3:10-cv-01036-JFA

Date Filed 06/07/12

Entry Number 175

Page 1 of 8

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA COLUMBIA DIVISION

ANTHONY LAWRENCE DASH

) ) Plaintiff, ) ) vs. ) ) FLOYD MAYWEATHER, JR., an ) individual, MAYWEATHER ) PROMOTIONS; MAYWEATHER ) PROMOTIONS, LLC; PHILTHY ) RICH RECORDS, INC; and WORLD ) WRESTLING ENTERTAINMENT, INC., ) ) Defendants. ) )

Civil Action No.: 3:10-CV-01036-JFA

PLAINTIFFS MOTION TO RECONSIDER ORDER GRANTING DEFENDANTS MOTIONS FOR SUMMARY JUDGMENT ON ACTUAL DAMAGES AND PROFIT DAMAGES (DOCKET 172) PURSUANT TO RULES 59(e) AND 60(b), FED. R. CIV. P. AND MEMORANDUM IN SUPPORT I. INTRODUCTION On May 11, 2012, this Court granted Defendants motions for Summary Judgment on the issue of whether or not Plaintiff is entitled to actual damages and profit damages. Plaintiff respectfully moves under Rules 59(e) and 60(b) Fed. R. Civ. P. that the Court reconsider its Order and find that Plaintiff has met his burden for establishing his entitlement to actual damages

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and a profit-based measure of damages.1 This motion is made and based upon the following memorandum of points and authorities, all papers and pleadings on file herein, and any argument of counsel the Court entertains. Plaintiff respectfully submits that this Court erred in applying the standard for the causal connection requirement, and further erred in characterizing Defendants profits as indirect profits. II. DISCUSSION A. Legal Standard Rule 59(e) permits motions to reconsider to correct a clear error of law or prevent manifest injustice. Zinkand v. Brown, 478 F.3d 634, 637 (4th Cir. 2007). Under Rule 60(b), a court may grant relief from an order for mistake or any other reason justifying relief. See Fed. R. Civ. Proc. 60(b)(6). The ultimate responsibility of the federal courts, at all levels, is to reach the correct judgment under the law. See American Canoe Assn v. Murphy Farms, 326 F.3d 505, 515 (4th Cir. 2003). In this matter, Plaintiff respectfully contends this Court, in holding that Defendants may make millions of dollars in profits from a performance and broadcast using two minutes of Plaintiffs song without permission and Plaintiff may not reach these profits with a copyright claim, has made a clear error of law justifying relief under both Rules 59(e) and 60(b).

B.

This decision represents a significant misreading of Bouchat and Bonner and an unprecedented limitation on the rights of artists and other copyright holders
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Pursuant to Local Rule 7.04, the undersigned certifies a full explanation of this motion

is contained within. Further, pursuant to Local Rule 7.02, the undersigned certifies that in his belief the instant motion is a similar dispositive motion and no consultation is required.

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This Court supported its Order by relying primarily on an erroneous reading of Bouchat v. Baltimore Ravens Football Club, Inc., 3346 F.3d 514 (4th Cir. 2003). The Courts Order is based on the premise that Plaintiff must show a revenue stream of Defendants was enhanced by Plaintiffs music. In other words, Plaintiff must show Defendants made more money stealing Plaintiffs music than they would have made without stealing it. The purported source of this rule is Bouchat: Critical to the resolution of this issue is the Plaintiffs stipulation that playing Yep did not increase the revenues of the Wrestlemania or RAW programs beyond what they would have otherwise garnered. Given this stipulation, Plaintiff fails to get past his initial 504(b) burden as outlined in Bouchat. Order Granting Summary Judgment at 7. The difficulty with this reading of Bouchat is that the Fourth Circuit, in the subsequent Bonner case, characterizes its holding much differently than this Court did: In Bouchat, we were concerned about the holder of a copyright of the Baltimore Ravens logo being able to recover from profit streams that had little or nothing to do with the franchise's logo, such as those generated by media rights and gameday parking. . . . We held that these non-merchandise revenues had no conceivable connection to the logo printed on team apparel, and thus were not part of the gross revenue intended under 504(b). Bonner v. Dawson, 404 F.3d 290, 294 (4th Cir. 2005). Plaintiff Dashs principal claim is the profits from sales of products which included his music: Wrestlemania tickets and pay-per-view fees. These are a far cry from the relationship between a football franchises marketing logo and revenues from game-day parking and media rights. Further, the theory relied upon by the Court, that Plaintiff must show enhanced revenues, was flatly rejected by the Bonner court. [T]he [District] court found this evidence [of profits from the building] was not sufficient to satisfy the causal connection requirement articulated in Bouchat, because it was not clear that the basis for the profits was the

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particularized design of the building. In doing so, however, the court misinterpreted the level of connection between infringement and profits that is required under Bouchat. Bonner, 404 F.3d at 294. Just as the District Court in Bonner tried to make the Plaintiff prove the income from the building was increased by the architectural design, this Court has held Plaintiff must prove the Defendants profit was increased by the use of his music. This is a misinterpretation of Bouchat, according to the Fourth Circuit. Further, even the Bouchat court did not require what the Court did in this case. The Bouchat court permitted the merchandise revenues such as team logo apparel to go the jury without requiring any sort of heightened proof of additional profits. Had this Courts ruling been applied in Bouchat, the plaintiff would have had to show that there was additional profit that was a result of the logo as compared to the profits that would have been generated by hat and jersey sales without the new Ravens logo. Not even Bouchat went that far such a ruling demands an impossible standard of proof and guts the profit damages provisions of the copyright act. Phoenix Renovation Corp. v. Rodriguez, 439 F. Supp. 2d 510, 519 (E.D. Va. 2006), is an instructive example of a proper application of Bouchat and Bonner. In Phoenix Renovation, the Defendants took a similar position regarding Plaintiffs initial burden as do the Defendants in the present case. Regarding the causal link, Defendants argue that their use of Phoenix's Interior Repipe Agreement did not lead to any revenue. According to Koci's affidavit, the consumer sales contract was merely a final, ministerial step taken in reaching an agreement between Atlantic and its customers. In every transaction, Atlantic would assess the work to be done and offer the customer a proposal for the cost of Atlantic's services. Atlantic never presented the consumer contract to any customer until after it had reached a verbal agreement with the customer. Because Atlantic did not use the contract as a point of sale, Defendants argue that none of their revenues are traceable to the copyright infringement. Phoenix Renovation Corp. v. Rodriguez, 439 F. Supp. 2d 510, 519 (E.D. Va. 2006).
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The Phoenix Renovation Corp court noted that the Defendants misconceive(d) the nature of Phoenixs initial burden under Section 504(b). In Phoenix Renovation, the Plaintiff was a plumbing company whose two former employees had left and started a competing company. In so doing, the former employees continued to use Phoenixs copyrighted contract in their competing business. There is no conceivable scenario in which any revenue of a plumbing company could be increased or enhanced by the language of a copyrighted sales contract. Nevertheless, the court rejected the Defendant argument about lack of a causal connection. This Court should have done the same.

C.

This Court should reconsider its characterization of Defendants profits as indirect profits. In this Courts order granting Defendants motions for summary judgment, the Court

stated that [W]hile Plaintiff asserts that the damages in this case are direct, the court is not convinced that the damages in this case are in fact direct. (Order Granting Summary Judgment at 7). The Court asserts that Defendant did not directly sell the work, and as a result, the profits at issue here align more closely with cases involving indirect profits. Id. However, it is undisputed by the parties that the infringing works, Wrestlemania 24 and the subsequent Raw event, included the allegedly infringing song Yep. Further, at least with respect to Wrestlemania 24, it is undisputed that revenues were generated through ticket sales to the infringing event, pay-per-view sales, and subsequent DVD sales over the course of the last few years. Thus, the infringing work Wrestlemania 24, which included the infringing song Yep, generated revenues and large profits through direct sales of the event, or through the sale of copies of the infringing event. Although the Court did not clearly delineate what constitutes

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direct profits in the Fourth Circuit in its Order, direct profits are generally recognized by wellestablished precedent to be profits generated through the sale of an infringing work, whether that work is infringing in whole or in part. Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc. (Frank I), 772 F.2d 505, 514 (9th Cir. 1985), affd in part, revd in part, 886 F.2d 1545. Plaintiff respectfully submits that the Defendants profits in this case are properly characterized as direct profits, generated by the sale of the infringing work. D. Plaintiff should be eligible for Actual Damages For purposes of the summary judgment motion, and in the interest of judicial economy, the parties agreed to assume copyright liability in order to settle the issue of Plaintiffs entitlement to actual and profit damages. Plaintiff provided an expert report that included a measure of Plaintiffs actual damages (in the amount of $3000.00), which was determined by comparing licensing fees for other works used in the infringing event Wrestlemania 24. The Courts Order of May 11, 2012 opined that Plaintiff was not entitled to any actual damages because Plaintiff has only offered speculation as to the value of the song. (Order Granting Summary Judgment at 9). However, even if the court did not agree with the method for calculating actual damages, that is a question properly decided by a jury. The summary judgment motions were made only for the purpose of determining whether Plaintiff is entitled to any actual damages, but were not made for the purpose of determining the amount of such damages. Assuming for purposes of this issue, as the parties agreed to do, that copyright infringement has been established, the Court offered no cogent reason why Plaintiff is not entitled to any actual damages, even if it disagreed with the method used by Plaintiff for calculating such damages.

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F. `

Statutory Damages This Court also opined that Plaintiffs policy argument fails to present a complete

picture of relief available under the Copyright Act, and bolstered its opinion by stating that statutory damages are available to Plaintiffs who timely file their copyright applications in situations where other damages are unavailable. However, the Copyright Act operates so that a Plaintiff may elect either statutory damages (particularly in cases where no profits were made), or profit damages, but not both. 17 USC 504(a). The fact that statutory damages may have been available if Plaintiff had filed his copyright application earlier is not relevant to the present situation. The question here is not whether other, lesser remedies were available, but rather what a Plaintiff must show in order to be eligible for profit damages.

III. CONCLUSION This Order raises the following question: If a Plaintiff can prove copyright infringement, and further proves that the Defendant generated profits through the direct sale of the infringing work (as is the case here), what more must he show to be entitled to profit damages? The language of the opinion suggests that a Plaintiff must show that the use of the infringing work in the context of a larger work contributed additional revenue to the profits enjoyed by the Defendants. This evidently means that a Plaintiff must prove not only gross revenues of the actual sales of the infringing work, but must further prove a negative, which is the amount of money that the infringing work would have made without the inclusion of the infringing material. Such is not the law, and effectively precludes any Plaintiff from recovering copyright infringement profit damages in the Fourth Circuit, and the legal theory behind this order finds no support, either within the Fourth Circuit or beyond. This Courts Order is a significant and

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serious departure from the copyright law of the Fourth Circuit, and Plaintiff respectfully submits it should be reconsidered. For the reasons set forth herein, Plaintiff requests that this court reconsider the order granting the Defendants motions for summary judgment, and hold that Plaintiff is entitled to recover a profits-based measure of damages in accordance with the statutory scheme under U.S. Copyright law. Respectfully Submitted, By: /s/ John G. Felder, Jr. Thomas L. Moses (ID 07049) MONAHAN & MOSES, LLC 13-B West Washington Street Greenville, SC 29601 (864) 241-4604 (864) 241-4606 (fax) tom.moses@momolaw.com John G. Felder (ID 6441) MCGOWAN, HOOD & FELDER LLC 1517 Hampton Street Columbia, SC 29201 (803) 779-0100 (803) 256-0702 (fax) jfelder@mcgowanhood.com William A. McKinnon (ID 7982) MCGOWAN, HOOD & FELDER, LLC 1539 Health Care Drive Rock Hill, SC 29732 (803) 327-7800 (803) 328-5656 (fax) bmckinnon@mcgowanhood.com Attorneys for Plaintiff June 7, 2012 Columbia, South Carolina
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