Paula Petrella will be able to proceed with her case after the Supreme Court ruled that lower courts should not have dismissed the suit on the basis that she waited too long to file it in 2009.
The question before the Supreme Court was not about Petrella’s rights to “Raging Bull,” but over her claim that a three-year statute of limitations on copyright cases should have kept her litigation alive. Instead, a district court and the 9th Circuit said that she waited too long to file, and dismissed it under the doctrine of laches. That’s the legal standard that bars plaintiffs from filing cases if they have had unnecessary delay.
But the high court justices ruled 6-3 that the lower courts should not have thrown out her claim, in a ruling that could have implications for Hollywood studios as they seek to quickly dismiss suits brought by heirs and estates invoking rights to content made many years ago.
In the opinion written by Justice Ruth Bader Ginsburg, the majority held that Petrella should still be allowed to seek a claim on MGM’s returns from “Raging Bull” within the three-year statute of limitations period. Because she filed suit in 2009, it means that if she wins her case, she could collect damages going back to 2006. The movie has continued to be sold on home video and in streaming platforms.
“Nothing in this Court’s precedent suggests a doctrine of such sweep,” Ginsburg wrote in the majority opinion. “Quite the contrary, we have never applied laches to bar in their entirety claims for discrete wrongs occurring within a federally prescribed limitations period.”
MGM had argued that the defense of laches must be available, even when there is a statute of limitations period, because otherwise those who make a copyright claim on a movie could simply wait until it starts to turn a profit. The studio pointed out that she was first made aware that she may have a claim for ownership in the movie as far back as 1991, yet did not file suit until nearly two decades later.
“It is hardly incumbent on copyright owners, however, to challenge each and every actionable infringement,” Ginsburg wrote. “And there is nothing untoward about waiting to see whether an infringer’s exploitation undercuts the value of the copyrighted work, has no effect on the original work, or even complements it. Fan sites prompted by a book or film, for example, may benefit the copyright owner. Even if an infringement is harmful, the harm may be too small to justify the cost of litigation.”
She added, “If the rule were, as MGM urges, ‘use soon, or forever hold your peace,’ copyright owners would have to mount a federal case fast to stop seemingly innocuous infringements, lest those infringements eventually grow in magnitude.”
Ginsburg even suggested that it was MGM that could have sought a declaratory judgment to protect its investment when it found out in the 1990s that Petrella may have a claim to “Raging Bull.”
She wrote that “there is no evident basis for immunizing MGM’s present and future uses of the copyrighted work, free from any obligation to pay royalties.”
Petrella’s case will now return to the district court.
Her father, Frank Petrella, collaborated with Jake LaMotta on a screenplay in 1963 about LaMotta’s life. In 1976 they assigned the screenplay, as well as two other works, for the making of a motion picture, eventually made by MGM in 1980.
Petrella died in 1981. But under a previous Supreme Court decision, copyright renewal rights could revert to heirs, and his daughter, through an attorney, did just that in 1991.
The Supreme Court took the “Raging Bull” case because the 9th Circuit’s decision to dismiss it ran contrary to other appellate courts. In fact, plaintiffs’ attorneys have complained that the 9th Circuit has too often sided with studios in copyright cases, and the appellate judges’ willingness to dismiss claims based on the doctrine of laches was only one example of that.
Petrella’s attorney, Stephanos Bibas, professor of law at the University of Pennsylvania Law School, said that what the decision is significant because so many plaintiffs seeking to assert copyright claims are outmatched in legal resources against big media companies.
“Our job is to level the playing field, to protect people on the other side,” he said, adding that “this removes one of the barriers well-financed defendants can use to win.”
He said that Petrella was “thrilled and very gratified.”
Mark Perry of Gibson, Dunn & Crutcher, who represented MGM, said that “while we agreed with the 9th Circuit’s conclusion that laches is an available defense against stale copyright claims, the Supreme Court has spoken.
“The decision, however, does not end this matter as we continue to believe that the plaintiff’s case is legally and factually unsupportable. We look forward to vindicating our rights in the film ‘Raging Bull’ in the lower courts.”
Justice Stephen Breyer authored the dissenting opinion, joined by Chief Justice John Roberts and and Justice Anthony Kennedy.
Breyer argued that it was a matter of equity.
“The 3-year limitations period may seem brief, but it is not,” Breyer wrote. “That is because it is a rolling limitations period, which restarts upon each ‘separate accrual’ of a claim. If a defendant reproduces or sells an infringing work on a continuing basis, a plaintiff can sue every 3 years until the copyright term expires — which may be up to 70 years after an author’s death.”
The case’s impact may be greater now than even when “Raging Bull” was first released, as studios rely so heavily on remakes and reboots, mining the past for bankable source material.
William Kane, litigator with BakerHostetler, predicted that the decision “could open up new avenues for copyright owners to assert their rights and legitimately profit from recycled source material.”
The opinion brings certainty to plaintiffs, in that they will know they have a statute of limitations period rather than face a dismissal based on a court’s discretion, he said. But if a plaintiff wins, he noted, studios would still be able to deduct their costs incurred in distributing a movie, as Ginsburg mentioned in her opinion.
Kane represented the estate of Kevin McClory in a recent settlement with MGM of a 50-year dispute over the rights to the James Bond franchise.
Following the Petrella decision, studios may have to be “more vigilant in communicating with rights holders and tracking them down.”
“I think it just brings a lot more balance, and will require more studio cooperation with rights holders,” he said.
Jonathan Sokol, partner at Greenberg Glusker, said that he was not surprised by the ruling but a bit surprised that the majority said they didn’t find anything wrong with a plaintiff waiting until a movie made money before making a claim. Nor did the justices seem concerned whether the passage of time had diminished the availability of evidence or witnesses.
“It’s obviously a blow to the studios and also other production companies,” Sokol said. “For a long time studios thought a delay in time worked in their favor.”
He said that studios that make substantial investments in projects may want to seek a declaration in court for unresolved rights issues before proceeding.
But Sokol said the decision also may reflect a “more practical approach” to copyright, where plaintiffs can wait and see if lawsuits for acts infringement, particularly online, are really worth their
Many plaintiffs, he said, “simply don’t have money to sue. If (infringers) are not making any money off of it, why sue?”