United States Court of Appeals
For the First Circuit
No. 05-1027
OSVALDO GARCÍA-GOYCO; NADJA BAGUÉ; CONJUGAL PARTNERSHIP GARCÍA-
BAGUÉ; PASO DEL INDIO, INC.,
Plaintiffs-Appellants,
v.
LAW ENVIRONMENTAL CONSULTANTS, INC., d/b/a/ LAW ENVIRONMENTAL-
CARIBE, INC.,
Defendants-Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen Consuelo Cerezo, U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella and Dyk*,
Circuit Judges.
Guillermo J. Ramos Luiña, with whom Rivera, Tulla &
Ferrer, was on brief, for appellants.
Manuel A. Pietrantoni, with whom Mariano A. Mier-Romeu,
and Fiddler, Gonzáles & Rodríguez, PSC, were on brief, for
appellees.
October 28, 2005
*
Of the Federal Circuit, sitting by designation.
DYK, Circuit Judge. Law Environmental Consultants, Inc.,
d/b/a Law Environmental-Caribe, Inc. (“LEC” or “appellee”),
prevailed on summary judgment in an action for copyright
infringement brought by Osvaldo García-Goyco (“García-Goyco”) and
Nadja Bagué, personally and on behalf of their conjugal partnership
and Paso del Indio, Inc. (“PDI”) (collectively “appellants”). This
judgment was not appealed. Subsequently, the district court
awarded costs and attorney’s fees to LEC as a prevailing party
under the Copyright Act, 17 U.S.C. § 505. This appeal followed.
We affirm the award of costs and attorney’s fees.
I.
A. The Copyright Action
The parties were engaged by the Puerto Rican Highway
Authority (“PRHA”) to provide historical preservation services for
an archeological site. On May 6, 1993, García-Goyco was employed
directly by PRHA to prepare various preliminary documents during
the planning and proposal phases of the project. García-Goyco
prepared a “Mitigation Plan” in October of 1993, and a “Research
Design and Proposal” during 1994 and 1995. On February 6, 1997,
PRHA informed García-Goyco of its intent to contract with LEC to
oversee the administration of the laboratory phase of the project,
and requested that García-Goyco and his company, PDI, negotiate a
subcontract for the delivery of archeological services directly
with LEC.
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Upon receipt of this information, on February 25, 1997,
García-Goyco obtained copyrights for the two documents he had
prepared pursuant to the agreement with PRHA during the planning
and design phases of the project. García-Goyco then notified PRHA
and LEC that they would have to negotiate for the implementation
and use of those documents during the administration phase, because
he owned the copyrights to the documents.
On September 5, 1997, PDI contracted with LEC, in
writing, to provide technical services for the preliminary
administration of the project in accordance with the PRHA/LEC
agreement. LEC’s contract with PRHA to serve as prime contractor
during the administrative phase of the project was formalized in
writing on November 20, 1998. It provided that “[t]he [PRHA] will
have a [sic] complete and unrestricted ownership rights to all
Reports, Technical Memorandums, plans, data . . . or any other work
product . . . prepared by [LEC] in connection with the services’
performance.” On January 20, 1999, García-Goyco copyrighted a
third research and work plan, reworking the two documents from the
prior work done for PRHA, and incorporating work done pursuant to
the contract with LEC. The three copyrighted documents, as
described in the district court’s decision on the merits, are
compilations of the works of various authors, the bulk of the
content comprising “historical fact discoveries,” and otherwise
consist “primarily [of] procedures and methods of operation for the
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recovery, analysis and reporting of findings related to an
archeological site.” Osvaldo García-Goyco v. Puerto Rico Highway
Auth., 275 F. Supp. 2d 142, 147-49, 154 (D.P.R. 2003).
Following LEC’s supposed failure to comply with an oral
contract to hire PDI for the final administrative phase of the
project, on April 20, 1999, García-Goyco brought suit against LEC1
in the United States District Court for the District of Puerto
Rico. The complaint alleged copyright infringement under the
Copyright Act, 17 U.S.C. § 101 et seq., as well as pendent state
law claims for breach of contract and unjust enrichment. It was
“undisputed that . . . LEC and the Highway Authority utilized the
data in the Research Design and Work Plan prepared by plaintiff
pursuant to his contracts with them.” García-Goyco, 275 F. Supp.
2d at 146.
After over two years of litigation, the district court
entered summary judgment in favor of LEC on April 30, 2003. The
copyright claim was dismissed with prejudice and the state law
claims were dismissed without prejudice. The district court held
that the works at issue were not copyrightable because: (1) they
were compilations of noncopyrightable subject matter under section
102 of the Copyright Act2; (2) the arrangement and selection of the
1
PRHA was initially named as a defendant but was
subsequently dismissed and is not involved in the attorney’s fees
dispute.
2
“In no case does copyright protection for an original
work of authorship extend to any idea, procedure, process, system,
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noncopyrightable materials within each work lacked originality; and
(3) the works were prepared in connection with a federally
authorized prehistoric survey, and therefore were the property of
the federal government under 36 C.F.R. § 79.3(a)(2).
B. The Fee Dispute
On May 21, 2003, LEC, having prevailed on the merits,
filed a timely motion requesting costs and attorney’s fees in
accordance with the Copyright Act, 17 U.S.C. § 505.3 On March 8,
2004, the district court issued an order denying LEC’s motion,
“without prejudice of being resubmitted with satisfactory evidence,
in addition to LEC’s attorneys’ own affidavits, justifying the
reasonableness of its requested rate for attorney’s fees.” On
March 16, 2004, LEC filed a motion for an enlargement of time,
requesting an additional thirty days (until April 22, 2004) to
submit the requested evidence on the reasonableness of its rate for
attorney fees. In docketing LEC’s motion for an enlargement of
time, the district court set a deadline of March 29, 2004, for the
method of operation, concept, principle, or discovery, regardless
of the form in which it is described, explained, illustrated, or
embodied in such work.” 17 U.S.C. § 102(b) (2000).
3
The fee shifting provision of the 1976 Copyright Act
states: “In any civil action under this title, the court in its
discretion may allow the recovery of full costs by or against any
party other than the United States or an officer thereof. Except
as otherwise provided by this title, the court may also award a
reasonable attorney’s fee to the prevailing party as part of the
costs.” Pub. L. No. 94-553, Title 1, § 101, 90 Stat. 2586 (1976)
(codified at 17 U.S.C. § 505 (2000)).
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filing of any response in opposition from appellants. Appellants
filed no such response.
On April 21, 2004, one day before the requested deadline
of April 22, 2004, LEC submitted additional evidence concerning the
reasonableness of its attorney’s fees rates to the district court.
On May 11, 2004, appellants for the first time raised a timeliness
challenge to the attorney’s fees request. Appellants also
reiterated a series of other objections to the request for fees and
costs, arguing, inter alia, that the award was not warranted under
the factors set forth in the Supreme Court’s decision in Fogerty v.
Fantasy, 510 U.S. 517 (1994); that the rates charged were
unreasonable; and that LEC improperly incurred translation costs
after the district court dismissed the action.
On November 12, 2004, the district court ordered García-
Goyco to pay LEC $13,721.82 in costs and $98,000.00 in attorney’s
fees. The district court noted that “[p]laintiffs . . . contend
that attorney’s fees are not warranted in this case because the
Court never stated nor relied on any finding that García-Goyco’s
claim was frivolous or that plaintiffs filed their action in bad
faith.” The court found that “copyrighting the[] documents was
done in bad faith in order to leverage LEC’s cooperation in hiring
[García-Goyco] [and that] further use of the copyrights to
bootstrap a state law contract action into federal court wasted an
immeasurable amount of this Court’s time as well as causing
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inappropriate and unnecessary legal expenses for LEC.” This appeal
followed. Our review as to the issue of jurisdiction is plenary.
We review the district court’s award of costs and attorney’s fees
for abuse of discretion. Invessys, Inc. v. McGraw-Hill Cos., Ltd.,
369 F.3d 16, 19 (1st Cir. 2004).
II.
We address first the question whether the district court
had jurisdiction to award attorney’s fees under 17 U.S.C. § 505.4
Appellants contend that the district court’s order of March 8,
2004, denying LEC’s initial request without prejudice and with
leave to resubmit, was a final order. They therefore claim that
the district court was without jurisdiction to rule on LEC’s April
21, 2004, motion supplementing the original fee request with
additional evidence, because this motion was filed after the
mandatory ten-day period to file a Rule 59(e) motion had expired.5
There is no question that awards of attorney's fees may
be appealed separately as final orders after a final determination
of liability on the merits. See In re Nineteen Appeals, 982 F.2d
4
Both parties now agree that LEC’s motion for costs was
timely. LEC filed a motion to amend the district court’s order on
costs on March 23, 2004. Pursuant to F.R.C.P. 59(e), this motion
was filed within ten days (excluding Saturdays, Sundays, and March
22, which is a legal holiday in Puerto Rico) from the district
court’s March 8, 2004, order denying costs. Thus, even if the Rule
59(e) time limit applied, the motion was timely.
5
Rule 59(e) provides that “[a] motion to alter or amend
the judgment shall be served not later than 10 days after entry of
the judgment.” Fed. R. Civ. P. 59(e).
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603, 609 n.10 (1st Cir. 1992) (noting that “orders setting
attorneys’ fees are separate from determinations on the merits in
a jurisdictionally significant sense”). There is also no question
that a dismissal of a complaint without prejudice is generally
considered to be a final judgment for appeal purposes. Mirpuri v.
ACT Mfg., Inc., 212 F.3d 624, 628-29 (1st Cir. 2000). Here,
however, LEC argues that the district court’s order was conditional
rather than final because, in denying the fees without prejudice,
the district court expressly invited the defendants to file an
amended request for fees including additional evidence.
The question of whether the district court’s initial
dismissal was final is complicated. In Jung v. K. & D. Mining Co.,
356 U.S. 335 (1957), the Supreme Court held that where a district
court dismissed a complaint but granted the plaintiff a specific
period of time to refile, the initial dismissal was not final, and
an appeal could be filed after a later final order of dismissal.
Id. at 336-37. The circuits have adopted conflicting
interpretations of Jung. Compare Richards v. Dunne, 325 F.2d 155,
156 (1st Cir. 1963) (finding that the district court’s dismissal of
plaintiffs’ claim was not a final judgment where the court allowed
plaintiffs a specific time period to amend and plaintiffs did
nothing except file a notice of appeal after the time period
elapsed), and WMX Techs, Inc. v. Miller, 104 F.3d 1133, 1136 (9th
Cir. 1997) (en banc) (same), with Otis v. City of Chicago, 29 F.3d
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1159, 1166-68 (7th Cir. 1994) (en banc) (finding that after the
period of leave to amend had elapsed, the district court’s
dismissal of plaintiff’s case became final), and Schuurman v. Motor
Vessel “Betty K V”, 798 F.2d 442, 445 (11th Cir. 1986) (same).
This case presents a particularly difficult problem
because the original dismissal order provided no specific time
limit for filing a new attorney’s fees request. This court has not
addressed this particular issue, and the scant authority concerning
such orders reveals no uniformly accepted approach. See Schuurman,
798 F.2d at 446 (Hatchett, J., concurring) (noting that where no
time limit for amendment is given by the district court, the
initial dismissal should be appealed within thirty days); Azar v.
Conley, 480 F.2d 220, 222 (6th Cir. 1973) (finding that a district
court’s dismissal of a complaint was not final and not appealable
where it set forth no time limit for amendment but detailed what a
proper complaint should contain).
We need not decide whether the district court’s initial
dismissal here was final because, even if it was final and the ten
day limit of Rule 59 applied to preclude amendments to that
judgment, the judgment did not preclude LEC from filing a new
motion for attorney’s fees based on different evidence. Here, the
district court explicitly cabined its dismissal order by denying
the motion “without prejudice of being resubmitted with
satisfactory evidence, in addition to LEC’s attorneys’ own
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affidavits, justifying the reasonableness of its requested rate for
attorney’s fees.” We view the district court’s order as being
“with prejudice” to another request based on the same evidence, but
“without prejudice” to a new motion based on additional evidence.
In such circumstances, a single judgment can preclude further
litigation of particular issues, while still permitting further
litigation on other issues and the underlying claim itself. See
18A Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Pro.
Juris. 2d § 4435, at 134 (2d ed. 2002).
To the extent that the dismissal was “without prejudice”
LEC was not barred from refiling the claim with the same court.
Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505-06
(2001); see also López-Gonzáles v. Municipality of Comerío, 404
F.3d 548, 553 (1st Cir. 2005) (holding that a dismissal without
prejudice does not bar refiling the claim before the same court,
notwithstanding the statute of limitations); Wright & Miller, supra
§ 4435, at 132 n.4 (noting that a dismissal without prejudice is
not a final adjudication on the merits for res judicata purposes).
Therefore, the district court’s dismissal here did not bar LEC from
refiling its request for attorney’s fees with additional evidence.
Furthermore, to the extent appellants contend that LEC
was precluded from refiling its request under Puerto Rico Local
Rule 332 because it was not filed within forty-five days following
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the entry of judgment,6 we find this argument unpersuasive. LEC
argues that the district court had discretion to depart from the
local rules in the circumstances of this case. We agree. “In
general, it is for the district court to determine what departures
from its rules may be overlooked.” United States v. Diaz-
Villafane, 874 F.2d 43, 46 (1st Cir. 1989) (internal quotation
marks and alterations omitted); Crowley v. L.L. Bean, Inc., 361
F.3d 22, 25 (1st Cir. 2004) (holding that “the application of a
district court’s local rule is reviewed for abuse of discretion”).
While the district court does not have “unbridled” discretion to
ignore the local rules, it enjoys a “considerable latitude in
applying local procedural rules . . . and in departing from them.”
Diaz-Villafane, 874 F.2d at 46. We generally will not disturb the
district court’s departure from its local rules so long as there is
sound reason for the departure and no party’s substantial rights
have been unfairly jeopardized. Id.
Here, LEC filed its initial fee request fifteen days
after the district court granted summary judgment in its favor.
The district court took over nine months to dismiss this request.
Eight days after this dismissal, LEC filed a motion requesting an
additional thirty days within which to refile its request. Despite
6
Rule 332 was amended on September 29, 2003, and now appears
as Puerto Rico Local Rule 54(a). It states that “[a] motion
requesting attorneys’ fees must be filed within forty-five (45)
days following entry of judgment.”
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the district court’s express invitation to appellants to oppose
LEC’s request for an extension of time, appellants made no
objection. LEC then filed a new motion for attorney’s fees within
the requested thirty days, and within forty-five days from the
initial order denying its request. Under these circumstances, we
cannot find that the district court’s departure from the local rule
constituted an abuse of discretion.
III.
Having decided that LEC’s second fee request was properly
before the district court, we must now turn to the district court’s
award of fees. Appellants contend that even if the fee request was
not time-barred, the district court should not have awarded fees
under Fogerty v. Fantasy, 510 U.S. 517 (1994).
Contrary to appellants’ argument, an explicit finding of
frivolity or bad faith is not required for the award of attorney’s
fees under 17 U.S.C. § 505. In Fogerty, the Supreme Court
interpreted the attorney’s fees provision of the Copyright Act and
rejected a "dual" standard under which a greater burden had been
placed on prevailing defendants than prevailing plaintiffs before
fees could be awarded. See 510 U.S. at 520-22 & n. 8, 534. The
Court expressly disapproved the practice of awarding fees to
prevailing defendants only upon a showing of frivolousness or bad
faith. Id. at 531-32. At the same time, the Court rejected the
"British Rule" requiring fees as a matter of course for the winner.
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Id. at 533. Instead, it opted for a middle ground, under which
"[p]revailing plaintiffs and prevailing defendants are to be
treated alike, but attorney's fees are to be awarded to prevailing
parties only as a matter of the court's discretion." Id.
The Court approved the “evenhanded” approach adopted by
the Third Circuit and observed that the court’s discretionary
decision to award fees could be guided by the non-exclusive list of
factors that the Third Circuit had identified in Lieb v. Topstone
Industries, Inc., 788 F.2d 151 (3rd Cir. 1986). That list included
“‘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.’" 510 U.S. at 534 n. 19 (quoting
Lieb,788 F.2d at 156); see also Lotus Dev. Corp. v. Borland Int’l.,
Inc., 140 F.3d 70, 72-73 (1st Cir. 1988) (quoting Fogerty, 510 U.S.
at 534 n.19).
In the past, this court has applied the Fogerty factors
in affirming awards of attorney’s fees where the plaintiff’s
copyright claim was neither frivolous nor instituted in bad faith.
Thus, the award of fees has been approved where the claim was
“objectively weak.” See, e.g., Invessys, Inc., 369 F.3d at 20-21;
Matthews v. Freedman, 157 F.3d 25, 29 (1st Cir. 1998); see also
Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996). For
example, in Invessys, the district court rejected a copyright claim
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because the plaintiffs’ company did not buy, and therefore did not
own, the copyrighted software. The district court awarded fees.
In affirming the award of fees, this court stated that “at first
blush it might appear as if the plaintiffs had a colorable claim.”
369 F.3d at 21. However, after further factual development, the
plaintiffs’ claim of ownership of the software appeared “more
dubious.” Id. This court found that the underlying copyright
infringement claim was “objectively quite weak.” Id.
So too in Matthews the district court awarded fees to the
prevailing party where both parties made colorable arguments
regarding whether the phrase appearing on the defendant’s t-shirt
was substantially similar to the phrase on the plaintiff’s t-shirt.
157 F.3d at 26. The court found a lack of similarity and awarded
fees to the alleged infringer. This court concluded that the
“district court could conclude that the losing party should pay
even if all of the arguments it made were reasonable.” Id. at 29.
Here, just as in Invessys and Matthews, the district
court made no express finding of frivolity, nor was there a finding
that the copyright litigation was itself instituted in bad faith.
In justifying the award of fees, the court stated that
“copyrighting the[] documents was done in bad faith in order to
leverage LEC’s cooperation in hiring [García-Goyco] [and that]
further use of the copyrights to bootstrap a state law contract
action into federal court wasted an immeasurable amount of this
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Court’s time as well as causing inappropriate and unnecessary legal
expenses for LEC.” We understand the district court to have held
that fees were justified because (1) the plaintiffs misused the
copyright to leverage its position with respect to the contract and
(2) the plaintiffs’ copyright claim was otherwise not sufficiently
strong to warrant the federal action, the purpose of the federal
action being to bring state claims within the district court’s
jurisdiction. We need not reach the misuse ground7 because we
agree that the district court could properly find that the
copyright claim was lacking in merit because García-Goyco had
surrendered ownership in the works at issue.
The district court concluded that the works were not
copyrightable because they were “associated records” that were
prepared for, or in connection with, a federal prehistoric resource
project under 36 C.F.R. § 79.3(a)(2), and therefore, they were the
property of the United States Government.
The relevant provision of 36 C.F.R. § 79.3(a)(2) states:
Associated records that are prepared or assembled
in connection with a Federal or federally
authorized prehistoric or historic resource survey,
excavation or other study are the property of the
7
This court has not yet recognized misuse of a copyright as
a defense to infringement. See Data Gen. Corp. v. Grumman Sys.
Support Corp., 36 F.3d 1147, 1170 (1st Cir. 1994) (“[T]his case
does not require us to decide whether the federal copyright law
permits a misuse defense.”); Broad. Music Inc. v. Hampton Beach
Casino Ballroom Inc., No. CV-94-248-B, 1995 WL 803576, at *5 n.7
(D.N.H. Aug. 30, 1995) (“The First Circuit has not addressed the
issue of copyright misuse.”).
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U.S. Government, regardless of the location of the
resource.
The term “associated records” is defined by the regulation as
“original records (or copies thereof) that are prepared, assembled
and document efforts to locate, evaluate, record, study, preserve
or recover a prehistoric or historic resource” which include
“proposals” and “reports.” 36 C.F.R. § 79.4(a)(2) (2004). The
district court’s determination that the copyrighted documents here
were covered by the regulation was plainly correct.
Even if the regulation were inapplicable, there is a
strong argument that PRHA and LEC obtained non-exclusive licenses
to use the works because García-Goyco prepared the documents
pursuant to agreements with these entities and was compensated for
the work. See, e.g., Effects Assocs., Inc. v. Cohen, 908 F.2d 555,
558-59 (9th Cir. 1990); Foad Consulting Group, Inc. v. Musil Govan
Azzalino, 270 F.3d 821, 825-831 (9th Cir. 2001); 3 M. Nimmer & D.
Nimmer, Nimmer on Copyright § 10.03[A][7] (2005). Contrary to
appellants’ argument, there is no reason to infer that these
licenses were terminated. Cf. Effects Assocs., Inc., 908 F.2d at
559 n.7 (finding that a non-exclusive license was not terminated by
refusal of defendant to pay full compensation for the work). Under
these circumstances, the district court properly found that
appellants had no colorable claim to assert in federal court.
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IV.
We also conclude that there is no obvious error in the
amount of the district court’s fee award. Our review of the
district court’s award of attorney’s fees to a prevailing party
under the Copyright Act is extremely deferential. “We will disturb
a ruling under section 505 only if the record persuades us that the
trial court indulged in a serious lapse in judgment.” Lotus Dev.
Corp., 140 F.3d at 72 (internal quotation marks and citation
omitted). LEC provided satisfactory evidence of the reasonableness
of the rates charged by its attorneys and of the billing practices
followed. See Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir.
1994). The court also was within its discretion in relying upon
its own knowledge and experience regarding attorneys’ rates and the
local market. Andrade v. Jamestown Hous. Auth., 82 F.3d 1179, 1190
(1st Cir. 1996); Wojtkowski v. Cade, 725 F.2d 127, 130 (1st Cir.
1984).
Contrary to García-Goyco’s arguments, the district court
also did not err in taxing the full costs claimed by LEC, including
the costs incurred in translating the copyrighted documents. That
the documents were translated after the district court’s grant of
summary judgment is of no import. The documents were submitted to
the court and were part of the record. As such, the rules required
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their translation to English in the event of any future appeal.8
1st Cir. R. 30(d) (this court “will not receive documents not in
the English language unless translations are furnished”); Ramos-
Baez v. Bossolo-Lopez, 240 F.3d 92, 94 (1st Cir. 2001).
Accordingly, we affirm the district court’s award of
attorney’s fees and costs.
It is so ordered.
8
The translations were done in early May, 2003, and LEC
did not know whether appellants would appeal the judgment until
June 5, 2003. In addition, the district court’s earlier order to
translate the documents had never been rescinded.
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