
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                                 ____________________        No. 96-2192                                   MARTHA EDWARDS,                                 Plaintiff, Appellee,                                          v.                                 RED FARM STUDIO CO.,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF RHODE ISLAND                     [Hon. Ernest C. Torres, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Lynch, Circuit Judge,                                        _____________                      Aldrich and Bownes, Senior Circuit Judges.                                          _____________________                                 ____________________            John D. Deacon, Jr. for appellant.            ___________________            Michael T.  Eskey with whom Lauren  E. Jones  and Jones Associates            _________________           ________________      ________________        were on brief for appellee.                                 ____________________                                    March 28, 1997                                 ____________________                      ALDRICH, Senior  Circuit Judge.  This  is an appeal                               _____________________            by Red Farm Studio Co., a successful defendant in a copyright            infringement  case, from  the  court's denial  of  attorney's            fees.    Concededly,  fees  are  discretionary,  the  statute            reading as follows,                           In  any  civil  action   under  this                      title,  the court  in its  discretion may                      allow the  recovery of  full costs  by or                      against any  party other than  the United                      States or an officer thereof.   Except as                      otherwise  provided  by  this title,  the                      court   may   also  award   a  reasonable                      attorney's fee to the prevailing party as                      part of the costs.            17 U.S.C.    505.   The  court  did award  defendant  partial            costs.                      Defendant  has  assumed  a heavy  burden,  but  not            without justification.  We reverse.                      A nationwide difference  of views  on this  subject            led to the  case of Fogerty v.  Fantasy, Inc., 510  U.S. 517,                                _______     _____________            534  (1994), where  the Court  rejected the  so-called "dual"            standard  rule.   "[P]revailing  plaintiffs [were]  generally            awarded  attorney's  fees  as   a  matter  of  course,  while            prevailing defendants  must show  that the original  suit was            frivolous  or brought in bad faith."  510 U.S. at pp. 520-21.            Rather, defendants are entitled to consideration "evenhandly"            with plaintiffs.                      The Court particularly criticized Breffort v. The I                                                        ________    _____            Had a Ball Co., 271 F. Supp. 623 (S.D.N.Y. 1967), saying,             ______________                                         -2-                           That   court  concluded   that  "the                      considerations prompting an award of fees                      to   a   successful  plaintiff   must  of                      necessity  differ from  those determining                      whether   a   prevailing   defendant   is                      entitled  to such  an award."   Breffort,                                                      ________                      271 F.  Supp., at  627.  As  support, the                      court stated:   "The purpose of an  award                      of  counsel  fees  to a  plaintiff  is to                      deter  copyright infringement. . . .   In                      the  case  of  a   prevailing  defendant,                      however,  prevention  of infringement  is                      obviously not  a factor; and if  an award                      is  to be  made at  all, it  represents a                      penalty  imposed  upon the  plaintiff for                      institution of a baseless,  frivolous, or                      unreasonable suit, or  one instituted  in                      bad faith."   Ibid.   As we  have already                                    _____                      explained,  supra,  at 527,  such  is too                                  _____                      narrow  a view  of  the  purposes of  the                      Copyright   Act   because  it   fails  to                      adequately  consider  the important  role                      played by copyright defendants.            510 U.S. at 532 n.18.                      The  district  court  ruling  that   Fogerty  found                                                           _______            improper  was  that  the  defendant could  not  recover  fees            because  it  had  not   "demonstrated  that  the  action  was            frivolous  or was  instituted and  prosecuted in  bad faith."            Fantasy,  Inc. v.  Fogerty,  984 F.2d  1524,  1532 (9th  Cir.            ______________     _______            1993).  The  Supreme Court  condensed this  to "frivolous  or            brought in bad faith."                      In  the case  at  bar1 there  were three  pertinent            court proceedings.  On November 16, 1995, the court delivered            an oral  opinion denying plaintiff Martha  Edwards' claims of                                            ____________________            1.  The plaintiff also brought claims for breach of contract,            violations of the Lanham Act and unfair competition.  None of            these claims concerns us here.                                         -3-            copyright  infringement  on  six out  of  eight  works.2   On            September  9, 1996, it  conducted a hearing  on cross motions            for attorneys'  fees and  sanctions.  Except  for defendant's            stating that it  was cited  in its memorandum,  there was  no            mention of  Fogerty; both  counsel argued exclusively  on the                        _______            question of  unreasonableness.  The court  reserved decision.            On  September 18, it delivered  an oral decision on copyright            fees, Lanham Act fees, and Fed. R. Civ. P. 11 sanctions.                      On  copyright,  our  only  issue,  the  court  gave            reasonableness little attention.  It said,                           The  Supreme  Court  in the  Fogerty                                                        _______                      case  identified some of the factors that                      the   Court   ought   to    consider   in                      determining   whether  to   exercise  its                      discretion and award counsel fees.  Those                      [sic], basically, there  are two  factors                      that Fogerty identified.  One  is whether                           _______                      the  claim  could  be   characterized  as                      frivolous    and    second,   what    the                      Plaintiff's motive was, whether the claim                      was brought in bad faith.            This seems singular emphasis,  since Fogerty's point was that                                                 _______            these  extremes  were  no  longer  the  sole  factors  to  be            considered.  510 U.S. at 534 n.19.3  The court proceeded,                                            ____________________            2.  Defendant,  with apologies,  conceded an  inadvertence on            the other two.  The court noted that "those claims turned out            to be a pittance."            3.  The Court listed  non-exclusive factors to  be considered            by courts in making awards of attorney's fees including,                           [F]rivolousness,         motivation,                      objective  unreasonableness (both  in the                      factual and legal components of the case)                      and the need in  particular circumstances                                         -4-                           Here  the  Defendant  relies on  the                      twenty year course of dealing between the                      parties to establish  that the  Defendant                      acted  properly  and  that the  Plaintiff                      acted unreasonably and/or in bad faith in                      bringing the copyright claims.                      The  district  court  then   described  plaintiff's            asserted   justification   for    bringing   suit,    namely,            ambiguities.   Ambiguities  did not  win  the case,  but they            defeated frivolousness and bad faith.                           So   in   light  of   those  things,                      although [I] found  for the Defendant for                      a   variety   of   reasons,    I   cannot                      characterize  the  Plaintiff's  copyright                      claims as  being frivolous or  brought in                      bad faith.                           Therefore,  I  will  not  award  any                      attorney's fees to the Defendant  for the                      copyright claims.                      Faced with this positive language,  plaintiff urges            us to interpret liberally, arguing that,                           Viewed  in  its proper  context, the                      record  elsewhere   additionally  reveals                      that while the court may have principally                      articulated its conclusions at the moment                      of    its    decision    in   terms    of                      frivolousness,   it    used   that   term                      interchangeably       with      objective                      unreasonableness.                      The "elsewhere,"  except in the  earlier hearing on            September 9, is not conspicuous.   Plaintiff would have  been            more   accurate   had   she   said  that   the   court   read                                            ____________________                      to advance considerations of compensation                      and deterrence.            510 U.S. at 534 n.19 (citations omitted).                                         -5-            unreasonableness in terms of frivolousness.4   But manifestly            Fogerty did not reject the dual rule in order to add a clone.            _______                      We  say this  particularly  because the  court held            that an obligation  for fees was  not sparked by  plaintiff's            unilaterally  rejecting a  practice between  the  parties, as            artist  and publisher,  that plaintiff  had accepted  for two            decades; the more  especially when her rejection was based on            ambiguities  which,  in its  decision denying  liability, the            court had said  she could not rely on because  it was she who            had  created them.   This,  it seems  to us,  was inescapably            highly unreasonable, if not  frivolous.  The court overlooked            not only the  tenor of  the Fogerty opinion,  but its  above-                                        _______            quoted  footnote recognizing  "the important  role played  by            copyright  defendants," --  preventing copyright  owners from            restricting  rightful publications.    It used  too strict  a            requirement,    acknowledged,     and    then    disregarded,            unreasonableness, and reached a wrong result.                                            ____________________            4.  For  good measure we note the  court's repetition of this            equivalency when considering plaintiff's obligation  for fees            for the Lanham Act claims (which the court granted, plaintiff            having introduced no evidence),                           The  factors  to  be considered  are                      similar  to  those  applicable under  the                      Copyright  Act  whether  the claims  were                      frivolous or brought in bad faith.   What                      it boils down to is whether the Plaintiff                      acted   reasonably   in  bringing   these                      claims.                                         -6-                      Ordinarily  we  would now  remand for  defendant to            start over.  However,  plaintiff's claim was so poor  that we            consider  it would  be an  abuse of  discretion not  to award            fees; the only question should be the amount.  We reverse and            remand  for that  purpose, cf.  Diamond Star  Bldg. Corp.  v.                                       ___  _________________________            Freed,  30 F.2d  503, 506  (4th Cir.  1994), to  the original            _____            judge.                                         -7-
