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March 25, 2008

Attorney's Fee Award in RIAA Case Appealed to U.S. Supreme Court

One man's tangle with the RIAA is on appeal to the United States Supreme Court over whether he is entitled to attorney fees.  Cliff Thompson was sued by the RIAA for file sharing, but later dismissed the suit when they discovered the party they were really after was his adult daughter.  Thompson asked for attorneys' fees but was denied at the District Court and later affirmed by the Fifth Circuit.  It seems there's a split in the Circuits on what the is the standard for awarding fees when the plaintiff voluntarily dismisses the case.  The Fifth Circuit (Virgin Records America, Inc. v. Thompson, 512 F.3d 724 (CA5 January 4, 2008) said that the award is not automatic, citing Fogerty v. Fantasy, Inc., 510 U.S.517 (1994):

Nevertheless, recovery of attorney's fees is not automatic. See Fogerty, 510 U.S. at 534, 114 S.Ct. 1023; Creations Unlimited, Inc. v. McCain, 112 F.3d 814, 817 (5th Cir.1997) (noting that the Supreme Court “repudiated the ‘British Rule’ for automatic recovery of attorney's fees by the prevailing party” and holding that the district court did not abuse its discretion in denying fees). “[A]ttorney's fees are to be awarded to prevailing parties only as a matter of the court's discretion.” Fogerty, 510 U.S. at 534, 114 S.Ct. 1023 . The Supreme Court listed several non-exclusive factors that a court may consider in exercising its discretion: “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Id. at 534 n. 19, 114 S.Ct. 1023 (quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir.1986)).

In a more recent case, by about a month and a half, Riviera Distributors, Inc. v. Jones, ____ F.3d ____(CA7, Feb 20, 2008), the Seventh Circuit said that a material change in the material legal relationship of the parties is enough, citing Buckhannon Board & Care Home, Inc. v. West Virginia Dep't of Health & Human Services, 523 U.S. 598 (2001):

This approach supposes that the content of a judge's opinion is what makes a litigant a prevailing party. If the judge sustains a litigant's position on the merits, then it “prevails”; otherwise not. The Supreme Court took a different view in Buckhannon Board & Care Home, Inc. v. West Virginia Dep't of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), which holds that a litigant “prevails” (for the purpose of fee-shifting statutes) when it obtains a “material alteration of the legal relationship of the parties”, 532 U.S. at 604, 121 S.Ct. 1835, quoting from Texas State Teachers Ass'n v. Garland Independent School District, 489 U.S. 782, 792-93, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989). A judgment in a party's favor has such an effect, which is why a consent decree confers prevailing-party status even though everyone denies liability as part of the underlying settlement, and the judge takes no position on the merits.

The RIAA strategy of shotgun lawsuits followed by cutting and running when the case looks like a loser may get some examination if the Court takes up the case.  More in Ars Technica.

March 25, 2008 | Permalink

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