IP Law Daily, COPYRIGHT—2nd Cir.: Appellate attorney fees added to $250,000 fee award to Jay Z for defending sound engineer’s time-barred claims, (Feb 25, 2016)

By Cheryl Beise, J.D.

The federal district court in Manhattan properly awarded over $250,000 in attorney fees and costs to hip-hop star Jay Z (aka Shawn Carter) and his companies, Roc Nation and Roc-A-Fella Records, for their successful defense against time-barred claims brought by sound engineer Chauncey Mahan, the U.S. Court of Appeals in New York City has held. The appeals court additionally ruled that Mahan should pay the defendants’ fees and costs incurred in connection with the appeal. The case was remanded for the district court to determine the amount of appellate fees and whether Mahan’s counsel should be held personally liable for them (Mahan v. Roc Nation, February 24, 2016, per curiam).

From 1999 to 2000, Mahan was a sound engineer for a number of songs recorded by Roc-A-Fella Records. For his work, Mahan received a flat fee but did not obtain a right to royalties. Mahan contributed to 41 sound recordings in collaboration with Carter and Roc-A-Fella. Roc-A-Fella Records released most of the songs on albums during 1999 and 2000 and the rest remained unpublished.

Nearly 14 years later, Mahan demanded that Roc Nation pay him a $100,000 “storage fee” for keeping the unpublished recordings, or else Mahan would auction off the songs. Counsel for Roc Nation contacted the Los Angeles Police Department (LAPD), which seized the unpublished recordings. Mahan was not charged. Mahan then sued for a declaratory judgment that he was a co-owner of the songs on the albums and of the unpublished recordings and to obtain damages for the defendants’ alleged conspiracy to commit conversion and/or trespass to chattels.

In an April 15, 2015, decision, the district court determined that Mahan’s ownership claims were barred by the Copyright Act’s three-year statute of limitations because Mahan’s relationship with the defendants ended in 2000. The court held that the defendants were entitled to attorney fees under Section 505 of the Copyright Act because Mahan’s claims were objectively unreasonable and doing so would deter future similarly frivolous lawsuits. The court dismissed the conversion/trespass to chattels claim for failure to state a claim because any communication that Roc Nation made to the LAPD were privileged. On July 17, 2015, the district court awarded $194,328.59 in fees and costs to Carter and Roc-A-Fella and $59,081.40 to Roc Nation. Mahan appealed.

District court fee award. The Second Circuit held that the district court did not abuse its discretion in awarding attorney fees to the defendants or in its fee calculation. Section 505 of the Copyright Act provides that “[i]n any civil action under this title, the court in its discretion may … award a reasonable attorney’s fee to the prevailing party.”

Claims of co-ownership under the Copyright Act must be brought within three years of accrual. The statute of limitations on Mahan’s claims began to run when he knew or had reason to know of his alleged injury. Claims of co-ownership typically accrue once there has been an “express repudiation” of ownership. The albums were released in 1999 and 2000, and bore a copyright notice listing Roc-A-Fella Records as the sole copyright owner. Mahan had received no royalties for the sale of the albums for 14 years. These circumstances constitute clear “express repudiation” of Mahan’s alleged co-ownership of the copyright, the appeals court said. Mahan brought suit over 10 years after the expiration of the applicable statute of limitations. Therefore, his copyright claims were clearly time-barred. The district court properly concluded that Mahan’s position was objectively unreasonable and that awarding fees would deter similar frivolous suits from being filed by others.

Attorney fees for appeal. The defendants also sought attorney fees and costs incurred in the appeal under 17 U.S.C. § 505. “Mahan’s arguments here are as frivolous as those he made below; an award of attorney’s fees would further the objectives of the Copyright Act by deterring such baseless appeals,” the court said. The case was remanded to the district court for the limited purpose of calculating the defendants’ attorney’s fees and costs for litigating the appeal. “The district court in its discretion may determine whether to hold Mahan’s counsel personally liable for the assessed attorney’s fees and costs,” the court added.

The case is No. 15-1238-cv.

Attorneys: James H. Freeman (JH Freeman Law) for Chauncey Mahan. Andrew H. Bart (Jenner & Block LLP) for Shawn Carter and Rock-A-Fella Records, LLC. Cynthia S. Arato (Shapiro Arato LLP) for Roc Nation.

Companies: Rock-A-Fella Records, LLC; Roc Nation, LLC

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