Fharmacy Records v. Salaam Nassar

465 F. App'x 448
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 23, 2012
Docket10-1354, 10-2073
StatusUnpublished
Cited by33 cases

This text of 465 F. App'x 448 (Fharmacy Records v. Salaam Nassar) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fharmacy Records v. Salaam Nassar, 465 F. App'x 448 (6th Cir. 2012).

Opinion

OPINION

PER CURIAM.

These consolidated appeals stem from protracted copyright infringement litigation concerning the alleged unauthorized use of a rhythm line known as “Ess Beats.” Ess Beats was allegedly created by plaintiff Shelton Rivers and allegedly used without permission in a song entitled “Shot Down” that appeared on a commercially successful album, Grand, Champ, released by rap artist DMX in 2003. On March 31, 2008, the district court awarded summary judgment to defendants, concluding there was insufficient evidence of unauthorized use of Rivers’ actual sound recording of Ess Beats to support plaintiffs’ unauthorized sampling claim. R. 248, Opinion and Order at 35^11. The district court also grounded its ruling on a second line of analysis. In the exercise of its inherent authority, the court imposed the ultimate sanction of dismissal of plaintiffs’ complaint based on its findings that plaintiffs and their counsel had engaged in a pattern of egregious bad-faith misconduct, including discovery abuses, misrepresentation and spoliation of evidence. Their conduct was deemed to contravene all basic notions of fairness and professional responsibility, amounting to a “campaign of fraud.” Id. at 41-45. In an earlier appeal, the Sixth Circuit affirmed the district court’s judgment, upholding the dismissal as a sanction and finding it unnecessary to reach the merits of the summary judgment ruling. Fharmacy Records, Inc. v. Salaam Nassar, 379 Fed.Appx. 522 (6th Cir. 2010).

*451 Meanwhile, the district court had taken up defendants’ motion for attorney’s fees, which resulted in the filing of defendants’ counsel’s billing records. In these records, plaintiffs purport to have found evidence that defendants’ counsel perpetrated a fraud on the court. They moved the district court to set aside its judgment under Fed.R.Civ.P. 60(d)(3). The district court denied the motion in an order dated February 24, 2010, finding little evidence of fraud and nothing that undermined the essential elements of the court’s judgment. R. 352, Order Denying Rule 60(d)(3) Motion; R. 356, Hearing Tr. at 33. Plaintiffs’ appeal from this ruling is one of two appeals now before us. The second concerns the district court’s award of attorney’s fees to defendants in the amount of $546,199.89. The district court held that defendants were entitled to this award both as prevailing parties under the Copyright Act, 17 U.S.C. § 505, and as a sanction imposed on plaintiffs and their counsel for vexatious litigation under 28 U.S.C. § 1927. R. 363, Opinion and Order. Because we find no merit in either appeal, we affirm both rulings. 1

I. Appeal No. 10-1354

The denial of plaintiffs’ motion to set aside the judgment for fraud on the court is reviewed for abuse of discretion. Workman v. Bell, 484 F.3d 887, 840 (6th Cir.2007). To show entitlement to relief, plaintiffs have the burden of presenting clear and convincing evidence that defendants’ counsel engaged in conduct directed at the court: that was either intentionally false, willfully blind to the truth, or in reckless disregard for the truth; that was either a positive averment or an act of concealment in the face of a duty to disclose; and that deceived the court in such a way as to affect the outcome of the case. Carter v. Anderson, 585 F.3d 1007, 1011-12 (6th Cir.2009); Workman, 484 F.3d at 840. Entitlement to relief is circumscribed by the public policy favoring finality of judgments and termination of litigation. Doe v. Lexington-Fayette Urban Cty. Gov’t, 407 F.3d 755, 760 (6th Cir.2005).

A. Defendants’ Undisclosed Possession of Deposit Copy of CD

First, plaintiffs contend the billing records revealed that defendants’ counsel had in early 2006 obtained a deposit copy of the compact disk plaintiffs submitted to the Copyright Office with their copyright application for Ess Beats. Defendants’ possession of the CD had not been disclosed, plaintiffs contend, and defendants are said to have deceptively used this nondisclosure to justify efforts to compel discovery of Shelton Rivers’ original recording of Ess Beats. These discovery efforts revealed that plaintiffs lacked reliable evidence of Rivers’ original creation of Ess Beats; that their evidence was either tainted, lost or discarded. And these revelations were integral to the district court’s summary judgment ruling and dismissal of the complaint. Hence, plaintiffs in effect complain that defendants’ misleading nondisclosure contributed to the court’s discovery that their claim lacked essential evidentiary support.

In response, defendants explain that the deposit copy of the CD did not reveal the date of its creation. It was this fact, they contend, that necessitated their pursuit of plaintiffs’ evidence of Rivers’ original re *452 cording. They maintain they did not conceal anything they were obliged to disclose, did not intentionally mislead the court, and, through their discovery efforts, helped expose the evidentiary weakness of plaintiffs’ claim.

The district court concluded that defendants have the stronger arguments. Indeed, plaintiffs have failed to show how the district court was misled in any way that so affected the outcome as to warrant disturbing the court’s judgment under Rule 60(d)(3). We find no abuse of discretion in the district court’s denial of relief on this ground.

B. Unsigned Expert Report

Next, plaintiffs contend the billing records disclosed that defendants’ counsel claimed 135 hours of work with their computer forensics expert, Ives Potrafka, whose fee was over $18,000. Noting that Potrafka’s expert report, filed electronically, did not bear an actual handwritten signature, plaintiffs deduce that Potrafka did not sign the report because it did not reflect his opinion, and that the report was actually fabricated and falsified by defendants’ counsel. Plaintiffs contend that Po-trafka’s report, now shown to be unsigned, unreliable, and fraudulent, was improperly relied on by the district court. The district court observed that it had already addressed and denied numerous challenges to Potrafka’s report. The court held that the omission of Potrafka’s actual signature was merely a technical defect and that plaintiffs’ objection was not timely asserted and was therefore forfeited.

Defendants’ counsel conceded during appellate oral arguments that Potrafka’s original report does not bear an ink signature. Still, the circumstances here relied on by plaintiffs to accuse counsel of perpetrating fraud on the court fall far short of the required clear and convincing evidence. Moreover, even if Potrafka’s report were discounted, this would have no impact on the integrity of the summary judgment ruling.

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465 F. App'x 448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fharmacy-records-v-salaam-nassar-ca6-2012.