Filed: Jul. 07, 2009
Latest Update: Mar. 28, 2017
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 08-1534 QUANTUM SYSTEMS INTEGRATORS, INCORPORATED, a Nevada Corporation, Plaintiff - Appellee, v. SPRINT NEXTEL CORPORATION, a Kansas Corporation, Defendant - Appellant. No. 08-1585 QUANTUM SYSTEMS INTEGRATORS, INCORPORATED, a Nevada Corporation, Plaintiff - Appellant, v. SPRINT NEXTEL CORPORATION, a Kansas Corporation, Defendant - Appellee. Appeals from the United States District Court for the Eastern District of Virginia, at
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 08-1534 QUANTUM SYSTEMS INTEGRATORS, INCORPORATED, a Nevada Corporation, Plaintiff - Appellee, v. SPRINT NEXTEL CORPORATION, a Kansas Corporation, Defendant - Appellant. No. 08-1585 QUANTUM SYSTEMS INTEGRATORS, INCORPORATED, a Nevada Corporation, Plaintiff - Appellant, v. SPRINT NEXTEL CORPORATION, a Kansas Corporation, Defendant - Appellee. Appeals from the United States District Court for the Eastern District of Virginia, at ..
More
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1534
QUANTUM SYSTEMS INTEGRATORS, INCORPORATED, a Nevada
Corporation,
Plaintiff - Appellee,
v.
SPRINT NEXTEL CORPORATION, a Kansas Corporation,
Defendant - Appellant.
No. 08-1585
QUANTUM SYSTEMS INTEGRATORS, INCORPORATED, a Nevada
Corporation,
Plaintiff - Appellant,
v.
SPRINT NEXTEL CORPORATION, a Kansas Corporation,
Defendant - Appellee.
Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria. Liam O’Grady, District
Judge. (1:07-cv-00491-LO-TCB)
Argued: May 14, 2009 Decided: July 7, 2009
Before SHEDD and DUNCAN, Circuit Judges, and Frederick P. STAMP,
Jr., Senior United States District Judge for the Northern
District of West Virginia, sitting by designation.
Affirmed in part, reversed in part, and remanded by unpublished
opinion. Judge Duncan wrote the opinion, in which Judge Shedd
and Senior Judge Stamp joined.
ARGUED: Michael J. Songer, CROWELL & MORING, LLP, Washington,
D.C., for Sprint Nextel Corporation, a Kansas Corporation.
James J. Merek, MEREK, BLACKMON & VOORHEES, LLC, Alexandria,
Virginia, for Quantum Systems Integrators, Incorporated, a
Nevada Corporation. ON BRIEF: Clifton S. Elgarten, Clyde E.
Findley, CROWELL & MORING, LLP, Washington, D.C., for Sprint
Nextel Corporation, a Kansas Corporation. David H. Voorhees,
MEREK, BLACKMON & VOORHEES, LLC, Alexandria, Virginia, for
Quantum Systems Integrators, Incorporated, a Nevada Corporation.
Unpublished opinions are not binding precedent in this circuit.
2
DUNCAN, Circuit Judge:
Quantum Systems Integrators, Inc. (“Quantum”) sued Sprint
Nextel Corp. (“Sprint”), alleging claims for copyright
infringement based on the loading of Quantum’s software onto the
RAM of thirteen Sprint computers. After a jury trial, the
district court awarded Quantum actual damages of $69,000 for
eight infringing computers. The district court also awarded
Quantum almost $400,000 in attorney’s fees and costs. Both
parties now cross-appeal. For the reasons that follow, we
affirm in part, reverse in part, and remand for reconsideration.
I.
In 1997, Sprint licensed software from Quantum for use on
several hundred Sprint computers. The software performed data-
monitoring functions, such as recording the keystrokes of Sprint
employees logging into Sprint’s computer network. In 2004,
Sprint switched providers and began replacing Quantum’s software
with software from another vendor. Quantum sued Sprint in 2005
for unauthorized use of its software on Sprint computers. The
parties settled the suit on August 7, 2006, and Sprint agreed to
stop using Quantum’s software within 60 days of the parties’
settlement agreement.
3
In 2007, Quantum sued Sprint again, asserting claims for
copyright infringement and fraud. The suit was prompted by
Quantum’s receipt of “autoreporting” messages indicating that
the Quantum software remained on some Sprint computers and was
being loaded into these computers’ RAM when the computers were
turned on or rebooted. Discovery revealed that Quantum’s
software remained on a handful of Sprint computers after the
parties’ 2006 settlement agreement. There is no evidence in the
record, however, that any Sprint employee deliberately accessed
the Quantum software for a business-related purpose after
October 7, 2006, the date by which Sprint agreed to stop using
Quantum’s software. Several computers had unconfigured copies
of the software that no Sprint employees ever accessed. On two
other computers, Sprint engineers inadvertently accessed
Quantum’s software while remotely logging into Sprint’s network.
The district court granted summary judgment in favor of
Sprint on Quantum’s fraud claim, finding that although Sprint
may have been negligent in failing to remove Quantum’s software
from its computers, there was no evidence that Sprint had
entered into the settlement agreement with the intent not to
discontinue use of the Quantum software. The district court
also granted summary judgment in favor of Sprint on Quantum’s
claim for a portion of Sprint’s profits as damages. Noting that
4
Quantum’s software automatically loaded on only six computers
and that the software merely provided a “bridge or transport
mechanism” to another program with its own security features,
the district court found that Quantum had not shown a connection
between its software on the Sprint computers and Sprint’s
revenues. J.A. 427.
Quantum’s remaining claim for copyright infringement went
to trial. Before the case was submitted to the jury, the
district court granted Sprint’s motion for judgment as a matter
of law (“JMOL”) on the issue of willful infringement, finding
that Sprint’s conduct had not been willful. The jury found that
the software on nine computers infringed Quantum’s copyright,
but the district court granted Sprint’s JMOL motion as to one of
these nine computers, known as “ferrari1.” The district court
found that ferrari1 did not infringe Quantum’s copyright because
it had been stored in a closet during the infringement period
and never turned on, and therefore had never created infringing
RAM copies.
With respect to the eight computers for which liability was
found, Quantum opted for actual damages. The jury awarded
Quantum the software license fee ($8,700) for each infringing
computer, for a total of $69,000 in damages. Quantum later
5
sought $381,705 in attorney’s fees and $17,292.41 in costs,
which the district court summarily granted.
Both parties now appeal. Quantum appeals the district
court’s grant of summary judgment in favor of Sprint, as well as
the district court’s decision to grant Sprint’s JMOL motion as
to the “ferrari1” computer. Sprint seeks to reverse the jury
verdict and appeals the district court’s award of costs and
attorney’s fees. We address the parties’ claims in turn.
II.
Quantum challenges the district court’s decision to grant
summary judgment in favor of Sprint on several issues, including
Quantum’s claim for damages based on Sprint’s profits; the
relevant time period for infringement; and Quantum’s fraud
claim. We review a district court’s grant of summary judgment
de novo. Jennings v. Univ. of N.C., 482 F.3d 686, 694 (4th Cir.
2007) (en banc) (citing Hill v. Lockheed Martin Logistics Mgmt.,
Inc.,
354 F.3d 277, 283 (4th Cir. 2004) (en banc)). Each of
Quantum’s claims is discussed separately below.
A.
First, Quantum appeals the district court’s grant of
summary judgment in favor of Sprint on Quantum’s claim for a
portion of Sprint’s profits. In rejecting Quantum’s claim for
6
profits under 17 U.S.C. § 504, the district court stated that to
recover lost profits, “Quantum Systems must make a showing that
the revenue derived only from the infringing activity.” J.A.
426. Arguing that the district court applied the wrong
standard, Quantum contends that it need not show that Sprint’s
profits derived solely from the infringement of Quantum’s
software. Rather, Quantum asserts that it should be entitled to
a portion of Sprint’s profits if it can show that those profits
“are attributable to use of the copyright owner’s work in
addition to other factors.” Quantum’s Br. at 36. Because, as
Quantum argues, it “established that the heart of Sprint’s
wireless telecommunications network . . . infringed Quantum’s
copyrights,” Quantum contends that it is entitled to a portion
of Sprint’s profits. Id. at 37.
Title 17 U.S.C. § 504 allows a copyright owner to recover
either “actual damages and any additional profits of the
infringer,” or statutory damages. If the copyright owner elects
to recover actual damages, section 504(b) states:
The copyright owner is entitled to recover the actual
damages suffered by him or her as a result of the
infringement, and any profits of the infringer that
are attributable to the infringement and are not taken
into account in computing the actual damages. In
establishing the infringer’s profits, the copyright
owner is required to present proof only of the
infringer’s gross revenue, and the infringer is
required to prove his or her deductible expenses and
7
the elements of profit attributable to factors other
than the copyrighted work.
Based on this language, Quantum argues that it “was entitled to
a presumption that all of Sprint’s gross revenues from its
infringing network are recoverable as profits attributable to
the infringement.” Quantum’s Br. at 37.
Quantum’s arguments slightly miss the mark. Although
Quantum asserts that “the heart of Sprint’s wireless
telecommunications network . . . infringed Quantum’s
copyrights,” Quantum’s Br. at 37, this assertion is not enough
to entitle Quantum to a portion of Sprint’s profits. To the
contrary, we have held that any profits awarded as damages for
copyright infringement must be “reasonably related to the
infringement.” Bonner v. Dawson, 404 F.3d 290, 294 (4th Cir.
2005) (citation omitted). A copyright owner “has the burden of
demonstrating some causal link between the infringement and the
particular profit stream before the burden-shifting provisions
of § 504(b) apply.” Id. A district court may therefore grant
summary judgment in favor of an alleged copyright infringer on
the issue of profits awarded as damages “if either (1) there
exists no conceivable connection between the infringement and
those [profits]; or (2) despite the existence of a conceivable
connection, [the copyright owner] offered only speculation as to
the existence of a causal link between the infringement and the
8
[profits].” Bouchat v. Balt. Ravens Football Club, Inc., 346
F.3d 514, 522–23 (4th Cir. 2003).
Although the district court may have articulated an
incorrect legal standard for evaluating Quantum’s claim for a
portion of Sprint’s profits as damages, we nevertheless affirm
the district court’s judgment. The record shows -- and Quantum
does not dispute -- that the infringement of Quantum’s software
in this case consisted of RAM copies that were automatically
generated whenever an infringing computer was turned on or
rebooted. The record also shows that none of Sprint’s employees
had in fact knowingly used the software for its intended purpose
during the infringement period. Even considering these facts in
the light most favorable to Quantum, we find that Quantum has
failed to demonstrate that any of Sprint’s profits were
“reasonably related to” the automatically generated RAM copies.
Bonner, 404 F.3d at 294. The district court correctly concluded
that Quantum is not entitled to a portion of Sprint’s profits as
damages.
B.
Quantum also argues that the district court erred in
finding that the infringement period began on October 7, 2006,
the date by which Sprint agreed to stop using Quantum’s
software, instead of on August 7, 2006, the date on which the
9
parties entered into the settlement agreement. Quantum asserts
that under the parties’ agreement, “use” includes the loading of
Quantum’s software into a computer’s RAM, such that any such RAM
loads occurring on Sprint computers between August 7 and October
7, 2006 qualified as “use” and constituted a material breach of
the settlement agreement. Quantum argues that “[b]ecause Sprint
materially breached the Settlement Agreement, Sprint could not
avail itself of the sixty-day grace period set forth in the
Settlement Agreement.” Quantum’s Br. at 38. Sprint responds
that “[t]here was no requirement in the settlement agreement
that Sprint remove the software from its computers” and that the
presence of the software on Sprint computers “would not amount
to a breach of contract.” Sprint’s Reply Br. at 3.
Quantum’s arguments are not persuasive. As Sprint points
out, the settlement agreement required Sprint to stop using the
software, which it materially did. Indeed, the record reflects
that the number of functioning Sprint computers that had Quantum
software loaded on their hard drives dropped from almost two
hundred, at the peak of Sprint’s use, to fewer than ten.
Although two Sprint employees inadvertently accessed the Quantum
software while logging into the Sprint network in order to work
with another software program, we find that such “use” does not
qualify as a material breach that warrants holding Sprint liable
10
for copyright infringement from the date of the agreement. The
district court did not err in finding that the infringement
period began on October 7, 2006.
C.
Lastly, Quantum argues that the district court should not
have granted summary judgment on its fraud claim because Quantum
showed a fact issue as to whether Sprint entered into the
settlement agreement with the intent not to stop using Quantum’s
software. Quantum points to “autoreporting” logs in the record
showing that Sprint’s computers were running Quantum’s software
on January 1, 2005, and asserts that there is nothing in the
record showing that Sprint took steps to ensure that these
computers would stop running Quantum’s software on or after
August 7, 2006, the date of the settlement agreement. Quantum
asserts that this failure to act, combined with Sprint’s
representation that “it had taken all actions necessary to
perform its obligations” under the settlement agreement, shows a
fact issue as to Sprint’s allegedly fraudulent intent.
Quantum’s Br. at 47.
Quantum’s arguments overstate the evidence. As noted
above, the record shows that the number of Sprint computers with
Quantum’s software saved on their hard drives decreased from
almost two hundred at the peak of Sprint’s use of the software
11
to fewer than ten after the settlement’s deadline for Sprint to
discontinue use. Furthermore, evidence that Quantum software
was loaded into certain Sprint computers’ RAM does not, without
more, show that Sprint was actively and intentionally using the
software in violation of the settlement agreement. Because
Quantum failed to show a fact issue as to whether Sprint
intended to violate the settlement, the district court did not
err in granting Sprint summary judgment on Quantum’s fraud
claim. 1
1
Quantum also challenges the district court’s denial of its
motion to compel discovery of previously withheld documents.
The district court found that these documents were privileged,
but Quantum argues that Sprint waived privilege through the
testimony of its in-house counsel, which Sprint used in its
summary judgment motion. Quantum asserts that Sprint
volunteered its counsel’s testimony and that Sprint’s questions
of its counsel were sufficiently broad to constitute waiver of
attorney–client privilege and work-product privilege.
Quantum’s arguments lack merit. The record clearly shows
that the magistrate judge decided to “allow [Quantum] to take
[Sprint’s counsel’s] deposition on a very limited basis” -- that
is, “whether or not he received information from outside counsel
that related to [the autoreporting logs], as well as to this,
the [Quantum] software still being loaded onto the servers in
2005 and 2006.” J.A. 103–04. The questions that Quantum argues
constitute a waiver remain well within these parameters, asking
whether Sprint’s in-house counsel “ever receive[d] information
from outside counsel showing that the [Quantum] software was
still being used” or “ever receive[d] any auto reporting
messages that showed to you that the [Quantum] software was
still being used.” J.A. 126. Sprint did not elect to present
its counsel as a witness and therefore did not waive privilege
with respect to matters covered in his testimony. Cf. United
States v. Nobles, 422 U.S. 225, 239-40 (1975).
12
III.
Both parties appeal decisions that the district court made
concerning Sprint’s motions for judgment as a matter of law
during the trial. Quantum challenges the district court’s
decision to grant Sprint’s JMOL motion on whether the computer
“ferrarri1” infringed Quantum’s copyright. Sprint challenges
the district court’s denial of its JMOL motion as to the issue
of copyright infringement. We review de novo the district
court’s denial of a motion for judgment as a matter of law.
Int’l Ground Transp., Inc. v. Mayor of Ocean City, 475 F.3d 214,
218 (4th Cir. 2007). We address the parties’ claims in turn.
A.
“Ferrari1” is a computer that Sprint claims was in storage
and never turned on during the infringement period. Quantum
argues that the district court erred in granting Sprint’s 50(b)
motion on ferrari1 because the court made an improper
credibility determination and placed undue weight on testimony
from Thomas D. Smith that changed during the course of the
litigation. Quantum points out that in his deposition, Smith
testified that ferrari1 had been running during the infringement
period, but at trial he testified that ferrari1 had been turned
off and put in storage. Quantum’s Br. at 41-42. Sprint
responds that the judge did not make a credibility
13
determination, but instead properly found that “the evidence was
not sufficient to support the jury’s verdict as to ferrari1.”
Sprint’s Reply Br. at 49. In addition, Sprint points out that
Quantum provided no evidence to contradict Smith’s trial
testimony.
“Judgment as a matter of law is proper when, without
weighing the credibility of the evidence, there can be but one
reasonable conclusion as to the proper judgment.” Price v. City
of Charlotte, N.C., 93 F.3d 1241, 1249 (4th Cir. 1996)
(quotation and citation omitted). Although the district court
may have improperly weighed Smith’s credibility, we nevertheless
affirm the district court’s judgment because the evidence does
not support a finding of infringement for ferrari1. As Sprint
points out, Quantum received no autoreporting messages showing
that ferrari1 was on and running Quantum’s software after
October 7, 2006. Furthermore, Quantum presented no evidence at
trial showing that ferrari1 was ever turned on during the
infringement period. The district court did not err in finding
that the absence of autoreporting logs, combined with Smith’s
testimony and Quantum’s failure to provide any evidence as to
ferrari1’s status during the infringement period, could not
support the jury verdict.
14
B.
Sprint argues that the district court erred in denying its
JMOL motion and sustaining the jury’s finding of infringement
because there was no evidence that Sprint engaged in “volitional
copying.” Relying heavily on CoStar Group, Inc. v. LoopNet,
Inc., 373 F.3d 544 (4th Cir. 2004), Sprint argues that “copying
[under the Copyright Act must] be volitional” and “the nature
and duration of the use [must] be more than transitory.”
Sprint’s Br. at 28. Quantum responds that Sprint’s “use” of its
software infringed Quantum’s copyright because it violated the
settlement agreement.
Sprint overstates the “volitional” requirement purportedly
established by CoStar. Although CoStar did involve RAM copies,
that case concerned a copyright holder suing an Internet Service
Provider (“ISP”) for providing services used by third parties to
upload infringing photographs to the Internet. In CoStar, we
found that the ISP provided “electronic infrastructure . . .
designed and managed as a conduit of information and data,” 373
F.3d at 550, such that “the owner and manager of the conduit
hardly ‘copies’ the information and data,” id. at 552, in
violation of section 106 of the Copyright Act. “[I]n the
context of the conduct typically engaged in by an ISP,” we found
that the Copyright Act requires “some aspect of volition and
15
meaningful causation -- as distinct from passive ownership and
management of an electronic Internet facility.” Id. at 550. We
ultimately held:
At bottom, we hold that ISPs, when passively storing
material at the direction of users in order to make
that material available to other users upon their
request, do not ‘copy’ the material in direct
violation of § 106 of the Copyright Act. Agreeing
with the analysis in [Religious Technology Center v.
Netcom On-Line Communciation Services, Inc., 907 F.
Supp. 1361 (N.D. Cal. 1995)], we hold that the
automatic copying, storage, and transmission of
copyrighted materials, when instigated by others, does
not render an ISP strictly liable for copyright
infringement under §§ 501 and 106 of the Copyright
Act.
Id. at 555.
Relying on CoStar, Sprint argues that it “undertook no
volitional action” in making the RAM copies, Sprint’s Br. at 30,
and therefore did not copy Quantum’s software in violation of
the Copyright Act. CoStar, however, is inapposite. This case
does not involve third-party copyright infringement or the
“automatic copying, storage, and transmission of copyrighted
materials . . . instigated by others.” CoStar, 373 F.3d at 555.
Nor does it involve a defendant that engages in “conduct
typically engaged in by an ISP.” Id. at 550. To the contrary,
this case concerns copying that, at bottom, was instigated by
Sprint’s own employees. Unlike an ISP, who has no control over
the content that its users upload to the Internet, Sprint’s
16
original loading of the software onto its computers was
volitional. Each copy of the Quantum software was within
Sprint’s control and the actions of Sprint’s employees (in
rebooting the computers) are attributable to Sprint. Although
Sprint correctly points out that the parties’ settlement
agreement did not require Sprint to delete or otherwise remove
the Quantum software from Sprint’s computers, Sprint was
nevertheless less than diligent in ensuring that its computers
would not load Quantum’s software into RAM after the parties’
settlement agreement. The fact that Sprint’s computers
generated copies and loaded these copies into RAM automatically
does not absolve Sprint of liability for copyright infringement.
Sprint also argues that the RAM copies were transitory and
not sufficiently fixed to constitute an infringing copy.
Although this circuit has not yet directly addressed whether RAM
copies can infringe, the Ninth Circuit’s MAI Systems opinion is
the leading case on the issue and holds that RAM copies are
sufficiently fixed for purposes of copyright law. MAI Systems
Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993).
Numerous district courts and at least two of our sister circuits
have followed MAI Systems in holding that the loading of
copyrighted software into RAM creates an infringing copy. See,
e.g., Stenograph L.L.C. v. Bossard Assoc., Inc.,
144 F.3d 96,
17
101–02 (D.C. Cir. 1998); NLFC, Inc. v. Devcom Mid-Am., Inc., 45
F.3d 231, 235 (7th Cir. 1995). But see Cartoon Network LP, LLLP
v. CSC Holdings, Inc.,
536 F.3d 121, 127–28 (2d Cir. 2008)
(interpreting MAI Systems to hold only that “loading a program
into a computer’s RAM can result in copying that program,” and
not that, “as a matter of law, loading a program into a form of
RAM always results in copying”). Indeed, in CoStar we noted
that copyrighted software saved onto a computer “no longer
remains transitory” because “it may be used to serve the
computer or the computer owner.” 373 F.3d at 551 (emphasis
added). Although we acknowledge that Sprint engineers never
deliberately accessed the Quantum software for any business
purpose after the parties’ settlement agreement, we find that in
this case the RAM copies were sufficiently fixed for purposes of
copyright infringement. 2
We affirm the district court’s decision to deny Sprint’s
JMOL motion as to copyright infringement and affirm the award of
actual damages.
2
Sprint also argues on appeal that the district court erred
in instructing the jury because the court failed to define the
“volitional conduct” and “fixed for more than a limited
duration” elements of infringement under CoStar. As noted
above, Sprint places more weight on CoStar than it can bear.
The district court did not abuse its discretion in instructing
the jury as it did.
18
IV.
Finally, we turn to the district court’s award of
attorney’s fees and costs to Quantum under 17 U.S.C. § 505,
which grants district courts discretion to “allow the recovery
of full costs” and “a reasonable attorney’s fee” to the
prevailing party in a copyright action. Sprint challenges the
district court’s award of attorney’s fees on both procedural and
substantive grounds. First, Sprint argues that the district
court abused its discretion by failing both to conduct an
inquiry into the reasonableness of Quantum’s requested fees and
to explain its reasons for awarding fees. Second, Sprint argues
that the Copyright Act is not an automatic recovery statute and
that Quantum should not be awarded fees under the discretionary
factors noted in Fogerty v. Fantasty, Inc., 510 U.S. 517 (1994).
Quantum responds that the attorney’s fees award should not be
overturned because the award was not “clearly wrong” under the
Fogerty factors. Quantum’s Br. at 66.
In Fogerty v. Fantasy, Inc., the Supreme Court addressed
what standards should inform a court’s discretion under section
505 and adopted an “evenhanded” approach under which prevailing
plaintiffs and defendants “are to be treated alike.” 510 U.S.
517, 534 n.19 (1994). “[A]ttorney’s fees are to be awarded to
prevailing parties only as a matter of the court’s discretion.”
19
Id. The Fogerty Court acknowledged that “[t]here is no precise
rule or formula for making these determinations,” but noted
several factors that courts may consider. Id. (citation
omitted). Relying on Fogerty, we adopted the following factors
for considering an award of attorney’s fees:
(1) the motivation of the parties;
(2) the objective reasonableness of the legal and
factual positions advanced;
(3) the need in particular circumstances to advance
considerations of compensation and deterrence; and
(4) any other relevant factor presented.
Rosciszewki v. Arete Assocs., Inc., 1 F.3d 225, 234 (4th Cir.
1993). We review a district court’s decision on the
appropriateness of an award of attorney’s fees and costs under
17 U.S.C. § 505 for an abuse of discretion. Diamond Star Bldg.
Corp. v. Freed,
30 F.3d 503, 506 (4th Cir. 1994).
In this case, the district court’s order awarding fees
stated:
Plaintiff’s Motion for Attorneys’ Fees . . . is
GRANTED. In accordance with 17 U.S.C. § 505 and the
Supreme Court’s guidance in Fogerty v. Fantasy, Inc. .
. . , the Court finds that the Plaintiff’s request for
attorneys’ fees in the amount of $391,705 is
reasonable, and hereby awards attorneys’ fees in that
amount.
20
J.A. 529. We are unable to determine from the order whether the
district court considered any of the Rosciszewki factors in
awarding fees to Quantum.
Because of the conclusory nature of the order, we are
constrained to vacate the award of fees and costs and remand for
reconsideration. Although we do not seek to circumscribe the
district court’s judgment on remand, we do note that Quantum
achieved minimal success in this lawsuit, and that the awarded
attorney’s fees are almost five times its award of actual
damages. Moreover, the $69,000 awarded in damages represents
far less than either the $1,000,000 Quantum originally sought in
actual damages or the $450,000 Quantum sought in statutory
damages. See Hensley v. Eckerhart, 461 U.S. 424, 436 (1983)
(cited in Fogerty, 510 U.S. at 534, and noting that if “a
plaintiff has achieved only partial or limited success, the
product of hours reasonably expended on the litigation as a
whole times a reasonable hourly rate may be an excessive
amount”). Although the fees seem disproportionate in light of
the relatively small amount of damages awarded, we are unable to
review the district court’s discretion because it has not
articulated the basis for its decision. In Diamond Star, we
reversed a district court’s denial of a motion for attorney’s
fees under section 505 when the district court acknowledged the
21
Rosciszewki factors, but summarily concluded that “its
discretion is best exercised in this case by refusing to award
fees.” 30 F.3d at 506. Similarly, the district court here
cited Fogerty in awarding fees, but without more we are unable
to evaluate whether the district court abused its discretion in
applying the Rosciszewki factors.
We therefore reverse the award of fees and costs and remand
for reconsideration.
V.
For the reasons stated above, the judgment of the district
court is
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED.
22
