Friday, January 12, 2007

Laches and the Statute of Limitations

Previous posts (here and here) discussed whether laches is available against a claim brought within the three year limitations period provided for in Section 507(b). I think not for the reasons given in those posts, but in a lamentable tendency to treat copyright litigation as if it somehow enjoyed a special exemption from general principles applicable to general civil litigation, some courts have allowed laches to bar such claims. The latest to do so is the Sixth Circuit, in its January 10, 2007 opinion in Chirco v. Crosswinds Communities, available here (do a search by plaintiff's name Chirco). The court had a far sounder ground upon which to reach the result it wished, making its discussion even more regrettable.

It is not difficult to see why the court wanted to ding plaintiff for its delay. In the course of an earlier suit, plaintiff discovered facts that put it on notice of a different infringement. As the court of appeals recited:

During the discovery period for that federal law suit, Chirco v.. Charter Oak Homes, Inc. (No. 01-71403), the plaintiffs obviously learned of Glieberman's intention to build yet another development that allegedly infringed upon the plaintiffs' copyrights, because plans for a Glieberman project known as Jonathan's Landing in Howell, Michigan, were found in the plaintiffs' files, dating from April 16, 2001. Six months later, on October 16, 2001, the plaintiffs made a request of local officials for copies of the plans for the Jonathan's Landing project through the Michigan Freedom of Information Act. Those plans were then sent to the plaintiffs a week later, but no action was taken by Chirco and Moceri, even in May 2002, when Glieberman and Crosswinds Communities, Inc., broke ground for the 252-unit development. In fact, the plaintiffs took no steps to prevent the second alleged infringement of their copyrights until November 14, 2003, when the plaintiffs filed a second federal law suit against Glieberman, Chirco v. Crosswinds Communities, Inc. (No. 03-74600). By that time, 168 of the planned 252 units had been constructed, 141 of them sold, and 109 already occupied by the buyers.

Eventually, the defendants filed a motion for summary judgment in the second law suit, Chirco v. Crosswinds Communities, Inc., arguing that the plaintiffs' attempts to recover for copyright infringement were barred by the equitable doctrine of laches. The district judge agreed, ruling that the plaintiffs knew of the Jonathan's Landing construction for at least 18 months prior to the filing of the federal action. The district court further stated:

Defendants have shown prejudice in this case. As of the filing of the Complaint, more than 168 units were built, 109 of which were occupied. Plaintiffs have not shown why they did not diligently pursue the claim as to Jonathan's Landing as early as May 9, 2002, or perhaps earlier. Plaintiffs have not shown that the Jonathan's Landing case was in fact covered in Case No. 01-71403, a case in which Crosswinds is not a party. There is no mention of the Jonathan's Landing project in the Amended Complaint. Defendants had no notice that Plaintiffs were going to sue them regarding this project.

The court of appeals' approach was that of a de novo fact finder and statute re-drafter. As to monetary damages and injunctive relief, the court held that defendant had not shown undue prejudice, apparently disagreeing with the district court on the facts. As to plaintiff's request for destruction of completed and occupied condos, the court affirmed, saying "such a request smacks of inequity... ." True enough under the facts, but this has nothing to do with the statute of limitations, but rather is a discretionary question of remedial relief. The legislative history of the Architectural Works Protection Act provides sound support for not granting such relief.

The court's decision to rest this part of the opinion on laches was unnecessary, therefore, as was its decision to reverse on its application to money damages and injunctive relief: the Sixth Circuit permitted such relief but only after an extended discussion of laches that will open the barn door to routine arguments of the same kind, thereby causing litigants and courts extra time and expense. Sometimes just saying no is the best approach.

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