Seidman v. Authentic Brands Group LLC

CourtDistrict Court, S.D. New York
DecidedApril 21, 2020
Docket1:19-cv-08343
StatusUnknown

This text of Seidman v. Authentic Brands Group LLC (Seidman v. Authentic Brands Group LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seidman v. Authentic Brands Group LLC, (S.D.N.Y. 2020).

Opinion

USDC SDNY UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DOC #: cana nnn nna na naancsncccnnc scans KK DATE FILED:_ 4/21/2020 HELY ANE SEIDMAN, Plaintiff, : 19-cv-8343 (LJL) ~ OPINION & ORDER AUTHENTIC BRANDS GROUP LLC, : Defendant.

LEWIS J. LIMAN, United States District Judge: Defendant Authentic Brands Group LLC (“ABG” or “Defendant”) moves for an order requiring Plaintiff Helayne Seidman (“Seidman” or “‘Plaintiff’) to post a bond. For the following reasons, that motion is denied. BACKGROUND Plaintiff is a professional photographer in the business of licensing her photographs to online and print media for a fee. (Dkt. No. 19 4]5.) Many years ago, she photographed a mask sculpture at an art show (the “Photograph’”). (Ud. 411, Exhibit A.) She licensed the Photograph to the New York Post, which published it on February 16, 2010 in an article entitled “Shaq’s in the paint with new art show.” (Ud. | 8-9.) Plaintiff now alleges that Defendant, a foreign limited liability company that operates Shaquille O’ Neal’s Facebook page, ran the Photograph on the Facebook page without obtaining a license from her or her consent. (dd. 6, 10-11.) It is apparently not disputed that Defendant published the Photograph on or about March 9, 2012. Ud., Exhibit D; Dkt. No. 28 at 3.) Plaintiff alleges she first discovered the Facebook post in July 2019. (Dkt. No. 19 4 14.) She registered the Photograph with the United States Copyright Office on or about August 3, 2019.

(Id. ¶ 11, Exhibit C.) On September 8, 2019, she brought this action alleging copyright infringement under 17 U.S.C. §§ 106 and 501. (See generally id.) Among other relief, she seeks statutory damages and a declaration that ABG infringed her copyright. (Id. at 4–5.) On March 5, 2020, ABG served an Offer of Judgment (the “Offer”) on Plaintiff, pursuant

to Federal Rule of Civil Procedure 68. (Dkt. No. 28 at 3.) Defendant avers that the Offer “well exceeded more than five (5) times Plaintiff’s best-case scenario historical licensing fees.” (Id. at 3–4.) Plaintiff rejected the Offer of Settlement. (Id. at 5.) This motion followed, in which Defendant seeks a bond of not less than $20,000. (Id. at 9.) DISCUSSION Local Civil Rule 54.2, titled “Security for Costs,” states as follows: The Court, on motion or on its own initiative, may order any party to file an original bond for costs or additional security for costs in such an amount and so conditioned as it may designate. For failure to comply with the order the Court may make such orders in regard to noncompliance as are just, and among others the following: an order striking out pleadings or staying further proceedings until the bond is filed or dismissing the action or rendering a judgment by default against the noncomplying party.

Courts consider several factors when determining whether a bond is appropriate, including: “(1) the financial condition and ability to pay of the party at issue; (2) whether that party is a non- resident or foreign corporation; (3) the merits of the underlying claims; (4) the extent and scope of discovery; (5) the legal costs expected to be incurred; and (6) compliance with past court orders.” Rice v. Musee Lingerie, LLC, 2019 WL 2865210 at *1 (S.D.N.Y. July 3, 2019); Cruz v. American Broadcasting Companies, Inc., 2017 WL 5665657 at *1 (S.D.N.Y. Nov. 17, 2017); Gary Friedrich Enterps. LLC v. Marvel Enterps., Inc., 2010 WL 3452375 at *2 (S.D.N.Y. Sept. 1, 2010); Johnson v. Kassovitz, 1998 WL 655534 at *1 (S.D.N.Y. Sept. 24, 1998). “[T]he primary purpose of the bond requirement is to insure that whatever assets a party does possess will not have been dissipated or otherwise have become unreachable by the time . . . costs actually are awarded.” Selletti v. Carey, 173 F.3d 104, 112 (2d Cir. 1999) (emphasis omitted); Valentini v. Citigroup, Inc., 2013 WL 4407065, at *5 (S.D.N.Y. Aug. 16, 2013) (“The primary purpose of the rule is to ensure that the prevailing party will be able to collect the costs and fees owed to it in situations where the other party is unlikely or unwilling to pay.”) (quoting

Kensington Int’l Ltd. v. Congo, 2005 WL 646086, at *1 (S.D.N.Y. Mar. 21, 2005)). The rule was also “designed to encourage settlements without the burdens of additional litigation.” Reiter v. MTA New York City Transit Auth., 457 F.3d 224, 229 (2d Cir. 2006). The parties here disagree over a number of issues, including: whether ABG has offered sufficient evidence of Plaintiff’s financial condition to justify a bond; whether it is dispositive that Plaintiff is not a non-resident or foreign corporation; whether the imposition of sanction awards on Plaintiff’s counsel in other cases should be imputed to Seidman in this case (where neither she nor her counsel has been sanctioned); and whether the Court should consider anything other than the fifth and sixth Rice factors in a copyright case of this type. The Court deems it unnecessary to reach any of those issues. The most critical, and

ultimately dispositive, issue here is what legal costs are expected to be incurred. ABG does not argue that any of the bond factors would be satisfied here if the legal costs expected to be incurred were limited to filing fees and court reporter costs (which are typically covered by Federal Rule of Civil Procedure 54). ABG argues, however, that a bond is justified because Plaintiff is likely to incur costs in the form of ABG’s attorneys’ fees. ABG argues that Seidman will have to pay attorneys’ fees at the end of this case because one of the following three scenarios is how this case will most likely end: (1) ABG prevails and Rule 68 shifts ABG’s post-Offer costs, including fees, to Plaintiff; (2) Plaintiff prevails and is awarded an amount lower than the Offer, such that Rule 68

shifts ABG’s post-Offer costs, including fees, to Plaintiff; (3) ABG prevails and is awarded fees via Section 505 of the Copyright Act (apart from Rule 68). The Court discusses Rule 68 first and then whether a bond is appropriate under the Copyright Act.

Rule 68 Turning first to scenario (2) above, ABG argues that it is entitled to a bond that includes ABG’s post-Offer attorneys’ fees because, even if Seidman prevails in this case, the Offer exceeds the size of any damages award she is likely to receive. Analysis of that argument requires the Court to consider the language of Rule 68 and cases interpreting it, as well as the language of the Copyright Act. Rule 68(d) provides as follows: If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.

The Supreme Court has held that “all costs properly awardable in an action are to be considered within the scope of Rule 68 ‘costs.’” Marek v. Chesny, 473 U.S. 1, 9 (1985) (emphasis added); Wilson v. Nomura Sec. Int’l, Inc., 361 F.3d 86, 89 (2d Cir. 2004) (restating Marek definition). By the same token, where the underlying statute precludes recovery of attorneys’ fees, such fees may not be included as costs for purposes of Rule 68. See Stanczyk v. City of New York, 752 F.3d 273, 282 (2d Cir. 2014) (holding that, because 42 U.S.C.

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Bluebook (online)
Seidman v. Authentic Brands Group LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seidman-v-authentic-brands-group-llc-nysd-2020.