissal, choosing not to address the merits of the copyright claim, but finding that the plaintiffs' discovery abuses warranted dismissal. Fharmacy Records v. Nassar, Nos. 08-1607, 08-2201, 379 Fed.Appx. 522, 2010 WL 2294538 (6th Cir., June 7, 2010). Addressing the decision to dismiss the case...