United States District Court, W.D. Wisconsin
MARILYN MOFFAT, KAREN KEMMIS, DANIELLE PARKER, and MARK RICHARDS, Plaintiffs,
ACADEMY OF GERIATRIC PHYSICAL THERAPY, Defendant.
OPINION & ORDER
D. PETERSON, DISTRICT JUDGE.
Marilyn Moffat, Karen Kemmis, Danielle Parker, and Mark
Richards claimed ownership of copyright in course materials
used by defendant Academy of Geriatric Physical Therapy.
Plaintiffs asserted copyright infringement claims, and the
Academy asserted counterclaims for breaches of contract and
fiduciary duty. The court granted summary judgment in favor
of the Academy and dismissed the copyright infringement
claims, Dkt. 61, and the parties stipulated to dismiss the
counterclaims, Dkt. 88.
Academy has filed a motion for attorney fees and a bill of
costs. Dkt. 92 and Dkt. 93. The court will order costs in the
amount requested by the Academy. The court will grant the
Academy's motion for attorney fees, but it will not award
the full amount requested. The court finds both the hourly
rates and the amount of time spent by counsel to be
reasonable. But the court will reduce the fee award slightly
to reflect that counsel's work on the Academy's
counterclaims does not perfectly mirror the work required to
defend plaintiffs' copyright claims. More significantly,
the court will also reduce the fee award by one-third, to
reflect the Academy's contribution to the poor
contracting that led to this dispute in the first place. The
Academy is awarded attorney fees in the amount of $177,
203.95 and costs in the amount of $8, 497.01.
court will deny Academy's motion under 28 U.S.C. §
1927 for sanctions against plaintiffs' former counsel. It
will grant plaintiffs' motion to file a sur-reply. Dkt.
Grounds for attorney fees
the Copyright Act, a district court “may . . . award a
reasonable attorney's fee to the prevailing party.”
17 U.S.C. § 505. The Act's language “clearly
connotes discretion, and eschews any ‘precise rule or
formula' for awarding fees.” Kirtsaeng v. John
Wiley & Sons, Inc., 136 S.Ct. 1979, 1985 (2016)
(quoting Fogerty v. Fantasy, Inc., 510 U.S. 517,
533, 534 (1994)). But a district court's discretion is
cabined by two principles. First, the court cannot grant
“attorney fees as a matter of course.”
Id. (quoting Fogerty, 510 U.S. at 533).
Instead, the “court must make a more particularized,
case-by-case assessment.” Id. Second, the
court “may not treat prevailing plaintiffs and
prevailing defendants any differently.” Id.
Defendants should be “encouraged to litigate
[meritorious defenses] to the same extent that plaintiffs are
encouraged to litigate meritorious claims of
infringement.” Id. (quoting Fogerty,
510 U.S. at 527). In essence, “[u]nlike many
fee-shifting statutes, which entitle prevailing plaintiffs to
recover fees as a matter of course but allow prevailing
defendants to recover fees only if the suit was frivolous,
[the Copyright Act] treats both sides equally and allows an
award in either direction.” Riviera Distribs, Inc.
v. Jones, 517 F.3d 926, 928 (7th Cir. 2008).
these two limiting principles, a district court may consider
several discretionary factors: (1) frivolousness of claims or
defenses; (2) motivation of the parties; (3) objective
unreasonableness; and (4) “the need in particular
circumstances to advance considerations of compensation and
deterrence.” Kirtsaeng, 136 S.Ct. at 1985
(quoting Fogerty, 510 U.S. at 534, n.19). This is
not an exclusive list of factors, and a district court has
wide discretion to consider “the totality of
Seventh Circuit, “the two most important considerations
. . . ‘are the strength of the prevailing party's
case and the amount of damages or other relief the party
obtained.'” Klinger v. Conan Doyle Estate,
Ltd., 761 F.3d 789, 791 (7th Cir. 2014) (quoting
Assessment Techs. of Wis., LLC v. WIREdata, Inc.,
361 F.3d 434, 436 (7th Cir. 2004)). This means that
“[i]f the case was a toss-up and the prevailing party
obtained generous damages, or injunctive relief of
substantial monetary value, there is no urgent need to add an
award of attorneys' fees.” Id. (quoting
Assessment Techs., 361 F.3d at 436). On the other
hand, if “the claim or defense was frivolous and the
prevailing party obtained no relief at all, the case for
awarding attorneys' fees is compelling.”
Id. The Seventh Circuit has held that a prevailing
defendant, who by definition does not obtain monetary relief,
is “entitled to a ‘very strong' presumption
in favor of receiving attorney fees.” Id.
(quoting Assessment Techs., 361 F.3d at 437). This
rule avoids forcing a defendant to enter into “a
nuisance settlement” and abandon meritorious defenses.
Id. (quoting Assessment Techs., 361 F.3d at
this analytical framework in mind, the court turns to the
factors that are salient in this case.
The Academy prevailed, but as the defendant makes no
Academy is plainly the prevailing party here because the
copyright claims at the heart of this case were decided in
its favor. The Academy's counterclaims largely, though
not entirely, mirrored plaintiffs' claims. Thus, the
dismissal of the relatively minor counterclaims does not
diminish the Academy's status as the prevailing party.
But the Academy makes no affirmative recovery here, so under
the Seventh Circuit's guidance, the Academy is entitled
to a presumption that it should recover its fees.
contend that the Seventh Circuit's view is contrary to
Kirtsaeng, where the Supreme Court explained that a
district court “may not treat prevailing plaintiffs and
prevailing defendants any differently.”
Kirtsaeng, 136 S.Ct. at 1985. In Kirtsaeng,
one of the issues was whether a district court should give
“substantial weight” to the reasonableness of the
losing party's position. Id. at 1988-89.
Although the Supreme Court concluded that a district court
could give such substantial weight, the Court nonetheless
remanded the case because the Second Circuit had “a
presumption against granting fees” when the losing
party's position was reasonable. Id. Such a
presumption, the Court explained, went “too far in
cabining how a district court must structure its analysis and
what it may conclude from its review of relevant factors,
” and the district courts in the Second Circuit had
turned “substantial weight” to “nearly
dispositive weight” when evaluating fee petitions.
makes it clear that a neither side is entitled to a
dispositive presumption on the fee question. But
Kirtsaeng does not contradict the Seventh
Circuit's guidance that a prevailing defendant who takes
nothing should generally be entitled to fees. This notion is
really just the converse of the idea that a prevailing
plaintiff who makes a recovery that is far less than the
expense of the litigation should also generally be entitled
to fees. So both plaintiffs and defendants are treated
equally in this regard. It's also worth pointing out that
the Seventh Circuit reaffirmed the presumption rule in
Klinger, 761 F.3d at 791, after the Supreme Court
had held that “[p]revailing plaintiffs and prevailing
defendants are to be treated alike, ” in
Fogerty, 510 U.S. at 534. So the Seventh Circuit
recognized the obligation to treat both sides alike when it
reaffirmed the presumption rule.
court concludes that as a prevailing defendant who recovered
nothing, the Academy is presumptively entitled to an award of
attorney fees. But that presumption is not dispositive, and
we are far from the end of the analysis.
Strength of plaintiffs' case
strength of plaintiffs' case is a factor that weighs in
favor of awarding fees to the Academy. Plaintiffs' claims
were facially plausible because the consideration of
copyright ownership begins with the individual human creator
who did the actual work. See Cmty. for Creative
Non-Violence v. Reid, 490 U.S. 730, 737 (1989). Here,
plaintiffs were among the human creators of the works at
issue. And, as the court noted in the summary judgment
opinion, the parties could have avoided this dispute by
contacts that clearly specified ownership. Dkt. 61, at 1. But
despite this facial plausibility, plaintiffs' case was
asserted copyright in eight works. But plaintiffs conceded at
summary judgment that two of the eight copyrighted works, the
Pre-course Materials, were the initial versions of the course
materials and that they belonged to the Academy. The
remaining six works, the 2013 Materials, were derivative
works based on the Pre-course Materials. So plaintiffs could
claim ownership, at most, in those aspects of the 2013
Materials that were original to them. And even then,
plaintiffs' rights to create derivative works based on
the Pre-course Materials were subject to the approval ...