United States District Court, S.D. New York
December 9, 2005.
ARTHUR GRACE, Plaintiff,
CORBIS SYGMA f/k/a SYGMA PHOTO NEWS, INC., SYGMA S.A.R.L., f/k/a SYGMA PARIS, CORBIS CORPORATION, Defendants.
The opinion of the court was delivered by: DENNY CHIN, District Judge
Plaintiff Arthur Grace is a photojournalist whose photographs
recorded events of historical significance for many years. His
images appeared in numerous newspapers and magazines, including
Time, Newsweek, and Life, often on the cover, examples of
which are shown above. For three decades he had a licensing
arrangement with defendant Sygma Photo News, Inc. ("Sygma"),
whereby Sygma took possession of the images and licensed them to news publications and other media. When the relationship ended in
2001, Grace asked Sygma to return his photographs, but many
indeed, tens of thousands were missing. Grace brought this
diversity action to recover damages for the missing images.
The case was tried to the Court in November and December 2004.
Judgment will be entered in favor of Grace, to the extent set
forth below. The following constitute my findings of fact and
conclusions of law.
FINDINGS OF FACT
A. The Career of a Photojournalist
Grace began his career as a photojournalist as a "stringer," or
freelance photographer, for United Press International ("UPI") in
Boston in the early 1970s. He eventually was hired as a staff
photographer for UPI in Europe and was assigned to cover, among
other things, the hostilities in Northern Ireland; the drought in
Western Africa; and the 1973 Middle East war. His photographs
were published in newspapers and magazines throughout the world.
(Tr. 53-56, 247; PX 10).*fn1
In 1974, Grace returned to Boston and became the New England
photo correspondent for The New York Times, working as an
independent contractor. He shot photographs for the national page
of the Times. He remained with the Times through 1977. His
major stories included school busing and desegregation in Boston in 1974 and 1975. During this period, he did not work for other
newspapers, but he was able to and did shoot photographs for
magazines, including Time and People. (Tr. 56-60, 455; PX
In 1978, after leaving the Times, Grace moved to Washington,
D.C., and began shooting full-time, eventually under contract,
for Time magazine. (Tr. 60-61, 92-94, 247-48, 458-59; PX 10).
From 1978 through 1980, Grace served as Time magazine's White
House photo correspondent. He covered the White House extensively
during the Carter Administration and often traveled with
President Carter. During the Iran hostage crisis in 1979, he was
given the opportunity to photograph President Carter alone one
evening in the Oval Office, without any other photographers
present. The image of President Carter in a sweater sitting at
his desk and studying an Iran briefing book appeared in many
magazines, including on some covers. (Tr. 92-99; PX 13).
Grace continued as a contract photographer for Time until
1985, and he photographed, among other stories: the 1980
presidential campaign; President Carter's efforts to bring peace
to the Middle East; the Solidarity movement and martial law in
Poland in the early 1980s; the U.S. invasion of Grenada in 1983;
Geraldine Ferraro's vice-presidential campaign in 1984; the
America's Cup loss in Newport, R.I. in 1983; and the 1984 Los
Angeles Olympics. (Tr. 80-81; PX 10).*fn2 In January 1986, Grace joined Newsweek as a staff
photographer, on salary. Grace remained with Newsweek through
1990, covering, among other stories: the Bork Supreme Court
nomination; the Challenger space shuttle disaster in 1986; Pope
John Paul II's visit to Poland in 1987; the Reagan-Gorbachev
summit in Moscow in 1988; and President George H.W. Bush's visit
to Europe in 1989. He also published several photographic essays
in Newsweek, including street kids in San Francisco; life in
Poland; and portraits of presidential candidates in 1987 and
1988. The latter was later expanded into a book, Choose Me:
Portraits of a Presidential Race, which was published in 1989.
He also photographed the Supreme Court justices. (Tr. 134-37,
147, 250, 372-73, 381, 487-88; PX 10, 38).
Starting in the 1990s, Grace's career took a different turn. He
continued his professional photography but shifted away from news
photography. He wrote and photographed a coffee table book,
Comedians, published in 1991. He struck a relationship with
Robin Williams and began shooting album covers, movie posters,
and personal and family functions for the actor-comedian. Grace
and his assistant were the first photographers to take photos of
the actor Christopher Reeve after the accident that left him
paralyzed. Reeve was a friend of Williams, and Williams and his
wife organized a fund-raiser and asked Grace to volunteer his photographic services. Grace did so. (Tr. 151-53,
646-48).*fn3 Grace also did free-lance work for advertising
clients, including major movie studios. He also did personal work
for other celebrities; for example, he photographed Steven
Spielberg's wedding. (Tr. 147-52, 244-45, 293-97, 430; PX 10).
During the 1970s and through the 1980s, Grace was one of the
leading photographers in the field of photojournalism. (Tr.
432-41, 452, 455-56, 581, 970-72; see also Tr. 109). He
captured many moments of historical significance with his "unique
eye," and his photographs had a certain quality to them that
photographs of other photojournalists did not have. (See Tr.
468, 486, 488). One of his photographs in The New York Times
was nominated for a Pulitzer prize. (Tr. 432; PX 42A). In 2003,
Grace agreed to donate all his color images and many of his black
and white images to the Center for American History (the
"Center") at the University of Texas. The images will be referred
to as The Arthur Grace Photographic Collection and the Center
will house, preserve, and maintain the collection for educational
and scholarly purposes. (Tr. 409-12, 423-25; DX N).
B. Grace Signs with Sygma
Sygma began its operations as a photo agency in the early
1970s, when it broke off from a company called Gamma. (Tr.
573-75). Sygma had an office in New York but its main office was in France. (Tr. 575). Eliane Laffont was part of the group that
left Gamma to start Sygma; she was involved in the operations in
New York. (Tr. 573, 583-86, 645-46).
In the early 1970s, Grace met with Laffont in Manhattan. (See
Tr. 57-58, 61-64, 215, 575, 645). They agreed to work together:
Grace agreed to turn his photographs over to Sygma, and Sygma
agreed to act as Grace's agent to license the images. Grace would
"receive 50 per cent of whatever [Sygma] made,"*fn4 and
Sygma would be responsible for getting the images to clients,
negotiating the fees with clients, getting the images back from
clients, and billing for and collecting the fees. (Tr. 62-63,
215-19, 224-25). The agreement was not put into writing, nor was
there any discussion about how long the agreement would last or
how the agreement could be terminated. (Tr. 63-65, 220).
Grace had a follow-up conversation with Laffont in
approximately February or March of 1974, after he returned from
his stint in Europe, when he firmed up his relationship with
Sygma and discussed the arrangement in more detail. Laffont
explained that there would be a monthly statement with a check for Grace's share of the income. She also represented that she
would work to promote Grace and get him assignments. (Tr.
229-33). Again, there was no written contract or other
memorialization of the discussion. (Tr. 236). Grace never had any
discussion with Laffont about how his materials would be returned
to him if and when the relationship ended. (Tr. 361).
D. Sygma Licenses the Images
After Grace signed with Sygma, when he shot on assignment for
Time, Newsweek, or other magazines, the magazine in question
eventually released the images to Sygma to distribute and license
worldwide. (Tr. 66-69). Sometimes Sygma itself sent Grace out on
assignment, and the images he took on these assignments were also
made available by Sygma for licensing. (Tr. 74, 116, 226, 280,
589). When images were published, they usually were accompanied
by a credit line that read "Arthur Grace/Sygma," although in
later years for photos taken for Time the credit simply read
"Arthur Grace." (See Tr. 69-70, 140-41).*fn5
During this period, which preceded the introduction of digital
photography, Grace usually shot in 35 millimeter format, both
black and white and in color. (Tr. 70-71, 582-83).*fn6 For black and white photos, Sygma would usually make prints from the
negatives and then send a selection to clients. For color shots,
Sygma would send either originals or duplicates of the slides to
the clients. (Tr. 582-83).
Grace shot on location, using rolls of film with 36 exposures.
(Tr. 71-73). After a shoot, Grace would send the film back to the
entity that had assigned him Time, Newsweek, other
magazines, or Sygma for processing. (Tr. 67, 74).*fn7 Once
he sent film, like most photojournalists, he would want to
confirm as quickly as possible whether the film had been received
and processed and he anxiously awaited hearing whether the shots
"came out well." (Tr. 81-82). Grace did not keep a record of the
rolls of film he submitted. He did use caption envelopes, both at
Time and Newsweek, on which he wrote down certain information
and any necessary instructions, but he did not make copies of
these. (72, 74-78, 90-91, 138; PX 6).
At Time, once the film was developed, the editors would go
through an editing or selection process to find the image or
images that would best fit the story. A small selection of images
would be shown to the editor in charge. (Tr. 82-83, 454, 456; see Tr. 221).*fn8 After the magazine made its
selections, in general the negatives (for black and white) or
slides (for color) would be released to Sygma. Often Time made
duplicates of images. A representative of Sygma in the early
days, often Laffont herself would go to Time's offices to
pick up the materials. (Tr. 83-85, 456, 458, 586). As soon as the
magazine "closed" on Friday nights, all the photo agencies,
including Sygma, would appear at the Time-Life building to pick
up the film for their photographers so that they could begin the
process of distributing the images as quickly as they could.
Time had the right of first usage, but Sygma could then offer
the images for use by other publications, including those
distributed in Europe. This process continued at least through
1985, when Grace left Time. (Tr. 67-68, 85, 89-90, 469,
The process was essentially the same at Newsweek. (Tr. 137,
589, 594; see Tr. 488-89). After Grace shot a story, he would
send the rolls of film to Newsweek, and the film was usually
processed at Newsweek's headquarters in New York. (Tr. 138).
Sygma picked up Grace's film, once it was released, in the same
manner as it did at Time, also on Friday nights at first and later on Saturday nights when Newsweek moved its deadline to
Saturday. (Tr. 139-40). Even though Grace was an employee of
Newsweek, the practice was to release the images to Sygma once
the magazine closed so that Sygma could try to license them to
other publications. (Tr. 141-42). This continued to be the
practice until Grace left Newsweek. (Tr. 142-43, 146).
When Sygma sent photographs to a client, it used a standard
consignment form that specified that $1,500 would be charged for
any lost or damaged transparency. (Tr. 462-63, 493, 583, 621-23;
PX 43, 44). The amount of $1,500 as a liquidated sum for a lost
transparency was industry standard in the 1970s. (Tr. 463, 490,
629). When an image was lost, however, often the amount to be
paid was negotiated or the fee was waived. (Tr. 541-43, 799-800).
E. Sygma's System for Storing the Images
Sygma never had a system in New York for keeping track of all
the images in its inventory. Its system for tracking images was
"completely inadequate." (Tr. 814). Materials were not organized
by photographer, but were kept chronologically and by theme or
story. When slides were sent out on consignment, no record was
kept of which images were sent to the client or which images were
returned. Speed was essential, and the pace of the business made
it difficult to keep accurate track of the images in the
pre-digital age. As late as January 2, 1998, Sygma was unable to
account for all its images in New York. In Paris, Sygma started
to keep track of its photographs starting in 1977, but this system was also inadequate. (Tr. 630-32, 814-15, 906).
In June 1999, Corbis Corporation ("Corbis") acquired Sygma and
Sygma-Paris. Sygma became known as Corbis Sygma and Sygma-Paris
became known as Sygma S.A.R.L. (See Def. Pretrial Prop.
Findings of Fact & Concl. of Law at 3; Tr. 631; PX 28). By
acquiring Sygma, Corbis acquired Sygma's right to license some 40
million images (including Grace's images).*fn9
No inventory had been prepared of all the photographs in
Sygma's archives. (Tr. 814-15, 905-07). Since the acquisition,
the Sygma images have been stored, together with other images, in
double-stacked file cabinets that fill three rooms the size of a
courtroom. Approximately 60 per cent of the images are Sygma
images. (Tr. 907-08).
Over the course of the years, on occasion, perhaps once a year,
Grace asked Sygma for the return of specific photographs, for
example, when he wanted to enter a photograph in a contest. He
never had difficulty on any of these occasions getting an image
back. (Tr. 123-24, 158-60, 361-62). F. Grace's Licensing Income
Over the years, Grace received monthly statements from Sygma,
one for New York and one for Paris, showing his share of the
licensing fees. He also received a check each month for his
royalties (covering both New York and Paris). (Tr. 237-38, 329,
340, 342). The record contains the monthly statements for New
York from 1988 through 2002 (DX A) and for Paris from 1979
through 2002 (DX B).*fn10
For the thirteen years from 1990 to 2002, from Sygma's
licensing of his images, including both international and United
States "sales," Grace earned $143,032.29 (after deductions), or
an average of $11,002.48 per year.*fn11 These numbers
include fees from the licensing of images of Robin Williams and Christopher
Reeve. When those fees are removed, Grace's average total income
for the ten-year period from 1991 through 2000 was $5,881. (DX CC
at 4; see DX R-3; Tr. 875-79).
Although the data is incomplete (particularly for New York),
Grace's earnings from 1979 through 1989 appear somewhat higher
than they were in the 1990s. Grace's best year was 1979, when his
Paris licensings earned 80,232.36 francs, or
$19,970.72.*fn12 For that eleven-year period, Grace averaged
$8,475.77.*fn13 If New York income were to be added, Grace's
annual earnings from Sygma's licensing of his images would exceed the
average for the period from 1990 through 2002.
Assuming Grace were to earn $5,900 per year from the licensing
of his images for the next thirty years, the present value of
that sum would be approximately $48,000, using a discount rate of
12 per cent. (DX CC at 4-5; Tr. 1028, 1048-49). This calculation
does not account for the likelihood that the income stream would
decrease over time as the images continue to age. (Tr.
1030).*fn14 Moreover, the calculation is based on all
Grace's images, and no deduction has been made to account for the
many images returned to Grace, which are available for him to
license. (Tr. 1031). On the other hand, the drop in Grace's
income stream from the 1980s to the 1990s undoubtedly was due in
part to the loss of so many of his images they were not
available for licensing because they were missing. G. Grace Ends His Relationship with Sygma
In May 2001, Grace decided to end his relationship with Sygma,
or, as it was known by then, Corbis Sygma. He did so for three
reasons. First, the people he had worked with at Sygma over the
years had left, following Sygma's acquisition by Corbis in June
1999. Second, he believed he was earning less money from his
photographs, even though the same number of photographs were
being licensed. Third, he had read, and other photographers had
told him that they had also heard, that Corbis had purchased a
cave in Pennsylvania that was going to be used to archive
photographs that Corbis had been acquiring. This concerned the
photographers, who feared their images would not be accessible.
(Tr. 154-56, 321-22, 326-28; see Tr. 707).
On May 10, 2001, Grace sent a letter to Charles Borst, the
Executive Editor of Corbis Sygma, that read in part:
This letter is formal notification that I am
terminating Corbis/Sygma's representation of my
photography effective immediately.
Please alert all of your agents and sub-agents around
the world to cease selling my material as of today's
date and to return all of my material in their
possession to me via Corbis/Sygma.
I expect all of my images that are now in
Corbis/Sygma's files to be returned to me no later
than June 1, 2001. This includes all images from May
1972 to the present that have been archived in both
New York and Paris as originals or dupes.
(PX 7; see Tr. 769-70).
After leaving Corbis Sygma, Grace signed with another photo agency, Zuma, one of Corbis's competitors. (Tr. 207-08).
Zuma is serving the same function for Grace that Sygma served
over the years. Grace's photos are historically significant, and
because Zuma had a gap in its archives for the 1970s and 1980s,
Zuma was interested in Grace's images. (Tr. 207-08).*fn15
H. The Return of the Images
After he sent his May 10, 2001, letter, Grace had several
conversations with Borst about the return of his materials, and
Borst also left several messages for Grace on his answering
machine. These conversations began and the messages were left
starting in June 2001 and continued through September 2001.
Corbis Sygma was having difficulty gathering and returning
Grace's photographs. It was encountering problems finding and
"pulling" the images, and there were other photographers who had
also terminated their relationships with Corbis Sygma who had
asked for the return of their photographs as well. For Grace,
some thirty years' worth of photographs were involved, and the
photographs were kept in different locations. (Tr. 163-69,
364-65, 768-69, 828-29; PX 5A (transcript of telephone messages).
At some point, Corbis obtained a list of the stories for which
Grace had received licensing fees and went through its files for each of those stories looking for Grace's images. Some
were found and returned to him. (See Tr. 169, 992-97, 1005).
The first images were returned to Grace in the fall of 2001.
(Tr. 169). The process has continued, as there were periodic
returns after the filing of this lawsuit. (Tr. 119). Some images
were not returned until the week before trial. (Tr. 99). Many of
the images were returned in a disorganized and haphazard fashion.
For example, at one point after suit was filed, Grace received
two boxes containing more than a thousand rolls of processed
black and white film covering stories from 1972 through 1984.
There was no caption sheet or memorandum identifying the images.
Grace and his assistants had to cut the rolls into strips and
organize them, a difficult and laborious process. (Tr. 119-23).
Some of the returned slides had mold (or some other contaminant)
on them. (Tr. 201-04). In addition, in the midst of the trial, in
response to a subpoena, Time returned some 2,000 of Grace's
images that it had retained. (Tr. 507-08).
As of December 7, 2004, Sygma had returned 33,013 original
images to Grace. (PX 2A (33,013); see DX K (noting return of
34,792 images, including duplicates, as of September 14, 2004)).
Based on Grace's estimates, tens of thousands more are still
missing. (Tr. 169-88, 193-96; PX 2A).*fn16 Many of Grace's missing images are images of Jimmy Carter, Geraldine
Ferraro, Walter Mondale, and other politicians from political
campaigns from many years ago. (Tr. 742). The images Grace took
of Christopher Reeve are not among the missing as Laffont
returned all the negatives to Marsha Williams. (Tr. 648-49).
Likewise, few, if any, images of Robin Williams are among the
missing, as most of these images were returned to the Williams
family or to Grace himself or they were not given to Sygma in the
For most of the stories that Grace shot while at Sygma, at
least some of the images were returned, that is, some images for
the particular story were returned. (PX 2A). The vast majority of
the stories are news events and political events and campaigns
from the 1970s and 1980s. Of the 732 stories shown on the
partially returned stories list compiled by Grace, some 138 of
the stories are of President Carter. (See PX 2A).
There were also a number of stories for which no images were
returned at all. For a few of these stories some prints were
returned (but no negatives or transparencies). All of these
stories are from the 1970s and 1980s. (PX 13 at 13-14).
On perhaps half a dozen occasions after he had ended his
relationship with Corbis Sygma, Grace found some of his images on Corbis's website. Each time he asked Corbis to remove
the images and it did so. (Tr. 209-11).
I discuss subject matter jurisdiction, liability, and damages,
This Court has subject matter jurisdiction over this case by
virtue of the diversity of citizenship of the parties. Grace is
and has been since 1995 a citizen of California. (Tr. 50-51).
Corbis Sygma is a New York corporation, Sygma S.A.R.L. is a
French corporation, and Corbis is a Washington corporation with
its principal place of business in Seattle. (See Def. Pretrial
Prop. Findings of Fact & Concl. of Law at p. 3).
1. Applicable Law
A bailment is a delivery of personal property by one to
another, where, explicitly or implicitly, the latter agrees to
return the property once the purpose of the bailment is fulfilled
or the former requests the property back, or to otherwise deal
with the property as the former instructs. See Herrington v.
Verrilli, 151 F. Supp. 2d 449, 457 (S.D.N.Y. 2001) (applying New
York law); 9 N.Y. Jur. 2d Bailments & Chattel Leases § 1
(2005). A bailment is created when a bailee takes lawful
possession of personal property and has a duty to account for it.
Martin v. Briggs, 663 N.Y.S.2d 184, 197 (1st Dep't 1997). Where a bailment is for the mutual benefit of the parties, the
bailee has a duty to exercise reasonable care in the handling of
the property. Ryan v. Aer Lingus, 878 F. Supp. 461, 464
(S.D.N.Y. 1994); Rosen v. Vill. Chevrolet, Inc.,
311 N.Y.S.2d 230, 233 (N.Y. Civil Ct. Queens Co. 1970) (in mutual benefit
bailment, bailee must "exercise that degree of care which a
reasonably careful owner of similar goods would exercise under
the same circumstances"). When a bailee fails to return bailed
property, the bailee is presumed negligent and to have failed to
use reasonable care. Ryan, 878 F. Supp. at 464; see Rosen,
311 N.Y.S.2d at 234 (presumption of negligence arises from proof
of bailment and failure to return property). The burden then
shifts to the bailee to explain the loss. Rosen,
311 N.Y.S. 2d at 234.
Here, defendants do not seriously dispute liability; they
dispute only the number of missing images and the value thereof.
Clearly, a bailment was created. Sygma took lawful possession of
Grace's images and had a duty to account for them. Once Grace
terminated the relationship in May 2001, the bailment ended and
Sygma was obliged to return the images. Although many were
returned, many were not. Because this was a mutual benefit
bailment, Sygma is presumed to have been negligent in failing to
return the missing images. Defendants have not provided a
sufficient explanation for the loss, and, indeed, the record
shows that Sygma's system of keeping track of images was
"completely inadequate." Hence, defendants are liable. C. Damages
1. Applicable Law
Although the task of placing a value on photographs is a
difficult one, the case law provides guidance. As the Second
Circuit has recognized, under New York law, "the value of lost
slides depends primarily on their uniqueness and the `plaintiff's
earning potential.'" Gasperini v. Ctr. for Humanities, Inc.,
149 F.3d 137, 141 (2d Cir. 1998) (quoting Lowit v. Consol.
Edison Co., 650 N.Y.S.2d 152, 152 (1st Dep't 1996)). Factors
bearing on a photographer's earning potential include: past
earnings from use of the images; the photographer's reputation
and expertise; the extent and nature of the market demand for
images of this type; and the potential for competition.
Raishevich v. Foster, 9 F. Supp. 2d 415, 417 (S.D.N.Y. 1998).
In this case, another important factor is the purchase price for
the acquisition of comparable photo collections. Finally, Grace
relies heavily on the industry standard for liquidated damages
for the loss of consigned transparencies.
The plaintiff has the burden of proving damages with reasonable
certainty, but exactitude is not required, particularly when a
precise calculation of damages is made difficult by the
wrongdoer's conduct. Id.
a) The Number of Missing Images
The threshold question is: how many images did Corbis fail to return? It is impossible to determine the precise number
of images, for the record-keeping was essentially non-existent
and Grace's calculations are only estimates. I conclude, however,
that the number of missing images is substantially below 67,473,
the number claimed by Grace, and that, more likely than not, the
number is about 40,000. (See DX AA at 4). I reach these
conclusions because some of Grace's estimates are high (for
example, there was some inadvertent double-counting (Tr.
391-99)); some images were undoubtedly returned to Grace over the
course of the thirty years; and some of the images were not given
to Sygma in the first place (for example, Time returned 2,000
images during the trial and Newsweek located some images after
trial (see Def. Post-Trial Mem., Ex. 2, 3)). In any event, in
light of my rulings below on damages, a precise number is not
b) The Value of the Missing Images
As for the value of the missing images, I consider the various
factors set forth above. I then discuss plaintiff's alternative
theories of damages. Finally, I determine the amount to be
Although, as I conclude above, Grace had a "unique eye" and was
one of the top photojournalists of his time, the vast majority of
the missing images were not unique. Although it is true that the
lost images cannot be replicated as they are photographs of
moments in history years ago, see Raishevich, 9 F. Supp. 2d at 418 ("a fleeting historical event . . . by definition
is incapable of recreation"), there are alternatives. Most of the
lost images were news shots of events that attracted many other
photographers. Grace had many competitors and many
photojournalists covered news stories for the national magazines,
newspapers, and wire services. Sygma itself had dozens of
photographers, and there were numerous other photo agencies that
competed with Sygma. There are other substantial collections of
photographs that contain news shots from the 1970s and 1980s.
Moreover, Grace himself took many shots of most if not all of
the news stories he covered. Many images have been returned for
many of these stories, and for these stories some images are
available for licensing.
Although the missing images surely do contain "selects," the
majority are not unique in the sense that many were "out-takes."
Many of the missing images are images Sygma chose not to send to
clients. Many of the missing images undoubtedly were not usable
for one reason or another (e.g., they were duplicative, or the
subject blinked or turned her head at the last moment, or the
image is out of focus). Moreover, only a small percentage of any
collection of photographs is placed into the licensing stream.
Even Zuma is selecting only 6 to 10 per cent of Grace's images
for scanning and licensing.
ii) Plaintiff's Earning Potential
The first consideration bearing on a plaintiff's earning
potential is past earnings from use of the images. Here, there is an ample record. For the thirteen-year period from 1990
through 2002, for all fees earned from all of Grace's images
licensed by Sygma, Grace earned an average of $11,002.48 per
year. For the ten-year period from 1991 through 2000, with the
revenues from the celebrity photos omitted, Grace earned an
average of $5,881 per year. These averages, of course, provide
guidance only. As a measure of future income, these numbers are
high because they include revenue for all Grace's images,
including revenues from the 33,000 images that have been returned
to him these images are available for licensing. On the other
hand, the numbers are low particularly for the later years
because more likely than not the income was reduced because many
of the images had been lost and were not available for licensing.
The next consideration is the photographer's reputation and
expertise. Grace was one of the best. But he has spent little
time as a photojournalist in the last fifteen years.
The next consideration is the nature and extent of the market
demand for these kinds of images. There is still a demand for
images of news events from the 1970s and 1980s, but that demand
is decreasing with the passage of time. The income stream from
these images will not remain constant for the next thirty years;
rather, the income stream will surely decline as the images age
and the news stories in question fade into history. It is always
possible, of course, that future events will rekindle interest in
past events, but this possibility is not a basis for
significantly increasing any damages award. The next consideration is the potential for competition. As
already discussed, Grace's images compete with images of other
accomplished photojournalists, and there are many of them.
Moreover, there are a number of photo licensing agencies and
stock photo agencies with their own images to license. Hence,
there is significant competition.
iii) The Sales of Other Collections
The licensing rights to the entire Sygma collection some 40
million images, including Grace's images cost Corbis $12.5
million, or approximately $.31 per image. The copyrights to the
11 million images in the Bettmann collection sold for $13.5
million, or about $1.23 per image. The copyrights to the 600,000
images in the Turnley collection (which was edited before the
acquisition) sold for $2.3 million, or $3.83 an image.
These numbers are relevant and I take them into account. On the
other hand, the circumstances are different: the collections are
different and, unlike here, the transactions involved willing
buyers and willing sellers. Grace did not want to sell his
iv) The Liquidated Damages Provision
The industry standard in the 1970s and 1980s for a lost
transparency that had been delivered to a client on consignment
was $1,500. Some courts have accepted this as a reasonable value
for lost images. See, e.g., Gasperini, 149 F.3d at 141
(affirming district court's upholding of jury verdict awarding
$1,500 per slide for 240 lost slides that were of "superior quality," "unique," and for the most part "irreplaceable");
Lowit, 650 N.Y.S.2d at 152-53 (affirming judgment on jury
verdict awarding $1,500 per slide for 49 lost slides, where
slides were "unique" and that amount comported with plaintiff's
earnings potential); Girard Studio Group, Ltd. v. Young &
Rubicam, Inc., 536 N.Y.S.2d 790, 790 (1st Dep't 1989) (reducing
jury verdict from $240,000 to $120,000, or $1,500 each, for 80
The standard does not apply in this case and would lead to an
absurd result. At trial, Grace argued that he is entitled to
recover $1,500 times 67,000 images or $100.5 million. (Tr.
1070). Even with the number of missing images found by this Court
40,000 the recovery would be $60 million. Both those sums far
exceed what was paid for the licensing rights to Sygma's entire
collection of 40 million images (which included Grace's images)
and for the copyrights to collections of 11 million and 600,000
images combined. Moreover, the 40,000 images here were not
"unique" and "irreplaceable." What a client was willing to
stipulate to as compensation in the event of the loss of an image
when receiving a few "selects" on consignment to review under the
pressure of a deadline is not relevant to a situation involving
v) Plaintiff's Theories
Grace's valuation expert, Jeffrey D. Smith, ranked Grace's
images into three categories and opined that they were worth
$5,000, $2,500, or $1,500-$2,000 each, depending on the ranking.
(PX 31). I reject his testimony. He was evasive and non-responsive, and his testimony did not make sense. Although he
tried to fudge by saying he could not "predict to the dollar," he
seemed to be suggesting, for example, that for the 511 shots
missing from the Poland 1981-1982 story, Grace was entitled to an
award of $5,000 per image or a total of more than $2.5 million
for these 511 images alone. (Tr. 534-37). He also never looked at
the licensing revenue that Grace's photographs actually earned,
which clearly is a relevant consideration. (Tr. 547-48).
As an alternative, Grace proposes a theory that ranks 5 per
cent of the images (assuming 66,653 missing images) as "super
selects" at a value of $1,500 each, 5 per cent as "selects" at a
value of $750 each, and the remaining 90 per cent at a value of
$75 each, for a total recovery of $11,996,850. (Pl. Post-Trial
Br. at 32-33). This theory is also rejected as unreasonable. This
sum is almost what Corbis paid for the entire Bettmann
collection. The annual interest that could be earned on this sum
would be more then ten times what Grace was earning a year, on
average, from the licensing of all his images.
As a final alternative, Grace proposes a theory that values 10
per cent of the missing images (again assuming 66,653 images) at
$1,500 each, for a total recovery of $9,997,500. (Id. at 33).
This theory is also rejected as unreasonable, for the same
reasons as above.
vi) The Court's Award
I conclude that defendants' proposal of looking at Grace's
licensing income is reasonable, but only as a starting point. At a minimum, Grace should be compensated for what he
would have earned if the missing images had been available for
licensing in the past and if they were available for licensing in
the future. But he should be awarded something more, for the loss
of the licensing income is only part of his damages. The images
have a value beyond just the licensing income Grace no longer
has these images to view or hold or enjoy or otherwise do with as
Accordingly, taking into account all of the above, I award
Grace damages as follows:
First, he is awarded $8,000 a year for four-and-a-half years,
or $36,000, to account for lost licensing income from July 1,
2001, when his images should have been returned, to date.
Second, he is awarded an additional $436,000 for the loss of
the images, based on a value of $100 per image for 4,000 images
(I conclude 10 per cent are "selects") and $1 an image for the
remaining 36,000 images.
The above numbers take into account pre-judgment interest. No
additional award is allowed for claims for holding fees or
improper deductions or any other expenses or damages.
For the foregoing reasons, judgment will be entered in favor of
Grace in the amount of $472,000, with costs but without fees. No further injunctive relief will be awarded. The Clerk of
the Court shall enter judgment accordingly.
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