United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
A. FITZWATER, UNITED STATES DISTRICT JUDGE
instant motion for attorney's fees presents the question
whether a party who succeeds in compelling arbitration of a
copyright infringement claim can qualify as a
“prevailing party” under 17 U.S.C. § 505.
Concluding that the party cannot qualify as a
“prevailing party, ” the court denies the motion.
this case is the subject of a prior memorandum opinion and
order, see Heritage Capital Corp. v. Christie's,
Inc., 2017 WL 1550514 (N.D. Tex. May 1, 2017)
(Fitzwater, J.) (“Heritage I”), the
court will only recount the background facts and procedural
history that are pertinent to this decision.
Heritage Capital Corporation, Heritage Auctioneers &
Galleries, Inc., Heritage Numismatic Auctioneers, Inc.,
Heritage Auctions, Inc., Heritage Vintage Sports Auctions,
Inc., Currency Auctions of America, Inc., and Heritage
Collectibles, Inc. (collectively, “Heritage”)
operate the website www.HA.com
(“HA.com”), which hosts sales and auctions of
collectibles. Heritage alleged that defendants
Christie's, Inc. and Collectrum, Inc.
“Christie's, ” unless otherwise indicated)
had downloaded some or all of HA.com's listings using an
advanced computer code. Heritage traced this activity to
Christie's, discovered that some of the downloaded
listings had appeared on the Collectrum website, and filed
the instant lawsuit alleging seven federal- and state-law
claims, among them copyright infringement under 17 U.S.C.
§§ 106 and 501. Christie's moved to dismiss and
compel arbitration based on the arbitration clause in
Heritage's Website Use Agreement. In Heritage I the
court held that Heritage's claim fell under the Use
Agreement's broad scope, granted the motion to compel
arbitration, and dismissed the action with prejudice.
Heritage I, 2017 WL 1550514, at *6.
now moves for an award of attorney's fees under 17 U.S.C.
§ 505, a provision of the Copyright Act, alleging that
it is a “prevailing party” under the statute.
Heritage opposes the motion.
a general rule, litigants must pay their own attorney's
fees.” Stover v. Hattiesburg Pub. Sch. Dist.,
549 F.3d 985, 997 (5th Cir. 2008) (citing Alyeska
Pipeline Co. v. Wilderness Soc'y, 421 U.S. 240, 247
(1975)). “The ‘American Rule' is the starting
point for fee awards: Even prevailing litigants are
ordinarily not entitled to attorneys' fees from the
losing party.” Blue Skies Alliance v. Tex.
Comm'n on Envtl. Quality, 265 Fed.Appx. 203, 206
(5th Cir. 2008) (per curiam). A party may recover
attorney's fees, however, if authorized by statute or
contract. See Buckhannon Bd. & Care Home, Inc. v.
W.Va. Dep't of Health & Human Res., 532 U.S.
598, 602 (2001).
17 U.S.C. § 505, “[i]n any civil action under this
title . . . the court may  award a reasonable
attorney's fees to the prevailing party as part
of the costs.” 17 U.S.C. § 505 (emphasis added).
“Awarding attorney's fees to a prevailing party
pursuant to § 505 is the rule rather than the exception,
and fees should be rewarded routinely.” PAR
Microsystems v. Pinnacle Dev. Corp., 995 F.Supp. 655,
656 (N.D. Tex. 1997) (Fitzwater, J.) (citing
Micromanipulator Co. v. Bough, 779 F.2d 255, 259
(5th Cir. 1985)). Although the recovery of attorney's
fees is routine under § 505, it is not automatic; they
are “‘to be awarded to prevailing parties only as
a matter of the court's discretion.'”
Virgin Records Am., Inc. v. Thompson, 512 F.3d 724,
726 (5th Cir. 2008) (quoting Fogerty v. Fantasy,
Inc., 510 U.S. 517, 534 (1994)).
question whether Christie's can recover attorney's
fees under § 505 turns on whether Christie's
qualifies as a “prevailing party.”
‘prevailing party' is one who has been awarded some
relief by the court[.]” Buckhannon, 532 U.S.
at 603. “The touchstone of the prevailing
party inquiry . . . [is] the material alteration of the legal
relationship of the parties in a manner which Congress sought
to promote in the fee statute.” Sole v. Wyner,
551 U.S. 74, 82 (2007) (quoting Tex. State Teachers
Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782,
792-93 (1989)) (citing Buckhannon, 532 U.S. at 605).
Although the Fifth Circuit has not yet directly interpreted
the term “prevailing party” in § 505, under
analogous statutes a prevailing party must “(1) obtain
actual relief that (2) materially alters the legal
relationship between the parties and (3) modifies the
[opposing party's] behavior in ...