Dissenting Circuit Judge Intimates No Fees Were Deserved Based on Scathing Comments of District Judge.
Just to show you how attorney’s fees make the world go round and affirm our Mission Statement that they are often a controversial (and determinative) factor in commercial litigation, we have decided to do a quick synopsis of an interesting federal copyright case. To say the least, plaintiffs prevailed (but not that much), asked for a lot of fees, received about 45% of what they asked for, and barely sustained the result on appeal—with a dissenting Ninth Circuit Judge suggesting that nothing should have been awarded in the fee award category. So, here we go with Milton H. Greene Archives, Inc. v. Julien’s Auction House, LLC, Case No. CV 05-7686 AHM (FMOx) (C.D.Cal.) (12/20/07 fees decision), aff’d, Case No. 07-55614 (9th Cir. Sept. 1, 2009) (unpublished).
In Greene Archives, plaintiff Milton H. Greene Archives, Inc.sued for federal copyright infringement, but only recovered $34,875.97 against defendant Julien’s Auction House (even though suing another defendant Barclay Butera, Inc, seeking $2.9 million from both defendants). Because there is a fee-shifting statute under the federal copyright scheme, plaintiff sought to initially recover $611,597.33 from both defendants. The district judge directed plaintiff to recalculate that amount, because Barclay prevailed such that work allotted to that defendant had to be excluded. (As an aside, the district judge ultimately did award fees to Barclay as a prevailing party.) Plaintiff responded by increasing its fee request against Julien’s to $752,208.83, an additional $140,611.50 from the previous request which needed discounting. In the end, the district judge, after applying the factors in Wall Data, Inc. v. Los Angeles County Sheriff’s Dept., 447 F.3d 769, 787 (9th Cir. 2006), only awarded 45% of the total request, or $338,493.97. The district judge did so in a written order that was far from complimentary of plaintiff’s counsel, making such observations and findings as “flagrant greed,” “systematically engag[ing] in conduct that caused the case to be blown out of proportion,” “embarrassing sloppiness,” “miscit[ing] the law,” and incorrectly characterizing the district court’s own order. He even noted that “[t]he outcome of this case and of the trial was a bust.”
[Still from Erich von Stroheim’s Greed, circa 1924]
Although both sides appealed, the Ninth Circuit affirmed across the board. However, there was a split opinion on the award of fees to plaintiff and against Julien’s.
The majority acknowledged that plaintiff’s limited success in receiving essentially nominal damages would have supported an award of no fees (or significantly lower fees). They also indicated that a fee award ten times more than the amount of the compensatory damage could seem “unreasonable under the circumstances.” However, the majority affirmed based on the abuse of discretion standard, especially given the district judge’s birds’ eye view of the litigation and consideration of the correct factors under Wall Data.
Circuit Judge Wardlaw dissented on the fee award. She found that plaintiff only “won” a judgment amounting to approximately 1% of his damage request (described by the district judge as “a bust”) and that the award of almost $340,000 was inexplicable based on the totality of feedback about the performance of counsel in the district judge’s order. “Under these circumstances, the attorneys should have received nothing at all, and certainly not an amount in fees that was worth ten times their client’s recovery.”
BLOG UNDERVIEW—Quite a case. We note that Benjamin G. Shatz, who specializes in appellate law and is with Manatt, Phelps & Phillips, LLP, was one of the counsel representing Julien’s (and almost got a fee reversal). We thank him for sending us District Judge Matz’s fee decision and the subsequent unpublished Ninth Circuit opinion in Greene Archives.