Seidman v. Authentic Brands Group LLC

Background

Helayne Seidman, a professional photographer who licenses photographs to online and print media, photographed a mask sculpture at an art show. She licensed the photograph to the New York Post, which published it on February 16, 2010. Seidman alleged that Authentic Brands Group LLC, which operated Shaquille O’Neal’s Facebook page, later used the photograph there without obtaining a license or her consent. The parties apparently did not dispute that the photograph was published on the Facebook page on or about March 9, 2012.

Seidman alleged that she discovered the Facebook post in July 2019 and registered the photograph with the United States Copyright Office on or about August 3, 2019. She filed this copyright-infringement action on September 8, 2019, seeking statutory damages and a declaration that ABG infringed her copyright.

On March 5, 2020, ABG served Seidman with an offer of judgment under Federal Rule of Civil Procedure 68. Seidman rejected the offer. ABG then moved under Local Civil Rule 54.2 for an order requiring Seidman to post a bond of at least $20,000 for potential costs.

Rule for Security for Costs

Local Civil Rule 54.2 allows the court to require a party to file a bond or provide additional security for costs. Courts may consider the party’s financial condition, whether the party is a nonresident or foreign corporation, the merits of the claims, the scope of discovery, expected legal costs, and compliance with past court orders. The primary purpose of a bond is to help ensure that recoverable costs can be collected later.

The parties disputed several of these factors. The court did not decide those disputes because it found the expected legal costs to be the decisive issue. ABG did not contend that a bond would be justified if expected costs were limited to filing fees and court-reporter costs. Instead, ABG relied primarily on the possibility that Seidman might have to pay ABG’s attorney’s fees.

Rule 68 and Attorney’s Fees

ABG offered three possible reasons for including its attorney’s fees in the requested bond: ABG might prevail and seek post-offer costs under Rule 68; Seidman might prevail but obtain a judgment less favorable than the rejected offer, triggering Rule 68; or ABG might prevail and receive fees under Section 505 of the Copyright Act.

Rule 68 requires an offeree to pay costs incurred after an offer if the final judgment is not more favorable than the unaccepted offer. The court explained that, under the Supreme Court’s decision in Marek v. Chesny, Rule 68 costs include costs properly recoverable under the applicable substantive law. Section 505 of the Copyright Act allows a court, in its discretion, to award reasonable attorney’s fees to a prevailing party as part of costs.

The court held that attorney’s fees are not available under Rule 68 to a non-prevailing party in a copyright case. Section 505 limits eligibility for attorney’s fees to prevailing parties, meaning parties who obtain a court-ordered material change in the legal relationship between the parties. Rule 68 therefore could not make those fees recoverable by a party that did not prevail under Section 505.

The court also held that Rule 68 does not apply when the defendant obtains the judgment. Thus, ABG could not rely on Rule 68 to obtain attorney’s fees if it prevailed. ABG would instead have to rely on the Copyright Act itself.

Copyright Act Fees

ABG argued separately that it might receive attorney’s fees under Section 505 because the photograph might not be sufficiently original for copyright protection or because the statute of limitations might bar Seidman’s damages claims. The court said those issues had not been presented in a motion to dismiss or motion for summary judgment, so it would be premature to decide them in the bond proceeding.

The court stated that if ABG later prevailed on those issues and Seidman’s position proved objectively unreasonable, Seidman might incur attorney’s fees. Because Section 505 makes a fee award discretionary and requires the recipient to be a prevailing party, the court found that this possibility did not justify requiring a bond at that stage.

The court also noted ABG’s arguments that the photograph was worth less than $300, that its only use occurred more than eight years earlier, and that Seidman waited nearly a decade to complain. The court explained that, if those statements were true, Seidman’s victory might produce little or no statutory damages and might not include reimbursement of her attorney’s fees. But those considerations did not support ordering a bond.

Disposition

The court denied ABG’s motion for an order requiring Seidman to post a bond. It directed the Clerk of Court to close the docket entry for that motion. The opinion did not decide whether ABG infringed Seidman’s copyright.