Opinion
Civil Action No. SA 97-CA-0266
December 24, 1997
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
TO: H. F. Garcia United States District Judge
Pursuant to the order of referral in the above-styled and numbered cause of action to the undersigned United States Magistrate Judge the following report is submitted for your review and consideration. The Court finds it has jurisdiction to enter this Report and Recommendation under the authority ofPerales v. Casillas, 950 F.2d 1066, 1069-70 (5th Cir. 1992).
But see Conners v. O'Connor, 6 F.3d 656, 658 (9th Cir. 1993). In the instant case, neither party objected to the Magistrate Judge's jurisdiction.
I. Jurisidiction
The Court has federal question jurisdiction. 28 U.S.C. § 1331.II. STATEMENT OF FACTS
In this case, Harold J. Hodges ("Hodges") claims that defendants infringed on his copyrighted song entitled "Earth Song." Specifically, Hodges claims that after he copyrighted the song in August of 1990, he sent a cassette tape of his song to defendants for their consideration. Hodges contends that he later modified the song in September 1990, but was advised by the copyright office that he did not need to register the new version of the song. In 1995, Jackson released a song also entitled "Earth Song," which Hodges claimed infringed on his copyright. Hodges insists that the September 1990 version of his Earth Song and Jackson's Earth Song share the same title, the same theme, and the same signature music consisting of eight bars or four chords.
Defendants, Michael Jackson, MJJ Productions, Inc., Sony Music Entertainment, Inc., Warner/Chappell Music, Inc., Warner-Tamerlane Publishing Corp., and Warner Bros. Publications, U.S., Inc. (the "core defendants"), on the other hand, contend that they can establish that Jackson created and recorded "Earth Song" back in 1988, which is long before Hodges obtained his copyright. During the discovery phase of the trial, the core defendants advised Hodges that they had overwhelmingly persuasive evidence that Jackson had made recordings of Earth Song before the time that Hodges allegedly created his version. The core defendants were so confident in their evidence that they sent Hodges a draft of a motion for sanctions, as required under Rule 11, seeking $75,000.00 in sanctions unless Hodges agreed to dismiss his lawsuit.
Hodges contends that when he received the motion, he evaluated his chances of ultimately prevailing in the lawsuit in light of the numerous counsel representing the defendants and the potential costs associated with pursuing the case. Hodges contends that although he firmly believes he is correct in his position, he has decided to dismiss the lawsuit because he fears an adverse judgment could cause him to lose his business. The core defendants do not oppose Hodges' motion to dismiss his case, but contend that costs and attorney's fees incurred in defending the lawsuit should be taxed against Hodges. Defendant, KBL Cable Systems of the Southwest Inc. ("KBL") also filed a motion for attorneys, but does not oppose the motion to dismiss.
Hodges timely opposed the motions for attorneys fees and a hearing was held on the motions on December 17, 1997, This Report and Recommendation will address Hodges' second amended motion to grant plaintiffs voluntary dismissal (docket no. 76), KBL's motion for attorneys fees (docket no. 78), and the core defendants' request for attorney's fees (docket no. 77).
The core defendants and KBL appeared through their counsel of record and argued their motions. Hodges appeared both in person and through his counsel of record and responded to the motion. Defendant Southern Music, Co. appeared through its counsel at the hearing, but did not oppose Hodges' motion.
III. ISSUE
Whether the defendant in a copyright case is considered a prevailing party and is automatically entitled to attorney's fees under the Copyright Act, 17 U.S.C. § 505, if the defendant agrees to voluntarily dismiss his case without a determination on the merits?
IV. ARGUMENTS AND CONCLUSIONS OF LAW
The Copyright Act provides that a court may in its discretion award attorney's fees to a prevailing party as part of the costs:
In any civil action under this title, the court in its discretion may allow recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs.17 U.S.C. § 505. It is well established that to be considered a "prevailing party," the party must succeed "on a significant issue in the litigation that achieves some of the benefits the party sought in bringing the suit." Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). The Supreme Court rejected a "dual standard" in copyright cases that favored awards to plaintiffs over awards to prevailing defendants. Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). The Supreme Court also rejected the "British Rule" for the automatic recovery of attorney's fees and emphasized that the award should be left to the court's discretion. Id. The Court then set forth a nonexclusive list of factors to be considered in deciding whether to award attorney's fees, including the following: "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." Id; Creations Unlimited, Inc. v. McCain, 112 F.3d 814, 817 (5th Cir. 1997) (affirming denial of attorneys fees to defendant who prevailed on summary judgment motion).
Beginning with the first factor, frivolousness, the Court finds there is no evidence to suggest that the instant case was frivolous. Hodges had a copyrighted song with the same titled as Jackson's song. Hodges had a sincere belief that the song had a similar theme and similar music to Jackson's song. The thrust of the core defendants argument is that there was substantial evidence that Jackson had recorded his song before Hodges. However, it was not until defendants' counsel sent a letter to Hodges' counsel on July 25, 1997, that defendants first advised Hodges of their theory and evidence of prior creation.
Jackson also had a copyright on his version of Earth Song, however, the copyright registration reflected that the date of completion for the song was 1995. (Docket no. 79, Exhibit 2). Thus, Hodges had no way of knowing from the copyright registration that Jackson would later contend that he had recorded Earth Song in 1988.
The evidence reflects that although this lawsuit was filed in February 1997, no discovery took place until recently. The core defendants resisted Hodges' attempt to engage in formal discovery until a hearing was held on November 4, 1997. Following the hearing, the Court ordered the discovery in the case to be bifurcated between liability and damages and the parties were Ordered to participate in discovery on the issue of liability. Judging from the numerous letters between the parties' counsel, discovery was still delayed even following the hearing and Court Order. The core defendants offered Hodges informal discovery consisting of access to Jackson's alleged prior recordings of the song.
However, as revealed at the hearing, Hodges never actually engaged in this discovery because of a dispute concerning an appropriate protective order and the failure to agree on the logistics of the discovery. Defendants did, however, file a motion for summary judgment that contained some of their evidence, and Hodges was apparently allowed to listen to a tape of the Jackson's 1988 version of the song. But Hodges was not allowed to give the tape to an expert to determine when it was created. Following the stand off on the formal discovery issue, defendants served on Hodges a motion for sanctions requesting him to dismiss his lawsuit with prejudice under the threat of $75, 000.00 in sanctions.
Based on these facts, the Court finds there is no evidence that Hodges' lawsuit was frivolous or that he acted inappropriately or with malicious intent. Hodges' had a copyrighted song by the same name as Jackson's song. Hodges' copyright was obtained long before Jackson's. It was not until the lawsuit had been on file for many months that Jackson advanced his theory that his version of the song had been created first. When Hodges obtained this evidence and engaged in a small amount of informal discovery, he decided to dismiss his case with prejudice. Under the circumstance, Hodges acted reasonably. The Court, therefore, recommends that the lawsuit be dismissed with prejudice and all motions for attorneys fees and costs be DENIED.
V. RECOMMENDATION
The Court recommends that Hodges' second amended motion to grant plaintiffs voluntary dismissal (docket no. 76) be GRANTED, and KBL's motion for attorneys fees (docket no. 78), and the core defendants' request for attorney's fees (docket no. 77) be DENIED.
VI. INSTRUCTIONS FOR SERVICE AND NOTICE OF RIGHT TO OBJECT/APPEAL
The United States District Clerk shall serve a copy of this Memorandum and Recommendation on each and every party either (1) by certified mail, return receipt requested, or (2) by facsimile if authorization to do so is on file with the Clerk. According to Title 28 U.S.C. § 636(b)(1) and Rule 72(b), Fed.R.Civ.P., any party who desires to object to this report must serve and file written objections to the Memorandum and Recommendation within 10 days after being served with a copy unless this time period is modified by the district court. A party filing objections must specifically identify those findings, conclusions or recommendations to which objections are being made and the basis for such objections; the district court need not consider frivolous, conclusive or general objections. Such party shall file the objections with the clerk of the court, and serve the objections on all other parties and the magistrate judge. A party's failure to file written objections to the proposed findings, conclusions and recommendations contained in this report shall bar the party from a de novo determination by the district court. See Thomas v. Arn, 474 U.S. 140, 150; 106 S.Ct. 466, 472; 88 L.Ed.2d 435 (1985). Additionally, any failure to file written objections to the proposed findings, conclusions and recommendations contained in this Memorandum and Recommendation within 10 days after being served with a copy shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the district court. Douglass v. United Services Automobile Ass'n, 79 F.3d 1415, 1428 (5th Cir. 1996).