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McDermott v. Monday Monday, LLC

United States District Court, S.D. New York

February 22, 2018


          For the plaintiff: Richard P. Liebowitz Liebowitz Law Firm, PLLC

          For the defendant: Valerie K. Ferrier Law Offices of Nolan Kelin


          DENISE COTE United States District Judge

         Plaintiff Matthew McDermott commenced this copyright action on November 23, 2017. After the defendant moved to dismiss for lack of personal jurisdiction, the plaintiff voluntarily withdrew his action without prejudice to refiling. The defendant asserts that it is a prevailing party and has moved to compel the plaintiff to pay attorney's fees and costs in defending against this lawsuit. For the following reasons, the motion is denied.


         On November 23, 2017, plaintiff filed this action, asserting that the defendant displayed the plaintiff's copyrighted photograph on the defendant's website. The complaint acknowledged that the defendant is an Idaho limited liability company based in Idaho. The complaint asserts personal jurisdiction exists over the defendant because the defendant “transacts business in New York.” On November 28, an initial conference was scheduled to occur on February 2, 2018.[1]The defendant was served with plaintiff's complaint on or about November 30.[2]

         On January 2, 2018, the defendant served an offer of judgment on the defendant in the amount of $1, 000. Then, on January 17, defendant filed a motion to dismiss for lack of personal jurisdiction.[3] Defendant, an Idaho-based business, is a digital newspaper that does not charge a fee for its content or sell anything through its website. It argued that the simple presence of an informational website, without opportunity for sales or other internet-based business transactions, was not enough to establish that the defendant had sufficient contacts with the forum in order to justify personal jurisdiction under either the New York long arm statute or the Due Process Clause. It asserted that the plaintiff had “apparently filed in this District for his own convenience, but has utterly failed to allege any facts sufficient to establish personal jurisdiction over an Idaho company.”

         Opposition to the motion to dismiss was due February 7, in the event the plaintiff did not amend his complaint in response to the motion. Plaintiff did not file any amended complaint or oppose the motion. Instead, he voluntarily dismissed his suit on January 30. The same day, defendant filed a letter motion to compel the plaintiff to pay attorney's fees and costs. He sought fees and costs incurred after January 2 pursuant to Fed.R.Civ.P. 68 due to its $1, 000 offer of judgment, and he sought all of this costs and attorney's fees in the action pursuant to the Copyright Act, 17 U.S.C. § 505.

         Plaintiff opposed, arguing that the defendant is not a “prevailing party” under the standard set forth in Buckhannon Bd. and Care Home, Inc. v. West Virginia Dpt. of Health and Human Resources, 532 U.S. 598 (2001), and that Rule 68 does not apply since judgment was not entered for the defendant. Defendant replied on January 31.


         Section 505 of the Copyright Act permits a “prevailing party” to recover its reasonable attorney's fees. 17 U.S.C. § 505. “Before deciding whether an award of attorney's fees is appropriate in a given case . . . a court must determine whether the party seeking fees has prevailed in the litigation.” CRST Van Expedited, Inc. v. E.E.O.C., 136 S.Ct. 1642, 1646 (2016). While there are various statutes that award attorney's fees to a “prevailing party, ” the Supreme Court has interpreted the term in a consistent manner across those statutes. Id.

         In the context of determining whether a plaintiff has prevailed, the “touchstone” of the prevailing party inquiry is whether there was a “material alteration of the legal relationship of the parties.” Id. (citation omitted). “This change must be marked by judicial imprimatur.” Id. (citation omitted). A prevailing defendant may recover “fees expended in frivolous, unreasonable, or groundless litigation when the case is resolved in the defendant's favor, whether on the merits or not.” Id. at 1652.

         “The congressional policy regarding the exercise of district court discretion in the ultimate decision whether to award attorney' fees does not distinguish between merits-based and non-merits based judgments.” Id. Indeed, “one purpose of the fee-shifting provision is to deter the bringing of lawsuits without proper foundation.” Id. (citation omitted). The defendant has “fulfilled its primary objective” when the “plaintiff's challenge is rebuffed, irrespective of the precise reason for the court's decision.” Id. at 1651. Defendants can be prevailing parties “even if the court's final judgment rejects the plaintiff's claims for a nonmerits reason.” Id.

         In copyright cases, “[p]revailing plaintiffs and prevailing defendants are to be treated alike, but attorney's fees are to be awarded to prevailing parties only as a matter of the court's discretion.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). In ...

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