Horror Inc. v. Miller

Writer of Friday the 13th screenplay awarded $886,564.88 in attorneys’ fees after prevailing in copyright termination action to reclaim rights to screenplay.

Manny Co. hired Victor Miller in 1979 to write a screenplay for the horror film Friday the 13th, which went on to spawn numerous sequels and earn tens of millions of dollars for Manny Co. and its successor, Horror Inc. In 2016, Miller served a termination notice pursuant to Section 203(a) of the Copyright Act to terminate the agreement he had signed with Manny and thereby reclaim the rights to the screenplay. Manny and Horror commenced this action for declaratory judgment that the screenplay was written as a work for hire and that Miller therefore held no authorship rights to the screenplay. Miller prevailed on summary judgment and on appeal to the Second Circuit Court of Appeals. (Read our summary of the district court’s decision here and the Second Circuit’s affirmance here.) Miller thereafter moved for attorneys’ fees pursuant to Section 505 of the Copyright Act.

The district court first analyzed whether, as a threshold matter, attorneys’ fees were awarded in an action brought pursuant to the Declaratory Judgment Act, in contrast to a copyright infringement action brought directly under the Copyright Act. While the Second Circuit has not explicitly held that fees are awardable in copyright-related actions brought under the Declaratory Judgment Act, the district court observed that other courts have awarded attorneys’ fees pursuant to Section 505 in declaratory judgment actions that, like this one, “arise under” the Copyright Act. Accordingly, the court determined that fees are awardable in declaratory judgment actions centering on the Copyright Act’s termination provisions.

The court assessed whether to award fees to Miller, as the prevailing party, under the multifactor test set forth in the Supreme Court’s decisions in Fogerty v. Fantasy (1994) and Kirtsaeng v. John Wiley & Sons (2016). 

Addressing the first factor—whether plaintiffs’ claims were “objectively unreasonable” or “frivolous”— the court rejected plaintiffs’ contention that this case involved novel and unsettled questions of copyright law. Rather, the court deemed plaintiffs’ claims contrary to well-settled precedent, which, according to the court: “Plaintiffs appeared to try to circumvent rather than to try to challenge.” On that basis, the court deemed plaintiffs’ claims objectively unreasonable. The court held that the claims were not frivolous, however, given that the agency test to justify plaintiffs’ work-for-hire assertions was, under Supreme Court precedent, a “nonexhaustive” one such that there was “at least an arguable basis in law” for plaintiffs’ claims.

Turning to the second factor—the presence of improper motivation or bad faith conduct—the court disagreed with plaintiffs’ contention that they brought the action merely to quiet title to the screenplay. Noting that plaintiffs also brought claims for slander of title and for violation of the Connecticut Unfair Trade Practices Act, the court explained that plaintiffs had alleged that Miller engaged in tortious conduct and, on that basis, perceived that plaintiffs brought the action “to intimidate Miller from exercising his termination rights,” concluding that this reflected an improper motive.

Examining the third Fogerty factor—considerations of compensation and deterrence—the court noted that an award of attorneys’ fees may be justified on these grounds where they are faithful to the purposes of the Copyright Act. The court found that Miller’s successful termination of plaintiffs’ copyright interest was consistent with the congressional purpose in creating termination rights for the benefit of authors and that a fee award was appropriate to compensate Miller. The court further noted that an award of fees would deter others from bringing unreasonable claims against authors who assert valid termination rights.

The court thus held that a fee award was appropriate under this analysis. In determining the amount of the award, the court applied the lodestar method to ascertain the reasonable amount of fees, based on the reasonable hourly rates for Miller’s attorneys and the reasonable amount of time expended on work relating to the copyright issues in the action. Finding that the rates for each of Miller’s five attorneys were reasonable for copyright practitioners, the court turned to whether the 1,855.45 hours identified as having been expended by Miller’s counsel (over 1,000 of which were by Miller’s lead attorney) were reasonable. The court noted that some of the attorney time appeared excessive and that Miller’s counsel’s work in advancing an anti-SLAPP motion were not recoverable and, on that basis, reduced the overall amount of recoverable attorney time by 25%.

Based on the foregoing, the court awarded Miller $886,564.88 in attorneys’ fees.

Summary prepared by Wook Hwang and Alex Inman