Stan Lee Media, Inc. v. Walt Disney Co.
| Decision Date | 31 July 2014 |
| Docket Number | Civil Action No. 12-cv-2663-WJM-KMT |
| Parties | STAN LEE MEDIA, INC., Plaintiff, v. THE WALT DISNEY COMPANY, Defendant. |
| Court | U.S. District Court — District of Colorado |
This matter is before the court on Defendant The Walt Disney Company's ("Defendant") Motion for Attorneys' Fees ("Motion"). (ECF No. 67.) Having obtained judgment, Defendant's counsel now seeks $461,881.80 in attorneys' fees pursuant to 17 U.S.C. § 505, 28 U.S.C. § 1927, and Fed. R. Civ. P. 54(d). The amount sought by Defendant's Motion is opposed by Plaintiff Stan Lee Media, Inc. ("Plaintiff"). (ECF No. 71.) For the reasons set forth below, the Motion is granted in part and denied in part.
Plaintiff is a Colorado corporation that entered into an agreement in 1998 ("1998 Agreement") with Stan Lee, a comic book artist who created several well-known comic book characters while employed at Marvel Comics. (ECF No. 25 ¶¶ 2, 4.) In the 1998 Agreement, Lee assigned to Plaintiff the copyrights for the comic book characters that he had previously created, and those that he would create in the future. (Id. ¶ 4.) Leesubsequently sent a letter to Plaintiff purporting to terminate the 1998 Agreement because Plaintiff had materially breached it, and assigned the same copyrights to Marvel, leading to several legal disputes involving Plaintiff, Lee, Marvel, and others. (Id. ¶ 10; ECF No. 37 at 9.) Among other claims, these disputes involved Plaintiff's attempt to enforce its ownership of the copyrights to Lee's characters conferred upon it in the 1998 Agreement. (ECF No. 25 ¶¶ 27-35.)
In 2009, Disney purchased Marvel and turned it into a wholly-owned subsidiary. (Id. ¶ 11.) Marvel and other Disney subsidiaries have since used copyrighted characters created by Lee without Plaintiff's consent in distributing movies, selling merchandise, and in creating and distributing print media. (Id. ¶¶ 19-21.)
On October 9, 2012, Plaintiff filed a Complaint alleging that Defendant infringed the copyrights it holds by virtue of the 1998 Agreement. (ECF No. 1.) An Amended Complaint was filed on December 26, 2012. (ECF No. 25.) On January 14, 2013, Defendant filed a motion to dismiss all claims. (ECF No. 37.) On September 5, 2013, the Court granting Defendant's motion and dismissed Plaintiff's copyright claims with prejudice for failure to state a claim. (ECF No. 64 at 9.)
On September 19, 2013, Defendant filed the instant Motion seeking $461,881.80 in attorneys' fees pursuant to 17 U.S.C. § 505 and 28 U.S.C. § 1927. (ECF No. 67.) On October 15, 2013, Plaintiff filed an opposition to Plaintiff's Motion. (ECF No. 71.) Defendant submitted a Reply on November 1, 2013, which included its attorneys' billing records. (ECF No. 76.) On June 16, 2014, the Court submitted an Order allowingPlaintiff to submit a Sur-Reply in order to address the reasonableness of Defendant's billing records. (ECF No. 82.) Plaintiff submitted a Sur-Reply on June 30, 2014. (ECF No. 83.)
Defendant seeks $461,881.80 in attorneys' fees pursuant to 17 U.S.C. § 505 and 28 U.S.C. § 1927. (See ECF No. 67.) The Court will analyze each of Defendant's request for fees in turn.
Pursuant to 17 U.S.C. § 505, the Court may award reasonable attorneys' fees to the prevailing party in a copyright infringement action. An award of attorneys' fees in a copyright case depends on the Court's consideration of the following factors: (1) frivolousness; (2) motivation; (3) "objective unreasonableness (both in the factual and in the legal components of the case)"; and (4) "the need in particular circumstances to advance considerations of compensation and deterrence." Fogerty v. Fantasy, Inc., 510 U.S. 517, 535 n.19 (1994).
Defendant argues that Plaintiff's claim was frivolous and objectively unreasonable because Plaintiff chose to pursue this action despite three previous rulings that it had no basis for asserting ownership of any of the claimed copyrights. (ECF No. 67 at 4.) A copyright infringement claim is "objectively unreasonable when the claim is clearly without merit or otherwise patently devoid of a legal or factual basis." Diplomatic Man, Inc. v. Nike, Inc., 2009 WL 935674, at *3 (S.D.N.Y. Apr. 7, 2009).
Here, Plaintiff relied solely on the 1998 Agreement to establish its ownership of the copyrights at issue in this case. (Id.) As the Court mentioned in its Order granting Defendant's Motion to Dismiss, a District Court had previously determined that the statute of limitations on the 1998 Agreement had run, and that Plaintiff could not exercise any ownership over the copyrights. (Id. at 7 (citing Abadin v. Marvel Entm't, Inc., 2010 WL 1257519 (S.D.N.Y. Mar. 31, 2010)).) Additionally, after Abadin, two other District Courts subsequently found that Plaintiff was precluded from asserting its alleged ownership of copyrights under the 1998 Agreement. (Id. at 7 ().)
The Court, finds that it was objectively unreasonable for Plaintiff to pursue its copyright claims under the 1998 Agreement after three District Courts had previously found that it had no basis for asserting ownership of any of the claimed copyrights. Pannonia Farms, Inc. v. Re/Max Int'l, Inc., 407 F. Supp. 2d 41, 46 (D.D.C. 2005) (). Accordingly, Defendant should be awarded attorneys' fees pursuant to 17 U.S.C. § 505.
1. Reasonableness of Fees
A party seeking an award of attorneys' fees must demonstrate that the fees itseeks are reasonable. See Dewey v. Hewlett Packard Co., 2007 WL 707462, at *1 (D. Colo. Mar. 5, 2007). Therefore, counsel must make a good faith effort to exclude hours or costs that are "excessive, redundant or otherwise unnecessary." Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Generally, the starting point for any calculation of a reasonable attorneys' fee is the "lodestar," that is, the number of hours reasonably expended multiplied by a reasonable hourly rate. Id. at 433; Malloy v. Monahan, 73 F.3d 1012, 1017-18 (10th Cir. 1996). To determine the number of hours expended, the Court reviews counsel's billing entries to ensure that counsel exercised proper billing judgment. Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243, 1250 (10th Cir. 1998). Once the Court determines the lodestar, it may "adjust the lodestar upward or downward to account for the particularities" of the work performed. Phelps v. Hamilton, 120 F.3d 1126, 1131 (10th Cir. 1997). The Court is not required to reach a lodestar determination in every instance, however, and may simply accept or reduce a fee request within its discretion. Hensley, 461 U.S. at 436-37.
As for the hourly rate, the Tenth Circuit has indicated that "the court must look to 'what the evidence shows the market commands for civil rights or analogous litigation.'" Burch v. La Petite Academy, Inc., 10 F. App'x 753, 755 (10th Cir. 2001) (quoting Case, 157 F.3d at 1255). The "local market rate" is usually defined by the state or city in which counsel practices. Ellis v. Univ. of Kan. Med. Ctr., 163 F.3d 1186, 1203 (10th Cir. 1998) (); Case, 157 F.3d at 1256 (). The burden is on the party seeking fees to provide evidence of the prevailing market rate for similar services by "lawyers of reasonably comparable skill, experience, and reputation" in the relevant community. Ellis, 163 F.3d at 1203.
Defendant has submitted an affidavit and a copy of its bills as part of its fee requests. (ECF Nos. 67-1, 76-2.) Defendant seeks an award of attorneys' fees for the work performed by its New York attorneys: Mr. Singer, Mr. Quinn, Mr. Rich, Ms. Perelman, Ms. Costa, and Ms. Sperle.1 (Singer Aff. (ECF No. 67-1).) The hourly rates charged for the work performed on this case by these attorneys are $630, $855, $855, $499.50, $396, and $319.50, respectively. (Id. at ¶¶ 7-12.)
Defendant, however, has not submitted any evidence that these rates were the "prevailing market rates" in the Denver area for intellectual property or commercial litigation attorneys of comparable skill, experience and reputation. See Broad. Music, Inc. v. Cleatz Bar & Grill, LLC, 2013 WL 753468, at *2 (D. Colo. Feb. 27, 2013). Defendant has, therefore, failed to meet its burden of establishing the "prevailing market rate."
Defendant requests an amount of $461,881.80 in attorneys' fees for work doneby eight attorneys in two different law firms. (ECF Nos. 67 at 7, 67-1 at 2-5.) The Court finds these fees to be grossly excessive. It shocks the Court's conscience that Defendants would bill almost half a million dollars, or 900 hours, on a case with minimal discovery that was resolved on a motion to dismiss.
A review of Defendant's billing records indicates that eight attorneys spent nearly 200 hours handling the initial motion to dismiss. (See id.) After the Court found that Defendant's initial motion to dismiss became moot when Plaintiff filed the Amended Complaint, seven attorneys spend nearly forty hours researching and drafting an amended motion to dismiss. (Id.) These hours are excessive, not only because Defendant's attorneys are sophisticated litigators who have undoubtably filed similar motions, but because the issues in this case had been decided previously by three other courts.
Additionally, many of Defendant's billing records are vague, making it virtually...
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