Mattsson v. Pat McGrath Cosmetics LLC

Background

Pat McGrath Cosmetics LLC (PMG) moved under Local Civil Rule 54.2 of the Southern and Eastern Districts of New York for an order requiring Desiree Mattsson to post a bond for costs or other security. The underlying action is a copyright-infringement case concerning PMG’s alleged unauthorized use of one of Mattsson’s photographs, called the “Fly Face Image.” The opinion states that Mattsson seeks actual damages and has given up her right to elect statutory damages.

The opinion identifies Mattsson as a citizen of Norway and states that she effectively conceded she could not post a bond, potentially forcing her to abandon claims she believed were meritorious. PMG argued that a bond was warranted based on anticipated discovery and potential litigation costs, among other considerations.

Legal standard

Local Civil Rule 54.2 permits the court, on motion or on its own initiative, to require a party to file a bond for costs or additional security for costs. The court explained that potentially recoverable costs can include reasonable attorneys’ fees available to a prevailing defendant under Section 505 of the Copyright Act. Courts may consider factors including the party’s financial condition, non-resident status, the merits of the claims, the scope of discovery, expected legal costs, and compliance with prior court orders. The court need not consider every factor in every case.

Court’s analysis

The court found that Mattsson’s financial condition and non-resident status favored requiring a bond. It found, however, that the remaining four factors weighed against one.

On the merits factor, the court stated that it did not need to decide the merits to resolve the bond motion. PMG had answered the operative complaint rather than challenging the facial plausibility of Mattsson’s claims and had asserted counterclaims. Although the answer was not a concession that Mattsson would ultimately prevail, the court found that the complaint contained enough factual matter to state a plausible claim and that the case had not developed enough to show that either side was likely to prevail. The possibility remained that Mattsson could recover on one or more theories of PMG’s liability.

The court considered discovery and expected legal costs together. It described the dispute as involving a single photograph allegedly used on multiple products, with possible sales information from retail defendants. Although discovery was potentially extensive, the court found it was not unusually large for a copyright case. The court also noted that the action would not be bifurcated, fact discovery was due to end by mid-August, and Judge Rakoff had held discovery conferences and made rulings on outstanding discovery. The court therefore found little, if any, risk of uncontrolled fact discovery. It also noted that PMG had not served an offer of judgment, meaning a possible award of attorneys’ fees and costs under the Copyright Act would not be automatic. The court accordingly discounted PMG’s projection of expansive discovery and significant costs.

On compliance with court orders, the court found that PMG did not contend that Mattsson had violated any court orders and had not provided grounds to believe that Mattsson or her counsel would evade court orders or litigate imprudently. The court did not credit PMG’s effort in its reply to characterize Mattsson’s pleading amendments and requests for court intervention in discovery disputes as vexatious conduct.

Disposition

The court concluded that the balance of the Rule 54.2 factors weighed against PMG and declined to require Mattsson to post a bond. Magistrate Judge Sarah L. Cave therefore denied PMG’s motion. The Clerk was directed to close the docket entry for that motion. This order did not decide the ultimate merits of the copyright-infringement claims.