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GRACE v. CORBIS SYGMA

December 9, 2005.

ARTHUR GRACE, Plaintiff,
v.
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

OPINION

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 10).

  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, 589-90).

  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. ...


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