We’ve written and lectured a lot on the subject of factoids. This is one that always sounds great, millions of real dollars coming your way. And it’s not from a long lost relative in Nigeria, but rather a real judge in a real courtroom talking real money. But scratch the surface and you find out, it ain’t necessarily so.
Lawyers and photographers are hardly immune from intentionally or unintentionally engaging in false advertising. Oft times a headline from a newspaper, blog or web site will proclaim, “Joe Photographer Wins 10 Million Dollar Copyright Case” or “Sally Lawyer Obtains 15 Million Dollar Judgment from Federal Court”. While Joe and Sally may have indeed secured judgments in those exact astronomical amounts, such proclamations may be simultaneously accurate and worthless. Lawyers use them on their websites to impress potential clients and photographers who “win” such cases become instant celebrities or in some cases, copyright “experts”.
The concept of a “default judgment” is a legal term indicating that one side simply “gave up” the fight. While there are several scenarios by which a default judgment may be obtained, the typical ones are:
1. The person being sued has died or the company receiving the claims (such persons/companies known as a “defendant”) has long since closed its doors;
2. The defendant wisely elects not to participate a given legal action because he/she/it resides outside of the state or country in which the lawsuit was started. A judgment obtained by virtue of a default is often unenforceable (a/k/a noncollectable) in the state in which the non-participant lives, resides or does business. In such cases the plaintiff would have to sue again in a state or country where the defendant does in fact live, work, is incorporated or does business;
3. The defendant’s attorney(s) maintains that the court selected by the plaintiff is without power to adjudicate the case and intentionally ignores the lawsuit brought in that court and rightly couldn’t care less what the end result turns out to be.
4. In the middle of the action the defendant elects to move out of the United States to a country (like Iran) where American Law can not touch them. (It happened to Ed and neither he nor his client has any intention of flying to Tehran anytime soon)
5. The defendant company is unstable economically and elects to take a default judgment so it can seek protection in a Bankruptcy Court which in effect, has the power to lower the amount awarded by a regular court or even discharge the debt without any payment. The bigger the judgment the better it is for the company filing for bankruptcy protection.
6. The amount sought was so small that it was cheaper to concede the case than pay a lawyer to defend it. This gives the potential loser plenty of time to hide assets, make themselves judgment proof or simply delay paying what is due by at least the amount of time it takes for the lawsuit to wind its way through the courts. If the defendant is a salaried person, most states will allow him/her to pay off the judgment on an extended basis ie 10% of their weekly salary. Intentionally taking a default gives a deadbeat the opportunity to get the benefit of a payment plan. So a judgment in the sum of 1 million dollars rendered against a 63 year old person with no known assets but who currently makes 50k per year will never begin to get paid off. If the defendant retires and goes to live in the Caymans or Bali, the winner of the case won’t even collect enough money to pay for their own lawyers’ fees.
7. In virtually all default cases the plaintiff is awarded a sum of money with no input or opposition from the other side. The judge hears only the plaintiff’s case and renders a decision mitigated only by the judge’s own common sense as to how much the plaintiff should get. Remember, once the other side doesn’t show up (like a “forfeit” in Little League) the plaintiff (essentially) wins automatically and the only issue remaining for the court is how much the winner should get. Anybody can score touchdowns when there is no defense on the field.
Remember:
A. A default judgment rarely serves as a precedent and often has little legal effect on other cases. Simply put, a default judgment is rarely of any importance in any other similar type case;
B. Most default judgments go uncollected;
C. They sound real impressive to those not sophisticated in legal matters;
D. Generally no legal principal has been set by a judge or jury which has not had the benefit of hearing both sides of the case.
Which leads us back to our opening. With rare exceptions, no self-respecting lawyer would boast about a multi million dollar default judgment to any other lawyer. Most litigators have had more than a few big default judgments. This office has several copyright default judgments, which are frankly, quite worthless.
When you see or hear of a photographer or lawyer “getting” a multi million-dollar judgment, check to see if it has in fact been collected or whether there was even a trial. If you see the word “default” you are likely better off tuning in Modern Family.
#1 by Matt Timmons on April 16, 2013 - 2:58 am
(Slightly off topic) Our buddy Joe McNally posted on his blog last week about an infringer that his office contacted and instructed to remove their stolen image, let them off the hook and all was well. In Joe’s whimsical writing style, he describes that he’d rather greet the infringer with camo face paint and an assault chopper. It brought up a point to me that since anyone can steal an image and photographers can rightfully sue; however no lawyer in his right mind is going to take a case where the infringer when viewed from a monetary stance resembles a turnip. So in essence, is it true that broke thieves are free to steal whatever they want? And if so, I reckon the only resort there is in dealing with these financially challenged infringers, as I replied to Joe, is a cinder block, a chain and a deep enough river.
#2 by Jack and Ed on April 16, 2013 - 7:32 am
Short response because Ed and I are in Orlando today getting ready for Photoshop World. I’ll see Joe here and talk to him, but this is not something you should always decide that the infringer has no resources. One website I sued claimed poverty and they said it would put them out of business. A “turnip” in your terms. Well, in discovery we found out they made about a million dollars a year on this site. So who was the poor one here? We settled for an amount that made me very happy. They no longer steal images. And that’s one of the issues. IF you just let people “off the hook” there is no incentive to stop. You need to make them aware the repercussions from stealing. We’ll write more on this subject. Now I’m off to set up for my Canon Pre-Convention lighting workshop.
#3 by Jason on April 16, 2013 - 3:07 pm
Is it ok to use book cover photos for our website. I am just trying to make a website that keeps track of all the books that my 11 year old son has read so he can look back at it anytime he wants.
#4 by Matt Timmons on April 16, 2013 - 10:50 pm
Enjoy Orlando guys. Would definitely like to hear Joe’s reasoning and learn more on this subject. I can see where many a photographer would rather allow their stolen property to go without recourse if the end result amounts to a bill from their attorney and that’s all.
#5 by Edward C. Greenberg on April 22, 2013 - 2:36 pm
You must never, ever assume that an infringer is “broke”. As discussed at our classes in Orlando, most businesses carry “Errors and Omissions” Insurance Policies. In such event, akin to an auto accident, the coverage may exceed by many times the PERCEIVED value and/or income of a company. Additionally, a judgment is typically good for 10 or more years enabling the winner to get paid whenever the loser receives funds, sells property, transacts business etc.
Never, never assume that an infringer does not have the resources to pay a judgment. Until your attorney is well into the pre-trial discovery process, you have no way of knowing what infringer’s financial ability to pay now or in the future can possibly be. Typically a guilty party which is anything but a Fortune 500 company will tell creators that they are “small” or “broke” for the sole purpose of dissuading you from suing. They lie and they lie because it generally works.
#6 by Edward C. Greenberg on September 17, 2013 - 7:02 pm
Following up on the above April 22nd post – we obtained a judgment of over $100,000 against a photo rep who claimed to be “broke and out of business”. the judge granted our request for punitive damages after we established that the rep used monies due our client, the photographer, for the rep’s own business and personal reasons. We have been receiving payments for well over a year via a monthly check from the NYC Marshal from this “out of business rep”. The September check came today – $475. Some months the amount is much more other times less. Those checks just keep coming and will continue to do so until the rep is dead and the estate exhausted of funds.
A bankruptcy filing will serve only to accelerate the payments to our client so the “broke” rep is stuck. Interest on the unpaid balance continues to run at 9% per year and our client is getting back all the money due him/her and more. The rep did manage to stick his/her lawyer who actually believed that the client had no money and wound up working for nothing before quitting. Too bad it was too late for that barrister to collect.
Lesson to be learned – don’t ever believe that you “can’t get blood out of a stone”. You don’t have to. You need only collect money which a judge has determined is due you. The law gives you many legal avenues to collect those bucks.