Tca Television Corp. v. Kevin Mccollum, the Ensemble Studio Theatre, Inc.

TCA TELEVISION CORP., HI NEIGHBOR, and DIANA ABBOTT COLTON, Plaintiffs, v. KEVIN MCCOLLUM, THE ENSEMBLE STUDIO THEATRE, INC., MANHATTAN CLASS COMPANY INC.,ROBERT ASKINS, HAND TO GOD LLC, and DOES and ABC COMPANIES 1-10, Defendants.

15 Civ. 4325 (GBD) (JCF)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

June 12, 2018

MEMORANDUM DECISION AND ORDER

GEORGE B. DANIELS, United States District Judge:

Plaintiffs TCA Television Corp., Hi Neighbor, and Diana Abbott Colton, the successors in interest to the estates of the comedy duo Abbott and Costello, brought this action against Defendants Kevin McCollum, The Ensemble Theatre, Inc., Manhattan Class Company Inc., Robert Askins, Hand to God LLC, and Does and ABC Companies 1-10, alleging Defendants infringed on Plaintiffs' copyright by using dialogue from an Abbott and Costello routine known as Who's on First? (the "Routine") in the Broadway play Hand to God. TCA Television Corp. v. McCollum ("TCA I"), 151 F. Supp. 3d 419, 424 (S.D.N.Y. 2015). In a Memorandum Decision and Order dated December 17, 2015 (the "2015 Decision"), this Court accepted Plaintiffs' claim of copyright ownership but granted Defendants' motion to dismiss Plaintiffs' complaint on the grounds that Defendants' use of the Routine was a non-infringing fair use. Id. at 437. On appeal, the Second Circuit found that Defendants' use of the Routine was not fair use, but affirmed dismissal of the complaint on the grounds that Plaintiffs failed to plausibly allege the existence of a valid copyright interest.¹ TCA II, 839 F.3d at 172. Defendants now move for attorneys' fees and costs incurred in bringing the motion to dismiss and defending the appeal. (See ECF No. 100.)

Before this Court is Magistrate Judge James C. Francis's Report and Recommendation, ("Report," ECF No. 124), recommending that Defendants be awarded $50,123.04 in attorneys' fees and costs.² (Id. at 41.) In his Report, Magistrate Judge Francis informed the parties that failure to file timely objections to the Report would result in a waiver of those objections on appeal. (Id.) Plaintiffs filed timely written objections and requested oral argument on the motion. (See Pls. Objs. ("Objs."), ECF No. 125; Letter from Jonathan D. Reichman to this Court, dated July 21, 2017, ECF No. 126.) Defendants did not file written responses to Plaintiffs' objections, but did respond to the objections at oral argument.

Plaintiffs' objections are overruled. Magistrate Judge Francis's Report is ADOPTED. Defendants' motion for attorneys' fees and costs is GRANTED.

I. LEGAL STANDARDS

A. Reports and Recommendations

A court "may accept, reject, or modify, in whole or in part, the findings or recommendations" set forth within a magistrate judge's report. 28 U.S.C. § 636(b)(1)(C). The court must review de novo the portions of a magistrate judge's report to which a party properly objects. Id. The court, however, need not conduct a de novo hearing on the matter. See UnitedStates v. Raddatz, 447 U.S. 667, 675-76 (1980). Rather, it is sufficient that the court "arrive at its own, independent conclusion" regarding those portions of the Report to which objections were made. Nelson v. Smith, 618 F. Supp. 1186, 1189-90 (S.D.N.Y. 1985) (quoting Hernandez v. Estelle, 711 F.2d 619, 620 (5th Cir. 1983)).

Portions of a magistrate judge's report to which no or "merely perfunctory" objections are made are reviewed for clear error. See Edwards v. Fischer, 414 F. Supp. 2d 342, 346-47 (S.D.N.Y. 2006) (citation omitted). The clear error standard also applies when a party's "objections are improper—because they are 'conclusory,' 'general,' or 'simply rehash or reiterate the original briefs to the magistrate judge.'" Stone v. Comm'r of Soc. Sec., No. 17 Civ. 569 (RJS) (KNF), 2018 WL 1581993, at *3 (S.D.N.Y. Mar. 27, 2018) (quoting Rodriguez v. Colvin, No. 12 Civ. 3931 (RJS) (RLE), 2014 WL 5038410, at *3 (S.D.N.Y. Sept. 29, 2014)). Here, because all of Plaintiffs' objections reiterate arguments made to Magistrate Judge Francis, this Court has reviewed the Report for clear error.

"In clear error review, a court should reverse a finding only if it is 'left with the definite and firm conviction that a mistake has been committed,' and not merely if it 'would have decided the case differently.'" Hernandez v. City of New York, No. 11 Civ. 6644 (KPF) (DF), 2015 WL 321830, at *2 (S.D.N.Y. Jan. 23, 2015) (quoting Easley v. Cromartie, 532 U.S. 234, 242 (2001)). In other words, the clear error standard is "highly deferential . . . and reversal is appropriate only if [the magistrate judge's] discretion is abused" or if the magistrate judge "fails to apply or misapplies relevant statutes, case law, or rules of procedure." Levy v. Young Adult Inst., Inc., No. 13 Civ. 2861 (JPO), 2016 WL 4402038, at *1 (S.D.N.Y. Aug. 18, 2016) (citations omitted); see also BlackRock Allocation Target Shares: Series S Portfolio v. Wells Fargo Bank, Nat'l Ass'n, No. 14 Civ. 10067 (KPF) (SN), 2017 WL 3610511, at *5 (S.D.N.Y. Aug. 21, 2017) (noting thatclear error "is a highly deferential standard, and '[t]he party seeking to overturn a magistrate judge's decision thus carries a heavy burden'") (citation omitted).

B. Copyright Act of 1976

Defendants seek attorneys' fees and costs pursuant to § 505 of the Copyright Act of 1976. Section 505 provides that, in a copyright infringement action, "the court in its discretion may allow the recovery of full costs by or against any party" and "may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505. "[U]nder section 505 . . . an award of attorney's fees may be made for services rendered on appeal as well as at the trial level." Twin Peaks Prods., Inc. v. Publ'ns Int'l, Ltd., 996 F.3d 1366, 1383 (2d Cir. 1993) (internal quotation marks and citation omitted).

In Fogerty v. Fantasy, Inc., the Supreme Court noted that "there is no precise rule or formula" for determining whether costs and fees should be awarded under § 505, but identified "several nonexclusive factors" that "may be used to guide courts' discretion," which include "[1] frivolousness, [2] motivation; [3] objective unreasonableness (both in the factual and legal components of the case), and . . . [4] considerations of compensation and deterrence." 510 U.S. 517, 534 & n.19 (1994). In Kirtsaeng v. John Wiley & Sons, Inc., the Supreme Court further explained that "[a]lthough objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act's essential goals" of "encouraging and rewarding authors' creations while also enabling others to build on that work." 136 S. Ct. 1979, 1986, 1989 (2016).

II. DEFENDANTS ARE ENTITLED TO ATTORNEYS' FEES AND COSTS

The Report found that although Defendants did not establish that Plaintiffs had an improper motivation for bringing this action, the remaining relevant factors—the objectiveunreasonableness of Plaintiffs' claims, the frivolousness of Plaintiffs' arguments, and considerations of compensation and deterrence—favor an award of reasonable attorneys' fees and costs to Defendants. (Report at 21-35.)

A. There is No Clear Error in the Report's Finding of Objective Unreasonableness

The Report found that it was "objectively unreasonable" for Plaintiffs "to argue that (1) "[Plaintiffs' predecessors in interest] assigned the copyright in the Routine" to Universal Pictures Company, Inc. ("UPC"), which produced two films that the Routine appeared in; (2) "the Routine was a work-for-hire" produced for UPC; and (3) "the Routine merged with the film One Night in the Tropics" in which the Routine appeared. (Id. at 23.) Plaintiffs object to this finding because "this Court held in its . . . 2015 [D]ecision that Plaintiffs' copyright ownership claim was . . . sufficiently valid to withstand a dismissal motion," and "the Second Circuit's disagreement with this Court . . . does not transform Plaintiffs' copyright ownership claim from valid to objectively unreasonable." (Objs. at 3.) Plaintiffs' objection to this finding simply reiterates the argument made to Magistrate Judge Francis. (See Pls. Mem. in Opp'n to Defs. Mot. for Attorneys' Fees ("Opp'n"), ECF No. 108, at 7-8).)

After considering this argument, the Magistrate Judge concluded, based on language from the Second Circuit's opinion in this action, that all three of Plaintiffs' theories as to their ownership of a valid copyright were objectively unreasonable. First, the Report noted "the Second Circuit found that the language of" two agreements that Plaintiffs argued created an assignment of the copyright "'plain[ly]' furnished a mere license to UPC to use the Routine" and found "[t]hat is the only reasonable reading of the agreements." (Report at 24 (quoting TCA II, 839 F.3d at 188-89).) The Report also noted that a separate "1984 Quitclaim does not help the Plaintiffs, because the Second Circuit found the language of the document undermined the notion that [UPC] owned thecopyright in the Routine." (Report at 25 (citing TCA II, 839 F.3d at 191).) Thus, the Magistrate Judge found Plaintiffs' theory that the two agreements at issue created an assignment rather than a license "ignore[d] the plain language of the agreements as well as controlling law, [and] was therefore objectively unreasonable." (Report at 27.)

Second, the Magistrate Judge found that Plaintiffs' theory that the Routine was a work for hire pursuant to the two agreements with UPC was undermined by Plaintiffs' admission "that the Routine pre-existed the . . . agreements by 'more than two years.'" (Report at 27 (quoting TCA II, 839 F.3d at 190, and citing Am. Compl., ECF No. 3, ¶ 32).) The Report also noted that the Second Circuit found Abbott and Costello "plainly did not create the Routine at UPC's 'instance and expense.'" (Report at 27 (quoting TCA II, 839 F.3d at 190).) The Report further found that Plaintiffs' argument in their appellate brief...