ABKCO Music, Inc. v. Sagan

Background

The plaintiffs are music publishers that claimed ownership of, or exclusive licenses in, copyrights to 197 musical works. The defendants made concert recordings available for download and streaming and manufactured physical records containing some of the works. The defendants argued that they had valid compulsory mechanical licenses under Section 115 of the Copyright Act.

Before trial, the court held that the defendants had not shown that they possessed valid mechanical licenses. The court identified several independent problems, including that audiovisual recordings were not eligible for those licenses under Section 115, that the defendants had not shown that many recordings were made with performers’ consent, and that some licenses were not obtained before distribution. The court also previously found infringement to be willful for 167 works. A jury later found regular copyright infringement for the 30 works for which the defendants’ state of mind remained at issue and awarded the plaintiffs a total of $189,500 in statutory damages for all 197 works.

Motion for a New Trial

The plaintiffs sought a new damages trial under Federal Rule of Civil Procedure 59. They argued that the trial was fundamentally unfair because the COVID-19 pandemic was worsening in New York City, the jury deliberated for less than an hour after a nine-day trial, and the damages awards were lower than the plaintiffs expected. They also relied on Juror Number 5’s concerns about exposing jurors to the virus and about his mother’s compromised immune system.

The court denied the motion. It found no sufficient basis to conclude that the verdict was a miscarriage of justice. The court noted that it had not pressured the jury to deliberate quickly, had told the jurors they could stay as long as they wished, and had given the parties opportunities to object to the jury instructions or raise concerns about the pandemic. No party objected to Juror Number 5’s comments or asked that he be removed. The court also found no persuasive connection between the short deliberation and the specific damages amounts.

Attorneys’ Fees and Costs

The plaintiffs moved for attorneys’ fees and costs under Section 505 of the Copyright Act. The court found that the plaintiffs were prevailing parties because they succeeded on each infringement claim and established willful infringement for most of the works. The court also found that the defendants’ position regarding artist consent was objectively unreasonable because the defendants lacked admissible evidence supporting their claim that artists had consented to the original recordings. In addition, the court found that the defendants’ conduct concerning many works supported a fee award for deterrence, because the defendants had been warned about missing rights and licensing problems before exploiting the recordings.

The court declined to treat all of the defendants’ unsuccessful legal arguments as objectively unreasonable. It also considered factors weighing against a full fee award, including the financial disparity between the parties and the large difference between the fees sought and the damages awarded. The plaintiffs requested $6,050,565.50 in attorneys’ fees and $52,689.12 in costs.

The court granted the plaintiffs’ motion for attorneys’ fees and costs but reduced the attorneys’ fee award by 60%. Applying that reduction to the requested fee amount, the court awarded $2,420,226.00 in attorneys’ fees. The opinion does not separately state a final dollar amount for costs.

Disposition

Judge Edgardo Ramos denied the plaintiffs’ motion for a new trial. He granted the plaintiffs’ motion for attorneys’ fees and costs, subject to a 60% reduction of the attorneys’ fee award. The Clerk of Court was directed to terminate docket numbers 374 and 377.