IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division

BMG RIGHTS MANAGEMENT (US)

LLC,and ROUND HILL MUSICLP,

Civil No. l:14-cv-1611

Plaintiffs,

Hon. Liam O'Grady
V.

COX COMMUNICATIONS, INC., and
COXCOM,LLC,
Defendants.

MEMORANDUM OPINION

After an extended litigation battle and a two-week trial, ajury found Defendants Cox
Communications, Inc. and Coxcom, LLC ("Cox") liable for willful contributory copyright

infringement. The jury awarded PlaintiffBMG Rights Management ("BMG") $25 million in
damages, and the Court denied both parties' post-trial motions for relief. (Dkt. No. 794). Now

pending before the Court are the parties' motions for costs and attorney's fees. Specifically,
BMG has filed for attorney's fees and costs against Cox, (Dkt. Nos. 819, 827) and Cox, in turn,
has filed for fees andcosts against Round HillMusic LP ("Round Hill") (Dkt. Nos. 822, 836).
For the reasons that follow, BMG's motionsare herebyGRANTED IN PART and DENIED IN
PART. Cox's motions are hereby DENIED.
I. BACKGROUND

The facts of this case have been set forth in the Court's previous memorandum opinions,

andwill only be summarized briefly here. See Dkt. Nos. 703, 794. Defendant Cox provides

hi^-speed internet services to customers nationwide. Plaintiffs BMG and Round Hill are the

 putative owners or administrators of approximately 1,400 musical composition copyrights.
Plaintiffs initially alleged that Cox?s subscribers were using peer-to-peer ?le sharing to
illegally upload and download copyrighted music ?les. The parties? dispute came to a head in
October 2014, when BMG and Round Hill brought claims of contributory copyright
infringement and vicarious copyright infringement against Cox.

After a period of discovery, the parties ?led cross-motions for summary
judgment in September 2015. These motions raised two primary questions: (1) do plaintiffs own
the copyrights at issue?; and (2) is Cox eligible for the DMCA safe-harbor defense under ?512(i)
of the See 17 U.S.C. 512(i). MSJ Mem. Op. at 9 (Dkt. No. 703). On the ownership
issue, the Court ruled in favor of BMG, ?nding that it had conclusively established ownership of
the asserted copyrights. With regard to Round Hill, however, the Court found that the company
was hired ?to provide services related to copyrights it did not own and that this employment did
not result in any assignment of rights to Plaintiff.? Id. at 23 (internal citations and quotations
omitted). Accordingly, the Court dismissed Round Hill from the case because it did not have
statutory standing to bring the infringement action.

As for the DMCA issue, the Court found that Cox had not reasonably implemented a
repeat infringer policy as required to receive the protections of the DMCA. Speci?cally, the
evidence showed that Cox did not terminate access for repeat in?ingers under appropriate
circumstances, and that, before 2012, the company had an informal policy of consistently
reinstating infringing users. See id. at 31?42. Cox continued these actions in spite of the fact
that it ?had knowledge that at least some of its account holders were intentionally and repeatedly
infringing.? Id. at 42. As such, the Court granted motion for summary judgment and

denied Cox?s corresponding motion for the protections of the DMCA safe-harbor.

The case culminated a two-week jury trial in December 2015. On December 17, 2015,
the jury found that Cox was liable for contributory infringement, but that it was not liable for
vicarious infringement. See Dkt. No. 754. It awarded BMG $25 million in statutory damages.
After this victory, BMG sought a permanent injunction to prevent Cox from future infringement.
It also sought judgment as a matter of law on its vicarious infringement claim. Cox responded
with its own motion for judgment as a matter of law, or alternatively, for a new trial. In a
Memorandum Opinion dated August 8, 2016, the Court denied all of the parties? post-trial
motions and entered a ?nal judgment on the verdict. Post-Trial Mem. Op. at 2, Dkt. No. 794.
Cox ?led its notice of appeal on August 19, 2016.

All that remain before the Court are the parties? motions for attorney?s fees and costs.
The law ?rm of Steptoe Johnson LLP and local counsel Hausfeld LLP represented both BMG
and Round Hill in this action. Fenwick West LLP and the Law Of?ces of Craig C. Reilly
represented Cox. BMG has moved to recover on its bill of costs (Dkt. No. 819), and its motion
for attorney?s fees (Dkt. No. 827). In support of those motions, BMG submitted declarations
from Michael J. Allan, Walter D. Kelley, N. Thomas Connally, Stephanie Roberts, and
Jeremy D. Engle, as well as detailed billing records and an itemized bill of costs. Relying on its
success in dismissing Round Hill as a plaintiff, Cox has also ?led a bill of costs (Dkt. No. 822)
and a motion for attorney?s fees (Dkt. No. 836). In support, it has ?led similar documentation,
including declarations from edediah Wake?eld, Craig C. Reilly, and Andrew P. Bridges.

II. MOTION FOR FEES

Despite the Supreme Court?s admonition that applications for attorney?s fees ?should not

result in a second major litigation,? the petitions in this case have generated hundreds of pages of

?lings and now present an array of legal questions for the court to consider in awarding fees and

costs. Kirtsaeng v. John Wiley Sons, Inc., 136 S. Ct. 1979, 1988 (2016) (internal quotations
and citations omitted). After setting forth the general legal standard for awarding fees under
505, the Court will address the discrete legal questions raised by the parties? respective
motions. Upon consideration of the parties? brie?ng and the relevant caselaw, the Court will
GRANT motion for attomey?s fees, but reduce the requested fee award by 20%.
Relatedly, the Court will DENY motion as it relates to nontaxable litigation expenses.
Next, it will GRANT bill of costs, but will exclude certain costs and reduce it by 10%.
Finally, the Court will DENY Cox?s motions for attomey?s fees and costs in full because it is not
a ?prevailing party? under 505.

A. Legal Standard

Section 505 of the Copyright Act of 1976 provides that ?the court in its discretion may
allow the recovery of full costs . . . [and] a reasonable attorney's fee to the prevailing party as
part of the costs . . 17 U.S.C. 505. Interpreting this statute, the Supreme Court has
explained that prevailing plaintiffs and prevailing defendants are equally eligible to receive fee
awards. Fogerty v. Fantasy, Inc. 510 US. 517, 527 (1994). That said, fees are not awarded as a
matter of right, and courts ?must make a . . . particularized, case-by-case assessment? when
deciding whether they should be awarded. Kirtsaeng, 136 S. Ct. at 1985. The key principle
underlying this assessment is whether awarding fees would further the essential goals of the
Copyright Act by ?enriching the general public through access to creative works.? ogerty, 510
US. at 527.

The Fourth Circuit has provided the following factors for district courts to consider when
deciding whether or not to award fees: (1) the motivation of the parties; (2) the objective

reasonableness of the parties? legal and factual positions; (3) the need to advance considerations

of compensation and deterrence; and (4) any other relevant factor. Rosciszewski v. Arete
Associates, Inc., 1 F.3d 225, 234 (4th Cir. 1993); see also Kirtsaeng, 136 at 1985 (listing
similar non-exclusive factors). Of these factors, ?objective reasonableness? is often given more
weight than other considerations; however, it is not the controlling factor, and courts should
consider the circumstances of the case as a whole in making its decision. See Kirtsaeng, 136 S.
Ct. at 1988. At the end of the day, the trial court maintains broad discretion in awarding fees.
Id.

Once a court has determined that a fee award is appropriate, it must then use the lodestar
method to determine the amount to be awarded. See Gisbrecht v. Barnhart, 535 US. 789, 801
(2002) (stating that, in assessing fees, ?the lodestar ?gure has, as its name suggests, become the
guiding light?). Once calculated, there is ?a strong presumption that the lodestar represents the
reasonable fee.? City of Burlington v. Dague, 505 US. 557, 562 (1992) (internal quotation
marks omitted).

The Fourth Circuit employs a three-step methodology in calculating the appropriate fee
award. ?First, the court must determine the lodestar ?gure by multiplying the number of
reasonable hours expended times a reasonable rate.? McA?ze v. Boczar, 738 F.3d 81, 88 (4th Cir.
2013). In determining the reasonable number of hours and a reasonable rate, the court should
consider the twelve-factors set out in Johnson v. Georgia Highway Express Inc.:

(1) The time and labor expended; (2) the novelty and dif?culty of the questions

raised; (3) the skill required to properly perform the legal services rendered;

(4) the attorney's opportunity costs in pressing the instant litigation; (5) the

customary fee for like work; (6) the attorney's expectations at the outset of the

litigation; (7) the time limitations imposed by the client or circumstances; (8) the
amount in controversy and the results obtained; (9) the experience, reputation, and
ability of the attorney; (10) the undesirability of the case within the legal

community in which the suit arose; (11) the nature and length of the professional

relationship between attorney and client; and (12) attomeys' fees awards in similar
cases.

488 F.2d 714, 717?19 (5th Cir.1974).1

After the lodestar ?gure is calculated, ?the court must subtract fees for hours spent on
unsuccessful claims unrelated to successful ones.? McAfee, 738 F.3d at 88. Finally, the court
?award[s] some percentage of the remaining amount, depending on the degree of success
enjoyed by the plaintiff.? Id. This three-step process determines the ?nal amount of fees to
which the prevailing party is entitled.

B. BMG is Entitled to Fees

BMG seeks a total of $10,479,335.08 in attomey?s fees. As an initial matter, the parties
do not dispute that BMG is a ?prevailing party? under 505. The Supreme Court has de?ned a
prevailing party as ?a party in whose favor a judgement is rendered, regardless of the amount of
damages awarded . . Buckhannon Ed. and Care Home, Inc. v. West Virginia Dept. of Health
and Human Resources, 532 US. 598, 603 (2001). Although it did not succeed on all of its
claims, BMG was awarded a $25 million jury verdict and Cox was found liable for will?ll
contributory infringement. This favorable verdict plainly satis?es the ?prevailing party?
standard.

Beyond this initial concession, Cox relies on Kirtsaeng to argue that, because its
positions were objectively reasonable and served to clarify an important and novel area of the
law, its litigation ultimately advanced the interests of the Copyright Act. Therefore, when
weighed with the other Rosciszewskz? factors, Cox asserts that BMG should not be entitled to any

attomey?s fees. The Court disagrees for two reasons. First, although Cox appropriately

 

1 As discussed in McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013), the Supreme Court has emphasized the
?important virtues? of the lodestar method as the presumptive method for calculating fees. Perdue v. Kenny, 559
US. 542, 550-51 (2010). As such, the Johnson factors may still inform the Court?s fee analysis, but many of them

are subsumed by the lodestar ?gure, and departures ?'om this ?gure are only appropriate in ?rare circumstances.?
Id. at 554.

6

defended its novel legal position in the abstract, it also made speci?c arguments that were
objectively unreasonable as a matter of fact and of law. Second, the remaining Rosciszewski
factors all out against Cox. Together, these considerations dictate the conclusion that BMG is
entitled to fees.

1. Objective Reasonableness

The Court acknowledges the importance of Cox?s overall defense in light of the complex
legal issues at play in this case. It further recognizes that neither party embodied a perfect model
of civility or reasonableness in this case, particularly in the discovery phase of the litigation.2
That recognition, however, does not extend to Cox?s positions with regard to its DMCA defense,
which lacked a basis in fact and was therefore objectively unreasonable.

The objective reasonableness of a party?s position is an important factor in deciding
whether to award fees. See Kirtsaeng, 136 S. Ct. at 1988. In a hard-fought litigation battle such
as this one, discovery disputes and ?erce brie?ng are to be expected, and they should not be held
too against either party. Nonetheless, there are a few instances in which Cox?s advocacy
crossed the line of objective reasonableness. In particular, both Cox?s attempts to obscure its
practice of reinstating infringing customers, and its subsequent assertions of a deeply ?awed
DMCA defense evince a meritless litigation position that Cox vigorously defended.

BMG highlights a number of Cox?s alleged discovery abuses in its brie?ng. Of these,
four serve as useful examples of Cox?s attempts to obstruct BMG from obtaining facts regarding
its actual DMCA-related abuse practices. First, Cox provided an unquali?ed 30(b)(6) witness
who did not have knowledge of the company?s abuse practices, despite the fact that those

practices were a principal subject of inquiry. See Allan Decl. 43, Ex. 4 at 45:18?46:20.

 

2 Both parties were sanctioned for abuses during the course of discovery. See Sept. 18, 2015 Order, Dkt. No. 290
(granting Defendants? motion for sanctions); see also Oct. 9, 2015 Order, Dkt. No. 381 (granting Plaintiffs? motion
for evidentiary sanctions).

7

Second, Cox?s Senior Lead Abuse Manager, Joseph Sikes, revealed a selective recollection of
the term ?soft termination.? See Allan Decl. ?l 40, Ex. 2 at 191:20?192z3, 192:15?193:10.
Speci?cally, almost immediately after stating that he was ?not familiar with that term?, Mr.
Sikes was presented with evidence showing that he had personally used the term in instant-
message conversations. Id. Only a?er being confronted with that evidence did Mr. Sikes
explain what a ?soft termination? meant. Id. Third, Cox signi?cantly delayed the production of
documents relating to its abuse policy. See Allan Decl.1?[ 21?26. Finally, Cox submitted a
declaration from Mr. Roseblatt who bluntly attempted to categorize Cox?s soft terminations and
customer reinstatements as ?occasional variations? in spite of the overwhelming evidence to the
contrary. Roseblatt Decl. 1] 118 (Dkt. No. 390).

Eventually, these factual issues came to a head in the legal dispute over Cox?s DMCA
defense at the summary judgement phase. Although Cox?s DMCA defense cannot be
categorized as frivolous or in bad faith, the Court found that ?[t]he record conclusively
establishes that before the fall of 2012, Cox did not implement its repeat in?inger policy.
Instead, Cox publicly purported to comply with its policy, while privately disparaging and
intentionally circumventing the requirements.? Mem. Op. at 31 (Dkt. No. 703). The
evidence supporting this conclusion was overwhelming, and it included ?smoking gun? email
conversations. See generally id. at 31?42 (detailing the evidence of Cox?s informal policies to
reinstate infringing users). The most memorable of these contained Cox?s own abuse manager
stating: . . . the See Mem. in Supp. Fees at 5 (quoting 
Therefore, although Cox?s defensive arguments may have been reasonable as an abstract legal
theory, when viewed in light of the actual facts of the case, they evince an objectively

unreasonable litigation position that was nonetheless vigorously defended.

2. The Parties? Motivation

The parties? motivation is determined by a variety of factors, including the nature of the
infringement and any bad faith by the defendant. Rosciszewski, 1 F.3d at 234. Along those lines,
courts have noted that willful infringement ?is an important factor favoring an award of fees.?
Historical Research v. Cabral, 80 F.3d 377, 379 (9th Cir. 1996). In part, this is because
?defendants must not be able to sneer in the face of copyright owners and copyright laws?, and
willful acts suggest that deterrence is necessary to prevent further violations. Cable/Home
Comm 'n Corp. v. Network Prods, Inc., 902 F.2d 829, 851 (11th Cir. 1990) (internal quotations
omitted). As such, courts frequently award fees where willfulness was an element of liability.
Id; see also Superior orm Builders, Inc. v. Dan Chase Taxidermy Supply Co., 74 F.3d 488, 498
(4th Cir. 1996). Indeed, Cox can only cite to one case in which the jury found willful
infringement but the court did not award fees. See Lowry ?s Reports, Inc. v. Legg Mason, Inc.,
302 F. Supp. 2d 455, 463?64 (D. Md. 2004).3

Cox?s willfulness cannot seriously be contested. As the Court has previously noted, the
jury was appropriately instructed that BMG needed to establish ?by a preponderance of the
evidence that Cox had knowledge that its subscribers? actions constituted in?ingement of
copyrights, acted with reckless disregard for the infringement of copyrights, or
was willfully blind to the in?ingement of copyrights.? Post-Trial Mem. Op. at 32 (Dkt.
No. 794). As detailed in the post-trial Memorandum Opinion, the jury had ample evidence to
support its ?nding of willfulness, and it did so unequivocally in its verdict. See id. In other

words, the jury found that Cox knew, or should have known, that its behavior was wrong and

 

3 This was a pre-Kirtsaeng case that appears to have applied a very strict reasonableness standard in its fee
evaluation. The court noted that, because the defendant?s position was not ??ivolous? and was not of ?absolute
insignificance,? it was therefore reasonable and did not support a fees award. Lowry ?s Reports, Inc. v. Legg Mason,
Inc., 302 F. Supp. 2d 455, 463 (D. Md. 2004).

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continued in spite of that awareness. Therefore, its motivations can be seriously questioned, and
fees are appropriate in order to deter future violations.
3. Deterrence and Compensation

Deterrence considerations blend into each of the Rosciszewski factors. Put into more
direct terms, however, the jury found that Cox engaged in a willful and large-scale practice of
contributory infringement and, as a result, Cox should be incentivized to change its behavior.
Quantum Sys. Integrators, Inc. v. Sprint Nextel Corp., No. CIV.A. 2009 WL
3423848, at *3 (ED. Va. Oct. 16, 2009) attorney's fees and costs in copyright
in?'ingement actions likely will have a deterrent effect on present and future As a
practical matter, this change in behavior could take the form of a more robust and effective
DMCA program, or perhaps a different response to infringement notices from companies like
However Cox decides to address its users? repeat infringement, it is clear that the
company should be given a proper ?nancial incentive to change its policies and procedures. For
a company as large and as pro?table as Cox, responsibility for attomey?s fees will help to initiate
that change and deter ?xture violations.

As for compensation, Cox argues that the jury verdict is suf?cient compensation and that
any attomey?s fees would ?amount to a double recovery.? Cox Opp?n at 18. This argument
misses the mark. Indeed, Cox?s position is foreclosed by the language of the Copyright Act
itself, which allows prevailing parties to recover both fees and costs. 18 U.S.C. 505. The
statute contemplates three separate inquiries: (1) liability; (2) fees; and (3) costs. In this case, the
jury did not know how much it cost to litigate this case and it was not instructed to consider
attomey?s fees in its verdict. As such, ?nding that the verdict fully remunerated BMG would

undermine the separate fees and costs inquiries, which were designed to compensate parties for

10

their enforcement of infringement laws, and which are a basis for recovery apart from the
statutory penalties available under the Copyright Act.

In this case, the jury awarded $25 million in damages for infringement. Separately, BMG
incurred more than $10 million in attorney?s fees. Therefore, without an attorney?s fees award,
the cost of litigating this case would erode approximately 40% of the verdict. See Chi-Boy
Music v. Charlie Club, Inc., 930 F.2d 1224, 1230 (7th Cir. 1991) (?[Appellant] maintains that an
award of fees would be punitive because the plaintiffs already have been made more than whole
by the court's award of damages. We ?nd no merit in this argument?); see also Final Order,
Oracle USA v. Rimim' Street, No. 2-10-cv-106 (D. Nev. Sept. 21, 2016) (awarding approximately
$28 million in fees in addition to a verdict of approximately $50 million). As such, the Court
?nds that a fees award is necessary to properly compensate BMG for its litigation expenses.

4. Other Factors

Each of the factors above strongly suggest that awarding fees here would ?further the
policies of the Copyright Act.? Fogerty, 510 U.S. at 527. Moreover, determining the need
for compensation, the Court may analyze the relative size of the parties as well as the ability of a
party to be assessed with fees to pay the assessment.? Quantum Sys. Integrators, Inc. v. Sprint
Nextel Corp, No. CIV.A. 2009 WL 3423 848, at *3 (ED. Va. Oct. 16, 2009). Cox
is a massive company with $18 billion in annual revenue.4 It fought this lawsuit with vigor every
step of the way, and it spared no expense in doing so. In ?ghting back, BMG took huge risk and
ultimately expended more than $10 million in attorney?s fees.

In the end, BMG was successful in asserting its copyrights. Nonetheless, the prospect of

bringing suit against Cox and incurring millions of dollars in attorney?s fees will likely deter

 

4 The Court takes judicial notice of Cox?s reported annual revenue, which is publicly available on Cox?s website.
See Financial Information, f'mancials.coxenterprises.com (last visited Jan. 27, 2017).

11

other potential plaintiffs from seeking to enforce their rights. In order to continue to promote the
vindication of individuals? copyrights, therefore, BMG (and others like it) should be rewarded
for facing up against willful in?ingers with deep pockets.

B. Lodestar

Having determined that BMG is eligible for fees, the Court?s analysis turns to the
lodestar calculation. The legal disputes over the reasonableness of the hourly rates and the hours
spent on the case will be addressed ?rst, followed by a table detailing the rates and hours
calculated for each individual attorney and paralegal.

l. Hourly Rate

In general, the fee applicant has the duty to ?submit evidence supporting the hours
worked and rates claimed. Where the documentation of hours is inadequate, the district court
may reduce the award accordingly.? Hensley v. Eckerhart, 461 US. 424, 433 (1983). ?In
addition to the attomey?s own af?davits, the fees applicant must produce satisfactory ?speci?c
evidence of the prevailing market rates in the relevant community? for the type of work for
which he seeks an award.? Plyler v. Evatt, 902 F. 2d 273, 277 (4th Cir. 1990) (quoting Spell v.
McDaniel, 824 F.2d 1380, 1402 (4th Cir. 1987)). Speci?c evidence in this context will often
take the form of ?affidavits of other local lawyers who are familiar both with the skills of the fee
applicants and more generally with the type of work in the relevant community.? Robinson v.
Equifax Information Servs., LLC, 560 F.3d 235, 245 (4th Cir. 2009); see also Blum v. Stetson,
465 US. 886, 895 n.11 (stating that the fee applicant has the burden ?to produce satisfactory
evidence . . . that the requested rates are in line with those prevailing in the community for
similar services by lawyers of reasonably comparable skill, experience and reputation?). ?The

relevant market for determining the prevailing rate is ordinarily the community in which the

12

court where the action is prosecuted sits.? Rum Creek Coal Sales, Inc v. Caperton, 31 F.3d 169,
175 (4th Cir. 1994).

BMG draws support for the reasonableness of its claimed rates from three main sources.
First, it cites the af?davits from three separate attorneys that explain the detailed and complex
nature of the attorneys? work on this case. These af?davits also show that the rates are
customary for this kind of litigation, and that, where they exceeded the customary amount, they
have been reduced to comport with the customary rates of attorneys in the Alexandria area.
Second, BMG points to af?davits from Craig Reilly (Cox?s local counsel) in previous cases
supporting the reasonableness of similar rates in analogous cases. Third, BMG cites to the
matrix set forth in Vienna Metro (and the cases adopting that matrix) to show that courts have
previously accepted analogous rates. Fees Opinion, Vienna Metro LLC v. Pulte Home Corp.,
No. 1:10-cv-502, Dkt. 263 (ED. Va. Aug. 24, 2011) (hereinafter ?Vienna Metro?).

The Vienna Metro matrix is reproduced below.

 

2011 Range of Hourly Rates in Northern Virginia

 

 

Paralegal 1-3 [years of 4-7 [years of 8-10 [years of 11-19 [years 20+ [years of
experience] experience] experience] of experience] experience]

 

 

 

$130-350 $250-435 $3 50-600 $465-640 $520-770 $505-820

 

 

 

 

 

Id. at 12. Notably, the Matrix was created by Cox?s own attorney, Mr. Reilly, who ?surveyed the
rates offered by Northern Virginia ?rms capable of handling [that] type of complex litigation.?
Id. (citing the Declaration of Craig Reilly). Since the Vienna Metro decision, at least three other
opinions in this district have found the Matrix to be persuasive evidence of an appropriate range
for the rates of attorneys engaged in complex litigation in Northern Virginia. See, e. g. 
Intelligent Veri?cation Sys., LLC v. Microsoft Corp, No. 2014 WL 6685440, at *4

(ED. Va. Nov. 25, 2014); Taylor v. Republic Servs., Inc., No. 2014 WL

13

325169, at *5 (ED. Va. Jan. 29, 2014); Mitile, Ltd. v. Hasbro, Inc., No. 2013 WL
5525685, at *1 (ED. Va. Oct. 4, 2013). As such, because the rates claimed by BMG fall within
this range, BMG urges the Court to accept them as reasonable.

Cox responds with two principal arguments. First, it argues that Vienna Metro is
inapplicable because it dealt with a contractual fee-shifting provision rather than the award of
attomey?s fees under 505. Building on that argument, Cox asserts that the fee structure
adopted by the court in Humphreys Partners Architects, L. P. v. Lessard Design, Inc. is a more
appropriate template for this case. 152 F. Supp. 3d 503 (ED. Va. 2015). In particular, Cox
points out that Humphreys is more recent than Vienna Metro, and it is a copyright case that
assessed fees under 505.

The Court rejects the argument that Vienna Metro is uniquely applicable to contractual
attomey?s fees cases. As a starting point, there is nothing in Vienna Metro that would limit the
Matrix to fees in contract-based fee petitions. In addition, it is now taken for granted that ?fee-
shifting statutes? similar language is ?a strong indication? that they are to be interpreted alike.?
Indep. ed'n of Flight Attendants v. Zipes, 491 U.S. 754, 759 (1989). The fee inquiry is also
materially equivalent for contract-based attomey?s fees petitions, which also rely on the
reasonableness inquiries of the lodestar method to assess fees. Nautical Girl LLC v. Polaris
Investments Ltd, No. CIV.A. ELH-10-3564, 2011 WL 6411082, at *1 (D. Md. Dec. 19, 2011)
(?Notably, cases decided under the lodestar approach can ?provide helpful guidance? in
contractual fee-shifting cases?) (internal citations omitted). Indeed, some of the cases that have

adopted Vienna Metro were statutory rather than contractual fee-shifting provisions. See, e. 

Taylor, 2014 WL 325169, at 

14

Cox?s second argument requires more consideration, as it highlights an apparent tension
between two recent cases from this court: Humphreys and Vienna Metro. As the Supreme Court
has recognized, ?determining an appropriate ?market rate? for the services of a lawyer is
inherently dif?cult.? Blum, 465 US. at 895 n.11. Indeed, a litany of factors may in?uence what
constitutes a reasonable fee, and ?[t]he amount of the fee . . . must be determined on the facts of
each case.? Eckerhart, 461 US. at 429. With this in mind, the tension between the two cases is
signi?cantly reduced when viewed with an towards the facts of those cases rather than their
ultimate conclusions.

In particular, the Court in Humphreys weighed two key factors that distinguish it from
Vienna Metro and from the instant case. First, in Humphreys the Court was presented with a
dramatic difference in the rates claimed by two sets of counsel. The Court wrote:

It is instructive to contrast Finnegan's rates with the rates charged by the Northern

Virginia lawyers in this case. The Northwestern defendants? local counsel, Craig

Reilly, charges $350/hour, and the Penrose defendants? attorneys charge $3 7 5?

390/hour. The Lessard defendants have provided no evidence for why the

services provided by their Washington, DC. attorneys should be valued so much

higher [more than $700/hour] than the services provided by their Virginia co-
counsel.

Humphreys, 152 F. Supp. 3d at 520 n.26. Thus, while the Court found that local counsel?s rates
represented an accurate picture of legal market in Northern Virginia, the higher rates claimed by
defendants could only be supported by national averages, which the Court found to be
unpersuasive evidence. Id. at 519 (refuting defendants citation to ?data from a national survey
for billing rates for ?rms with more than 150 ?ill time intellectual property lawyers?). That
difference in rates simply is not present in this case. In fact, the Declaration of Walter Kelley

explains that, in its fee application, BMG discounted the rates it actually paid Hausfeld in order

15

to fall within the Vienna Metro Matrix. See Kelley Decl. 1} 6?7 (Dkt. No. 830). After that
reduction, local counsel?s rates are almost exactly the same as those charged by Steptoe.

Second, the Vienna Metro case presented a higher level of complication, as well as a
different litigation posture, from Humphreys. In particular, Humphreys was resolved at summary
judgment on a basic question of copyright law and therefore did not require the parties to address
the dif?cult and specialized judgment calls (or time commitment) required by trial. Id. at 508.
By contrast, plaintiff?s counsel (Kirkland Ellis) in Vienna Metro needed to prepare for a four-
day trial that included twelve subpoenaed witnesses, six motions in lirnine, and more than 1,000
trial exhibits. Vienna Metro, Dkt. No. 283 at 9. Not only does this make Vienna Metro a more
complex case logistically, but it also tied up Kirkland?s resources, increased their opportunity
costs, and likely allowed them to negotiate for a higher rate. See Robinson v. Equifax Info.
Servs., LLC, 560 F.3d 235, 243-44 (4th Cir. 2009) (citing Barber v. Kimbrell Inc., 557 F.2d
216, 226 n.28 (4th Cir. 1978)) (noting that opportunity costs can factor into an attomey?s hourly
rate). The complexity of the case even led the Court to note that the defendant?s ?method of
trying the case further expanded the amount of time and labor utilized by Plaintiff litigation
team.? Vienna Metro, Dkt. No. 283 at 9.

To emphasize the complexity of Vienna Metro as compared to Humphreys, it is also
worth noting that there were three separate sets of defendants in Humphreys. This would have
presented the opportunity for a joint defense group to coordinate motions or otherwise allocate
work. By contrast, Kirkland worked alone in its representation of Vienna Metro and successfully
prosecuted claims surrounding a $100 million development project. Further, it is instructive that
the defendant in Vienna Metro claimed more than $4 million in fees, while no defendant in

Humphreys claimed attomey?s fees in excess of $1.5 million. Although this difference in claims

16

is certainly not decisive, it supports the conclusion that the need for a high-stakes trial litigation
law ?rm in Vienna Metro would have properly commanded a higher rate than the joint-defense
posture in Humphreys.

These same distinctions apply with magni?ed force to this case. The parties agree that
this case was complex, hard-fought, and presented novel issues of law. See Cox Opp?n at 2 (Dkt.
No. 851) (discussing the ?importance? and the ?novelty of legal issues? presented to the Court);
see also BMG Mem in Supp. at 25 (Dkt. No. 828) (?The dif?culty and complexity of this case
justify premium hourly rates?). Indeed, it is difficult to dispute this assessment of the case,
which raised dif?cult issues of ?rst impression and which, like Vienna Metro, ultimately
required a full trial to resolve. The case depended on sophisticated counsel, and as such, the
Court ?nds that the Vienna Metro Matrix for complex civil litigation supplies an appropriate
range of fees here.

This conclusion is supported by additional evidence from BMG. Most prominent among
this evidence is Mr. Reilly?s Declaration in a 2014 case in this District, which states that
?complex, intellectual property litigation involving complex, software copyright infringement?
demands higher rates. Engle Decl. Ex. B, Dkt. No. 868-2 at 20 (?2014 Reilly This
prior submission from Cox?s own respected local counsel is bolstered by af?davits from
experienced attorneys like N. Thomas Connally who has been practicing law in Northern
Virginia for 23 years, and who con?rms that Steptoe?s rates are reasonable in this case. See
Robinson, 560 F.3d at 245 (explaining that af?davits ?'om local attorneys with relevant
experience are [e]xamples of the type of speci?c evidence that we have held suf?cient to verify
the prevailing market rates?). In light of this evidence, the Court concludes that the rates

claimed by BMG are reasonable. A chart detailing these rates can be found below.

17

2. Number of Hours

The hours claimed by attorneys are largely reasonable for a case of this
complexity and magnitude. The reasonableness of these hours is enhanced by the fact that
Michael Allan has used his billing judgment to eliminate almost $1 million in fees from the total
tally. See Mem. in Supp. at 26?27; Allan Decl. 103?107. Nonetheless, an additional
10% reduction in the total claimed fee is warranted for instances of block billing, vague entries,
and duplicative work. See Am. Bird Conservancy v. US. Fish Wildlife Serv., 110 F. Supp. 3d
655, 675 (ED. Va. 2015) documentation is a proper basis for reducing a fee
award because it prevents an accurate determination of the reasonableness of the time expended
in a case?) (internal alterations and quotations omitted).

To begin, it is worth repeating a passage from Humphreys regarding the billing practices
of large law ?rms:

Large law ?rms often task far more attorneys than is necessary in a lawsuit like

this. Indeed, in this case, a litigation team of sixteen individuals worked on behalf

of one group of defendants. With such a large litigation team, the number of

hours billed grows rapidly. If multiple lawyers assigned to the case all read a

memorandum or meet to confer about the status of the case, each lawyer bills time

and there is a risk of duplicative effort. Put another way, this case could have

been fully and fairly litigated with each party devoting no more than two

experienced, competent lawyers to the case.
Humphreys, 152 F. Supp. 3d at 527. In other words, large law ?rms are often hired to cinch
every belt, tighten every suspender, and scrutinize every Bluebook citation. But while this may
be expected in the context of large law ?rms, it is not necessarily ?reasonable? in the legal sense,
and oftentimes a more focused expenditure of hours from fewer attorneys could have achieved
the same task with the same results.

With that in mind, the Court ?nds that the hours expended on this case were duplicative

in many instances. The most telling evidence of this is the fact that 13 attorneys worked on the

18

case, with each attorney billing between 400?2,200 hours.5 This included ?ve partners, three of
counsel, and ?ve associates. In addition, four separate paralegals contributed to the work tally.
In light of these numbers, argument that this case was ?leanly staffed and litigated? is
overstated. See Mem. in Supp. at 27. With this many cooks in the kitchen, it would have been
impossible to conduct basic case management without some degree of duplicative efforts. Even
the process of keeping 13 attorneys apprised of case developments has a level of transactional
costs that cannot be easily measured.

For example, consider the team meetings that occurred on November 11?12, 2015.
Every attorney except for Mr. Engle attended meetings or ?confer[red] with? the team on these
days.6 This was a busy period with the team preparing for trial, and the billing entries all list
multiple tasks for each attorney. This makes it dif?th to determine precisely how long the
meetings lasted. However, even if we assume that the meetings took up only one hour of each
attorney?s time, these meetings would have accumulated almost $7,000 in fees. Similarly, the
three-hour summary judgment hearing on October 30, 2015 would have accrued approximately
$15,000 in fees because eight attorneys attended. These tallies do not strike the Court as
reasonable. BMG authorized a large litigation team and, having done so, the impetus now shifts
to BMG to demonstrate why this work could not have been accomplished by fewer attorneys.
On the current record, it has not done so, and therefore a reduction in the total fee is warranted.

In re Outsidewall Tire Litig, 748 F. Supp. 2d 557, 565 (ED. Va. 2010) (noting that a fee

 

5 This does not include the additional attorneys that worked a ?de minimis? amount of time and whose time entries
were discounted in their entirety. See BMG Mem. in Supp. at 26; Allan Decl. 1  103.

6 It is not entirely clear whether Ms. McKenzie was at the team meetings. Her billing entries indicates that she
?attend[ed] to various case inquiries and provide[d] assistance to team?; on November 12, she similarly ?assist[ed]
with misc. team inquiries.? See Allan Decl., Ex. 6 at 193, Dkt. No. 829-6. Considering the rest of her team was in
team meetings, it seems reasonable to conclude that her ?assistance? with ?misc. inquiries? and other requests was
likewise related to those meetings.

19

applicant ?bears the burden of establishing by clear and convincing evidence the amount of a
reasonable fee in the circumstances?).

The time entries surrounding the eight attorneys who attended the summary judgment
hearing on October 30, 2016 provide concrete examples of the parties? duplicative efforts. 7
BMG has not offered any explanation for why the presence of eight attorneys was either
reasonable or necessary. See id. Courts have recognized that there are certain circumstances
where ?a lawyer who has worked on the case and will be working on it subsequently may need to
observe argument to judge how to proceed later? or ?because their assistance is or may be
needed by the lawyer arguing the case.? Democratic Party of Wash. State v. Reed, 388 F.3d
1281, 1286?87 (9th Cir. 2004). But this principle does not extend to every member of a trial
team, and BMG has not offered any explanation for why this day of billing was reasonable. See
Fross v. Cty. of Allegheny, 848 F. Supp. 2d 547, 555 (W.D. Pa. 2012) (?Although Attorneys
Strassburger and Rose no doubt wished to be at the argument to witness the culmination of their
efforts on this case, the client would not ordinarily pay for their presence?); anco v. Haslam,
No. 3:13-cv-1159, 2016 WL 1171058, at *7 (MD. Tenn. Mar. 25, 2016) (?While perhaps
desirable, it was not necessary for so many attorneys to travel to and participate in meetings,
moots and oral arguments. An excellent result was achieved for the client, but one that at times
could likely have been achieved with the billing discipline that a fee-paying client would have
demanded?); Roe v. Saenz, No. 97-cv-529, 2000 WL 33128689, at *2 (ED. Cal. Nov. 20, 2000).
As such, a reduction is warranted for this duplicative billing.

More generally, from October 27-30, nearly every attomey?s time entries contain some

version of ?team meeting and trial prep?; ?moot summary judgment arguments?; or ?prepare for

 

7 Attorneys Pecau, Warin, Allen, Engle, Roberts, Mazgaj, Guo, and McKenzie all attended the hearing. See Allan
Decl. Ex. 6.

20

summary judgment argument.? See generally Allan Decl. Ex. 6 (Dkt. No. 829-6). Putting aside
the vagueness issues for a moment, these entries suggest a high level of duplicative efforts. It is
not obvious what ?prepar[ing] for hearing? entails, and it is further unclearwhy each of the eight
attorneys needed to perform what appears on paper to be the same ?preparation.? This is not to
suggest that the attorneys were not working diligently on the task at hand, but the Court is not
able to tell from the records Whether this work was reasonably necessary.

Furthermore, Cox identi?es 164.75 hours of vague billing entries ?that do not disclose
the nature, volume, or relevance of the documents frustrate any attempt to assess the
reasonableness of the time devoted to that task.? Route Triple Seven Ltd., ?ship v. Total
Hockey, Inc., 127 F. Supp 3d 607, 621 (ED. Va. 2015); see Bridges Decl. 1[ 32, Ex. 17 (Dkt. No.
852-17). The Court does not agree that all of the entries identi?ed by Cox are vague. For
example, on March 3, 2015, Mr. Caracappa?s spent 3.25 hours on ?[m]eeting with R. Steele;
phone call with experts; edits to discovery plan.? Id. at 2. Although this is not a perfectly
detailed entry, it provides enough information for the Court to assess that Mr. Caracappa
communicated with Chief Technical Of?cer, spoke with other experts, and
provided his thoughts on a plan for proceeding with complicated discovery. A basic common-
sense understanding of trial preparation allows the Court to determine that these activities were
reasonable, and therefore they cannot be categorized as vague for the purpose of discounting
attomey?s fees.

On the other hand, many of the other entries ?frustrate any attempt to assess the
reasonableness of the time devoted to that task.? Route Triple Seven Ltd, 127 F. Supp 3d at 621.
For example, on August 3, 2015, Mr. Warin spent a half hour ?[r]eview[ing] case materials.?

Bridges Decl(Dkt. No. 852-17). In a case as complicated and protracted as this

21

one, the term ?case materials? could mean any one of a hundred categories of documents, and the
Court therefore cannot assess whether this time was spent reasonably or not. As such, this time
entry falls into the category of ?preparation? and ?team meeting? entries that surrounded the
summary judgment hearing, and which can be properly categorized as vague.

All told, the Court recognizes the practical issues with a court-imposed requirement for
highly-detailed billing entries, especially when clients do not necessarily demand the same level
of speci?city. Attorneys are understandably occupied when preparing for trial, and they may not
always have a perfect recollection of what tasks they completed throughout the day (or the
week). Therefore, upon ?nal consideration of the vague and duplicative time entries submitted
by BMG, the Court will assess a 10% reduction on the total fees claimed.

3. Unrelated Claims

With a ?nal lodestar number calculated, the next step is to ?subtract fees for hours Spent
on unsuccessful claims unrelated to successful ones.? McAfee, 738 F.3d at 88. In some cases,
even motions that parties never ?led can qualify for fees. See In re Gen. Motors Corp. 110 F.3d
1003, 1021 (4th Cir. 1997) (granting attomey?s fees for work on a writ of mandamus that was
never ?led). Hence, at this stage of the lodestar inquiry, ?entitlement to fees for one aspect of a
protracted litigation does not turn narrowly on whether the party prevailed on that particular
matter, but whether a separate claim or, as here, a separate proceeding is so unrelated as to justify
treating it as a ?separate lawsuit[ Plyler v. Evatt, 902 F.2d 273, 280 (4th Cir. 1990) (citing
Hensley, 461 US. at 435). In other words, in order to qualify for a reduction on this basis, the
party must lose its ?prevailing party? status as to a distinct portion of the case. See id.

Cox?s examples of purportedly ?unrelated? issues do not come close to reaching this

standard. They include work completed for: (1) an unsuccess?il motion to quash a subpoena for

22

Robert Steele of (2) an attempt to depose a Cox employee named Martin Mathews;
(3) research related to Cox Enterprises, an af?liated company that was ultimately dismissed as a
defendant; (4) projects and motions regarding Ralph Oman, whose testimony the Court
excluded; and (5) projects related to two expert witnesses on the issue of vicarious liability. See
Cox Opp?n at 24. All of these discrete legal issues related to broader claims of
contributory infringement, and Cox does not offer any reasoned distinction that would suggest
otherwise. Depositions of relevant witnesses, work on expert reports, and investigation of
subsidiaries as potential defendants are all reasonably within the scope of this litigation. As
such, because this work was not meaningfully distinct, the fact that BMG lost on these issues
does not alter its fee award. Plyler, 902 F.2d 273, 280.
4. Degree of Success

At the ?nal step of the lodestar method, the Court ?award[s] some percentage of the
remaining amount, depending on the degree of success enjoyed by the plaintiff.? McAfee, 738
F.3d at 88. ?Where a plaintiff has obtained excellent results, his attorney should recover a ?illy
compensatory fee.? Hensley v. Eckerhart, 461 US. at 435. Furthermore, in cases that involve a
?common core of facts? and ?related legal theories,? it will be dif?cult to ?divide the hours on a
claim by claim basis.? Id. In those cases, the focus should be more generally on the attomey?s
work and overall success rather than a critical assessment of each argument. Id.

In this case, BMG established liability for willful contributory infringement, proved
copyright infringement of 1,397 copyrights, and obtained $25 million in statutory damages. In
most respects, this can be viewed as a highly successful result. On the other hand, BMG failed

in its vicarious liability claims and its motion for injunctive relief. In particular, BMG devoted a

23

considerable amount of resources to its vicarious liability claims, and it likely would have
received a larger award if that legal theory had been accepted by the jury.

Despite the fact that they provide separate bases for liability, ?the lines between direct
infringement, contributory infringement, and vicarious liability are not clearly drawn?. Sony
Corp. of Am. v. Universal City Studios, Inc., 464 US. 417, 435 n.17 (1984). In delineating the
two theories, the Supreme Court has explained, ?[o]ne infringes contributorin by intentionally
inducing or encouraging direct infringement, and infringes vicariously by pro?ting from direct
infringement while declining to exercise a right to stop or limit it.? 
Studios Inc. v. Grokster, Ltd, 545 US. 913, 930 (2005) (internal citations omitted). In this case,
the Court found that ?the jury had a substantial basis on which to conclude that Cox did not
maintain an obvious and direct ?nancial interest in the in?ingement of works on its
network.? Post-Trial Mem. Op. at 54. The Court therefore entered a verdict in favor of Cox on
the issue of vicarious infringement.

Nonetheless, the similarities between the two claims are signi?cant. BMG correctly
notes that both of these claims ?required BMG to prove direct infringement, were subject to
Cox?s key DMCA defense, required an exploration of Cox?s handling of infringement, and were
subject to the same statutory damages analysis.? BMG Reply in Supp. Fees Pet. at 14 (Dkt. No.
868). Therefore, litigation strategy did not have to shift much in order to encompass
both theories of liability. Indeed, the evidence of the ?nancial bene?t Cox derived from its
customers? BitTorrent usage also helped to support a ?nding of will?ilness in the contributory
infringement claims. See Post-Trial Mem. Op. at 54. As such, the Court ?nds that the inclusion

of this theory did not signi?cantly raise the legal costs associated with case. As such,

only a minimal reduction is warranted.

24

In addition, BMG sought post-trial relief in the form of a motion for a permanent
injunction.8 The Court denied the motion, ?nding that proposed injunctive relief would
pose far more questions than it would answer. See Post-Trial Mem. Op. at 55?63. When
combined with the vicarious liability failure, the unsuccessful claim for injunctive relief means
that the result of the case for BMG should be properly understood as something less than
?excellent results.? In light of these two minor setbacks in its prosecution of this case, the Court
will reduce lodestar ?gure by 10%.

The Court?s analysis and its calculations are re?ected in the table below.

 

BMG notes that it does not seek compensation for post-verdict work, including the injunction papers. BMG Reply
1n Supp. Fees. Pet. at 13 n.7. Nonetheless, the Amended Complaint seeks injunctive relief that BMG was not

awarded and therefore this failure can be considered in determining ?degree of success.? Am. Comp]. 45
(Dkt. No. 16).

25

5.

Final Lodestar Table

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  
 

 

 

 

 

 

 

20%Di?cj0unt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.  Attorney 
Roger i3. Warin 0? 5505-820  ?3 404.1} $332,069.75 I
William G. Pecau Steptoe 40 $799.90 $505-820 959.99 $767,892.00
Michael J. Allan Steptoe 18 $686.85 $505-770 1,992.74 $1,368,710.03
John M. Caracappa Steptoe 18 $736.25 $505-770 1,197.00 $881,291.15
Paul A. Gennari Steptoe 17 $669.75 $505-770 1,696.59 $1,136,291.15
Jeffrey M. Theodore Steptoe 10 $639.35 $465-640 759.56 $485,621.49
Jeremy D. Engle Steptoe 10 $646.00 $465-640 2,040.50 $1,318,165.58
Margaret Kammerud Steptoe 9 $636.50 $465-640 704.34 $448,312.41
Stephanie L. Roberts Steptoe 8 $631.75 $465-640 2,179.98 $1,377,202.37
David L. Hecht Steptoe 8 $631.75 $465-640 495.00 $312,716.25
Matthew Mazgaj Steptoe 4 $489.25 $3 50-600 984.02 $481,429.34
Li Guo Steptoe 3 $431.30 $250-435 1,652.40 $712,680.12
Elizabeth McKenzie Steptoe 3 $424.65 $250-435 1,823.44 $774,322.10
Manual Rios Steptoe Paralegal $292.60 $130-350 821.88 $240,482.09
Kenneth MacPhail Steptoe Paralegal $251.75 $130-350 383.18 $96,464.31
Jonathan Huie Steptoe Paralegal $228.00 $130-350 632.97 $144,317.16
James A. Noetzel Steptoe Paralegal $141.55 $130-350 344.43 $48,754.07
Document Review Steptoe 608.31 $106,094.10
IT/Technical Support Steptoe 339.68 $129,800.29
Walter D. Kelley, Jr. Hausfeld 35 $820 $505-$820 532.90 $436,978.00
Jarrett Schindler Hausfeld Law Clerk9 $260 174.] $45,266.00
Total 0 $1 1344353479312
Total Claimed after $10,479,33 5.08
Steptoe Discounts

with  

 

 

 

9 Mr. Schindler cannot properly be categorized as an attorney because he was not admitted to the bar of any state
while the litigation took place. However, his hourly rate falls within the acceptable rates for a paralegal and he is the

only other person that lent any assistance to Mr. Kelley. Therefore, the Court will not disturb his claimed rate.

26

 

 MOTION FOR EXPENSES

In its Motion for Attomey?s fees, BMG also seeks $2,920,643.76 in nontaxable expenses
such as travel costs, expert witness fees, and legal research costs that fall outside the purview of
28 U.S.C. 1821 '0 and 1920?. Cox challenges the legal basis for these claims and opposes
them in full. The Court agrees with Cox that these fees are not recoverable under 17 U.S.C.
505 and therefore DENIES motion with respect to these expenses.

There is a circuit Split on the issue of whether non-taxable fees are recoverable under
505. In support of its motion, BMG cites a Ninth Circuit case which ?hold[s] that district
courts may award otherwise non-taxable costs, including those that lie outside the scope of
1920, under 505.? Twentieth Century Fox il Corp. v. Entertainment Distributing, 429 F.3d
869, 885 (9th Cir. 2005); accord Susan Wakeen Doll Co. v. Ashton Drake Galleries, 272 F.3d
441 458 (7th Cir. 2001). The Ninth Circuit reasoned that limiting the recovery of costs to only
those available in 1920 would effectively read the term ?full costs? out of the Copyright Act
and render it super?uous. Twentieth Century Fox, 429 F.3d at 855. Therefore, because ?statutes
should not be construed to make surplusage of any provision?, the court found that expert fees
were available under 505. Id. (internal quotations and citations omitted).

The Eighth and Eleventh Circuits have disagreed, holding that 505 does not ?permit the
recovery of expert witness fees beyond the limitations speci?ed in 28 U.S.C. 1920 and 1821.?
Artisan Contractors Ass'n of Am, Inc. v. Frontier Ins. Co., 275 F.3d 1038, 1039 (11th Cir.

2001); accord Pinkham v. Camex, Inc., 84 F.3d 292, 295 (8th Cir. 1996).12 These decisions

 

'0 28 U.S.C. 1821 sets a cap of $40 per day for witness fees. The expert witness fees in this case vastly exceed this
amount. See Mem. in Supp. at 28?29.

28 U.S.C. 1920 sets forth six categories of expenditures that may be properly taxed as costs.

'2 When faced with the same question, district courts in this circuit have agreed with the Eighth and Eleventh
Circuit. See Arista Records, LLC v. Gaines, 635 F. Supp. 2d 414, 2009); Humphreys, 152 F.
Supp. 3d at 524-25.

27

relied on a plain reading of the Supreme Court?s instruction that: ?[a]ny argument that a federal
court is empowered to exceed the limitations explicitly set out in 1920 and 1821 without plain
evidence of congressional intent to supersede those sections ignores our longstanding practice of
construing statutes in pari materia.? Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 US. 437,
445 (1987). Therefore, because 505 does not mention witness fees, travel expenses, or any
other non-taxable fees, the Eighth and Eleventh Circuits did not ?nd the ?plain evidence?
necessary to displace the provisions of 1820 and 1921.

In light of the Supreme Court?s guidance, the Court ?nds the holdings of the Eighth and
Eleventh Circuits to be persuasive. Crawford, 482 US. at 445. Crawford was clear in its
instruction that ?absent explicit statutory or contractual authorization for the taxation of the
expenses of a litigant?s witnesses as costs, federal courts are bound by the limitations set out in
28 U.S.C. 1821 and 1920.? Id. (emphasis added). Although there is reasonable debate over
the proper interpretation of the word ?full? in 505, that term is certainly not explicit in
authorizing witness fees or any other non-taxable costs. If it wanted to, Congress could have
easily inserted language allowing for the recovery of any category of costs, however, it chose not
to, and the Court will not implicitly read those terms into the statute.13

In any case, as the Court in Humphreys explained, ?the term ?full? has another possible
non-super?uous meaning: it could refer to the degree of costs recoverable under 1821 and
1920.? Humphreys, 152 F. Supp. 3d at 524?25. In other words, it could mean that a full
percentage of every cost available under existing statutes is made available for prevailing parties

under 505. Therefore, the term can be more properly categorized as ambiguous rather than

 

?3 For example, the Voting Rights Act provides that, any action or proceeding to enforce the voting guarantees
of the fourteenth or ?fteenth amendment, the court, in its discretion, may allow the prevailing party, other than the

United States, a reasonable attomey?s fee, reasonable expert fees, and other reasonable litigation expenses as part
of the costs.? 52 U.S.C. 10310(e) (emphasis added).

28

super?uous. In light of this alternative de?nition, and without ?explicit statutory or contractual
authorization? to the contrary, the Court declines to award fees beyond those allowed for in 28
U.S.C. 1821 and 1920. Crawford, 482 US. at 445. motion for nontaxable expenses
is DENIED.

IV. BILL OF COSTS

BMG has submitted a bill of costs totaling $180,138.59. These costs fall into three basic
categories: (1) clerk fees, including pro hac vice applications; (2) trial and deposition transcripts
and related fees; and (3) fees for exempli?cation and copies of transcripts and trial exhibits. Cox
has attacked nearly every aspect of the bill. In large part, the Court ?nds Cox?s arguments to be
unconvincing. Nonetheless, the Court will deduct the transcription fees that BMG and Cox
agreed to split, and it will reduce the rest of the cost award by 10%, consistent with 
?degree of success.?

After a ?nal judgment, the Federal Rules provide that costs ?should be allowed the
prevailing party.? Fed. R. Civ. P. The categories of allowable costs are set forth in 28
U.S.C. 1920. They are:

(1) Fees of the clerk and marshal;

(2) Fees for printed or electronically recorded transcripts necessarily obtained for
use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exempli?cation and the costs of making copies of any materials
where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and

salaries, fees, expenses, and costs of special interpretation services under section
1828 of this title.

28 U.S.C. 1920. Though bound to these categories, the Court has ?considerable discretion? in
awarding costs. Fells v. Virginia Dep't of ransp., 605 F. Supp. 2d 740, 742 (ED. Va. 2009)

(citing Constantino v. Achilles, 580 F.2d 121, 123 (4th Cir. 1978). However, costs ?should

29

be limited to those ?reasonably necessary at the time.? Id. (citing La Vay Corp. v. Dominion
Fed. Savings Loan, 830 F.2d 522, 528 (4th Cir. 1987). seeks to collect under three of
the categories enumerated in 1920. Each of these will be addressed in turn.

A. Clerk Fees

Cox challenges nine of pro hac vice applications. These ?ling fees are imposed
by the Clerk, are they are therefore permitted to be taxed under 1920(1). See Synergestic Int 
LLC v. Korman, No. CIV. 2007 WL 517676, at *2 (ED. Va. Feb 8, 2007). The fact
that there were nine applications does not alter this analysis. In light of the complexities of this
case, it was reasonable for BMG to employ a large litigation team. Although there were some
duplicative efforts inherent in a team of this size (discussed infra), it would be improper for the
Court to go so far as to limit the number of attorneys who are authorized to appear in the case.
Indeed, Cox had at least 11 pro hac vice applications in its own right. Given the approximate
numerical equivalence in applications, it is unusual that Cox would even challenge this $675.00
in total pro hac vice applications. In fact, Cox likely could have saved more money in attomey?s
fees by simply leaving that page out of its brief.

B. Trial and Deposition-Related Fees

Transcripts ?necessarily obtained for use in the case? are recoverable as costs under
1920(2). See Bd. of Directors, Water?s Edge v. Anden Grp., 135 F.R.D. 129, 135 (ED. Va.
1991). Cox attacks the transcription fees as unnecessary, arguing that must show that it
needed these transcripts and used them in the case.? Cox Br. in Opp?n to Costs at 5 (Dkt. No.
859) (emphasis in original). This argument distorts the rule, which does not place a burden on
the prevailing party to show that it actually used the transcripts in order to recover their costs.

Instead, the moving party must only show that the transcripts ?appeared reasonably necessary for

30

preparation for the trial at the time taken.? See Bd. of Directors, Water ?3 Edge, 135 F.R.D. at
13 1 .

The Court ?nds that the cost of 12 of 13 pre-trial transcripts was reasonably
necessary under Many of the pre-trial rulings in this case were given from the
bench, and instead of a full written opinion, the Court?s orders only cited ?the reasons stated
from the bench? as the basis for the ruling. See, e. Dkt. Nos. 63, 115?117, 154 ?156, 168.
Therefore, in order to precisely identify both the Court?s rulings and its analysis, it was entirely
reasonable for BMG to obtain transcripts of those hearings so that it could prepare both for
subsequent motions hearings and for trial. The fact that some excerpts of these transcripts may
not have been speci?cally relevant does not factor into the Court?s analysis. Indeed, it would
likely take more effort to review and redact a transcript than it would to reproduce the hearing in
4 full. Therefore, the Court rejects Cox?s challenge to the transcription fees.

This reasoning does not extend to the same-day trial transcripts in this case. It is
generally true that attorneys in a jury trial may properly obtain daily transcripts of the court
proceedings in order to develop their trial strategy. See US. ex rel. Davis v. US. Training Ctr.,
Inc., 829 F. Supp. 2d 329, 332 (ED. Va. 2011). Here, however, the parties agreed to split the
costs of daily transcripts before trial. See Cox Opp?n to Costs, Ex. A (Dkt. No. 859-1).
Although the parties in Ex Rel. Davis had a similar agreement, other courts have approved of
systems for sharing the cost of daily trial transcripts. See Thomas v. Duralite Co., 524 F.2d 577,
590 (3d Cir. 1975) (?nding that it was proper for the district court to exclude costs incurred for

daily transcripts because the ?parties had agreed to share the expense for this service?).

 

'4 BMG does not seek to recover the costs of the October 23, 2015 hearing in which the Court denied Electronic
Frontier Foundation?s motion to appear as amicus. See Mem. in Supp. Fees at 4, Dkt. No. 820.

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The Court ?nds the holding of the Third Circuit to be appropriate here. In a litigation
battle as ?erce as this one, parties should be rewarded for compromising on basic procedural
agreements that mitigate the costs on either side. Accordingly, the Court will exercise its
discretion and deduct $17,037.75 portion of the transcription costs) from the bill of
costs.'5

C. Fees for Exemplification and Copies

Cox also challenges the following copying costs: (1) costs for copyright certi?cates; (2)
electronic ?le conversion costs; and (3) trial exhibit costs. The Court ?nds these challenges to
be without merit.

For the copyright certi?cates, Cox concedes that they are a taxable cost, but asserts that
because BMG did not produce ?the actual invoice detailing the costs and fees charged by the
Copyright Of?ce per certi?cate,? it may not recover for these costs. See Cox Opp?n to Fees at 8.
This argument borders on ?ivolous. BMG submitted detailed records of its internal accounting
to show what it paid for each copyright certi?cate. Moreover, basic mathematics illustrates that
926 copyright certi?cates (one for each of the infringed copyrights) multiplied by $40 per
certi?cate (the price charged by the Copyright Of?ce) yields a total of $37,040.00, which is
precisely the amount that BMG is seeking. Cox challenged BMG to prove ownership on each
and every one of these copyrights instead of agreeing to a stipulated sample set. It cannot now
turn around and seek to punish BMG for rising to its challenge and producing copies of each
certi?cate.

Cox?s arguments regarding the electronic ?le conversion costs are more reasonable, but

they are nonetheless rejected. The Fourth Circuit has held that the costs associated with

 

?5 There is no merit to Cox?s arguments regarding deposition costs. See Francisco v. Verizon S., Inc, 272
F.R.D. 436, 442 (ED. Va. 2011); Fordv. Zalco Realty Inc, 708 F. Supp. 2d 558, 562 (ED. Va. 2010). The Court
will therefore exercise its discretion in awarding these costs to BMG in full.

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?converting electronic ?les to non-editable formats, and burning the ?les onto discs? are taxable
under 1920(4). Country Vintner of N. Carolina, LLC v. E. J. Gallo Winery, Inc., 718 F.3d
249, 259 (4th Cir. 2013). On the other hand, this holding does not extend to costs associated
with ESI processing, such as ?attening and indexing electronic data, unitizing electronic
documents, and bates-stamping documents. Id. at 258. In analyzing similar issues, courts have
also excluded metadata extraction and generating OCR to create searchable text as non-taxable
costs. See Amdocs (Israel) Ltd. v. Openet elecom, Inc., No. 2013 WL
1192947, at *7 (ED. Va. Mar. 21, 2013) (excluding metadata extraction); Intellectual Ventures 1,
2015 WL 7283108 at *9 (excluding OCR processing and bates stamping).

In light of the increasingly technology-driven nature of document production, the line
between ?converting electronic ?les to non-editable formats, and burning the ?les onto discs? on
the one hand, and non-taxable costs like bates stamping, on the other, is often blurred. No doubt,
the modern ?copying? of electronic documents encompasses some work that was not
contemplated when 1920 was originally drafted. Indeed, as a practical matter, electronic
copying requires employees to run the appropriate systems and monitor document productions.
Individuals must also coordinate with vendors and clients and troubleshoot technological errors.
Some portion of the fees related to this work therefore must be included in the term ?copying? in
order to properly compensate the prevailing party under Rule 54(d).

BMG does not seek costs for any category of activity that can be distinguished from the
interpretation of ?making copies? that was accepted by Country Vintner. The costs that Cox
highlights as non-taxable are mostly associated with coordinating production efforts within the
litigation team. For example, Cox highlights billing entries in which Adam Wehler

?[c]ommunicate[s] with M. Rios; download[s] Defendant?s Exhibits to Summary Judgment

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motion from enwick?s FTP server.? See Cox Opp?n to Fees at 11. The act of downloading
something from a server ?ts within the term ?copying? as de?ned in Country Vintner because, in
a literal sense, it is ?a reproduction of an original wor 718 F.3d 25 8?259.

As for the other portions of this entry, the Court ?nds that they relate to coordinating the
acts of copying and producing documents and cannot be reasonably segregated as non-taxable
costs. With the advent of electronically stored information, the costs of ?copying? can no longer
be cabined to a price-per-page calculation. The process of downloading, categorizing, and
preparing ?les for transfer necessarily requires some degree of coordination and oversight. And
while courts are able to categorically exclude discrete activities like ?metadata scrubbing? or
?bates stamping?, it is impossible to fully extract the human element from the process of copying
electronically stored data. As such, the Court declines to deduct these human costs, which it
?nds are inexorably intertwined with the copying of electronic data.

This leaves the copying of the trial exhibits, which the Court also ?nds to be a reasonable
cost. Copying and printing costs that are necessary to litigate a case are recoverable. See Bd. of
Directors, Water?s Edge, 135 F.R.D. at 137 (?Costs for copies of exhibits may be awarded where
such copies were necessarily obtained for use in the case?). The question therefore becomes one
of necessity. Cox?s primary argument is that it was not necessary for BMG to create a ?ll] paper
set of documents because the parties had agreed to exchange all proposed trial exhibits
electronically. Cox Opp?n to Fees at 12. The Court is not inclined to impose such a strict
interpretation of 1920. As this Court has previously noted, exhibits need not be made part of
the record in order to be deemed necessary for the purposes of recovering costs. See Francisco,

272 F.R.D. at 445. In this case, it is enough that counsel used the exhibits both in trial and in its

efforts to prepare witnesses.

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In addition to the full proposed-exhibit set of paper copies, BMG needed to print paper
copies of all trial exhibits for Cox, the Court, and the witnesses. Although Cox claims that
expenditure on these exhibits was unreasonable, it has no evidence to support that
blanket assertion. In contrast, BMG has submitted detailed billing records to show that it did, in
fact, spend more than $33,000 on paper versions of the admitted exhibits. On its face, this
appears to be a large number. However, it serves to remember that Cox insisted that BMG
produce original copyright certi?cates for each of the copyrights at issue in this case. Moreover,
though the ntunbers may be large, Cox has not given any reason for the Court to doubt the
accuracy of invoices or the integrity of its declarant, Stephanie Roberts. Therefore, costs
of copying exhibits will be awarded in full.

In sum, the Court will deduct $17,037.75 from total costs of $1 80,138.59,
resulting in a total of $163,100.84. For the reasons discussed above, the Court will also reduce
costs by 10% to account for its failure on the vicarious liability claim and its motion for
injunctive relief. See McKnight v. Circuit City Stores, Inc., 14 F. App'x 147, 156 (4th Cir. 2001)
(approving the district court?s ?partial costs award based on the partial success of? the party?s
appeal). In total, the Court awards BMG $146,790.76 in costs.

IV. MOTION FOR FEES AND COSTS

Cox?s entitlement to fees turns on the Court?s de?nition of a ?prevailing party? under
505. While there is no doubt as to status as a victor in this case, the parties dispute
Cox?s position vis-a-vis Round Hill. Their arguments raise the question of whether the Court?s
dismissal of Round Hill without prejudice on the grounds of statutory standing grants Cox

prevailing party status under 505. The Court ?nds that it does not, and it therefore DENIES

Cox?s motions for attorney?s fees and costs.

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This question can be resolved on a plain reading of the statute, which contemplates a
single prevailing party. 17 U.S.C. 505 (allowing for the Court to award fees to ?the prevailing
party?). Interpreting other fee statutes, both this Court and the Federal Circuit have agreed that
?[f]or the purposes of costs and fees, there can be only one winner. A court must choose one,
and only one, ?prevailing party.? Intellectual Ventures I LLC v. Capital One Fin. Corp. No.
2015 WL 7283108, at *2 (ED. Va. Nov. 17, 2015) (citing Shum v. Intel Corp, 629
F. 3d 1360, 1367 (Fed. Cir. 2010). In that sense, the ?critical inquiry is . . . the nature of each
party?s ?respective successes? as they relate to the ?central issue? in the case.? Id. The Federal
Circuit explained this interpretation:

Our conclusion that there can only be one prevailing party in a given case is

reinforced by the use of the de?nite article ?the? before ?prevailing party.?

Alternatives like ?any,? or ?some? lead to phrases like ?a prevailing party?

and ?any prevailing party.? These hypothetical, unenacted versions of Rule 54

could be read to suggest that it is possible to have more than one prevailing party

in an action. However, none of these theoretical alternatives is what Congress

enacted.

Shum v. Intel Corp, 629 F. 3d 1360, 1367 (Fed. Cir. 2010).

The Court is not convinced that this strict literal reading of the statute would apply in all
contexts. Indeed, there are many well-cited cases in which multiple plaintiffs or multiple
defendants have received fee awards; Roscisewski itself was a decision in which two groups of
defendants prevailed. 1 F.3d at 227. In addition, when separate causes of action are
consolidated for trial, contain counterclaims, or implead separate defendants, it might be possible
for a defendant to prevail against one party, but to lose against another. See, e. Modick v.

Carve] Stores of N. Y., Inc., 209 F. Supp. 361, 363 (S.D.N.Y. 1962) (?The consolidation of

separate causes of action involving separate plaintiffs for trial purposes does not free a losing

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plaintiff from the duty of paying costs simply because another one of the plaintiffs was
successful?).

When courts award fees to multiple ?prevailing parties,? however, those parties appear on
the same side of a single cause of action. See, e. Rosciszewski, 1 F.3d at 227. By way of
illustration, the Modick decision contained ?various plaintiffs [with] different causes of action
involving different sets of facts.? 209 F. Supp. at 363. In that case, the separate suits were
combined in the same case in a way that allowed the court to award against some plaintiffs but
not others. Id. In most cases, however, the ?prevailing parties? will be either be all plaintiffs or
all defendants in a given action. See, e. Bonnes v. Long, 651 F.2d 214, 218 (4th Cir. 1981)
(?nding that was error . . . for the district court to conclude that the plaintiffs were not
prevailing parties?).

In that sense, the Court reads 505 to mean that only one side of a cause of action may
prevail. This understanding ?ts neatly into our adversarial judicial system, which requires a
?case or controversy? so that courts may pick a clear winner from one side of the See US.
Const. art 111, 2, cl. 1. It also comports with cases like Cramer in which the Fourth Circuit
awarded fees to defendants despite the fact that the plaintiff ?enjoyed [some] measure of success
[on his] ERISA claim.? Cramer v. Crestar Fin. Corp., 67 F.3d 294 (4th Cir. 1995). This
holding, along with Intellectual Ventures 1, Shum, and others like them, contemplates a search
for a single winner.

In this case, BMG is that winner. BMG and Round Hill were represented by the same
counsel and brought the same claims against Cox in a uni?ed complaint. These were not
separate causes of action consolidated for ?the convenience of parties and the Court,? but were

instead a product of the same wrongful acts by Cox, and were uni?ed by an intertwined set of

37

facts. Modick, 209 F. Supp. at 363. Cox litigated against both plaintiffs without ?ling any
counterclaims or impleading any additional parties. After a prolonged lawsuit, Cox lost a $25
million dollar jury verdict.

In comparison, the non-prejudicial dismissal of Round Hill is something far less than
triumphant. This conclusion is ampli?ed because the preclusive effect of the Court?s decision
would likely be contested and limited in any future judicial proceeding. 16 As such, another
Round Hill affiliate (the one with legal ownership of the copyrights) could still bring the exact
same case against Cox. In fact, Round Hill itself could likely bring another lawsuit on a similar
set of facts if it affected a proper transfer of full copyright ownership. In sum, although Cox
successfully obtained a dismissal against Round Hill, it still lost a $25 million jury verdict. This
loss precludes the Court from awarding it fees and costs as a ?prevailing party? under 505.

V. CONCLUSION

In conclusion, the Court GRANTS IN PART and DENIES IN PART Motion
for Attorney?s Fees. The motion is DENIED to the extent it seeks nontaxable expenses. After
applying a 20% discount for improper billing entries and a reduced degree of success, the motion
is GRANTED as to $8,383,468.06 in attomey?s fees.

bill of costs is similarly GRANTED IN PART and DENIED IN PART. The
motion is DENIED with regard to transcription fees that the parties agreed to split before trial.
The remaining costs are reduced by 10% for the claims on which BMG did not succeed, but

otherwise GRANTED for a total of $146,790.76

 

'6 In large part, the parties? brie?ng focuses on the issue of whether a dismissal without prejudice on statutory
standing grounds can be the basis for ?prevailing party? status under any circumstances. The Court does not reach
this question in its analysis, but it is worth noting that, even If Cox were a ?prevailing party,? the without-prejudice
categorization of Round Hill?s dismissal would likely temper the ?degree of success? that Cox enjoyed.

38

Because Cox is not a prevailing party under 17 U.S.C. 505, each of its motions for fees

and costs are DENIED in full.

An appropriate order shall issue.

Liam O?Grad
United States lstrict Judge

February 2017
Alexandria, Virginia

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