DENISE COTE, United States District Judge.
The parties have settled this declaratory judgment action addressing the validity of two copyrights in the musical composition "We Shall Overcome" (the "Song"). As part of the settlement, defendants agreed to stop claiming a copyright in the melody or lyrics of any verse of the Song. The plaintiffs now move pursuant to 17 U.S.C. § 505 ("Section 505") for an award of attorneys' fees in the amount of over $1 million and expenses of over $60,000. For the following reasons, they are awarded $352,000 in attorneys' fees, plus certain expenses and costs, as described in an Order that accompanies this Opinion.
The Song is an iconic anthem of the American civil rights movement, although its precise origins are unknown.
The defendants have described their virtuous motives in obtaining the copyrights for the Song. They wanted to protect, to the extent they could, the Song from being abused commercially. The licensing fees earned from the Song's copyrights have been modest, and the writers' portion of the royalties has been contributed to the Highlander Research and Education Center, a charitable fund that provides scholarships to African-American youth.
The plaintiffs, We Shall Overcome Foundation ("WSOF") and Butler Films, LLC ("Butler"), brought this action on April 14, 2016, challenging through a putative class action the validity of the defendants' copyrights in the Song. Butler had produced an award-winning American historical drama for which it sought to use the Song in several scenes. It ultimately paid $15,000 for a license to use the Song for no more than ten seconds. WSOF had requested a quote for a synchronization license to use the Song in a documentary. That request was refused.
The complaint sought a declaration that the copyrights in the Song are limited to, at most, the arrangements of the Song and some of the more obscure verses of the Song. They asserted as well that the defendants had fraudulently obtained the copyrights and forfeited the copyrights through publication of the Song without the required copyright notices. The complaint also included four state law claims.
From the initial conference held on June 10, 2016, the parties agreed that their principal dispute was whether the lyrics to the first verse of the Song were in the public domain. On July 14, the defendants moved to dismiss the amended class action complaint, in particular the state law claims and the challenge to their copyright in the lyrics to that first verse. An Opinion of November 21, 2016, granted the motion to dismiss the state law claims, but denied it with respect to the copyright claims.
There was little likelihood that the copyright claim could be dismissed for its failure to state a claim. The November 2016 Opinion noted that the plaintiffs had plausibly alleged that the first verse of the Song lacked originality.
As for that prong of the motion that sought to dismiss the claim of fraud on the copyright office, the complaint plausibly alleged that the copyrights had been obtained through fraud. It asserted that the defendants deliberately omitted from the copyright applications, which were for a copyright in a derivative work, all references to the public domain spiritual and certain prior publications of the Song. The complaint also alleged that there was an insufficient basis for listing as authors those persons identified as authors in the copyright applications.
Discovery on the copyright claims followed. On June 20, 2017, the plaintiffs filed a motion for summary judgment in which they principally argued that the lyrics and melody in the first verse of the Song, and its identical fifth verse ("Verse 1/5"), were not sufficiently original to qualify for copyright registration as a derivative work. Through the Summary Judgment Opinion, issued on September 8, 2017, this Court ruled on that motion and the accompanying
The Summary Judgment Opinion held that the plaintiffs had carried their burden of showing that the two verses lacked the originality required for protection as a derivative work, and that the defendants had failed to offer evidence of originality that could raise a material question of fact requiring a trial.
As before, the defendants principally relied on the presumption of validity to defend their copyrights. The plaintiffs successfully rebutted that presumption through evidence that the applications for the copyrights in the Song were significantly flawed. As for the challenge to the originality of the Song's Verse 1/5, the defendants emphasized only one word change: they argued that the change of the word will to the word shall was transformative. The Summary Judgment Opinion held that the substitution of that single word was "quintessentially trivial."
The Summary Judgment Opinion denied plaintiffs' motion addressed to the remainder of the claims, however. Specifically, summary judgment was denied on the issues of authorship, divestment, and fraud.
Defendants then moved to dismiss the plaintiffs' remaining claims on the ground that there was no longer a justiciable controversy in light of the Summary Judgment Opinion. That motion was denied summarily on November 1, 2017. On November 14, a conference was held to organize litigation on the remainder of the case. The Court ruled that any class certification proceedings would take place before the trial. On December 1, plaintiffs withdrew their class action allegations.
Accordingly, trial was set for February 5, 2018. The defendants attempted to avoid a trial, but to preserve their right to challenge the Summary Judgment Opinion on appeal. They tendered a covenant-not-to-sue to the plaintiffs over the all verses of the song except Verse 1/5, and a revised covenant when the first was challenged as insufficient. They argued that this mooted the claims as to the remaining verses of the Song, and allowed a final judgment to be entered. On January 12, 2018, the Court ruled that the covenant did not moot the alternative grounds for challenging the copyright in Verses 1/5, particularly the theories of fraud and divestment, and ordered that a trial would take place at least as to those theories.
The parties thereafter entered into a settlement and presented to the Court, for its signature, a Stipulation and Order of dismissal with prejudice ("Stipulation") pursuant to Rule 41(a)(1)(A)(ii), Fed. R. Civ. P. The Stipulation was filed on the public docket on January 26, 2018, and so-ordered by this Court on the signature line provided by the parties. In that detailed document, the defendants abandoned their right to appeal from the Summary Judgment Opinion. They also "agree[d] that hereafter they will not claim copyright in the melody or lyrics of any verse of the song We Shall Overcome ("the Song"), included in" their two copyright registrations. And, "Defendants agree[d] that the
Section 505 of the Copyright Act provides that a district court "may ... award a reasonable attorney's fee to the prevailing party." 17 U.S.C. § 505. "`Congress has included the term `prevailing party' in various fee-shifting statutes, and it has been the Court's approach to interpret the term in a consistent manner.'"
The plaintiffs are the prevailing party. Although plaintiffs did not obtain a final judgment on the merits following a trial, they obtained a summary judgment decision in their favor on the merits of their primary claim. And, with that Stipulation, the defendants not only surrendered their right to appeal the decision rendered against them in the Summary Judgment Opinion, but also reduced the scope of their copyrights to a fraction of the defendants' originally claimed rights.
Defendants primarily contend that plaintiffs have prevailed only in part, and should therefore not be deemed to be the "prevailing party." Although it is true that plaintiffs have not prevailed on every aspect of their complaint, that is not the standard.
Once the prevailing party requirement is met, the Supreme Court has "recognized the broad leeway § 505 gives to district courts" in awarding fees, but has "also established several principles and criteria to guide their decisions."
With that principle in mind, there are "`several nonexclusive factors' to inform a court's fee shifting decisions", known as the
The first factor to consider is whether the defense proffered here was frivolous. While not frivolous, it was weak. Once it became clear that the defendants could not rely exclusively on the presumption provided by the registration of the copyrights, the weaknesses in the defense of the copyrights were evident. The defense on the issue of originality boiled down essentially to a single word change between the Song and the predecessor version indisputably in the public domain: the change from will to shall. The defense on the issue of authorship was similarly troubled. The listed authors were not available to defend their authorship, and the most famous of their number — Pete Seeger — had acknowledged that the authors were unknown. The defendants were even at significant risk of a finding that they had engaged in a fraud on the Copyright Office. The applications for registration of the copyrights had omitted material disclosures of prior works and authors.
The second factor to consider is the defendants' motivation in defending the copyrights. The defendants emphasize this factor as weighing in their favor and they are correct. The defendants obtained the copyrights out of respect for the Civil Rights Movement, to protect the Song from what they feared might be improper exploitation of an American treasure, and to continue to send writers' royalties to the Highlander Research and Education Center.
The next factor to weigh is whether defendants' litigation position was objectively unreasonable. This factor is to be given "substantial weight" in the balancing of the factors, but cannot be controlling.
Although, defendants' arguments in this case were not strong, they were not, with a few exceptions, objectively unreasonable. On summary judgment, this Court found that there were material factual disputes as to the authorship, divestment, and fraud on the copyright claims. That finding may not always be completely dispositive of whether those claims were "utterly lacking in support," but in this case it indicates that defendants' positions were not objectively unreasonable. As to the ground on which summary judgment was granted, originality, it was not unreasonable to argue that the originality question was for a jury. Defendants' position on summary judgment was not objectively unreasonable.
A few aspects of the defendants' litigating position, however, bordered on the objectively unreasonable. The motion to dismiss, to the extent it challenged the pleading of the copyright claims, was weak. The plaintiffs' complaint included extensive allegations sufficient to rebut the presumption of validity inherent in all copyrights. Defendants' first motion to dismiss the case after the Summary Judgment Opinion also stood little chance of success. Plaintiff WSOF clearly stated their intention to use the entire Song in a soundtrack in their amended complaint, and at that time defendants' had not returned the licensing fees. And defendants' second motion to terminate the case, on the basis of "mootness," was flawed inasmuch as it confused constitutional mootness with prudential mootness. It also bears noting that the second motion came on the eve of a trial that the parties had already invested substantial effort preparing for. That motion is best understood as reflecting the defendants' lack of confidence in their ability to defend against either the authorship or fraud challenges to their copyrights at trial. The objective unreasonableness factor, therefore, tilts in favor of plaintiffs, albeit slightly.
The last factor is considerations of compensation and deterrence. While the plaintiffs clearly prevailed and are deserving of compensation, the issues of compensation and deterrence are complex in this case. Because of the plaintiffs, the Song is now, except for the arrangements covered by the copyrights, in the public domain. This result serves one of the twin of the copyright statute, which is to provide access for the public to the creative works of others, and to permit others to build on those creative works. That aim is all the more important in this case in light of the Song's status as an American treasure.
The deterrence aspect of this factor weighs less strongly. In this case, the only thing that could be deterred would be the baseless assertion of copyright rights. Although, as stated above, the defenses were not strong, they were not baseless, particularly when so much of the case turned on events that happened 50 or more years ago. Considerations of deterrence do not weigh heavily in the balancing of the
After analyzing the
That plaintiffs are entitled to a fee award, however, does not resolve the amount of fees to which they are entitled. Section 505 fee awards are based off a calculation of the "presumptively reasonable fee," or the fee that "`a reasonable, paying client would be willing to pay.'"
"[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates."
Plaintiffs represent that they eliminated time spent drafting and defending the state law claims and the class certification allegations. They also reduced their hours by a further 10 percent to eliminate any concern over duplicative work by attorneys. As an overall matter, comparison with the time spent by defense counsel on this litigation indicates this request is a reasonable reflection of the investment in time made by the skilled counsel representing the plaintiffs.
Despite the plaintiffs' unilateral measures to adjust their fee request and the request's reasonableness when measured against the defendants' expenditures, the size of the award here must be substantially reduced below the amount requested. As explained below, the plaintiffs are entitled to a significantly lower hourly rate than they have requested. Defendants have also made specific objections to certain hours expended in plaintiffs' fee request. In considering those objections, "an exacting, entry-by-entry review need not be conducted."
Plaintiffs' counsel have requested as hourly rates the rates they normally charge hourly-fee-paying clients. These hourly rates appear generally in-line with the rates charged for complex commercial litigation in the Southern District of New York. Indeed, they are comparable to the rates charged by defense counsel, prior to defense counsel's 50% rate reduction in view of the charitable status of their client.
The inquiry
Plaintiffs' counsel pursued this case on a contingent fee arrangement. Any hypothetical fee negotiation for this case would have to take into account that this was not an ordinary copyright dispute. For the principal of the primary plaintiff, this case represented, by his own description, a "calling." As the time records indicate, plaintiffs' counsel obtained substantial publicity and reputational benefits for themselves by bringing and prevailing in this case. The Song is of historical importance, and many wished to see it returned to the public domain. Any reasonable, hourly fee-paying client choosing to bring this case, would likely have found
Two benchmarks that this Court takes into account in this regard are the fee-reduction that defense counsel offered their clients, and the amount reasonably recoverable if this case had proceeded as a common-fund class action. Defense counsel reduced their fees 50% in light of the defendants' history donating 50% of the royalties from the Song to charity. The charitable aspects of the plaintiffs' side of the case were similarly substantial — plaintiff WSOF is a non-profit organization. This benchmark indicates that a reasonable, fee-paying plaintiff could likely seek at least a 50% fee-reduction in a hypothetical fee negotiation.
Another benchmark is that plaintiffs' counsel sought to achieve common fund recovery as a class action, from which their attorneys' fees would be paid. The maximum fees recoverable from that class action, however, would have been relatively modest, as plaintiffs' counsel were advised early in this case. Although plaintiffs' counsel might have had some expectation of receiving an additional fee under Section 505, such awards are not a sure thing.
Ultimately, although there is no precise, mathematical formula that can determine the appropriate amount of the reduction, an across-the-board reduction of 65% from the requested hourly rates is a reasonable approximation of the fees that the reasonable, hourly-fee paying client could expect to pay to bring a case such as this one. This Court is mindful of
The defendants make certain other challenges to the billing rates charged in this case. The defendants point out that the majority of the work on the plaintiffs' case was performed by two partners charging at partner billing rates, rather than less expensive attorneys. It is appropriate to review with care the distribution of work among attorneys to discover whether a fee requested has been inflated through unnecessary use of highly-compensated counsel. In this case, however, much of the
Defendants are correct, however, that the services of a paralegal, even if experienced, do not merit a $320/hour billing rate. The Court reduces the claimed rate to $200/hour for the experienced paralegal, and $150/hour for the newer paralegal, prior to the 65% across the board reduction. The other challenges to the hourly rates have been considered and rejected except as described herein.
The second component of the calculation of the presumptively reasonable fee is to calculate the number of hours reasonably expended. As outlined above, the amount of hours expended by plaintiffs' counsel was generally reasonable. Specific categories of work are addressed below.
Defendants contend that there was "overlapping" work done by multiple attorneys, such as multiple attorneys drafting motion papers and attending depositions. In cases such as this one, it is not presumptively unreasonable for multiple attorneys to attend the same deposition or to work on motion papers. No additional deduction for duplicative work is warranted above the 10% taken by plaintiffs' counsel.
Defendants next contend that some of the time entries are so vague or unintelligible as to be meaningless. In the context of the total number of hours expended in this complex case, there are inevitably bound to be some time-entries that are not drafted with an ideal amount of clarity. The standard, ultimately, is whether the time records submitted permit "a meaningful review of the hours requested."
Similar considerations apply to block-billed entries. Block-billing has been repeatedly criticized, and those criticisms are particularly appropriate when the party sought to be held responsible for paying those block-billed entries has little or no means to understand the distribution of time within the hours block-billed. Nonetheless, the block-billing in this case does not, with very limited exceptions, impede the ability to review the reasonableness of the work performed. The Court declines to make any reductions for block billing.
Defendants criticize plaintiffs' counsel for not deducting a sufficient number of hours for pleading and defense of the state law claims. Having reviewed this issue, this Court declines to deduct additional hours for the prosecution of the state law claims.
While the defendants argue that this case was not resolved more expeditiously because of the class action allegations, that argument is unconvincing. The defendants did not want to lose the copyrights in the Song and resisted a settlement of this litigation that involved abandonment of the copyrights even after the class action claim had been dismissed. The defendants hoped to achieve review of the summary judgment decision on originality without having
Although not challenged by defendants, plaintiffs' counsel have included in their fee requests time spent conversing with media outlets regarding this case, or reviewing the media coverage of this case. Even if such activities may be in the client's best interest, they are not the type of activities for which the reasonable, hourly fee-paying client would pay this case. Although there is some authority for awarding fees for speaking to media out-lets when the case is a class or collective action in order to reach potential class members, this case was brought as a mandatory class action, and the list of all potential class members would have been in defendants' records. There was therefore no litigation need to converse with the media on these facts. The fee awarded here has been adjusted accordingly.
After calculating the presumptively reasonable fee, courts must be mindful that it is not "`conclusive in all circumstances.'"
Plaintiffs also seek recovery for the fees of their expert witnesses and consultants. "The Supreme Court has made clear on multiple occasions that, absent explicit statutory authorization, a district court may not award reimbursement for expert fees beyond the allowances authorized by 28 U.S.C. § 1920, as limited by 28 U.S.C. § 1821."
Plaintiffs' counsel seek recovery as expenses the fees for an expert musicologist, Dr. E Michael Harrington, D.M.A. Dr. Harrington was an impressive expert, and his report was of great value to the Court in rendering its Summary Judgment Opinion. Plaintiffs' counsel also seek to recover as expenses the fees for a legal consultant, Prof. Robert Brauneis. Under the binding authority outlined in
The February 9, 2018 motion for attorneys' fees and costs is granted to the extent of awarding plaintiffs $352,000 in attorneys' fees. The determination of certain items of expenses and costs is resolved in an accompanying Order.
SO ORDERED.
