Petrella v. Metro-Goldwyn-Mayer Inc.

Ninth Circuit affirms grant of summary judgment in copyright action alleging that defendants infringed plaintiff’s interests in a book and two screenplays that plaintiff claimed formed the basis of the 1980 motion picture Raging Bull, concluding that plaintiff’s claims were barred by the equitable defense of laches.

After retiring from boxing, Jake LaMotta collaborated with Frank Peter Petrella to produce a book and two screenplays about LaMotta’s life. In 1976, Petrella and LaMotta assigned all their respective copyrights for the book and screenplays to Chartoff-Winkler Productions, Inc., and in 1978 defendant Metro-Goldwyn-Mayer Studios Inc. acquired the motion picture rights to Raging Bull from Chartoff-Winkler. Plaintiff, Petrella’s daughter, brought suit, alleging that, following her father’s death in 1981, she became the sole owner of his interest in the book and the two screenplays. In 1991, plaintiff filed a renewal application for the 1963 screenplay. In 1998, plaintiff’s attorney contacted the defendants, asserting that plaintiff had obtained the rights to the 1963 screenplay and that the exploitation of any derivative work, including the motion picture Raging Bull, was an infringement of these exclusive rights. Although plaintiff repeatedly threatened to take legal action, she did not file suit until 2009. The district court granted summary judgment in favor of the defendants, holding that plaintiff’s claims were barred by the equitable defense of laches. The district court also denied the defendants’ motions for sanctions and attorney’s fees. On appeal, the Ninth Circuit affirmed.

At the outset, the circuit court considered whether plaintiff’s conduct constituted laches. Laches, instructed the court, prevents a plaintiff who, with full knowledge of the facts, acquiesces in a transaction and sleeps on her rights. To prevail on a defense of laches, a defendant must prove that (1) the plaintiff delayed in initiating the lawsuit, (2) the delay was unreasonable, and (3) the delay resulted in prejudice. The court held that, applying either an abuse of discretion or a clear error standard, the district court’s decision to grant summary judgment was proper because defendants had established that no genuine issue of material facts existed as to these three elements.

First, the court found that plaintiff, who was aware of her potential claims since 1991 and did not file her lawsuit until 18 years later, delayed in initiating the lawsuit. Second, the court concluded that plaintiff’s explanations for the delay – that her mother was ill and that her family could not afford to bring suit – were unsupported by evidence, and in any event, were insufficient to demonstrate that the filing delay was reasonable. The court also noted that while a delay to determine whether the scope of proposed infringement would justify the cost of litigation might be reasonable, delay for the purpose of capitalizing on the value of the alleged infringer’s labor by determining whether the infringing conduct will be profitable is not, and the evidence suggested that the true cause of plaintiff’s delay was that Raging Bull had not made any money during the delay period.

Third, the court found that plaintiff’s delay resulted in prejudice to the defendants, given that defendants expended substantial financial resources to distribute the Raging Bull film in the United States and abroad; spent $3 million to create, promote, and distribute a 25th Anniversary Edition of the film; incurred $100,000 in costs to convert Raging Bull to the Blu-Ray format; and entered into numerous agreements to license the film through 2015. During the 18-year period of plaintiff’s delay, defendants made business decisions and entered into contracts relying on their belief that they were the rightful owners of the right to exploit Raging Bull. This, concluded the court, is the essence of expectations-based prejudice.

The court also held that laches barred plaintiff’s state law claims for unjust enrichment and accounting claims. Plaintiff argued, in the alternative, that defendants, as co-owners, rather than infringers of the book, had an ongoing duty to account to and pay her for any monies derived through the exploitation of the book and its derivatives. The court explained that, because unjust enrichment and non-contract-based accounting claims are equitable remedies, they are also subject to and can be barred by the defense of laches.

Finally, the court affirmed the district court’s ruling that defendants are not entitled to sanctions under Rule 11 and attorney’s fees for plaintiff’s alleged unjustified filing and prosecution of the action. The court agreed with the district court that plaintiff had a reasonable belief that she could overcome the laches defense because laches is an equitable doctrine involving many variables. In addition, the court noted that plaintiff’s attempt to distinguish applicable case law was not legally and factually unreasonable, and no evidence of improper motive existed.