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Dc Comics v. Pacific Pictures Corporation; Ip Worldwide

April 4, 2013

DC COMICS, PLAINTIFFS,
v.
PACIFIC PICTURES CORPORATION; IP WORLDWIDE, LLC; IPW, LLC; MARC TOBEROFF; MARK WARREN PEARY; JEAN ADELE PEAVY, LAURA SIEGEL LARSON; DOES 1--10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Otis D. Wright, II United States District Judge

O

ORDER DENYING DC'S MOTION FOR ATTORNEYS' FEES [562]

I.INTRODUCTION

In 2010, DC Comics filed suit against (among others) the heirs of Superman co-creator Joseph Shuster, alleging that the heirs' attempted copyright-grant termination was ineffective. DC also sought to invalidate three agreements between the heirs and Defendants Marc Toberoff and Pacific Pictures Corporation under 17 U.S.C. § 304(c)(6)(D). After two years of acrimonious litigation, the Court granted partial summary judgment on both claims in DC's favor.

DC now moves for $500,000 in attorneys' fees under the Copyright Act's fee-shifting statute, 17 U.S.C. § 505. But DC seeks fees only against Toberoff, and only on its third claim concerning the heirs' 2001 and 2003 agreements with Pacific Pictures and the 2008 consent agreement between the Shuster and Siegel heirs. Defendants oppose DC's fees request, arguing that DC succeeded only minimally and that Defendants had not asserted any frivolous or unreasonable defenses during the litigation. After considering the various factors expounded by the United States Supreme Court, as well as public-policy considerations, the Court DENIES DC's Motion for Attorneys' Fees.*fn1

II.FACTUAL AND PROCEDURAL BACKGROUND

In November 2001, Defendants Mark Warren Peary and Jean Adele Peavy entered into a "Joint Venture Agreement" with Defendant Pacific Pictures Corporation, purportedly assigning any interest the heirs would recapture from the 1992 Shuster termination notice to the venture. The parties reaffirmed this agreement in 2003. But in 2004, the parties rescinded both agreements. In 2008, the Shuster heirs and the Siegel heirs entered into a consent agreement, which prohibited either family from entering into an agreement with DC without the other's approval.

On August 20, 2012, DC moved for partial summary judgment on its first, second, and third claims. (ECF No. 458.) DC's first claim sought a declaratory judgment that the Shuster heirs' purported 2003 termination notice was ineffective under the Copyright Act for five alternative reasons. (FAC ¶¶ 105--34.) Under its third claim, DC sought a declaratory judgment that the 2001 and 2003 Pacific Pictures agreements and a 2008 consent agreement all violated 17 U.S.C. § 304(c)(6)(D). (Id. ¶¶ 165--73.) DC argued that, as the allegedly terminated grantee, it was the only party with which the Shuster heirs could enter into an agreement regarding the Superman rights expected to be recovered from the 2003 termination. (ECF No. 458, at 31--33.)

Defendants filed a cross-motion for partial summary judgment on the same claims. (ECF No. 478.) With respect to DC's first claim, Defendants argued that Mark Warren Peary validly terminated the 1992 agreement in 2003 under 17 U.S.C. § 304(d). (Id. at 19--30.) Defendants also asserted that DC had no right to exclusively negotiate with the heirs under § 304(c)(6)(D). (Id. at 33--34.)

On October 17, 2012, the Court granted partial summary judgment in DC's favor on its first and third claims. (ECF No. 507.) The Court found that the 1992 agreement between DC and the Shuster heirs revoked and regranted the heirs' Superman rights, thereby precluding the heirs from invoking § 304(d)'s termination provision. (ECF No. 507, at 8--13.) On DC's third claim, the Court determined that the 2001, 2003, and 2008 agreements violated § 304(c)(6)(D), as they predated the purported termination notice's October 2013 effective date. (Id. at 16--17.) On December 11, 2012, the Court accordingly issued partial judgment. (ECF No. 540.)

Despite its victory on both its first and third claims, DC now moves for $500,000 in attorneys' fees only against Marc Toberoff and Pacific Pictures*fn2 and only for prosecuting its third claim. (Notice of Mot. 2 (ECF No. 562, at 3).) DC chose not to seek fees from Peary and Defendant Jean Adele Peavy, asserting that they too "were the victims of Marc Toberoff and his illicit schemes to interfere with DC's rights for his own private gain." (Id.) Defendants timely opposed on February 4, 2013. (ECF No. 576.) That Motion is now before the Court for decision.*fn3

III.LEGAL STANDARD

Under the "American Rule," the prevailing party ordinarily is not entitled to collect attorneys' fees from the losing party absent explicit statutory authority to the contrary. Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 602 (2001). Section 505 of the Copyright Act provides that a court may, in its discretion, award reasonable attorneys' fees to the prevailing party in "any civil action under this title." 17 U.S.C. § 505.

The United States Supreme Court has expounded four nonexclusive factors a district court should consider in determining whether to award attorneys' fees under this section: (1) frivolousness; (2) motivation; (3) objective unreasonableness in both the factual and legal components of the case; and (4) the need to advance compensation and deterrence goals. Fogerty v. Fantasy, Inc., 510 U.S. 517, 535 n.19 (1994). The Ninth Circuit also considers the prevailing party's degree of success. Wall Data Inc. v. L.A. Cnty. Sheriff's Dep't, 447 F.3d 769, 787 (9th Cir. 2006). Despite these vague factors, the Ninth Circuit has emphasized that an attorneys'-fees award is "reposed in the sound discretion of the district courts." Fantasy, Inc. v. Fogerty, 94 F.3d 553, 555 (9th Cir. 1996).

IV.DISCUSSION

DC moves for attorneys' fees solely against Toberoff and Pacific Pictures and only based on DC's third claim. DC argues that since Defendants have agreed that the 2001 and 2003 Pacific Pictures agreements were invalid, they should have stipulated to judgment in DC's favor on the third ...


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