Clifton v. Houghton Mifflin Harcourt Publishing Company

Filing 32

ORDER DENYING MOTION TO DISMISS. Signed by Magistrate Judge Laurel Beeler on 12/23/2015.(lblc2, COURT STAFF) (Filed on 12/23/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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San Francisco Division

United States District Court
Northern District of California

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CARR CLIFTON,

Case No. 3:15-cv-03985-LB

Plaintiff,

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ORDER DENYING MOTION TO
DISMISS

v.

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HOUGHTON MIFFLIN HARCOURT
PUBLISHING COMPANY,

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[Re: ECF No. 18]

Defendant.
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INTRODUCTION

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Carr Clifton is a photographer who licensed many of his photographs to book publisher

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Houghton Mifflin Harcourt Publishing Company (“HMH”). These licenses were limited in scope,

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and Mr. Clifton alleges HMH exceeded this scope without his permission and therefore violated

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his copyrights in his photographs. HMH filed a motion to dismiss Mr. Clifton’s complaint

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because, HMH argues, the complaint does not contain sufficient factual allegations to raise a

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plausible claim for relief. The court disagrees and denies HMH’s motion.

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STATEMENT

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Mr. Clifton is a professional photographer who makes his living licensing his photographic

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images to publishers, including HMH. (Complaint, ECF No. 1, ¶ 2.)1 He is the owner of

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Record citations are to documents in the Electronic Case File (“ECF”); pinpoint citations are to
the ECF-generated page numbers at the tops of the documents.
ORDER (No. 3:15-cv-03985-LB)

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copyrights in the 30 photographic images (“Photographs”) depicted in Exhibit 1 to his complaint.

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(Id. ¶ 6, Ex. 1.) Exhibit 1, which is incorporated in the complaint, is a chart containing the

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following information for each of the 30 Photographs: (1) a thumbnail image of the Photograph;

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(2) an Image ID for and description of the Photograph; (3) the copyright registration number and

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date of the Photograph; (4) an invoice number and date for the Photograph; (5) the imprint under

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which the Photograph was published; (6) the name of the publication in which the Photograph was

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published; and (7) the limits imposed by the license for the Photograph. (Id. ¶ 10, Ex. 1.)

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“Between 1996 and 2008, in response to permission requests from HMH, [Mr.] Clifton sold
HMH limited licenses to use copies of the Photographs in particular educational publications
identified in HMH’s requests and [Mr.] Clifton’s licenses.” (Id. ¶ 7.) “The licenses [Mr.] Clifton

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United States District Court
Northern District of California

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granted HMH were expressly limited by number of copies, distribution area, language, duration,

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and/or media, as summarized in Exhibit 1.” (Id.)

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“Upon information and belief, shortly after obtaining the licenses from [Mr.] Clifton, HMH
exceeded the licenses and infringed [Mr.] Clifton’s copyrights in various ways, including:

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a. printing more copies of the Photographs than Clifton authorized;

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b. distributing publications containing the Photographs outside the authorized
distribution area;

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c. publishing the Photographs in electronic, ancillary, or derivative publications
without permission;
d. publishing the Photographs in international editions and foreign publications
without permission; [and]
e. publishing the Photographs beyond specified time limits.

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(Id. ¶ 8.) In addition, “[u]pon information and belief, after obtaining access to the Photographs,

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HMH used the Photographs without any license or permission in additional publications that have

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not yet been identified.” (Id. ¶ 9.) “Because HMH alone knows of these wholly unauthorized uses,

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[Mr.] Clifton cannot further identify them without discovery.” (Id.)

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Because of this conduct, Mr. Clifton sued HMH for copyright infringement in violation of the

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Copyright Act of 1976, 17 U.S.C. §§ 501 et seq. (Id. ¶¶ 11-13.) HMH filed a motion to dismiss

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Mr. Clifton’s complaint. (Motion, ECF No. 18.)
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ORDER (No. 3:15-cv-03985-LB)

GOVERNING LAW

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1. Motion to Dismiss
A complaint must contain a “short and plain statement of the claim showing that the pleader is

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entitled to relief” to give the defendant “fair notice” of what the claims are and the grounds upon

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which they rest. Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

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A complaint does not need detailed factual allegations, but “a plaintiff's obligation to provide the

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‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic

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recitation of the elements of a cause of action will not do. Factual allegations must be enough to

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raise a claim for relief above the speculative level . . . .” Twombly, 550 U.S. at 555 (internal

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citations omitted).

United States District Court
Northern District of California

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To survive a motion to dismiss, a complaint must contain sufficient factual allegations,

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accepted as true, “‘to state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556

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U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when

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the plaintiff pleads factual content that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a

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‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

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unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are

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‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and

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plausibility of “entitlement to relief.”’” Id. (quoting Twombly, 550 U.S. at 557).

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If a court dismisses a complaint, it should give leave to amend unless the “the pleading could

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not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v. Northern

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California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990).

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2. Copyright Act

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The Copyright Act of 1976 provides that “the owner of copyright under this title has the

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exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work

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in copies or phonorecords; . . . (3) to distribute copies or phonorecords of the copyrighted work to

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the public by sale or other transfer of ownership, or by rental, lease, or lending . . . .” 17 U.S.C. §

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106. “‘Anyone who violates any of the exclusive rights of the copyright owner,’ that is, anyone
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ORDER (No. 3:15-cv-03985-LB)

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who trespasses into his exclusive domain by using or authorizing the use of the copyrighted work .

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. . ‘is an infringer of the copyright.’” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S.

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417, 433 (1984) (quoting 17 U.S.C. § 501(a)). “A licensee infringes the owner’s copyright if its

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use exceeds the scope of its license.” S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1087 (9th Cir.

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1989) (citing Gilliam v. American Broad. Cos., 538 F.2d 14, 20 (2d Cir. 1976)).

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To establish copyright infringement, a plaintiff must prove two elements: “(1) ownership of a

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valid copyright, and (2) copying of constituent elements of the work that are original.” Feist

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Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).
ANALYSIS

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1. Whether Mr. Clifton Alleges a Plausible Claim for Relief

United States District Court
Northern District of California

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HMH does not argue that Mr. Clifton’s allegations of copyright ownership are deficient; the

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court in any event finds that the allegations are sufficient. (See Complaint, ECF No. 1, ¶ 6, Ex. 1

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(setting forth the copyright numbers and registration dates for 30 Photographs).) HMH instead

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challenges the “copying” element, arguing that Mr. Clifton does not allege a plausible claim for

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relief because he did not allege facts—such as “which photographs were printed, when they were

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printed, how many copies were printed, [or] where the photographs were distributed”—to support

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his “conclusory” allegation that HMH exceeded the scope of the licenses for the Photographs.

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(Motion, ECF No. 18 at 6-7.) Essentially, HMH contends that all of Mr. Clifton’s infringement-

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related allegations, made “on information and belief,” are conclusory and lacking in factual

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support. (See id.)

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Post Twombly and Iqbal, the Ninth Circuit has not considered the sufficiency of similar

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allegations made on “information and belief.” The Second Circuit has, holding (in a copyright

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case) that the Twombly and Iqbal plausibility standard allows factual allegations made “upon

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information and belief” where (1) “the facts are peculiarly within the possession and control of the

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defendant,” or (2) “where the belief is based on factual information that makes the inference of

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culpability plausible.” Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010). Several

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lower courts, including at least one in this district, have followed this approach. See Cisco Sys.,

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Inc. v. STMicroeletronics, Inc., No. C-14-03236-RMW, 2015 WL 3488923, at *4 (N.D. Cal. June
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ORDER (No. 3:15-cv-03985-LB)

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2, 2015); Lefkowitz v. McGraw-Hill Global Educ. Holdings, LLC, 23 F. Supp. 3d 344, 355-56

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(S.D.N.Y. 2014); Frerck v. Pearson Educ., Inc., No. 11-cv-5319, 2012 WL 1280771, at *3 (N.D.

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Ill. Apr. 16, 2012). A leading treatise endorses it. See Wright & Miller, 5 Fed. Prac. & Proc. Civ. §

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1224 (3d ed. 2015). The court applies the approach here.

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Mr. Clifton alleges that (1) he entered into license agreements with HMH allowing HMH to

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publish 30 of his Photographs, (2) those licenses all contained limitations regarding the number of

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times, how, and where HMH could publish them, and (3) HMH exceeded those licenses by

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exceeding those limitations. These allegations put HMH on notice about how it infringed his

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copyrights. (See Complaint, ECF No. 1, ¶¶ 8-9.) And the court must assume the veracity of Mr.
Clifton’s factual, as opposed to conclusory, allegations. See Eclectic Properties East, LLC v.

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United States District Court
Northern District of California

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Marcus & Millichap Co., 751 F.3d 990, 996 (9th Cir. 2014).

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After Twombly and Iqbal, in the book publishing context, numerous courts have denied

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motions to dismiss copyright infringement claims where the plaintiff alleged, as Mr. Clifton does

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here, that the defendant exceeded the limitations in licenses for photographs by, for example,

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printing more copies of the publication than authorized, publishing the photographs in derivative

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publications without permission, and distributed the publication outside of the authorized

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distribution area. See, e.g., Young-Wolff v. McGraw-Hill Sch. Educ. Holding, LLC, No. 13-CV-

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4372 (KMW), 2015 WL 1399702, at *3 (S.D.N.Y. Mar. 27, 2015); Lefkowitz, 23 F. Supp. 3d at

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353-54; Warren v. John Wiley & Sons, Inc., 952 F. Supp. 2d 610, 618 (S.D.N.Y. 2013); Schneider

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v. Pearson Educ., Inc., No. 12 Civ. 6392(JPO), 2013 WL 1386968, at *1, *3 (S.D.N.Y. Apr. 5,

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2013); Frerck, 2012 WL 1280771, at *1, *3; Pac. Stock, Inc. v. Pearson Educ., Inc., No. 11-00423

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SOM/BMK, 2012 WL 93182, at *6 (D. Haw. Jan. 11, 2012); Wu v. Pearson Educ., Inc., No. 09

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Civ. 6557(RJH), 2010 WL 3791676, at *6 (S.D.N.Y. 2010). Conversely, courts that have granted

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motions to dismiss copyright infringement claims in the publishing context have done so when the

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plaintiff alleged only generally that the defendant exceeded the license limitations and did not

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allege how the defendant did so. See, e.g., Palmer Cane LLC v. Scholastic Corp., No. 12 CV 3890,

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2013 WL 709276, at *3 (S.D.N.Y. Feb. 27, 2013); Cole v. John Wiley & Sons, Inc., No. 11

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Civ.2090(DF), 2012 WL 3133520, at *12-*14 (S.D.N.Y. Aug. 1, 2012) (defects included failure
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ORDER (No. 3:15-cv-03985-LB)

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to specify works that were the subject of the plaintiff’s claims and failure to allege infringing acts);

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Marvullo v. Gruner & Jahr, 105 F. Supp. 2d 225, 230-31 (S.D.N.Y. 2000).
In its reply, HMH suggests that Mr. Clifton, before filing suit, should have investigated

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himself “whether the books in question had many editions that included the [P]hotographs,

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whether the [P]hotographs appeared in foreign language or overseas editions, whether the

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[P]hotographs appeared in electronic editions, and whether the [P]hotographs are still being used,

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etc.” (Reply, ECF No. 25 at 5 n.1.) Even if Mr. Clifton could discover these facts (and it is not

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apparent that he could), this is not his burden at this stage. See Arista Records, 604 F.3d at 120-21

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(rejecting the defendant’s “contention that Twombly and Iqbal require the pleading of specific

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evidence or extra facts beyond what is needed to make the claim plausible”). Instead, he must

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United States District Court
Northern District of California

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allege a plausible claim for relief. See Iqbal, 556 U.S. at 678. Ultimately, “[d]etermining whether a

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complaint states a plausible claim for relief . . . [is] a context-specific task that requires the

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reviewing court to draw on its judicial experience and common sense.” Id. at 679. Here, Mr.

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Clifton has alleged what he can, based on the information he has. The additional facts needed to

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substantiate his “information and belief” allegations are “peculiarly within the possession and

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control” of HMH. The court concludes that Mr. Clifton alleged a plausible claim for relief.

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2. Mr. Clifton Need Not Have Pleaded around HMH’s Statute-of-Limitations Defense

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HMH also argues that Mr. Clifton’s allegations suggest that the infringing acts occurred many

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years ago and thus his claim is barred by the Copyright Act’s three-year statute of limitations.

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(Motion, ECF No. 18 at 7-8.) HMH notes that Mr. Clifton alleges that HMH exceeded the licenses

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and infringed on his copyrights “shortly after” Mr. Clifton and HMH entered into the license

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agreements. (Id. at 7 (citing Complaint, ECF No. 1, ¶ 8.).) HMH then highlights that the parties

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entered into these license agreements between 1996 and 2008. (Id. (citing Complaint, ECF No. 1,

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¶ 7, Ex. 1).) According to HMH, this temporal allegation means that the statute of limitations

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defense is apparent on the face of Mr. Clifton’s complaint and can be considered now. (Id. at 7-8

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(citing Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980) (“If the running of the

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statute is apparent on the face of the complaint, the defense may be raised by a motion to

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dismiss.”).) Because the last license agreement was entered into in 2008 and Mr. Clifton fails to
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ORDER (No. 3:15-cv-03985-LB)

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allege any infringing activity within three years from the date he filed his complaint or otherwise

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plead around the statute of limitations, HMH contends that Mr. Clifton’s claim is barred. (Id. at 8.)

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“When an affirmative defense is obvious on the face of a complaint, . . . a defendant can raise

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that defense in a motion to dismiss.” Rivera v. Peri & Sons Farms, Inc., 735 F.3d 892, 902 (9th

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Cir. 2013); accord Gomez v. Quicken Loans, Inc., --- Fed. App’x ----, ----, 2015 WL 6655476, at

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*1 (9th Cir. Nov. 2, 2015) (“An affirmative defense cannot serve as a basis for dismissal unless it

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is obvious on the face of the complaint.”).
Here, the statute-of-limitations defense is not obvious from the face of the complaint. The

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complaint’s allegations, which define the beginning of the infringement as “shortly” after the

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license agreements, leave open the possibility that HMH’s infringing acts continued into the

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United States District Court
Northern District of California

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limitations period. Moreover, the allegations are silent about when Mr. Clifton discovered or

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should have discovered any infringement at some particular time. Consequently, there are

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insufficient facts to allow the court to dismiss the complaint (at least now) based on the defense’s

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affirmative defense on which they bear the burden of proof. See Supermail Cargo, Inc. v. United

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States, 68 F.3d 1204, 1206 (9th Cir. 1995) (“[A] complaint cannot be dismissed unless it appears

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beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the

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claim.”); see Coleman v. Kohl’s Dep’t Stores, Inc., No. 15-cv-02588-JCS, 2015 WL 5782352, at

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*4 (N.D. Cal. Oct. 5, 2015) (denying the defendant’s motion to dismiss on statute of limitations

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grounds where it was not obvious from the face of the complaint when the alleged violation

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occurred); Harris v. Home Depot U.S.A., Inc., No. 15-cv-01058-VC, --- F. Supp. 3d ----, ----, 2015

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WL 4270313, at *1 (N.D. Cal. June 30, 2015) (same).
CONCLUSION

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The court denies HMH’s motion to dismiss. This disposes of ECF No. 18.

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IT IS SO ORDERED.

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Dated: December 23, 2015

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______________________________________
LAUREL BEELER
United States Magistrate Judge

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ORDER (No. 3:15-cv-03985-LB)