Shamir v. Anchor-International Foundation, Inc. et al
ORDER re 31 Report and Recommendations. The Court adopts the findings and conclusions set forth in Judge Freeman's Report and Recommendation in their entirety. It is hereby ORDERED that Defendants are jointly and severally liable for statutory damages, pursuant to the Copyright Act, 17 U.S.C. § 504(c), in the amount of $5,000. Plaintiff's request for attorneys' fees and costs is denied. The Clerk of the Court is directed to enter judgment for Plaintiff and to close this case. (Signed by Judge Paul G. Gardephe on 7/29/2013) (cd)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ELECTRONICALL Y FILED
I 3 ,
10 Civ. 725 (PGG)
FOUNDATION, INC., CIRCLES
INTERNATIONAL, LIGHTNING SOURCE,
RICHARD TORRENCE, and MARSHALL
PAUL G. GARDEPHE, U.S.DJ.:
Plaintiff Rami Shamir filed this action against Defendants Anchor· International
Foundation, Inc. ("Anchor"), Circles International ("Circles"), Lightning Source, Richard
Torrence, and Marshall Yaegar, claiming copyright infringement in violation of Section 106 of
the Copyright Act, and raising state law claims of invasion of privacy, misappropriation, and
unfair competition. (Cmplt.
23·25,33·34,38) On February 10,2010, Plaintiff voluntarily
dismissed as against Defendant Lightning Source. (Dkt. No.9)
None of the remaining defendants answered or otherwise responded to the
Complaint. Accordingly, on May 18, 2010, this Court entered a default judgment against
Anchor, Circles, Torrence and Yaegar (Dkt. No. 15), and referred the action to Magistrate Judge
Debra Freeman for an inquest on damages. (Dkt. No. 16) On March 20,2012, Judge Freeman
issued a Report and Recommendation ("R&R") recommending that this Court award Plaintiff
$5,000 in statutory damages
pursuant to 17 U.S.C. § 504(c)
and deny Plaintiffs request for
attorneys' fees and costs. (Dkt. No. 31) Yaegar filed written objections to the R&R (Dkt. No.
32); no other party has submitted objections. For the reasons stated below, this Court will adopt
Judge Freeman's R&R in its entirety.
In 2007, Plaintiff authored and registered a copyright for a novel entitled, "Train
to Pokipse." (R&R at 2 (citing Cmplt.
4, 10)) Defendant Anchor is a not-for-profit
organization that owns Defendant Circles, a publishing company. (R&R at 2 (citing Cmplt. ~~ 5,
6)) Defendant Torrence, who is now deceased, was the executive director of Anchor, and
Defendant Yaegar is the president of Circles. (R&R at 2 (citing Cmplt.
8, 9)) In May 2009,
Yaegar and Torrence, via Anchor, offered a grant to assist Plaintiff with the publication of "Train
to Pokipse." (R&R at 2 (citing Cmplt.
11, 12)) Yaegar helped Plaintiff copy-edit the novel
and by September 2009, Defendants had printed "advanced reader's copies" of the book. (R&R
at 2 (citing Cmplt.
14, 16)) Plaintiff never transferred any of his copyright or publication
rights to Defendants, however. (R&R at 2 (citing Cmplt.
In October 2009, Plaintiff discovered that Defendants were selling his novel
through Defendants' website and various third-party websites. (R&R at 2 (citing Cmplt.
18)) Plaintiff sent a cease and desist e-mail to Lightning Source - a publishing company used by
on October 9, 2009. (R&R at 2-3 (citing Cmplt.
7,20)) Lightning Source
responded that all inquiries should be directed to Yaegar, and forwarded the e-mail to Yaegar.
(R&R at 3 (citing Cmplt.
20)) Plaintiff sent another cease and desist letter to all Defendants on
November 11,2009. (R&R at 3 (citing Cmplt.
On January 29, 2010, Plaintiff filed a complaint alleging copyright infringement,
pursuant to 17 US.c. §§ 106(1), (3), and (5); invasion of privacy under New York Civil Rights
Law § 51; and misappropriation and unfair competition under New York common law. (R&R at
3) On February 11,2010, this Court issued a preliminary injunction enjoining Defendants from
taking any action that infringed Plaintiffs copyright (Dkt No.1 0)
None of the Defendants answered or otherwise responded to the Complaint.
Accordingly, on May 3, 2010, this Court issued an order requiring Defendants to show cause
why a default judgment should not be entered against them. (Dkt. No. 13) Defendants filed no
response to the order to show cause, and Plaintiff moved for a default judgment. (Dkt. No. 14)
On May 18, 2010, this Court entered a default judgment against Defendants Anchor, Circles,
Torrence, and Yaegar (Dkt. No. 15), and referred the matter to Judge Freeman for an inquest on
damages. (Dkt. No. 16)
Before Judge Freeman, Plaintiff sought $150,000 per defendant in statutory
damages on the copyright infringement claim, $38,176 in attorneys' fees, and $1,500 in costs.
(R&R at 5 (citing Supplemental Submission with Respect to Damages (Dkt. No. 19))) Plaintiff
did not request any damages with respect to his state law claims. (R&R at 5-6 (citing
Supplemental Submission with Respect to Damages (Dkt. No. 19)))
On August 2, 2010, Defendant Yaegar sent a letter to Judge Freeman in his
capacity as "Administrator" of Anchor. (R&R at 6 (citing Yaegar Ltr. (Dkt. No. 22))) In
response, Judge Freeman issued an order noting that, as a pro se litigant, Yaegar could not make
a submission on behalf of a corporation such as Anchor (Dkt. No. 20) (citing Grace v. Bank
Leumi Trust Co., 443 F.3d 180, 192 (2d Cir. 2006))), and also could not act on behalf of the
other individual defendants. (Id.) Judge Freeman also noted that Yaegar's August 2,2010 letter
dealt only with liability, and did not address the damages issue that had been referred to Judge
Freeman. (R&R at 6 (citing August 2,2010 Yaegar Ltr. (Dkt. No. 22)))
Accordingly, on November 23, 2010, Judge Freeman issued an order giving
Defendants a final opportunity to respond to Plaintiff s submission on damages. (R&R at 6-7
(citing Scheduling Order for Damages Inquest (Dkt. No. 20))) Judge Freeman's order explicitly
informed the Defendants that Anchor could make a submission only through counsel, and that
Torrence could make a submission either pro
or through counsel. (Dkt. No. 20)
On December 3, 2010, Defendant Torrence, proceeding pro se, sent a submission
to Judge Freeman that addressed liability. Torrence's remarks concerning damages were limited
to a representation that Defendants had no assets and that, accordingly, any damages award
would be uncollectible. (Dkt. No. 21 at 5)) Yaegar sent additional letters to Judge Freeman
contesting liability and claiming financial inability to satisfy any type ofjudgment. (R&R at 8
(citing Yaegar Ltrs. (Dkt. Nos. 28, 29)))
On January 24, 2012, Judge Freeman conducted an evidentiary hearing on
damages. None of the Defendants appeared at the hearing. (R&R at 8-9) At the hearing,
Plaintiff testified about Defendants' continued sale of "advanced reading copies" of "Train to
Pokipse," despite his cease and desist letters and e-mail, and about the damages that Plaintiff had
suffered as a result of Defendants' infringing activities. (R&R at 9) After the hearing, Yaegar
sent a letter to the court asserting that only 100 "advanced reading copies" of the novel were ever
printed by the Defendants. (R&R at 9)
On March 30, 2013, Judge Freeman issued her R&R. (Dkt. No. 31) In the R&R,
Judge Freeman found that Defendants willfully infringed Plaintiffs copyright by continuing to
sell copies of "Train to Pokipse" despite Plaintiff s cease and desist letters, and that Defendants
had realized estimated profits of $1 ,200 from their infringing activities. (R&R at 12 (citing
20, 21; Hearing Tr. at 6)) Judge Freeman also determined that Plaintiff suffered no
losses due to Defendants' infringement because, by Plaintiffs own admission, the book was not
ready for release. (R&R at 12) Accordingly, Judge Freeman concluded that "this case presents a
situation of willful infringement, with modest profits to the infringers, at best, and no
demonstrable, actual loss to Plaintiff. Under the circumstances, while the Court retains the
discretion to award anywhere from $750 to $150,000 in statutory damages, a relatively modest
award would be appropriate here." (R&R at 12-13)
Judge Freeman recommended a $5,000 statutory damages award on Plaintiffs
copyright infringement claim. (R&R at 13) She determined that "[t]his award, while far less
than sought by Plaintiff, would still amount to more than four times the revenue generated by
Defendants' infringement, should be sufficient to deter future infringement, and would be
supported by precedent in this circuit." (R&R at 13 (collecting cases)) Judge Freeman further
recommended that Defendants be held jointly and severally liable for the award. (R&R at 14)
Finally, Judge Freeman recommended that this Court deny Plaintiffs request for attorneys' fees
and costs, because Plaintiffs unsworn, unauthenticated submission, and non-contemporaneous
records, do not substantiate Plaintiff s requested award. (R&R at 15-17) I
On April 5,2012, Yaegar submitted written objections to Judge Freeman's R&R.
(Dkt. No. 32) Yaeger's objections address liability and not damages. (Id. at 1-2) No other party
filed an objection.
Judge Freeman also recommended that no damages be awarded for Plaintiffs state law claims,
because Plaintiff did not request - and thus had waived - any right to damages on those claims.
(R&R at 8 n.7) This Court finds no clear error in this determination.
2 Yaegar's objections were submitted on the letterhead of Anchor. As Judge Freeman noted, as
a pro se party, Yaegar may not appear on behalf of a corporation or any other defendant. (R&R
at 6 (citing Grace, 443 F.3d at 192)).
STANDARD OF REVIEW
This Court "may accept, reject, or modify in whole or in part" findings or
recommendations issued by a magistrate judge. 28 US.C. § 636(b)(1). A district court must
review de novo "those portions of the report or specified proposed findings or recommendations
to which objection is made." Id. § 636(b)(1)(C). "To the extent, however, that the party makes
only conclusory or general arguments, or simply reiterates the original arguments, the Court will
review the Report strictly for clear error." Indymac Bank, F.S.B. v. Nat'l Settlement Agency,
Inc., No. 07 Civ. 6865, 2008 WL 4810043, at *1 (S.D.N.Y. Nov. 3, 2008); Ortiz v. Barkley, 558
F. Supp. 2d 444,451 (S.D.N.Y. 2008) ("Reviewing courts should review a report and
recommendation for clear error where objections are merely perfunctory responses, argued in an
attempt to engage the district court in a rehashing of the same arguments set forth in the original
petition.") (citation and internal quotation marks omitted).
"The objections of parties appearing pro se are 'generally accorded leniency' and
should be construed 'to raise the strongest arguments that they suggest. ", DiPilato v. 7-Eleven,
Inc., 662 F. Supp. 2d 333, 340 (S.D.N.Y. 2009) (quoting Milano v. Astrue, 05 Civ. 6527,2008
WL 441Ol31, at *24 (S.D.N.Y. Sept. 26,2008) (internal quotation marks omitted)).
'''Nonetheless, even a pro se party's objections to a Report and Recommendation must be
specific and clearly aimed at particular findings in the magistrate's proposal, such that no party
be allowed a second bite at the apple by simply relitigating a prior argument.'" Id. (quoting
Pinkney v. Progressive Home Health Servs., No. 06 Civ. 5023, 2008 WL 2811816, at * 1
(S.D.N.Y. July 21,2008) (internal quotations marks omitted)).
THE R&R IS NOT CLEARLY ERRONEOUS
In his objections, Yaegar argues that: (l) Plaintiff had already published and sold
an earlier version of the novel; (2) Defendants only published 100 "Advanced Reading Copies"
of "Train to Pokipse"; (3) Plaintiff put ads for "Train to Pokipse" on the Internet; (4) Plaintiff is
mentally unstable; (5) Plaintiffs suit is motivated by a desire to extort money from Defendants;
(6) Plaintiff has no proof that Defendants sold his book; (7) the copies Defendants published
were never sold; (8) advanced reading copies cannot be copyrighted and thus Plaintiff could not
obtain a copyright for Defendants' edited version of "Train to Pokipse"; and (9) Plaintiff picked
up the approximately 100 published copies of the novel from Yaegar's apartment building after
Defendants severed ties with Plaintiff. (Yaegar Obj. at 1-2) These arguments do not address
Judge Freeman's findings concerning damages, but instead relate to liability.
To the extent that Yaegar's objections could be construed as addressing damages,
his objections lack specificity and are not directed at particular findings of fact or conclusions of
law in the R&R. Accordingly, this Court will review Judge Freeman's R&R for clear error. See
Gilmore v. Comm'r of Soc. Sec., No. 09 Civ. 6241 (RMB)(FM), 2011 WL 611826, at *1
(S.D.N.Y. Feb. 18,2011) (,"The district judge evaluating a magistrate judge's recommendation
may adopt those portions of the recommendation, without further review, where no specific
objection is made, as long as they are not clearly erroneous. "') (quoting Chimarev v. TO
Waterhouse Investor Servs., Inc., 280 F. Supp. 2d 208,212 (S.D.N.Y. 2003)).
In making her recommendations, Judge Freeman applied the correct standard for
determining a statutory damages award under the Copyright Act, 17 U.S.C. § 504(c). Judge
Freeman considered: "'(1) the infringers' state of mind; (2) the expenses saved, and profits
earned, by the infringer; (3) the revenue lost by the copyright holder; (4) the deterrent effect on
the infringer and third parties; (5) the infringer's cooperation in providing evidence concerning
the value of the infringing material; and (6) the conduct and attitude of the parties.'" (R&R at 11
(quoting Bryant v. Media Right Prods., Inc, 603 F.3d 135, 144 (2d Cir. 2010)))
As to the infringers' state of mind, Judge Freeman correctly found that
Defendants willfully infringed Plaintiff's copyright because they continued to offer copies of
"Train to Pokipse" for sale even after Plaintiff sent them multiple cease and desist letters. (R&R
at 12) Judge Freeman found that there was little evidence as to the expenses saved, and profits
earned, by the Defendants, because they had not participated in the proceedings. (R&R at 12)
Judge Freeman determined, however, that because Defendants retained approximately 100
copies of the book, which were advertised for sale at $12 each, the Defendants estimated profit
was $1,200. (R&R at 12) There is no clear error in Judge Freeman's findings, especially "in the
absence of any evidence on costs that could have been supplied by Defendants," had they chosen
to participate in the damages inquest hearing. (See R&R at 12)
There is also nothing clearly erroneous in Judge Freeman's finding that Plaintiff
could not substantiate any revenue loss because he admitted that the book was not yet ready for
publication. (R&R at 12); see Harpercollins Publishers L.L.C. v. Gawker Media LLC, 721 F.
Supp. 2d 303, 307 (S.D.N. Y. 2010) (granting temporary restraining order against on-line media
company from publishing abridged versions of copyright holder's book before the copyright
holder officially released her book, but noting that "[a] later claim for damages would probably
be unavailing because of problems of measurement").
Accordingly, this Court agrees with Judge Freeman that where, as here, there is
"willful infringement, with modest profits to the infringers, at best, and no demonstrable, actual
loss to Plaintiff," a modest statutory award of$5,000 is appropriate. (R&R at 12-13 (collecting
Yurman Studio, Inc. v. Castaneda, Nos. 07
cases with similar statutory damages awards));
Civ. 1241(SAS), 07 Civ. 7862(SAS), 2008 WL 4949775, at *3 (S.D.N.Y. Nov. 19,2008)
("[S]tatutory damages cannot be divorced entirely from economic reality .... [Courts should not]
impos[e] ... monumental statutory damages against smaller-scale or shorter-term willful
Attorneys' Fees and Costs
Judge Freeman also correctly denied Plaintiffs application for attorneys' fees and
costs. The Second Circuit requires that a party seeking an award of attorneys' fees support the
request with contemporaneous time records that "specify, for each attorney, the date, the hours
expended, and the nature of the work done." N.Y. State Ass'n for Retarded Children, Inc. v.
Carey, 711 F.2d 1136, 1147 (2d Cir. 1983)). Here, Plaintiff submitted only an unsworn,
unauthenticated document that does not substantiate the dates when work was performed, the
hours expended, or the nature of the work completed by the various timekeepers. (R&R at 15
16) Judge Freeman also noted that, in violation of Carey, Plaintiff had not put forth either a
sworn or unsworn statement representing that his submission constituted a compilation of
contemporaneous time records. (R&R at 17)
As to costs, Plaintiff submitted no affidavit or declaration confirming that the
requested costs were actually incurred. (Id.)
Given these defects, Plaintiffs submissions do not provide an adequate basis for
an award of costs or attorneys' fees. See Ermenegildo Zenga Corp. v. 56th Street Menswear,
No. 06 Civ. 7827 (HB)(GWG), 2008 WL 4449533, at *6 (S.D.N.Y. Oct. 2,2008) (noting
that "courts routinely decline to award fees when a party submits a fee request that fails to
indicate that it is based on contemporaneous time records").
The Court adopts the findings and conclusions set forth in Judge Freeman's
Report and Recommendation in their entirety. It is hereby ORDERED that Defendants are
jointly and severally liable for statutory damages, pursuant to the Copyright Act, 17 U.S.C. §
504(c), in the amount of$5,000. Plaintiff's request for attorneys' fees and costs is denied.
The Clerk of the Court is directed to enter judgment for Plaintiff and to close this
Dated: New York, New York
July 29, 2013
Paul G. Gardephe
United States District Judge
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