Aamot v. Peterson et al
Filing
66
MEMORANDUM OPINION AND ORDER denying 54 Motion for Attorney Fees. (Written Opinion) Signed by Chief Judge John R. Tunheim on 8/21/2020. (HAZ)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
SUSAN AAMOT,
Civil No. 18-1402 (JRT/LIB)
Plaintiff,
v.
MARK PETERSON AND TIMOTHY AKERS,
MEMORANDUM OPINION AND
ORDER DENYING DEFENDANTS’ MOTION
FOR SANCTIONS, ATTORNEYS’ FEES AND
COSTS
Defendants.
Blake G. Iverson and Maxwell S. Felsheim, IVERSON FELSHEIM, 2945 44th
Avenue South, Minneapolis, MN 55406, for plaintiff.
Michael Sherrill, SHERRILL LAW OFFICES, PLLC, 4756 Banning Avenue, Suite
212, White Bear Lake, MN 55110; Steven R. Fairchild, FAIRCHILD LAW, LLC,
292 Powers Street, 1B, Brooklyn, NY 11211, for defendants.
Defendants Mark Peterson and Timothy Akers filed this motion for costs, attorney
fees, and sanctions related to the voluntary dismissal of Plaintiff Susan Aamot’s
underlying copyright-infringement action. Because the Court finds that neither an award
of costs and fees nor sanctions against Felsheim are warranted, the Court will deny
Defendants’ motion.
BACKGROUND
FACTUAL BACKGROUND
In October 2016, Defendant Peterson commissioned Plaintiff Aamot to produce
illustrations for a book he was writing in conjunction with Defendant Akers. (Decl. of
Michael S. Sherrill (“Sherrill Decl.”) ¶ 5, Ex. A (“Aamot Depo.”) at 36:12–38:9, Jan. 16,
2020, Docket No. 63.) Though it is undisputed that Aamot then produced the illustrations
and sent them to Peterson, the contours of the agreed upon compensation is disputed,
and there was no written contract memorializing the agreement. (See id. at 57:1–61:25,
63:4–24.) Defendants assert that Aamot agreed to receive payment via royalties based
on the books sales, while Aamot states she agreed to be paid $300 per illustration plus
royalties. 1 (See, e.g., id. at 63:4–24.)
In October 2017, having found no literary agent or publisher, Peterson and Akers
self-published the book using Aamot’s illustrations, but they apparently did not inform
Aamot. (See Decl. of Maxwell Felsheim (“Felsheim Decl.”) ¶¶ 4, 7–8, Ex. B, 136:17–24,
137:13–25, Feb. 5, 2020, Docket No. 65.)
On January 3, 2018, Aamot sent Peterson a text message inquiring on the status of
the book. (Felsheim Decl. ¶ 6, Ex. D.) Peterson told Aamot that he was “working his ass
off to make a living and keep the book project going as well” and didn’t “have the time”
1
The Court does not need to reach the issue of agreed upon compensation to resolve the
present Motion for fees and costs.
-2-
to give Aamot “updates on what is happening or not happening with the book so [Aamot]
can start thinking about money.” (Id.) Aamot then informed Peterson that she deserved
to get paid for her work and alleged that one of Peterson’s friends had taken credit for
Aamot’s work. (Id.) Shortly before sending Peterson the text inquiring about the status
of the book, Aamot learned through a friend that Peterson had self-published the book
and announced its release via Facebook on or about October 23, 2018. (Felsheim Decl. ¶
3, Ex. A, 29:2–18.)
On or about January 7, 2018, Aamot mailed Peterson an invoice for $9,200 ($300
per illustration for 30 illustrations and a $500 fee for rushed delivery). (See id. at 10.) The
next day, Peterson and Akers informed Aamot that her illustrations would no longer be
featured in the book and that they were pulling the book from sale to replace her
illustrations. (Felsheim Decl. ¶ 4, Ex. B, 162:3–14.) At this point, according to Peterson
and Akers, they had not paid Aamot anything for her illustrations. (See Felsheim Decl. ¶
10, Ex. E.)
On January 22 and 23, 2018, Aamot (through her attorney Max Felsheim) filed
copyright registrations for Aamot’s illustrations used in the book and listed October 23,
2017 as the publication date for the illustrations. (Felsheim Decl. ¶ 7.) Attorney Felsheim
reviewed online book sellers including Amazon and Barnes and Noble as well as social
media posts by Defendants, which all indicated that the novel featuring the illustrations
was first available for sale on October 23, 2017. (Id. ¶ 8.) Attorney Felsheim also
-3-
researched relevant law to determine that the date first available for sale was the date of
publication for copyright purposes. (Id. ¶ 9.) The illustrations had not been published
prior to appearing in the book. (Aamot Depo. at 65:5–10.)
PROCEDURAL BACKGROUND
On May 22, 2018, Aamot filed this action alleging one count of willful copyright
infringement pursuant to 17 U.S.C. § 501 and seeking $6,900,000 in statutory damages
pursuant to 17 U.S.C. § 504(c). (Compl. ¶¶ 41–53, May 22, 2018, Docket No. 1.)
On July 27, 2018, Defendants Peterson and Akers filed an Answer denying all
claims, asserting a number of affirmative defenses (including that they had an implied
license to use the illustrations and that the copyright claim was untimely), and alleging
counterclaims against Aamot for breach of contract, fraud in the inducement, and seeking
fees and costs. (See generally Answer, July 27, 2018, Docket No. 8.)
On December 27, 2018, Defendants filed an amended Answer to additionally
assert a counterclaim for libel, alleging that Aamot anonymously sent a defamatory email
regarding Defendant Akers to an editor with whom Akers is associated. (Amd. Answer ¶¶
104–21, Dec. 27, 2018, Docket No. 35.)
On November 21, 2019, the parties filed a Joint Stipulation for Voluntary Dismissal
of Claims in which the parties agreed that all claims and counterclaims in the action would
be voluntarily dismissed except for Defendants’ claim for recovery of attorneys’ fees and
costs, pursuant to 17 U.S.C. § 505. (Joint Stip. at 1–2, Nov. 21, 2019, Docket No. 50.) The
-4-
parties’ claims were subsequently dismissed by the Court. (Amd. Judgment at 1–2, Jan.
15, 2020, Docket No. 61)
The Defendants filed this motion seeking the recovery of costs and fees under 17
U.S.C. § 505, as well as sanctions against attorney Felsheim pursuant to 28 U.S.C. § 1927.
(Defs.’ Motion for Attorneys’ Fees & Costs, Dec. 16, 2019, Docket No. 54.)
DISCUSSION
STANDARD OF REVIEW
Under 17 U.S.C. § 505, a court may “in its discretion” award full costs and a
“reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. 2
The Court should exercise this discretion “in an evenhanded manner by considering
factors such as whether the lawsuit was frivolous or unreasonable, the losing litigant’s
motivations, the need in a particular case to compensate or deter, and the purposes of
the Copyright Act.” Action Tapes, Inc. v. Mattson, 462 F.3d 1010, 1014 (8th Cir. 2006). The
“objective reasonableness” of the losing party’s position should be given “substantial
weight” in determining whether to award attorney’s fees to the prevailing party.
Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1988 (2016). Put another way, a
good faith, colorable claim weighs heavily against a discretionary grant of fees. See, e.g.,
2
It is undisputed that Defendants timely filed their Motion and a plaintiff’s voluntary
dismissal with prejudice renders the defendant a “prevailing party.” Killer Joe Nev., LLC v.
Does 1-20, 807 F.3d 908, 911 (8th Cir. 2015).
-5-
Hartman v. Hallmark Cards, Inc., 833 F.2d 117, 122 (8th Cir. 1987) (“Although an award is
not preconditioned on a showing of bad faith or frivolity, a losing plaintiff's good faith in
bringing a colorable claim will justify a district court's denial of fees.”). 3
ANALYSIS
Defendants argue that Aamot’s copyright infringement claim was objectively
unreasonable and frivolous because (1) Defendants had an implied license to use the
illustrations and therefore could not infringe; and (2) Aamot’s attorney, Maxwell
Felsheim, fabricated evidence in order to qualify Aamot’s claim for statutory damages.
The Court finds both arguments lacking. First, the parties’ central dispute centered
around the agreement and whether an implied license existed. The Court will not decide
the issue here based on a joint, voluntary dismissal of Aamot’s claims and Defendants’
counterclaims. Second, for the Court to conclude that Felsheim fabricated evidence as
Defendants suggest, it must conclude that it is clearly established law that an
unauthorized publication of copyrighted material does not qualify as a “publication”
under the Copyright Act and that Felsheim knew this to be the case when he filed this
action. But this appears to be an open question of law in the Eighth Circuit, and
3
See also Killer Joe Nev., 807 F.3d at 912–13 (no abuse of discretion for denial of
attorney’s fees under § 505 when plaintiff lacked improper motive); Action Tapes, Inc.,
462 F.3d at 1014 (no abuse of discretion for denial of fees under § 505 when plaintiff
“raised important and novel issues”).
-6-
Defendants cite only an agency manual and nonbinding case law to argue Felsheim’s
actions were frivolous or objectively unreasonable. Felsheim also states that he only
agreed to dismiss the claim (and did so promptly) after verifying that Defendants’
published the book on October 17, 2018, not October 23, 2018, putting Aamot’s claim
outside the three-month window for statutory damages under the Copyright Act.
Making a challenge to an open question of law cannot be said to be frivolous or
objectively unreasonable. See Action Tapes, Inc., 462 F.3d at 1014 (no abuse of discretion
for denial of fees under § 505 when plaintiff “raised important and novel issues”).
Further, Felsheim’s prompt dismissal after verifying the date of the purported publication
by Defendants supports a finding good faith. See Killer Joe Nev., 807 F.3d at 912 (noting
no improper motive when plaintiff promptly dismissed claim in similar circumstances).
The Court therefore finds that Aamot’s claims were colorable and brought in good faith.
Accordingly, the Court will deny Defendants’ Motion to the extent it seeks attorney fees
and costs under § 505. See Hartman v. Hallmark Cards, Inc., 833 F.2d 117, 122 (8th Cir.
1987) (“Although an award is not preconditioned on a showing of bad faith or frivolity, a
losing plaintiff's good faith in bringing a colorable claim will justify a district court's denial
of fees.”).
Having found that Aamot and Felsheim brought a good-faith, colorable claim, the
Court will also deny Defendants’ Motion to the extent it seeks sanctions against Attorney
Felsheim under 28 U.S.C. § 1927. See SPV-LS, LLC v. Transamerica Life Ins. Co., 912 F.3d
-7-
1106, 1113 (8th Cir. 2019) (noting that sanctions under § 1927 should only be imposed
“when attorney conduct, viewed objectively, manifests either intentional or reckless
disregard of the attorney’s duties to the court” (quoting Lee v. L.B. Sales, Inc., 177 F.3d
714, 718 (8th Cir. 1999))).
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendants’ Joint Motion for Attorneys’ Fees and Costs [Docket
No. 54] is DENIED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
DATED: August 21, 2020
at Minneapolis, Minnesota.
_________
_________
JOHN R. TUNHEIM
Chief Judge
United States District Court
-8-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?