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Atlantic Recording Corp., et al. v. Andersen

In this copyright infringement case involving peer-to-peer file sharing brought by the RIAA on behalf of various record companies, the claims against the defendant were dismissed with prejudice. The defendant filed a motion requesting attorney’s fees and a magistrate judge recommended that her motion be granted. The district court approved the magistrate’s recommendation, finding that the defendant was the prevailing party for purposes of awarding attorney’s fees under the Copyright Act.

The court rejected the plaintiffs’ narrow reading of Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep’t of Health and Human Res., 543 U.S. 598 (2001), stating that the plaintiffs ignored subsequent Ninth Circuit case law specifically rejecting the notion that a party must obtain either an “enforceable judgment on the merits” or a “court-ordered consent decree” to be considered a prevailing party.” The court noted that in Buckhannon, the court held that to be considered a prevailing party, one must have obtained a “material alteration of the legal relationship of the parties” that is judicially sanctioned, such as a judgment on the merits or a court-ordered consent decree.

The district court held that the magistrate judge was correct in concluding that there had been a material alteration of the legal relationship of the parties because the plaintiffs’ copyright infringement claims were dismissed with prejudice, and thus the defendant had received all of the relief available to a copyright defendant. Moreover, the district court granted the defendant’s motion to dismiss her counterclaims without prejudice, thereby allowing her to raise those claims in a pending class action in the same district. The court concluded that taken as a whole the parties’ stipulation of dismissal of all of the plaintiffs’ claims with prejudice, the court’s retention of jurisdiction to award attorney’s fees, and the court’s order dismissing the defendant’s counterclaims without prejudice provided a sufficient “judicial imprimatur” on the “alteration of the legal relationship of the parties” to justify conferring prevailing party status on the defendant.