Skip to content

It looks like we may have content for your preferred language. Would you like to view this page in English?

IP/Entertainment Case Law Updates

Shangold, et al. v. The Walt Disney Company, et al.

The Second Circuit affirmed the district court’s dismissal of the complaint as a sanction for the plaintiffs’ committing a fraud upon the court in this copyright infringement case brought against a publisher and author.

The plaintiffs wrote a series of treatments for a children’s theatrical production called Starmond and sent several versions of the treatment to Disney over several years. In 2002, Disney’s subsidiary, Miramax Books, published the novel Summerland by Michael Chabon. The plaintiffs claimed that the novel infringed their copyright in their treatment.

However, the defendants established, by clear and convincing evidence, that the plaintiffs submitted fraudulent evidence to the district court in order to bolster their claim of copyright infringement. For example, one of the plaintiffs’ treatments submitted to the district court, which they claimed to have written in the spring of 1995, contained various references to a character’s “Palm Pilot.” The defendants established that palmOne, Inc., the company that manufactures the “Palm Pilot,” did not itself refer to the device by that name, even for internal corporate purposes, until late 1995. Furthermore, the name was not known to the public until early 1996, several months after the plaintiffs claimed to have written the treatment. In addition, both plaintiffs offered testimony, which the district court found to be false, at their respective depositions in order to bolster their claims and continue the fraud. The Second Circuit held that while dismissal is a harsh sanction, it is appropriate if there is a showing of willfulness, bad faith, or fault on the part of the sanctioned party, and that the plaintiffs’ repeated false statements showed their willfulness and bad faith.

The Second Circuit also found that the district court did not abuse its discretion in awarding attorney’s fees to the defendants only in the amount of $10,000, a smaller amount than the defendants had requested. The court noted, among other things, that it is within the discretion of the district court to take into account the financial assets of the plaintiffs when determining the amount of fees to be awarded. “We are not at all unsympathetic to the defendants’ position that the misbehavior, including but not limited to fraud, in which the district court found the plaintiffs to have engaged resulted in substantial unnecessary expenditures by the defendants. It warrants serious sanction. But we also note that Shangold and Niederman were represented by counsel before the district court. That court was in a far better position than we are, in rendering the fee decision, to determine the extent to which the plaintiffs’ counsel and not the plaintiffs themselves may have been at fault.”