Bridgeport Music, Inc. v. Rhyme Syndicate Music , 376 F.3d 615 ( 2004 )

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Pursuant to Sixth Circuit Rule 206 2 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
ELECTRONIC CITATION: 2004 FED App. 0233P (6th Cir.) Syndicate Music, et al.
File Name: 04a0233p.06
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
UNITED STATES COURT OF APPEALS No. 01-00706—Thomas A. Higgins, District Judge.
FOR THE SIXTH CIRCUIT
_________________ Argued: April 28, 2004
Decided and Filed: July 22, 2004
BRIDGEPORT MUSIC , INC., X
Plaintiff-Appellant, - Before: GUY and GILMAN, Circuit Judges;
- BARZILAY, Judge.*
- Nos. 03-5005/5744
SOUTHFIELD MUSIC , INC.; -
WESTBOUND RECORDS, INC.; > _________________
,
NINE RECORDS, INC., - COUNSEL
Plaintiffs, -
- ARGUED: Richard S. Busch, KING & BALLOW,
v. - Nashville, Tennessee, for Appellant. Russell J. Frackman,
- MITCHELL, SILBERBERG & KNUPP, Los Angeles,
- California, for Appellees. ON BRIEF: Richard S. Busch,
RHYME SYNDICATE MUSIC ; D’Lesli M. Davis, KING & BALLOW, Nashville, Tennessee,
-
UNIVERSAL-POLYGRAM - for Appellant. Russell J. Frackman, Jeffrey D. Goldman,
INTERNATIONAL PUBLISHING , - Marc E. Mayer, MITCHELL, SILBERBERG & KNUPP, Los
INC., individually and as - Angeles, California, Philip M. Kirkpatrick, STEWART,
successor to Polygram - ESTES & DONNELL, Nashville, Tennessee, for Appellees.
International Publishing, Inc.; - GUY, J., delivered the opinion of the court, in which
-
CARRUMBA MUSIC ; AMMO - BARZILAY, J., joined. GILMAN, J. (pp. 23-24), delivered
DUMP MUSIC , - a separate opinion concurring in part and dissenting in part.
Defendants-Appellees, -
-
WB MUSIC CORP .; WARNER- -
CHAPPELL MUSIC , INC.; -
-
RHYME SYNDICATE RECORDS, -
Defendants. -
N
*
The Honorab le Judith M. Barzilay, Judge for the United States Court
of International Trade, sitting by designation.
1
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 3 4 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
_________________ Ass and Jam” (“Get Off”).2 Bridgeport Music is in the
business of owning and exploiting copyrights in musical
OPINION compositions. We assume for purposes of this appeal that
_________________ Bridgeport would be able to establish that it owns the
composition “Get Off,” which was written and recorded by
RALPH B. GUY, JR., Circuit Judge. Plaintiff, Bridgeport George Clinton, Jr., and the Funkadelics in the mid-1970s.
Music, Inc., appeals from the district court’s orders
(1) granting summary judgment to defendant Universal- A. Background Facts
PolyGram International Publishing, Inc. (UPIP), on
Bridgeport’s copyright infringement claims; (2) dismissing The song “99 Problems” was co-written and performed by
defendants Carrumba Music and Ammo Dump Music without Tracy Marrow, p/k/a Ice-T, for release on the album “Home
prejudice for lack of proper service of process; and Invasion.” At that time, Marrow, d/b/a Rhyme Syndicate
(3) awarding attorney fees and costs to UPIP as a prevailing Music, owned 66.7% of the composition copyright in “99
defendant under 17 U.S.C. § 505. No other claims or parties Problems.” Alphonso Henderson, p/k/a DJ Aladdin, co-wrote
are before us.1 After review of the record and the arguments “99 Problems.” The album was released by Priority Records
presented on appeal, we affirm both the entry of summary on March 23, 1993. While a mechanical license was probably
judgment and the dismissals for lack of service. With respect granted for use of the composition “99 Problems,” there was
to Bridgeport’s separate appeal from the award of attorney no evidence presented in that regard.
fees and costs to UPIP, however, we vacate the award and
remand for further consideration consistent with this opinion. More than a year later, UPIP obtained an interest in the
composition through its predecessor, PolyGram International
I. Publishing, Inc., by assignment from Marrow, d/b/a Rhyme
Syndicate Music. Specifically, in November 1994, Marrow
The claims at issue in this appeal were first asserted on entered into several agreements with PolyGram, including an
May 4, 2001. In that original complaint, Bridgeport and three Exclusive Songwriter’s Agreement and a Co-Publishing
sister companies alleged nearly 500 counts against Agreement covering past and future works. As part of these
approximately 800 defendants for copyright infringement and agreements, PolyGram acquired half of Marrow’s interest in
other state law claims arising from music sampling. The the composition “99 Problems” (or 33.34%), as well as the
amended complaint, filed after the district court severed the exclusive right to administer their combined interests and
initial pleading into 476 separate actions, was based on the
claim that the rap song “99 Problems” sampled the opening
three-note chord from the musical composition “Get Off Your 2
The term “sampling” typically refers to the copying of a portion of
a master sound recording and using it in the making of a new work.
1
Bridge port Music, Inc. v. Still N The W ater Publ’g, 327 F.3d 472 , 475 n.2
Bridgeport appealed from the entry of summary judgment in favor (6th Cir.), cert. denied, 124 S. Ct. 399 (200 3). Use of a sample from a
of defendants WB Music and W arner/Chappe ll Music, but vo luntarily master recording implicates two distinct copyrights: one in the musical
dismissed the appeal against them as a result of a settlement. Also, no composition and one in the sound recording itself. Id. at n.3. When the
distinct claims of error have been argued with respect to Rhyme Syndica te samp le is an interpolation, meaning the master sound recording is not
Music. used, only the composition copyrights are implicated.
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 5 6 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
collect and distribute royalties. The copyright registration because they were barred both by a release as part of a
reflecting this transfer listed the copyright claimants as settlement of prior litigation and by the applicable three-year
PolyGram, Rhyme Syndicate Music, WB Music, Carrumba statute of limitations. As part of that decision, the magistrate
Music, and Ammo Dump Music. The record does not reflect judge indicated that although the Warner defendants had
when UPIP succeeded PolyGram. issued a license for the release of “99 Problems” in 1993, the
only acts by the Warner defendants within the limitations
On January 7, 1998, Bridgeport’s administrator, Jane period were the receipt of royalties on the sale of the album.
Peterer, notified UPIP and others of its sampling claim and Recognizing that there was no case law on the question, the
demanded that Bridgeport be granted a 33.33% ownership magistrate judge concluded that the receipt of income from
interest in the musical composition “99 Problems.” UPIP did the sale of infringing products within the limitations period,
not respond, but Warner/Chappell Music denied any samples by a party who does not manufacture, distribute, or sell the
were used on the “Home Invasion” album. infringing product (but who did provide a license), would not
constitute direct or contributory infringement.
B. Procedural Facts
The district court adopted the report and recommendation,
This action was commenced May 4, 2001, more than three over plaintiffs’ objections, and granted summary judgment to
years after Bridgeport had actual notice of the alleged the Warner defendants on September 16, 2002. Because
infringement. Plaintiffs attempted to effect service of process Bridgeport has settled with the Warner defendants, that order
on Carrumba Music and Ammo Dump Music through is no longer before us on appeal. It remains pertinent,
Warner/Chappell Music. Bridgeport also attempted to serve however, to the district court’s decision to award UPIP
Carrumba Music at an address that was the office of attorney fees and costs incurred after September 16, 2002.
Carrumba’s accounting firm.
UPIP had also moved for summary judgment, arguing,
Carrumba Music moved to dismiss both for failure of inter alia, that Bridgeport’s claims were barred, or
service and for lack of personal jurisdiction, while Bridgeport alternatively, limited by the statute of limitations.3 While the
filed a motion for default judgment against Ammo Dump motion was pending, UPIP wrote to Bridgeport and proposed
Music. The district court granted Carrumba’s motion, denied that they stipulate to judgment in favor of UPIP based on the
Bridgeport’s motion for default judgment, and dismissed magistrate judge’s recommendation concerning the Warner
Carrumba Music and Ammo Dump Music without prejudice defendants’ motion for summary judgment. Bridgeport did
pursuant to Fed. R. Civ. P. 4(m). Bridgeport’s subsequent not respond. Once the district court granted summary
motion for reconsideration was denied. judgment to the Warner defendants, UPIP obtained leave to
Defendants Warner/Chappell Music and WB Music
(Warner defendants) moved for summary judgment on several
grounds. In August 2002, after considerable briefing and 3
UPIP also argued that Bridgeport could not prevail on its
supplementation, the magistrate judge issued a report and infringement claims either because the sampled three-note chord was not
recommendation in which he concluded that the infringement entitled to copyright protection, or because the use of the sample from the
claims against the Warner defendants should be dismissed composition was de m inimis. We do not reach the questions o f originality
or de m inimis use.
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 7 8 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
supplement its motion for summary judgment. Bridgeport knowledge. Roley v. New World Pictures, Ltd., 19 F.3d 479,
responded in opposition on October 4, 2002. The district 481 (9th Cir. 1994). Because each act of infringement is a
court granted summary judgment to UPIP on November 7, distinct harm, the statute of limitations bars infringement
2002, finding that Bridgeport failed to demonstrate direct, claims that accrued more than three years before suit was
contributory, or vicarious infringement by UPIP within the filed, but does not preclude infringement claims that accrued
limitations period. Judgment was entered accordingly, and within the statutory period. Id.; Stone v. Williams, 970 F.2d
Bridgeport appealed. 1043, 1049-50 (2d Cir. 1992); Hoste v. Radio Corp. of Am.,
654 F.2d 11, 11 (6th Cir. 1981) (per curiam); Mount v. Book-
In a post-judgment motion, UPIP moved for an award of of-the-Month Club, Inc., 555 F.2d 1108, 1110-11 (2d Cir.
$297,292.60 in attorney fees and $16,119.22 in nontaxable 1977).
costs as a prevailing party under 17 U.S.C. § 505. On May 6,
2003, the district court awarded UPIP $79,340.94 in attorney It is undisputed that Bridgeport had actual knowledge of its
fees and $3,409.35 in costs, which represented the fees and infringement claims with respect to “99 Problems” more than
costs incurred by UPIP after September 16, 2002. Bridgeport three years before this action was filed and, therefore, claims
appealed. arising prior to May 4, 1998, are barred by the statute of
limitations. For this reason, our focus must be on whether
II. Bridgeport established any acts within the period for which
UPIP could be held liable as a direct infringer, a contributory
In its first claim of error, Bridgeport argues that there was infringer, or as one vicariously liable for the acts of another.
a question of fact whether UPIP committed acts within the
limitations period for which it could be liable for copyright Liability for direct infringement arises from the violation of
infringement. We review the district court’s decision to grant any one of the exclusive rights of a copyright owner.
summary judgment de novo. Smith v. Ameritech, 129 F.3d 17 U.S.C. § 501(a). The owner of copyright in a musical
857, 863 (6th Cir. 1997). In deciding a motion for summary composition has the exclusive right to, and to authorize others
judgment, the court must view the evidence and reasonable to, reproduce, distribute, perform, display, and prepare
inferences in the light most favorable to the nonmoving party. derivative works from the copyrighted composition.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 17 U.S.C. § 106. Liability for contributory infringement is
574, 587 (1986). The nonmoving party may not rest on his based on the defendant’s relationship to the direct
pleadings, but must come forward with evidence from which infringement. Ez-Tixz, Inc. v. Hit-Tix, Inc., 919 F. Supp. 728,
a rational trier of fact could find in his favor. Anderson v. 732-33 (S.D.N.Y. 1996). Contributory infringement occurs
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). when one, “with knowledge of the infringing activity,
induces, causes, or materially contributes to the infringing
A. Copyright Infringement conduct of another.” Gershwin Publ’g Corp. v. Columbia
Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971). A
A civil action under the Copyright Act must be defendant can be held vicariously liable if he enjoys a direct
“commenced within three years after the claim accrued.” financial benefit from the infringing activity and “has the
17 U.S.C. § 507(b). A cause of action accrues when a right and ability to supervise” the infringing activity. Ellison
plaintiff knows of the infringement or is chargeable with such
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 9 10 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004) (internal be sold and offered for sale after May 4, 1998.4 There is
quotation marks and citation omitted). no claim, however, that UPIP was directly involved in the
manufacture, distribution, or sale of the album. Nor is there
B. Analysis evidence from which a rational trier of fact could conclude
that UPIP ever granted a mechanical license for use of the
The district court seems to have assumed that UPIP granted composition “99 Problems” on the “Home Invasion” album.
a mechanical license for use of the composition “99 UPIP became a co-owner of the composition more than a year
Problems” on the “Home Invasion” album and received after the album’s release and has flatly denied ever granting
royalties from the sale of the album within the limitations a license for the use of the composition. Specifically, UPIP
period. With that assumption, the district court then found offered the affidavit of Edward Arrow, a vice-president of
that no direct infringement could be established because there copyrights, attesting that there is no record that UPIP ever
was no evidence either that Bridgeport ever demanded that issued any mechanical, performance, synchronization,
UPIP revoke its license because of the claimed infringement, sheet/music or other licenses, or distributed or otherwise
or that UPIP had the right to revoke the license for this exploited sheet music for the musical composition “99
reason. It also found, consistent with its earlier decision Problems.” Arrow also stated that UPIP never controlled the
relating to the Warner defendants, that UPIP’s passive receipt sale, distribution, or public performance of the “Home
of income alone could not constitute contributory Invasion” album; the issuance of blanket performance
infringement. Finally, vicarious liability was rejected because licenses; or the apportionment of fees generated by such
there was no showing that UPIP had control over a direct licenses.
infringer.
In addition, UPIP’s records showed that it did not receive
After close examination of the record, we find a complete any mechanical royalties for the sale of “99 Problems.” In
absence of proof connecting UPIP either to the distribution fact, Anthony Sarageueta, vice-president of royalties,
and sale of the album or to the performance of the allegedly testified that while UPIP would seem to have a right to
infringing work within the limitations period. We affirm on mechanical royalties, he could not explain without conducting
this basis and do not reach the question of whether a publisher further research why UPIP had not received any such
may be found liable for infringing sales occurring within the royalties. The burden was on Bridgeport to follow up with
limitations period when its only actions were the granting of further discovery in its attempt to connect UPIP to the
a license outside the period and the receipt of royalty distribution and sale of the album. Neither UPIP’s status as
payments under that license within the limitations period. a co-owner of the composition, nor its contractual right to
Bridgeport has also failed to demonstrate a basis to find UPIP administer the composition and receive and distribute
vicariously liable for the acts of a direct infringer.
1. Mechanical License
4
Spe cifically, there was evidence that over 300,000 copies of the
Bridgeport repeatedly emphasizes that there was “Home Invasion” album were sold since its release in 1993. With respect
evidence that the “Home Invasion” album continued to to the relevant period, Bridgeport also indicates in a footnote that a late-
discovered Chart History showed that 2,37 7 copies of “99 P roblems” sold
between May 4, 1998, and May 4, 2001.
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 11 12 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
royalties, is sufficient to create a genuine issue of fact whether limitations period either by UPIP, or to which UPIP could be
UPIP received mechanical royalties. liable under theories of contributory infringement or vicarious
liability.5
Since Bridgeport failed to make a showing that UPIP
granted a license, received any royalties from the sale of the For the above reasons, we affirm the entry of summary
album, or had any connection to the distribution and sale of judgment in favor of UPIP on Bridgeport’s claims of
the album within the limitations period, summary judgment copyright infringement.
was properly entered in favor of UPIP on the claims of direct
and contributory infringement. Similarly, Bridgeport’s claim III.
of vicarious liability is based solely on the allegation that
UPIP granted a mechanical license to the record label and had Bridgeport alleged that Ammo Dump Music and Carrumba
the right (through the contracts with Marrow) to administer Music, the d/b/a of Jorge Hinojosa, are publishers with an
the composition. The record fails to demonstrate UPIP’s interest in the composition “99 Problems.” The district court
connection to, much less the ability to supervise or control, dismissed the action against both Ammo Dump Music and
the infringing activity. Carrumba Music for lack of proper service of process. If
service of the summons and complaint is not made upon a
2. Performance Royalties defendant within 120 days after the filing of the complaint,
the court, upon motion or on its own initiative, shall dismiss
Bridgeport contends that the undisputed evidence in the the action without prejudice as to that defendant or direct that
record establishes that “99 Problems” was publicly performed service be effected within a specified time. FED . R. CIV . P.
after May 4, 1998, as a direct result of licenses granted by 4(m). We exercise plenary review over legal issues involving
UPIP even if they were granted outside the limitations period. the adequacy of service but review the relevant findings of
On the contrary, the only thing established by the evidence fact for clear error. LSJ Inv. Co. v. O.L.D., Inc.,167 F.3d 320,
was that UPIP received $0.81 in performance royalties after 322 (6th Cir. 1999). Actual knowledge of a lawsuit does not
May 4, 1998. Specifically, UPIP received a total of $14.91 in substitute for proper service under Fed. R. Civ. P. 4.
performance royalties related to the public performance of
“99 Problems,” of which only $0.81 was received after
May 4, 1998. 5
Bridgeport also argues tha t even if U PIP did not actually license use
of the compo sition, UPIP may be liable as a direct infringer for offering
A composition copyright owner has the exclusive right to to license the work within the limitations period. None of the cases relied
perform, or authorize the performance of, a copyrighted upon by Bridgeport involved the offering to license a wo rk. See Hotaling
composition. 17 U.S.C. § 106(4). A claim for infringement v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 , 203 (4th
Cir. 1997) (pub lic library distributes infringing work when it adds the
of this right requires proof that the composition was publicly work to its collection, lists it in the catalog, and makes it available for
performed without having obtained permission. See Jobete borrowing by the p ublic); Repp v. Webber, 914 F. Supp. 80, 84 (S.D.N.Y.
Music Co. v. Johnson Communications, Inc., 285 F. Supp. 2d 1996) (alleged infringer distributed the infringing work and granted
1077, 1082 (S.D. Ohio 2003). Because Bridgeport failed to licenses to third parties to reproduce the infringing work); Johnson v.
show that any public performance occurred after May 4, Radio City Prods., Inc., No. 97 CIV. 4099 (JSR), 1998 WL 171463
1998, there was no evidence of an infringing act within the (S.D.N.Y. 1998) (question of fact whether there was a performance
license and whether performances were authorized under the license).
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 13 14 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
A. Ammo Dump Music Ammo Dump Music. See Dodco, Inc. v. Am. Bonding Co., 7
F.3d 1387, 1388-89 (8th Cir. 1993) (salesman did not
Despite having been advised by Warner/Chappell that it exclusively represent the defendant). In support of its claim
was not authorized to accept service for Ammo Dump Music that Warner/Chappell is a managing agent for Ammo Dump
or Carrumba Music, Bridgeport attempted to serve the Music, Bridgeport relies on the affidavit of Ed Pierson, an
amended complaint on Ammo Dump Music through executive vice-president for Warner/Chappell, that was filed
Warner/Chappell by mailing it to CT Corporation Systems, in opposition to Bridgeport’s motion for entry of default
which is authorized to accept service on behalf of judgment against Ammo Dump Music.
Warner/Chappell. Bridgeport contends that it properly served
Ammo Dump Music by serving a “managing agent” as Pierson stated that Warner/Chappell works as a limited
permitted by Fed. R. Civ. P. 4(h)(1).6 agent for thousands of writers and their publishing entities,
but has never been authorized to accept service of process on
A managing agent is one authorized to transact all business behalf of a writer or publishing company. Generally,
of a particular kind at a particular place and must be vested Warner/Chappell issues licenses to companies that want to
with powers of discretion rather than being under direct use musical compositions in television, movies, video games,
superior control. See Grammenos v. Lemos, 457 F.2d 1067, and the like. It collects the income generated from such
1073 (2d Cir. 1972). Another factor to consider is the licenses and distributes the royalty shares to the writers and/or
exclusivity of the relationship between Warner/Chappell and their publishing entities. There was no evidence in the record
concerning the amount of discretion Warner/Chappell can
exercise with respect to the licensing of works owned by
6
Fed. R. Civ. P. 4(h) pro vides that:
Ammo Dump Music. See Jennings v. McCall Corp., 320
F.2d 64 (8th Cir. 1963) (salesman was not managing agent
(h) Service Upon Corporations and A ssociations. Unless where he was hired to secure new accounts but did not have
otherwise provided by federal law, service upon a domestic or discretion to establish prices, terms, or conditions of contracts
foreign corporation or upon a partnership or other and whose orders were subject to company approval).
unincorporated association that is subject to suit under a
common name, and from which a waiver of service has not been
Because Bridgeport failed to come forward with evidence
obtained and filed, shall be effected: supporting a finding that Warner/Chappell was a managing
agent of Ammo Dump Music for purposes of Fed. R. Civ. P.
(1) in a judicial district of the United States in the manner 4(h)(1), the district court did not err by dismissing the action
prescribed for individuals by subdivision (e)(1), or by delivering against Ammo Dump Music for lack of proper service of
a copy of the sum mon s and of the co mpla int to an officer, a process.
managing or general agent, or to any other agent authorized by
appointment or by law to receive service of process and, if the
agent is one authorized by statute to receive service and the B. Carrumba Music
statute so requires, by also mailing a copy to the defendant, or
Service on Carrumba Music, the d/b/a for Jorge Hinojosa,
(2) in a place not within any judicial district of the United is governed by Fed. R. Civ. P. 4(e), the provision for service
States in any manner prescribed for individuals by subdivision
(f) except personal delivery as provided in paragraph (2 )(C)(i)
thereo f.
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 15 16 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
of process on individuals.7 Rule 4(e) permits service pursuant person apparently in charge of his or her office, place of
to the law of the state in which service is effected, which in business, or usual mailing address other than a United
this case is California because Hinojosa is a resident of States Postal Service post office box, at least 18 years of
California. See LSJ Inv., 167 F.3d at 322-23. Under age, who shall be informed of the contents thereof, and
California law, service on an individual may be effected as by thereafter mailing a copy of the summons and of the
follows: complaint by first-class mail, postage prepaid to the
person to be served at the place where a copy of the
If a copy of the summons and complaint cannot with summons and complaint were left. Service of a summons
reasonable diligence be personally delivered to the in this manner is deemed complete on the 10th day after
person to be served, as specified in Section 416.60, the mailing.
416.70, 416.80, or 416.90, a summons may be served by
leaving a copy of the summons and complaint at the CAL. CIV . PROC. CODE § 415.20(b) (West 2004).
person’s dwelling house, usual place of abode, usual
place of business, or usual mailing address other than a Bridgeport attempted to serve Carrumba Music by leaving
United States Postal Service post office box, in the the summons and amended complaint with a receptionist at
presence of a competent member of the household or a the office of Provident Financial Management in Los
Angeles, California. Provident is an accounting firm retained
by Carrumba Music to perform routine bookkeeping and
7
accounting functions limited to tasks such as paying bills,
Fed. R. Civ. P. 4(e) states: receiving and depositing checks, preparing taxes, and keeping
Carrumba Music’s books and records. Provident was not
(e) Serv ice U pon Indiv idua ls W ithin a Judicial District
of the United Sta tes. Unless otherwise provided by federal law,
authorized to accept service of process on behalf of Carrumba
service upon an ind ividual from whom a waive r has no t been Music.
obtained and filed , other than an infant or an incompetent
person, may be effected in any judicial district of the United Bridgeport failed to show compliance with California’s rule
States: for service of process on individuals because it offered no
basis to conclude that the Los Angeles address for Provident
(1) pursuant to the law of the state in which the
district court is located, or in which service is effected, was the usual place of business or usual mailing address of
for the service of a summons upon the defendant in an Carrumba Music. See LSJ Inv. Co., 167 F.3d at 323 (office
action brought in the courts of general jurisdiction of was location repeatedly given by defendant as the address for
the State; or his business and himself). Accordingly, we find no error in
the dismissal of Carrumba Music for lack of service of
(2) by delivering a copy of the summons and of the
complaint to the ind ividual perso nally or by leaving process.
copies thereof at the individual's dwelling house or
usual place of abode with some person of suitable age IV.
and discretion then residing therein or by delivering a
copy of the summons and of the complaint to an agent Turning next to Bridgeport’s separate appeal, we review the
authorized by appointment or by law to receive service district court’s decision to award $79,340.94 in attorney fees
of proce ss.
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 17 18 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
and $3,409.35 in nontaxable costs to UPIP for abuse of not all weigh in favor of an award in order to grant fees to a
discretion. Coles v. Wonder, 283 F.3d 798, 804 (6th Cir. prevailing party and other factors may be considered.
2002); Murray Hill Publ’ns, Inc. v. ABC Communications,
264 F.3d 622, 639 (6th Cir. 2001). The Copyright Act Separate summary judgment motions were filed by UPIP
provides that in civil suits the district court, in its discretion, and the Warner defendants. After the magistrate judge issued
may award costs, including reasonable attorney fees, to the his decision recommending that summary judgment be
prevailing party. 17 U.S.C. § 505.8 This discretion must be granted to the Warner defendants on August 5, 2002, UPIP
exercised in an evenhanded manner with respect to prevailing wrote to Bridgeport and urged that Bridgeport stipulate to the
plaintiffs and prevailing defendants, and in a manner entry of summary judgment in favor of UPIP. That letter,
consistent with the primary purposes of the Copyright Act. dated August 23, 2002, stated in part that:
Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994).
Despite lengthy, intrusive, and expensive discovery, you
While rejecting both a “dual standard” under which have not established and there is no evidence that any
prevailing defendants are required to show frivolousness or infringing acts by UPIP took place after May 4, 1998.
bad faith and the “British Rule” of automatic recovery of This letter will further confirm that none of the very
attorney fees by the prevailing party, the Court in Fogerty limited monies UPIP has received after May 4, 1998
explained that “‘[t]here is no precise rule or formula for attributable to the composition 99 Problems are
making these determinations,’ but instead equitable discretion attributable to post-May 4, 1998 activities[.] UPIP has
should be exercised ‘in light of the considerations we have not granted any licenses for 99 Problems after May 4,
identified.’” Id. at 534 (citation omitted). Several 1998. . . . Indeed, the total revenue received by UPIP for
nonexclusive factors were approved by the Court in Fogerty 99 Problems since May 4, 1998 are 81 cents – of which
for consideration in making awards to prevailing parties, as UPIP retained 40 cents.
long as the factors were “faithful to the purposes of the
Copyright Act and are applied to prevailing plaintiffs and Thus, in both Case Nos. 703 and 706, the Universal
defendants in an evenhanded manner.” Id. at 534 n.19. [d]efendants stand in the same shoes as the Warner
Those factors include “‘frivolousness, motivation, objective defendants in Case No. 706. We can provide you with
unreasonableness (both in the factual and legal components sworn declarations to this effect if you so desire
of the case) and the need in particular circumstances to (although, from the extensive discovery conducted and
advance considerations of compensation and deterrence.’” Id. your failure to put forward any such evidence in
(quoting Lieb v. Topstone Indus. Inc., 788 F.2d 151, 156 (3d opposition to our summary judgment motion, you are
Cir. 1986)). As the district court observed, the factors need already aware of the complete absence of evidence of
such activities during the statutory period).
....
8
“In any civil action und er this title, the co urt in its discre tion may
allow the recovery of full costs by or against any party other than the We have reviewed your Rule 72 Objections to Judge
United States or an officer thereof. Except as otherwise provided by this Brown’s R&R to Judge Higgins. Judge Brown’s R&R
title, the court may also award a reasonable attorney’s fee to the was thoughtfully analyzed and well-reasoned, and we
prevailing party as part of the costs.” 17 U.S.C. § 505.
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 19 20 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
fully anticipate that Judge Higgins will adopt it as the “top-heavy” billing by partners for work that could have been
order of the Court. We understand you have also performed by associates. Bridgeport does not challenge the
indicated you intend to appeal this issue to the Sixth district court’s calculation of the amount of fees reasonably
Circuit. With that in mind, we propose and request that incurred or its inclusion of any particular item in the award.
Bridgeport stipulate to judgment in favor of Universal
Polygram International Publishing, Inc. (“UPIP”) in Case After correctly stating the applicable standards, the district
706 based upon Judge Brown’s R&R. This would court indicated at the outset that Bridgeport’s reliance on its
preserve the parties’ and the Court’s resources and avoid novel, albeit unsuccessful, theory was not objectively
unnecessary expenditures of time, effort, and expense unreasonable. In particular, the district court recognized that
because the cases against both Warner-Chappell and it had “ruled on a previous motion against Bridgeport for
UPIP would proceed simultaneously. attorney’s fees that the plaintiff’s theory that publishing
defendants could be liable for infringement within the
Bridgeport did not respond, and UPIP began preparing for the limitations period for the receipt of royalties income was
trial scheduled to commence on November 12, 2002. novel enough to weigh against an award of attorney’s fees.”
Once the district court adopted the magistrate judge’s report Nonetheless, the district court found that several factors
and recommendation with respect to the Warner defendants weighed in favor of an award, including factors enumerated
on September 16, 2002, UPIP obtained leave to supplement in its decisions awarding attorney fees to prevailing
its pending motion for summary judgment. In the defendants in other Bridgeport cases. Specifically, the district
supplemental brief filed on September 27, 2002, UPIP argued court noted the plaintiffs’ overly aggressive, take-no-prisoners
that it “stood in the same shoes” as the Warner defendants. litigation tactics, and the overall impression that plaintiffs’
Bridgeport filed an opposing memorandum on October 7, strategy was to exact the highest possible toll in order to
2002. The district court granted summary judgment to UPIP maximize the settlement value of the cases. The deciding
on November 7, 2002, and Bridgeport appealed. On factor, however, was specifically identified as
December 9, 2002, UPIP filed its motion seeking $297,292.60
in attorney fees and $16,119.22 in nontaxable costs as a the plaintiff’s decision not to settle or otherwise
prevailing party. compromise its claim after the Court ruled in this case
against its theory of infringement by receipt of royalties,
In its order of May 6, 2003, the district court found UPIP which by September 2002 was its only remaining viable
was a prevailing party and concluded that Bridgeport should theory against this defendant. Faced with certain defeat
bear the reasonable fees and costs incurred by UPIP after on summary judgment, the plaintiff unnecessarily
September 16, 2002, the date that summary judgment was extended this litigation and caused both sides to expend
entered in favor of the Warner defendants. In calculating the enormous resources preparing for a trial on a theory that
lodestar amount, the district court reduced the hourly rates had been clearly rejected by the Court, where the plaintiff
charged by UPIP’s Los Angeles counsel, “capped” the rates had no new facts to offer that might persuade the Court
charged for paralegal work, deducted fees for redacted or otherwise. The Court views this behavior as foolhardy,
nonspecific entries, allocated fees between two cases against and believes it entitles the defendant to a partial award of
UPIP, and reduced the lodestar amount by 25% to account for fees and costs. Therefore, the Court finds that [UPIP] is
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 21 22 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
entitled to all reasonable fees and costs incurred after claim. The district court also faulted Bridgeport for failing to
September 16, 2002, the date that the Court adopted the settle, but no settlement offer was made by UPIP. Instead,
Report and Recommendation by the Magistrate Judge [], UPIP demanded that Bridgeport stipulate to dismissal of its
approved the dismissal of all claims in this action against objectively reasonable claim and forego a decision on the
the Warner defendants as barred by the statute of merits specific to UPIP.
limitations and rejected receipt of income theory of
infringement. The Court finds that Bridgeport’s further While it would be improper to sanction a party simply for
pursuance of similar claims against Universal after that electing to await decision on a pending motion, we have
date were objectively unreasonable. recognized that a party’s litigation tactics may weigh in favor
of an award of fees when the conduct supports an inference
With our affirmance of summary judgment, it is clear that concerning motivation or a particular need for deterrence.
UPIP is a prevailing party. As discussed earlier, however, Compare Matthew Bender, 240 F.3d at 125-26 (filing
attorney fees are not to be awarded automatically to every 12(b)(6) motion), with Coles, 283 F.3d at 803 (in light of
prevailing party. In Murray Hill, this court reversed an award objective unreasonableness of the claims, the plaintiff’s
of attorney fees to the prevailing defendant and concluded tactics and strategies could “be interpreted as seeking to force
that the plaintiff had presented unsettled questions of law and settlement with a wealthy songwriter with little or no basis for
one or more colorable claims of infringement. 264 F.3d at doing so.”) We remand for the district court to consider in its
640. This is consistent with the view from other circuits that discretion whether, despite the objective reasonableness of the
it generally does not promote the purposes of the Copyright claim, an award or partial award is warranted based on a
Act to award attorney fees to a prevailing defendant when the weighing of one or more Fogerty factors or because an award
plaintiff has advanced a reasonable, yet unsuccessful claim. would otherwise further the purposes of the Copyright Act.
See Matthew Bender & Co. v. West Publ’g Co., 240 F.3d 116,
122 (2d Cir. 2001); Lotus Dev. Corp. v. Borland Int’l, Inc., For the reasons set forth above, we AFFIRM the entry of
140 F.3d 70, 75 (1st Cir. 1998) (In close infringement cases, summary judgment in favor of UPIP; AFFIRM the dismissal
“the need to encourage meritorious defenses is a factor that a of Ammo Dump Music and Carrumba Music; and VACATE
district court may balance against the potentially chilling the award of attorney fees and costs to UPIP and REMAND
effect of imposing a large fee award on a plaintiff[] who . . . for further consideration consistent with this opinion.
may have advanced a reasonable, albeit unsuccessful,
claim.”).
The district court explicitly found that Bridgeport’s receipt
of royalties theory was objectively reasonable. This
objectively reasonable theory did not suddenly become
objectively unreasonable (factually and legally) once it
became apparent that the district court would most likely
reject it and enter summary judgment in UPIP’s favor. As a
result, we find it would be an abuse of discretion to base the
award on the objective unreasonableness of Bridgeport’s
Nos. 03-5005/5744 Bridgeport Music, et al. v. Rhyme 23 24 Bridgeport Music, et al. v. Rhyme Nos. 03-5005/5744
Syndicate Music, et al. Syndicate Music, et al.
_____________________________________________ mistake has been made” in this case. Adcock-Ladd v. Sec’y of
Treasury, 227 F.3d 343, 349 (6th Cir. 2000) (quotation marks
CONCURRING IN PART, DISSENTING IN PART omitted) (defining the term “abuse of discretion”). Nor do I
_____________________________________________ believe that “the lower court relie[d] on clearly erroneous
findings of fact, . . . improperly applie[d] the law[,] or use[d]
RONALD LEE GILMAN, Circuit Judge, concurring in part an erroneous legal standard.” Id. (quotation marks omitted).
and dissenting in part. I concur in Parts I, II, and III of the Accordingly, I would AFFIRM the decision of the district
majority opinion. But I disagree with the majority’s court because I find no abuse of discretion in its award of
conclusion in Part IV that the district court abused its attorney fees to UPIP.
discretion in awarding attorney fees to UPIP, the prevailing
defendant.
Even assuming that Bridgeport’s receipt-of-royalties
argument was not unreasonable at the outset, the fact remains
that the failure of the argument was absolutely foreordained
once the district court resolved that very issue in a parallel
case in which Bridgeport was also the plaintiff. From that
point forward, the district court had a sound basis to conclude
that Bridgeport was unreasonable in continuing to pursue its
claim against UPIP, especially in light of UPIP’s proposal to
stipulate to a dismissal of the complaint while still preserving
Bridgeport’s right to appeal. This case is therefore easily
distinguishable from those where the district court was found
to have abused its discretion by shifting attorney fees to a
party who advanced a reasonable claim that had not
previously been ruled upon, such as in Matthew Bender &
Co., Inc. v. West Publishing Co., 240 F.3d 116, 123 (2d Cir.
2001), which is cited in Part IV of the majority’s opinion.
I agree with the general principle that awarding attorney
fees in cases that present close questions in unsettled areas of
law is improper; otherwise, parties might be deterred from
bringing colorable claims or defenses that merit judicial
consideration. But I cannot perceive how the purposes of the
Copyright Act would be thwarted by deterring a plaintiff such
as Bridgeport from pressing a theory that had already been
considered and rejected in a parallel case before the very same
judge. At a minimum, I am not “firmly convinced that a