Curet-Velazquez v. Acemla De Puerto Rico, Inc.

United States Court of Appeals
For the First Circuit

No. 10-1587

HILDA CURET-VELÁZQUEZ, EDUARDO CURET-VELÁZQUEZ,
HILDA VELÁZQUEZ-COTO,

Plaintiffs, Appellees,

v.

ACEMLA DE PUERTO RICO, INC.;
LATIN AMERICAN MUSIC CO., INC.,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Aida M. Delgado-Colón, U.S. District Judge]

Before

Lynch, Chief Judge,
Torruella and Lipez, Circuit Judges.

Mauricio Hernández-Arroyo, with whom José Luis Torres and Law
Offices of Mauricio Hernández-Arroyo, were on brief for appellants.
Samuel F. Pamias-Portalatín, with whom Aileen E. Vázquez-
Jiménez and Hoglund & Pamias, P.S.C., were on brief for appellees.

August 29, 2011
 TORRUELLA, Circuit Judge. This appeal concerns a

copyright infringement claim involving four songs that Puerto Rican

composer Catalino "Tite" Curet-Alonso ("Tite Curet") authored.

Appellees Hilda Curet-Velázquez, Eduardo Curet-Velázquez and Hilda

Velázquez-Coto (collectively, the "Curet Heirs") filed a complaint

against the appellants, ACEMLA de Puerto Rico, Inc. ("ACEMLA") and

Latin American Music Co., Inc. ("LAMCO"), alleging copyright

infringement under the Copyright Act of 1976, as amended, 17 U.S.C.

§ 101, et seq. The complaint also included Puerto Rico law claims

for, inter alia, breach of contract, nullity of contract, and

rescission of contract. The district court adopted the magistrate

judge's report and recommendation granting in part the Curet Heirs'

motions for summary judgment and finding that the appellants had

infringed on the Curet Heirs' valid copyrights on four of Tite

Curet's songs. After a bench trial to determine damages and to

address the Curet Heirs' contractual claims, the court also imposed

the maximum statutory damages for the copyright infringements

pursuant to 17 U.S.C. § 504(c)(1).

Appellants now ask us to find that the district court

erred in, among other things, (a) extending the deadline for

discovery; (b) not finding that the Curet Heirs' claims were barred

by the Civil Code's statute of limitations for rescission claims,

P.R. Laws Ann. tit. 31, § 3500; (c) allowing the Curet Heirs'

expert witness to testify regarding matters outside his expert

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report, not excluding his testimony as a sanction; and (d) imposing

the maximum statutory damages pursuant to 17 U.S.C. § 504(c)(1).

For the reasons explained hereafter, we affirm the judgment of the

district court.

I. Background

A. Facts1

Tite Curet was a prolific Puerto Rican composer who

passed away on August 5, 2003, leaving three heirs. LAMCO is a

publisher that owns music through contracts with composers and

ACEMLA is a performance rights society. Tite Curet's musical

catalog with ACEMLA and LAMCO includes approximately 1100 to 1200

compositions.

At issue in this case are four of Tite Curet's songs,

Pueblo Latino, Distinto y Diferente, Periódico de Ayer, and Planté

Bandera. On August 4, 1995, Tite Curet signed contracts with LAMCO

and ACEMLA assigning and conveying the licensing rights to certain

songs, including the four songs at issue here. According to these

contracts, LAMCO and ACEMLA were obligated to provide Tite Curet

with bi-annual royalty reports on February 15th and August 15th of

each year. Tite Curet also signed the June 9, 1998 Rider (the

1
For additional details, refer to the magistrate judge's report
and recommendation, Curet-Velázquez v. ACEMLA de P.R., Inc., No.
06-1014 (ADC), 2008 WL 4006701, at *4-6 (D.P.R. Aug. 26, 2008), and
the district court's post-trial opinion and order, Curet-Velázquez
v. ACEMLA de P.R., No. 06-1014 (ADC), slip op. (D.P.R. Mar. 31,
2010).

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"1998 Rider"), which extended the previously mentioned contracts

indefinitely in exchange for $6000. However, as the Curet Heirs'

expert testified, ACEMLA and LAMCO never paid Tite Curet the $6000.

ACEMLA and LAMCO failed to comply with the requirement to

provide bi-annual royalty reports. They failed to issue separate

royalty reports between 1995 and 2001 but instead compiled the

royalties data for those years in the 2002 and 2003 royalty

reports. Further, although ACEMLA and LAMCO are separate entities

and should have provided separate reports, they submitted combined

data in the 2002 and 2003 royalty reports. They failed to provide

any royalty reports for 2005 and did not provide the 2006 and 2007

royalty reports until January 15, 2009. To make matters worse, the

district court found that the reports contained inconsistencies and

accounting discrepancies. See Curet-Velázquez v. ACEMLA de P.R.,

No. 06-1014 (ADC), slip op. at 10, 14-17 (D.P.R. Mar. 31, 2010).

ACEMLA and LAMCO also issued several checks to Tite Curet as

royalty reimbursements or as performance-based bonuses, but

accounted for them as royalty advances. ACEMLA and LAMCO also

failed to report royalties and to issue payments with respect to

the same. See id. at 10-12.

B. Procedural History

The Curet Heirs filed a complaint against ACEMLA and

LAMCO in the United States District Court for the District of

Puerto Rico seeking injunctive and monetary relief pursuant to the

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Copyright Act of 1976, as amended, 17 U.S.C. § 101, et seq. The

district court had jurisdiction over this claim pursuant to 28

U.S.C. §§ 1331 and 1338. The complaint also included Puerto Rico

law claims for breach of contract, nullity of contract, rescission

of contract, unfair competition, tort, unjust enrichment and moral

rights. The district court had jurisdiction over these claims

pursuant to 28 U.S.C. §§ 1338 and 1367.

On April 11, 2006, the Curet Heirs filed a motion for

summary judgment and a statement of facts in support thereof. This

initial motion for summary judgment stated that no genuine issue of

material fact existed with respect to ACEMLA's and LAMCO's

infringement of the Pueblo Latino copyright. The district court

set September 15, 2006 as the deadline for ACEMLA's and LAMCO's

response to the Curet Heirs' motion for summary judgment. ACEMLA

and LAMCO filed their opposition to the motion for summary judgment

on the deadline date, and the Curet Heirs filed a sur-reply on

October 27, 2006.

On February 22, 2007, the Curet Heirs filed a second

motion for summary judgment and a second statement of material

facts alleging that no genuine issue of material fact existed with

respect to ACEMLA's and LAMCO's infringement of Pueblo Latino,

Distinto y Diferente, Periódico de Ayer, and Planté Bandera.

ACEMLA and LAMCO filed their opposition to the second motion for

summary judgment on April 13, 2007.

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 On June 19, 2007, the district court issued an order

referring the motions for summary judgment to a magistrate judge

for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1).

On November 21, 2007, the magistrate judge issued a report and

recommendation granting in part and denying in part the motions for

summary judgment. Curet-Velázquez v. ACEMLA de Puerto Rico, Inc.,

No. 06-1014 (ADC), 2008 WL 4006701, at *4 (D.P.R. Aug. 26, 2008).

The magistrate judge recommended granting summary judgment

regarding 1) the copyright infringement claim regarding the

licensing of the performance of Pueblo Latino at a concert at

Hostos Community College and 2) the copyright infringement claims

regarding the licenses issued as to Planté Bandera and Periódico de

Ayer.2 Id. at *14. On January 2, 2008, ACEMLA and LAMCO filed

their objections to the report and recommendation, but despite the

objections, the district court adopted the report and

recommendation in full in an order issued on August 26, 2008. Id.

at *1.

The district court then held a bench trial to address two

issues: 1) the amount of damages and 2) the Curet Heirs' claims of

breach of contract and rescission. During the trial, the court

heard testimony from Félix Norman Román-Negrón ("Román"), the Curet

Heirs' expert witness, regarding the royalty reports and his

2
The Curet Heirs were unable to produce admissible evidence to
establish that ACEMLA and LAMCO committed infringements of Distinto
y Diferente. Curet-Velázquez, 2008 WL 4006701, at *11-12.

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calculation of the damages to the plaintiffs. His valuation of the

Curet Heirs' damages was based on two value theories: 1) the

Opportunity Cost Theory and 2) the Conclusion of Value Theory

("CVT"). ACEMLA and LAMCO moved to strike Román's testimony,

arguing that he was not qualified as an expert in copyright

infringement and challenging the value theories he used to assess

the Curet Heirs' damages. On March 31, 2010, the court issued its

opinion and order, and entered judgment. Curet-Velázquez, No. 06-

1014 (ADC), slip op. at 17-18.

The district court concluded that Román was qualified as

an expert witness, but rejected the use of the Opportunity Cost

Theory, concluding that the theory did not pass muster under

Federal Rule of Evidence 702 and Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993). Curet-Velázquez, No.

06-1014 (ADC), slip op. at 4-5.

With respect to the copyright infringement claim, the

court concluded that ACEMLA's and LAMCO's copyright infringements

were not "willful" under the Copyright Act because at the time of

the infringements ACEMLA and LAMCO were appealing the district

court's ruling regarding the ownership of Pueblo Latino. Id. at

21. The court then proceeded to impose the maximum statutory

damages allowed under 17 U.S.C. § 504(c), which was $30,000 for

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each of the four infringements,3 for a total of $120,000 in

statutory damages. Id. at 21-23. The court reasoned that it was

impossible for it to determine the amount of damages due to

ACEMLA's and LAMCO's incomplete records. Id. at 22.

The court also concluded that the statute of limitations

for actions arising under the Commonwealth's Commerce Code or under

Article 940 of the Commerce Code, P.R. Laws Ann. tit. 10, § 1902,

did not bar the Curet Heirs' claims. Id. at 17-18. The court

noted that even if this statute of limitations were to apply, it

would not bar the Curet Heirs' claims because of the on-going

nature of ACEMLA's and LAMCO's actions. Id. at 18. Further, the

court determined that the applicable statute of limitations was the

fifteen year statute of limitations for breach of contract pursuant

to Article 1864 of the Puerto Rico Civil Code, P.R. Laws Ann. tit.

31, § 5294, and that the claims fell within the required

limitation. Id. at 18-19.

ACEMLA and LAMCO filed a notice of appeal on April 15,

2010. This court has jurisdiction over the appeal pursuant to 28

U.S.C. § 1291.

3
The district court determined that ACEMLA and LAMCO committed
two infringements of the Pueblo Latino copyright and one
infringement each of the Periódico de Ayer and Planté Bandera
copyrights. Curet-Velázquez, No. 06-1014 (ADC), slip op. at 20.

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 II. Discussion

A. Copyright Act Preemption and Statute of
Limitations

Appellants contend that the Copyright Act of 1976

preempts the Curet Heirs' cause of action under Puerto Rico law for

rescission of contract, P.R. Laws Ann. tit. 31, § 3491, and that

the statute of limitations for actions of rescission, id. § 3500,

bars the Curet Heirs' action seeking such rescission. Appellants

failed to properly raise these arguments at the district court

level and, absent compelling circumstances, these arguments are

waived.

We do not find any evidence in the record below that

ACEMLA and LAMCO argued that the Copyright Act preempts the cause

of action for rescission of contract under Puerto Rico law. "It is

hornbook law that theories not raised squarely in the district

court cannot be surfaced for the first time on appeal." McCoy v.

Mass. Inst. of Tech., 950 F.2d 13, 22 (1st Cir. 1991), cited with

approval in Horne v. Flores, 129 S. Ct. 2579, 2617 (2009); see,

e.g., Boston Celtics Ltd. P'ship v. Shaw, 908 F.2d 1041, 1045 (1st

Cir. 1990); Clauson v. Smith, 823 F.2d 660, 666 (1st Cir. 1987).

There is nothing sufficiently compelling about this case to warrant

relaxation of such a fundamental rule. See Teamsters, Chauffeurs,

Warehousemen & Helpers Union, Local No. 59 v. Superline Transp.

Co., 953 F.2d 17, 21 (1st Cir. 1992).

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 With respect to the statute of limitations argument,

ACEMLA and LAMCO argue that they specifically raised the argument

in their answer to the Curet Heirs' complaint where they stated,

"Claimant's allegations are time barred by the statute of

limitation," without specifying which statute of limitations was

applicable. During the closing arguments at the bench trial,

appellants argued that the applicable statute of limitations was

Article 948 of the Puerto Rico Commerce Code, P.R. Laws Ann. tit.

10, § 1910, et seq. See Curet-Velázquez, No. 06-1014 (ADC), slip

op. at 17-18. As the district court noted, both during trial and

in their post-trial brief, ACEMLA and LAMCO cited to a provision of

the Commerce Code that applies to actions that prescribe in one

year, none of which apply to the claims at issue in this case.4

Id. at 18. The appellants' post-trial brief failed to provide

4
The statute reads, in pertinent part,

The following shall prescribe after one year:

(1) Actions arising from services, works, provisions, and
furnishing of goods or money for the construction,
repair, equipment, or provisioning of vessels, or to
support the crew, . . . .

(2) Actions relating to the delivery of the cargo in
maritime or land transportation or to indemnity for
delays and damages suffered by the goods
transported, . . . .

(3) Actions to recover for the expenses of the judicial
sale of vessels, cargoes, or goods, transported by sea or
by land, . . . .

P.R. Laws Ann. tit. 10, § 1910.

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adequate legal argumentation explaining why the Commerce Code

should apply. See id. On appeal, appellants now seek to buttress

their statute of limitations argument by citing to a different

statute of limitations, P.R. Laws Ann. tit. 31, § 3500. Yet, they

fail to explain why they cited to a different statute in the

district court.

We cannot say that this argument was clearly raised

before the district court, and "[o]verburdened trial judges cannot

be expected to be mind readers." McCoy, 950 F.2d at 22. We

conclude that appellants have failed to make "some effort at

developed argumentation . . . . It is not enough merely to mention

a possible argument in the most skeletal way, leaving the court to

do counsel's work, create the ossature for the argument, and put

flesh on its bones." Harriman v. Hancock Cnty., 627 F.3d 22, 28

(1st Cir. 2010) (quoting United States v. Zannino, 895 F.2d 1, 17

(1st Cir. 1990)) (internal quotation marks omitted).

B. Various Objections to the Magistrate Judge's
Report and Recommendation

ACEMLA and LAMCO contend that the magistrate judge's

report and recommendation with respect to the Curet Heirs' motion

for summary judgment was based on erroneous findings of fact and

law. Specifically, they argue that the magistrate judge committed

errors of fact and law regarding the validity of the assignment

establishing ownership, and the finding that the Harry Fox Agency

authorization of licenses constituted infringements. We have

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examined ACEMLA's and LAMCO's objections to the magistrate judge's

report and recommendation and we conclude that they failed to

object to the magistrate judge's manner of addressing these issues

in the report and recommendation. Therefore, we conclude that

these arguments are waived. See Borden v. Sec'y of Health & Human

Servs., 836 F.2d 4, 6 (1st Cir. 1987) (agreeing with the district

court that the appellant had waived an issue by failing to raise it

before the magistrate judge). "[I]t is a virtually ironclad rule

that a party may not advance for the first time on appeal . . . a

new argument . . . ." Cochran v. Quest Software, Inc., 328 F.3d 1,

11 (1st Cir. 2003).

C. Implied License Defense

ACEMLA and LAMCO also argue that the district court erred

in deeming their implied license defense waived. See Curet-

Velázquez, 2008 WL 4006701, at *3. They argue that "[e]ven if the

arguments were more developed in the objections, the factual bases

are contained in the record, the complaint, and exhibits to the

motions . . . and were undoubtedly raised and argued by

defendants."

We review for abuse of discretion a district court's

conclusion that a party has waived an issue by failing to

adequately assert it before the magistrate judge. See

Guillemard-Ginorio v. Contreras-Gómez, 490 F.3d 31, 36 (1st Cir.

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2007). Arguments alluded to but not properly developed before a

magistrate judge are deemed waived. See id. at 37.

We conclude that the district court did not abuse its

discretion in not addressing an argument not explicitly raised

before the magistrate judge. The appellants had "their chance to

exhaust their nonexclusive implied license argument in front of the

[magistrate judge], but made the affirmative decision not to do

[so]." Curet-Velázquez, 2008 WL 4006701, at *3. Their contention

that the factual basis for the implied license argument was in the

record before the magistrate judge is unavailing. A passing

mention that fails to present analysis or any legal theory of

support is insufficient to constitute an argument. McCoy, 950 F.2d

at 22. A party has a duty "to spell out its arguments squarely and

distinctly . . . . [rather than being] allowed to defeat the system

by seeding the record with mysterious references . . . hoping to

set the stage for an ambush should the ensuing ruling fail to

suit." Id. (alterations in original) (internal quotation marks

omitted) (quoting Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec.

Co., 840 F.2d 985, 990 (1st Cir. 1988)). "If claims are merely

insinuated rather than actually articulated in the trial court, we

will ordinarily refuse to deem them preserved for appellate

review." Id. Here, the appellants mentioned in passing facts that

might have been used to support the argument they now seek to

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develop on appeal. The magistrate judge should not have been

expected to make the argument for them. The argument is waived.

D. Discovery and Expert Testimony

ACEMLA and LAMCO contend that the district court abused

its discretion when it reopened discovery and ordered simultaneous

disclosure of expert reports and that those actions prejudiced

them. They further assert that the district court abused its

discretion because it permitted the Curet Heirs' expert to testify

to matters beyond his report without requiring him to amend his

report. We conclude that the district court did not abuse its

discretion when it decided to reopen discovery and to allow the

expert witness to testify to matters beyond his report.

1. Reopening Discovery

District courts have broad discretion in pretrial

management matters. Wells Real Estate Inv. Trust II, Inc. v.

Chardón/Hato Rey P'ship, S.E., 615 F.3d 45, 58 (1st Cir. 2010). We

review discovery orders for abuse of discretion. Remexcel

Managerial Consultants, Inc. v. Arlequín, 583 F.3d 45, 51 (1st Cir.

2009). "[W]e may reverse a district court only upon a clear

showing of manifest injustice, that is, where the lower court's

discovery order was plainly wrong and resulted in substantial

prejudice to the aggrieved party." Id. (alteration in original)

(internal quotation marks omitted) (quoting In re Subpoena to

Witzel, 531 F.3d 113, 117 (1st Cir. 2008)).

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 At a settlement conference held on October 8, 2008, the

court set new deadlines for, among other things, discovery,

designation of experts, expert reports, and the deposition of

experts. ACEMLA and LAMCO argue that the court's decision to

reopen discovery prejudiced them, in part because the court

required that the parties submit their expert reports

simultaneously. Specifically, ACEMLA and LAMCO argue that the

court should have set the deadline for the submission of their

expert report for sixty days after the deadline for the Curet Heirs

to submit their expert report. They assert that the court's

failure to do so prejudiced them because they did not know whether

the Curet Heirs would use an expert or what the expert's testimony

would cover.

The record reveals that the appellants paint a picture

that is convenient for them, but unsupported in fact. Because the

parties explicitly agreed to designate experts and exchange reports

by a certain date, the appellants cannot claim that they were

unprepared for the possibility that the Curet Heirs would use an

expert. The district court's October 29, 2008 Settlement

Conference Report and Order, which was entered with respect to the

October 8, 2008 settlement conference, states that "October 28th

was agreed upon to exchange the designation of experts;

November 28, 2008 expert reports are due . . . ." (emphasis added).

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 It appears that what appellants are really complaining

about is the court's refusal to grant the requested extensions and

not the court's decision to extend discovery. In fact, they

themselves requested that the court extend the time further.

Although the appellants were aware of the deadline to produce their

expert report, they failed to file it on time and, on December 3,

2008, after the November 28, 2008 deadline, they filed a motion

titled "Omnibus Motion Regarding Expert Report, Nunc Pro Tunc,"

requesting an extension until December 11, 2008 to produce the

expert report. On December 12, 2008, they filed a motion titled

"Motion Requesting Enlargement of Time Opposition to Preclude

Expert Witness Nunc Pro Tunc," in which they requested an extension

until December 18, 2008 to produce their expert report. On

January 13, 2009, ACEMLA and LAMCO filed a motion seeking to extend

the time to conclude discovery until February 14, 2009. On

January 15, 2009, the court denied all motions requesting an

extension of time. Given the appellants' requests, we find it

difficult to understand exactly how the appellants were prejudiced

by the court's decision to reopen discovery. The district court

did not abuse its discretion in reopening discovery.

2. Expert Witness

ACEMLA and LAMCO also claim that the district court

abused its discretion by allowing the Curet Heirs' expert witness

to testify to matters that were not covered in his expert report,

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in particular, documents that he received on the day of his

deposition and a week before trial. They also objected to Román's

qualifications and methodology. The appellants filed a motion to

limit the Curet Heirs' expert's testimony to the content of his

filed report. The district court nevertheless allowed Román to

testify, including about the newly received evidence. The

appellants now object to the district court's failure to exclude

Román's testimony as a sanction for failing to amend his expert

report to reflect new evidence, as Federal Rule of Civil Procedure

26(e)(2) requires. They also appeal the district court's

conclusion that Román was a qualified expert witness.

a. Expert Report Discussion

We review a district court's decision to admit or exclude

expert testimony due to a violation of Federal Rule of Civil

Procedure 26(e) for abuse of discretion. Boston Gas Co., d/b/a

KeySpan Energy Delivery v. Century Indem. Co., 529 F.3d 8, 17 (1st

Cir. 2008) (reviewing the district court's decision to preclude an

expert witness from supplementing his expert report for abuse of

discretion). Further, the court's abuse of discretion must have

"resulted in prejudice to the complaining party." Licciardi v. TIG

Ins. Grp., 140 F.3d 357, 362-63 (1st Cir. 1998).

Federal Rule of Civil Procedure 26(e)(2) requires a party

to supplement information included in the expert report and

information given during the expert's deposition. One of the

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purposes of this rule is "to avoid trial by ambush." Macaulay v.

Anas, 321 F.3d 45, 50 (1st Cir. 2003). We have "looked to a

variety of factors in assessing a claim of error under Rule 26."

Licciardi, 140 F.3d at 363. These include "the conduct of the

trial, the importance of the evidence to its proponent, and the

ability of the [opposing party] to formulate a response." Id.

(alteration in original) (quoting Johnson v. H.K. Webster, Inc.,

775 F.2d 1, 8 (1st Cir. 1985)) (internal quotation marks omitted).

"Surprise and prejudice are important integers" in determining

whether the district court abused its discretion. Macaulay, 321

F.3d at 51.

Here, appellants complain that Román testified to things

he did after his report was rendered without amending his expert

report. We have examined the record and note that during the voir

dire, plaintiffs' counsel did ask questions about documents that

were not included in the report. However, the documents at issue

are documents that ACEMLA and LAMCO produced on the day of Román's

deposition and about a week before trial. The court noted that

Román did not prepare an amended report, but verified that he did

not reach any new conclusions or change his opinion based on the

new information. Román testified that the new documentation did

not change the conclusion in his original report and in fact

corroborated the inconsistencies and lack of proper record keeping

that he originally identified.

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 In these circumstances, we conclude that the district

court did not abuse its discretion in concluding that no amendment

to the expert report was required and allowing the testimony.

Here, there was no prejudice to the appellants because Román's

testimony briefly referenced new documents that the appellants

themselves drafted and had delayed in disclosing. In this case,

the expert's testimony did not evidence a different conclusion or

opinion from that expressed in his report. Cf. Macaulay, 321 F.3d

at 51-52 (affirming the district court's decision to preclude

appellant's expert witness where her expert witness attempted to

opine on a new theory of liability and the court concluded that

this change would cause unfair surprise); Licciardi, 140 F.3d at

359-60, 367 (vacating and remanding for a new trial where the trial

testimony of appellee's expert directly contradicted and went

beyond his expert report regarding a material issue in the case).

Further, appellants cannot claim that the reference to these new

documents was an unfair surprise because they themselves prepared

and disclosed the documents. See Brennan's Inc. v. Dickie Brennan

& Co., 376 F.3d 356, 375 (5th Cir. 2004) (affirming district

court's denial of a motion to exclude plaintiff's expert's

supplemental report where the district court reasonably believed

that the defense expert had access to the supporting work papers

and calculations and where the defense expert was already familiar

with the underlying data).

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 b. Expert's Qualifications

Appellants also object to the district court's failure to

strike Román's testimony because his qualifications and methodology

were unreliable. We review a district court's Federal Rule of

Evidence 7025 rulings for abuse of discretion. Milward v. Acuity

Specialty Prods. Grp., Inc., 639 F.3d 11, 13 (1st Cir. 2011).

Appellants specifically objected to the reliability of

Román's Opportunity Cost Theory. Although the district court

allowed Román to present the theory and did not strike it from the

record, it rejected the Opportunity Cost Theory in its opinion and

order. Curet-Velázquez, No. 06-1014 (ADC), slip op. at 5.

Therefore, there was no prejudice to ACEMLA and LAMCO due to the

testimony regarding the Opportunity Cost Theory. We can easily

dismiss appellants' argument because the district court ultimately

rejected and disregarded the portion of Román's testimony based on

his Opportunity Cost Theory, a method that he created and that had

5
Federal Rule of Evidence 702 provides as follows:

If scientific, technical, or other specialized knowledge
will assist the trier of fact to understand the evidence
or to determine a fact in issue, a witness qualified as
an expert by knowledge, skill, experience, training, or
education, may testify thereto in the form of an opinion
or otherwise, if (1) the testimony is based upon
sufficient facts or data, (2) the testimony is the
product of reliable principles and methods, and (3) the
witness has applied the principles and methods reliably
to the facts of the case.

Fed. R. Evid. 702.

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not gained acceptance in the music industry. Id. After reviewing

the record we find no abuse of discretion in the district court's

determination that Román was a qualified expert. We therefore

affirm the district court's decision to qualify Román as an expert

and to allow his testimony regarding appellants' accounting,

royalty reports and statements.

E. Statutory Damages

Appellants ACEMLA and LAMCO argue that the district court

erred in awarding, pursuant to 17 U.S.C. § 504(c)(1), maximum

statutory damages for each of the four infringements that ACEMLA

and LAMCO were found to have committed. Specifically, ACEMLA and

LAMCO argue that the Curet Heirs did not properly exercise the

option to receive statutory damages because their complaint elected

to receive an award of either actual damages or statutory damages.

They also aver that the district court's imposition of the

statutory maximum for each infringement was grossly excessive and

was an abuse of discretion because the damages were not proven and

the court improperly relied on Román's determination of damages.

We reject the appellants' claims and affirm the district court's

imposition of the maximum damages allowed under 17 U.S.C.

§ 504(c)(1).

First, we reject the contention that the Curet Heirs

failed to properly exercise their option to receive statutory

damages. In these circumstances, where the Curet Heirs requested

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either actual damages or statutory damages, appellants cannot

complain that they had no notice that the court might grant

statutory damages. In fact, Federal Rule of Civil Procedure 8

explicitly allows a plaintiff to demand relief in the alternative.

Fed. R. Civ. P. 8(a)(3) ("[A] demand for the relief sought[] . . .

may include relief in the alternative or different types of

relief."); see also 6 William F. Patry, Patry on Copyright § 22:171

(2011) (noting that a plaintiff may submit both actual damages and

statutory damages to the trier of fact as alternatives and wait

until the verdict is rendered to select which one it prefers).

Further, the statute clearly states that "the copyright owner may

elect, at any time before final judgment is rendered, to

recover[] . . . an award of statutory damages for all infringements

involved in the action . . . ." 17 U.S.C. § 504(c)(1). In any

event, the Curet Heirs clearly elected statutory damages before

judgment was entered in their proposed findings of fact and

conclusions of law. We therefore dismiss appellants' contention

that the Curet Heirs failed to properly elect statutory damages.

We now turn to our review of the district court's

imposition of the maximum statutory damages under 17 U.S.C.

§ 504(c). Our review of a trier of fact's decision as to the

amount of a statutory damages award is "extremely narrow." Morley

Music Co. v. Dick Stacey's Plaza Motel, Inc., 725 F.2d 1, 3 (1st

Cir. 1983). "The employment of the statutory yardstick, within set

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limits, is committed solely to the court which hears the case, and

this fact takes the matter out of the ordinary rule with respect to

abuse of discretion." Id. (quoting Douglas v. Cunningham, 294 U.S.

207, 210 (1935)) (internal quotation marks omitted); see also

Markham v. A.E. Borden Co., 221 F.2d 586, 587 (1st Cir. 1955) ("The

Supreme Court has held that within the minimum and maximum limits

set by Congress '* * * the court's discretion and sense of justice

are controlling * * *' in its award of statutory damages."

(citations omitted)). Other circuit courts agree that an appellate

court's review of a district court's award of statutory damages is

extremely limited. See, e.g., Yurman Design, Inc. v. PAJ, Inc.,

262 F.3d 101, 113 (2d Cir. 2001) (noting that a deferential

standard of review is applied to a fact finder's calculations of

statutory damages); Superior Form Builders, Inc. v. Dan Chase

Taxidermy Supply Co., 74 F.3d 488, 496 (4th Cir. 1996) (noting that

the appellate court reviews the award of statutory damages for a

willful infringement under a standard more deferential than abuse

of discretion); Dream Games of Ariz., Inc. v. PC Onsite, 561 F.3d

983, 992 (9th Cir. 2009) (noting that a jury has "wide discretion

in determining the amount of statutory damages to be awarded,

constrained only by the specified maxima and minima" (quoting Peer

Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir.

1990)) (internal quotation mark omitted)).

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 Although the court's discretion in awarding statutory

damages is broad, it is not unlimited. There must be some basis,

such as a hearing or sufficient affidavits, for the court's

judgment. See Morley Music Co., 725 F.2d at 3. ACEMLA and LAMCO

complain that the district court based its award of the maximum

statutory damages on the opinion of the Curet Heirs' expert.

However, a review of the district court's reasoning suggests

otherwise. See Curet-Velázquez, No. 06-1014 (ADC), slip op. at 19-

23. The district court acknowledged that, in determining what

amount of statutory damages to impose, it may consider factors such

as "the expenses saved and profits reaped by the defendants in

connection with the infringements, the revenues lost by the

plaintiffs as a result of the defendant's conduct," and the state

of mind of the infringers.6 Id. at 20 (quoting N.A.S. Import,

Corp. v. Chenson Enters., Inc., 968 F.2d 250, 252 (2d Cir. 1992)).

However, the district court could not take the above

referenced factors into consideration because ACEMLA and LAMCO did

not cooperate. They did not provide comprehensive and accurate

reports to the district court. Id. at 22. The district court

properly took this fact into account, stating,

[I]t is impossible for the court to determine
the expenses saved or the profits reaped by

6
The court also noted that it may consider whether the defendants
had cooperated in providing the court with records from which to
assess the damages to the copyright owner. See Curet-Velázquez,
No. 06-1014 (ADC), slip op. at 20.

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 the defendants, nor can it be established with
certainty the amount of revenues lost as a
result of the defendants' conduct. However,
what the court can assess is [appellants']
inability to provide clear records for each
company, its intermingling of the reports, and
its failure to fulfill its contractual
obligations of rendering royalty reports to
plaintiffs. This is exacerbated by the fact
that the underlying data that supports the
reports furnished to the plaintiffs does not
coincide and is unreliable, making it
impossible to re-create or track the
information, data and revenues supplied in the
defendants' reports.

Id. Given our limited review of the amount of a district court's

statutory damages award and the validity of the reason given by the

district court in support of its award, we affirm the district

court's imposition of the maximum statutory damages pursuant to 17

U.S.C. § 504(c).

III. Conclusion

For the reasons stated above, we affirm the district

court's orders.

Affirmed.

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