Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 1 of 10 PageID# 1793
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`Newport News Division
`
`CLF-HK.U.S iJlSTTllCl COURT
`
`CHARLES W. ROSS BUILDER, INC.
`
`d/b/a CHARLES ROSS HOMES,
`
`Plaintiff,
`
`v.
`
`Civil Action No. 4:10cvl29
`
`OLSEN FINE HOME BUILDING, LLC,
`
`BEVERLY OLSEN,
`
`BOATHOUSE CREEK GRAPHICS, INC.,
`
`RICK J. RUBIN, and JENNIFER L. RUBIN,
`
`Defendants.
`
`OPINION AND ORDER
`
`This matter is before the Court on the motions for attorneys' fees filed by Olsen Fine
`
`Home Building, LLC and Beverly Olsen (collectively. "Olseif7}, Boathousc Creek Graphics, Inc.
`
`("BCG"), and Rick J. Rubin and Jennifer L. Rubin ("the Rubins") (collectively, "Defendants")
`
`on October 13, 2011. For the reasons slated herein, Defendants' Motions are GRANTED IN
`
`PART and DENIED IN PART.
`
`I.
`
`FACTUAL AND PROCEDURAL BACKGROUND
`
`On November 24, 2010, Plaintiff Charles W. Ross Builder, Inc., d/b/a Charles Ross
`
`Homes ("Plaintiff) filed an Amended Complaint against Olsen, BCG, and the Rubins alleging
`
`federal copyright violations against all Defendants (Count One), copyright infringement against
`
`the Rubins (Count Two), violations of the Digital Millennium Copyright Act against BCG and
`
`Olsen (Count Three), and unfair competition against BCG and Olsen (Count Four). Each of the
`
`Defendants filed a Motion to Dismiss the Amended Complaint pursuant to Federal Rule of Civil
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 2 of 10 PageID# 1794
`
`Procedure 12(b)(6) and each Defendant subsequently filed a Motion for Summary Judgment. By
`
`Opinion and Order dated September 29, 2011, this Court granted Defendants' Motions for
`
`Summary Judgment as to Counts One, Two, and Three, and dismissed Count Four without
`
`prejudice for lack of jurisdiction. (Docket No. 67.) Each Defendant subsequently filed a Motion
`
`for Attorney's Fees and Costs. (Docket Nos. 70, 72, 73.)
`
`II.
`
`LEGAL STANDARD
`
`"Our legal system generally requires each party to bear his own litigation expenses,
`
`including attorney's fees, regardless whether he wins or loses. Indeed, this principle is so firmly
`
`entrenched that it is known as the 'American Rule.'" Fox v. Vice. 131 S. Ct. 2205, 2213 (2011)
`
`(citing Alveska Pipline Svc. Co. v. Wilderness Soc'v. 421 U.S. 240, 247 (1975)). Therefore,
`
`unless Congress has authorized "fee shifting," courts ordinarily may not deviate from this
`
`background rule. See id
`
`III. ANALYSIS
`
`A. Digital Millennium Copyright A ct Claims
`
`The Digital Millennium Copyright Act ("DMCA") provides that a court "in its discretion
`
`may award reasonable attorney's fees to the prevailing party." 17 U.S.C. § 1203(b)(5). In
`
`deciding whether to award attorney's fees under the DMCA, courts consider "the motive,
`
`reasonableness of the fee, deterrence and compensation, and the ability of the nonmoving party
`
`to pay." Dahn World Co.. Ltd. v. Chung. No. RWT 06-2170, 2009 WL 277603, *2 (D. Md. Feb.
`
`5, 2009) (citing Rosciszewski. 1 F.3d at 234). At the outset, we find that that Defendants Olsen
`
`and BCG meet the threshold requirements for receiving attorney's fees as they were
`
`undisputedly the prevailing party before this Court. 17 U.S.C. § 1203(b)(5); Dahn World Co..
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 3 of 10 PageID# 1795
`
`2009 WL 277603 at *2. Moreover, the Court finds that in this case, as in Dahn. "all four factors
`
`support an award of attorneys' fees" under the DMCA. Id
`
`First, Plaintiff recited no facts whatsoever to support its allegation that Defendants Olsen
`
`and BCG removed copyright information from Plaintiffs plans in an attempt to pass off the
`
`plans as their own. As we noted in our Order on Summary Judgment, Plaintiff "provide[d] no
`
`substantive evidence that Defendants provided or distributed any false copyright management
`
`information with the intent to induce, enable, facilitate, or conceal infringement or that
`
`Defendant removed any copyright information." See Ross v. Olsen Fine Home Bldg.. LLC.
`
`(E.D.Va. Sept. 24, 2011) (internal citations omitted). Instead, Plaintiffs DMCA claims appear
`
`to have rested solely on its contention that the only plausible explanation for the fact that the two
`
`sets of plans in question were, according to Plaintiff, substantially similar, was that Defendants
`
`used Plaintiffs plans and removed the copyright information. However, as we previously found,
`
`the two sets of plans were not substantially similar, and the "myriad differences" between the
`
`Plaintiffs Copyrighted Plans and the plans for the Rubin home show that neither BCG nor Olsen
`
`had removed copyright information from the Ross plans. See Id
`
`An award of attorney's fees and costs in this case would also support the goals of
`
`deterrence and compensation. As Plaintiff had no evidence that Defendants Olsen and BCG had
`
`removed copyright information from the Copyrighted Plans, Plaintiffs DMCA claim was
`
`frivolous and should not have been brought. Granting attorney's fees as to these claims would
`
`deter future plaintiffs from bringing claims under the Act who have no evidence that the
`
`defendant at issue removed copyright information. With respect to the issue of compensation,
`
`the Court notes that BCG is owned and operated by one individual, Lisa Moberg, who is the
`
`company's sole employee and who performs all of its residential design work. (BCG Mot.
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 4 of 10 PageID# 1796
`
`Atty's Fees at 6.) Ms. Moberg received approximately $4,000 for her design of the Rubin home
`
`and carried no insurance to cover the expenses associated with defending a copyright suit. (Id.)
`
`Although Plaintiff is not a large entity itself, it employs seven full-time employees and its
`
`resources appear to substantially exceed those of either BCG or Olsen.
`
`Moreover, although Plaintiff asserted claims under the DMCA against both Olsen and
`
`BCG, Plaintiffs Amended Complaint does not even mention Olsen when discussing the
`
`allegations under the DMCA. Rather, it states, "[o]n information and belief, BC Graphics
`
`removed Charles Ross Homes' copyright notice from the Copyrighted Plans" and "BC Graphics
`
`has falsely represented, and is falsely representing, that the Infringing Plans originated with BC
`
`Graphics and/or are BC Graphics' design." Thus, not only did Plaintiff fail to advance facts
`
`sufficient to make out a claim for infringement against Olsen under the DMCA, but Plaintiff also
`
`failed to even name Olsen in detailing its factual allegations. For the foregoing reasons,
`
`Defendant Olsen's and Defendant BCG's Motions for Attorneys' Fees on Plaintiffs DMCA
`
`Claims are hereby GRANTED.
`
`B. Copyright Act Claims
`
`The Copyright Act provides, "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 ... the
`
`court may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17
`
`U.S.C.A. § 505. The plain language of § 505 makes clear that whether to award attorney's fees,
`
`and the amount of fees to be awarded, is a matter wholly within the court's discretion. Foqartv
`
`v. Fantasy. Inc.. 510 U.S. 517, 533 (1994); Henslev v. Eckerhart. 461 U.S. 424 (1983); Diamond
`
`Star Bdle. Corp. v. Freed. 30 F.3d 503, 507 (4th Cir. 1994) (district court need not award costs
`
`and attorney's fees as a matter of course). However, in order to inject some measure of
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 5 of 10 PageID# 1797
`
`uniformity into the decision-making process, the Fourth Circuit has set forth four factors that
`
`courts should consider in determining whether to award attorney's fees and costs. These factors
`
`include the following: (i) the motivation of the parties, (ii) the objective reasonableness of the
`
`legal and factual positions advanced, (iii) the need in particular circumstances to advance
`
`considerations of compensation and deterrence, and (iv) any other relevant factor presented.
`
`Rosciszewski v. Arete Assocs.. Inc.. 1 F.3d 225,234 (4th Cir. 1993) (internal citations omitted).
`
`1. Plaintiffs Motivation in Bringing Suit
`
`Defendants contend that Plaintiff acted in bad faith and with an improper motive in
`
`bringing this suit. (Rubin Mem. Atty's Fees at 4; BCG Mem. Atty's Fees at 4-5; Olsen Mem.
`
`Atty's Fees at 5.) Specifically, BCG contends that Defendant's motivation for this action "was
`
`to deter or harm [BCG's] residential design business in Ford's Colony in order to gain a
`
`competitive advantage in the Ford's Colony market," (BCG Mem. Atty's Fees at 5), the Rubins
`
`posit that Plaintiff acted in bad faith by failing to contact Defendants to address the situation
`
`before bringing suit, (Rubin Mem. Atty's Fees at 4), and Olsen contends that Plaintiff acted in
`
`bad faith by "allowing] construction of the Rubin's residence to continue unchallenged for
`
`approximately two months before initiating suit" and "serv[ing] Olsen without any. prior notice
`
`to Olsen or any attempt at resolution." (Olsen Mem. Atty's Fees at 5 (emphasis in original).)
`
`Plaintiff counters that it brought suit not to stifle competition in the Ford's Colony area,
`
`but because it "believed that it had a valid and enforceable copyright hi The Bainbridge
`
`architectural work and that it sought to protect the substantial investment it had made in the
`
`design of The Bainbridge." (Def.'s Mem. in Opp. at 7.) In response to Defendants' emphasis on
`
`Plaintiffs failure to send a "cease and desist" letter prior to bringing suit, Plaintiff states that its
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 6 of 10 PageID# 1798
`
`delay in bringing suit was the result of its desire to wait to determine whether continued
`
`construction of the Rubins' home would evince substantial dissimilarities to The Bainbridge
`
`design, thereby rendering legal action unnecessary. (Id at 7-8.) Finally, Plaintiff states that
`
`"[t]here is no evidence in this case that [Plaintiff] acted in bad faith by bringing this copyright
`
`action." (Id at 8.) We agree. Certainly, a more appropriate response by Plaintiff would have
`
`been to contact Defendants as soon as Plaintiff suspected infringement and to attempt to resolve
`
`the matter outside of the adversarial system. But Plaintiff was under no legal obligation to
`
`pursue any such remedial action prior to filing suit, and failure to do so, without more, does not
`
`amount to considered bad faith.1
`
`Nonetheless, because the Supreme Court has expressly held that the absence of bad faith
`
`is not dispositive in the determination of whether to award attorney's fees, we must examine the
`
`additional factors as set forth in Rosciszewski to determine whether an award of attorney's fees
`
`is proper in this case. See Fogartv. 510 U.S. at 533 (rejecting the argument that defendants were
`
`required to prove bad faith to prevail on a motion for attorney's fees under 17 U.S.C. § 505);
`
`Rosciszewski. 1 F.3d at 225 (same).
`
`1 Defendants cite a number of cases in support of their contention that Plaintiffs failure to attempt a non-judicial
`resolution of the dispute constituted bad faith. However, each of these cases is distinguishable from the instant
`
`litigation. For example, in Oravec v. Sunny Isles Luxury Ventures. L.C.. 2010 WL 1302914 (S.D. Fla. 2010), the
`court found that the plaintiff "did not initiate this action with entirely altruistic motives, which is demonstrated by
`his twenty-month silent acquiescence to the Trump Buildings' construction and failure to engage in timely pre-suit
`
`discussions." Id. at S. However, in Oravec. the Court only awarded fees and costs to Defendants because it found
`that Plaintiff had failed to remove patently unreasonable claims from the pleadings and that Plaintiff had a pecuniary
`motive in pursuing these unreasonable claims. In Superior Form Builders. Inc. v. Dan Chase Taxidermy Supply
`Co.. the Fourth Circuit upheld an award of attorney's fees where the plaintiff had engaged in such conduct as
`registering sculptures obtained from another as its own and talcing inconsistent positions in litigation. 74 F.3d 48S
`
`(4th Cir. 1996). However, Plaintiff did not here engage in this type of outrageous behavior.
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 7 of 10 PageID# 1799
`
`2-
`
`Objective Reasonableness of Plaintiff s Claims
`
`In assessing the objective reasonableness of a plaintiff s claims, courts consider "whether
`
`the positions advanced by the parties were frivolous, on the one hand, or well-grounded in law
`
`and fact, on the other hand." SER Solutions. Inc. v. Masco Cnrp 103 Fed. Appx. 483, 489 (4
`
`Cir. 2004). A plaintiffs position is frivolous, and thus objectively unreasonable, where the issue
`
`of substantial similarity in a copyright action is found not to be "a close or complex question."
`
`S^ Earth Flag Ltd. v. Alamo Flag Co., 154 F. Supp. 2d 663, 668 (S.D.N.Y. 2001).Defendants
`
`rely heavily on the fact that this case was resolved on summary judgment to argue that Plaintiffs
`
`suit was "clearly frivolous when brought." However, this argument begs the question. Adopting
`
`the position advocated by Defendants - that the grant of summary judgment in favor of a
`
`defendant inevitably means that the plaintiffs claims were objectively unreasonable - would
`
`establish a per se entitlement to attorney's fees whenever a copyright plaintiff faces an adverse
`
`summary judgment ruling. As this Court has previously held, such a position is at odds with the
`
`discretionary standard clearly established by both the United States Supreme Court and the
`
`Fourth Circuit. See, e.g.. Tessler v. NBC Universal. Tnc.. No. 2:08cv234, 2010 WL 3835061
`
`(E.D.Va. Sept. 29, 2010) ("simply because a defendant is successful in obtaining 'summary
`
`judgment does not necessarily mean that the plaintiffs position was frivolous or patently
`
`unreasonable'"). See also Positive Black Talk. Inc. v. Cash Money Records. Inc.. 394 F.3d 357,
`
`383 (5th Cir. 2004) (to accept the argument that plaintiffs "claim was per se objectively
`
`unreasonable because the jury found in favor of the defendants is without merit - to accept such
`
`an argument necessarily would transform the discretionary rule into the clearly rejected British
`
`Rule, under which a prevailing defendant always recovers fees.").
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 8 of 10 PageID# 1800
`
`Moreover, although this Court found that most of the features of Plaintiffs design to
`
`which it claimed copyright protection and to which it alleged infringement were either in the
`
`public domain and not protected or entitled only to "thin" protection, thereby entitling the
`
`Defendants to prevail at the summary judgment stage, these findings do not render Plaintiffs
`
`claims patently unreasonable. See Charles W. Ross Builder. Inc. v. Olsen Fine Home R1HP
`
`LLC, No. 4:10cvl29, 2011 Wl 4590003, at 15 (E.D.Va. Sept. 29, 2011). Indeed, at the time of
`
`this Court's ruling on summary judgment, the Fourth Circuit had not squarely addressed certain
`
`issues raised by Plaintiffs copyright suit. Even assuming that Plaintiff knew or should have
`
`known that copyright protection for The Bainbridge was limited, Plaintiff was - as this Court
`
`acknowledged - entitled to some such protection and we find now that it was not unreasonable
`
`for Plaintiff to seek to enforce the limits of that protection. See Tessler. 2010 WL 3835061, at
`
`*9 ("[Defendant's] summary judgment success simply reflects the fact that [Plaintiff] was unable
`
`to establish a prima facie case for copyright infringement; it does not necessarily imply that the
`
`factual or legal grounds of the case rise to the level of objective unreasonableness."). Moreover,
`
`in stark contrast to Plaintiffs claims brought under the DMCA, Plaintiffs copyright claims were
`
`grounded in adequate factual bases. Although Plaintiff ultimately did not prevail on these
`
`claims, such failure does not render its claims frivolous or objectively unreasonable.
`
`3- Considerations of Compensation and Deterrence
`
`The Fourth Circuit has instructed that "the goal of deterring a party from pursuing
`
`frivolous litigation is furthered by the imposition of attorney's fees and costs." Diamond Star
`
`Bldg. Corp., 30 F.3d at 506. Defendants point to this language to buttress their contention that
`
`awarding attorney's fees will deter future filings of frivolous copyright litigation. However, in
`
`Diamond Star, the district court referred to the suit as "a piece of litigation that should never
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 9 of 10 PageID# 1801
`
`have been brought" and "a case of. .. absolute insignificance." Jd That is simply not the
`
`case
`
`here. Although we ultimately found that Plaintiffs copyright claims lacked merit, its claims
`
`were not so utterly lacking in foundation or legal basis as to amount to "a defamation of a
`
`copyright case," as the court characterized the plaintiffs claims in Diamond Star. Id
`
`Certainly, awarding attorney's fees to prevailing defendants is one means of "deterfring]
`
`copyright holders from filing such suits without first attempting to resolve the matter outside of
`
`court." See Dawes-Ordonez v. Forman. 418 Fed. Appx. 819, 892 (11th Cir. 2011) (citing
`
`Fogerty, 510 U.S. at 527). However, Plaintiffs copyright claims were not such a flagrant
`
`attempt to abuse copyright law that they merit the strong medicine of awarding the prevailing
`
`party attorney's fees and costs. To award attorney's fees here, without evidence of bad faith or
`
`frivolity, would pave the way for granting such fees as a matter of course whenever a copyright
`
`holder-plaintiff is defeated on summary judgment. This sweeps too far, and could potentially
`
`chill litigation properly brought to enforce copyright protections. Finally, although Defendants
`
`argue that the Court should award attorney's fees on the grounds that they lack the resources to
`
`cover the costs of litigation, (Rubin Mem. Arty's Fees at 6; BCG Mem. Arty's Fees at 6), this is
`
`but one factor to be taken under advisement. See Rosciszewski. 1 F.3d at 234. In light of the
`
`other considerations weighing against the award of attorney's fees and costs, it does not tip the
`
`scale heavily enough in favor of granting fees and costs as to Plaintiffs copyright claims.
`
`In sum, we find that none of the factors set forth in Rosciszewski. nor any other factor,
`
`counsels in favor of awarding attorney's fees and costs on Plaintiffs copyright claims, pursuant
`
`to 17 U.S.C. § 505, as set forth in Counts One and Two of the Complaint. Therefore,
`
`Defendants' Motions for Attorney's Fees as to the claims arising under the aforesaid Copyright
`
`Act are hereby DENIED.
`
`

`
`Case 4:10-cv-00129-RGD-DEM Document 96 Filed 01/09/12 Page 10 of 10 PageID# 1802
`
`B. CONCLUSION
`
`For the reasons stated herein, the Court finds that it is in the interests of justice to deny
`
`Defendant's motions for attorney's fees as to Plaintiffs Copyright Act claims under 17 U.S.C. §
`
`505 but to award such fees with respect to Plaintiffs claims under the Digital Millennium
`
`Copyright Act under 17 U.S.C. § 1203(b)(5). Therefore, the Rubins' Motions for Attorney's
`
`Fees and Costs are hereby DENIED. Olsen and BCG's Motion for Attorney's Fees and Costs
`
`are hereby DENIED as to the claims brought under the Copyright Act under 17 U.S.C. § 505 but
`
`GRANTED as to the claims brought under the Digital Millennium Copyright Act under 17
`
`U.S.C. § 1203(b)(5). Olsen and BCG are further ORDERED to file within thirty days after the
`
`judgment becomes final affidavits detailing the expenses and costs they incurred specifically in
`
`defending the DMCA claims so that the Court may determine the proper amount of their award.
`
`The Clerk is DIRECTED to deliver a copy of this Order to all counsel of record.
`
`It is so ORDERED.
`
`Newport News, Virginia
`
`January 1 ,2012
`
`Robert G. Doumar
`Senior United S