Sands v. Bauer Media Group USA, LLC

Filing 67

MEMORANDUM OPINION: This action shall be dismissed with prejudice unless Sands, on or before October 29, 2019, posts of a bond or other sufficient security in the amount of $50,000 for costs and attorney's fees in this action. SO ORDERED. (Signed by Judge Lewis A. Kaplan on 10/22/2019) (mml) Transmission to Finance Unit (Cashiers) for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------x
STEVE SANDS,
Plaintiff,
17-cv 9215 (LAK)

-againstBAUER MEDIA GROUP USA, LLC,
Defendant.

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MEMORANDUM OPINION
Appearances:
Richard Liebowitz
Yekaterina Tsyvkin
LIEBOWITZ LAW FIRM PLLC
Attorneysfor Plaintiff
Terence P. Keegan
David S. Korzenik
MILLER KORZENIK SOMMERS RAYMAN LLP
Attorneys for Defendant
LEWIS A. KAPLAN, District Judge.
On September 18, 2019, I issued a memorandum opinion that, among other things,
granted defendant Bauer Media Group USA, LLC's motion for sanctions [DI-38] against plaintiff
Steve Sands and his counsel, Richard Liebowitz, "to the extent that ... plaintiff shall show cause,
on or before October 2, 2019, why the Court should not condition plaintiffs ability to proceed with

2
this action on the posting of a bond or other sufficient security in the amount of $50,000 for costs
and attorney's fees in this action." 1 The parties have briefed the issue, and it is now ripe for decision.

Discussion
Local Civil Rule 54.2 provides:
"The Court, on motion or on its own initiative, may order any party to file an original
bond for costs or additional security for costs in such an amount and so conditioned
as it may designate. For failure to comply with the order the Court may make such
orders in regard to noncompliance as are just, and among others the following: an
order striking out pleadings or staying further proceedings until the bond is filed or
dismissing the action or rendering a judgment by default against the non-complying
party."
The "costs" for which courts may require a security include the reasonable attorneys'
fees available to a prevailing defendant under Section 505 of the Copyright Act.2 "Factors generally
considered [in determining whether to require security for costs] include: [1] the financial condition
and ability to pay of the party at issue; [2] whether that party is a non-resident or foreign corporation;
[3] the merits of the underlying claims; [4] the extent and scope of discovery; [5] the legal costs
expected to be incurred; and [6] compliance with past court orders."3 In copyright cases, courts rely

Memorandum Opinion 15 [DI-56].
2

See Cruz v. Am. Broad. Companies, Inc., No. 17-CV-8794 (LAK), 2017 WL 5665657, at
* 1 (S.D.N.Y. Nov. 17, 2017) (citing Selletti v. Carey, 173 F.R.D. 96, I 00 (S.D.N.Y. 1997)
(Chin, J.), aff'd, 173 F.3d 104 (2d Cir. 1999)); see also 17 U.S.C. § 505.
3

Id. (quoting Selletti, 173 F.R.D. at 100-01); see also, e.g., Mango v. Democracy Now!
Prods., Inc., No. 18CV10588 (DLC), 2019 WL 3325842, at *2 (S.D.N.Y. July 24, 2019)
(same); Rice v. Musee Lingerie, LLC, No. 18-CV-9130 (AJN), 2019 WL 2865210, at *I
(S.D.N.Y. July 3, 2019) (same).

3
frequently on the fifth and sixth factors, at times to the exclusion of the other four.4 "Security often
has been required where the merits of a plaintiffs case are questionable and there is doubt as to the
[plaintiffs] ability to satisfy any costs judgment that ultimately may be imposed."5
Factor one points in neither direction, as the parties have not presented information
on Sands's financial condition or ability to pay. Factor two points in favor of Sands because he is
a U.S. citizen. Although I need not look to the merits of Sands's claim, as factor three invites me
to do, I note that his discovery violation has obscured important facts and impeded thereby my ability
to assess the merits. Moreover, at this time it appears that Bauer has a reasonable likelihood of
success on his fair use defense. Factor four points against Sands, as his discovery violation has
created the need for additional discovery and, therefore, additional costs for Bauer. Defense counsel
estimates, and I have no reason to doubt, that the additional attorneys' fees to be incmTed as a result
of the reopened discove1y may be as high as $40,000 to $60,000.6
Factors five and six are where the rubber meets the road. As noted above, Sands may
be required under Section 505 of the Copyright Act to pay Bauer's reasonable attorneys' fees. Bauer
asserts that it already has incurred "well in excess" of $50,000 in attorneys' fees litigating this case. 7

Rice, No. 18-CV-9130 (AJN), 2019 WL 2865210, at* 1 (citing, e.g., Leibowitz v. Galore
Media, Inc., No. 18-cv-2626 (RA) (HBP), 2018 WL 4519208, at *2 (S.D.N.Y. Sept. 20,
2018)).
Cruz, No. 17-CV-8794 (LAK.), 2017 WL 5665657, at *1 (citingSelletti, 173 F.R.D. at 10102).
6

Declaration of David S. Korzenik in Support of Bauer Media Group USA, LLC's Award
of Attorney's Fees & in Support of Order Requiring Security for Costs 3 [Dl-65].
7

Id

4

Its counsel has submitted invoices pertaining to its work litigating the motion for sanctions that total
roughly $40,000. 8 I already have ordered Mr. Liebowitz to reimburse Bauer for fees incun-ed
litigating that motion,' and I therefore do not consider those fees in estimating the costs and expenses
that Sands may be required to pay under Section 505. Nonetheless, I find that the other work
performed by Bauer's counsel has generated significant fees and that those fees will continue
accruing as the litigation moves forward. The fifth factor weighs strongly in favor of ordering Sands
to post a bond. 10
If Sands ultimately is ordered to pay Bauer's reasonable attorneys' fees, I have reason
to doubt that he will comply with any such order in light of his failure to comply with the March 9,
2018 order to produce disclosures required by Rule 26(a). As I found in my prior opinion, Sands
misleadingly identified only himself as a person likely to possess information concerning the
licensing history of the allegedly infringed photographs at issue in this case. 11 His failure to identify
Getty Images and Matrix Pictures as entities with relevant information - without any satisfactory

8

Id at 2.
9

See Memorandum Opinion 15 [D1-56].
10

Bauer did not provide invoices documenting its counsel's other work litigating this matter.
Such invoices would have been more helpful to understanding the costs it has incurred than
the representation of its counsel that those costs - apparently inclusive of the roughly
$40,000 spent litigating the sanctions motion - are "well in excess" of $50,000.
Nonetheless, I find that the amount of fees Bauer has incurred is significant in light of the
billing rates noted in its papers, see id at 3, along with my assessment of the rough amount
of hours an attorney would reasonably expend on this work. I need not be aware of the
precise amount Bauer's counsel has invoiced to conclude that, when viewed in conjunction
with the other factors I consider in this opinion, it substantiates the relief ordered herein.
11

Memorandum Opinion 7-9 [D1-55].

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excuse for the omission -prejudiced Bauer and caused me to reopen discovery. 12 This violation was
neither inadvertent nor insubstantial. 13
Sands's opposition to the order to show cause does little to assuage these concerns.
His October 2, 2019 memorandum in response to that order is copied almost verbatim from his
November 30, 2018 memorandum in opposition to Bauer's motion for a bond as security. 14 Thus,
some ofhis central contentions, such as a lengthy section arguing that "Sands has never violated any
Court orders," 15 are incorrect and raise serious questions about his (and his counsel's) interest in
litigating this case - a factor that weighs further in favor of conditioning Sands' s ability to proceed
on his posting of a bond or other sufficient security. Sands provides otherwise no persuasive

12

Id. at 11-15.
13

As I found, Sands's violation left Bauer,
post the close of the discovery period[,] facing a motion for pa1tial summary
judgment motion as to liability, a previously unmade claim that these photos had
been licensed to Getty and Matrix, and still no documentary evidence of any such
licenses, let alone any information at all about the economic terms of any such
licenses. Now it has before it a need for reopened discovery of plaintiff, Getty, and
Matrix -the last of which is based in the United Kingdom and may not be subject
to process here - and a waste of some level of effort between the date of the initial
conference and the present.
Id. at 14.
14

Compare Memorandum of Law in Response to Court's Order to Show Cause as to Why
Plaintiff Should Not Be Required to Post a Bond as Security for Costs and Fees Under
Local Rule 54.2 [DI-58], with Memorandum of Law in Opposition to Defendant's Motion
for a Bond as Security for Costs and Fees Under Local Rule 54.2 and for Discovery
Sanctions [DI-43].
15

Memorandum of Law in Response to Court's Order to Show Cause as to Why Plaintiff
Should Not Be Required to Post a Bond as Security for Costs and Fees Under Local Rule
54.2 at23 [Dl-58]; id. at21-26.

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argument rebutting my findings that Bauer has incun-ed and will continue to incur significant costs
that may be recoverable under Section 505.16
In sum, there is a reasonable possibility that Sands will be required to reimburse
Bauer's costs, and Sands's conduct in this litigation - to say nothing of his counsel's conduct 17 reveals a reasonable possibility that Sands will default on that obligation.

Under these

circumstances, the Rule 54.2 order contemplated in my previous opinion is wan-anted.

Conclusion
This action shall be dismissed with prejudice unless Sands, on or before October 29,
2019, posts of a bond or other sufficient security in the amount of $50,000 for costs and attorney's
fees in this action.
SO ORDERED.
October 22, 2019

Dated:

16
I decline Bauer's request to hold that Sands defaulted on the order to show cause by
resubmitting old materials.
17

Other courts in this district have cited Mr. Liebowitz's repeated failure to comply with court
orders and his habit of filing misleading documents as weighing in favor of imposing a
bond on his clients. See, e.g., Rice, No. 18-CV-9130 (AJN), 2019 WL 2865210, at *1. I
reach my holding without considering these factors, as I find that Sands' s conduct in this
case merits the relief ordered herein. Nonetheless, to the extent Mr. Liebowitz's conduct
in other cases is relevant to his client's likelihood of defaulting on a possible obligation to
pay attorneys' fees, that conduct would weigh heavily in favor of requiring Sands to post
a bond.