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Sullivan v. Flora, Inc.

United States District Court, W.D. Wisconsin

June 29, 2018

AMY LEE SULLIVAN, Plaintiff,
v.
FLORA, INC., Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY DISTRICT JUDGE.

         Plaintiff Amy Lee Sullivan asserted copyright infringement claims and related unjust enrichment claims against defendant Flora, Inc., based on Flora's use of Sullivan's illustrations. This case was tried to a jury, who (1) rejected defendant's joint works defense (Jury Verdict Phase I (dkt. #251)), (2) found in favor of plaintiff on both her copyright infringement and unjust enrichment claims (Jury Verdict Phase II (dkt. #253)), and (3) awarded her $143, 500 in actual damages for copyright infringement, $3, 600, 000 in statutory damages for copyright infringement and $350, 000 in damages for unjust enrichment (Damages Verdict (dkt. #257)). Not surprisingly, plaintiff opted for the statutory over the actual damages award for the copyright infringement claim, and the court entered judgment in her favor, resulting in a total damages award of $3, 950, 000. (5/16/17 Op. & Order (dkt. #278); Judgment (dkt. #279).)

         Before the court are a number of post-trial motions. Defendant seeks remittitur of the damages award or a new trial on damages as excessive or violating substantive due process. (Dkt. #295.) For the reasons described below, the court agrees that the amount of the jury's statutory award for copyright infringement is very high, but not “monstrously excessive, ” without a rational connection to the evidence or outside a rough comparison to similar cases. Similarly, the award for unjust enrichment is neither excessive, nor against the manifest weight of the evidence. The court also rejects defendant's argument that awards, falling well within the statutory range, “shocks the conscious.” Sullivan also filed her own motion for an award of attorney fees and related non-taxable expenses. (Dkt. #386.) Because the court finds that defendant's joint works defense was objectively reasonable and that there are no other circumstances that would warrant fee-shifting, the court will deny that motion as well. Even so, plaintiff is entitled to statutory costs pursuant to Federal Rule of Civil Procedure 54(d)(1) in the amount of $30, 215.13. (Dkt. #284.) Finally, the parties filed related motions concerning execution of the judgment. The court will grant defendant a brief stay of 45 days to arrange a bond or other acceptable surety, or obtain a further stay from the Seventh Circuit. If defendant fails to accomplish one these steps, plaintiff will be free to proceed to enforce the judgment.

         OPINION

         I. Defendant's Motion for Remittitur or a New Trial

         Defendant Flora seeks remittitur of the jury's statutory damages award of $3, 600, 000.00, to $30, 000.00, based on a theory that: (1) the jury only had a basis for finding infringement of, and thus awarding statutory damages for, 11 of the 33 copyrighted illustrations; (2) the jury had no basis for finding that the infringement was willful; and (3) an award at the statutory maximum for non-willful infringement is capped at $30, 000 per work. Defendant also seeks remittitur of the award for unjust enrichment of $350, 000.00, arguing that plaintiff Sullivan failed to prove any benefit to defendant and the record only reflected three foreign-language productions of the Flor-Essence video. Alternatively, defendant seeks a new trial on damages.

         In reviewing a request for remittitur, the court is to consider: “(1) whether the award is monstrously excessive; (2) whether there is no rational connection between the award and the evidence; and (3) whether the award is roughly comparable to awards made in similar cases.” Deloughery v. City of Chi., 422 F.3d 611, 619 (7th Cir. 2005). In reviewing a request for a new trial under Federal Rule of Civil Procedure 59, the court considers whether the “verdict is against the manifest weight of the evidence.” Mejia v. Cook Cnty., Ill., 650 F.3d 631, 633 (7th Cir. 2011).

         As an overarching matter, plaintiff contends that defendant should not be able to raise insufficiency of the evidence challenges in the context of a Rule 59 motion, having failed to move before the case was submitted to the jury under Rule 50(a) or to renew the motion under Rule 50(b). (Pl.'s Opp'n (dkt. #313) 4-5.) Although that sanction would be too harsh, Rule 59 may not be used to raise new theories or arguments that could have been presented before judgment was entered. See Uphoff v. Elegant Bath, Ltd., 176 F.3d 399, 410 (7th Cir. 1999) (“Rule 59(e) may not be used to raise novel legal theories that a party had the ability to address in the first instance.”). Accordingly, the court will consider the merits of defendant's various arguments in light of whether it could have raised them in a Rule 50(a) motion.

         A. Statutory Damages Award for Copyright Infringement

         i. Number of Works

         First, defendant contends that while plaintiff's copyrights cover 33 illustrations, plaintiff only introduced evidence to support a finding of infringement as to 11 of those illustrations.[1] This finding is material because the jury was instructed to award statutory damages by individual work, as the law directs (Damages Instr. (dkt. #254) 2), and the court had previously determined that each illustration constituted a separate work. (4/17/17 Order (dkt. #240).)

         In response, plaintiff directs the court to Exhibit 384, containing the digital files of her copyrighted illustrations that Sullivan testified without contradiction were found on a hard drive copied from Flora's own computer system. (Trial Tr. (dkt. #276) 60.) That Exhibit also describes the illustrations Flora used in foreign language productions. (Ex. 384 (listing illustrations used in the Greek, Spanish and Chinese Flor- Essence videos, among others).) From this, a reasonable jury could infer that all 33 illustrations were used by Flora in violation of Sullivan's copyrighted works. In addition to Sullivan's testimony as to the use of her protected works reflected in Flora's records and advertisements, plaintiff notes the testimony of Flora's own employees, who acknowledged their use of her illustrations in other promotional materials and Flora's efforts to modify the illustrations to avoid Sullivan's claims of copyright infringement, which the jury could reasonably have found was insufficient. (Pl.'s Opp'n (dkt. #313) 7.)

         Supplemented by this testimony from Sullivan and various Flora employees, therefore, a reasonable jury could have relied on Exhibit 384 to conclude that Flora continued to use either the original illustrations (or modified versions of those illustrations that still infringed Sullivan's copyright) well beyond the scope of the originally limited license. Indeed, this finding was probably inevitable in light of defendant's failure to develop any responsive evidence or argument during the course of trial, especially in the damages phase, that the jury should only award statutory damages based on some subset of Sullivan's illustrations. Accordingly, the court rejects any challenge to the statutory damages award on this basis, finding the jury's award for all 33 works had a rational connection to the evidence for purposes of defendant's motion for remittitur and is not against the manifest weigh of the evidence for purposes of defendant's motion for a new trial.

         ii. Jury's Consideration of Various Factors

         Next, defendant challenges the jury's statutory damages award on the basis that the jury disobeyed the court's instructions in arriving at the $3.6 million award. Specifically, the jury was instructed that they may consider the following factors:

• the expenses that defendant saved and the profits that it earned because of the infringement;
• the revenues that plaintiff lost because of the infringement;
• the difficulty of proving plaintiff's actual damages;
• the circumstances of the infringement;
• whether defendant intentionally infringed plaintiff's copyright; and
• deterrence of future infringement.

(Damages Instr. (dkt. #254) 3.)

         Consistent with the law, the jury was neither instructed that they had to consider all of these factors, nor how they should weigh each of the factors; rather, they were told these factors simply provided guidance on how to consider a per work award of $750 to $30, 000, or up to $150, 000 if the jury found that defendant willfully infringed plaintiff's copyright. Nevertheless, defendant now speculates that the jury's treatment of three of the factors either compels remittitur or a new trial. The court addresses each of these three factors below.

         a. Flora's Profits

         First, defendant argues that despite there being no evidence of defendant's profits earned because of the infringement, the jury must have “guessed at Flora's profits” and used that guess to support “this oppressive and disproportionate award.” (Def.'s Br. (dkt. #296) 13.) As context, the court previously determined that plaintiff could not pursue an actual damages award based on defendant's lost profits because of this lack of evidence. (4/25/17 Op. & Order (dkt. #261) 1-7.) Still, defendant never objected to including both expenses saved and profits earned in the factors listed consistent with the pattern jury instructions.

         During deliberations on damages, the jury submitted a question asking for defendant Flora's annual profits from 2014, 2015 and 2016 from the sales of two infringing products, 7 Sources and Flor-Essence. (Court Ex. 19 (dkt. #258-19).) Because there was no evidence breaking out profits attributable to the infringement, the court instructed the jury that “Your decision must be based on the evidence in the record.” (Court Ex. 20 (dkt. #258-20).) Approximately 30 minutes later, the jury rendered their verdict. Defendant engages in rank speculation as to the importance of this brief exchange based solely from the short gap between the court's answer and the jury's verdict.

         Not only does defendant's speculation run contrary to the evidence and instructions given to the jury, but it is much more likely that the jury understood the court's response as confirming that there was no evidence as to defendant's profitability. Moreover, there is nothing in the record to support defendant's contrary theory. See CSX Transp., Inc. v. Hensley, 556 U.S. 838, 841 (2009) (“[J]uries are presumed to follow the court's instructions.”). If anything, the quick turnaround suggests the jury finished its deliberations with renewed understanding that profits were not a factor they could meaningfully consider. Finally, since copyright law did not require plaintiff to prove defendant's profits from infringement, any failure to provide the jury with a sense of those profits falls as much on defendant as plaintiff. Having taken a chance by ...


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