The opinion of the court was delivered by: Hon. Harry D. Leinenweber
MEMORANDUM OPINION AND ORDER
Before the Court are the Arc and Frederick Defendants' Motions for Attorney's Fees under the Copyright Act. The Motions are granted as to liability. Arc Defendants' Motion is denied without prejudice in regards to apportionment. Both Defendants' also moved for sanctions under 28 U.S.C. § 1927. Those Motions are denied.
Plaintiff, the Estate of Joe Brown, brought an action against the following Defendants: Arc Music Group and Opus 19 Music, LLC (the "Arc Defendants"), Music Sales Corporation ("Music Sales"), Frederick Music Company and Vincent Brandom (the "Frederick Defendants"), and Katrina Music Company and Willie C. Cobbs (the "Katrina Defendants").
Plaintiff brought claims against the Arc Defendants for copyright infringement, fraud, unjust enrichment and civil conspiracy. Plaintiff also sought an accounting and a constructive trust. Plaintiff alleged that, without authority, the Arc Defendants filed copyright registrations and collected funds for compositions owned by the Plaintiff. The Court granted the Arc Defendants' Motion to Dismiss, dismissing for failure to state a claim the copyright infringement, fraud, constructive trust, and civil conspiracy claims with prejudice in an order dated November 22, 2011. The Court dismissed the unjust enrichment and accounting claims without prejudice to allow the Plaintiff to replead those claims.
From the Frederick Defendants, Plaintiff sought to recover for copyright infringement, trademark infringement, common law fraud, and conspiracy. Plaintiff alleged that the Frederick Defendants failed to pay royalties owed to the Plaintiff under a publishing agreement. Plaintiff's Second Amended Complaint voluntarily dismissed its copyright and trademark infringement claims against the Frederick Defendants, and added claims of breach of fiduciary duty, unjust enrichment, accounting, and constructive trust. The Court granted the Frederick Defendants' Motion to Dismiss, dismissing all claims with prejudice.
The Arc and Frederick Defendants now move for attorneys' fees pursuant to the Copyright Act (17 U.S.C. § 505) and for sanctions under 28 U.S.C. § 1927. Familiarity with the Court's order of November 22, 2011 is presumed, and further facts are discussed below where relevant.
A. Attorneys' Fees Under the Copyright Act, 17 U.S.C. § 505
The Copyright Act provides that a court has discretion to award the prevailing party reasonable attorneys' fees. 17 U.S.C. § 505 (2006). For this provision, prevailing plaintiffs and defendants are treated alike. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). The defendant is considered the prevailing party when the action is dismissed with prejudice. Riviera Distribs., Inc. v. Jones, 517 F.3d 926, 928 (7th Cir. 2007).
The Supreme Court in Fogerty listed four non-exclusive factors that courts use to guide their discretion regarding attorneys' fees. These factors are frivolousness, motivation, objective factual and legal unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence. Fogerty, 510 U.S. at 534 n. 19 (citing Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986)).
The Seventh Circuit has further streamlined the Fogerty factors into just two important considerations: the strength of the prevailing party's case and the amount of the relief obtained by the prevailing party. Assessment Techs. of WI, LLC v. WIREData, Inc., 361 F.3d 434, 436-437 (7th Cir. 2004). When the claim is frivolous and the prevailing party is a defendant who has not otherwise obtained damages (through a counterclaim, for example), the presumption to award attorneys' fees is "compelling." Id.
The prevailing party entitled to attorneys' fees on a particular claim can only recover attorneys' fees in defending against that one claim or any related claims, but not for unrelated claims. Entm't Research Grp. v. ...