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FameFlynet, Inc. v. Jasmine Enterprises Inc.

United States District Court, N.D. Illinois, Eastern Division

August 8, 2019

FameFlynet, Inc., Plaintiff,
v.
Jasmine Enterprises Incorporated, Defendant.

          MEMORANDUM OPINION AND ORDER

          Honorable Thomas M. Durkin United States District Judge.

         FameFlynet, Inc. (FFN) brought this action against Jasmine Enterprises for copyright infringement after Jasmine posted celebrity wedding photos on its company blog. In January 2019, the parties stipulated to the facts, evidence, and a statutory damages award, reserving only their claims to attorneys' fees. R. 110. Now before the Court is FFN's petition for attorneys' fees and costs [113], and Jasmine's motion to strike FFN's motion [119]. For the following reasons, Jasmine's motion to strike is granted in part and denied in part, and FFN is awarded $10, 500 in attorneys' fees and costs.

         Background

         This case exemplifies the familiar adage of cutting off your nose to spite your face. Less than two months after FFN filed its complaint in the fall of 2016, the parties ended settlement negotiations because they could not bridge the $1, 000 gap between the $16, 000 demand and $15, 000 offer. Now, over two-and-a-half years later, and after a stipulated statutory damages award of only $5, 000, FFN requests attorneys' fees totaling $241, 443.77.

         The underlying facts will not be repeated at length here.[1] FFN owns copyrights to 46 photographs of Nicky Hilton and James Rothschild from the couple's July 2015 wedding. R. 110 ¶¶ 14-16. That August, an employee of Jasmine Enterprises, a wedding dress retailer, posted three of those photos on the company's blog without FFN's permission. Id. ¶¶ 13, 21; R. 84 ¶ 23. FFN observed the photographs that October, sent a cease-and-desist letter the following June, and sued Jasmine for copyright infringement in the Southern District of New York in September 2016. R. 110 ¶¶ 18, 25; R. 1.[2] Less than one month after Jasmine was served, FFN demanded $16, 000 to settle the case. R. 114 9. FFN arrived at that amount by multiplying the highest licensing fee FFN had received for a Hilton-Rothschild wedding photograph by three ($2, 500 from People Magazine), and adding to that its attorneys' fees as of that date ($7, 800). Id. Jasmine countered at $15, 000, which FFN's counsel declined, stating: “We will probably never be this close again but no problem. It was a good try. Plaintiff withdraws all offers of settlement. We will reprice after conference/motion/whatever comes next.” Id. ¶¶ 10-11. Jasmine again offered to settle the case for $15, 000 that December and the following February. Id. ¶¶ 17, 25. In June 2017, FFN rejected Jasmine's offer of judgment for $15, 000, inclusive of attorneys' fees. Id. ¶¶ 33-34. Meanwhile, FFN's attorneys' fees had climbed to $55, 450. Id. ¶ 34. For the next year, the parties engaged in discovery disputes, including motions to compel and for sanctions by Jasmine. Id. ¶¶ 47, 63.

         In September 2018, this Court granted FFN's motion for summary judgment as to Jasmine's liability. R. 99. Following the Court's order, FFN made an all-inclusive $200, 000 demand. R.114 ¶ 70. In the subsequent weeks, Jasmine offered $15, 000 and then $17, 500 to settle the case, which FFN again declined. Id. ¶¶ 72, 74.

         In lieu of trial, the parties stipulated to the facts and a statutory damages award of $5, 000, reserving only their claims to attorneys' fees. R. 110 at 1. FFN then filed its motion requesting $225, 567.18 in attorneys' fees and costs and submitted declarations from the following four members of Sanders Law PLLC: Craig Sanders, Erica Carvajal, David Barshay, and Jonathan Cader. R. 113-117. Carvajal's declaration provides a detailed synopsis of the firm's work and interactions with Jasmine. The other declarations attest to the accuracy of FFN's billing records and costs. Shortly thereafter, Jasmine filed its opposition, as well as a motion to strike FFN's motion. FFN then increased its request to $241, 443.77 to account for its additional work preparing the reply and its opposition to Jasmine's motion to strike.

         Analysis

         I. Jasmine's Motion to Strike Jasmine provides a laundry list of reasons why this Court should strike FFN's motion for fees. The Court is largely unpersuaded.

         First, Jasmine contends that FFN's motion “is predicated almost entirely on inadmissible settlement communications and confidential mediation proceedings, ” and is thus barred by Federal Rule of Evidence 408.[3] R. 119 at 2. To support its position, Jasmine cites two patent cases from the Eastern District of New York in which the court held settlement negotiations involving attorneys' fees were inadmissible. See R. 119 at 2-3; HR U.S. LLC v. Mizco Int'l, Inc., 2010 WL 3924548, at *11 (E.D.N.Y. Sept. 29, 2010) (finding evidence of settlement negotiations inadmissible in request for attorneys' fees in patent case); Siracuse v. Program for the Dev. of Human Potential, 2012 WL 1624291, at *20 (E.D.N.Y. Apr. 30, 2012) (finding defendant's reference to settlement offers in opposing plaintiff's request for fees was “inappropriate” and citing Mizco). In response, FFN cites several cases that come to the opposite conclusion, including a more recent Eastern District of New York case directly on point. See R. 124 at 5; Fortgang v. Pereiras Architects Ubiquitous LLC, 2018 WL 1832184, at *4 (E.D.N.Y. Mar. 9, 2018), report and recommendation adopted, 2018 WL 1505564 (E.D.N.Y. Mar. 27, 2018) (“This Court joins others that have held that Rule 408 does not bar consideration of settlement discussions in the context of determining whether attorneys' fees are appropriate under Section 505 of the Copyright Act.”); see also Lohman v. Duryea Borough, 574 F.3d 163, 167 (3d Cir. 2009) (holding Rule 408 does not bar a court's consideration of settlement negotiations in its analysis of what constitutes a reasonable fee award); Ingram v. Oroudijan, 647 F.3d 925, 927 (9th Cir. 2011) (holding district court did not err by considering settlement negotiations for the purpose of deciding a reasonable attorneys' fee award); Greenwich Film Prods., S.A. v. DRG Records, Inc., 1996 WL 502336, at *2 (S.D.N.Y. Sept. 5, 1996) (“While determining the reasonableness of a claim for attorney's fees is not specifically mentioned as a purpose for which evidence of a settlement offer may be considered, strong public policy considerations support its admissibility for that purpose.”). Although the Seventh Circuit has not ruled on the issue, the weight of authority supports considering settlement discussions when ruling on whether to award attorneys' fees. That conclusion is consistent with Rule 408, under which the admissibility of evidence depends on whether the evidence is intended to “prove liability of or invalidity of the claim or its amount, ” or whether it is offered for “another purpose.” Clevenger v. Bolingbrook Chevrolet, Inc., 401 F.Supp.2d 878, 880 (N.D. Ill. 2005) (quoting Fed.R.Evid. 408). Here, as Jasmine readily acknowledges in its motion to strike, FFN submitted the parties' settlement negotiations as proof of Jasmine's “litigation conduct.” See R. 119 at 3-4. As such, the settlement negotiations are admissible for the purposes of FFN's motion.

         Jasmine also argues that the Court should strike FFN's motion for fees because FFN breached the Southern District of New York Mediation Program's confidentiality provision by disclosing Jasmine's conduct and settlement offer during the mediation proceedings. This argument also fails. The confidentiality provision provides that “[a]ny communications made exclusively during or for the mediation process shall be confidential except as to the provisions indicated in this section.” S.D.N.Y. Procedures of the Mediation Program 2(a) (Dec. 26, 2018).[4] However, Jasmine did not point this Court to one statement made exclusively for the mediation process, and thus there is no basis for striking FFN's motion on that ground.

         Jasmine next argues the Court should strike Carvajal's declaration because she was not included in FFN's Rule 26 initial disclosures. Tellingly, Jasmine cites no cases in support of its position. The purpose of discovery rules is to “facilitate the development of the facts underlying a given dispute so that justice may be done on the merits.” Avnet, Inc. v. Motio, Inc., 2016 WL 927194, at *4 (N.D. Ill. Mar. 4, 2016) (emphasis added). Here, the merits concern information regarding FFN's infringement claim, not its request for attorneys' fees. Further, to the extent Jasmine argues FFN never disclosed Carvajal, this argument need not be entertained as Carvajal's name appears on top of the docket sheet and thus Jasmine was fully aware of her connection to the case. See Gicla v. United States, 572 F.3d 407, 411 (7th Cir. 2009) (“Rule 26 is designed to avoid surprise . . . .”).

         Jasmine also contends that the Court should strike portions of Carvajal's declaration because it contains hearsay statements and references to Jasmine's insurance in violation of Federal Rules of Evidence 802 and 411. Turning first to hearsay, Jasmine does not explain the basis for its objections and cites no cases in support of its position. As an initial matter, the Court is not compelled to fill in the gaps in Jasmine's arguments. See Harvey v. Town of Merrillville, 649 F.3d 526, 532 (7th Cir. 2011) (arguments that are perfunctory, undeveloped, or unsupported by authority are waived). In addition, as FFN correctly points out, affidavits need not be admissible in form so long as they would be admissible in content. See Winskunas v. Birnbaum, 23 F.3d 1264, 1267-68 (7th Cir. 1994). Having reviewed Jasmine's objections and FFN's responses, the statements at issue either do not constitute hearsay, fall under an exception, and/or are admissible in content if not form. Thus, Jasmine's hearsay objections miss the mark.

         Jasmine's argument based on Rule 411 is equally unavailing. Rule 411 provides that evidence “a person was or was not insured against liability is not admissible to prove whether the person acted negligently or otherwise wrongfully. But the court may admit this evidence for another purpose . . . .” Fed.R.Evid. 411. Here, FFN mentions Jasmine's insurance ...


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