UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
November 21, 2012
JAMES E. ZALEWSKI ET AL., PLAINTIFFS,
T.P. BUILDERS, INC. ET AL., DEFENDANTS. JAMES E. ZALEWSKI ET AL., PLAINTIFFS,
CICERO BUILDER DEV., INC. ET AL., DEFENDANTS.
The opinion of the court was delivered by: Susan E. Farley, Esq. Gary L. Sharpe Chief Judge
MEMORANDUM-DECISION AND ORDER
Plaintiffs James Zalewski and Draftics, Ltd. commenced these actions for copyright infringement under the Copyright Act of 1976, as amended,*fn2 against multiple defendants, including T.P. Builders, Inc. and Thomas Paonessa (collectively "T.P."); Roxanne K. Heller and DeRaven Design & Drafting (collectively "DeRaven"); and Cicero Building Dev., Inc. and Luigi Cicero (collectively "Cicero"). (See 3d Am. Compl., Dkt. No. 138, 10-cv-876; Compl., Dkt. No. 1, 11-cv-1156.) In a Memorandum-Decision and Order dated June 19, 2012, the court dismissed plaintiffs' claims, and entered judgment for defendants shortly thereafter. (See generally Dkt. Nos. 194, 195.) Pending are T.P., DeRaven and Cicero's motions for attorneys' fees and costs. (See Dkt. Nos. 196, 197; Dkt. No. 25, 11-cv-1156.) For the reasons that follow, T.P. and DeRaven's motions are granted in part, and Cicero's motion is denied.
The court presumes the parties' familiarity with the underlying facts and procedural history as discussed in its previous Memorandum-Decision and Order. (See Dkt. No. 194 at 3-7.)
III. Standard of Review
The Copyright Act provides that the court may award reasonable attorneys' fees to the prevailing party at its discretion. See 17 U.S.C. § 505. In making this determination, the court considers the following factors: "'frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.'" Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)
(quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986)). While there is not a "precise rule or formula" in determining whether an award of fees is appropriate, Silberstein v. Fox Entm't Grp., Inc., 536 F. Supp. 2d 440, 443 (S.D.N.Y. 2008) (internal quotation marks and citations omitted), courts generally afford greater weight to the objective reasonableness of a claim. See Matthew Bender & Co. v. West Publ'g Co., 240 F.3d 116, 121-22 (2d Cir. 2001). Yet no matter what factors the court considers, it must remain "faithful to the purposes of the Copyright Act." Id. at 121 (internal quotation marks and citations omitted). Thus, simply deciding which party prevailed is not determinative, see Silberstein, 536 F. Supp. 2d at 443, as "the interests of the Copyright Act" are served by any claim-successful or not-that aides in, inter alia, demarcating "the boundaries of copyright law," Matthew Bender, 240 F.3d at 122 (internal quotation marks and citations omitted). But see Matthews v. Freedman, 157 F.3d 25, 29 (1st Cir. 1998) ("Depending on other circumstances, a district court could conclude that the losing party should pay even if all of the arguments it made were reasonable.")
Among other arguments,*fn3 T.P. DeRaven and Cicero*fn4 assert that plaintiffs' claims were objectively unreasonable, and thus, they are entitled to attorneys' fees and costs. (See Dkt. No. 196, Attach. 1 at 2-5; Dkt. No. 197, Attach. 1 at 8-12; Dkt. No. 25, Attach. 1 at 1-5, 11-cv-1156.) Relying, in part, on the evolving nature of architectural copyright law, plaintiffs counter that the causes of action contained in the Third Amended Complaint were reasonable; however, in so doing, they implicitly concede that the earlier Complaints were not legally sound. (See Dkt. No. 200 at 1-12.) Moreover, plaintiffs contend that even if attorneys' fees are appropriate, the fees requested are excessive. (See id. at 12-19.) The court will address each of these arguments in turn.
A. Appropriateness of Attorneys' Fees
While some are clearer than others, defendants' arguments are essentially the same; each cites the protracted nature of this litigation and their ultimate success on the merits to support their contentions that plaintiffs' claims were objectively unreasonable. (See Dkt. No. 196, Attach. 1 at 2-5; Dkt. No. 197, Attach. 1 at 8-12; Dkt. No. 25, Attach. 1 at 1-5, 11-cv-1156.) However, their reliance on at least the latter factor is misplaced, as success alone is not dispositive. See Silberstein, 536 F. Supp. 2d at 443. Rather, in this Circuit, a finding of objective unreasonableness is generally reserved for those claims "that are clearly without merit or otherwise patently devoid of legal or factual basis." Id. (internal quotation marks and citations omitted). Applying this standard to plaintiffs' Third Amended Complaint, the court disagrees with defendants.
This is so for several reasons, including the fact that neither the Second Circuit nor this court has established any clear precedent that squarely fits the facts here. (See Dkt. No. 194 at 12-29.) Although the court identified ample support for its conclusion that the works in question were not substantially similar, it was only able to do so after conducting a side-by-side comparison of the works, with a focus on the elements thereof that constituted protected expression. (See id. at 29-38.) Indeed, it is quite possible that this litigation, which is currently before the Circuit for review, will clarify the threshold between those architectural works that are sufficiently specific to warrant protection, and those that are not, as well as the appropriate test for substantial similarity where the work is only protectable as a compilation. Given these considerations, the court is unpersuaded that plaintiffs' causes of action in their Third Amended Complaint lacked a legal or factual basis.
But the same cannot be said for plaintiffs' earlier Complaints, which were strewn with legal conclusions and lacked sufficient factual bases to survive defendants' motions to dismiss. (See generally Dkt. No. 133.) In fact, plaintiffs did not even include copies of their works or proof of copyright registration with either the Amended or Second Amended Complaints. (See Am. Compl., Dkt. No. 11; 2d Am. Compl., Dkt. No. 60.) And while there are in excess of eighty drawings attached to the original Complaint, the description of the alleged infringement is nearly unintelligible. (See Compl., Dkt. No. 1.) Finally, plaintiffs' decision to name numerous defendants who they now admit "bore no culpability," (Dkt. No. 200 at 2), unnecessarily complicated the litigation. Among other reasons, these infirmities lead the court to conclude that plaintiffs' first three Complaints were "patently devoid of [a] legal . . . basis." Silberstein, 536 F. Supp. 2d at 443.
In sum, having reviewed the record as a whole, and considering both equity in awarding attorneys' fees and the purposes served by doing so, the court concludes that plaintiffs' first three Complaints were objectively unreasonable. On the contrary, plaintiffs' Third Amended Complaint was not so, as it advanced claims that will contribute to the demarcation of "the boundaries of copyright law." Matthew Bender, 240 F.3d at 122 (internal quotation marks and citations omitted). It follows that T.P. and DeRaven's motions for attorneys' fees are granted to the extent that they seek attorneys' fees for successfully defending against the first three Complaints.
B. Excessiveness of the Fees Requested
T.P. seeks $285,642.60 in attorneys' fees for 931.9 hours of work, with rates varying from $225 to $400 per hour, and $6,524.60 in costs. (See Dkt. No. 196, Attach. 1 at 9-10.) And DeRaven, for its 339.8 hours of work, requests $43,045 in attorneys' fees, but includes no mention of costs. (See Dkt. No. 197, Attach. 1 at 12-13.) Conversely, plaintiffs contend that both the number of hours and hourly rates are excessive. (See Dkt. No. 200 at 12-19.) The court agrees with plaintiffs.
"Attorneys' fees are awarded by determining a presumptively reasonable fee, reached by multiplying a reasonable hourly rate by the number of reasonably expended hours." Bergerson v. N.Y. State Office of Mental Health, Cent. N.Y. Psychiatric Ctr., 652 F.3d 277, 290 (2d Cir. 2011). The so-called "lodestar" is not always conclusive, but must, "absent extraordinary circumstances," be the starting point for a fee calculation. Millea v. Metro-North R.R. Co., 658 F.3d 154, 166-69 (2d Cir. 2011). In calculating the lodestar, the overwhelming majority of case-specific circumstances, such as the novelty and complexity of the case, do not warrant an adjustment; however, these factors are still relevant in determining the reasonable hourly rate and "the reasonable number of hours the case requires." See id. at 167. Ultimately, while a detailed tabulation is unnecessary, the court should, at a minimum, "provide the number of hours and hourly rate it used to produce the lodestar figure." Id. at 166-67 (citing Perdue v. Kenny A. ex rel. Winn, 130 S. Ct. 1662, 1674 (2010)).
In the instant case, attorneys' fees are only appropriate for the hours spent defending against the first three Complaints. Consequently, the hours T.P. and DeRaven spent on other parts of this litigation, including the time they devoted to asserting and defending against cross-claims, and all of the time spent on this matter after the Third Amended Complaint was filed must be excluded from the total number of hours each provided.*fn5
(See Dkt. No. 196, Attach. 4; Dkt. No. 197, Attach. 3.) To this end, T.P.'s total number of compensable hours is reduced to 439.9-which reflects 21.4 hours for attorney Arlen Olsen and 418.5 hours for attorney Autondria Minor-and DeRaven's total number of compensable hours is reduced to 133.3. (See id.)
Turning to the reasonable hourly rate in this District, T.P.'s rates,
unlike the effective rate of $126 per hour DeRaven seeks, are
excessive. (See Dkt. No. 196, Attach. 1 at 9-10; Dkt. No. 197, Attach.
1 at 12-13.) As
Judge Miner stated in Bergerson, "The reasonable hourly rate should be
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." 652 F.3d at 289-90(internal quotation marks and
citations omitted). Applying this reasoning, the court recently noted
that the "prevailing hourly rates" in this District were "$210 per
hour for an experienced attorney, $150 per hour for an attorney with
more than four years experience, $120 per hour for an attorney with
less than four years experience, and $80 per hour for paralegals."
Broad. Music, Inc., v. DFK Entm't, LLC, No. 1:10-cv-1393, 2012 WL
893470, at *7 (N.D.N.Y. Mar. 15, 2012) (internal quotation marks and
citation omitted). However, it also alluded to the fact that the rates
are "slightly higher now." Id. Based on a review of other decisions on
attorneys' fees in this District, the court concludes that, in this
case, the following are reasonable rates:*fn6 $275 per
hour for partners; $200 per hour for an attorney with more than four
years experience; $170 per hour for an attorney with less than four
years experience; and $90 per hour for paralegals. After reviewing the
this case, and considering all of case-specific circumstances, the
court finds no reason to depart from these rates.
Here, both of T.P.'s attorneys are partners at Schmeiser, Olsen & Watts, LLP. (See Dkt. No. 196, Attach. 1 at 8-9.) Multiplying the reasonable number of hours that T.P spent on this litigation, 439.9, by the reasonable hourly rate of $275 per hour, the appropriate award is $120,972.50 in attorneys' fees. Using the same methodology in calculating DeRaven's award, the appropriate sum is $16,795.80, which is the product of 133.3 hours times DeRaven's effective rate of $126 per hour. It follows that T.P. and DeRaven's motions are granted, however the awards requested are reduced to $120,972.50 in attorneys' fees for T.P., and $16,795.80 for DeRaven.
WHEREFORE, for the foregoing reasons, it is hereby ORDERED that Cicero's motion (Dkt. No. 25, 11-cv-1156) is DENIED as untimely; and it is further
ORDERED that T.P. and DeRaven's motions (Dkt. Nos. 196, 197) are GRANTED, however the awards requested are reduced to $120,972.50 in attorneys' fees for T.P., and $16,795.80 in attorneys' fees for DeRaven; and it is further
ORDERED that plaintiffs' letter requests (Dkt. Nos. 208, 209) are DENIED; and it is further
ORDERED that the Clerk provide a copy of this Memorandum-Decision and Order to the parties.
IT IS SO ORDERED.