McDermott v. Monday Monday, LLC
1:17-cv-09230
S.D.N.Y.Feb 22, 2018Background
- McDermott sued an Idaho LLC for copyright infringement in S.D.N.Y., alleging the defendant displayed his photograph on its website. Defendant is an Idaho-based digital newspaper that does not sell goods or solicit transactions online.
- Defendant was served late November 2017. On January 2, 2018, defendant served a Rule 68 offer of judgment for $1,000.
- On January 17, 2018, defendant moved to dismiss for lack of personal jurisdiction. Plaintiff did not oppose or amend and voluntarily dismissed the case on January 30, 2018 under Rule 41(a)(1).
- Defendant moved to compel plaintiff to pay attorney’s fees and costs under 17 U.S.C. § 505 (Copyright Act) and Fed. R. Civ. P. 68. Plaintiff argued defendant was not a prevailing party and Rule 68 was inapplicable because no judgment was entered.
- The district court found the filing appeared frivolous and noted plaintiff’s counsel’s history of similar suits, but declined to award fees under § 505 or Rule 68 and warned counsel that future filings lacking a non-frivolous basis for jurisdiction could lead to sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendant is a "prevailing party" under the Copyright Act § 505 after plaintiff's voluntary Rule 41 dismissal | McDermott: not prevailing because dismissal was voluntary and no judicial decision changed parties' legal relationship | Defendant: prevailing because plaintiff’s dismissal followed defendant’s Rule 68 offer and motion to dismiss; plaintiff’s suit was rebuffed | Held: Not a prevailing party here — no judicial imprimatur or judgment; § 505 fee award denied |
| Whether Rule 68 entitles defendant to costs after plaintiff dismissed without a judgment | McDermott: Rule 68 inapplicable because no judgment was entered | Defendant: Rule 68 applies because plaintiff obtained nothing and dismissal followed offer | Held: Rule 68 inapplicable — rule requires a judgment and none was entered |
| Whether court should award fees based on objective reasonableness or misconduct despite lack of prevailing-party status | McDermott: no fee award appropriate; dismissal without prejudice prevents prevailing-party status | Defendant: plaintiff’s filing was frivolous and counsel’s pattern justifies fees or sanctions | Held: Court found the filing appeared frivolous and counsel problematic but declined to exercise § 505 or inherent-power sanctions now; warned of future sanctions if pattern continues |
| Whether dismissal under Rule 41(a)(1) is a judgment that can trigger fee-shifting | McDermott: voluntary dismissal is without prejudice and not a judgment | Defendant: dismissal following defense motion and offer should allow fees | Held: Voluntary dismissal under Rule 41(a)(1) is not a judgment absent court action; fees not triggered |
Key Cases Cited
- Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep’t of Health & Human Resources, 532 U.S. 598 (addresses prevailing-party requirement and judicial imprimatur)
- CRST Van Expedited, Inc. v. E.E.O.C., 136 S. Ct. 1642 (2016) (defines prevailing party and permits fee awards even for non-merits judgments; focuses on material alteration of legal relationship)
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (treats fee awards under Copyright Act as discretionary and lists factors for awarding fees)
- Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979 (fee awards not automatic; prevailing plaintiffs/defendants must be treated alike)
- Revson v. Cinque & Cinque, P.C., 221 F.3d 71 (2d Cir. 2000) (courts’ inherent power to sanction attorneys for bad faith)
- Youssef v. Thisman Construction Corp., 744 F.3d 821 (2d Cir. 2014) (voluntary dismissal under Rule 41(a)(1) presumed without prejudice)
- ISC Holding AG v. Nobel Biocare Finance AG, 688 F.3d 98 (2d Cir. 2012) (Rule 41(a)(1)(A) dismissal is the only form that requires no court action and is effective without court approval)