United States District Court, M.D. Tennessee, Nashville Division
ALETA A. TRAUGER, District Judge.
The defendant has filed a Renewed Motion for Attorneys' Fees and Costs (Docket No. 112), to which the plaintiff has filed a Response in opposition (Docket No. 116), and the defendant has filed a Reply (Docket No. 119). For the reasons stated herein, the motion will be granted.
The facts and procedural history of this case are set forth in previous opinions of this court (Docket Nos. 57, 69, and 95) and the Sixth Circuit (Docket No. 110), familiarity with which is assumed. The pending motion is the third (and final) iteration of defendant Sergey Lazarev's request for fees and expenses, which the plaintiffs have opposed each time.
Under Fed.R.Civ.P. 54(d) and Local Rule 54.01, Lazarev seeks to recover $80, 295.50 in fees and expenses incurred in defending the case, including fees and expenses incurred both (a) at the district court level and on appeal, and (b) relative both to his U.S.-based counsel (the Everhart Law Firm) and his Russia-based counsel (Yakovlev & Partners ("Y&P")). (Docket No. 112 at p. 2.) The First, Second, Third, and Fourth Everhart Declarations attach itemized billing records for fees charged by the Everhart Law Firm and litigation expenses billed to Lazarev. The First and Second Mikhailenko Declarations attach itemized (and translated) billing records for fees charged by Y&P. Lazarev argues that he is entitled to recover these fees and expenses either (1) under Russian law, which awards fees to a prevailing litigant as a matter of right ( see Articles 94, 98, and 100 of the Russian Civil Procedural Code, Grazhdanskii Protesessual'nyi Kodeks ("Rus. Civ. Proc. Code")), or (2) under the Copyright Act, which permits the district court discretion to award fees to a prevailing litigant (17 U.S.C. § 505) (hereinafter "§ 505").
The plaintiffs contend that Lazarev's motion should be denied because: (1) he waived the right to recover fees by failing to plead them as "special damages" under Fed.R.Civ.P. 9(g); (2) he waived the right to recover fees because he failed to plead them in compliance with Tennessee law, which requires that damages be alleged with specificity; (3) the Russian fee-shifting rule should not apply (a) because it is procedural or (b) because the plaintiffs failed to plead it in compliance with Fed.R.Civ.P. 44.1; and (4) the discretionary factors relevant to a claim for fees under the Copyright Act (§ 505) weigh against awarding fees to Lazarev. Notably, although they challenge whether Lazarev is entitled to recover his fees or expenses at all ( i.e., in the aggregate), the plaintiffs do not challenge the reasonableness of the fees and expenses demanded by Lazarev. As a consequence, the plaintiffs have not objected to the rates charged by Lazarev's attorneys, the time those attorneys spent on the tasks identified in their billing records, the fact that Lazarev retained both U.S.-based and Russia-based counsel, or the appropriateness of any particular expenses for which Lazarev seeks repayment.
In response, Lazarev argues that: (1) Fed.R.Civ.P. 9(g) did not require him to plead a demand for attorney's fees and, regardless, the plaintiffs were on notice of his fee request well in advance of final judgment; (2) the Russian fee-shifting rule should apply because (a) under Tennessee choice of law rules, Russian substantive law should govern the fee-shifting issue, and (b) the Russian rule embodies substantive Russian policy; and (3) even if the Russian fee-shifting rule does not apply, Lazarev is entitled to recover his fees and expenses under § 505 for prevailing on the plaintiffs' Copyright Act claim.
I. Rule 54 and Waiver
A. Relevant Procedural Background
After the plaintiffs filed their Complaint, Lazarev appeared pro se and wrote a letter in response to the Complaint, which the court docketed as an "Answer." (Docket No. 16.) In the Answer, Lazarev denied that he owed the plaintiffs any money and contended (correctly, as it turned out) that he had received the plaintiffs' authority to record Almost Sorry, that he possessed a valid sublicense to record and perform the work after that initial recording, that he had no contractual relationship with the plaintiffs and was not obligated to pay them royalties, and that, if anyone owed the plaintiffs money, it was Style Records. (Id. )
On March 2, 2011, the Magistrate Judge (acting on referral) entered a Scheduling Order that included a "target trial date" of February 28, 2012. (Docket No. 16.) With the exception of Lazarev's filing an identical second copy of his Answer on May 31, 2012 (Docket No. 20), the case remained dormant until February 14, 2012, when plaintiffs' counsel inquired about the target trial date. The court ordered the plaintiffs to state whether they had served Style Records (Docket No. 22), after which the plaintiffs voluntarily dismissed Style Records without explanation (Docket No. 24). With leave of court, the plaintiffs filed an Amended Complaint against Lazarev only (Docket No. 31), adding a breach of contract claim against him. On May 16, 2012, Lazarev retained the Everhart Law Firm and filed an emergency motion to extend his time to respond to the Amended Complaint (Docket No. 36). The court granted the motion. (Docket No. 38).
On May 25, 2012, Lazarev filed a Motion to Dismiss the Amended Complaint under Rule 12(b)(6) (Docket No. 39), which the court converted to a Rule 56 motion after the plaintiffs filed materials outside the Amended Complaint in response to it (Docket No. 48). The court initially granted summary judgment to Lazarev. (Docket No. 58.) On September 11, 2012, Lazarev timely moved under Rule 54(d)(2)(A) and Local Rule 54.01 to recover his attorney's fees and costs. (Docket No. 60.) The plaintiffs filed a motion under Rule 59 to alter the court's judgment in part (Docket No. 64), seeking reconsideration on the U.S. and Russian copyright infringement claims - but not the breach of contract claim. The court granted the motion on December 12, 2012, thereby (a) permitting the U.S. and Russian law claims to proceed, and (b) mooting Lazarev's motion for fees. (Docket No. 70.)
The court held a case management conference on January 18, 2013. On February 5, 2013, the court entered a Case Management Order ("CMO") that adopted the parties' joint proposed case management order. ( See Docket Nos. 72 (joint proposal) and 73 (CMO)). The CMO set forth deadlines for written discovery and fact witness depositions, expert disclosures, and dispositive motions. The plaintiffs did not raise issue with the court that Lazarev had not filed an Answer to the Amended Complaint.
On September 11, 2013, Lazarev filed a renewed Motion for Summary Judgment (Docket No. 80), which the court granted on December 10, 2013. (Docket No. 96.) Lazarev filed a renewed motion for fees. (Docket No. 99). Because the plaintiffs appealed the court's summary order (Docket No. 104), the court held Lazarev's renewed fee request in abeyance pending disposition of the appeal (Docket No. 106). After the Sixth Circuit affirmed, Lazarev filed the instant Renewed Motion for Fees and Costs.
The plaintiffs argue that the court should not even reach the merits of Lazarev's Renewed Motion for Fees and Costs because his original Answer did not plead the recovery of attorney's fees as a form of "special damages" under Rule 9(g). The plaintiffs argue that the Sixth Circuit decision in In re: Am. Casualty Co., 851 F.2d 794, 802 (6th Cir. 1988) requires this result. In response, Lazarev argues that Fed.R.Civ.P. 54(d)(2)(A) and Local Rule 54.01 required him to demand fees through a post-trial motion rather in a responsive pleading, that attorney's fees are not "special damages" in a copyright infringement lawsuit, that American Casualty should apply only to cases involving the recovery of fees under a contractual fee-shifting clause, and that, even if he should have pleaded a responsive demand for fees, the plaintiffs were on notice from other filings that Lazarev was seeking to recover fees. Despite multiple opportunities, the plaintiffs have not developed their ...