The opinion of the court was delivered by: Denise Cote, District Judge
The Court previously held that plaintiffs Barclays Capital Inc. ("Barclays Capital") and Morgan Stanley & Co. Incorporated ("Morgan Stanley") are entitled under 17 U.S.C. § 505 to receive a reasonable attorney's fee from defendant Theflyonthewall.com ("Fly"). This Opinion establishes the final fee amount, $200,000, and sets forth the reasons for that determination.
The facts and procedural history of this litigation are described at length in the Court's Opinion and Order of March 18, 2010. Barclays Capital Inc. v. Theflyonthewall.com, __ F. Supp. 2d __, 2010 WL 1005160 (S.D.N.Y. Mar. 18, 2010) (the "March 18 Opinion"). The facts most relevant to this Opinion are restated briefly below.
Barclays Capital and Morgan Stanley (collectively, the "Copyright Plaintiffs") are each major financial institutions that, inter alia, produce research reports about publicly traded equity securities. These research reports frequently include recommendations about whether investors should buy, sell, or hold a given stock or other security. Id. at *2. The defendant, Fly, is a New Jersey corporation that, since 1998, has been in the business of collecting and publishing financial news and rumors on its subscription-based online newsfeed, www.theflyonthewall.com. Id. at *9.
Between February 14 and March 2, 2005, Fly published at least seventeen stories on its newsfeed that contained "direct, verbatim copying of key excerpts from [the Copyright Plaintiffs'] research reports." Id. at *14. Eight of the copied reports were produced by Morgan Stanley, and nine were produced by Lehman Brothers Inc. ("Lehman Brothers"), the predecessor-in-interest of Barclays Capital. After discovering these acts of infringement, Morgan Stanley and Lehman Brothers sent Fly a cease-and-desist letter in April 2005. Fly thereafter stopped its wholesale copying of the Copyright Plaintiffs' research reports, but continued to publish the reports' key recommendations in paraphrased form. Id. at *13.
In June 2006, Barclays Capital, Morgan Stanley, and a third firm -- Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") -- brought this lawsuit alleging claims of copyright infringement and hot-news misappropriation. Fly disputed liability on the copyright claims for over three years. Among its various defenses, Fly asserted fair use, and litigated that defense in both affirmative and defensive summary judgment briefing. In September 2009, while the cross-motions for summary judgment were pending, the Copyright Plaintiffs decided to limit their requested relief on the copyright claims to the minimum statutory damages of $750 per infringed report plus attorney's fees.*fn1 Id. at *15. In late January 2010, roughly six weeks before trial, Fly conceded liability for copyright infringement. A bench trial was then held to determine Fly's liability for hot-news misappropriation.
Following trial, the March 18 Opinion held that Fly was liable for misappropriation. The plaintiffs were awarded injunctive relief on the misappropriation claim, and the Copyright Plaintiffs were awarded an aggregated statutory damages award of $12,750 plus prejudgment interest on the copyright infringement claims. Id. With respect to attorney's fees, the March 18 Opinion decided that Fly's litigation position with respect to the copyright claims was "objectively unreasonable" in light of existing precedent.*fn2 Id. at *16. The March 18 Opinion thereby determined that the Copyright Plaintiffs were entitled to a "reasonable attorney's fee" under 17 U.S.C. § 505. An Order accompanying the March 18 Opinion set a schedule for the Copyright Plaintiffs and Fly to make submissions concerning the proper methodology for calculating the attorney's fee award.
By Order of March 29, 2010 (the "March 29 Order"), the Court set out the methodology to govern that calculation. The March 29 Order determined, inter alia, that: (1) 100% of Copyright Plaintiffs' counsel's time entries relating solely to the copyright claims, including research on the fair-use defense, would be included; (2) none of the time entries that did not relate to the copyright claims would be included wherever such non-copyright work could be readily identified and segregated; (3) 33.3% of the time entries relating to both copyright infringement and misappropriation would be included; and (4) none of the time entries relating to settlement of the litigation would be included. The March 29 Order was supplemented by an Order dated April 1, 2010 (the "April 1 Order"), which established a cut-off date of January 22, 2010 for all time entries and which clarified that 100% of time spent researching the fair use defense would be included, while 33.3% of time relating to both fair use and hot-news misappropriation would be included.
The Copyright Plaintiffs filed their original fee application on April 9, 2010, seeking attorney's fees totaling $394,146.57. After conferring with Fly, the Copyright Plaintiffs submitted a revised fee application on April 30. In their revised application, the Copyright Plaintiffs request an award of attorney's fees in the amount of $361,280.74.*fn3 On May 14, Fly filed its opposition to the Copyright Plaintiffs' application, and on May 21, the Copyright Plaintiffs filed a reply.
To determine the amount of a prevailing party's fee award under 17 U.S.C. § 505, a court first calculates the "presumptively reasonable fee." Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110, 111 (2d Cir. 2007), amended on other grounds, 522 F.3d 182 (2d Cir. 2008) ("Arbor Hill"). The focus of the courts is on setting "a reasonable hourly rate, taking account of all case-specific variables." Id. at 117; see also Simmons v. N.Y. City Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009) (emphasis omitted).*fn4
"The presumptively reasonable fee boils down to 'what a reasonable paying client would be willing to pay,' given that such a party wishes 'to spend the minimum necessary to litigate the case effectively.'" Simmons, 575 F.3d at 174 (quoting Arbor Hill, 493 F.3d at 112, 118).
"[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." Hensley, 461 U.S. at 437. "Applications for award of fees must be documented by time records," and such records should be "contemporaneously created" and should "specify, for each attorney, the date, the hours expended, and the nature of the work done." Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) (citation omitted). "[C]counsel... [are] not required to record in great detail how each minute of [their] time was expended," but "counsel should identify the general subject matter of [their] time expenditures." Hensley v. Eckerhart, 461 U.S. 424, 437 n.12 (1983). The Copyright Plaintiffs have supported their ...