Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 1 of 10
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF NEW YORK
`________________________________
`UNIVERSAL INSTRUMENTS
`CORPORATION,
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`Plaintiff,
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`v.
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`MICRO SYSTEMS ENGINEERING,
`INC. et al.,
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`Defendants.
`________________________________
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`SUMMARY ORDER
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`3:13-cv-831
`(GLS/DEP)
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`Defendants Micro Systems Engineering, Inc. (MSEI) and Missouri
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`Tooling & Automation (MTA) prevailed in this lawsuit when the court
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`granted their motions for judgment as a matter of law, (Dkt. Nos. 391-93),
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`pursuant to a Rule 50 order, (Dkt. No. 396). Pending are defendants’ joint
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`motion for attorneys’ fees and costs pursuant to Section 505 of the
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`Copyright Act.1 (Dkt. Nos. 410-12.)2
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`The Copyright Act grants a court discretion to “allow the recovery of
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`full costs by or against any party other than the United States” and to
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`1 See 17 U.S.C. § 505.
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`2 Although defendants purportedly seek fees under Fed. R. Civ. P. 54(d)(2) and
`Section 505, (Dkt. Nos. 410; 411 at 1), the court considers these requests as a motion for
`attorneys’ fees and costs stemming from Section 505 for the reasons stated below.
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`Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 2 of 10
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`“award a reasonable attorney’s fee to the prevailing party as part of the
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`costs.” 17 U.S.C. § 505.
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`A.
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`Attorneys’ Fees
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`There is no precise formula for making fee determinations under
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`Section 505; instead, the court must rely on its equitable discretion. See
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`Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). In deciding whether an
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`award of attorneys’ fees is appropriate, a court should consider “(1) the
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`frivolousness of the non-prevailing party’s claims or defenses; (2) the
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`party’s motivation; (3) whether the claims or defenses were objectively
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`unreasonable; and (4) compensation and deterrence.” 16 Casa Duse, LLC
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`v. Merkin, 791 F.3d 247, 264 (2d Cir. 2015) (internal quotation marks and
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`citation omitted). The third factor, objective reasonableness (or lack
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`thereof), is “an important factor in assessing fee applications.” Kirtsaeng v.
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`John Wiley & Sons, Inc., 136 S. Ct. 1979, 1988 (2016). Ultimately, all
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`circumstances must be examined and balanced in light of the Copyright
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`Act’s purpose: “[to] enrich[] the general public through access to creative
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`works” by “encouraging and rewarding authors’ creations while also
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`enabling others to build on that work.” Kirtsaeng, 136 S. Ct. at 1986
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`(internal quotation marks and citation omitted).
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`Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 3 of 10
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`Defendants argue that all of the facts supporting the court’s entry of
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`judgment were known to Universal before it filed its complaint and, as
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`such, “the case should not have been brought, and certainly should not
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`have been turned into a vehicle for bogus claims of tens of millions of
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`dollars in damages.” (Dkt. No. 411 at 4-5.) Specifically, defendants point
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`out that Universal shifted its theory of liability throughout the litigation and
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`advanced theories in contradiction to its operative pleading. (Id. at 5-7.)
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`Furthermore, defendants contend that Universal’s pursuit of
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`“[e]xaggerated and [u]nsupported [d]amages” added to this
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`unreasonableness. (Id. at 7-9.) In response, Universal first contends that
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`defendants’ motion should be denied because it fails to comport with Fed.
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`R. Civ. P. 54(d)(2)(B)(iii) by omitting the amount of fees sought. (Dkt. No.
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`415 at 4-7.) Alternatively, Universal refutes defendants’ contentions and
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`points out that defendants’ conduct was at least equally blameworthy.
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`(Dkt. No. 415 at 7-22.)
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`First, given that Rule 54(d)(2)(B), on which Universal relies, is only
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`applicable “[u]nless . . . a court order provides otherwise,” the court need
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`not resolve the parties’ specific procedural arguments.3 Instead,
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`considering defendants’ subsequently-filed fee estimate, (Dkt. No. 417 at
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`n.1), and the length of this litigation, the court uses its discretion to
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`dispense with Rule 54(d)(2)(B)(iii)’s requirement in order to proceed to the
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`merits of defendants’ motion.
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`Given the totality of the circumstances and the Copyright Act’s
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`goals, this litigation warrants an award of attorneys’ fees and costs to the
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`prevailing parties. Universal has litigated this case in an unreasonable
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`manner that exacerbated the issues to be resolved and the expenses
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`incurred by all parties. Specifically, as discussed in the court’s Rule 50
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`order, (Dkt. No. 396), Universal shifted its theory of liability to such an
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`extent that they actually advanced theories which contradicted their own
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`pleadings. Equally as troubling, Universal demonstrated a fundamental
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`3 Universal primarily relies on the language of Fed. R. Civ. P. 54(d)(2)(B)(iii), which
`provides that a claim for attorney’s fees must be made by a motion that “state[s] the amount
`sought or provide[s] a fair estimate of it.” Universal contends that case law interpreting Rule
`54 provides that “[d]efendants are . . . required to provide . . . a reasonable calculated estimate
`of the amount sought.” (Dkt. No. 415 at 7) (citing Sorenson v. Wolfson, 170 F. Supp. 3d 622,
`629 (S.D.N.Y. 2016); Williams v. Crichton, 891 F. Supp. 120, 122 (S.D.N.Y. 1994)).
`Conversely, defendants draw the court’s attention to Fed. R. Civ. P. 54(d)(2)(C), which
`provides that “[t]he court may decide issues of liability for fees before receiving submissions on
`the value of services.” They argue that this provision, coupled with the fact that they later
`provided a ballpark figure of the amount sought to Universal, (Dkt. No. 417 at n.1), makes their
`conduct procedurally permissible, (Dkt No. 411 at 2 n.1; Dkt. No. 420 at 1-3) (citing
`Konangataa v. Am. Broadcastingcompanies, Inc., No. 16-cv-7382, 2017 WL 2684067, at *2
`(S.D.N.Y. June 21, 2017); Video-Cinema Films, Inc. v. Cable News Network, Inc., No. 98 Civ.
`7128, 2003 WL 1701904, at *5 (S.D.N.Y. Mar. 31, 2003)).
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`lack of understanding about basic legal concepts, such as the
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`consequences of a motion for summary judgment. (Dkt. No. 316, Attachs.
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`11-13.) Given that no reasonable view of the evidence supported
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`Universal’s claims, a reasonable copyright attorney would not have filed a
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`complaint in the first instance. Moreover, Universal’s conduct and
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`staggering damage demands––notwithstanding that the amounts sought
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`were either precluded or entirely speculative, (Dkt. No. 396 at
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`7 n.1)––highlight the lack of any reasonable attempt to resolve this
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`litigation short of trial. Even if such unreasonableness does not rise to the
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`level of frivolousness and there is no specific evidence that Universal
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`acted in bad faith, its contradictory and meritless theories unnecessarily
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`increased the time and resources expended on this litigation. Not only will
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`an award of attorneys’ fees deter copyright holders from pursuing similar
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`litigation in the future, but it will also encourage similarly-situated
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`defendants to litigate meritorious copyright defenses and ultimately
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`provide greater public access to creative works. See Kirtsaeng, 136 S.
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`Ct. at 1986. Therefore, defendants’ motion for attorneys’ fees, (Dkt. No.
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`110), is granted.
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`Nonetheless, the court appreciates Universal’s arguments, (Dkt. No.
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`415 at 20-22; Dkt. No. 419 at 1-2), that defendants were also
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`unreasonable throughout this litigation. As such, an overall percentage
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`reduction of the eventual attorneys’ fee award is appropriate. The exact
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`amount of the award will be determined by subsequent briefing.
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`Accordingly, defendants are directed to file their papers on or before
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`February 23, 2018 and Universal will have seven days thereafter to
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`respond.
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`B.
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`Costs
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`Universal argues that defendants’ bill of costs, (Dkt. No. 412),
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`“should be denied, or in the alternative, reduced by at least the costs
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`attributable to (1) all rough draft deposition transcripts and condensed
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`deposition transcripts; (2) all deposition costs for the August 25, 2016
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`deposition of William Burwell . . . [and (3)] any deposition costs imposed
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`on Universal should be reduced by 50 percent.” (Dkt. No. 419 at 5-6.)
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`Defendants largely rest on their bill of costs itemization, (Dkt. No. 412,
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`Attach. 1), which provides various reasonable explanations for the
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`amounts included. However, defendants also assert that “[a]n award of
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`‘full costs’ [under Section 505] is broader than a standard award of ‘costs’
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`under 28 U.S.C. § 1920.” (Dkt. Nos. 411 at 2-3; 420 at 3, n.3.)
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`Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 7 of 10
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`Although the court’s award of costs in this action is rendered under
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`the auspices of Section 505 of the Copyright Act rather than that of Fed.
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`R. Civ. P. 54, the categories of costs allowable are likewise
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`commensurate with those enumerated by 28 U.S.C. § 1920. See Barrera
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`v. Brooklyn Music, Ltd., 346 F. Supp. 2d 400, 404-05 (S.D.N.Y. 2004);
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`Nat’l Football League v. PrimeTime 24 Joint Venture, 131 F. Supp. 2d
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`458, 484 (S.D.N.Y. 2001) (“The categories of allowable costs under the
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`Copyright Act and Rule 54 are the same.”); U.S. Media Corp. v. Edde
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`Entm’t, Inc., No. 94 Civ. 4849, 1999 WL 498216, at *7 (S.D.N.Y. July 14,
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`1999) (“The weight of authority indicates that the ‘full costs’ referred to in
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`the Copyright Act are nothing more than the costs allowed under 28
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`U.S.C. § 1920.”); Data Gen. Corp. v. Grumman Sys. Support Corp., 825
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`F. Supp. 361, 366-67 (D. Mass. 1993) (“28 U.S.C. § 1920 defines the
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`‘costs’ that may be awarded under more general authority, such as . . .
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`§ 505 of the Copyright Act.”), aff’d, 36 F.3d 1147 (1st Cir. 1994).
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`Where a bill of costs is challenged, the reviewing district court
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`“exercis[es] its own discretion to decide the cost question [it]self.”
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`Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001) abrogated on other
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`grounds by Bruce v. Samuels, 136 S. Ct. 627 (2016) (internal quotation
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`Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 8 of 10
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`marks and citation omitted). Although there is a presumption that costs
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`will be awarded after the prevailing party demonstrates an amount that
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`falls within an allowable category under 28 U.S.C. § 1920, the burden is
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`ultimately on the prevailing party to establish that the taxation of costs is
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`justified. See Amash v. Home Depot U.S.A., Inc., No. 1:12–cv–837, 2015
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`WL 4642944, at *2 (N.D.N.Y. Aug. 4, 2015); Woodard v. CSX Transp.,
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`Inc., No. 1:10–cv–753, 2013 WL 6190843, at *3 (N.D.N.Y. Nov. 26, 2013).
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`Generally, taxable costs “include the cost for the original deposition
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`transcript and one copy of the transcript.” Cutie v. Sheehan, 1:11-CV-66,
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`2016 WL 3661395, at *4 (N.D.N.Y. July 5, 2016) (internal quotation marks
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`and citation omitted). The relevant inquiry is whether the transcripts were
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`necessary for use in the case, rather than merely convenient. See Galella
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`v. Onassis, 487 F.2d 986, 999 (2d Cir.1973); see also Farberware
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`Licensing Co. v. Meyer Mktg. Co., No. 09 Civ. 2570, 2009 WL 5173787, at
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`*5 (S.D.N.Y. Dec. 30, 2009), aff’d, 428 F. App’x 97 (2d Cir. 2011) (“Even
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`where the cost of a deposition transcript itself will be taxable . . . certain
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`associated fees that are not necessary generally may not be taxed[.]”).
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`Defendants have not explained how rough draft or condensed versions of
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`deposition transcripts were necessary or for anything other than
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`Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 9 of 10
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`convenience of counsel. As such, defendants’ bill of costs is reduced by
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`$8,758.30 to reflect the denial of these requested costs. The court is not
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`convinced by Universal’s remaining arguments. (Dkt. No. 419 at 1-2, 4-5.)
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`Accordingly, the court taxes costs of $38,247.89.
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`WHEREFORE, for the foregoing reasons, it is hereby
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`ORDERED that defendants’ motions for attorneys’ fees and costs
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`(Dkt. Nos. 410-12) are GRANTED in part and DENIED in part as follows:
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`GRANTED with respect to an award of attorneys’ fees in an
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`amount to be determined and costs in the amount of
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`$38,247.89; and
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`DENIED in all other respects; and it is further
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`ORDERED that defendants are directed to file papers related to the
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`requested amount of an attorneys’ fees award on or before February 23,
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`2018 and plaintiff may file a response seven days thereafter; and it is
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`further
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`ORDERED that the Clerk provide a copy of this Summary Order to
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`the parties.
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`IT IS SO ORDERED.
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`Case 3:13-cv-00831-GLS-DEP Document 421 Filed 02/07/18 Page 10 of 10
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`February 7, 2018
`Albany, New York
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