New York Court Rejects “Limited Financial Means” Argument, Refuses to Reduce Fee Award in Facebook Live-Streaming Case

Posted on July 17th, 2018 by Legal Fee Advisors

By Zachary Kalmbach.

In May 2016, a man (“plaintiff”) publicly live-streamed on Facebook a 45-minute video of his partner giving birth to their child. Various news outlets (“defendants”) reported on the video and used very brief excerpts of the video in their news reports. Plaintiff sued defendants, alleging violations of the Copyright Act. The Southern District of New York dismissed the action, and defendants subsequently moved for attorneys’ fees under the Copyright Act in the amount of $121,469. The Court rejected plaintiff’s argument that the award should be reduced based on his alleged limited financial means.

Plaintiff objected to the amount of fees requested, first arguing—in an unsworn memorandum—that he was “a person of limited means” and that a full fee award could result in bankruptcy. Although the aim of the statute was not “ruination,” the Court rejected plaintiff’s argument because he submitted “no evidence at all as to his financial circumstances” other than the unsworn statement in a memorandum by his lawyer. The Court noted that reductions in fee awards based on limited means typically are made “in response to evidence rather than airy claims” and that plaintiff bore the burden of proving his financial circumstances.

The Court noted that plaintiff brought three other cases based on the same event and found that each of the cases were settled. Thus, the Court concluded that plaintiff must have had additional money from the settlements which he failed to disclose to the Court. In light of the lack of evidence of plaintiff’s financial situation and his failure to disclose benefits from the three settlements, the Court declined to reduce the fee award.

Plaintiff also challenged the reliability, sufficiency, and contemporaneity of the defendants’ time records, the costs charged by NBC for the work of its in-house counsel, and the overall reasonableness of the expenses. The Court rejected all the arguments for reasons that were not discussed in the 6-page ruling.

Interestingly, the Court included a footnote in the ruling reading, “The Court expresses no view on whether and to what extent plaintiff may have recourse against his attorney for the attorneys’ fees awarded here in view of any attorney advice to pursue this case and the failure to submit evidence of plaintiff’s financial condition.” This footnote suggests the Court’s apparent disapproval towards plaintiff’s attorney for failing to submit evidence of plaintiff’s financial decision, and even suggests that the attorney should never have brought the case in the first place.

This case shows the burden plaintiffs carry when arguing that a fee award should be reduced based on limited financial means. If they do not put forth solid evidence of their alleged limited resources demonstrating “ruination” a fee award may cause, courts may decline to reduce fee awards. Moreover, the aforementioned footnote should serve as a warning to lawyers that failing to submit such evidence may result in consequences beyond failing to recoup attorneys’ fees.

Kanongataa v. Am. Broad. Companies, Inc., No. 16-CV-7382 (LAK), 2017 WL 4776981 (S.D.N.Y. Oct. 4, 2017)

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