Pearson Education, Inc. v. Almgren

Summarized by Sarah Smegal , Bartlett Hackett Feinberg PC
13 years 7 months ago

Citation:

Pearson Education, Inc. v. Almgren, --- F.3d ---, 2012 WL 2865968 (8th Cir. July 13, 2012)

Tag(s):

Ruling:

The Eighth Circuit Court of Appeals affirmed the orders of the Bankruptcy Court for the District of Minnesota striking the Appellants' demand for a jury trial on the amount of damages in relation to copyright infringement claims and denying an award of attorney's fees sought pursuant to 17 U.S.C. s. 505.

Procedural context:

Appellants appealed two orders entered by the Bankruptcy Court for the District of Minnesota. The District Court for the District of Minnesota affirmed the orders. Appellants appealed to the Eighth Circuit Court of Appeals, which also affirmed the Bankruptcy Court's orders. Legal conclusions were reviewed de novo and findings of fact for clear error. The Court of Appeals, citing Katchen v. Landy, 382 U.S. 323 (1966), agreed the Appellants had "relinquished their right to have a jury determine the amount of damages when [Appellants] filed claims against [the Debtor's] bankruptcy estate." The Court of Appeals agreed with other circuits to address the issue and rejected Appellants' argument that Katchen and Langenkamp v. Culp, 498 U.S. 42 (1990) (per curiam), did not apply to non-dischargeability actions and were limited to preference actions. The Court of Appeals further rejected Appellants' contention that Stern v. Marshall, 564 U.S. ---, 131 S.Ct. 2594 (2011) cast doubt on the continued viability of Katchen and Langenkamp and noted that Katchen and Langenkamp were expressly distinguished by the U.S. Supreme Court in the Stern decision. Finally, the Court of Appeals affirmed the denial of attorney's fees to Appellants pursuant to 17 U.S.C. s. 505 and case law interpreting the statute, and refused to find that the Bankruptcy Court had "committed a clear error of judgment in finding that an award of attorney's fees would not 'advance considerations of compensation and deterrence' in these 'particular circumstances.'"

Facts:

Textbook publishers and appellants, Pearson Education, Inc., Cengage Learning, Inc., and The McGraw-Hill Companies, Inc., filed a copyright infringement suit in the District Court for the Southern District of New York against the Debtor, Joel Thomas Almgren, to "'make an example of' him through litigation." The cost of litigation rendered the Debtor insolvent and he filed for Chapter 7 bankruptcy protection in the Bankruptcy Court for the District of Minnesota. Appellants filed proofs of claim and initiated an adversary proceeding seeking a declaration that any damages owed by the Debtor for copyright infringement were non-dischargeable in bankruptcy. The Bankruptcy Court made a finding of willful infringement, but awarded the minimum in statutory damages, resulting in an award of $14,250 deemed non-dischargeable in bankruptcy. The Bankruptcy Court denied the Appellants' motion for attorney's fees in excess of $90,000.

Judge(s):

Murphy, Gruender, Ross (sitting by designation)

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