Laches Defense Knocked Out in Raging Bull Decision
Supreme Court Decides Petrella v. Metro-Goldwyn-Mayer, Inc.
The Supreme Court issued its decision in Petrella v. Metro-Goldwyn-Mayer, Inc., on Monday. Justice Ginsburg writing for the Court reversed and remanded the Ninth Circuit’s decision, holding that laches could not be invoked to preclude adjudication of a claim for damages brought by the owner of a screenplay alleging copyright infringement within the three-year window established by Section 507(b) of the Copyright Act. The Court determined in extraordinary circumstances laches may limit the relief equitably awarded.
The allegedly infringing work is the motion picture Raging Bull, based on the life of boxing champion Jake LaMotta. LaMotta, along with Frank Petrella, wrote a screenplay about his story, which was copyrighted in 1963. In 1976, the pair assigned their rights and renewal rights, which were later acquired by United Artists Corporation, a subsidiary of respondent MGM. In 1980, MGM released and registered a copyright in the film Raging Bull and still markets the film today.
Upon Frank Petrella’s death, renewal rights reverted to his daughter, Paula Petrella, who became the sole owner of the copyright. Petrella advised MGM that its exploitation of Raging Bull violated her copyright and threatened suit. January 6, 2009, nine years later, she filed an infringement suit, seeking monetary and injunctive relief limited to acts of infringement falling within the three-year statute of limitations contemplated by the Act. MGM moved for summary judgment on the equitable doctrine of laches, arguing that Petrella’s 18-year delay in filing suit was unreasonable and prejudicial to MGM. The District Court granted MGM’s motion, holding laches barred Petrella’s complaint and the Ninth Circuit affirmed. The Supreme Court reversed the lower courts and remanded, explaining the lower courts’ position is contrary to §507(b) and precedent on laches, and accordingly, there was no basis for dismissing Petrella’s suit for damages.
Under the Act’s statute of limitations, Petrella could recover damages for infringements in the last three years, such as profits from exploiting the movie since 2006. Petrella could also obtain injunctive relief against future infringement, which would require the owners of the movie to reach an agreement with her if they wanted to continue to exploit the movie. The Court noted that if infringement within the three-year window is shown, a defendant (MGM) may offset against profits made in that period expenses incurred in generating those profits. §504(b). In addition, a defendant may retain the return on investment shown to be attributable to its own efforts, as distinct from the value created by the infringed work.
The Court explained that MGM’s arguments regarding the scope of the laches defense are ineffective. Justice Ginsburg wrote that because laches is an equitable doctrine, it could not have a role in determining the timeliness of an action for damages. Although courts have applied laches to assess timeliness for causes of action without a statute of limitations, laches is inappropriate in this case because the Act does have a statute of limitations. Petrella, at 14-15. The Court explicated that permitting laches to be an affirmative defense available in every civil action to bar all forms of relief, as MGM suggests, would be too expansive and would essentially override the statute of limitations contemplated the Copyright Act, instead of acting as a gap-filler.
Second, while MGM argued that laches, like equitable tolling, should be “read into every federal statute of limitation,” laches, unlike tolling, cannot be described as a rule for interpreting a statutory prescription. Petrella, at 15-16.
Third, the Court explained that §507(b)’s limitations period, coupled to the separate-accrual rule, allows a copyright owner to defer suit until she can estimate that litigation is worthwhile. Accordingly, the Court was not moved by MGM’s argument that a laches defense is necessary to prevent a copyright owner from doing nothing while waiting to see what an alleged infringer’s investment will be.
Fourth, in response to MGM’s concern that evidence needed or useful to defend against liability will be lost during a copyright owner’s inaction, the Court notes that Congress must have been aware that the passage of time and author’s death could cause evidentiary issues when it provided for reversionary renewal rights that an author’s heirs can exercise long after a work was written and copyrighted.
Fifth, the Court explained that the doctrine of estoppel may bar the copyright owner’s claims completely, eliminating all potential remedies, if a copyright owner engages in intentionally misleading representation concerning his abstention from suit. Petrella, at 19.
Finally, the Court explained the doctrine of laches could bar equitable claims in “extraordinary circumstances.” The Court stressed that Petrella’s claim does not present extraordinary circumstances because the relief sought “would not result in total destruction of the film, or anything close to it.” The Court noted that the trial court could take delay into account in determining appropriate relief, but it was wrong to reject the suit at the outset.
Justice Breyer, joined by Chief Justice Roberts and Justice Kennedy dissented, arguing that actions at the core of Petrella’s suit seem inequitable, and impose unreasonable burdens on those who exploit copyrighted works.