United States District Court, D. Idaho
ASSET VISION, LLC, and Idaho limited liability company, and DEER VALLEY TRUICKING INC., an Idaho corporation, Plaintiff,
CREG FIELDING, and individual, BRAD HALL, an individual, COLE HALL, an individual, and BRAD HALL & ASSOCIATES INC., and Idaho corporation, Defendant.
MEMORANDUM DECISION AND ORDER
B. LYNN WINMILL, Chief District Judge.
The Court has before it Brad Hall & Associates' (BH&A) Motion for Attorneys' Fees and Costs (Dkt. 88). The Court has determined that oral argument would not significantly assist the decisional process and will therefore consider the matters without a hearing. Being familiar with the record and having considered the parties' briefing, the Court will grant the motion and award $86, 154.03 in fees and costs to BH&A against Asset Vision.
Asset Vision filed a complaint (Dkt. 1) against Creg Fielding for copyright infringement and related claims for developing software called FreightBooks. Asset Vision amended the complaint (Dkt. 12) to include BH&A as a defendant. BH&A denies any involvement in the use or development of the FreightBooks software, and claims they don't know why they were ever involved in this lawsuit. Memo At 6, Dkt. 88-1. Asset Vision insists that BH&A was using the FreightBooks software, but ultimately all claims against BH&A were dismissed with prejudice through a motion to dismiss (Dkt. 50), and an ensuing settlement and stipulation. Order Dkt. 86. BH&A now seeks attorney's fees in accordance to Section 505 of the Copyright Act. 17 U.S.C. § 505.
Section 505 of the Copyright Act gives courts discretion to "allow the recovery of full costs" and "reasonable attorney's fee to the prevailing party." Id . The Ninth Circuit has stated that a court should exercise its discretion in light of several nonexclusive considerations, including (1) the degree of success obtained; (2) frivolousness; (3) objective unreasonableness "both in the factual and legal arguments in the case"; (4) motivation; and (5) the need "to advance considerations of compensation and deterrence." Jackson v. Axton, 25 F.3d 884, 890 (9th Cir.1994) (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994)).
In weighing these factors, "[c]ourts should keep in mind the purpose [ ] of the Copyright Act, " which is to "promote creativity for the public good." Id. Though a court's discretion may be influenced by the plaintiff's culpability, "blameworthiness is not a prerequisite to awarding fees to a prevailing defendant." Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir.1996). Overall, "[f]aithfulness to the purposes of the Copyright Act is... the pivotal criterion." Id.
A. Recovering Attorney's Fees
1. Degree of Success
The Supreme Court has considered what constitutes a "prevailing party" where a plaintiff settles rather than proceeding to a determination on the merits. The Court concluded that a party who settles their claims may be a prevailing party if the settlement requires "a material alteration of the legal relationship of the parties." Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 604 (2001) (construing the attorney's fees provisions in the Federal Housing Amendments Act ("FHAA") and the Americans With Disabilities Act ("ADA")). See also Richard S. v. Dep't of Developmental Services 317 F.3d 1080, 1086 (9th Cir.2003); Barrios v. California Interscholastic Fed'n, 277 F.3d 1128, 1134 (9th Cir. 2002).
The obvious alteration of the legal relationship is the dismissal of all claims with prejudice against BH&A. In question here is whether BH&A's agreement not to use the FreightBooks software as part of a settlement constitutes a material alteration of the legal relationship of the parties, thus affecting BH&A's prevailing party status.
Asset Vision argues that ending BH&A's use and access to FreightBooks is exactly the outcome sought through litigation, so BH&A is not a prevailing party. Asset Vision also settled with Cole Hall and Teton who appear to be the developers of the software in question. Consequently, the settlement with Cole Hall and Teton "not [to] use, copy, distribute, sell or create derivatives works of FreightBooks or encourage others to copy, distribute, sell or create derivative works of FreightBooks" would extend not only to BH&A, but essentially every business. Resp. at 16 Dkt. 100. By limiting the software at the source, no business may legally use, copy, distribute, sell or create derivative works of ...