Harrington v. Aerogelic Ballooning, LLC

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          NINJA Y. WANG UNITED STATES MAGISTRATE JUDGE

         Magistrate Judge Nina Y. Wang This action comes before this court for recommendation on the following three issues:

(1) The amount of statutory damages to be awarded to Plaintiff pursuant to the Order dated January 4, 2019, [#27], entered by the presiding judge, the Honorable Marcia S. Krieger;

(2) Plaintiff's Motion for Rule 11 Sanctions, and Points and Authorities in Support Thereof (“Motion for Sanctions”) [#26, filed January 4, 2019]; and

(3) Plaintiff's Motion to Exclude Expert Testimony of Joshua T. Martin (“Motion to Exclude”) [#47, filed March 29, 2019].

         These matters were referred to this Magistrate Judge pursuant to 28 U.S.C. § 636(b), the Order Referring Case dated August 13, 2018 [#5], and the Memoranda dated February 13, 2019 [#36] and March 29, 2019 [#48]. On March 19, 2019, in anticipation of an evidentiary hearing on the issue of statutory damages, this court convened a Status Conference during which the Parties and the court discussed the witnesses to be presented, including expert witnesses. [#45]. That same day, Defendants Aerogelic Ballooning, LLC (“Aerogelic Ballooning”) and Shane Cory (“Mr. Cory”) (collectively, “Defendants”) filed a “Motion to Certify Joshua T. Martin as an Expert Rule 702.” [#44].^[1] The court held an evidentiary hearing on the issue of statutory damages on March 21, 2019, and entertained oral argument on the issue as well as the Motion for Sanctions. [#46]. Being fully apprised of the premises, this court respectfully RECOMMENDS that Plaintiff be AWARDED $3, 500 in statutory damages; that the Motion for Sanctions be DENIED; and that the Motion to Exclude be GRANTED IN PART and DENIED IN PART.^[2]

         BACKGROUND

         Plaintiff Blaine Harrington III (“Plaintiff” or “Mr. Harrington”) is a professional photographer, and initiated this action for copyright infringement on August 9, 2018, based on Defendants' use of a photograph from a hot air balloon (“Copyrighted Work”) without permission. [#1]. On September 28, 2018, Defendants filed an Answer to the Complaint. [#12]. The disputes between the Parties began almost immediately. After this court set a Scheduling Conference for October 18, 2018, see [#7], Plaintiff filed a Motion to Participate in Initial Scheduling Conference by Telephone (“Motion to Appear by Telephone”), see [#13]. Defendants objected, see [#14], and, in the Response, Defendants articulated several bases for such objection, including opposing counsel's failure to confer; Plaintiff's demand of a disproportionate amount of damages; a delay in providing a proposed Scheduling Order; “Plaintiff's Counsel is not properly admitted to this Court”; and “Federal Courts are deluged with ‘Professional Photographer' cases including pornography cases where alleged artists plant unlabeled pictures and movies on the internet, then track innocent downloaders, then attempt to extort thousands of dollars for an innocent click of a button.” [Id. at 1-2]. Defendants' Response to the Motion to Appear by Telephone also included a statement that “[d]enying Plaintiff's ill pled and false Motion may help to defuse this type of Complaint for the public good.” [Id. at 2]. Plaintiff then filed a Reply, entitled “Plaintiff's Response to Defendant's Opposition to Motion to Participate in Initial Scheduling Conference by Telephone and Proposed Order, ” in which Plaintiff sought to rebut Defendants' statements reflected in their Response. See [#15]. This court granted the Motion to Appear by Telephone, but converted the Scheduling Conference to a Status Conference due to the Parties' failure to submit a proposed Scheduling Order by the deadline set in its original Minute Order. See [#17]. The following day, Plaintiff submitted a proposed Scheduling Order, see [#18], and the court proceeded to consider scheduling during the Status Conference on October 18, 2018, see [#19].

         The court entered the Scheduling Order on October 18, 2018, with a number of edits. See [#20]. The Scheduling Order contained the following deadlines with respect to expert disclosures: the Parties were required to disclose experts and comply with Rule 26(a)(2)(B) or (C) for disclosures for affirmative experts no later than March 1, 2019, rebuttal experts no later than March 22, 2019, and close expert discovery on or before April 12, 2019. [Id. at 5]. During the Scheduling Conference, counsel for Defendants indicated his intent to raise certain defenses. To that end, Defendants filed “Defendants' Motion for Summary Judgement [sic]” on October 29, 2018. [#22]. Plaintiff then filed an Opposition to Motion for Summary Judgment, [#23], and Defendants filed a Reply, [#24].

         On November 29, 2018, Judge Krieger issued an Opinion and Order Denying Motion for Summary Judgment. See [#25]. In it, Judge Krieger not only denied Defendants' Motion for Summary Judgement, but included an Order to Show Cause as to “why the Court should not grant summary judgment to Mr. Harrington on the question of liability on his claim of copyright infringement, leaving only the question of the appropriate amount of statutory damages to be addressed in a future evidentiary hearing.” [Id. at 4-5].

         On January 4, 2019, Plaintiff filed the instant Motion for Sanctions. [#26]. That same day, having not received any response to the Order to Show Cause by Defendants, Judge Krieger entered an Order granting summary judgment in favor of Plaintiff and setting an evidentiary hearing on the issue of statutory damages for January 24, 2019. See [#27]. Defendants then filed a “Motion to Continue Evidentiary Hearing to February, 2019 or Close the Case, ” [#28], which Judge Krieger granted in part as to the rescheduling of the evidentiary hearing to January 28, 2019, and denied in part as to any substantive relief requested by Defendants. [#29]. Defendants then filed a Second Motion to Continue on January 16, 2019, [#30], which Judge Krieger granted the following day, see [#31]. Then, on January 21, 2019, Plaintiff filed a Motion to Continue the evidentiary hearing, [#32], which Judge Krieger granted, vacating the February 4, 2019 hearing, see [#35]. On February 13, 2019, Judge Krieger referred both the issue of statutory damages and the Motion for Sanctions to this Magistrate Judge for Recommendation. [#36].

         On February 21, 2019, this court set the evidentiary hearing as to the appropriate amount of statutory damages for March 21, 2019. [#38]. The court also set deadlines for submission of proposed witness and exhibits lists for March 7, 2019, and for objections to such designations no later than March 14, 2019. [Id.]. On March 7, 2019, Defendants submitted their proposed witness and exhibit lists. [#39]. On March 8, 2019, Plaintiff submitted his proposed witness and exhibit lists. [#40]. No. objections were raised or filed by either party by March 14, 2019.

         Nevertheless, having reviewed the proposed witness and exhibit lists and finding defense counsel listed as a witness on each side's witness list, this court convened a Status Conference on March 19, 2019. [#45]. It was during this conference that Plaintiff's counsel first raised an issue with the testimony of either of Defendants' expert witnesses, Joshua T. Martin and Lewis Brande. [Id.]. This court indicated its intent, given its referral role, to take testimony from any individual offered as an expert and then have Plaintiff file a Motion to Exclude no later than March 29, 2019, with a Response by Defendants filed no later than April 12, 2019, so that Judge Krieger could have a complete record to review with any Recommendation and/or Order. [Id.].

         The Parties appeared for the Evidentiary Hearing on the issue of statutory damages on March 21, 2019. [#46]. At the hearing, Plaintiff testified on his own behalf, but did not offer nor seek to admit any other evidence, including any of the exhibits listed on his Exhibit List. Compare [#49] with [#40]. Defendants elicited testimony from Mr. Cory and Mr. Joshua Martin, and sought to tender Mr. Joshua Martin as an expert. [#49]. Defendants also offered a series of exhibits, which did not-in this court's review-directly correlate to the proposed exhibits listed in Defendants' Exhibit List. Compare [#46-1 through #46-16] with [#39 at 2]. The court then allowed the Parties to make limited argument with respect to both the issue of statutory damages and the Motion for Sanctions, and took these matter under advisement for the purposes of this Recommendation.

         Plaintiff filed the instant Motion to Exclude on March 29, 2019, [#47], and on April 15, 2019, Defendants filed “Defendants' Motion to Convert Plaintiff's Motion to Exclude Expert Testimony of Joshua T. Martin to a Reply to Defendants' Motion to Certify Joshua T. Martin as an Expert Rule 702 and Accept this Filing as a Response to Plaintiff's Reply” (“Defendants' Response to the Motion to Exclude”).^[3] [#50]. Accordingly, these matters are ripe for Recommendation.

         LEGAL STANDARDS

         I. Copyright Damages

         An infringer of copyright is liable for either the copyright owner's actual damages or statutory damages under 17 U.S.C. § 504. In his Complaint, Mr. Harrington seeks only an award of statutory damages, see [#1 at 5], which Judge Krieger recognized in her Order granting summary judgment on liability in favor of Plaintiff, see [#27].

         The Copyright Act provides that statutory damages ordinarily may be awarded in the sum of not less than $750 or more than $30, 000. 17 U.S.C. § 504(a). However, if the infringer sustains the burden of proving, and the court finds, that the infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court may exercise its discretion to reduce the award of statutory damages to a sum of not less than $200. Id. § 504(c)(2). The statute makes clear that an award of statutory damages is for all infringements involved in an action, with respect to any one work. Id. § 504(c)(1) (emphasis added). Put another way, “[a] single infringer of a single work is liable for a single amount [now between $200 and $150, 000], ^[4] no matter how many acts of infringement are involved in the action and regardless of whether the acts were separate, isolated, or occurred in a related series.” Melville B. Nimmer et al., Nimmer on Copyright, 14-135 § 14.04[E][2][a][i] (quoting H. Rep. p. 162 and 17 U.S.C. § 504(c)(1)).

         As noted by Judge Krieger in her Order Denying Summary Judgment, “[t]he question of the appropriate amount of statutory damages to award involves consideration of a wide array of factors by the Court, from the degree of willfulness or inadvertence by the infringer to the deterrent purposes of the Copyright Act and the typical license fees charged for the use of the work.” [#25 at 4 (citing Girlsongs v. 609 Industries, Inc., 625 F.Supp.2d 1127, 1130-31 (D. Colo. 2008))]. Other factors include “the expenses saved, and profits earned, by the infringer, ” and “the revenue lost by the copyright holder.” Bryant v. Media Right Prod. Inc., 603 F.3d 135, 144 (2d Cir. 2010). These last two factors allow the court to account for the extent of infringement. Arista Records LLC v. Lime Group LLC, 784 F.Supp.2d 313, 317 (S.D.N.Y. 2011).

         II. Rule 11 of the Federal Rules of Civil Procedure

         Plaintiff moves for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure. Rule 11(b) provides that:

Representations to the Court. By presenting to the court a pleading, written motion, or other paper-whether by signing, filing, submitting, or later advocating it-an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

         The Rule (and this District's Local Rules of Civil Practice) specify procedures for a motion for sanctions, as well as limitations on the nature of any sanctions. First, a motion for sanctions under Rule 11 must be served under Rule 5 of the Federal Rules of Civil Procedure, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time that the court sets. Fed.R.Civ.P. 11(c)(2). See also Kazazian v. Emergency Serv. Physicians, P.C., 300 F.R.D. 672, 677 (D. Colo. 2014) (quoting Fed.R.Civ.P. 11(c)(2)). In addition, Local Rule 54.3 requires the movant to support the motion by affidavit, and the contents of the motion must include a summary of the relevant qualifications and experience for each attorney seeking fees, as well as a detailed description of the services rendered, the amount of time spent, the hourly rate charged, and the total amount sought. See D.C.COLO.LCivR 54.3(a), (b). Second, a sanction imposed under Rule 11 must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. Fed.R.Civ.P. 11(c)(4). In addition, a court may not impose monetary sanctions against a represented party for violation Rule 11(b)(2). Fed.R.Civ.P. 11(c)(5).

         III. Experts

         A. Required Disclosures

         Affirmative experts as contemplated by the District of Colorado's form Scheduling Order are typically experts designated by a party who bears the burden of proof on an issue. See Anderson v. Seven Falls Co., Civil Action No. 12-cv-01490-RM-CBS, 2013 WL 3771300, *6 (D. Colo. July 18, 2013) (citing Advisory Comm. Notes to 1993 Amendments to Fed.R.Civ.P. 26). Rebuttal witnesses are those who are “intended solely to contradict or rebut evidence on the same subject matter identified” by affirmative experts. Fed.R.Civ.P. 26(a)(2)(D)(ii); E.E.O.C. v. JBS USA, Inc., No. 10-cv-02103-PAB-KLM, 2013 WL 3302429, at *6 (D. Colo. July 1, 2013). Specially-retained experts are required to provide written reports that reflect a complete statement of all opinions the witness will express and the basis and reasons for them, the facts or data considered by the witness in forming them, any exhibits that will be used to summarize or support them, the witness's qualifications, including a list of all publications authored in the previous 10 years, and a statement of the compensation to be paid for the study and testimony in the case. Fed.R.Civ.P. 26(a)(2)(B). An expert witness who is not specially-retained for the purpose of trial is still required to make a disclosure of the subject matter on which the witness is expected to present evidence un Federal Rule of Evidence 702, 703, or 705, and a summary of the facts and opinions to which the witness is expected to testify to. Fed.R.Civ.P. 26(a)(2)(C).

         Failure to disclose, or to properly provide information required by Rule 26(a), is subject to Rule 37(c) of the Federal Rules of Civil Procedure. Under Rule 37(c), a party is not permitted to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless. Fed.R.Civ.P. 37(c). In addition to or instead of preclusion, the court may impose other sanctions upon motion and after giving opportunity to be heard. Id.

         B.

         Substantive Requirements Under the ...