Southern Credentialing Support Services, L.L.C. v. Hammond Surgical Hospital, L.L.C. et al

Filing 200

FINDINGS OF FACT AND CONCLUSIONS OF LAW - Plaintiff is entitled to a judgment in the amount of $5,000.00, reasonable attorneys' fees and costs, and a permanent injunction, as set forth in document. Signed by Judge Jane Triche Milazzo on 10/9/2018.(sa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SOUTHERN CREDENTIALING
SUPPORT SERVICES, LLC

CIVIL ACTION

VERSUS

NO: 15-7013

HAMMOND SURGICAL
HOSPITAL, LLC ET AL.

SECTION: “H”(1)

FINDINGS OF FACT AND CONCLUSIONS OF LAW
Plaintiff, Southern Credentialing Support Services, LLC (“SCSS”), has
alleged that Defendants Hammond Surgical Hospital, LLC d/b/a Cypress
Pointe Surgical Hospital (“CPSH”) and Hammond Surgical Hospital
Management Co. LLC 1 infringed on its copyright through the unauthorized
use, reproduction, and distribution of Plaintiff’s healthcare credentialing form
packets. This Court previously held that Plaintiff has valid copyrights in these
packets as factual compilations and that it is entitled to judgment on its
copyright claim. The Court noted that Defendants had verbatim copied 60 and
44 percent of Plaintiff’s copyrighted works and published those works online.
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Defendant Christopher Beary was voluntarily dismissed by Plaintiff at trial.
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Following these pre-trial rulings, this Court held a bench trial on March
20 and 21, 2018 on the issue of damages. Having considered the evidence
admitted at trial and the arguments of counsel, this Court makes the following
findings of fact and conclusions of law. To the extent a finding of fact
constitutes a conclusion of law, and vice versa, the Court adopts it as such.
FINDINGS OF FACT
1. There are two copyrighted works at issue here (collectively, “the
Packets”)—the Louisiana Hospital Credentialing Process Packet (the
“Initial

Application

Packet”)

and

the

Louisiana

Hospital

Credentialing Process Packet (the “Re-Credentialing Packet”).

ReEach

Packet consists of forms, applications, delineations, and other documents
designed to streamline the healthcare credentialing process.
2. This Court previously found that the Packets are each entitled to
copyright protection of their selection, coordination, and arrangement as
factual compilations. Doc. 149.
3. In October 2010, CPSH hired Plaintiff to provide healthcare
credentialing services as an independent contractor, and Plaintiff began
using the Packets in connection with its credentialing services.
4. Plaintiff ended the business relationship, and it terminated in May 2013.
5. Plaintiff registered the Initial Application Packet for copyright
protection on February 26, 2014 and the Re-Credentialing Packet on
July 25, 2014.

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6. After the termination of the business relationship, CPSH hired LA
Credentials, Inc. to conduct its credentialing services but continued to
use portions of the Packets.
7. Defendants’ infringing use of the Packets in its credentialing process
began prior to the copyright registration of the Packets and continued
thereafter.
8. Defendants first received notice from Debra Caminita, Plaintiff’s owner,
via email on July 28, 2014 that Plaintiff believed that Defendants’
continued use of the Packets violated its copyrights.
9. Upon receipt of the aforementioned notice, the chairman of the board of
CPSH forwarded Caminita’s email and the credentialing forms then in
use by the hospital to its general counsel and sought an opinion on
Plaintiff’s claim of copyright infringement.
10. Defendants’ general counsel

opined

that

the

forms

were

not

copyrightable, and Defendants therefore continued using the forms.
11. Caminita did not respond to requests to identify with specificity which
documents she alleged were protected by copyright.
12. Plaintiff filed this suit alleging copyright infringement on December 23,
2015.
13. Defendants continued using and copying the Packets even after suit was
filed.
14. Between January and August 2017, Defendants published 60 percent of
the Initial Application Packet and 44 percent of the Re-Credentialing
Packet on LA Credentials website. This Court has previously held that
this constituted copying. Doc. 181.
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15. At trial, Plaintiff sought only statutory damages for the Defendants’
internet distribution of the Packets.
16. Defendants do not earn money for credentialing physicians.
17. Plaintiff never licensed or sold the Packets.
18. Plaintiff alleges that its actual damages are $112,775, the amount that
it would have earned had it performed the credentialing work that used
its Packets after it terminated the business relationship with CPSH.
This is not an appropriate measure of Plaintiff’s damages. First, the fee
that Plaintiff charged Defendants to process a credentialing application
included more than merely the use of the Packets. Second, Plaintiff
terminated its business relationship with Defendants and therefore lost
the opportunity to profit off its credentialing needs.
19. Plaintiff did not submit evidence of any lost profits related to Defendants’
continued use of its Packets.
20. Plaintiff alleges Defendants’ profits increased $68,050, the amount
Defendants saved by contracting with LA Credentials to perform its
credentialing instead of Plaintiff because LA Credentials charged lower
rates. There is no evidence that LA Credentials charged lower rates
because it was using Plaintiff’s forms.
21. Plaintiff also failed to present evidence of Defendants’ gross revenue.
22. Plaintiff has not to shown any actual damages suffered or an increase in
Defendants’ profits related to Defendants’ continued use of its Packets.

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CONCLUSIONS OF LAW
Statutory Damages
1. “[N]o award of statutory damages or of attorney’s fees . . . shall be made
for . . . any infringement of copyright commenced after first publication
of the work and before the effective date of its registration, unless such
registration is made within three months after the first publication of
the work.” 17 U.S.C.A. § 412. “Where a work is not registered until after
the infringement, the copyright holder is not eligible for statutory
damages and is limited to actual damages and profits under sec. 504(b)
of the 1976 Act. Furthermore, where the alleged infringing activity
commences prior to the registration of a copyright, the copyright
claimant may not claim statutory damages for continued postregistration activity.” Mason v. Montgomery Data, Inc., 741 F. Supp.
1282, 1285 (S.D. Tex. 1990), aff’d, 967 F.2d 135 (5th Cir. 1992).
2. Plaintiff is not entitled to statutory damages for Defendants’ continued
use of portions of the Packets in its credentialing process.
3. “[T]he 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.” 17
U.S.C. § 504. Statutory damages may range between $750 and $30,000
per infringed work, or if the infringement is willful, the Court may
increase the statutory damages up to $150,000 per infringement. Id.
Accordingly, Plaintiff is entitled to present evidence at trial of its actual
damages, of the additional profits of Defendants, and of Defendants’
willfulness in infringing on its copyright.
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4. “A ‘new’ or ‘separate’ basis for the award of statutory damages is created
. . . where there is a difference between pre- and post-registration
infringing activities.” Mason., 741 F. Supp. at 1285.
5. Defendants’ internet distribution of the Packets is different in kind from
their prior infringing acts of using the Packets in their credentialing
process.
6. “Infringement is willful if the Defendant had knowledge that his conduct
represented infringement or recklessly disregarded the possibility that
his conduct might constitute infringement.” Controversy Music v. Down
Under Pub Tyler, Inc., 488 F. Supp. 2d 572, 578 (E.D. Tex. 2007).
7. Defendants’ publication of the Packets to LA Credentials website was
not willful given the fact that it was done at the advice of its general
counsel and without full knowledge of which documents Plaintiff claimed
copyright protection.
8. Plaintiff is entitled to statutory damages for Defendants’ non-willful acts
in posting both the Initial Application Packet and the Re-Credentialing
Packet to LA Credentials website for an eight-month period.
9. “The district court is afforded almost exclusive discretion, between the
minimum and maximum statutory limit, in determining the amount
actually awarded.” Guillot-Vogt Assocs., Inc. v. Holly & Smith, 848 F.
Supp. 682, 691 (E.D. La. 1994); see Broad. Music, Inc. v. Star
Amusements, Inc., 44 F.3d 485, 488 (7th Cir. 1995). “Among the factors
a court may consider in setting statutory damage amounts are: the
expenses saved and profits reaped by the infringer, the deterrent effect
of the award on defendant and on third parties, and the infringer’s state
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of mind in committing the infringement.” Playboy Enterprises, Inc. v.
Webbworld, Inc., 968 F. Supp. 1171, 1176 (N.D. Tex. 1997).
10. “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).
11. Plaintiff failed to show actual damages or Defendants’ increased profit.
12. In light of the fact that Defendant’s infringement was not willful and
Plaintiff has failed to show actual damages, this Court finds that a
statutory damages award in the lower range of allowable awards is
appropriate.
13. Plaintiff is entitled to a statutory damages award in the amount of
$2,500 per infringement, or $5,000 total.
Injunctive Relief
14. A court may grant “final injunctions on such terms as it may deem
reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C.
§ 502.
15. Plaintiff is entitled to a permanent injunction preventing Defendants
from further infringing on its copyrights.
Attorneys’ Fees and Costs
16. “Although attorney’s fees are awarded in the trial court’s discretion, they
are the rule rather than the exception and should be awarded routinely.”
Micromanipulator Co. v. Bough, 779 F.2d 255, 259 (5th Cir. 1985).

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17. Plaintiff is entitled to an award of reasonable attorneys’ fees and costs
for the work done in association with Defendants’ infringing online
publication.
CONCLUSION
For the foregoing reasons, Plaintiff is entitled to a judgment in the
amount of $5,000, reasonable attorneys’ fees and costs, and a permanent
injunction.

New Orleans, Louisiana this 9th day of October, 2018.
____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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