Shady Records, Inc. v. Source Enterprises, Inc.

351 F. Supp. 2d 64, 71 U.S.P.Q. 2d (BNA) 1348, 2004 U.S. Dist. LEXIS 10511, 2004 WL 1277993
CourtDistrict Court, S.D. New York
DecidedJune 8, 2004
Docket03 Civ. 9944(GEL)
StatusPublished
Cited by5 cases

This text of 351 F. Supp. 2d 64 (Shady Records, Inc. v. Source Enterprises, Inc.) 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
Shady Records, Inc. v. Source Enterprises, Inc., 351 F. Supp. 2d 64, 71 U.S.P.Q. 2d (BNA) 1348, 2004 U.S. Dist. LEXIS 10511, 2004 WL 1277993 (S.D.N.Y. 2004).

Opinion

OPINION AND ORDER

LYNCH, District Judge.

In this action for copyright infringement, plaintiff Shady Records, Inc. (“Shady”) argues that defendants, various corporations and individuals associated with the magazine The Source (“Source”), infringed its copyright in certain songs allegedly created by the performer Eminem by posting recordings of those songs and printed versions of their lyrics on the *66 magazine’s website. 1 On December 15, 2003, this Court entered a temporary restraining order prohibiting Source from “[reproducing, distributing or publicly performing or in any way making available any hard copy or electronic copy” of the songs. 2 Shady now moves for an order holding defendants in contempt of that order. 3 The Court held an evidentiary hearing on that motion on April 5, 2004, after which the parties submitted written arguments. Having considered the evidence presented at the hearing and the arguments of the parties, the Court will grant the motion.

LEGAL STANDARDS

“It is well settled in this circuit that a party may be held in civil contempt for failure to comply with an order of the court if the order being enforced is clear and unambiguous, the proof of noncompliance is clear and convincing, and the defendants have not been reasonably diligent and energetic in attempting to accomplish what was ordered. It is not necessary to show that defendants disobeyed the district court’s orders willfully.” EEOC v. Local 638, Local 28 of Sheet Metal Workers’ Int’l Ass’n, 753 F.2d 1172, 1178 (2d Cir.1985), aff'd, 478 U.S. 421, 106 S.Ct. 3019, 92 L.Ed.2d 344 (1986) (citations and internal quotation marks omitted).

Shady moves for an order of civil contempt. Civil contempt is intended either to “coerce the contemnor into future compliance with the court’s order or to compensate the complainant for losses resulting from the contemnor’s past noncompliance.” New York State Nat’l Org. for Women v. Terry, 886 F.2d 1339, 1352 (2d Cir.1989); see also Hess v. New Jersey Transit Rail Operations, Inc., 846 F.2d 114, 115 (2d Cir.1988) (“If the sentence of contempt is imposed for the coercive or remedial purpose of compelling obedience to a court order and providing compensation or relief to the complaining party, the contempt is civil in nature.”). Profits derived by the contemnor from violating the order may be “an equivalent or a substitute for legal damages, when damages have not been shown, and are recoverable not by way of punishment but to insure full compensation to the party injured.” Manhattan Industries, Inc. v. Sweater Bee by Banff, Ltd., 885 F.2d 1, 6 (2d Cir.1989), citing Leman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 455-56, 52 S.Ct. 238, 76 L.Ed. 389 (1932) (internal quotation marks omitted).

In this case, there is no need for a coercive order, as the parties agree that Source is now in compliance with the *67 Court’s order and has been since January 6, 2004, shortly after Shady complained to it of the matters that are the subject of this motion, before the motion itself was even filed. Nor does Shady claim that it suffered damages from the exploitation of its intellectual property, or that Source derived any profits from the alleged violation.

Shady does claim that it should be compensated for its legal fees incurred in preparing and prosecuting this motion. Our Court of Appeals has stated that in order to award attorneys’ fees, a district court must find that a contempt was willful. King v. Allied Vision, Ltd., 65 F.3d 1051, 1063 (2d Cir.1995). But the statement in King is dictum, as the Court did not ultimately rule on the propriety of the attorneys’ fees award in that case. See id. Moreover, the authority relied upon for the statement in King did not themselves squarely hold that such an award would necessarily be inappropriate in the absence of a finding of willfulness, nor did the Court cite any cases where such an award had been reversed. See Sweater Bee, 885 F.2d at 8 (declining to award fees in the absence of a finding of wilfulness on grounds that “courts in this Circuit generally award [fees] only where violation of a court order is found to have been willful”); Vuitton et Fils S.A. v. Carousel Handbags, 592 F.2d 126, 130-31 (2d Cir.1979) (“Since the plaintiff should be made whole for the harm he has suffered, it is appropriate' for the court also to award the reasonable costs of prosecuting the contempt, including attorney’s fees, if the violation of the decree is found to have been willful.”). Subsequently, and again in dictum, the Court has suggested that “willfulness may not necessarily be a prerequisite to an award of fees and costs,” though a finding of willfulness “strongly supports granting them.” Weitzman v. Stein, 98 F.3d 717, 719 (2d Cir.1996). The Court has twice since noted the contrasting dicta in King and Stein, and stated that whether willful contempt is a prerequisite for an attorneys’ fee award remains an open question in this Circuit. North American Oil Co. v. Star Brite Distributing, Inc., No. 00-9526, 2001 WL 792643, at *2 (2d Cir. Jul.9, 2001); Jaeger v. Massis, No. 00-7390, 2000 WL 1678778, at *3 (2d Cir. Nov.3, 2000). 4

As the Eleventh Circuit has noted, permitting an award of attorneys’ fees serves a significant purpose where a contempt has been found by providing parties with “an added incentive to monitor and enforce an opponent’s compliance with a court order by allowing them to recover their expenses in exposing noncompliance.” Sizzler Family Steak Houses v. Western Sizzlin Steak House, Inc., 793 F.2d 1529, 1535 (11th Cir.1986).

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351 F. Supp. 2d 64, 71 U.S.P.Q. 2d (BNA) 1348, 2004 U.S. Dist. LEXIS 10511, 2004 WL 1277993, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shady-records-inc-v-source-enterprises-inc-nysd-2004.