ALISON J. NATHAN, District Judge.
Plaintiff filed this copyright infringement action on May 3, 2012. Dkt. No. 1. On September 10, 2013, the Court granted Defendants' motion to dismiss with respect to four of Plaintiff's claims. Dkt. No. 43. On March 24, 2015, the Court granted Defendants' motion for summary judgment with respect to Plaintiff's remaining claims. Dkt. No. 101. Shortly thereafter, Defendants Michael Diamond, Adam Horovitz, the Estate of Adam Yauch, and Brooklyn Dust Music (the "Beastie Boys Defendants") and Universal-Polygram International Publishing, Inc. and Capitol Records, LLC (the "UMG Defendants") moved for attorneys' fees and costs pursuant to Section 505 of the Copyright Act and Federal Rule of Civil Procedure 54. Dkt. Nos. 103, 106. For the reasons set forth below, Defendants' motions are GRANTED.
The background of the instant action is described in the Court's March 24, 2015 Memorandum and Order granting summary judgment to Defendants. Dkt. No. 101 at 2-5. In connection with that ruling, the Beastie Boys Defendants now seek attorneys' fees for their representation by the law firm Sheppard Mullin. Dkt. No. 107 ("BB Br.") at 11. The Beastie Boys have been billed by their attorneys and "have agreed to pay the fees . . . whether or not Sheppard Mullin is successful in this motion." Dkt. No. 119 ¶ 2. Similarly, the UMG Defendants seek attorneys' fees for their representation by the law firm Jenner & Block. Dkt. No. 104 ("UMG Br.") at 10. The UMG Defendants have already paid their attorneys in full. Dkt. No. 105 ("Bart Decl.") ¶ 14.
Section 505 of the Copyright Act provides that
17 U.S.C. § 505.
As the text of the statute indicates, "[a]n award of attorney's fees and costs is not automatic but rather lies within the sole and rather broad discretion of the Court." Baker v. Urban Outfitters, Inc., 431 F.Supp.2d 351, 357 (S.D.N.Y. 2006) aff'd, 249 F. App'x 845 (2d Cir. 2007) (citing Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1011 (2d Cir. 1995)). The crux of the analysis in awarding fees or costs under section 505 is whether doing so furthers the purposes of the Copyright Act. See Matthew Bender & Co. v. W. Publ'g. Co., 240 F.3d 116, 124-25 (2d Cir. 2001) (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)).
Although "[t]here is no precise rule or formula for making [attorneys' fees] determinations," the Supreme Court has identified "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" as relevant factors. Fogerty, 510 U.S. at 534 & n.19 (first quoting Hensley v. Eckerhart, 461 U.S. 424, 436-437 (1983); then quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986)). The Second Circuit and other courts have afforded "substantial weight" to the objective reasonableness factor in particular. Bryant v. Media Right Prods., Inc., 603 F.3d 135, 144 (2d Cir. 2010) (citing Matthew Bender & Co., 240 F.3d at 121-22 (collecting cases)). In fact, objective unreasonableness alone is sufficient to award attorneys' fees and costs. See Screenlife Establishment v. Tower Video, Inc., 868 F.Supp. 47, 52 (S.D.N.Y. 1994) (Sotomayor, J.) (fees may be awarded "once the court finds that the plaintiffs claim was objectively unreasonable").
Claims are objectively unreasonable if they "have no legal or factual support." Viva Video, Inc. v. Cabrera, 9 F. App'x 77, 80 (2d Cir. 2001); see also Silberstein v. Fox Entm't Grp., Inc., 536 F.Supp.2d 440, 444 (S.D.N.Y. 2008) (quoting Penguin Books U.S.A. Inc. v. New Christian Church of Full Endeavor, Ltd., 96-CV-4126 (RWS), 2004 WL 728878, at *3 (S.D.N.Y. Apr. 6, 2004)) ("[C]ourts of this Circuit have generally concluded that . . . claims that are clearly without merit or . . . devoid of legal or factual basis ought to be deemed objectively unreasonable."). However, the "mere fact that a [party] has prevailed does not necessarily equate with an objectively unreasonable claim." Berry v. Deutsche Bank Trust Co. Ams., 632 F.Supp.2d 300, 305 (S.D.N.Y.2009) (quotation marks and alteration omitted). Indeed, the purposes of the Copyright Act are served when "close infringement cases are litigated." Lotus Dev. Corp. v. Borland Int'l, Inc., 140 F.3d 70, 75 (1st Cir. 1998). For this reason, district courts are disinclined to award fees in cases that are close calls or which present novel legal issues or theories. See, e.g., Earth Flag Ltd. v. Alamo Flag Co., 154 F.Supp.2d 663, 666 (S.D.N.Y. 2001); Canal+ Image UK Ltd. v. Lutvak, 792 F.Supp.2d 675, 683 (S.D.N.Y. 2011).
The issue in dispute at the summary judgment stage of this action was Plaintiffs standing to enforce the copyright in question. Under the Copyright Act, holders of an exclusive license may sue for copyright infringement, while holders of a nonexclusive license may not. See Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 32-33 & n.3 (2d Cir. 1982) (citing 17 U.S.C. § 501(b)); John Wiley & Sons, Inc. v. DRK Photo, 998 F.Supp.2d 262, 277 (S.D.N.Y. 2014) (quoting Davis v. Blige, 505 F.3d 90, 100-01 (2d Cir. 2007). It is a well-established principle of copyright law that "a co-owner cannot unilaterally grant an exclusive license." Davis, 505 F.3d at 101 (citing Maurel v. Smith, 271 F. 211, 216 (2d Cir. 1921)). Relatedly, "[w]here . . . an agreement transfers nothing more than a bare right to sue . . . [it] cannot be the basis for standing under the Copyright Act." John Wiley & Sons, 998 F. Supp. 2d at 280-81 (internal quotation marks omitted).
Ultimately, the Court granted summary judgment to Defendants. Dkt. No. 101 at 10. In support of this conclusion, the Court noted that one co-owner of the copyright was not a signatory to one agreement purporting to convey an exclusive license to Plaintiff. Id. at 7. With respect to the other agreement purporting to convey an exclusive license, the Court observed that the agreement conveyed a bare right to sue, id. at 9, and that as a result, Plaintiff did not have an exclusive license and thus lacked standing. Id. at 9-10.
Plaintiff claims that it was not objectively unreasonable for it to contend that "its agreement with Dr. Avery did give it standing." Dkt. No. 114 ("Opp. Br.") at 5. Essentially, Plaintiff argues that it intended for the agreement to convey an exclusive license, and the fact that the agreement "failed in its wording to accomplish its goal does not mean that [Plaintiff] was acting unreasonably." Id. This position is unpersuasive given the Court's summary judgment ruling that "the clear and unambiguous intent of the parties to assign the bare right to sue permeates nearly every provision of the agreement." Dkt. No. 101 at 9. In light of the well-settled principle of law that "an agreement transfer[ring] nothing more than a bare right to sue . . . cannot be the basis for standing under the Copyright Act," John Wiley & Sons, 998 F. Supp. 2d at 280 (internal quotation marks omitted), the Court now concludes that the deficiencies of the agreements cited by Plaintiff as conveying an exclusive license were readily apparent, rendering its claim "clearly without merit" and "objectively unreasonable." Silberstein, 536 F. Supp. 2d at 444 (quoting Penguin Books U.S.A., 2004 WL 728878, at *3).
Plaintiff also argues that an award of attorneys' fees "would not serve the purposes of the Copyright Act" because, despite Plaintiffs standing issue, Defendants "unlawfully used [the relevant] recordings without permission or license." Opp. Br. at 8-9. The Court did not reach the substantive copyright infringement question in its summary judgment order, see Dkt. No. 101, and thus has not ruled on the lawfulness of Defendants' actions. Furthermore, the Court finds that the purposes of the Copyright Act are furthered by deterring the filing and pursuit of lawsuits in which chain of title has not been adequately investigated by the plaintiff. For these reasons, the Court finds that an award of attorneys' fees under section 505 is justified. See Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 885, 890 (9th Cir. 1996) (awarding fees under the Copyright Act where plaintiffs standing argument was objectively unreasonable); see also Contractual Obligation Prods., LLC v. AMC Networks, Inc., 546 F.Supp.2d 120, 126 (S.D.N.Y. 2008) (same).
Section 505 of the Copyright Act permits the Court to "award a reasonable attorney's fee to the prevailing party." 17 U.S.C. § 505. "The party seeking fees bears the burden of demonstrating that its requested fees are reasonable." Abel v. Town Sports Int'l, LLC, No. 09-CV-10388 (DF), 2012 WL 6720919, at *26 (S.D.N.Y. Dec. 18, 2012) (citing Blum v. Stenson, 465 U.S. 886, 897 (1984). "Both [the Second Circuit] and the Supreme Court have held that the lodestar—the product of a reasonable hourly rate and the reasonable number of hours required by the case—creates a `presumptively reasonable fee.'" Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Ass'n. v. Cty. of Albany, 522 F.3d 182, 183 (2d Cir. 2008)). The Court will first evaluate the "reasonable number of hours required by the case," and will then turn to the "reasonable hourly rate" before calculating the resulting reasonable fee.
To receive attorneys' fees, a party "must document [its] application with contemporaneous time records. . . . specify[ing], for each attorney, the date, the hours expended, and the nature of the work done." New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983). From this, the Court makes "a conscientious and detailed inquiry into the validity of the representations that a certain number of hours were usefully and reasonably expended." Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994). "The critical inquiry is `whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.'" Reiter v. Metro. Transp. Auth. of State of N.Y., No. 01-CV-2762 (GWG), 2007 WL 2775144, at *9 (S.D.N.Y. Sept. 25, 2007) (quoting Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992)). When confronted with questionable documentation, "the court has discretion simply to deduct a reasonable percentage of the number of hours claimed `as a practical means of trimming fat from a fee application,'" Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (quoting Carey, 711 F.2d at 1146). Similarly, courts can deduct a percentage of the total number of hours to account for overbilling and "duplicative or repetitive work." LV v. New York City Dep't of Educ., 700 F.Supp.2d 510, 524 (S.D.N.Y. 2010) (quoting Simmonds v. New York City Dep't of Corr., No. 06-CV-5298 (NRB), 2008 WL 4303474, at *6 (S.D.N.Y. Sept. 16, 2008).
The Beastie Boys Defendants seek recovery for "1,155.4 hours of work by Sheppard Mullin attorneys and litigation support staff."
Plaintiff argues that "time records provided by defendants are replete with examples of block billing." Opp. Br. at 11. Block billing, defined as "aggregating multiple tasks into one billing entry," is "not prohibited," but may "make it exceedingly difficult for courts to assess the reasonableness of the hours billed." LV, 700 F. Supp. 2d at 525 (quoting Wise v. Kelly, 620 F.Supp.2d 435, 450 (S.D.N.Y. 2008) (internal quotation marks omitted). For this reason, block billing combined with vague descriptions in the "sparest of terms," id., can justify the deduction of "a reasonable percentage of the number of hours claimed `as a practical means of trimming fat from a fee application.'" Kirsch, 148 F.3d at 173 (quoting Carey, 711 F.2d at 1146); see also LV, 700 F. Supp. 2d at 525 (reducing hours for vague block billing entries like "meeting" and conference"); Soler v. G & U, Inc., 658 F.Supp. 1093, 1098-99 (S.D.N.Y.1987) (reducing hours for vague block billing entries like "outline," "writing," and "research").
Having carefully reviewed the time records from the Beastie Boys Defendants' attorneys, the Court concludes that vagueness and block billing do not require a substantial reduction here. Most of the Sheppard Mullin time entries are not described in the "sparest of terms" but instead contain considerable detail. See LV, 700 F. Supp. 2d at 526; see also Max Decl. Ex. V-1. at 20 ("Coordinated retrieval of complaint and briefs for Tuff N Rumble. Reviewed and summarized all Second Circuit cases regarding standard for establishing and/or negating substantial similarity. Attended meeting with K. Anderson and T. Max regarding infringing songs. Conducted preliminary research regarding judicial admissions."); Id. at 24 ("Reviewed, proofed, and revised memorandum of law in support of motion to dismiss TufAmerica's complaint. Conferred with T. Max."). Perhaps unavoidably, some entries have less detail or cover longer periods of time. See id. Ex. V-2 at 15 (2 hour entry with description: "Reviewed case status. Prepared for meeting with Ted Max"). As a result, the Court will "deduct a reasonable percentage of the number of hours claimed `as a practical means of trimming fat from a fee application.'" Kirsch, 148 F.3d at 173 (quoting Carey, 711 F.2d at 1146). The Court has chosen a modest deduction of 5% because the majority of the attorneys' time appears to be well-documented and accounted for in detail.
The potential for duplicative work also requires consideration. Here, Sheppard Mullin, representing the Beastie Boys Defendants, and Jenner & Block, representing the UMG Defendants, acted as co-counsel. UMG Br. at 12. Although counsel made admirable efforts to avoid duplicative work (for example, Sheppard Mullin drafted the motion to dismiss while Jenner & Block drafted the motion for summary judgment, see id.), "duplication of effort" and "inefficiencies" arising from the co-counsel relationship were likely "inevitable, if unintentional." See LV, 700 F. Supp. 2d at 525. In recognition of these inefficiencies, the Court will make a modest reduction of 5% of hours.
In sum, to arrive at a reasonable number of hours for the Beastie Boys Defendants' attorneys' fees award, the Court will reduce by 10% the amount of hours billed by Sheppard Mullin. As a result, the Beastie Boys Defendants may be compensated for 291.51 hours of work from Anderson, 380.25 hours from Max, 11.7 hours from Komen, 149.31 hours from Shenderovich, 114.48 hours from Monahan, 19.35 hours from Alter, 12.15 hours from Baker, 31.95 hours from Rodriguez, 23.76 hours from Simpson, and 5.85 hours from Mitchell, for a total of 1039.86 hours.
The UMG Defendants seek recovery for 464.6 hours of work by Jenner & Block attorneys and support staff.
Thus, to arrive at a reasonable number of hours for the UMG Defendants' attorneys' fees award, the Court will make a total 15% reduction of hours billed by Jenner & Block. As a result, the UMG Defendants may recover for 100.725 hours of work from Bart, 12.835 hours from Higginson, 262.905 hours from Benforado, 11.645 hours from Scholl, 1.445 hours from Lao, 1.615 hours from Miller, .255 hours for Englund, 2.805 hours from Gerber, .255 hours from Ramonas, and .425 hours from Aul, for a total of 394.91 hours.
An attorney's reasonable hourly rate is what "a reasonable, paying client would be willing to pay." Arbor Hill, 522 F.3d at 184. For the purpose of an award of attorneys' fees, this rate must be "in line with those [rates] prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Miroglio S.P.A. v. Conway Stores, Inc., 629 F.Supp.2d 307, 314 (S.D.N.Y. 2009) (quoting Reiter v. MTA N.Y. City Transit Auth., 457 F.3d 224, 232 (2d Cir. 2006)). In determining this rate, the Court "consider[s] factors including, but not limited to, the complexity and difficulty of the case, . . . the resources required to prosecute the case effectively, . . . the timing demands of the case, whether an attorney might have an interest (independent of that of his client) in achieving the ends of the litigation . . . and other returns (such as reputation, etc.) that an attorney might expect from the representation." Arbor Hill, 522 F.3d at 184. The Court also considers the Johnson factors laid out in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).
The Beastie Boys Defendants request rates of $675 per hour for partners Anderson and Max, $678.23 per hour for partner Komen, $404.92 per hour for associate Shenderovich, $460 per hour for associate Monahan, $560 per hour for associate Alter, $455.67 per hour for associate Baker, $255.51 per hour for paralegal Rodriguez, $202.80 per hour for managing clerk Simpson, and $206.85 per hour for litigation support specialist Mitchell, discounted across the board by $10,000. See Max. Decl. Ex. W. The Court finds that the hourly rates sought by the Beastie Boys Defendants for Sheppard Mullin partners Anderson, Max, and Komen are reasonable. Not only are these rates below the partners' customary hourly rates, see BB Br. at 14 n.8, but they are also in the range of fees recently authorized for similarly experienced attorneys in this district. See Regulatory Fundamentals Grp. LLC v. Governance Risk Mgmt. Compliance, LLC, No. 13-CV-2493 (KBF), 2014 WL 4792082, at *2 (S.D.N.Y. Sept. 24, 2014) ("In recent years, New York district courts have approved rates for experienced law firm partners in the range of $500 to $800 per hour."); Max Decl. ¶ 39 (surveys indicate the average hourly rate for a New York-based partner is $883.18). As a result, the Court is satisfied that these rates are reasonable. See Miraglia, 629 F. Supp. 2d at 315-16 (billing below customary hourly rate is reasonable); Regulatory Fundamentals Grp. LLC, 2014 WL 4792082, at *3 ($700 hourly fee is reasonable).
The requested rates for associates, however, require adjustment. Data provided by Defendants suggests that the average hourly rate for an associate in New York is $531.21, see Max Dec. ¶ 39, a figure slightly higher than suggested by recent cases from this district. See Mahan v. Roe Nation, LLC, No. 14-CV-5075 (LGS), 2015 WL 4388885, at *1, *3 (S.D.N.Y. July 17, 2015) (approving associate rates between $460 and $565); see also Regulatory Fundamentals Grp. LLC, 2014 WL 4792082, at *3 (approving associate rates between $325 and $390). Given these figures, the $560 rate requested for Alter, a senior associate who has been with the firm since 2005, is reasonable. See BB Br. at 13 n.7. However, rates requested for the other, more junior, associates are too high. Shenderovich and Baker began working on the case just over a year after their graduation from law school, while Monahan had one additional year of experience. See BB Br. at 12, 13 & n.7; Max. Decl. Ex. V-1 at 7, 12, 58. Based on rate data presented by Defendants, rates recently approved by courts in this district, and the different levels of experience of the junior associates, the Court will approve rates of $375 for Shenderovich and Baker, and $425 for Monahan.
Similarly, the requested support staff rates require adjustment. The Beastie Boys Defendants provide little information on the prevailing rates for support staff; their supporting declaration merely indicates that the requested rates are "equivalent or comparable to the prevailing rates charged for the time of similarly experienced" staff in other New York law firms. Max Dec. ¶¶ 34-36. Recent cases in this district suggest that the prevailing rate for paralegals is between $100 and $200 per hour. See Regulatory Fundamentals Grp. LLC, 2014 WL 4792082, at *3 (collecting cases affording a paralegal rate around $125). Based on the levels of experience of the support staff, see Max Decl, ¶¶ 34-36, the Court will reduce the allowable billing amount for the support staff to $175 per hour for Rodriguez and $150 per hour for Simpson and Mitchell.
The UMG Defendants request rates of $715.44 for Bart, $572.71 for Higginson, $476.17 for Benforado, $220.69 for Scholl, $225 for Lao, $190 for Miller, $743 for Englund, $270 for Gerber, $225 for Ramonas, and $190 for Aul.
The Court finds that rates charged by primary attorneys Bart, Higginson, and Benforado are reasonable, as those rates are well within the range of approved rates for attorneys with similar experience in this district. See Mahan, 2015 WL 4388885, at *1; Regulatory Fundamentals Grp. LLC, 2014 WL 4792082, at *3. However, the UMG Defendants have not provided enough information about the "paralegals and other support staff' to justify the requested rates. Although the Court is satisfied that the work of these individuals is sufficiently documented, Defendants do not explain with any specificity what position these individuals have at the firm.
"[T]he lodestar—the product of a reasonable hourly rate and the reasonable number of hours required by the case—creates a `presumptively reasonable fee.'" Millea, 658 F.3d at 166 (quoting Arbor Hill, 522 F.3d at 183). Based on the analysis above, the Court calculates approved attorneys' fees for the Beastie Boys Defendants and UMG Defendants as described below.
In addition to these fees spent litigating the motion to dismiss and summary judgment stages of the case, the UMG Defendants have requested an additional $33,102.50 in attorneys' fees for 83.3 hours of work spent preparing their motion for fees. See Dkt. No. 121 & Ex. B; see also Miraglia, 629 F. Supp. 2d at 314 (permitting party "to recover its fees for the hours spent preparing the application for costs and fees"). For the reasons stated above, the Court will deduct 15% from the total hours billed by Jenner & Block for work on this motion, approve the rates charged by Bart and Benforado,
The Second Circuit has consistently "held that attorney's fees awards include those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients." US. Football League v. Nat'l Football League, 887 F.2d 408, 416 (2d Cir. 1989); accord LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998). The Beastie Boys Defendants seek $11,553.29 in costs, while the UMG Defendants request $8,098.90 in costs. Dkt. No. 118 at 8 n.3; Dkt. No. 120 at 9 & n.10. These costs generally include mailing, postage, printing, legal research, and deposition-related expenses. Bart. Decl. Ex. W; Max Decl. Ex. X; Dkt. No. 119 Ex. 1.
Plaintiff contests these costs on two grounds. First, Plaintiff argues that the UMG Defendants' "Court Reporter Charges" and the Beastie Boys Defendants' "Aaron Fuchs" charges are insufficiently documented. Opp. Br. at 15. Despite Plaintiffs allegations, the Court is satisfied that Defendants' have adequately documented these deposition-related expenses. See Bart. Decl. Ex. W; Dkt. No. 119 Ex. 1; Dkt. No. 121 Ex. C.
Second, Plaintiff argues that costs related to one video-recorded deposition are improper because Defendants did not use that deposition as evidence in support of their motion for summary judgment. Opp. Br. at 15. Unlike the more limited costs recoverable under 28 U.S.C. § 1920, costs recoverable under section 505 of the Copyright Act include any "reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients." US. Football League, 887 F.2d at 416. Plaintiff points to no authority suggesting that discovery costs incurred to obtain evidence not ultimately presented to the Court are not recoverable costs under section 505. As a result, the Court finds that costs associated with the video-deposition represent "reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients" and are thus recoverable costs. Id.
For these reasons, the Court awards Defendants' their requested costs.
For the foregoing reasons, Defendants' motions for fees are GRANTED. The Beastie Boys Defendants are awarded $591,274.79 in attorneys' fees and $11,553.29 in costs. The UMG Defendants are awarded $234,670.25 in attorneys' fees and $8,098.90 in costs.
The Clerk of Court is directed to close the case.
SO ORDERED.
Arbor Hill, 522 F.3d at 186 n.3 (citing Johnson, 488 F.2d at 717-19).
