Charter School Capital, Inc. v. Charter Asset Mgmt. Fund, L.P. ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS APR 26 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHARTER SCHOOL CAPITAL, INC., a No. 17-56601
Delaware corporation,
D.C. No.
Plaintiff-Appellee, 2:14-cv-03385-GW-PLA
v.
MEMORANDUM*
CHARTER ASSET MANAGEMENT
FUND, L.P., a Delaware Limited
Partnership; CHARTER ASSET
MANAGEMENT GP, LLC,
Defendants-Appellants,
and
PAUL IM; DAVID PARK; CHARTER
ASSET MANAGEMENT, LLC,
Defendants.
CHARTER SCHOOL CAPITAL, INC., a No. 17-56603
Delaware corporation,
D.C. No.
Plaintiff-Appellant, 2:14-cv-03385-GW-PLA
v.
CHARTER ASSET MANAGEMENT
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
FUND, L.P., a Delaware Limited
Partnership; CHARTER ASSET
MANAGEMENT GP, LLC,
Defendants,
and
PAUL IM; DAVID PARK; CHARTER
ASSET MANAGEMENT, LLC,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted April 8, 2019
Pasadena, California
Before: RAWLINSON and MURGUIA, Circuit Judges, and RAKOFF,** District
Judge.
Defendants-Appellants Charter Asset Management Fund, L.P. and Charter
Asset Management GP, LLC (together, “CAM”) appeal from a jury verdict finding
CAM liable for copyright infringement and awarding $1,174,642 in profits to
Plaintiff-Appellee Charter School Capital, Inc. (“CSC”). CSC cross-appeals the
district court’s post-trial rulings granting a new trial and summary judgment to
Defendants and Cross-Appellees Paul Im and David Park (together, the “Individual
**
The Honorable Jed S. Rakoff, United States District Judge for the
Southern District of New York, sitting by designation.
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Defendants”). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.1
1. There was sufficient evidence for the jury to find that CAM was liable
for copyright infringement of either the 2013 form receivables purchase agreement
(the “Form RPA”) or the 2012 receivables purchase agreement between Avance
Academia and CSC (the “Avance RPA”). See L.A. Printex Indus., Inc. v.
Aeropostale, Inc., 676 F.3d 841, 846 (9th Cir. 2012). There was testimony
suggesting that the Avance RPA was covered by the assignment agreement
because the Avance RPA was essentially the Form RPA with the blanks filled in,
and CSC’s general counsel testified that the copyright application for the 2012
financing documents included the Avance RPA. CSC’s counsel also testified that
she compared CAM’s form not only to the Avance RPA, but also to the CSC
template form and concluded they were substantially similar.
2. Even if the district court abused its discretion by admitting evidence
that CAM had sued its lawyers for malpractice and then dismissed the suit, CAM
has not demonstrated prejudice. See Ruvalcaba v. City of L.A., 64 F.3d 1323, 1328
(9th Cir. 1995) (“District courts are granted broad discretion in admitting
evidence,” and a “new trial is only warranted when an erroneous evidentiary ruling
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We deny CAM’s motion to transmit a demonstrative exhibit, which was
not admitted into evidence below. 17-56601, Dkt. 38; 17-56603, Dkt. 37. We also
deny CAM’s motion for the Court to consider additional authority, which CAM
could have cited in its briefs. 17-56601, Dkt. 69; 17-56603, Dkt. 68.
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substantially prejudiced a party.”) (internal quotation marks and citations omitted).
3. The district court did not abuse its discretion by admitting evidence
regarding the amount of fees that CAM and CSC paid their respective attorneys to
draft the legal forms. In light of CAM’s argument at trial that its profits were
attributable to its lower prices, the fee evidence was relevant to proving a causal
nexus between CAM’s profits and the infringing form. See 17 U.S.C. § 504(b).
CSC did not use the fees evidence to support a “sweat of the brow” theory. See
Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 352-56 (1991).
4. The district court did not plainly err by instructing the jury that it
should compare the forms “side-by-side.” Although the model instructions do not
include this language, they do state that the “court and counsel [should]
specifically craft instructions on substantial similarity based on the particular
work(s) at issue, the copyright in question, and the evidence developed at trial.”
See Ninth Circuit Manual of Model Civil Jury Instructions (“Model Instructions”)
§ 17.19. Moreover, the district court accurately instructed the jury regarding the
extrinsic and intrinsic tests.
5. The district court did not plainly err by including a jury instruction on
joint authorship. The instruction was legally accurate, see Model Instructions
§ 17.9, and CAM has not shown prejudice.
6. The district court did not abuse its discretion by denying CAM’s
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motion for a new trial based on excessive damages. Once CSC presented evidence
of CAM’s gross revenue and established a causal nexus between the revenue and
the infringement, the burden shifted to CAM to prove its expenses and whether any
profits were attributable to other factors. See 17 U.S.C. § 504(b). The district court
correctly afforded the jury’s verdict “substantial deference” and concluded that
CAM failed to carry its burden of proving that CAM’s profits were attributable to
other factors. See Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d
1422, 1435 (9th Cir. 1996) (“We must uphold the jury’s finding unless the amount
is grossly excessive or monstrous, clearly not supported by the evidence, or based
only on speculation or guesswork.”).
7. The district court correctly granted the Individual Defendants’ motion
for a new trial and summary judgment. CSC submitted no evidence showing that
the Individual Defendants profited separately from CAM. See Model Instructions
§ 17.34 (“The defendant’s gross revenue is all of the defendant’s receipts from” the
use of the copyrighted work. “The plaintiff has the burden of proving the
defendant’s gross revenue by a preponderance of the evidence.”); Frank Music
Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 519 (9th Cir. 1985) (“[O]ne
defendant is not liable for the profit made by another.”).
AFFIRMED.
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