Opinion
18-CV-02730 (VSB)(SN)
05-16-2022
DAVID SYGALL, Plaintiff, v. ANDREW PITSICALIS, et al., Defendants.
REPORT AND RECOMMENDATION
SARAH NETBURN, United States Magistrate Judge.
TO THE HONORABLE VERNON S. BRODERICK:
This case concerns the unauthorized use of a copyrighted photograph taken by Plaintiff David Sygall (“Sygall”). Without permission to reproduce, modify, distribute, or display Sygall's photograph, Defendants Andrew Pitsicalis, Leon Hendrix, Purple Haze Properties, LLC, and Rockin Artwork, LLC (the “Pitsicalis Defendants”) hired an artist to reproduce Sygall's photograph with slight modifications. They then published the reproduction on their website and social media and sold commercial goods that prominently featured the reproduction.
On October 29, 2020, the Honorable Vernon S. Broderick entered a default against Defendant Hendrix during a telephonic hearing. Judge Broderick then referred the matter to me to conduct an inquest on damages and to report and recommend concerning the damages due to Sygall. ECF No. 74.
I recommend awarding Sygall statutory damages of $14,250. I also recommend awarding Sygall attorney's fees of $2,275, and post-judgment interest pursuant to 28 U.S.C. § 1961.
BACKGROUND
Sygall is a visual artist engaged in commercial photography. ECF No. 1 (Compl.) ¶¶ 12, 20. He has photographed many famous musicians, including Jimi Hendrix. Hendrix invited Sygall to a rehearsal session for a photoshoot. Id. At that photoshoot, Sygall took the photograph at issue in this case, “H16a005” (the “Copyrighted Photograph”). See id. The Copyrighted Photograph was registered with the United States Copyright Office on October 4, 2017, under Registration No. VA 2-070-031. Id. ¶ 21.
Defendant Hendrix is the partner of Defendant Pitsicalis, an owner and founder of Defendant Purple Haze Properties, LLC, and a managing member of Defendant Rockin Artwork, LLC. Id. ¶ 14. He and the other Pitsicalis Defendants hired an artist named “Biggs” to create a reproduction of the Copyrighted Photograph (the “Infringing Artwork”), by “framing and overlaying the Copyrighted Photograph with elements, color, and psychedelic swirls.” Id. at ¶¶ 23, 24. The Pitsicalis Defendants authorized Defendants Angotti Designs LLC, Kurt S. Adler, Inc., and Grassroots Clothing, LLC to reproduce the Infringing Artwork on various commercial products. Id. ¶ 5.
On or about March 5, 2018, Sygall sent a cease-and-desist letter to the Pitsicalis Defendants, demanding that they stop distributing any work containing unauthorized reproductions of his copyrighted work and pay compensation received from any sales of such work. Id. ¶ 25. He sent similar letters to the other three defendants in February and March of 2018 advising them of the infringement. Id. ¶¶ 26-28.
The Pitsicalis Defendants had been in negotiations to license or purchase Sygall's photographs, but they had no license and acknowledged as much in writing on May 31, 2017. Id. ¶¶ 29-30. The Pitsicalis Defendants, including Defendant Hendrix, incorporated and used the Infringing Artwork on their website, social media, “marijuana products, grinder cards, Mastercard and other uses.” Id. ¶ 31. The Pitsicalis Defendants also authorized other parties to reproduce the Infringing Artwork on commercial products and “created or distributed (or caused to be created and distributed) physical copies of goods” prominently featuring the Infringing Artwork, including t-shirts, Christmas ornaments, and caps. Id. ¶¶ 5-6, see ECF No. 1 Exs. C-E. According to Sygall, the Pitsicalis Defendants knew they did not have permission to use his work. Compl. ¶ 31.
Hendrix answered Sygall's complaint, ECF No. 37, and Judge Broderick granted Sygall injunctive relief, ECF No. 51. However, after Hendrix's attorney withdrew representation, ECF No. 57, and Hendrix failed to appear at a status conference, his answer was stricken, ECF No. 64. Judge Broderick subsequently entered default against Hendrix and referred the matter to me for an inquest on damages.
Sygall's initial proposed findings of fact and conclusions of law included a request to compel Hendrix to testify regarding damages. ECF No. 76. The Court held a conference on the issue, but Hendrix did not appear. ECF No. 80. As permitted by the Court, Sygall then submitted an addendum to the proposed findings of fact and law relevant to the Court's damages inquest and a declaration by his attorney. ECF Nos. 81, 82.
Sygall seeks damages under Sections 106 and 501 of the Copyright Act. 17 U.S.C. §§ 106, 501. Specifically, he seeks statutory damages “in the maximum amount allowed by law” or, alternatively, “actual damages suffered . . . and profits or other advantages derived by Defendants arising out of or related to copyright infringement of the Copyrighted Photograph,” and punitive damages to the extent available. Compl. at 18. He also seeks attorney's fees and costs. Id.
DISCUSSION
I. Legal Standard
The Court of Appeals set forth the procedural rules applicable to the entry of a default judgment in City of New York v. Mickalis Pawn Shop, LLC:
“Federal Rule of Civil Procedure 55 is the basic procedure to be followed when there is a default in the course of litigation.” Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004). Rule 55 provides a “two-step process” for the entry of judgment against a party who fails to defend: first, the entry of a default, and second, the entry of a default judgment. New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). The first step, entry of a default, formalizes a judicial recognition that a defendant has, through its failure to defend the action, admitted liability to the plaintiff.... The second step, entry of a default judgment, converts the defendant's admission of liability into a final judgment that terminates the litigation and awards the plaintiff any relief to which the court decides it is entitled, to the extent permitted by Rule 54(c).645 F.3d 114, 128 (2d Cir. 2011).
Where default has been entered against a defendant, courts are to accept as true all of the well-pleaded facts alleged in the complaint, except those concerning the amount of damages. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 108 (2d Cir. 1997) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). “Even after the default . . . it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” In re Industrial Diamonds Antitrust Litig., 119 F.Supp.2d 418, 420 (S.D.N.Y. 2000) (cleaned up). Where a plaintiff's well-pleaded facts are sufficient to state a claim on which relief can be granted, the only remaining issue in an inquest is if the plaintiff has provided adequate support for the requested relief. See Gucci Am., Inc. v. Tyrrell-
Miller, 678 F.Supp.2d 117, 119 (S.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)).
“[A] plaintiff seeking to recover damages against a defaulting defendant must prove its claim th[r]ough the submission of evidence . . . .” Malletier v. Carducci Leather Fashions, Inc., 648 F.Supp.2d 501, 503 (S.D.N.Y. 2009). A court may determine the amount a plaintiff is entitled to recover without holding a hearing so long as (1) the court determines the proper rule for calculating damages, and (2) the evidence submitted by the plaintiff establishes “with reasonable certainty” the basis for the damages. Id. (first citing Credit Lyonnais, 183 F.3d at 155, then citing Transatlantic Marine Claims Agency, Inc., 109 F.3d at 111).
II. Liability
“To make out a prima facie case of copyright infringement, a party must show (1) ownership of a valid copyright in the item and (2) unauthorized copying.” Int'l Swaps & Derivatives Ass'n, Inc. v. Socratek, L.L.C., 712 F.Supp.2d 96, 102 (S.D.N.Y. 2010) (citing Tufenkian Import/Export Ventures, Inc. v. Einstein Moomjy, Inc., 338 F.3d 127, 131 (2d Cir. 2003)). See also Davis v. Blige, 505 F.3d 90, 98-99 (2d Cir. 2007) (copyright includes rights to reproduction, preparation of derivative work, distribution, and others). Sygall proved ownership of a valid copyright by providing the copyright registration number and registration date for the Copyrighted Photograph, and alleged facts showing that Hendrix copied and used it without authorization. See Compl. ¶¶ 29-32. Accordingly, Sygall has established Hendrix's liability as a matter of law.
III. Damages
Because I find that Sygall has demonstrated that Hendrix is liable for copyright infringement, it is appropriate to award damages as supported by the evidence submitted for this inquest. See ECF Nos. 76, 81; Greyhound Exhibitgroup, Inc., 973 F.2d at 158 (damages following default must be established by the plaintiff). Determining appropriate damages “involves two tasks: determining the proper rule for calculating damages on such a claim, and assessing plaintiff's evidence supporting the damages to be determined under this rule.” Santana v. Latino Express Rests., Inc., 198 F.Supp.3d 285, 291 (S.D.N.Y. 2016) (quoting Credit Lyonnais, 183 F.3d at 155). A court need not hold an evidentiary hearing to determine damages but “must ‘take the necessary steps to establish damages with reasonable certainty.'” Id. (citing Transatlantic Marine Claims Agency, Inc., 109 F.3d at 111); see, e.g., Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989) (holding that detailed affidavits, documentary evidence, and district judge's personal knowledge of the record provided sufficient basis for calculating damages).
Sygall seeks either statutory or actual damages, as well as punitive damages to the extent available. As an initial matter, “punitive damages are not available under the Copyright Act of 1976,” and I therefore recommend the Court deny Sygall's request for punitive damages. Oboler v. Goldin, 714 F.2d 211, 213 (2d Cir. 1983).
As to actual damages, Sygall explains that he intended to discover sales information through discovery, but because Hendrix failed to appear after his attorney withdrew, Sygall was unable to conduct appropriate discovery to obtain Hendrix's business records to show the sales and profits from his infringing uses of the Copyrighted Photograph. ECF No. 76 ¶ 7. Sygall therefore cannot calculate the actual damages suffered by him “as a result of [Hendrix's] infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” 17 U.S.C. § 504(b). While Sygall must present only proof of Hendrix's gross revenue to establish his profits from the infringement, id., he has not done so. The dollar figures in Sygall's addendum are not enough. It is insufficient that “certain defendants” already dismissed from the action have produced information showing Hendrix's royalty earnings for the ornaments because Sygall seeks damages for more than just the sale of the ornaments. ECF No. 81 ¶ 1. Sygall's suggestion that the Court base its damages award on the net sales of the products sold by a “previous defendant” is also improper. Id. ¶ 2. He has not established that those net sales constituted Hendrix's gross revenue. Sygall cannot prove actual damages.
However, “[s]tatutory damages ‘are available without proof of plaintiff's actual damages,' and are useful in cases ‘where proof of actual damages or profits is insufficient.'” EMI April Music Inc. v. 4MM Games, LLC, No. 12-cv-2080 (DLC)(JLC), 2014 WL 325933, at *3 (S.D.N.Y. Jan. 13, 2014), adopted by 2014 WL 1383468 (S.D.N.Y. Apr. 7, 2014) (quoting Lucerne Textiles, Inc. v. H.C.T. Textiles Co., No. 12-cv-5456 (KMW)(AJP), 2013 WL 174226, at *2 (S.D.N.Y. Jan. 7, 2013) (internal citations omitted), adopted by 2013 WL 1234911 (S.D.N.Y. Mar. 26, 2013)). Registration is a prerequisite to be awarded statutory damages. 17 U.S.C. § 412.
Under the Copyright Act, a copyright owner may elect to recover statutory damages instead of actual damages in the amount “of not less than $750 or more than $30,000 as the court considers just.” 17 U.S.C. § 504(c)(1). Where the defendant's infringement is willful, the Copyright Act gives the court discretion to increase the award up to $150,000 per work. 17 U.S.C. § 504(c)(2). In calculating the appropriate statutory damages award, courts should consider:
(1) the infringer's state of mind; (2) the expenses saved, and profits earned, by the infringer; (3) the revenue lost by the copyright holder; (4) the deterrent effect on the infringer and third parties; (5) the infringer's cooperation in providing evidence concerning the value
of the infringing material; and (6) the conduct and attitude of the parties.Bryant v. Media Right Prods., 603 F.3d 135, 144 (2d Cir. 2010) (citation omitted).
It is established that Hendrix willfully infringed Sygall's copyright, and his default and subsequent silence show a lack of cooperation in determining damages. However, Sygall has provided little evidence that use of his copyright either saved Hendrix expenses or earned him significant profits. Sygall registered the Copyrighted Photograph with the United States Copyright Office on October 4, 2017. He sent Hendrix and the other Pitsicalis Defendants cease-and-desist letters by March 19, 2018, five months later. Compl. ¶ 26. Only some of the screenshots of products using the Infringing Artwork are dated: the hat, March 5, 2018, and the ornament, February 27, 2018. ECF No. 1 Ex. E; ECF No. 76 Ex. 4. There is, in sum, little evidence before the Court as to how long Hendrix continued to profit off the Copyrighted Photograph after it was registered. At most, the record supports approximately five months of unauthorized use of Sygall's copyright. I cannot infer that the infringement generated significant profits for Hendrix. Given the lack of discovery in this case, many of the other factors are similarly unrevealing.
Hendrix's state of mind, however, is helpful to consider. “Second Circuit case law . . . reflects that courts in this Circuit commonly award, in cases of non-innocent infringement, statutory damages of between three and five times the cost of the licensing fees the defendant would have paid.” Broad. Music, Inc. v. Prana Hosp., Inc., 158 F.Supp.3d 184, 199 (S.D.N.Y. 2016). To show non-innocent infringement, a plaintiff must prove that a defendant “had knowledge that its conduct represented infringement or . . . recklessly disregarded the possibility.” Bryant, 603 F.3d at 143 (quoting Twin Peaks Prods., Inc. v. Publications Int'l, Ltd., 996 F.2d 1366, 1382 (2d Cir. 1993)). Sygall has satisfied this standard: the Pitsicalis Defendants (including Hendrix) knew they had no license to use the Copyrighted Photograph, Compl. ¶¶ 2930, and disregarded the possibility that his work was copyrighted despite participating in an industry where copyright is “prevalent,” Mango v. BuzzFeed, Inc., 356 F.Supp.3d 368, 375 (S.D.N.Y. 2019), afPd, 970 F.3d 167 (2d Cir. 2020) (citation omitted). “[T]he Court is persuaded the multiplier should be at the higher end of the range typically awarded by courts in this district” given Sygall's experience as a photographer and Hendrix's willful conduct in using the Copyrighted Photo without a license, with a resulting statutory damages award five times the licensing fee that Hendrix would have paid. Id.
As for the fee itself, Sygall states in his sworn declaration that he has previously licensed photographs of Jimi Hendrix for between $1,200 and $4,500. ECF No. 76 Ex. 1 ¶ 8. He has provided supporting licensing agreements that show he was paid $2,500 for the use of 10 images not to be sold in retail stores, only “through Experience Hendrix to fans,” $1,200 for “cover and inside photo,” and $4,500 for 15 images to be used for the “Jimi Hendrix Experience box set.” ECF No. 76 Ex. 5. None of these agreements appears to contemplate the public commercial sale of the products using Sygall's licensed photos (which would suggest a higher licensing fee to account for any contemplated profits). With no further information, I find that Hendrix would have paid a licensing fee of at least $2,850 for the Copyrighted Photograph, the average of the range Sygall provided.
In sum, I recommend that the Court find that Hendrix's infringement was willful and award statutory damages to Sygall of five times $2,850, a total of $14,250.
IV. Attorney's Fees
Under the Copyright Act, a prevailing party may recover “a reasonable attorney's fee” and “the recovery of full costs.” 17 U.S.C. § 505. Sygall seeks $8,099 in attorney's fees for the work performed by his counsel, Mr. Scott Burroughs. ECF No. 76-7 (Burroughs Decl.) ¶ 8.
A fee applicant bears the burden of establishing the hours expended and hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The applicant must present “satisfactory evidence [of the hourly rates]-in addition to the attorney's own affidavits.” Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053, 1059 (2d Cir. 1989) (citation omitted). A party attempting to recover fees under a fee shifting statute must generally submit “contemporaneously prepared time records supporting the fee application.” Dweck v. Amadi, No. 10-cv-2577 (RMB)(HBP), 2012 WL 3020029, at *2 (S.D.N.Y. July 6, 2012), adopted by 2012 WL 3024185 (S.D.N.Y. July 24, 2012) (citing Scott v. City of New York, 626 F.3d 130, 134 (2d Cir. 2010), appeal after remand, 643 F.3d 56, 58-59 (2d Cir. 2010)). In the absence of such a submission, the party can recover fees only for “contemporaneously documented time that [counsel] was physically before the district court.” Scott, 643 F.3d at 59. “[E]ntries in official court records (e.g. the docket, minute entries, and transcriptions of proceedings) may serve as reliable documentation of an attorney's compensable hours in court at hearings and at trial and in conferences with the judge or other court personnel.” Id.
The only evidence offered in support of Sygall's fee application is a declaration by Mr. Burrough that describes the nature of the work he did for this case, his firm's experience with copyright infringement litigation, and his personal experience and skill level. Mr. Burroughs claims to have expended “in excess of” 17.8 hours on the case, Burroughs Decl. ¶ 7, but neither Sygall's initial proposed findings of fact and conclusions of law nor his addendum includes any contemporaneously prepared time records in support. Sygall cannot recover the requested fees for Mr. Burroughs's time without further support.
Upon review of the docket, Mr. Burroughs appeared on Sygall's behalf at several hearings and conferences: on November 1, 2019; November 22, 2019; February 7, 2020; October 29, 2020; and May 28, 2021. Although the docket does not reflect the length of these proceedings, I assume each lasted an hour. Accordingly, Sygall may recover for five hours of court conferences.
The remaining question is whether Mr. Burroughs's claimed rate is reasonable. A “reasonable fee” is based on a “reasonable hourly rate,” which is “the rate a paying client would be willing to pay.” Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2007). In determining a reasonable hourly rate, the Court should consider the prevailing rates of lawyers with comparable skill, experience, and reputation in the district in which the action was commenced and litigated. See Missouri v. Jenkins, 491 U.S. 274, 286 (1989); McDonald ex rel. Prendergast v. Pension Plan of NYSA-ILA Pension Tr. Fund, 450 F.3d 91, 96-97 (2d Cir. 2006).
Although these details were not included in Mr. Burroughs's declaration, review of the California and New York court systems' websites, his firm website biography, and his LinkedIn profile reveals that he is a partner of the firm, has been admitted to the California bar since 2005 and the New York bar since 2019, and has broad experience litigating copyright and art law disputes. His claimed “lodestar” billing rate is $455 per hour. Burroughs Decl. ¶ 6.
See Scott Alan Burroughs, LinkedIn, https://www.linkedin.com/in/scott-alan-burroughs-7ab2865/ (last visited May 3, 2022); Scott Alan Burroughs, Doniger / Burroughs, https://donigerlawfirm.com/attorneys/scott-alan-burroughs/ (last visited May 3, 2022).
I find no reason to question the reasonableness of the requested rates in light of counsel's experience and the prevailing rates in the Southern District of New York. See Hollander Glass Texas, Inc. v. Rosen-Paramount Glass Co., 291 F.Supp.3d 554, 561 (S.D.N.Y. 2018) (collecting cases); Beastie Boys v. Monster Energy Co., 112 F.Supp.3d 31, 55 (S.D.N.Y. 2015) (hourly rate of $675 for three “experienced partners in copyright cases”); Broad. Music, Inc. v. Pamdh Enters., Inc., No. 13-cv-2255 (KMW), 2014 WL 2781846, at *6-7 (S.D.N.Y. Jun. 19, 2014) (citing cases awarding $400 to $735 hourly for partners). Mr. Burroughs's claimed hourly rate of $455 is therefore reasonable.
In sum, I recommend that the Court award Sygall attorney's fees for five hours of Mr. Burroughs's time spent in hearings and conferences before the Court, or $2,275 in total.
V. Post-Judgment Interest
Sygall is entitled to post-judgment interest “on any money judgment in a civil case recovered in a district court.” 28 U.S.C. § 1961(a). This interest rate is calculated “from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[ ] the date of the judgment,” and is “computed daily to the date of payment except as provided in section 2516(b) of this title and section 1304(b) of title 31, and shall be compounded annually.” Id. (a)-(b). Sygall is therefore entitled to post-judgment interest on a total amount of $16,525, the sum of his statutory damages of $14,250 and attorney's fees of $2,275.
CONCLUSION
I recommend that the Court find Hendrix liable for $16,525, plus applicable interest, broken down as:
(1) $14,250 in statutory damages;
(2) $2,275 in attorney's fees; and
(3) Post-judgment interest pursuant to 28 U.S.C. § 1961 on the amount of $16,525 calculated from the date of judgment until the date of Hendrix's payment.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen days from the service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Vernon S. Broderick at the United States Courthouse, 40 Foley Square, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Broderick. The failure to file these timely objections will result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).