Yellow Pages Photos, Inc. v. Ziplocal, LP
846 F.3d 1159
11th Cir.
2017

Background

  • YPPI licensed a library of photographs to Ziplocal in 2004 under a contract (SLPA + EULA) that included a prevailing-party fee-and-costs clause covering enforcement and use of the photos.
  • Ziplocal transferred YPPI’s licensed images to Yellow Pages Group (YPG) without YPPI’s authorization; YPPI sued for breach of contract and copyright infringement (against Ziplocal and YPG).
  • A jury found Ziplocal breached the contract (no damages), found copyright infringement (statutory damages against YPG; nominal $1 actual damages against Ziplocal), and found Ziplocal liable as a contributory infringer for $100,000 actual damages; verdicts were upheld on appeal.
  • YPPI sought $1.42M in attorney’s fees and $269k in nontaxable costs under the contract; the District Court calculated a lodestar of $924,730.14 but reduced it 92.5% (awarding $69,354.76) by applying a proportional formula based on damages recovered versus damages sought; it applied the same 92.5% cut to nontaxable costs (awarding $20,211.37).
  • YPPI appealed, arguing (1) the District Court improperly excluded hours spent on intertwined copyright claims from the lodestar, (2) the court impermissibly used a strict mathematical proportionality (cash-register) reduction keyed to damages, and (3) it wrongly denied full contractual nontaxable costs without a sound basis.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether hours on copyright claims tied to the contract should be included in the lodestar YPPI: Copyright claims were inextricably intertwined with contract breach so fees for those hours are recoverable under the contract Ziplocal: Fees for copyright claims should be excluded from contractual-fee award Court: Include those hours — copyright claims arose from the same contract and are covered by the contractual fees clause
Whether the district court may reduce lodestar by strict mathematical ratio of damages awarded to damages sought YPPI: Mathematical reduction is impermissible; lodestar is presumptively reasonable and only rarely adjusted Ziplocal: Proportional reduction reflects plaintiff’s limited success and is appropriate Court: Reversed — applying a cash-register proportional formula (92.5% reduction) was an abuse of discretion
Whether contractual fee provision permits full recovery or allows district court large reductions YPPI: Contract grants prevailing party attorney’s fees and costs (intended to enable enforcement of minor breaches) Ziplocal: Court may discount heavily because plaintiff achieved limited recovery Court: Contract contemplated fee recovery; an extreme reduction defeats the parties’ bargain and is unreasonable
Whether district court properly denied full nontaxable costs absent a stated "sound reason" YPPI: Contract covers taxable and nontaxable costs; presumption favors awarding costs; no sound basis for denial Ziplocal: Reduction justified by plaintiff’s limited success Court: Reversed — Rule 54(d) presumption and the contractual entitlement require a sound reason to deny full costs; flat proportional cut was insufficient

Key Cases Cited

  • Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar framework and requirement for concise, clear explanation of fee awards)
  • Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (lodestar is presumptively reasonable; adjustments are rare)
  • Cullens v. Georgia Dept. of Trans., 29 F.3d 1489 (11th Cir. 1994) (rejects a rote cash-register proportional approach to fee awards)
  • Popham v. City of Kennesaw, 820 F.2d 1570 (11th Cir. 1987) (assessing degree of success and when claims are "inextricably intertwined")
  • City of Riverside v. Rivera, 477 U.S. 561 (1986) (rejects strict proportionality between damages recovered and fee award in civil rights cases)
  • Crawford Fitting Co. v. J.T. Gibbons, 482 U.S. 437 (1987) (§1920 defines taxable costs; contracts can expand recoverable costs)
  • Arcadian Fertilizer, L.P. v. MPW Indus. Servs. Inc., 249 F.3d 1293 (11th Cir. 2001) (contractual provisions can permit non-§1920 costs)
  • Lipscher v. LRP Publ., Inc., 266 F.3d 1305 (11th Cir. 2001) (prevailing party entitled to costs even with minimal recovery if judgment obtained on any claim)
  • Mathews v. Crosby, 480 F.3d 1265 (11th Cir. 2007) (strong presumption favoring award of costs under Rule 54(d))
  • Chapman v. AI Transp., 229 F.3d 1012 (11th Cir. 2000) (denial of costs functions as penalty; requires sound reason)
  • Bivins v. Wrap It Up, Inc., 548 F.3d 1348 (11th Cir. 2008) (prohibits double-counting factors already considered in lodestar when adjusting fees)
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