Petrella v. MGM: Supreme Court Recognizes Limits on Laches

by Foley & Lardner LLP
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The word “laches” is from French, meaning “remissness” or “slackness.” One of the familiar equitable defenses, laches developed in chancery to prevent unreasonable delay in pursuing a right or claim, lest that delay prejudice the defendant. Normally equitable defenses can be applied broadly. “Equity” itself comes from the Latin “aequitas,” a concept of justice, equality, or fairness. Last week’s decision from the Supreme Court in Petrella v. Metro-Goldwyn-Mayer, No. 12-1315 (May 19, 2014), however, teaches that there are limits to this venerable defense.

Petrella stems from the 1980 film Raging Bull, directed by Martin Scorsese. The movie starred Robert De Niro, portraying troubled boxer Jake LaMotta. The real LaMotta memorialized the story of his career in two screenplays and one book, with the help of life-long friend Frank Petrella years earlier. LaMotta and Petrella assigned their rights to a film company in 1976. Though critically acclaimed, initially the movie was not a commercial success.

The petitioner, Paula Petrella, is Frank Petrella’s daughter. In 1991 she renewed the copyrights in her father’s work after his 1981 death, having learned from an attorney that assignments of copyrights revert to an author’s heirs at death. In 1998 Paula’s attorney informed MGM that Raging Bull infringed on her renewed copyright. MGM denied the claim, and, after having waited for the film to become profitable, Paula brought suit in 2009 in California. MGM raised the defense of laches in its motion for summary judgment (based on the 18-year delay between the renewal of the copyright and filing suit), and the district court granted the motion. The Ninth Circuit affirmed.

What was unique about the case was the statute of limitations. 17 U.S.C. § 507(b) is a three-year look-back limitations period. Infringement is a violation subject to the separate-accrual rule, so the statute of limitations runs from each successive act of infringement, a sort of continuing violation. Paula, therefore, could recover damages for the three years preceding 2009. (Undoubtedly she had no interest in the earlier years, since she needed to prove damages based on the film’s commercial success.)

Paula argued that laches should not bar her claim where the statute of limitations operates to limit it to three years. The Supreme Court agreed in a 6-3 opinion authored by Justice Ginsburg that was in no way limited to the Copyright Act. Justice Breyer dissented, joined by Chief Justice Roberts and Justice Kennedy.

Laches, the Court held, “is a defense developed by courts of equity; its principal application was, and remains, to claims of an equitable cast for which the Legislature has provided no fixed time limitation.” In other words, absent extraordinary circumstances in which the doctrine might still operate against an equitable remedy, “in face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief.” The statute of limitations trumps the equitable defense.

This appears to be an undecided issue in Wisconsin. No Wisconsin court has reached precisely this conclusion, though old Wisconsin cases recognize that courts applying laches are inclined to mimic the statutes of limitations for similar actions at law. Perhaps a Wisconsin court will one day draw the connection between that line of authority and the idea that the existence of a limitations period precludes a defendant from using laches as a defense.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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