Jordan v. Time, Incorporated

• Court: Court of Appeals for the Eleventh Circuit
• Decided: April 25, 1997
• Docket: 95-5432
• Status: Published

Opinion

United States Court of Appeals,

Eleventh Circuit.

Nos. 95-5432, 96-4414.

Pat JORDAN, Plaintiff-Appellant,

v.

TIME, INCORPORATED, Defendant-Appellee.

Pat JORDAN, Plaintiff-Appellee,

TIME, INCORPORATED, Defendant-Appellant.

April 25, 1997.

Appeals from the United States District Court for the Southern District of Florida. (No. 94-6509-CIV), Federico A. Moreno, Judge.

Before CARNES, Circuit Judge, and FAY and CLARK, Senior Circuit Judges.

PER CURIAM:

Appellant Pat Jordan filed a copyright infringement suit

against appellee Time, Incorporated ("Time") when Sports

Illustrated reprinted an article authored by Jordan without prior

consent. Time made two offers of judgment, Fed.R.Civ.P. 68, which

Jordan rejected. After Time admitted liability, the district court

conducted a jury trial solely on the issue of damages. The jury

returned a verdict awarding Jordan actual damages, but rejecting

Jordan's claim for a portion of Time's profits and his claim that

the infringement was willful. Following the jury verdict, Jordan

elected to pursue statutory damages. 17 U.S.C. § 504(c)(1) (1994).

The district court awarded damages to Jordan. Both sides then

filed motions for attorneys' fees and costs. The district court

denied the motions. On appeal, Jordan argues the jury instructions on the issue of damages were erroneous. Time cross appeals from

the district court's denial of its motion for attorneys' fees and

costs. Having timely elected to receive statutory damages from the

court, Jordan is precluded from appealing any question related to

actual damages. As to Time's cross appeal, because Fed.R.Civ.P. 68

requires a district court to impose costs, we reverse the district

court's order denying Time's motion and remand the matter to the

district court for further proceedings.

Pat Jordan is a professional author who has written over forty

articles for Sports Illustrated magazine ("SI"). In 1971, Jordan

authored an article about a former professional baseball pitcher

named Robert "Bo" Belinsky, which SI published in its March 6,

1972, edition. The article was published pursuant to an agreement

entered between Jordan and SI. Under the terms of the agreement,

Jordan would submit certain articles to SI and SI would have first

publication rights. Following SI's first publication of the

Belinsky article, Jordan was the registered owner of the existing

copyrights to the article.

In 1993, SI celebrating its 40th anniversary, reprinted the

article without obtaining Jordan's prior consent or offering to

purchase republication rights. Based on SI's allegedly unlawful

republication of Jordan's article, Jordan filed a copyright

infringement suit against Time, the publisher of SI. Pursuant to

Rule 68 of the Federal Rules of Civil Procedure, Time made an offer

of judgment to Jordan in the amount of $15,000.00, plus attorneys'

fees and costs, if any. Subsequently, Time increased its offer of

judgment to $20,000.00. Jordan rejected both offers. After Time admitted liability for copyright infringement, the

district court held a three day jury trial solely on the issue of

damages. The jury returned a verdict awarding Jordan $5,000.00 in

actual damages, but rejecting Jordan's claim for a portion of

Time's profit and his claim that the infringement was willful.

Following the jury verdict, but before final judgment was entered,

Jordan elected to recover statutory damages. 17 U.S.C. § 504(c)(1)

(1994). The district court awarded Jordan $5,500.00 in damages,

but similarly rejected Jordan's claims for a share of Time's

profits and that the infringement was willful. The district court

then entered final judgment in the case. Jordan appeals from this

final judgment.

Both parties filed motions for attorneys' fees and costs.

Jordan argues that as the "prevailing party" he is entitled to

attorneys' fees and costs under 17 U.S.C. § 505 (1994). Time

contends that since Jordan did not obtain a judgment more favorable

than the ones contained in Time's offers of judgment, Jordan must

pay Time's attorneys' fees and costs. Fed.R.Civ.P. 68. The

district court "exercis[ing] its power of equitable discretion"

denied both motions.1 Time cross appeals from the district court's

order denying its motion for attorneys' fees and costs.

On appeal, Jordan asserts he is entitled to a new trial

because the district court erroneously instructed the jury. More

specifically, Jordan contends the district court erred in

instructing the jury that any profits recoverable under the

1 Jordan does not appeal the district court's denial of his motion for attorneys' fees and costs. Copyright Act must be "directly attributable" to the infringement,

and not "remotely" or "speculatively" attributable to the

infringement.2 Because Jordan elected to pursue statutory damages, he is now estopped from appealing the jury's award of actual

damages.

Under 17 U.S.C. § 504(a), a copyright owner may choose between

two types of damages: actual damages and profits or statutory

damages. The election between actual and statutory damages is to

be made "at any time before final judgment is rendered." 17 U.S.C.

§ 504(c). In our case, the jury awarded Jordan $5,000.00 in actual

damages. Jordan then timely opted for statutory damages, and the

district court awarded Jordan $5,500.00.

The Second Circuit has stated that "[o]nce a plaintiff has

elected statutory damages, it has given up the right to seek actual

damages and may not renew that right on appeal by cross-appealing

to seek an increase in the actual damages." Twin Peaks Productions

v. Publications Intern., 996 F.2d 1366, 1380 (2d Cir.1993). We

agree with the Second Circuit. A plaintiff is precluded from

electing statutory damages and then appealing the award of actual

damages; plaintiff does not get two bites of the apple. The

language of the statute is clear and precise: "the copyright owner

may elect, at any time before final judgment is rendered, to

recover, instead of actual damages and profits, an award of

statutory damages for all infringements involved in the action...."

2 The gravamen of the appellant's contention on the charge to the jury is that the words "directly attributable" describe and raise a different standard than the word "attributable." We find this contention foreclosed by the election of statutory damages and alternatively without merit. 17 U.S.C. § 504(c). Under this option, a plaintiff may proceed as

Jordan did, but once a timely election is made to receive statutory

damages all questions regarding actual and other damages are

rendered moot.

In its cross appeal, Time argues that Fed.R.Civ.P. 68 mandates

a district court to award attorneys' fees and costs, "[i]f the

judgment finally obtained by the offeree is not more favorable than

the offer, the offeree must pay the costs incurred after the making

of the offer." Thus, Time argues the district court erred when it

used its "power of equitable discretion" to deny Time's motion for

attorneys' fees and costs.

We have been unable to locate any case in this circuit, which

has delineated the proper standard for reviewing district court

decisions applying Rule 68 of the Federal Rules of Civil

Procedure.3 We believe that the mandatory language of the rule

leaves no room for district court discretion. When a proper Rule

68 offer is made and the other requirements of the rule are met,

the district court must award costs measured from the time the

offer was served. As such, the proper interpretation of Rule 68 is

a legal question which we review de novo. Sims v. Trus Joist

MacMillan, 22 F.3d 1059, 1060 (11th Cir.1994). However, any

disputed facts concerning the events surrounding a Rule 68 offer

are reviewed for clear error. See Herrington v. County of Sonoma,

12 F.3d 901, 906 (9th Cir.1993) ("[I]ssues involving construction

of Rule 68 offers are reviewed de novo, [while] disputed factual

3 The parties did not cite any authority suggesting the appropriate standard of review. findings concerning the circumstances under which the offer was

made are usually reviewed for clear error.") (quoting Erdman v.

Cochise County, 926 F.2d 877, 879 (9th Cir.1991)).

Reviewing Time's cross appeal of the district court's order

de novo, we reverse. Time made two offers of judgment in the

amounts of $15,000.00 and $20,000.00. Jordan rejected both offers.

The jury awarded Jordan $5,000.00 in actual damages and after

electing statutory damages the district court entered judgment in

the amount of $5,500.00. Both the jury's award and the statutory

damage award are less favorable than the offers made by Time. Rule

68 states in pertinent part "[i]f the judgment finally obtained by

the offeree is not more favorable than the offer, the offeree must

pay the costs incurred after the making of the offer." (emphasis

added). The language contained in Rule 68 is mandatory; the

district court does not have the discretion to rule otherwise.

Thus, the district court erred when it used its "equitable

discretion" to deny Time's motion for attorneys' fees and costs.

Jordan must pay the costs incurred by Time after the making of its

offer. We reverse the district court's order and remand the matter

to the district court for a determination of Time's costs. Costs

as used herein includes attorneys' fees. Under Marek v. Chesny,

473 U.S. 1, 9, 105 S.Ct. 3012, 3016-17, 87 L.Ed.2d 1 (1985), Rule

68 "costs" include attorneys' fees when the underlying statute so

prescribes. The Copyright Act so specifies, 17 U.S.C. § 505.

CONCLUSION

For the foregoing reasons, the final judgment is AFFIRMED and

the order denying Time's motion for costs is REVERSED. The case is REMANDED to allow the district court to calculate the amount of

costs (including attorneys fees).