Shloss v. Sweeney et al

Filing 88

Declaration of Julie A. Ahrens in Support of 87 MOTION Judicial Clarification of Bases for Prior Order Awarding Attorneys' Fees filed byCarol Loeb Shloss. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C)(Related document(s) 87 ) (Ahrens, Julie) (Filed on 10/2/2007)

Shloss v. Sweeney et al

Doc. 88 Att. 3

Case 5:06-cv-03718-JW

Document 88-4

Filed 10/02/2007

Page 1 of 20

EXHIBIT C

Dockets.Justia.com

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 12of 19 Filed 10/02/2007 Page of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Lawrence Lessig Anthony T. Falzone (SBN 190845) David S. Olson (SBN 231675) STANFORD LAW SCHOOL CENTER FOR INTERNET AND SOCIETY 559 Nathan Abbott Way Stanford, California 94305-8610 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] Mark A. Lemley (SBN 155830) Matthew M. Werdegar (SBN 200470) Dorothy McLaughlin (SBN 229453) KEKER & VAN NEST LLP 710 Sansome Street San Francisco, California 94111 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] Bernard A. Burk (SBN 118083) Robert Spoo (pro hac vice) HOWARD RICE NEMEROVSKI CANADY FALK & RABKIN, P.C. Three Embarcadero Center, 7th Floor San Francisco, California 94111-4024 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

CAROL LOEB SHLOSS, Plaintiff, v.

CASE NO. CV 06-3718 (JW) (HRL) REPLY MEMORANDUM IN SUPPORT OF PLAINTIFF'S MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS Date: Time: Judge: June 4, 2007 9:00 a.m. Hon. James Ware

SEÁN SWEENEY, in his capacity as trustee of the Estate of James Joyce, and THE ESTATE OF JAMES JOYCE, Defendants.

REPLY IN SUPPORT OF MOTION FOR ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 23of 19 Filed 10/02/2007 Page of 20

TABLE OF CONTENTS I. II. INTRODUCTION .......................................................................................................... 1 ARGUMENT .................................................................................................................2 A. B. Shloss Is The Prevailing Party ............................................................................ 2 An Award Of Attorneys' Fees To Shloss Would Further The Purpose Of The Copyright Act ......................................................................................... 5 1. 2. 3. 4. 5. C. Shloss's Success Favors Awarding Attorney's Fees .............................. 5 Defendants Have Taken Unreasonable And Frivolous Positions From The Beginning And Continue To Do So Now .............................. 6 Defendants' Motivation Was Improper .................................................. 8 The Need For Deterrence And Compensation Favors An Award Of Fees To Shloss ................................................................................... 9 Awarding Fees To Shloss Will Further The Purpose Of The Copyright Act........................................................................................10

Shloss's Harmless Error In Failing To Meet And Confer Until Just After This Motion Was Filed Cannot Justify The Denial Of Shloss's Motion for Attorney's Fees ................................................................ 11 Defendants' Other Reasons For Denying Fees Have No Merit........................13 There Is No Ground To Vacate The Dismissal Of This Action ....................... 13

D. E. III.

CONCLUSION.............................................................................................................15

i

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 34of 19 Filed 10/02/2007 Page of 20

TABLE OF AUTHORITIES FEDERAL CASES Barrios v. Cal. Interscholastic Federation, 277 F.3d 1128 (9th Cir. 2002) ........................3 Carbonell v. I.N.S., 429 F.3d 894 (9th Cir. 2005) .......................................................2, 3, 4 Cashner v. Freedom Stores, Inc., 98 F.3d 572 (10th Cir. 1996) .......................................14 Federal Sav. & Loan Insurance Corp. v. Ferrante, 364 F.3d 1037 (9th Cir. 2004)..............................................................................................................13 Feist Public, Inc. v. Rural Telegraph Serv. Co., 499 U.S. 340 (1991) ..............................10 Fischer v. SJB-P.D. Inc., 214 F.3d 1115 (9th Cir.2000) .....................................................4 Florentine Art Studio, Inc. v. Vedet K. Corp., 891 F. Supp. 532 (C.D. Cal. 1995).............................................................................................................4 Gator.com Corp. v. L.L.Bean, Inc., 398 F.3d 1125 (9th Cir. 2005) ..................................13 Latshaw v. Trainer Wortham & Co., Inc., 452 F.3d 1097 (9th Cir. 2006) ........................14 National Basketball Association v. SDC Basketball Club, Inc., 815 F.2d 562 (9th Cir. 1987)................................................................................................................4 Parents of Student W v. Puyallup Sch. District, 31 F.3d 1489 (9th Cir. 1994)............................................................................................................5, 6 Richard S. v. Department of Devel. Serv. of St. of Cal., 317 F.3d 1080 (9th Cir. 2003)............................................................................................................2, 4 Stewart v. Prof'l Computer Ctrs., Inc., 148 F.3d 937 (8th Cir. 1998) ...............................14 Tex. State Teachers Association v. Garland Independent Sch. District, 489 U.S. 782 (1989)...................................................................................................5, 6 Zucker v. Occidental Petroleum Corp., 192 F.3d 1323 (9th Cir. 1999) ............................13 STATE CASES Altamont Summit Apartments LLC v. Wolff Properties LLC, 2002 WL 31971832 (D. Or.).........................................................................................................................12

ii

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 45of 19 Filed 10/02/2007 Page of 20

Brant v. California Dairies, Inc., 4 Cal. 2d 128 (1935).....................................................14 Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc., 109 Cal. App. 4th 944 (2003) ......................................................14 Jacobsen v. Katzer, 2006 WL 3000473 (N.D. Cal) ...........................................................12 Marin Storage & Trucking, Inc. v. Benco Contracting & Engineering, Inc., Cal. App. 4th 1042 (2001)...................................................................................................14 Roddenberry v. Roddenberry, 44 Cal. App. 4th 634 (1996)..............................................14 Winet v. Price, 4 Cal. App. 4th 1159 (1992)......................................................................14 FEDERAL STATUTES 17 U.S.C. § 505................................................................................................................4, 5 28 U.S.C. § 1927..................................................................................................................7 RULES Fed. R. Civ. Proc. 61..........................................................................................................12 Fed. R. Civ. Proc. 60(b)(6) ................................................................................................13 Rule 54-6(a) ....................................................................................................................11 Rule 54-6(b) ....................................................................................................................12 Rule 60(b) .....................................................................................................................14

Rule 60(b)(6) ....................................................................................................................14

iii

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 56of 19 Filed 10/02/2007 Page of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

I.

INTRODUCTION The point of the Declaratory Judgment Act is to allow litigants to get out from

under a threat of suit and absolve themselves of the liability that might result. Here, Professor Carol Shloss ("Shloss") has done just that. Faced with a clear threat of an infringement suit should she publish the Electronic Supplement at issue in this case, she sued the Estate of James Joyce and its Trustees (collectively, "Defendants" or the "Estate") to establish her right to publish the Supplement on the Internet free of that threat and any resulting liability. Indeed, she sought no damages, and the only injunctive relief Shloss sought was to enjoin defendants from bringing the infringement suit she feared. Pursuant to the Settlement Agreement made enforceable by this Court and incorporated into its dismissal order, Defendants are prohibited from suing Shloss for the publication of the Supplement on the Internet or in print. In short, Defendants gave Shloss by Court-endorsed contract the very rights she sought by her Complaint. Defendants' capitulation makes Shloss eligible for attorneys' fees as the prevailing party under the controlling law. For years, Defendants proceeded as if Shloss's fair use rights did not exist, calling them "wishful thinking" and a "joke," and threatening suit against both Shloss and her publisher. When Shloss finally stood up to those threats, Defendants filed a thick stack of paper arguing that there was really no dispute at all. When the Court rejected that contention and called upon Defendants to defend the position they had staked out, they backed down rather than challenge Shloss's rights. The central issue before the Court is whether an award of fees to Shloss will promote the purposes of the Copyright Act. Fair use is a critical component of the Copyright Act, and serves its most central purpose--to promote original works of authorship. But it is often difficult and expensive to protect fair use rights, especially where, as here, the copyright holders have superior resources and use the mere threat of a costly and protracted dispute as a cudgel to extend their rights well beyond their proper metes and bounds. In this case, Defendants acted for the express purpose of chilling free scholarly inquiry into and discussion about the literary and historical material entrusted to their care--a purpose deeply inimical to the statutory and public policies of free access and fair use that Professor Shloss vindicated here. A
W03 402600523/1382189/v1

1

MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 67of 19 Filed 10/02/2007 Page of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

fee award to a successful proponent of fair use rights not only makes that vindication more attainable, it reminds copyright holders they will be held accountable for this kind of overreaching. A fee award to Shloss would further the purposes of the Copyright in both of these respects, and is therefore particularly appropriate here. II. ARGUMENT A. Shloss Is The Prevailing Party There should be no dispute that Shloss is the "prevailing party" in this action. The Estate concedes the test is whether the litigation resulted in a "material alteration of the legal relationship of the parties" and the resolution of it carries with it a sufficient "judicial imprimatur." E.g., Carbonell v. I.N.S., 429 F.3d 894, 898-901 (9th Cir. 2005); see Opp. at 9. Shloss passes both prongs of that test with flying colors. The only injunctive relief Shloss sought here was an injunction barring Defendants from suing her for copyright infringement for publication of the Electronic Supplement. See Amended Complaint, Prayer ¶ 7 (seeking injunction barring defendants from "assert[ing] copyrights against Shloss regarding the materials [in] the Electronic Supplement"). The Settlement Agreement bars the Estate from doing exactly that. Settlement Agreement ¶ 2(a). Accordingly, the Estate can no longer bring the infringement suit that Shloss feared and that was the sole focus of the injunctive relief Shloss sought. That Agreement was incorporated into the Court's order of dismissal, which is itself a sufficient "judicial imprimatur" to make Shloss the "prevailing party" here. E.g., Carbonell, 429 F.3d at 901; Memorandum of Points and Authorities in Support of Motion for Award of Attorneys' Fees ("Fee Motion") at 11-12. Unable to dispute this, the Estate suggests Shloss did not prevail because she "obtained no relief on the merits of any of the claims [she] asserted." Opp. at 9-10. But whether the Court reached the merits of Shloss's underlying defenses is beside the point, and that fact could not be clearer from the controlling law. In Carbonell, the Ninth Circuit expressly and emphatically rejected the notion that a party must obtain a ruling on the merits of her claim to be a "prevailing party" and explained that requirement is contrary to established Ninth Circuit law. See Carbonell, 429 F.3d at 898-900 (citing Richard S. v. Dept. of Devel. Serv. of St. of Cal., 317
W03 402600523/1382189/v1

2

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 78of 19 Filed 10/02/2007 Page of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

F.3d 1080 (9th Cir. 2003) and Barrios v. Cal. Interscholastic Fed'n, 277 F.3d 1128, 1134 (9th Cir. 2002)). Indeed, the plaintiff in Carbonell was held to be a prevailing party despite the fact the Court did not reach the merits of plaintiff's "underlying ineffective assistance [of counsel] claim." Carbonell, 429 F.3d at 900. The Estate's attempt to impose a requirement the Ninth Circuit has so clearly rejected is simply frivolous. The Estate's assertion that it should be considered the "prevailing party" here because Shloss dismissed her claims is equally silly. See Opp. at 7. Among other things, it ignores the reason Shloss dismissed this action and the substance of what happened here. The only reason Shloss dismissed this action is because the Estate capitulated in full. It gave up the right to do the only thing Shloss sought to enjoin it from doing--suing her for copyright infringement based on the publication of the Electronic Supplement. Moreover, Shloss did not dismiss any affirmative "claims." She pled no affirmative claims for relief, only defenses to infringement. Shloss dismissed her defenses to infringement only because they were no longer necessary in light of the fact the Estate forever gave up its right to assert infringement claims against her. The fact Shloss dismissed defenses to claims the Estate was foreclosed from asserting does not make the Estate the prevailing party, it merely highlights the fact the Estate capitulated in full. The cases the Estate cites on this issue (see Opp. at 7) do not suggest that a declaratory relief defendant's full capitulation makes it a prevailing party. Indeed, none of these cases involve any declaratory relief claims at all. Remaining in denial of what really happened here, Defendants assert that they have "not given up any enforcement rights as to the copyrights" at issue and that they "have not modified their conduct in any manner." Opp. at 11-12 (emphasis added). That is simply false. Defendants expressly and unambiguously gave up "enforcement rights" here. They promised not to enforce their copyrights against Shloss in connection with the publication of the Electronic Supplement. See Settlement Agreement ¶ 2(a). Defendants' obligation to refrain from doing something they would otherwise have the legal right to do is more than sufficient to establish the "material alteration" of the rights of the parties sufficient to confer prevailing party status. Again, this is clear in the controlling law. Carbonell explained the "material alteration" test was
W03 402600523/1382189/v1

3

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 89of 19 Filed 10/02/2007 Page of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

satisfied because the INS agreed not to deport Carbonell and therefore "required [defendants] to do something directly benefiting the plaintiff[] that they otherwise would not have had to do." Carbonell, 429 F.3d at 900; see also Richard S., 317 F.3d at 1087; Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1118 (9th Cir.2000) ("[T]he legal relationship is altered because the plaintiff can force the defendant to do something he otherwise would not have to do.")). Straining again to ignore the substance of what happened here, Defendants go on to suggest that they actually forced Shloss "to modify her behavior by foregoing her claims for a declaratory judgment" and are therefore entitled to fees under Florentine Art Studio, Inc. v. Vedet K. Corp., 891 F.Supp. 532, 541 (C.D. Cal. 1995). Opp. at 12. But the Estate again confuses legal claims with actual relief. All of the "claims" Shloss alleged were defenses to liability for publishing the Electronic Supplement, which liability she is now immune from courtesy of the Settlement Agreement. She only forewent those defenses because she obtained the actual relief--immunity from liability--those defenses were intended to obtain. Having obtained that relief, she had no need for legal defenses and gave nothing up by "foregoing" them. Florentine does not in any way suggest the Estate is the prevailing party because Shloss forewent defenses she no longer needed. That case simply awarded fees to a defendant who successfully defended against seven of nine infringement claims. Florentine, 891 F.Supp. at 541-42. If anything, Florentine reinforces the fact that Shloss is entitled to fees, because she too succeeded in defending herself against infringement liability. Finally, Defendants suggest their agreement not to sue Shloss for infringement provides no benefit to her because "Defendants have not sued Shloss." Opp. at 13. Defendants apparently forget the point of declaratory relief, which is to allow a litigant to determine her liability before a prospective plaintiff files suit against her. See, e.g., Nat'l Basketball Ass'n v. SDC Basketball Club, Inc., 815 F.2d 562, 566 n. 2 (9th Cir. 1987) ("all declaratory judgments . . . are premised on the understanding that the prospective plaintiff has not yet filed suit and the prospective defendant wishes to determine his or her liability"). There can be no dispute that the legal relationship of the parties has been altered in a material and critical way. Shloss is the "prevailing party" and is therefore eligible for fees under the Copyright Act. 17 U.S.C. § 505.
W03 402600523/1382189/v1

4

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Filed 10/02/2007

Page 9 ofof 20 Page 10 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

B.

An Award Of Attorney's Fees To Shloss Would Further the Purpose Of The Copyright Act Shloss's opening memo demonstrated that an award of attorney's fees to her

would further the purposes of the Copyright Act. See Fee Motion at 12-20. The Estate does not acknowledge, much less come to grips with, the very good reasons for awarding fees here 1. Shloss's Success Favors Awarding Attorney's Fees

Shloss's success here was complete because her only claim for actual relief was an injunction barring the infringement suit Defendants are prohibited from bringing pursuant to the Settlement Agreement. See Fee Motion at 14. Ignoring this, the Estate contends that the "results Shloss obtained [through] the Settlement Agreement were . . . de minimis, and at least equivalent to her situation had the suit never been filed." Opp. at 13 (emphasis added). Indeed, the Defendants assert that Shloss "received none of the relief she sought." Id. at 14 (emphasis added). This is nonsense. Again, the only actual relief Shloss sought was to enjoin Defendants from asserting its copyrights against her should she publish the Electronic Supplement. (P. 2, above.) She got exactly that. The Settlement Agreement gives Shloss precisely that protection and more because it also gives her the right to publish her Electronic Supplement in printed form, which she did not ask for in her complaint. The suggestion that she is no better off than she was before filing suit is demonstrably false. Prior to bringing suit, Shloss could not publish the Electronic Supplement without risking suit and liability for copyright infringement. Under the Settlement Agreement, Shloss has the right to publish the Electronic Supplement free from that very threat of suit and infringement liability. None of the cases Defendants cite suggest this full and complete relief was de minimis. Tex. State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782 (1989), held the relief plaintiffs obtained in that case was more than de minimis precisely because it limited the school district's right to restrict teacher communication concerning union activities. See id. at 792. Parents of Student W v. Puyallup Sch. Dist., 31 F.3d 1489 (9th Cir. 1994), held that plaintiff did not prevail because the administrative officer "reject[ed] all of plaintiffs' demands
W03 402600523/1382189/v1

5

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 10 of 19 Filed 10/02/2007 Page 11 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

for relief." Id. at 1498. In any event, both of these cases explain that it is the "material alteration of the legal relationship of the parties" that matters for purposes of determining who prevailed. See Tex. State Teachers, 489 U.S. at 792; Parents of Student W, 31 F.3d at 1498. Here, that alteration is undeniable. (Pp. 2-4, above.) 2. Defendants Have Taken Unreasonable And Frivolous Positions From The Beginning And Continue To Do So Now

Fees are also warranted here because Defendants consistently took unreasonable and frivolous positions before and during this lawsuit. See Fee Motion at 14-16. From the beginning, Defendants have dismissed fair use as "wishful thinking" and a "joke" and have purported to deny Shloss the right to use any quotation from any work they control, no matter how de minimis, scholarly, or transformative. See id. Once Shloss sued to vindicate her rights, Defendants tried to avoid the suit they provoked by simply ignoring the threats they made, and by pretending that a covenant not to sue as to part of the Electronic Supplement somehow mooted the controversy as to the entire Supplement. See id. Defendants either do not acknowledge, or do not attempt to defend these positions, or explain why they make any sense. Indeed, they still tout the supposedly "absolute right[s]" of copyright holders. See Opp. at 18. While Defendants generally deny making any unreasonable or frivolous arguments (see Opp. at 15-16), they continue to take unreasonable positions and assert frivolous arguments by, among other things, ignoring the Ninth Circuit law that controls the "prevailing party" determination. (Pp. 2-4, above.) In addition, they continue to make inaccurate factual assertions. Defendants suggest, for instance, that they did not know the extent of copyrighted materials to be included in the Electronic Supplement until Shloss filed her opposition to their motion to dismiss in December 2006. See Opp. at 16-17. This is simply untrue. Defendants had access to the revised Electronic Supplement since August of 2006 and were advised in September of 2006 and on more than one occasion that no more copyrighted quotations were going to be added to the Supplement. See Olson Dec. ¶¶ 4-6 and Ex. A. There is simply no basis to suggest that the Supplement was in any way a moving target after September 2006.

W03 402600523/1382189/v1

6

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 11 of 19 Filed 10/02/2007 Page 12 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendants likewise suggest that Shloss amended her complaint after the Estate covenanted not to sue Shloss for the original version of the Electronic Supplement, and announce that they "could not have covenanted . . . after the filing of the Amended Complaint." Opp. at 3. The Defendants made this same assertion at the hearing on its motion to dismiss. See Falzone Dec. Ex. E at 14 (transcript of January 31, 2007 hearing). It was false then, and remains false now. As Shloss's counsel explained at that hearing, Shloss's Amended Complaint was filed on October 25, 2006. See Falzone Dec. ¶¶ 2-4, Ex. E at 27-28. Defendants did not provide the covenant not to sue until they moved to dismiss the Amended Complaint on November 17, 2006. See id. While the declaration that contains the purported covenant is conveniently dated October 24, 1996, it was first provided to Shloss's counsel with the motion to dismiss it supports on November 17. See id. Other positions Defendants take are simply inconsistent. They claim, for example, that Shloss did not achieve any significant relief, because the copyrighted quotations in her Electronic Supplement are de minimis. See Opp. at 2, 11.1 Yet they also claim that they would have defeated Shloss's claimed right to use the material, including her claims of de minimis and fair use. See Opp. at 17. Defendants have likewise asserted frivolous threats against Shloss's counsel. Days before their opposition was due Defendants' counsel sent a letter to counsel for Shloss threatening to file a motion for personal sanctions against him under 28 U.S.C. § 1927 if Shloss did not withdraw her fee motion. See Supp. Olson Dec. ¶ 14, Ex. H (May 7, 2007 letter from Anna Raimer to David Olson). Shloss's counsel responded by explaining that Defendants' complaints were groundless and that they had shown no basis for sanctions. See Falzone Dec. ¶ 6, Ex. B (May 10, 2007 letter from Anthony Falzone to Anna Raimer). No sanctions motion was filed.

The printout of the Electronic Supplement runs exactly 158 pages. See Supplemental Declaration of David S. Olson in Support of Motion for Award of Attorney's Fees ("Supp. Olson Dec.") ¶ 16.
W03 402600523/1382189/v1

1

7

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 12 of 19 Filed 10/02/2007 Page 13 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

3.

Defendants' Motivation Was Improper

Indeed, Defendants have a long history of staking out unreasonable positions regarding the extent of their copyrights, and threatening suit to cow others into submitting to their claims. Defendants spent years calling Shloss's fair use defense "wishful thinking" and a "bad joke," leveling personal, ad hominem attacks, and threatening lawsuits which were "never lost." Even if the Court were to credit Defendants' continuing assertion that they had no intention of filing suit against Shloss (see Opp. at 1-2), this would simply raise another question: Why did they make pointed and repeated threats against Shloss if they had no intention of pursuing those threats? Defendants sought to menace Shloss with the costs, distractions and embarrassments of litigation as a means of deterring scholarly inquiry they could not control-- conduct repugnant to the basic values of free access and free expression that animate the Copyright Act in general, and its fair use provision in particular. Even now, Defendants admit they use their copyrights to protect the supposed privacy of the deceased. See Opp. at 18 n. 7. In doing so they simply ignore the case law that demonstrates protection of privacy is not a proper purpose of copyright law. Instead, Defendants merely argue, without support, that there is nothing wrong with protecting privacy via (unreasonable) threats of copyright suit. Opp. Br. at 19. To this day, Defendants continue to make it clear that their campaign against Shloss was based not on any rationale interpretation of copyright law, but on ill-will. They continue to make ad hominem attacks against Shloss, asserting at various times that Shloss's book is not scholarship (see MTD at 4), that her lawsuit was not in good faith but was instead a "pretext" (see MTD at 3) and that she is "not worth" their "financial or mental expense." Opp. at 2. Despite the clear nature of the injunctive relief Shloss requested, Defendants continue to assert that Shloss's motive in filing suit was not to gain the right to publish her Electronic Supplement, Opp. Br. at 19, and seem to premise such suggestions on bizarre and irrelevant assertions. See Opp. at 18 n.8 (reciting correspondence in which Stephen Joyce asserts that because Shloss did not recall exactly where in France she had tea with Joyce and his wife years

W03 402600523/1382189/v1

8

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 13 of 19 Filed 10/02/2007 Page 14 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

earlier, "any book Ms. Shloss writes will be sprinkled wit [sic] this type as well as other mistakes"). 4. The Need For Deterrence And Compensation Favors An Award Of Fees To Shloss

Defendants have tried to cut off inquiry into literary and historically significant events and sought to vindicate privacy rights through the assertion of copyrights all through improper threats of copyright enforcement. See Fee Motion at 18-19. And Shloss is not the only author that has suffered this misconduct. See Olson Dec. Exs. A, B, J; Shloss's Memorandum of Points and Authorities in Opposition to Defendants' Motion to Dismiss ("MTD Opp.") at 4-5, 89; Pierce Dec. ¶¶ 3-8 [Docket No. 36]. Defendants simply ignore this. Instead, they assert that they have not used Joyce copyrights to prevent Shloss from using factual works, or ever asserted that Shloss could not use third-party letters that were dictated by Joyce. Opp. Br. at 19-20. This misses the very serious point: Defendants have a habit of launching baseless threats and accusations aimed at deterring scholarship and free speech. It is also inaccurate. The fact is Defendants attempted to bar Shloss from using literally anything Joyce or anyone else in his family ever "drew, wrote, or painted" -- factual or not, regardless of whether they were dictated to anyone. See Mtd Opp. at 4-7. Defendants do not dispute they used threats of copyright enforcement to force Brenda Maddox cut an epilogue about Lucia from her book, promise not to criticize them, and demanded this promise bind not only Ms. Maddox but her heirs for all time as well. See Fee Motion at 4; compare MTD Opp. at 4-5 (asserting that misconduct) with Defendants' Reply Memorandum in Support of Motion to Dismiss at 3-5 (disputing other alleged misconduct, but ignoring the Brenda Maddox issue). Nor do Defendants deny they sought to use their control over copyrights in works in the special collections department at the University of Buffalo to make the department prohibit access and assistance to Shloss in relation to her book. See id. Defendants will repeat this misconduct if not deterred. Assessing fees here would be a good start toward that deterrence.

W03 402600523/1382189/v1

9

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 14 of 19 Filed 10/02/2007 Page 15 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

5.

Awarding Fees To Shloss Will Further The Purpose Of The Copyright Act

The purpose of the Copyright Act is not simply to reward copyright holders, but to "promote the Progress of Science and the useful Arts." Fee Motion at 19 (quoting Feist Pub., Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 349-350 (1991). Accordingly, "a successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of a copyright." Id. (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 527 (1994)). Here, there can be no dispute that Shloss's work is precisely the type of work the Copyright Act was designed to foster. Indeed, the Court has already found that to be so. See Fee Motion at 19. A fee award here will not only encourage other Joyce scholars to stand up to Defendants and vindicate the right to create other works of scholarship, it will encourage scholars everywhere to litigate if necessary to determine their fair use rights to quote other others in their own scholarly works. Even now Defendants would like to be able to threaten without cost to itself. It worries that the Supreme Court made declaratory judgment actions easier in Medimmune, and that an award of fees here would encourage other scholars to litigate when the Defendants threaten them with copyright infringement. Precisely. Fees are needed here to deter Defendants from their specific conduct against Shloss, and also to encourage other scholars to determine their fair use rights upon facing similar threats. Defendants suggest the assessment of fees is not necessary here because numerous Joyce-related works have been published in recent years. See Opp. at 20. But the problem is in the number not published because of Defendants' attempts at censorship. The fact Defendants have chosen to let certain works go unchallenged does not change the fact they have raised improper challenges to Shloss's work, and others they dislike. Copyright cannot be used as a tool to silence speech one dislikes. Thus, this Court should grant fees for an even more important reason than any of those analyzed in the individual "Fogerty factors" above. Fees should be awarded to encourage
W03 402600523/1382189/v1

10

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 15 of 19 Filed 10/02/2007 Page 16 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

scholars like Shloss--whose scholarly work depends on the ability to quote the copyrighted work of others--to author and publish their work without the editorial control of copyright holders. The Copyright Act, with its statutory right of fair use, exists just as much to encourage work such as Shloss's as it does to encourage works of fiction. Thus, to promote this purpose of the Copyright Act, the Court should award fees so that, when necessary, scholars are encouraged to determine their fair use rights by litigation, and then to publish their works in full. There is no reason that Shloss should have had to publish a chopped-down version of her work in print in 2003, and the rest of her work on the Internet in 2007 when the same fair use rights applied all along. While many authors (and publishers) will not be willing to litigate their fair use rights even with the prospect of recovering their attorney's fees, holding out the possibility of recovering fees will encourage at least a few more scholars to do so. C. Shloss's Harmless Error In Failing To Meet And Confer Until Just After This Motion Was Filed Cannot Justify The Denial Of Shloss's Motion for Attorney's Fees In an effort to avoid all of the very good reasons fees should be awarded here, Defendants contend that Shloss's motion is procedurally defective on two grounds. Neither has any merit. First, Defendants complain that Shloss's counsel did not meet and confer prior to filing this motion, per Local Rule 54-6(a). See Opp. at 5. Although it is true that Shloss's counsel failed to contact the Estate's counsel before filing this motion on April 10, Defendants fail to mention that Shloss's counsel did contact Defendants' counsel the same day the motion was filed. Defendants also neglect to mention that the parties engaged in weeks of communication during which Defendants never identified any specific issue they wished to discuss, except for the hearing date on this motion, which Shloss agreed to extend by two weeks at the request of Defendants' counsel. See Supp. Olson Dec. ¶¶ 7-9 and Exs. B-D. If anything, it was Defendants who failed to meet and confer promptly. On April 19, Shloss's counsel expressly invited Defendants' counsel to explain a cryptic assertion she had made that day suggesting Shloss's fee motion was "improperly filed." Supp. Olson Dec. ¶ 10 and Ex. E. In response, Defendants remained silent for eighteen days. See Supp. Olson Dec

¶¶ 11-14. Then, a week before their opposition papers were due, Defendants asserted for the first
W03 402600523/1382189/v1

11

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 16 of 19 Filed 10/02/2007 Page 17 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

time that Shloss's fee motion was improperly filed due to counsel's failure to meet and confer. See Olson Dec. ¶¶ 14-15 and Ex. I. During the exchange of letters that followed, they again failed to identify any issue they wished to meet and confer about, except to complain about the hearing date that was set by stipulation at Defendants' suggestion, which provided defendants more than a month to prepare their opposition. See Falzone Dec. Exs. A-D. Shloss's failure to meet and confer before filing--which was cured the day of filing--cannot be a basis to deny Shloss's fee motion. Fed. R. Civ. Proc. 61 (court "must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties"); Altamont Summit Apartments LLC v. Wolff Props. LLC, 2002 WL 31971832 at *3 (D. Or.) (refusing to deny motion on ground party failed to meet and confer before filing motion where "counsel did meet and confer shortly after the motion was filed" and provided opposing party with an extension of time to respond). Second, Defendants' complaint that Shloss's fee motion is improperly supported because it does not include documentation specifying the services rendered, time spent and qualifications of counsel, per Local Rule 54-6(b), is without merit. See Opp. at 6. As Shloss's moving brief made plain, and as Shloss's counsel has already explained to Defendants, Shloss intends to file such documentation once the Court determines she is entitled to fees. See Falzone Ex. B. The Federal Rules of Civil Procedure 54(d)(2)(D) expressly permits this. Id. ("The court may determine issues of liability for fees before receiving submissions bearing on issues of evaluation of services. . . ."). Nothing in the Local Rules prohibits it. See Local Rule 54-6(b). Nor does the one case Defendants cite suggest this approach is improper. See Jacobsen v. Katzer 2006 WL 3000473 *8-9 (N.D. Cal) (awarding fees upon successful anti-SLAPP motion). On the contrary, this approach is sensible and efficient and avoids the expense of producing, reviewing and arguing about time records unless and until the Court determines a fee award is warranted. There is no basis to ignore the important issues this motion presents based on either of the procedural complaints Defendants raise.

W03 402600523/1382189/v1

12

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 17 of 19 Filed 10/02/2007 Page 18 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

D.

Defendants' Other Reasons For Denying Fees Have No Merit As a fall-back, Defendants suggest various reasons why the Court should not

award fees here. First, Defendants protest that in settling this case, they did exactly what the "Court suggested they do." Opp. at 21. Of course, the Court did not (and could not) provide advice as to how any party should proceed in litigation. And even if Defendants had followed the Court's "suggestion," that would not change the fact that Shloss prevailed by vindicating her right to publish the Electronic Supplement, or undermine any of the very good reasons for awarding fees here under Fogerty. Defendants then suggest that a fee award would "result in a second major litigation." See Opp. at 22. But they do not explain how or why. On the contrary, this issue is ripe for decision. If the Court grants fees, all that would be necessary is the production of time records from Shloss's counsel, and the resolution of any disputes about the reasonableness of the time spent and hourly rates. That is routine in any fee award. Defendants next suggest the Court has no jurisdiction to award fees here. That is simply wrong. There is no question that federal district courts have ancillary jurisdiction "to decide attorney's fees and costs after a case is settled." Gator.com Corp. v. L.L.Bean, Inc., 398 F.3d 1125, 1133 n.1 (9th Cir. 2005) (en banc) (Tashima, J., concurring). Attorney's fees are "an ancillary matter over which the district court retains equitable jurisdiction even when the underlying case" is mooted or dismissed. Zucker v. Occidental Petroleum Corp., 192 F.3d 1323 (9th Cir. 1999); Federal Sav. & Loan Ins. Corp. v. Ferrante, 364 F.3d 1037, 1041 (9th Cir. 2004) ("ancillary jurisdiction exists over attorney fee disputes collateral to the underlying litigation"). E. There is No Ground to Vacate the Dismissal of This Action As a last-ditch effort to avoid the fee issue, Defendants assert in a scant two paragraphs that the Court should vacate the dismissal of this action under Federal Rule of Civil Procedure 60(b)(6) based on the allegation that the parties did not agree on the material terms of the Settlement Agreement. See Opp. at 23. But Defendants do not begin to meet the standard for such extraordinary relief, provide no evidentiary support for their allegations.

W03 402600523/1382189/v1

13

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 18 of 19 Filed 10/02/2007 Page 19 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Rule 60(b)(6) is "to be utilized only where extraordinary circumstances prevented a party from taking timely action to prevent or correct an erroneous judgment. . . . [A] party . . . must demonstrate both injury and circumstances beyond his control that prevented him from proceeding with ... the action in a proper fashion." Latshaw v. Trainer Wortham & Co., Inc., 452 F.3d 1097, 1103 (9th Cir. 2006). Here, Defendants fail even to allege that there were any circumstances that prevented them from taking action to prevent or correct the stipulated dismissal of this suit. Moreover, Rule 60(b)(6) does not provide relief in cases where a party makes a mistake regarding the meaning of an agreement it entered into deliberately. See Latshaw, 452 F.3d at 1103 (denying Rule 60(b)(6) motion where party who knowingly accepted an offer of judgment under Rule 68 later claimed she misunderstood the extent to which attorney's fees were included in the offer); Cashner v. Freedom Stores, Inc., 98 F.3d 572 (10th Cir. 1996) (reversing order granting relief from judgment because unilateral mistake as to meaning of stipulation does not support relief from judgment). Even if any provision of Rule 60(b) could apply here, Defendants offer no evidence to support their contentions--not even a conclusory declaration of counsel. Not that it would matter. Under California law "[t]he existence of mutual assent is determined by objective criteria, not by one party's subjective intent." Marin Storage & Trucking, Inc. v. Benco Contracting & Eng'g, Inc., Cal. App. 4th 1042, 1050 (2001). Assertions regarding a party's undisclosed contractual intent are therefore irrelevant to contractual interpretation. See Brant v. California Dairies, Inc., 4 Cal. 2d 128, 133 (1935); Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc., 109 Cal. App. 4th 944, 956 (2003); Roddenberry v. Roddenberry, 44 Cal. App. 4th 634, 657 (1996); Winet v. Price, 4 Cal. App. 4th 1159, 1166 n.3 (1992). Stewart v. Prof'l Computer Ctrs., Inc., 148 F.3d 937, 940 (8th Cir. 1998), does not suggest otherwise. There the Court--applying Missouri law--held that it was ambiguous as to whether a $4500 settlement included attorney's fees. Id. Here, there was no monetary payment and no such ambiguity.

W03 402600523/1382189/v1

14

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW

Case 5:06-cv-03718-JW Document 88-4 Case 5:06-cv-03718-JW Document 82

Filed 05/21/2007 Page 19 of 19 Filed 10/02/2007 Page 20 of 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

The Settlement Agreement is simply silent on attorney's fees, and is an integrated document. Accordingly, there is no basis for Defendants to suggest the Agreement covered, much less foreclosed, any award of attorney's fees. III. CONCLUSION Shloss is the prevailing party, and thus eligible for fees. A fee award is particularly appropriate here under the Fogerty factors, and this is exactly the sort of case in which a fee award promotes the purpose of the Copyright Act. Scholars such as Shloss already face an uphill battle in determining their right to make fair use of copyrighted material in their scholarly work. Scholars and publishers alike often lack the stomach and the resources to determine fair use through litigation. For those few who are willing, they should be encouraged to do so by the prospect of getting their fees once they have done the service of establishing their fair use rights to conduct and publish their scholarship analyzing others' copyrighted work. If we want to encourage scholarship on modern literature, such encouragement is more crucial now than ever, since much of what has been written in the last century is still locked up by copyright. The Court should grant Shloss's motion for an award of costs and attorney's fees in an amount to be determined according to proof.

DATED: May 21, 2007 STANFORD LAW SCHOOL CENTER FOR INTERNET AND SOCIETY

By: _____________/s/______________ David S. Olson Attorneys for Plaintiff CAROL LOEB SHLOSS

W03 402600523/1382189/v1

15

REPLY IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS ­ CV 06-3718 JW