500 F.Supp.3d 199
S.D.N.Y.2020Background
- Defendant William Sagan/Norton LLC purchased Bill Graham Archives (BGA) and later made numerous live concert audiovisual recordings available for download/streaming; Plaintiffs are music publishers who own copyrights in 197 musical works at issue.
- Defendants sought compulsory mechanical licenses (NOIs) and relied on third‑party arrangements (HFA, RightsFlow, Joint Exploitation Agreements); the Court held at summary judgment that mechanical licenses for audiovisual concert recordings were invalid and that many licenses were defectively procured.
- The nine‑day damages trial occurred March 2–12, 2020, as COVID‑19 cases rose in NYC; on the last day a juror expressed fear about the pandemic but stated he intended to perform his duty; the jury returned a damages verdict awarding $189,500 statutory damages for 197 works and found infringement/willfulness on many works.
- Plaintiffs moved for a new damages trial, arguing the pandemic prevented reasonable deliberation; they also moved for attorneys’ fees and costs under 17 U.S.C. § 505.
- The Court denied the new‑trial motion (no miscarriage of justice shown: short deliberations, low per‑work awards, and juror statements did not demonstrate coercion or unfairness) and granted Plaintiffs’ fee motion but reduced the requested fee award by 60%, resulting in a net award of $2,420,226.
- The Court found several of Defendants’ defenses were vigorously litigated and not sanctionable, but concluded Defendants’ lack of admissible proof of artist consent (despite notice of potential defects) was objectively unreasonable and supported a limited fee award; equitable factors (financial disparity, fee/damages gap) warranted a large reduction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether COVID‑19 fears and brief deliberations require a new damages trial | Trial was fundamentally unfair because jurors rushed/did not deliberate due to pandemic fears (juror statement; <1 hour deliberation) | No coercion or court pressure; juror affirmed desire to perform duty; court followed CDC guidance; verdict within statutory range | Denied — no miscarriage of justice; juror comments and short deliberations insufficient to overturn verdict |
| Whether Plaintiffs are "prevailing parties" eligible for fees under § 505 | Plaintiffs obtained a merits victory on infringement and willfulness and are prevailing parties | Defendants point to low damages award and limited monetary recovery as negating prevailing‑party status | Granted — Plaintiffs prevailed on liability and willfulness issues and so are prevailing parties |
| Whether Defendants’ litigation positions were objectively unreasonable (basis for fee award) | Defendants unreasonably insisted on artist consent and validity of mechanical licenses despite lack of admissible evidence | Defendants argue novel/complex issues justified litigation and some losing arguments were not in bad faith | Court found much of Defendants’ litigation reasonable, but held their evidence‑less insistence on artist consent was objectively unreasonable and weighs in favor of fees |
| Size of fee award (and reduction) — appropriate deterrence vs. fairness to financially weaker defendant | Seek full fees (~$6.05M) to incentivize enforcement and deter infringement | Excessive relative to damages; defendant financially weaker; many fees unrelated to damages outcome | Fees awarded but reduced 60% (net ~$2.42M) to account for equitable concerns and disproportion between fees claimed and damages recovered |
Key Cases Cited
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (U.S. 1994) (standards for awarding attorneys’ fees in copyright cases)
- Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979 (U.S. 2016) (objective unreasonableness factor given substantial weight)
- Atkins v. New York City, 143 F.3d 100 (2d Cir. 1998) (standard for granting new trial under Rule 59)
- Lucas v. American Mortgage Co., 630 F.2d 291 (5th Cir. 1980) (new‑trial concerns where external emergency pressured jurors)
- Warner Bros., Inc. v. Dae Rim Trading, Inc., 877 F.2d 1120 (2d Cir. 1989) (prevailing‑party and fee‑award context in copyright litigation)
- Matthew Bender & Co., Inc. v. West Pub. Co., 240 F.3d 116 (2d Cir. 2001) (objective unreasonableness and fee considerations)
- Beastie Boys v. Monster Energy Co., 112 F. Supp. 3d 31 (S.D.N.Y. 2015) (awarding fees for reckless licensing conduct; reduction principles)
- Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991) (deterrence weighs in favor of fees where defendant acted recklessly)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (lodestar and reasonableness of fee awards)
- Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182 (2d Cir. 2008) (factors for assessing reasonable attorneys’ fees)