Attorney Fees Update

The U.S. District Court for the Southern District of New York decided in part the amount of attorney fees and costs to be awarded network defendants that prevailed in a suit over use of clips of actor Robert Mitchum in news obituaries. Video-Cinema Films Inc. v. Cable News Network Inc. (CNN), 98-7128. The plaintiff had filed a copyright infringement action over the defendants' unlicensed broadcasting of clips of Mitchum from the film “The Story of G.I. Joe.” The district court granted summary judgment for the defendants and subsequently ruled for the defendants on their joint application for an award of legal fees.

In its most recent ruling, determining the award amount, the district court noted that federal courts in the Second Circuit, which includes New York, often apply the lodestar method that entails multiplying the number of hours reasonably spent on a case by a reasonable hourly rate. The Video-Cinema Films court found that the number of hours claimed by defense counsel was reasonable, “especially in light of the protracted nature of the litigation and the objectively unreasonable arguments made by the Plaintiff.” But the court nevertheless modified the award requests for the defendant networks in the following ways:

• The “sliding scale volume” discount arrangement between CNN and its outside counsel, the New York office of Davis Wright Tremaine, based, for example, on an hourly partner rate of $295, was reasonable given that the firm's rates were less than the median rates for New York law firms of similar size engaged in similar litigation. (The district court, using its own knowledge of billing rates, reached this conclusion without requiring CNN to provide expert testimony.)
  
• The 1,057 hours that Davis Wright employees worked on the litigation over three years, minus 72 hours written off by the firm, were reasonable. This properly included time spent in internal firm conferences and with lawyers for ABC and CBS. According to the court, the “time spent strategizing, both internally and with other parties who are litigating the same claims, is legitimate so long as the time is not excessive.”
  
• As for the results achieved, the district court noted, “First, Plaintiff's claims against CNN were dismissed on summary judgment. Second, this litigation advanced the important copyright policy of 'fair use,' and serves as precedent protecting similarly-situated news organizations from future infringement claims arising from their practice of making reasonable use of short film excerpts in news stories.”
• However, a billing agreement between CNN and Davis Wright that capped the amount of legal fees going forward after the first year of the case meant that CNN was entitled to receive $115,928.69, rather than its full fee request of $236,439, in attorney fees for work on the underlying litigation.
  
• ABC couldn't base its fee request for using its in-house counsel on Davis Wright's outside-counsel rate considering that ABC had estimated the network's true hourly cost at $152.44 per hour.
  
• ABC's request for an additional $50,000 in undocumented attorney hours was acceptable but the court reduced the amount by 25% for failure to keep contemporaneous records, for a total attorney fees award to ABC granted for $77,637.45.
  
• Court consideration of the $322 hourly rate (the same requested by ABC) purportedly incurred by CBS for using its in-house attorneys must await an estimate from CBS of the actual cost of in-house counsel. (Neither ABC nor CBS regularly maintained time records.) But the court accepted that CBS attorneys worked at least 30 hours on the underlying litigation based on Davis Wright records of communications and conferences that involved CBS in-house counsel. In addition, CBS had kept contemporaneous records of 40.1 hours of legal work on the attorney fee proceedings which the court found to be a reasonable amount of time.

Copyright Fair Use; Sec. 505