Seidman v. Authentic Brands Group LLC
1:19-cv-08343
S.D.N.Y.Apr 21, 2020Background
- Plaintiff Helayne Seidman, a professional photographer, licensed a photo to the New York Post (Feb. 16, 2010); ABG posted the Photograph on Shaquille O’Neal’s Facebook page around March 9, 2012 without a license.
- Seidman discovered the Facebook post in July 2019, registered the Photograph with the Copyright Office on Aug. 3, 2019, and sued ABG for copyright infringement on Sept. 8, 2019 seeking statutory damages and a declaration of infringement.
- On March 5, 2020 ABG served a Rule 68 Offer of Judgment (which ABG says exceeded plaintiff’s realistic licensing value); Seidman rejected the Offer.
- ABG moved under Local Civil Rule 54.2 for an order requiring Seidman to post a bond (at least $20,000), arguing the bond is needed to secure likely legal costs, including ABG’s post-Offer attorneys’ fees recoverable under Rule 68 or under 17 U.S.C. § 505.
- Central legal question: whether expected costs include a defendant’s attorneys’ fees such that a bond should be required—principally whether Rule 68 can make attorneys’ fees “costs” payable to a non-prevailing defendant in a copyright case.
- Decision: Court denied ABG’s motion for a bond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Local Rule 54.2 bond is warranted because anticipated costs include defendant’s attorneys’ fees | Bond unnecessary; fees not properly awardable to non-prevailing defendant | Bond warranted to secure ABG’s post-Offer fees recoverable under Rule 68 or under §505 | Denied: insufficient basis to require bond absent showing fees are properly awardable costs |
| Whether Rule 68 permits a defendant who did not obtain a judicial “prevailing party” determination to recover post-offer attorneys’ fees as "costs" in a copyright action | Marek precludes shifting plaintiff’s own post-offer fees; plaintiff not liable for defendant’s fees unless statute permits | Rule 68 + §505 make attorneys’ fees part of costs; defendant entitled to fees when offer exceeds recovery | Court follows majority: Rule 68 does not authorize attorneys’ fees to a non-prevailing defendant; §505 limits fees to judicially "prevailing parties" |
| Whether Rule 68 applies to a defendant who ultimately prevails (i.e., permits recovery of fees if defendant wins) | Rule 68 does not apply when defendant obtains judgment; defendant must rely on §505 | ABG asserted Rule 68 could shift fees | Held that Delta Air Lines controls: Rule 68 applies to offers by defendants and judgments obtained by plaintiffs; it does not furnish fees to a prevailing defendant |
| Whether unadjudicated substantive defenses (copyrightability, statute of limitations) justify a bond now | Plaintiff: photograph copyrightable; discovery rule delayed SOL; premature to conclude otherwise | Defendant: Photograph likely unprotectable or SOL bars relief, making plaintiff’s claim weak and justifying bond | Court: merits may later affect fee liability but are unadjudicated now; premature to require bond on that basis |
Key Cases Cited
- Marek v. Chesny, 473 U.S. 1 (1985) (Rule 68’s “costs” are those costs properly awardable under the relevant substantive statute)
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) (Copyright Act’s §505 gives courts discretion to award attorney’s fees to prevailing parties)
- Delta Air Lines, Inc. v. August, 450 U.S. 346 (1981) (Rule 68 applies only to offers made by defendants and judgments obtained by plaintiffs)
- Selletti v. Carey, 173 F.3d 104 (2d Cir. 1999) (primary purpose of security-for-costs rule is to prevent dissipation of assets and ensure collection of awarded costs)
- Manhattan Review LLC v. Yun, 919 F.3d 149 (2d Cir. 2019) (defining “prevailing party” for fee-shifting statutes as one who effects a judicially sanctioned material alteration of the legal relationship)
- Crossman v. Marcoccio, 806 F.2d 329 (1st Cir. 1986) (attorneys’ fees are not "properly awardable" under Rule 68 where the underlying statute awards fees only to prevailing parties)
- Harbor Motor Co. Inc. v. Arnell Chevrolet-Geo Inc., 265 F.3d 638 (7th Cir. 2001) (Rule 68 does not permit a non-prevailing copyright defendant to recover post-offer attorneys’ fees)
- UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006 (9th Cir. 2013) (same conclusion as to Rule 68 and §505 in copyright context)
- Hescott v. City of Saginaw, 757 F.3d 518 (6th Cir. 2014) (joining majority view that non-prevailing civil-rights defendants cannot recover post-offer attorneys’ fees under Rule 68)