Bit Parts

Copyright Infringement/Attorney Fees

The U.S. District Court for the Middle District of Florida, Tampa Division, granted a motion by film studios for attorney fees in a suit against an unauthorized downloader, but denied the fee amount requested. Twentieth Century Fox Film Corp. v. Childs, 8:05-cv-1656-T-23EAJ. The studios sued the defendant for copyright infringement. The district court granted a default judgment in favor of the studios that included an order stating: '[Defendant] is enjoined from directly or indirectly infringing the plaintiffs' rights under federal and state law in the motion pictures 'Spider-Man 2' and 'Alien vs. Predator' and in any copyrighted motion picture owned or controlled by the plaintiffs, whether now in existence or later created, including by using the Internet or any online media distribution system to reproduce, distribute, or make available to the public any motion picture owned and controlled by the plaintiffs, unless [defendant] is acting pursuant to lawful license or with the express authority of the plaintiffs.' But denying the $7,803 in attorney fees the studios requested, the district court noted: '[T]he plaintiffs' motion fails to demonstrate the reasonableness of the hourly rate charged. ' [T]he plaintiffs submit only the declaration ' of their attorney, Alexandra N. DeNeve, that states 'upon information and belief, the rates requested are commensurate with those generally charged for similar work in this district.' The unilateral declaration of the attorney performing the work fails to adequately demonstrate that the requested rate prevails in the applicable market.'

Executive Compensation/Severance Pay

The Supreme Court of Delaware affirmed a ruling that the directors of The Walt Disney Co. did not breach their fiduciary duties, or commit waste through an employment agreement with former Disney president Michael Ovitz that gave Ovitz $130 million after he was fired without cause only 14 months into his 5-year employment contract. In Re The Walt Disney Co. Derivative Litigation, 411. The supreme court noted in part that it was the responsibility of Disney's compensation committee to initially approve the Ovitz deal, then explained: '[Ovitz's agreement] was specifically structured to compensate Ovitz for walking away from $150 million to $200 million of anticipated commissions from [Creative Artists Agency of which Ovitz was a principal] over the 5-year [Disney employment contract] contract term. This meant that if Ovitz was terminated without cause, the earlier in the contract term the termination occurred the larger the severance amount would be to replace the lost commissions. Indeed, because Ovitz was terminated after only 1 year, the total amount of his severance payment (about $130 million) closely approximated the lower end of the range of Ovitz's forfeited commissions ($150 million), less the compensation Ovitz received during his first and only year as Disney's President. Accordingly, the Court of Chancery had a sufficient evidentiary basis in the record from which to find that, at the time they approved the [Ovitz employment agreement], the compensation committee members were adequately informed of the potential magnitude of an early [non-fault termination] severance payout.'

Film Distribution/Net Profits

The U.S. District Court for the Southern District of Texas, Houston Division, denied a default award to the producer of the film 'Altered Love' in a suit for payment from a distributor but allowed the producer a further opportunity to establish lost profits. Jenny's Memorial Business Enterprises v. Peacock Films, H-03-5873. The district court explained: '[The plaintiff] established that someone is distributing 'Altered Love' and, in all probability, receiving revenue. However, that revenue may not be sufficient to permit Jenny's to recover any 'Net Receipts.' The contract defines 'Net Receipts' as: All money received (gross receipts) minus 35% of the gross receipts paid to [the distributor] Peacock as a Distribution Fee minus Distribution Expenses minus money advanced to Jenny's or on behalf of Jenny's. ' Because the Distribution Fee is so large, 'Altered Love' cannot produce even a dollar of 'Net Receipts' unless the distribution costs do not exceed 65% of the gross receipts. Before this court will award Jenny's damages, it must receive evidence that 'Altered Love' produced Net Receipts, ie, some evidence, even approximate evidence, of the film's Gross Receipts and Distribution Expenses. ' If Jenny's complies with all of the discovery rules and intransigence by Peacock ' prevents Jenny's from producing evidence of damages then this court will entertain a motion for discovery sanctions which might allow an award of money that would be based on the criteria for sanctioning abuses of the discovery process, rather than on California's laws [under the distribution contract's choice-of-law clause] governing damage awards.'

Copyright Infringement/Attorney Fees

The U.S. District Court for the Middle District of Florida, Tampa Division, granted a motion by film studios for attorney fees in a suit against an unauthorized downloader, but denied the fee amount requested. Twentieth Century Fox Film Corp. v. Childs, 8:05-cv-1656-T-23EAJ. The studios sued the defendant for copyright infringement. The district court granted a default judgment in favor of the studios that included an order stating: '[Defendant] is enjoined from directly or indirectly infringing the plaintiffs' rights under federal and state law in the motion pictures 'Spider-Man 2' and 'Alien vs. Predator' and in any copyrighted motion picture owned or controlled by the plaintiffs, whether now in existence or later created, including by using the Internet or any online media distribution system to reproduce, distribute, or make available to the public any motion picture owned and controlled by the plaintiffs, unless [defendant] is acting pursuant to lawful license or with the express authority of the plaintiffs.' But denying the $7,803 in attorney fees the studios requested, the district court noted: '[T]he plaintiffs' motion fails to demonstrate the reasonableness of the hourly rate charged. ' [T]he plaintiffs submit only the declaration ' of their attorney, Alexandra N. DeNeve, that states 'upon information and belief, the rates requested are commensurate with those generally charged for similar work in this district.' The unilateral declaration of the attorney performing the work fails to adequately demonstrate that the requested rate prevails in the applicable market.'

Executive Compensation/Severance Pay

The Supreme Court of Delaware affirmed a ruling that the directors of The Walt Disney Co. did not breach their fiduciary duties, or commit waste through an employment agreement with former Disney president Michael Ovitz that gave Ovitz $130 million after he was fired without cause only 14 months into his 5-year employment contract. In Re The Walt Disney Co. Derivative Litigation, 411. The supreme court noted in part that it was the responsibility of Disney's compensation committee to initially approve the Ovitz deal, then explained: '[Ovitz's agreement] was specifically structured to compensate Ovitz for walking away from $150 million to $200 million of anticipated commissions from [Creative Artists Agency of which Ovitz was a principal] over the 5-year [Disney employment contract] contract term. This meant that if Ovitz was terminated without cause, the earlier in the contract term the termination occurred the larger the severance amount would be to replace the lost commissions. Indeed, because Ovitz was terminated after only 1 year, the total amount of his severance payment (about $130 million) closely approximated the lower end of the range of Ovitz's forfeited commissions ($150 million), less the compensation Ovitz received during his first and only year as Disney's President. Accordingly, the Court of Chancery had a sufficient evidentiary basis in the record from which to find that, at the time they approved the [Ovitz employment agreement], the compensation committee members were adequately informed of the potential magnitude of an early [non-fault termination] severance payout.'

Film Distribution/Net Profits

The U.S. District Court for the Southern District of Texas, Houston Division, denied a default award to the producer of the film 'Altered Love' in a suit for payment from a distributor but allowed the producer a further opportunity to establish lost profits. Jenny's Memorial Business Enterprises v. Peacock Films, H-03-5873. The district court explained: '[The plaintiff] established that someone is distributing 'Altered Love' and, in all probability, receiving revenue. However, that revenue may not be sufficient to permit Jenny's to recover any 'Net Receipts.' The contract defines 'Net Receipts' as: All money received (gross receipts) minus 35% of the gross receipts paid to [the distributor] Peacock as a Distribution Fee minus Distribution Expenses minus money advanced to Jenny's or on behalf of Jenny's. ' Because the Distribution Fee is so large, 'Altered Love' cannot produce even a dollar of 'Net Receipts' unless the distribution costs do not exceed 65% of the gross receipts. Before this court will award Jenny's damages, it must receive evidence that 'Altered Love' produced Net Receipts, ie, some evidence, even approximate evidence, of the film's Gross Receipts and Distribution Expenses. ' If Jenny's complies with all of the discovery rules and intransigence by Peacock ' prevents Jenny's from producing evidence of damages then this court will entertain a motion for discovery sanctions which might allow an award of money that would be based on the criteria for sanctioning abuses of the discovery process, rather than on California's laws [under the distribution contract's choice-of-law clause] governing damage awards.'