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Attorneys Granted Motion for Increased Fees in "Happy Birthday" Copyright Suit

August 28, 2016
Post by Blog Staff

Recently a California U.S. District Judge found that Warner/Chappell Music, Inc. did not hold a valid copyright on the song "Happy Birthday To You‚¬, and the song was held to be in the public domain. As part of the judgment, Warner/Chappell Music, Inc. was ordered to pay $14 million to reimburse members of the class action law suit ho had previously paid to use the song "Happy Birthday To You‚¬.

As a follow-up to the judgment, the Plaintiffs, Good Morning To You Productions Corp., Majar Productions, LLC, Rupa Marya, and Robert Siegel's made a motion for attorneys' fees. Attorneys' fees may be awarded in a certified class action if "authorized by law or by the parties' agreement.‚¬  Fed. R. Civ. P. 23(h).  Where "the successful litigants have created a common fund for recovery or extended a substantial benefit to a class,"an award of attorneys' fees is warranted. In re Bluetooth Headset Prods. Liability Litig., 654 F.3d 935, 941 (9th Cir. 2011) (internal quotation marks omitted).  In the class settlement context, courts must "ensure that the award, like the settlement itself, is reasonable, even if the parties have already agreed to an amount.‚¬  Id

When awarding attorneys' fees, the court has "discretion to use either a percentage or lodestar method.‚¬ Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998).  In the Happy Birthday case, the Plaintiffs requested that the percentage method be utilized and the Defendants did not object. In applying the percentage method, "courts typically calculate 25% of the fund as the ‚¬Ëœbenchmark' for a reasonable fee award, providing adequate explanation in the record of any ‚¬Ëœspecial circumstances' justifying a departure.‚¬ In re Bluetooth, 654 F.3d at 942. Where courts apply the percentage method, they should use a rough calculation of the lodestar as a cross-check to assess the reasonableness of the percentage award. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002). 

Here, the Plaintiffs, Good Morning To You Productions Corp. et al., requested a departure from the general benchmark of 25%, and requested attorneys' fees be awarded at a rate of 33%. The following may be considered by the court in determining the reasonableness of the attorneys' fees: 1) the results obtained for the class, (2) effort expended by counsel, (3) counsel's experience, (4) counsel's skill, (5) the complexity of the issues, (6) the risks of non-payment assumed by counsel, and (7) the comparison of the benchmark with counsel's lodestar. See id.  at 1048-50; Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 260 (N.D. Cal. 2015).

One of the Plaintiffs strongest arguments supporting an increase in attorneys' fees was based on the results obtained. Plaintiff asserted that it overturned a long running wrongful copyright and was awarded a $14 million settlement. Plaintiff also asserted that because the song was placed in the public domain, the public would save and estimated $15 million in future licensing payments, meaning the requested $4.6 million attorneys' fees is actually closer to 15.9% of the $29 million combined value of the obtained judgment. The Defendants challenged the estimate of $15 million in future licensing payments, and while the judge agreed that the amount saved may not be precisely quantified, the court held that the future benefits of the judgment would be substantial and could not be ignored.

The court also found the counsel's skill and the complexity of the issues weighed in favor of the increased attorneys' fees. The judge found that the "[p]laintiffs embraced the challenge of contesting an alleged copyright to song lyrics written at the turn of the Twentieth Century. No relevant witnesses are alive today. Nearly all of the documentary evidence in the case is over sixty years old. Highly pertinent documents-particularly, two agreements between the Hill sisters and Summy Co. and the deposit copy to the copyright registration that Defendants claimed covered the lyrics-were never found ‚¬¦ Yet Plaintiffs successfully worked with this aged, lengthy, and imperfect record to piece together their case and to prove that defendants did not own a copyright to the Happy Birthday lyrics.‚¬

The Defendants also challenged the Plaintiffs billing rates and the use of "blocked billing‚¬. However, the court held that the billing rates were reasonable for attorneys of similar skill in the area and that the blocked billing entries included sufficient description to evaluate the reasonableness of the time spent and the amount.  

The court calculated a rough lodestar calculation of $3.85 million for comparison. The court held that only a modest lodestar multiplier of 1.2 was required to reach the Plaintiffs requested fee award of $4.62 million. In conclusion, the Plaintiffs' counsel were award fees in the amount of $4.62 million.


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