Spanski Enters., Inc. v. Telewizja Polska S.A.

• Decision Date: 30 September 2017
• Docket Number: Civil Action No. 12–cv–957 (TSC)
• Citation: 278 F.Supp.3d 210
• Parties: SPANSKI ENTERPRISES, INC., Plaintiff, v. TELEWIZJA POLSKA S.A., Defendant.
• Court: U.S. District Court — District of Columbia

278 F.Supp.3d 210

SPANSKI ENTERPRISES, INC., Plaintiff,

v.TELEWIZJA POLSKA S.A., Defendant.

Civil Action No. 12–cv–957 (TSC)

United States District Court, District of Columbia.

Signed September 30, 2017

Nathan J. Muyskens, Loeb & Loeb LLP, Washington, DC, Walter Earl Steimel, Jr., The Steimel Law Group, Alexandria, VA, Sarah Schacter, Pro Hac Vice, John Anthony Piskora, Pro Hac Vice, Jonathan Zavin, Pro Hac Vice, Loeb & Loeb LLP, New York, NY, for Plaintiff.

Charles B. Wayne, Mary Elizabeth Gately, DLA Piper LLP, Washington, DC, Matthew Ganas, Pro Hac Vice, Melissa Reinckens, Pro Hac Vice, Andrew Lawrence Deutsch, Pro Hac Vice, DLA Piper LLP, New York, NY, David Samuel Wenger, Pro Hac Vice, DLA Piper LLP, Baltimore, MD, for Defendant.

MEMORANDUM OPINION

TANYA S. CHUTKAN, United States District Judge

I. INTRODUCTION

On December 2, 2016, after a trial, this court found that Defendant Telewizja Polska S.A. (TVP) "volitionally and intentionally infringed" Plaintiff Spanski Enterprises Inc. (SEI)'s exclusive copyrights over 51 television episodes by making those episodes available for display in the United States. (Am. Mem. Op. at 20, ECF No. 80). On February 14, 2017, the court ordered TVP to pay damages to SEI in the amount of $60,000 per episode, for a total of $3,060,000. (Mem. Op., ECF No. 85). On February 24, 2017, SEI filed a motion for attorney's fees and costs, pursuant to 17 U.S.C. § 505 and Fed. R. Civ. P. 54(d)(2). (Pl. Mot., ECF No. 87). Having considered the parties' filings and relevant precedent, and for the reasons that follow, TVP is hereby ORDERED to pay SEI reasonable attorney's fees in a final amount to be determined.

II. JUDICIAL STANDARD

Attorney's fees are not generally recoverable unless provided for by statute or enforceable contract. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 257, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). Typically, the party seeking fees "bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." Hensley v. Eckerhart , 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The decision whether to award attorney's fees is within the discretion of the district court. See Brayton v. Office of the U.S. Trade Representative, 641 F.3d 521, 524 (D.C. Cir. 2011) (reviewing refusal to award fees for abuse of discretion); Hensley, 461 U.S. at 437, 103 S.Ct. 1933 (noting that district court has discretion in making determinations regarding fee awards).

III. DISCUSSION

Section 505 of the Copyright Act states that "[i]n any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party .... [T]he court may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505. Thus, to justify an award of attorney's fees under the Copyright Act, a court must determine that (1) the party to whom the fees are awarded qualifies as a "prevailing party," and (2) an award of fees is warranted based on the totality of the circumstances surrounding the particular case, in light of a number of factors. See Fogerty v. Fantasy, 510 U.S. 517, 534 n.19, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994) (specifying non-exhaustive list of factors to be considered as part of the relevant circumstances in deciding whether to award fees). Provided that attorney's fees are warranted, the court must also settle on a reasonable amount to award. 17 U.S.C. § 505.

1. Prevailing Party

As an initial matter, SEI qualifies as the "prevailing party" within the meaning of section 505. The phrase "prevailing party" is a legal term of art. Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep't of Health & Human Res. , 532 U.S. 598, 603, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). A party "cannot be deemed to have prevailed, for purposes of fee-shifting statutes[,] ... unless there has been an enforceable ‘alteration of the legal relationship of the parties.’ " Id. at 622, 121 S.Ct. 1835. This specialized meaning notwithstanding, courts have consistently recognized that a judgment on the merits in favor of one party establishes prevailing party status. See, e.g. , id. at 604, 121 S.Ct. 1835 ("[E]nforceable judgments on the merits ... create the material alteration of the legal relationship of the parties necessary to permit an award of attorney's fees.") (citing Texas State Teachers Ass'n v. Garland Indep. School Dist., 489 U.S. 782, 792–93, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989) ). The parties do not contest SEI's status as the prevailing party, and this court has issued a judgment on the merits in favor of SEI. Thus, SEI qualifies as a prevailing party within the meaning of Section 505. See id.

2. Totality of the Circumstances

As "there is no precise rule or formula for making fee determinations under § 505," a court's decision to award fees under that section requires an exercise of "equitable discretion" that accounts for the circumstances of each particular case on its own terms. Fogerty , 510 U.S. at 534 & n.19, 114 S.Ct. 1023 ; see also Kirtsaeng v. John Wiley & Sons, Inc. , ––– U.S. ––––, 136 S.Ct. 1979, 1988–89, 195 L.Ed.2d 368 (2016). Courts generally consider a number of factors in exercising this discretion, including "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3d. Cir. 1986) ; see also Prunty v. Vivendi, 195 F.Supp.3d 107, 111–12 (D.D.C. 2016) ; Fogerty , 510 U.S. at 534 n.19, 114 S.Ct. 1023. Of these factors, the Supreme Court recently clarified that objective reasonableness carries "significant weight" in determining whether to award fees. Kirtsaeng, 136 S.Ct. at 1989. Nevertheless, the Court also noted that notwithstanding the significance of objective reasonableness, that factor is not necessarily controlling, as district courts retain discretion to "take into account a range of considerations beyond the reasonableness of litigating positions." Id. at 1988. Thus, "a court may order fee-shifting because of a party's litigation misconduct, whatever the reasonableness of his claims or defenses." Id. at 1988–89. In any event, all enumerated factors and other circumstances must be considered in a light "faithful to the purposes of the Copyright Act." ZilYen, Inc. v. Rubber Mfrs. Ass'n, 958 F.Supp.2d 215, 218 (D.D.C. 2013) (quoting Fogerty, 510 U.S. at 534 n.19, 114 S.Ct. 1023 ).

SEI argues that it is entitled to attorney's fees for a number of reasons. It contends that: (1) TVP's infringement of its copyright was "motivated by bad faith" and accompanied by an "express intent to ‘break’ the party's agreement"; (2) TVP's defenses—that the access to the allegedly infringing episodes was the result of technological error, that any infringement lacked a volitional element, and that witnesses contradicting these propositions lacked credibility—were objectively unreasonable; and (3) TVP's actions in "deleting and manipulating files to cover up" the infringement, including during litigation, constituted litigation misconduct justifying a fee award. (Pl. Mot. at 8–12, ECF No. 87). TVP responds that: (1) its defenses—including the extraterritoriality of the conduct alleged to constitute infringement, lack of intent and volition, and estoppel—were merely unsuccessful, not unreasonable (Def. Opp. to Mot. at 3–9, ECF No. 92); (2) this is not a case involving repeated instances of copyright infringement; and (3) the court's award of statutory damages suffices to address any concerns of compensation or deterrence relating to the Copyright Act. (Def. Opp. to Mot. at 10, ECF No. 92).

A. Frivolousness and Objective Reasonableness

This court concludes that the defenses presented at trial were neither frivolous nor objectively unreasonable. Claims under the Copyright Act are "objectively unreasonable if ‘[they are] clearly without merit or otherwise patently devoid of legal or factual basis,’ " and are "not objectively unreasonable if there is a ‘reasonable possibility’ that the court would reach a different outcome on the merits of the claim." Prunty, 195 F.Supp.3d at 112 (quoting ZilYen, 958 F.Supp.2d at 220 ). Although the court decided in favor of SEI, TVP's defenses were not so clearly devoid of legal or factual basis as to render unreasonable any possibility that a court would decide for TVP. Unlike the claims and defenses at issue in other cases in which courts have found frivolousness or objective unreasonableness,¹ both parties here presented serious defenses and arguments for this court to adjudicate. The mere fact that the court determined that SEI carried its burden of proof and that TVP's defenses were insufficiently meritorious does not establish unreasonableness, and the court is not aware of any other basis upon which to rest such a conclusion. See Kirtsaeng, 136 S.Ct. at 1988 (noting distinction between questions of whether a defendant infringed a copyright and whether a defendant made serious arguments in defense of his conduct, and separating the issue of liability from the issue of reasonableness). Nevertheless, the court does not find objective reasonableness to be the controlling factor in this case.

B. Litigation Misconduct, Compensation, and Deterrence

While defense counsel conducted himself with the utmost propriety and ethical probity throughout the course of this litigation, this court is nevertheless of the view that TVP engaged in egregious litigation misconduct. Although the objective reasonableness or unreasonableness of a party's litigation position is unquestionably important in considering the appropriateness of a fee award, the Supreme Court expressly noted in Kirtsaeng that fees can be awarded even where parties adopt reasonable positions before the court. See 136 S.Ct. at 1988–89. The Court particularly emphasized a...