Spooner v. Een Inc.

• Decision Date: 05 July 2011
• Docket Number: No. 10–2393.,10–2393.
• Citation: 644 F.3d 62,99 U.S.P.Q.2d 1219
• Parties: Jason SPOONER, Plaintiff, Appellee,v.EEN, INC. and Dan Egan, Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

644 F.3d 62

2011 Copr.L.Dec. P 30,095

99 U.S.P.Q.2d 1219

Jason SPOONER, Plaintiff, Appellee,

v.EEN, INC. and Dan Egan, Defendants, Appellants.

No. 10–2393.

United States Court of Appeals, First Circuit.

Heard June 7, 2011.Decided July 5, 2011.

Robert Edmond Mittel, with whom MittelAsen, LLC was on brief, for appellants.

Adam S. Taylor, with whom André G. Duchette and Taylor, McCormack & Frame, LLC were on brief, for appellee.Before HOWARD, SELYA and THOMPSON, Circuit Judges.SELYA, Circuit Judge.

After prevailing at trial in this copyright infringement case, the plaintiff sought and recovered substantial attorneys' fees. The defendants contest the fee award. Concluding that the district court acted within the realm of its discretion, we affirm.

I. BACKGROUND

The relevant facts are easily catalogued. On August 8, 2008, plaintiff-appellee Jason Spooner filed a complaint in the district court alleging that a gaggle of defendants—Dan Egan, EEN, Inc. (Egan's media production company), ¹ the Sugarloaf/USA ski resort, and its hierarchs—had engaged in “blatant and unauthorized use” of the plaintiff's protected musical composition, in violation of the Copyright Act, 17 U.S.C. § 106. The “use” occurred when EEN included a song composed, copyrighted, and performed by the plaintiff in a commercial advertisement prepared for television and internet display on behalf of Sugarloaf. The plaintiff had not authorized this use.

Dismayed by the infringement of his copyright, he sought an injunction, statutory damages, and costs (including attorneys' fees) under the Copyright Act. What followed was the litigation equivalent of hand-to-hand combat.

It would serve no useful purpose to recite book and verse. It suffices to say that the parties engaged in frenetic motions practice, conducted extensive discovery, and squabbled over a plethora of issues (large and small). During this pretrial period, the protagonists struggled to reach a global settlement. That effort proved unavailing but, in October of 2008, the plaintiff settled with the Sugarloaf defendants for $30,000, dismissing the claims against those parties. See Fed.R.Civ.P. 41(a)(1)(A)(ii). Shortly thereafter, Egan and EEN (hereinafter, the defendants) made a $10,000 offer of judgment under Federal Rule of Civil Procedure 68. This offer encompassed both damages and costs (including attorneys' fees). The plaintiff rejected it.

At a meeting held on November 17, 2008, the defendants offered the sum of $20,000 in full settlement. This second offer, which was not tendered under the aegis of Rule 68, went unrequited.

After settlement negotiations fizzled, the case was tried to the court. The plaintiff prevailed: the court found that the defendants had willfully infringed the protected work and that Egan had failed to act celeritously in response to the plaintiff's request to retire the Sugarloaf commercial. Spooner v. EEN, Inc. ( Spooner I ), No. 2:08–cv–00262, 2010 WL 1930239, at *7–8 (D.Me. May 11, 2010). Accordingly, the court granted the plaintiff both injunctive relief and statutory damages in the amount of $40,000. Id. at *8–9. Because all of the parties originally sued were jointly and severally liable for the statutory damages, the court set off the amount paid in the Sugarloaf settlement, leaving the plaintiff with a net additional recovery of $10,000 in statutory damages. Id. at *9. Finally, the court determined that the plaintiff should recover attorneys' fees pursuant to 17 U.S.C. § 505. Id. at *10.

A satellite proceeding ensued. After reviewing the plaintiff's request and the defendants' opposition, the court awarded the plaintiff fees of $98,745.80. Spooner v. EEN, Inc. ( Spooner II ), –––F.Supp.2d ––––, ––––, 2010 WL 4286358, at *5 (D.Me. Oct. 28, 2010). The plaintiff's request for costs (other than attorneys' fees) was denied without prejudice. See id.

The plaintiff filed an amended request for costs (other than attorneys' fees). That matter was still unresolved when the defendants appealed from the order awarding attorneys' fees.

II. ANALYSIS

We review a district court's award of attorneys' fees for abuse of discretion. Hutchinson ex rel. Julien v. Patrick, 636 F.3d 1, 13 (1st Cir.2011). Under this rubric, “we will set aside a fee award only if it clearly appears that the trial court ignored a factor deserving significant weight, relied upon an improper factor, or evaluated all the proper factors (and no improper ones), but made a serious mistake in weighing them.” Gay Officers Action League v. Puerto Rico, 247 F.3d 288, 292–93 (1st Cir.2001); see Latin Am. Music Co. v. Am. Soc'y of Composers, Authors & Publishers, 642 F.3d 87, 91 (1st Cir.2011). In all events, a material error of law constitutes an abuse of discretion. Torres–Rivera v. O'Neill–Cancel, 524 F.3d 331, 336 (1st Cir.2008).

In the American justice system, the parties customarily bear the responsibility for paying their own lawyers. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). But this general rule, like virtually every general rule, admits of exceptions. The Copyright Act creates such an exception: it authorizes a district court “in its discretion” to “award a reasonable attorney's fee to the prevailing party” in a copyright action.² 17 U.S.C. § 505; see Fogerty v. Fantasy, Inc., 510 U.S. 517, 533–34, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). A “prevailing party” is one who “has prevailed on the merits of at least some of his claims.” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 603, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001) (quoting Hanrahan v. Hampton, 446 U.S. 754, 758, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980) (per curiam)). This definition applies in the precincts patrolled by section 505. See Torres–Negrón v. J & N Records, LLC, 504 F.3d 151, 164 & n. 9 (1st Cir.2007).

The defendants acknowledge (as they must) that the plaintiff is a prevailing party. They nonetheless challenge the fee award for two reasons. First, they argue that the plaintiff's fee request was so excessive that the district court ought not to have awarded any fees at all. Second, they argue that, even if an award was warranted, the court should have limited it to work performed prior to November 17, 2008 (the date on which the plaintiff rejected the defendants' $20,000 settlement offer). After pausing to clear away a jurisdictional obstacle, we discuss these claims sequentially.

A. The Jurisdictional Obstacle.

There is a jurisdictional question in this case. Although the defendants' notice of appeal was directed exclusively at the order granting an award of attorneys' fees, the plaintiff's request for other costs remained pending in the district court. As a general rule, a post-verdict fee award is treated as distinct from an award of costs and, therefore, the fee award may be appealed even if the question of costs is unresolved. See Fed.R.Civ.P. 54(d); see also Marek v. Chesny, 473 U.S. 1, 8, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985).

Copyright cases, however, require the use of a different template. The Copyright Act authorizes a court to “award a reasonable attorney's fee to the prevailing party as part of the costs.” 17 U.S.C. § 505 (emphasis supplied). When a statute specifies that attorneys' fees are a part of costs in a particular class of cases, an inquiring court must honor that directive. See Marek, 473 U.S. at 9, 105 S.Ct. 3012. This taxonomy has practical consequences, one of which is that as long as the overall question of costs remains unresolved, an award of attorneys' fees—itself a component of the total recoverable costs—does not constitute a final and appealable order. See 28 U.S.C. § 1291; see also García–Goyco v. Law Envtl. Consultants, Inc., 428 F.3d 14, 18 (1st Cir.2005) (explaining, in case where district court denied section 505 request for fees without prejudice, that an initial order granting plaintiff a specific period within which to refile is typically not considered final).

A court is duty-bound to notice, and act upon, defects in its subject matter jurisdiction sua sponte. McCulloch v. Vélez, 364 F.3d 1, 5 (1st Cir.2004). Thus, even though the parties had not questioned appellate jurisdiction, we raised the point at oral argument.

Jurisdictional defects sometimes can be remedied by corrective measures even after an appeal is filed. See Kossler v. Crisanti, 564 F.3d 181, 186 (3d Cir.2009) (en banc) (explaining that parties cured initial jurisdictional defect caused by lack of final judgment by stipulating to entry of judgment on all claims that remained open in the district court); see also Grupo Dataflux v. Atlas Global Grp., 541 U.S. 567, 573, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004). Mindful of this possibility, we informally stayed the proceedings while the parties attended to this jurisdictional defect. In rapid sequence, the parties stipulated to the amount of the recoverable costs (other than attorneys' fees), the district court entered an appropriate order (taxing those costs against the defendants in the amount of $3,413.05), and the clerk of the district court certified that result to us. This corrective action left nothing open in the district court. Consequently, it cured the jurisdictional defect and rendered the fee award final and appealable.

B. The Fee Request.

The defendants' principal claim is that the plaintiff's request for fees reflects such a degree of extravagance that the only appropriate response to it was an outright denial of any fees. To put this claim into perspective, we first describe the conventional framework that courts use in fashioning fee awards: the lodestar method.³ See, e.g., Perdue v. Kenny A. ex rel. Winn, ––– U.S. ––––, 130 S.Ct. 1662, 1672, 176 L.Ed.2d 494 (2010); Lipsett v. Blanco, 975 F.2d 934, 937 (1st Cir.1992). This approach requires the district court to ascertain the number of hours productively expended and multiply that time by reasonable...