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Sid Bernstein Presents, LLC v. Apple Corps Ltd.

United States District Court, S.D. New York

March 29, 2018




         Plaintiff Sid Bernstein Presents, LLC ("SBP"), brought this action against Defendants Apple Corps Limited ("Apple Corps") and Subafilms Limited ("Subafilms") (collectively "Defendants"), alleging copyright infringement and seeking a declaration of rights in the "Master Tapes" and its derivative works, as well as damages for the Defendants' alleged copyright infringement based on Defendants' use of the raw audiovisual footage belonging to Plaintiff. (Compl., ECF No. 1, at 17-19.) SBP is the owner by assignment of all the intellectual property rights of the late music producer Sid Bernstein. (Id. ¶¶8-9.) Defendant Apple Corps was founded by members of The Beatles; Defendant Subafilms is its subsidiary. (Id. ¶¶ 2-3.)

         Defendants moved to dismiss the complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Defs.' Mot. to Dismiss, ECF No. 19.) This Court granted Defendants' motion to dismiss the complaint. (Mem. Decision & Order ("Order"), ECF No. 47, at 6-14.) Defendants also moved for sanctions against Plaintiffs counsel under Rule 11 of the Federal Rules of Civil Procedure. (Defs.' Sanctions Mot., ECF No. 25.) This Court denied Defendants' motion for sanctions, finding that although Plaintiff failed to state a plausible claim for relief, "the filings [did] not support a conclusion that the claims were clearly frivolous or were alleged in bad faith." (Order at 15-16.) As the prevailing party, Defendants moved for an award of attorneys' fees and costs pursuant to 17 U.S.C. § 505, Rule 54 of the Federal Rules of Civil Procedure, and Rule 54.1 of the Local Civil Rules. (Defs.' Mot. For Att'ys' Fees and Costs, ECF No. 49.)

         This matter was referred to Magistrate Judge Kevin N. Fox. (ECF No. 58.) Before this Court is Magistrate Judge Fox's January 25, 2018 Report and Recommendation (Report, ECF No. 63), recommending that this Court grant the Defendants' motion for costs in the amount of $1, 159.01, but award no attorneys' fees due to Defendants' failure to establish a basis for determining reasonable attorneys' fees.[1] (Id. at 19.) In his Report, Magistrate Judge Fox advised the parties that failure to file timely objections to the Report would constitute a waiver of those objections on appeal. (Id. at 20); see also 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Both Plaintiff and Defendants filed timely objections to the Report. (See PL Obj. to Report ("Pl. Obj."), ECF No. 65; Defs. Obj. to Report ("Defs. Obj."), ECF No. 64.)

         There is no clear error on the face of the record as to those portions of the report to which no objections were made. This Court considered the issues raised in Plaintiffs and Defendants' objections and reviewed de novo the objected-to portions of the Report. This Court ADOPTS Magistrate Judge Fox's recommendation that Defendants are entitled to attorneys' fees and costs, and REJECTS the recommendation that such costs cannot be reasonably calculated.

         Defendants' motion for attorneys' fees and costs is GRANTED. Plaintiff shall pay Defendants' reasonable fees in the amount of $83, 417.45 and costs in the amount of $1, 159.01.


         A court may accept, reject or modify, in whole or in part, the findings and recommendations set forth within a report and recommendation. See 28 U.S.C. § 636(b)(1)(C). When no objections to the Report are made, the court may adopt the report if "there is no clear error on the face of the record." Adee Motor Cars, LLC v. Amato, 388 F.Supp.2d 250, 253 (S.D.N.Y. 2005) (citation omitted).

         When there are objections to the report, the court must make a de novo determination as to the objected-to portions of the Report. 28 U.S.C. § 636(b)(1)(C); see also Rivera v. Barnhart, 423 F.Supp.2d 271, 273 (S.D.N.Y. 2006). It is sufficient that this Court "arrive at its own, independent conclusions" regarding those portions to which objections were made. Nelson v. Smith, 618 F.Supp. 1186, 1189-90 (S.D.N.Y. 1985) (internal citation omitted); see United States v. Raddatz, 447 U.S. 667, 675-76 (1980). However, where a litigant's objections are conclusory, repetitious, or perfunctory, the standard of review is clear error. McDonaugh v. Astrue, 672 F.Supp.2d 542, 547-48 (S.D.N.Y. 2009).

         Courts have discretion in deciding whether to award costs and attorneys' fees. Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994). In exercising this discretion, courts deciding whether to award costs and attorneys' fees under § 505 should consider "frivolousness, motivation, objective unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence." Porto v. Guirgis, 659 F.Supp.2d 597, 617 (S.D.N.Y. 2009) (quoting Fogerty, 510 U.S. at 534 n.19) (internal quotation marks and citations omitted). In calculating the amount of attorneys' fees to award, courts may consider other factors, including the financial resources of the losing party. See Peyser v. Searle Blatt & Co., No. 99 Civ. 10785 (WK), 2001 U.S. Dist. LEXIS 20844, at *20 (S.D.N.Y. Dec. 13, 2001) ("The aims of the Copyright Act are compensation and deterrence where appropriate, but not ruination.") (internal quotation marks and citations omitted).


         Plaintiff objects primarily to Magistrate Judge Fox's conclusion that the Fogerty factors weigh in favor of granting Defendant attorneys' fees. Plaintiffs specifically object to the Report's findings regarding the following Fogerty factors: (1) objective unreasonableness; (2) compensation and deterrence; and (3) the relative financial situation of the parties. (See Pl. Obj. at 2.)

         Plaintiff objects that its litigation position was not objectively unreasonable because, in denying Defendants' motion for sanctions, this Court necessarily found that Plaintiffs claims were not objectively unreasonable. (Id.) Plaintiff maintains, therefore, that under the doctrine of law of the case, this Court's previous finding that Plaintiffs positions "were not frivolous under an objectively unreasonable standard" should be controlling in this subsequent stage of the litigation. (Id. at 3-4.) Plaintiff maintains further that the "objectively unreasonable" standard under Rule 11 is not substantively different from the "objectively unreasonable" standard under Section 505. (Id. at 4; see also Id. at 2 ("[T]he cited case of Mar go v. Weiss . . . makes clear that the Rule 11 standard is substantively the same as the objective unreasonableness factor . . . under Section 505 of the Copyright Act.").) Furthermore, Plaintiff argues that based on the Circuit split concerning whether the mere registration of a copyright can trigger the statute of limitations, Plaintiffs argument that its claims were not time-barred was "a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law." (Id. at 5-7.) Plaintiff further objects that Fogerty's compensation and deterrence factors do not support an award of attorneys' fees for the same reasons. (See Id. at 8-9.)

         Plaintiff also objects that "the great financial disparity between the financial resources of Plaintiff and the Defendants" weighs against awarding attorneys' fees. (Id. at 12.) Plaintiff notes that Defendants did not object to Plaintiffs assertion that Defendants "are highly successful and well-heeled corporations with substantial assets and income." (Id. at 9.) Plaintiff also asks this Court to take judicial notice of a third-party report demonstrating the size of Defendants' ...

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