Opinion
19-CV-7112 (VSB) (KNF)
02-02-2021
SID AVERY AND ASSOCIATES, INC. dba MPTV IMAGES, Plaintiff, v. PARALLEL BAR INC. dba THE SUMMIT BAR, HAMID RASHIDZADA, and GREG SEIDER, Defendants.
REPORT AND RECOMMENDATION
KEVIN NATHANIEL FOX, UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE VERNON S. BRODERICK, UNITED STATES DISTRICT JUDGE
BACKGROUND
Sid Avery and Associates, Inc. (“SAAI”) doing business as MPTV Images commenced this action against Parallel Bar Inc., (“PBI”) Hamid Rashidzada and Greg Seider asserting violations of Section 501 of the Copyright Act based on an unauthorized display, on their website at www.thesummitbar.net, of SAAI's photograph entitled “Ocean's Eleven Cast” (“Work”) and registered with the Register of Copyrights in 1978 under the number Ju 14776. On March 13, 2020, the Clerk's Certificate of Default was entered against each defendant. See Docket Entry Nos. 28, 29 & 30. Your Honor granted the plaintiff's application for a judgment by default against the defendants and referred the matter to the undersigned “for an inquest on damages and attorneys' fees.” Docket Entry No. 31.
Before the Court is: (1) “Plaintiff's Motion for Damages”; (2) a declarations by Ron Avery (”Avery”), the president of SAAI, with Exhibit 1, “The Certificate of Registration, ” Exhibit 2, “Evidence of Form's use, ” and Exhibit 3, “the notices sent to Defendants”; and (3) a declaration by the plaintiff's counsel, Joel B. Rothman (“Rothman”), with Exhibit A, invoices to the plaintiff reflecting attorney's fees and costs incurred in this action. The plaintiff seeks “statutory damages of $87,500.00 for the infringed Work, or in the alternative, no less than $30,000.00 for the Work” and $4,714.75 in attorney's fees and costs. The defendants were served with the inquest submissions but did not oppose the plaintiff's request for damages and attorney's fees.
PLAINTIFF'S INQUEST SUBMISSIONS
The plaintiff argues that: (1) “actual damages are appropriate but insufficient for willful copyright infringement” due to the defendant's refusal to appear and participate in discovery; and (2) “statutory damages are appropriate for willful copyright infringement.” The plaintiff contends that the Work infringed “is a historically rare and exclusive iconic image of the original Ocean's Eleven (1960) film cast on set, ” and the fair market value for a commercial use license for the Work, comparable to the use by the defendants, is $3,500. The defendants' publication of the Work without attribution or other credit, harms severely the scarcity and the value of the Work. The plaintiff maintains that $17,500 in actual damages is warranted, “after considering a scarcity multiplier of 5 to the licensing fee of $3,500, ” making citation to “Leonard v. Stemtech Int'l, Inc., 834 F.3d 376, 394 (3d Cir. 2016) (affirming a jury verdict of $1.6 million where the sum included a three to five times the benchmark because of the scarcity factor).” Since the defendants refused to participate in discovery or defend this matter, the plaintiff is without information to identify how long the defendants used the Work for its commercial purposes, and the plaintiff's “actual damages may be a multiple of its annual license fee.” The plaintiff contends that $87,500 in statutory damages is warranted, “based on a five times willfulness multiplayer [sic] being applied to Avery's $17,500.00 damages for the photo.” Alternatively, no less than $30,000 in statutory damages is warranted for willful infringement of the Work, which “is consistent with a long-line of cases in this Circuit which award $30,000 where defendant has defaulted in a copyright infringement action.”
Avery states in his declaration that, in 1978, Sid Avery registered his 1960 photograph “Cast of ‘Ocean's Eleven, '” depicting the cast of the original film “Ocean's 11, ” with the United States Copyright Office under the number Ju 14776. Avery states that “[m]any of the individuals in the Work are considered iconic Hollywood actors and are now no longer living, ” and the Work “is scarce due to its iconic nature and subject matter.” SAAI, doing business as MPTV Images, owns the copyright in the Work. Avery states that, “[o]n a date after the Work was created, the Work was copied by Defendants without my permission, and Defendants used the Work on its website at www.thesummitbar.net” to promote the sale of their “goods and services to the public as a hand-crafted cocktail bar.” Avery states that “[t]he Fair Market Value of the Work, had the Defendants requested license to reproduce and display the Works” [sic] on the defendants' website “without attribution, is $3,500 per photograph for a rights managed license.” According to Avery, SSAI “would charge a comparable amount to a restaurant or similar commercial website to use the image for up to 3 years.” Avery asserts that “[t]he Work has lost significant value to its scarcity” as a result of the defendants' infringement.
Rothman states in his declaration that he is a founder and sole managing partner of his law firm Sriplaw and has been practicing law since 1991. Rothman is Board Certified in intellectual property law in Florida. His hourly rate is $475. Rothman's partner Jonah Grossbardt (“Grossbardt”) operates the firm's Los Angeles office and has been practicing law for approximately ten years. Grossbardt's hourly rate is $425. Rothman's partner Joseph Dunne (“Dunne”) operates the firm's New York office and has been practicing law for approximately 10 years. Dunne's hourly rate is $450. Meir Teitelbaum (“Teitelbaum”) is an associate who has been practicing law approximately six months and his hourly rate is $300. Summer associate Emily Dabney (“Dabney”) will be a 3L student at Emory Law School in the fall of 2020, and her hourly rate is $200. Paralegals Jamie James (“James”) and Michael Mulvaney (“Mulvaney”) each charges an hourly rate of $200. SAAI seeks $4,045 in attorney's fees and $669.75 in costs, consisting of the $400 filing fee and $269.75 for service of process.
LEGAL STANDARD
“Even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true.” Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). Establishing the appropriate amount of damages involves two steps: (1) “determining the proper rule for calculating damages”; and (2) “assessing plaintiff's evidence supporting the damages to be determined under this rule.” Id.
“Except as otherwise provided by this title, an infringer of copyright is liable for either- (1) the copyright owner's actual damages and any additional profits of the infringer, as provided by subsection (b); or (2) statutory damages, as provided by subsection (c).” 17 U.S.C. § 504(a).
Actual Damages and Profits.-The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.17 U.S.C. § 504(b).
“Although the Act itself does not define what constitutes actual damages, the primary measure of recovery is the extent to which the market value of the copyrighted work at the time of the infringement has been injured or destroyed by the infringement.” Fitzgerald Pub. Co. v. Baylor Pub. Co., 807 F.2d 1110, 1118 (2d Cir. 1986).
Statutory Damages.-(1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work. (2) In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.17 U.S.C. § 504(c).
In any civil action under this title, the court in its discretion may allow the 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.
When exercising their discretion to determine the reasonableness of the attorney's fees sought in an action based on a federal question, courts in this Circuit use the “presumptively reasonable fee” standard. Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008). The presumptively reasonable fee, also known as the lodestar, is “the product of a reasonable hourly rate and the reasonable number of hours required by the case.” Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). In calculating the presumptively reasonable fee, a district court must consider, among others, the twelve factors articulated in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Circ. 1974). See Arbor Hill Concerned Citizens Neighborhood Ass'n, 522 F.3d at 190. Those factors are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.Id. at 186-87 n.3.
A reasonable hourly rate is “the rate prevailing in the [relevant] community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Farbotko v. Clinton Cty. of N.Y., 433 F.3d 204, 208 (2d Cir. 2005) (quoting Blum v. Stenson, 465 U.S. 886, 896 n.11, 104 S.Ct. 1541, 1547 n.11 (1984)). A fee application that is not supported by evidence of “contemporaneous time records indicating, for each attorney, the date, the hours expended, and the nature of the work done” should normally be denied. New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir. 1983).
APPLICATION OF LEGAL STANDARD
Actual Damages
The plaintiff argues that the actual damages are appropriate but insufficient and, although the plaintiff appears to seek statutory damages, it bases the calculation of its statutory damages on the actual damages it claims not to seek. Thus, the Court will address the plaintiff's argument that the actual damages are appropriate.
In support of its request for damages, the plaintiff submitted Avery's declaration in which he states that: (1) the Work was registered with the Register of Copyright in 1978; (2) “[o]n a date after the Work was created, the Work was copied by Defendants without my permission, and Defendants used the Work on its [sic] website at www.thesummitbar.net”; and (3) “[t]he Fair Market Value of the Work, had the Defendants requested license to reproduce and display the Works”[sic] on the defendants' website “without attribution, is $3,500 per photograph for a rights managed license.” Exhibit 2, “Evidence of Form's use” to Avery's declaration appears to be a one-page “screenshot” of the defendants' website, identical to that attached to the plaintiff's October 19, 2018 letter to the defendants contained in Exhibit 3 to Avery's declaration. Neither Avery nor the plaintiff's October 19, 2018 letter to the defendants identifies the date on which the one-page “screenshot” of the defendants' website was made. Given that the Work was registered in 1978 and the plaintiff sent a letter to the defendants on October 19, 2018, the unidentified “date after the Work was created” on which the defendants copied the Work without authorization, including the date on which the plaintiff made a “screenshot” of the defendants' website displaying the Work, appears to fall between 1978 and October 19, 2018. Without any evidence of the date on which the plaintiff made the “screenshot, ” which Avery states is the evidence of the defendants' unauthorized use of the Work, or any other explanation by Avery, Avery's statement that the fair market value of the Work is $3,500, “had Defendants requested license to preproduce and display the Works” [sic] on their website without attribution, is baseless. As “the primary measure of recovery is the extent to which the market value of the copyrighted work at the time of the infringement has been injured or destroyed by the infringement, ” Fitzgerald Pub. Co., 807 F.2d at 1118 (emphasis added), and the time of the defendants' infringement, including the date on which the plaintiff made the “screenshot, ” is nowhere identified by the plaintiff, Avery's assertion that $3,500 is the fair market value is speculative, self-serving and uncorroborated by any evidence. Although “Section 504(b) permits a copyright owner to recover actual damages, in appropriate circumstances, for the fair market value of a license covering the defendant's infringing use, ” On Davis v. The Gap, Inc., 246 F.3d 152, 172 (2d Cir. 2001), as amended (May 15, 2001), in the circumstance of this case, the plaintiff failed to present sufficient evidence to support its argument that the actual damages are appropriate based on the fair market value of the copyrighted Work at the time of the infringement. No other basis for determining the actual damages is propounded by the plaintiff. Thus, the plaintiff failed to show that the actual damages are appropriate.
Statutory Damages
The plaintiff seeks $87,500 in statutory damages, “based on a five times willfulness multiplayer [sic] being applied to Avery's $17,500.00 damages for the photo, ” asserting that “[t]he requested amount is consistent with a long-line of cases in this Circuit which award $30,000 where defendant has defaulted in a copyright infringement action.” As discussed above, the plaintiff failed to establish the amount of actual damages or that they are appropriate in this circumstance. Thus; (a) using the unsupported amount of $3,500 claimed to be the fair market value of the Work as the basis for the plaintiff's actual damages; (b) multiplying five times the unsupported amount of $3,500 to arrive at $17,500, the total amount claimed to be the actual damages; and (c) multiplying five times $17,500, the amount claimed to be the actual damages in the circumstance of this case, is baseless, improper and insufficient to establish that $87,500 in statutory damages is warranted.
The plaintiff did not explain how the requested amount of $87,500 is consistent with $30,000, the amount the plaintiff asserts that courts routinely award in statutory damages, given the significant difference of $57,500 between the two amounts. Nor did the plaintiff explain why $57,500, in addition to $30,000 that it asserts courts award routinely, is justified in this case. Increasing statutory damages for willful infringement over the maximum statutory amount of $30,000 to not more than $150,000 is discretionary, see 17 U.S.C. § 504(c), and the Court cannot exercise its discretion arbitrarily but based on evidence showing that factual circumstances in this case warrant the amount requested. Other than Avery's' unsupported assertion that $3,500 is the fair market value of the Work and his self-serving conclusory statement that the Work “is a historically rare and exclusive iconic image of the original Ocean's Eleven (1960) film cast on set, ” no evidence is submitted that supports the plaintiff's requested amount of $85,700 or justifies any increase over the statutory maximum of $30,000.
Moreover, the plaintiff failed to show what amount, if any, beyond the statutory minimum is warranted for a willful infringement in this case. Avery asserts that the Work “is a historically rare and exclusive iconic image of the original Ocean's Eleven (1960) film cast on set, ” without providing any details about “the original Ocean's Eleven (1960) film” or its cast, or explaining what makes the image “historically rare” and “iconic, ” other than Avery saying so. Avery asserts that “[m]any of the individuals in the Work are considered iconic Hollywood actors and are now no longer living, ” without identifying any individuals or explaining who and why the individuals “no longer living” are considered “iconic” or explaining the meaning of the word “iconic” and its relevance to the determination of statutory damages in this case. In a similar conclusory fashion, Avery asserts that the Work “is scarce due to its iconic nature and subject matter, ” appearing to suggest that unidentified “iconic Hollywood actors” depicted in the Work make the Work “iconic.” However, using the word “iconic” in a circular manner to described unidentified individuals depicted in the Work and the Work, without more, is not sufficient to show that statutory damages beyond the minimum statutory amount are warranted. The court finds that $750 in statutory damages is warranted.
Attorney's Fees and Costs
Avery states in his declaration that Dunne is a partner who operates the firm's New York office, but Exhibit A to Avery's declaration, “Invoice 32759, ” lists Dunne's role as an “Associate.” The Court assumes that identification of Dunne in Exhibit A as an associate rather than a partner is an error, since Dunne's hourly rate is closer to the hourly rates for the firm's other partners, Rothman and Grossbardt, rather than to the hourly rates of the firm's associates, Teitelbaum and Dabney.
Upon review of counsel's time records, the Court finds that the following hourly rates requested, and the hours expended in this litigation are reasonable: (1) $475 for Rothman who expended 0.30 hours of work; (2) $450 for Dunne who expended 3 hours of work; (3) $425 for Grossbardt who expended 0.10 hours of work; (4) $300 for Teitelbaum who expended 0.10 hours of work; (5) $200 for Dabney who expended 6.60 hours of work; (6) $200 for James who expended 4.10 hours of work; and (7) $200 for Mulvaney who expended 1.70 of work. Accordingly, $4,045 is a reasonable amount of attorney's fees incurred in this action. The Court also finds that $669.75 is the reasonable amount of costs in this action. Thus, an award of $4,714.75 in reasonable attorney's fees and costs is warranted.
RECOMMENDATION
For the foregoing reasons, I recommend that the Plaintiff's Motion for Damages, ” Docket Entry No. 33, be granted and the following damages be awarded to the plaintiff: (1) $750 in statutory damages; and (2) $4,714.75 in reasonable attorney's fees and costs.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Any requests for an extension of time for filing objections must be directed to Judge Broderick. Failure to file objections within fourteen (14) days will result in a waiver of objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985); Cephas v. Nash, 328 F.3d 98, 107 (2d Cir. 2003).