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.
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