Sid Bernstein Presents, LLC v. Apple Corps Limited et al

Filing 69

MEMORANDUM DECISION AND ORDER adopting 63 Report and Recommendations, 49 Motion for Attorney Fees filed by Subafilms Limited, Apple Corps Limited: This Court ADOPTS Magistrate Judge Fox's Recommendation. Defendants' motion for att orneys' fees and costs is GRANTED. Plaintiff shall pay Defendants' reasonable fees in the amount of $83,417.45 and costs in the amount of $1,159.0l. The Clerk of the Court is directed to close the motion at ECF No. 49 accordingly. (Signed by Judge George B. Daniels on 3/29/2018) (jwh) Modified on 3/29/2018 (jwh).

UNITED ST A TES DISTRICT CO!URT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------ X

SID BERNSTEIN PRESENTS, LLC,
Plaintiff,
MEMORANDUM DECISION
AND ORDER

-againstAPPLE CORPS LIMITED and SUBAFILMS
LIMITED,

16 Civ. 7084 (GBD) (KNF)

Defendants.
------------------------------------ X

GEORGE B. DANIELS, United States District Judge:
Plaintiff Sid Bernstein Presents, LLC ("SBP"), brought this action against Defendants Apple
Corps Limited ("Apple Corps") and Subafilms Limited ("Subafilms") ( collectively "Defendants"),
alleging copyright infringement and seeking a declaration of rights in the "Master Tapes" and its
derivative works, as well as damages for the Defendants' alleged copyright infringement based on
Defendants' use of the raw audiovisual footage belonging to Plaintiff. (Compl., ECF No. 1, at 1719.) SBP is the owner by assignment of all the intellectual property rights of the late music producer
Sid Bernstein. (Id.

11

8-9.) Defendant Apple Corps was founded by members of The Beatles;

Defendant Subafilms is its subsidiary. (/d.

112-3.)

Defendants moved to dismiss the complaint for failure to state a claim pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure. (Defs.' Mot. to Dismiss, ECF No. 19.) This Court
granted Defendants' motion to dismiss the complaint. (Mem. Decision & Order ("Order"), ECF
No. 47, at 6-14.) Defendants also moved for sanctions against Plaintiffs counsel under Rule 11 of
the Federal Rules of Civil Procedure. (Defs.' Sanctions Mot., ECF No. 25.) This Court denied
Defendants' motion for sanctions, finding that although Plaintiff failed to state a plausible claim for
relief, ·'the filings [did] not support a conclusion that the claims were clearly frivolous or were

alleged in bad faith." (Order at 15-16.) As the prevailing party, Defendants moved for an award of
attorneys' fees and costs pursuant to 17 U.S.C. § 505, Rule 54 of the Federal Rules of Civil
Procedure, and Rule 54.1 of the Local Civil Rules. (Defs.' Mot. For Att'ys' Fees and Costs, ECF
No. 49.)
This matter was referred to Magistrate Judge Kevin N. Fox. (ECF No. 58.)

Before this

Court is Magistrate Judge Fox's Jan\ilary 25, 2018 Report and Recommendation (Report, ECF No.
63), recommending that this Court grant the Defendants' motion for costs in the amount of
$1,159.01, but award no attorneys' fees due to Defendants' failure to establish a basis for
determining reasonable attorneys' fees. 1 (Id. at 19.) In his Report, Magistrate Judge Fox advised
the parties that failure to file timely objections to the Report would constitute a waiver of those
objections on appeal. (Id. at 20); see also 28 U.S.C. § 636(b )(1 ); Fed. R. Civ. P. 72(b ). Both Plaintiff
and Defendants filed timely objections to the Report. (See Pl. Obj. to Report ("Pl. Obj."), ECF No.
65; Defs. Obj. to Report ("Defs. Obj."), ECF No. 64.)
There is no clear error on the face of the record as to those portions of the report to which
no objections were made. This Court considered the issues raised in Plaintiffs and Defendants'
objections and reviewed de nova the objected-to portions of the Report. This Court ADOPTS
Magistrate Judge Fox's recommendation that Defendants are entitled to attorneys' fees and costs,
and REJECTS the recommendation that such costs cannot be reasonably calculated.
Defendants' motion for attorneys' fees and costs is GRANTED.

Plaintiff shall pay

Defendants' reasonable fees in the amount of $83,417.45 and costs in the amount of$1,159.01.

1

The relevant procedural and factual background is set forth in greater detail in the Report, and is
incorporated herein.

2

-

I.

-·----··----·--------

LEGALSTANDARD

A court may accept, reject or modify, in whole or in part, the findings and recommendations
set forth within a report and recommendation. See 28 U.S.C. § 636(b)(l)(C). When no objections
to the Report are made, the court may adopt the report if "there is no clear error on the face of the
record." Adee Motor Cars, LLC v. Amato, 388 F. Supp. 2d 250, 253 (S.D.N.Y. 2005) (citation
omitted).
When there are objections to the report, the court must make a de nova determination as to
the objected-to portions of the Report. 28 U.S.C. § 636(b)(l)(C); see also Rivera v. Barnhart, 423
F. Supp. 2d 271, 273 (S.D.N.Y. 2006). It is sufficient that this Court "arrive at its own, independent
conclusions" regarding those portions to which objections were made. Nelson v. Smith, 618 F. Supp.
1186, 1189-90 (S.D.N.Y. 1985) (internal citation omitted); see United States v. Raddatz, 447 U.S.
667, 675-76 (1980).

However, where a litigant's objections are conclusory, repetitious, or

perfunctory, the standard of review is clear error. McDonaugh v. Astrue, 672 F. Supp. 2d 542, 54 748 (S.D.N.Y. 2009).
Courts have discretion in deciding whether to award costs and attorneys' fees. Fogerty v.

Fantasy, Inc., 510 U.S. 517, 533 (1994). In exercising this discretion, courts deciding whether to
award costs and attorneys' fees under § 505 should consider "frivolousness, motivation, objective
unreasonableness, and the need in particular circumstances to advance considerations of
compensation and deterrence." Porto v. Guirgis, 659 F. Supp. 2d 597,617 (S.D.N.Y. 2009) (quoting

Fogerty, 510 U.S. at 534 n.19) (internal quotation marks and citations omitted). In calculating the
amount of attorneys' fees to award, courts may consider other factors, including the financial
resources of the losing party. See Peyser v. Searle Blatt & Co., No. 99 Civ. 10785 (WK), 2001 U.S.
Dist. LEXIS 20844, at *20 (S.D.N.Y. Dec. 13, 2001) ("The aims of the Copyright Act are

3

-------------

compensation and deterrence where appropriate, but not ruination.") (internal quotation marks and
citations omitted).

II.

PLAINTIFF'S OBJECTIONS

Plaintiff objects primarily to Magistrate Judge Fox's conclusion that the Fogerty factors
weigh in favor of granting Defendant attorneys' fees. Plaintiffs specifically object to the Report's
findings regarding the following Fogerty factors: (1) objective unreasonableness; (2) compensation
and deterrence; and (3) the relative financial situation of the parties. (See Pl. Obj. at 2.)
Plaintiff objects that its litigation position was not objectively unreasonable because, in
denying Defendants' motion for sanctions, this Court necessarily found that Plaintiff's claims were
not objectively unreasonable. (Id.) Plaintiff maintains, therefore, that under the doctrine of law of
the case, this Court's previous finding that Plaintiff's positions "were not frivolous under an
objectively unreasonable standard" should be controlling in this subsequent stage of the litigation.

(Id. at 3-4.) Plaintiff maintains further that the "objectively unreasonable" standard under Rule 11
is not substantively different from the "objectively unreasonable" standard under Section 505. (Id.
at 4; see also id. at 2

ClT]he cited case of Margo v.

Weiss ... makes clear that the Rule 11 standard

is substantively the same as the objective unreasonableness factor ... under Section 505 of the
Copyright Act.").) Furthermore, Plaintiff argues that based on the Circuit split concerning whether
the mere registration of a copyright can trigger the statute of limitations, Plaintiffs argument that
its claims were not time-barred was "a nonfrivolous argument for extending, modifying, or reversing
existing law or for establishing new law." (Id at 5-7.) Plaintiff further objects that Fogerty's
compensation and deterrence factors do not support an award of attorneys' fees for the same reasons.

(See id. at 8-9.)

4

Plaintiff also objects that "the great financial disparity between the financial resources of
Plaintiff and the Defendants" weighs against awarding attorneys' fees. (Id. at 12.) Plaintiff notes
that Defendants did not object to Plaintiff's assertion that Defendants "are highly successful and
well-heeled corporations with substantial assets and income." (Id. at 9.) Plaintiff also asks this
Court to take judicial notice of a third-party report demonstrating the size of Defendants'
"substantial assets and income." (Id. at 10.) Plaintiff notes, in contrast, its own poor financial
condition. (Id.)
III.

DEFENDANTS' OBJECTIONS

Defendants object to the Report's conclusion that attorneys' fees could not be reasonably
calculated. (Dcts. Obj. at 1~2.) Defendants argue that they adhered "to all of the requirements of
the Federal Rules of Civil Procedure and Second Circuit case law," by providing the amount of
attorneys' fees sought along with "contemporaneous billing records specifying a description of the
services, the date, who performed the work, their hourly rate, and the time expended." (Id.)
Furthermore, Defendants note, because "SBP never objected to counsel's hourly rates or the
evidentiary submission," it failed to meet its burden once Defendants established that the attorneys'
fees are '·presumptively reasonable." (Id. at 2.) Specifically, Defendants argue that SBP never
challenged either "the hourly rates of Defendants' counsel, or contended they are not in line with
those prevailing in this District." (/d. at 3.) Defendants conclude "that it would be an unreasonably
harsh result" to deny their recovery "in light of the Magistrate Judge's finding of a clear entitlement
to attorneys' fees." (Id.)
IV.

ATTORNEYS' FEES ARE WARRANTED

The Report properly concluded that Defendants are entitled to attorneys' fees. With respect
to the first Fogerty factor, the gravamen of Plaintiff's objection is that the Report made an

5

independent determination that, despite this Court's previous findings that Rule 11 sanctions were
not warranted against Plaintiff's counsel, attorneys' fees may nevertheless be awarded. (Pl. Obj. at
2-5.) In support of its argument, Plaintiff principally relies on Margo v. Weiss, No. 96 Civ. 3842
(MBM), 1998 U.S. Dist. LEXIS 17258, at *2 (S.D.N.Y. Oct. 28, 1998). There, however, it was the
parties, not the court, who decided that the standards under Rule 11 and § 505 were the same. See

id. at *2 ("The two sides appear to agree that the standard under both the statute and the Rule is the
same"). Moreover, the court expressly cast doubt on whether that position was a correct one. (See

id.) Thus, Plaintiff has failed to cite any authority for the proposition that just because a claim is
not frivolous for purposes of Rule 11, attorneys' fees may not be awarded under§ 505. (See Report
at 11.)
The Report correctly found that the Plaintiffs litigation position was objectively
unreasonable within the meaning of § 505. (Id. at 12.)

As the Report noted, "the clear and

unambiguous terms of the contracts at issue in this action" provide that the "Master Tapes" and its
derivative works belong to Nems Enterprises, Ltd. ("Nems"). (Id.) Nems used the "Master Tapes"
to produce the movie "The Beatles at Shea Stadium," and Nems assigned ownership of the copyright
in that movie to Subafilms. (Id. at 2.) Furthermore, Plaintiff's claims were plainly time-barred, as
they accrued at least by March 1991-three years after Subafilms obtained the copyright registration
for the movie. (Id. at 12-13 .) As such, the Report correctly found that the objectively unreasonable
factor carries significant weight and militates in favor of awarding attorneys' fees under Section
505. (Id. at 13.) See Crown Awards, Inc. v. Disc. Trophy & Co., 564 F. Supp. 2d 290,294 (S.D.N.Y.
2008) c·Objective unreasonableness of a party's claims or defenses is sufficient to subject a party to
an award of attorneys' fees under§ 505.") (quoting Matthew Bender & Co. v. West Puhl 'g. Co., 240

6

F.3d 116, 121-22 (2d Cir. 2001) (citations omitted); see also Matthew Bender & Co., 240 F.3d at
122 ("An objectively unreasonable argument is not necessarily frivolous or made in bad faith.").
Although the objective unrea$onableness of Plaintiffs litigation position alone may suffice
to award Defendants with attorneys' fees, considerations of compensation and deterrence also
militate in favor of awarding attorneys' fees in this case. The Report properly found that "an award
of attorneys' fees and costs in this case will advance the purposes of the Copyright Act by
compensating the defendants for expending the time and incurring the expense of defending this
action." (Report at 14.) Furthermore, such an award will deter others "from pursuing meritless
claims, such as those asserted in this action." (Id) Plaintiff is correct to note "the great financial
disparity between the financial resources of Plaintiff and the Defendants." (See Pl. Obj. at 9-12.)
However, all other Fogerty factors outweigh the single "financial disparity" factor noted by Plaintiff.
Accordingly, the Report was correct in determining that attorneys' fees are warranted.
This portion of the Report is therefore ADOPTED.

V.

ATTORNEYS' FEES CAN BE REASONABLY CALCULATED 2

The portion of the Report denying Defendants' reasonable attorneys' fees, however, 1s
REJECTED because fees for the attorneys who worked on this matter, from the filing of the
complaint through the decision on the motion to dismiss, may be reasonably calculated.

A.

Reasonable Hourly Rates
The two primary attorneys who worked on this matter, Paul LiCalsi and Michael Kolcun,

charged reasonable hourly rates. A reasonable hourly rate is generally calculated by reference to

2

In both its opposition (to Defendants' motion for attorneys' fees) and objections to the Report, Plaintiff
never challenged the rates charged by Defendants' counsel as not being in line with prevailing hourly rates
in this District. Nor did it ever contend that the number of hours expended in obtaining dismissal of Plaintiff's
complaint was not reasonable.

7

-----·---

the prevailing hourly rates in the district where the court sits for attorneys of "comparable skill,
experience, and reputation." Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998). To receive
attorneys' fees, a party "must document [its] application with contemporaneous time records ...
specify[ingJ, for each attorney, the date, the hours expended, and the nature of the work done." N. Y

StateAss'nforRetardedChildren, Inc. v. Carey, 711 F.2d 1136, 1148(2dCir.1983). Courts may
then award "presumptively reasonable [attorneys'] fee[s]" by taking the product of the hours
reasonably expended and a reasonable hourly rate that reflects "what a reasonable, paying client
would be willing to pay." Arbor Hill Concerned Citizens Neighborhood Ass 'n v. County ofAlbany,
522 F.3d 182, 183-84 (2d Cir. 2008). "[C]ontemporaneous time records ... specify[ing], for each
attorney, the date, the hours expended, and the nature of the work done," are a "prerequisite" for
attorneys' fees. Carey, 711 F.2d at 1147-48.
Defendants seek reimbursement for LiCalsi' s work in this matter at a rate of $630 per hour.
(Deel. of Paul LiCalsi ("LiCalsi Deel."), ECF No. 51,

~

5.) Based on his declaration and firm

biography, LiCalsi is an experienced trial attorney with over thirty-five years of experience and coleader of Robins Kaplan LLP' s ("Robins Kaplan") Entertainment and Media group. (LiCalsi Deel.

il 5; see also LiCalsi Deel., Ex. B, ECF No. 51-4.)

As evidenced by his list of representative matters,

he has also litigated numerous intellectual property cases. (Id.) This rate is within the range of fees
recently authorized for similarly experienced attorneys in this District involved in copyright
infringement actions. See Tu/America Inc. v. Diamond, No. 12 Civ. 3529 (AJN), 2016 WL 1029553,
at *5 (S.D.N.Y. Mar. 9, 2016) (approving rates of $675 per hour and $678.23 per hour for
experienced law firms partners in a copyright infringement action); Regulatory Fundamentals Grp.

LLC v. Governance Risk Mgmt. Compliance, LLC, No. 13 Civ. 2493 (KBF), 2014 WL 4792082, at

8

*2 (S.D.N.Y. Sept. 24, 2014) ("In recent years, New York district courts have approved rates for
experienced law firm partners in the range of $500 to $800 per hour.").
Similarly, the rates for Kolcun, a senior associate at Robins Kaplan, are also reasonable.
Kolcun seeks reimbursement for his work on this matter at a rate of $337 per hour for 2015, $405
per hour for 2016, and $418 per hour for 2017. While Kolcun does not indicate how long he has
been a practicing attorney, his firm biography suggests that he has been practicing since 2012, which
would have made him a third-year associate when Robins Kaplan initially began working on this
matter. (See LiCalsi Deel., Ex. C, ECF No. 51-5.) As evidenced by his firm biography, Kolcun has
been involved in multiple representative matters, including as an associate at a class action law firm
prior to joining Robins Kaplan. (Id.) Kolcun' s requested rate is in line with rates recently approved
by courts in this district for attorneys with comparable experience. See TufAmerica, 2016 WL
1029553, at *6 (finding as reasonable a rate of $375 per hour for a first-year associate and a rate of
$425 per year for a second-year associate). However, without any further information as to why
three different rates were appropriate for this matter, it is reasonable to utilize Kolcun's rate of $405
per hour in calculating attorneys' fees.
On the other hand, Defendants fail to provide sufficient identifying information (such as
education or level of experience) concerning an "A. Shaw" and "S. Rozell," whose names each
appear once in the firm's 2017 invoice for this matter, and "T. Adachi" whose name appears twice
in the firm's 2016 invoice. (See LiCalsi Deel., Ex. A, ECF Nos. 51-1~3; LiCalsi Suppl. Deel., Ex.
D. ('"2017 Invoice''), ECF No. 60-1; Defs. Obj., Ex. A, ECF No. 64-1.) While Rozell is listed in the
invoice as an "Associate," Shaw is a given the title of "Miscellaneous." (2017 Invoice at 7, 12.)
Adachi is listed as a "Staff Attorney." (See LiCalsi Deel., Ex. A, ECF No. 51-2, at 6.) Because a

9

reasonable hourly rate cannot be determined on this information alone, the requested fees for Shaw,
Rozell, and Adachi are excluded from this Court's award of attorneys' fees.
Defendants also fail to provide sufficient identifying information concerning "P. Peterson,"
who is identified in the 2016 invoice as a "Paralegal." (See id.) However, recent cases in this district
suggest that the prevailing rate for paralegals is between $100 and $200 per hour. TufAmerica Inc.
2016 WL 1029553, at *6.

Thus, based on the complete absence of identifying information,

Peterson's hourly rate is reduced from $185 to $100. See Yea Kim v. 167 Nail Plaza, Inc., 05 Civ.
8560 (GBD), 2009 WL 77876, at *9 (S.D.N.Y. Jan. 12, 2009) (reducing paralegal rates where no
information was provided regarding their experience).
B.

Reasonable Hours Worked

As for the number of hours worked, Defendants provide detailed contemporaneous records
specifying '·the initials of the attorneys who performed the work, the date on which the work was
performed, the hours expended to the nearest tenth of an hour, and a description of the work done."
Tu/America Inc., 2016 WL 1029553, at *3. However, most of the time entries in the invoices are

based on block billing. "Block billing, defined as 'aggregating multiple tasks into one billing entry,'
is 'not prohibited,' but may 'make it exceedingly difficult for courts to assess the reasonableness of
the hours billed."' Id. (quoting LV v. NYC Dept. of Ed., 700 F. Supp. 2d 510, 525 (S.D.N.Y.
2010)). "For this reason, block billing combined with vague descriptions in the sparest of terms, ..
. can justify the deduction of a reasonable percentage of the number of hours claimed as a practical
means of trimming fat from a fee application." Id. (citation and quotation marks omitted); see also
Solerv. G& U, Jnc.,658 F. Supp.1093, 1098-99(S.D.N.Y.1987)(reducinghoursforvagueblock

billing entries like "outline," "writing," and "research"). Here, a modest deduction of 10% for the

10

number of hours claimed is appropriate "as a practical means of trimming fat from a fee
application[.]" Kirsch v. Fleet St., Ltd., 149, 173 (2d Cir. 1998) ( quoting Carey, 711 F .2d at 1146).

C.

Fee Calculations
Based on the foregoing, Defendants are entitled to an award of $83,417.45 3 in attorneys'

fees. 4

Proposed
Hours

Approved
Hours 5

Proposed
Rate

Approved
Rates

Fees Awarded

P. LiCalsi

68.6

44.46

$630

$630

$28,009.80

M. Kolcun

144.2

124.92

$405

$405

$50,592.60

81.2

11.61

$418

$405

$4,702.05

1.4

1.13

$185

$100

$113.00

TOTAL:

$83,417.45

P. Peterson

VI.

COSTS CAN BE REASONABLY CALCULATED

The Report recommended that costs sought by Defendants be reduced by $15 9. 66 for
research costs incurred by "T. Adachi," whose fees it found were not warranted. (Report at 19.)
Defendants do not object to this recommendation, and finding no clear error in it, this Court reduces
Defendants' recoverable costs by $159.66 to $1,159.01.

3

As argued by Plaintiff, and acknowledged by Defendants, this amount does not include time spent in relation
to Defendants' motion for sanctions. (See Defs.' Obj. at 8.)
4

Contrary to the Report's conclusion, the fact that this award stems from the work performed by merely two
attorneys further supports, not undermines, the reasonableness of the fees incurred and awarded in this case.
As noted, this Court awards fees for hours worked only between September 2016 and February 2017 and
then reduces those hours by 10% to account for excessive use of block billing.

5

11

VII.

CONCLUSION

This Court ADOPTS Magistrate Judge Fox's Recommendation. Defendants' motion for
attorneys' fees and costs is GRANTED. Plaintiff shall pay Defendants' reasonable fees in the
amount of$83,417.45 and costs in the amount of$1,159.0l.
The Clerk of the Court is directed to close the motion at ECF No. 49 accordingly.

Dated: New York, New York
March 29, 2018
SO ORDERED.

United States District Judge

12