Erickson Productions Inc et al v. Kraig R Kast

Filing 45

ORDER by Magistrate Judge Howard R. Lloyd granting in part and denying in part 23 plaintiffs' Motion to Strike Affirmative Defenses. Defendant given leave to amend fair use defense. Defendant's amended pleading, should he choose to file one, due by 5/7/2014. (hrllc2, COURT STAFF) (Filed on 4/23/2014)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

NORTHERN DISTRICT OF CALIFORNIA

10

SAN JOSE DIVISION

United States District Court
Northern District of California

11
ERICKSON PRODUCTIONS, INC. and
JIM ERICKSON,

12

Plaintiffs,

13
14

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION TO STRIKE AFFIRMATIVE
DEFENSES

v.

15

Case No. 5:13-cv-05472 HRL

KRAIG R. KAST,

[Re: Dkt. No. 23]

Defendant.

16
17

Plaintiffs Jim Erickson and Erickson Productions, Inc. sue for alleged copyright

18

infringement. Pending before the court is their motion to strike the affirmative defenses asserted

19

by defendant Kraig R. Kast. Kast opposes the motion. Plaintiffs did not file a reply. Upon

20

consideration of the moving and responding papers, as well as the arguments of counsel, the court

21

grants the motion in part and denies it in part. 1

BACKGROUND

22
23

According to the complaint, Jim Erickson is a professional photographer who makes his

24

living by licensing his photographs through his company, Erickson Productions, Inc. One of his

25

clients is Wells Fargo Bank (Wells Fargo). Erickson says that Kast copied several of his photos

26

from Wells Fargo’s website and used them without permission on the website for Atherton Trust,

27
1

28

All parties have expressly consented that all proceedings in this matter may be heard and finally
adjudicated by the undersigned. 28 U.S.C. § 636(c); Fed. R. Civ. P. 73.

1

a company allegedly owned and operated by Kast. Plaintiffs assert claims against Kast for

2

copyright infringement, as well as for contributory and vicarious copyright infringement.

3

That Erickson’s photos were contained on a version of Atherton Trust’s website is not

4

disputed. However, Kast contends that the Atherton Trust website was designed by a third-party,

5

Only Websites, Inc. (Only Websites), and that he had no knowledge of or control over any alleged

6

infringement. (Dkt. 22, Affirmative Defenses ¶¶ 3, 7). According to defendant, during the

7

development phase, Only Websites asked for examples of websites with a “similar look, feel,

8

layout, and basic structure” Kast desired for the Atherton Trust site. (Id. ¶ 8). In response, Kast

9

either pointed out or hyperlinked to Wells Fargo’s website (among others); and, Only Websites
reportedly used the Wells Fargo site as a “partial template” for the Atherton Trust site. (Id. ¶¶ 8-

11
United States District Court
Northern District of California

10

9). Kast says that the version of the Atherton Trust website containing plaintiff’s photos was

12

incomplete and never meant to be seen by the public. (Id. ¶¶ 4-6, 9). Defendant further contends

13

that he told Only Websites to procure licensed photos for Atherton Trust’s site and that the final

14

website contained only properly licensed images. (Id. ¶ 10).

15

Plaintiffs originally sued Kast, Atherton Trust, and Only Websites in the District Court for

16

the Southern District of New York. Atherton Trust and Only Websites reportedly never appeared

17

or responded to the complaint. The New York court entered their default and then eventually

18

entered default judgment against them. Plaintiffs say that after their motion for damages against

19

Atherton Trust and Only Websites was submitted, Atherton Trust appeared through counsel, who

20

filed a motion to set aside the default and to dismiss Atherton Trust for lack of personal

21

jurisdiction. This court is told that plaintiffs’ motion for damages and Atherton Trust’s dispositive

22

motion remain pending.

23

Meanwhile, Kast was dismissed from the New York action for lack of personal

24

jurisdiction. Plaintiffs then sued him in the District Court for the Central District of California for

25

alleged infringement of the copyright in the subject photos. That lawsuit subsequently was

26

removed here on the parties’ stipulation. Kast, appearing through counsel, answered the complaint

27

and asserted five defenses for (1) “Fair Use”; (2) “Setoff and Single Satisfaction Rule”; (3) “Lack

28

of Volitional Act” (4) “Innocent Infringement”; and (5) “Unconstitutionally Excessive Damages.”
2

1

Plaintiffs now move to strike those defenses. Although plaintiffs allude to Fed. R. Civ. P.

2

11, the actual basis for their motion is that Kast’s defenses are legally insufficient and fail to raise

3

a plausible right to relief. At the motion hearing, Kast voluntarily withdrew his fifth affirmative

4

defense. Accordingly, plaintiffs’ motion as to that defense is denied as moot. As for the four

5

remaining defenses, the court grants in part and denies in part plaintiffs’ motion to strike.

6
7

LEGAL STANDARD
On its own, or on motion by a party, “[t]he court may strike from a pleading an insufficient

8

defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f).

9

The purpose of such a motion “is to avoid the expenditure of time and money that must arise from
litigating spurious issues by dispensing with those issues prior to trial.” Whittlestone, Inc. v.

11
United States District Court
Northern District of California

10

Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010).

12

“A defense is insufficiently pled if it fails to give the plaintiff fair notice of the nature of

13

the defense,” i.e., fails to point to the existence of some identifiable fact that would make the

14

affirmative defense plausible on its face. Barnes v. AT&T Pension Benefit Plan-Nonbargained

15

Program, 718 F. Supp.2d 1167, 1170, 1172 (N.D. Cal. 2010) (citing Wyshak v. City Nat’l Bank,

16

607 F.2d 824, 827 (9th Cir.1979)). “A matter is immaterial if it has no essential or important

17

relationship to the claim for relief pleaded.” Id. (citing Fantasy, Inc. v. Fogerty, 984 F.2d 1524,

18

1527 (9th Cir.1993), rev’d on other grounds, 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455

19

(1994)). “A matter is impertinent if it does not pertain and is not necessary to the issues in

20

question in the case.” Id. “A court must deny the motion to strike if there is any doubt whether

21

the allegations in the pleadings might be relevant in the action.” Oracle America, Inc. v. Micron

22

Technology, Inc., 817 F. Supp.2d 1128, 1132 (N.D. Cal. 2011). “However, a motion to strike is

23

proper when a defense is insufficient as a matter of law.” Id.

24

“Motions to strike are not favored and ‘should not be granted unless it is clear that the

25

matter to be stricken could have no possible bearing on the subject matter of the litigation.’”

26

Oracle America, Inc., 817 F. Supp.2d at 1131 (quoting Colaprico v. Sun Microsys., Inc. , 758 F.

27

Supp. 1335, 1339 (N.D. Cal. 1991)). In considering the motion, the court “‘must view the

28

pleading in a light most favorable to the pleading party.’” Id. (quoting In re 2TheMart.com, Inc.
3

1

Sec. Litig., 114 F. Supp.2d 955, 965 (C.D. Cal. 2000)). Additionally, “the grounds for a motion to

2

strike must appear on the face of the pleading under attack, or from matters which the court may

3

judicial notice (e.g., the court’s own files or records).” Schwarzer, et al., California: Federal

4

Civil Procedure Before Trial, § 9:403 (Rev. #1 2014). 2

DISCUSSION

5
6

A. Iqbal and Twombly
Preliminarily, the parties dispute whether the pleading standard discussed in Bell Atlantic

7

Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and clarified in

9

Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), applies to the pleading

10

of affirmative defenses. No one points to any Ninth Circuit authority on point. Suffice to say that

11
United States District Court
Northern District of California

8

this court agrees with the decisions of other courts in this district, holding that Twombly and Iqbal

12

apply. See, e.g., Barnes, 718 F. Supp.2d at 1171.

13

B. Fair Use
Fair use is an affirmative defense that “presumes that unauthorized copying has occurred,

14
15

and is instead aimed at whether the defendant’s use was fair.” Monge v. Maya Magazine, Inc.,

16

688 F.3d 1164, 1170 (9th Cir. 2012). The doctrine is codified at section 107 of the Copyright Act,

17

which provides:

18
Notwithstanding the provisions of sections 106 and 106A, the fair
use of a copyrighted work, including such use by reproduction in
copies or phonorecords or by any other means specified by that
section, for purposes such as criticism, comment, news reporting,
teaching (including multiple copies for classroom use), scholarship,
or research, is not an infringement of copyright. In determining
whether the use made of a work in any particular case is a fair use
the factors to be considered shall include—

19
20
21
22
23

(1) the purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational purposes;

24

(2) the nature of the copyrighted work;

25

(3) the amount and substantiality of the portion used in relation to
the copyrighted work as a whole; and

26
27
2

28

The court has not considered the Declaration of Kevin McCullough or any of the appended
exhibits submitted by plaintiffs in support of the instant motion.
4

1
2
3
4

(4) the effect of the use upon the potential market for or value of the
copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of
fair use if such finding is made upon consideration of all the above
factors.

5

17 U.S.C. § 107. The determination whether the fair use doctrine applies “is not to be simplified

6

with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case

7

analysis.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577, 114 S. Ct. 1164, 127 L.Ed.2d

8

500 (1994). Additionally, the four statutory factors may not be treated in isolation; rather, “[a]ll

9

are to be explored, and the results weighed together, in light of the purposes of copyright.” Id. at
578. “The fair use doctrine thus permits [and requires] courts to avoid rigid application of the

11
United States District Court
Northern District of California

10

copyright statute when, on occasion, it would stifle the very creativity which that law is designed

12

to foster.” Id. at 577 (internal quotation marks omitted) (alteration in original).

13

The fair use doctrine presents a mixed question of law and fact. “However, ‘[i]f there are

14

no genuine issues of material fact, or if, even after resolving all issues in favor of the opposing

15

party, a reasonable trier of fact can reach only one conclusion, a court may conclude as a matter of

16

law whether the challenged use qualifies as fair use of the copyrighted work.’” Dhillon v. Does 1-

17

10, No. C13-01465 SI, 2014 WL 722592 at *3 (N.D. Cal., Feb. 25, 2014) (quoting Hustler

18

Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1151 (9th Cir. 1986)); see also Leadsinger,

19

Inc. v. BMG Music Publ’g, 512 F.3d 522, 530 (9th Cir. 2008) (The “assertion of fair use may be

20

considered on a motion to dismiss, which requires the court to consider all allegations to be true,

21

in a manner substantially similar to consideration of the same issue on a motion for summary

22

judgment, where no material facts are in dispute.”).

23

With respect to the first fair use factor, Kast’s pleading, as currently pled, supports only a

24

commercial use. Plaintiffs point out that the photos indisputably were used for Atherton Trust’s

25

commercial website. Although Kast says that the version of the Atherton Trust site containing

26

Erickson’s photos was not finished, all indications are that the site was publicly visible during

27

development. Kast reportedly did not intend for that to happen, but “the innocent intent of the

28

defendant constitutes no defense to liability.” Monge, 688 F.3d at 1170. There is no allegation
5

1

suggesting that the use was for public benefit, as opposed to private gain. Kast does not allege

2

that the use of plaintiff’s photos was for the purpose of “criticism, comment, news reporting,

3

teaching (including multiple copies for classroom use), scholarship, or research . . ..” 17 U.S.C. §

4

107. Nor does he allege that the use was transformative; 3 and, his allegations appear to

5

corroborate plaintiff’s contention that the subject photos were used in the same context as they

6

were used on Wells Fargo’s website.
Kast nevertheless maintains that use of the photos “had no effect on the market value of

7
8

Plaintiff’s work.” (Dkt. 22, Affirmative Defenses ¶ 12). This fourth and final fair use factor

9

considers “the effect of the use upon the potential market for or value of the copyrighted work.” 17
U.S.C. § 107(4). Thus, “[f]air use, when properly applied, is limited to copying by others which

11
United States District Court
Northern District of California

10

does not materially impair the marketability of the work which is copied.” Harper & Row

12

Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566-67, 105 S.Ct.2218, 85 L.Ed.2d 588

13

(1985). “In determining whether the use has harmed the work’s value or market, courts have

14

focused on whether the infringing use: (1) tends to diminish or prejudice the potential sale of [the]

15

work; or (2) tends to interfere with the marketability of the work, or (3) fulfills the demand for the

16

original work.” Hustler Magazine, Inc., 796 F.2d at 1155-56 (internal citations and quotations

17

omitted). Here, Kast’s position appears to turn upon his contention that Atherton Trust’s website

18

did not work properly, was never used by consumers, and is no longer being used. These

19

assertions, however, are not alleged in his pleading.
The parties say little, if anything, about the second and third fair use factors---the nature of

20
21

the copyrighted work and the amount and substantiality of the portion used in relation to the

22

copyrighted work as a whole. On the record presented here, however, there is no dispute that

23
3

24
25
26
27
28

“[E]ven if a particular use is solely commercial in nature, ‘the presumption of unfairness can be
rebutted by the characteristics of the use.’” Dhillon, 2014 WL 722592 at *3 (quoting Hustler
Magazine, 796 F.2d at 1152-53). “The central purpose of the inquiry under this factor is to
determine ‘whether the new work merely supersede[s] the objects of the original creation, or
instead adds something new, with a further purpose or different character, altering the first with
new expression, meaning, or message; it asks, in other words, whether and to what extent the new
work is ‘transformative.’” Id. (quoting Campbell, 510 U.S. at 579). “The more transformative the
allegedly infringing work is, the less important other concerns, including commercialism,
become.” Id.
6

1

plaintiff’s photos were copied. Moreover, “[p]hotos are generally viewed as creative, aesthetic

2

expressions of a scene or image and have long been the subject of copyright.” Monge, 688 F.3d at

3

1177.

4

Thus, taken together, Kast’s allegations indicate that the subject photos were used for

5

Atherton Trust’s commercial website that was visible to the public during its development. On the

6

record presented, the court finds that Kast’s allegations, even if deemed true, do not support a

7

plausible fair use defense. He is nevertheless given leave to amend.

8
9

C. Setoff and Single Satisfaction Rule
Kast says that, in the New York action, plaintiff will likely obtain judgment as to Only
Websites or Atherton Trust (or both) because their default has been entered and Only Websites has

11
United States District Court
Northern District of California

10

never made an appearance. Because plaintiffs have not actually obtained judgment against anyone

12

at this time, their motion to strike this defense is granted.

13
14

D. Lack of Volitional Act
Kast contends that to the extent any of plaintiffs’ copyrights were infringed, the

15

infringement was not the result of any volitional act by him. Plaintiffs move to strike on the

16

ground that this is not a true affirmative defense, but merely a negation of elements plaintiffs are

17

required to prove. “‘A defense which demonstrates that plaintiff has not met its burden of proof as

18

to an element plaintiff is required to prove is not an affirmative defense.’” Barnes, 718 F. Supp.2d

19

at 1173 (quoting Zivkovic v. S. California Edison Co., 302 F.3d 1080, 1088 (9th Cir.2002)).

20

“Such a defense is merely rebuttal against the evidence presented by the plaintiff.” Id. By

21

contrast, “‘[a]n affirmative defense, under the meaning of Federal Rule of Civil Procedure 8(c), is

22

a defense that does not negate the elements of the plaintiff’s claim, but instead precludes liability

23

even if all of the elements of the plaintiff’s claim are proven.’” Id. (quoting Roberge v. Hannah

24

Marine Corp., No. 96-1691, 1997 WL 468330, at *3 (6th Cir.1997)). “It is a defense on which the

25

defendant has the burden of proof.” Id.

26

The court agrees that Kast’s third “affirmative defense” is merely a negation of elements to

27

be proven by plaintiffs. Plaintiffs’ motion to strike therefore is granted without leave to amend.

28

This ruling, however, does not preclude Kast from rebutting plaintiffs’ evidence on the ground
7

1

that the alleged infringement was not due to any volitional act by him.

2

E. Innocent Infringement
In his fourth affirmative defense, Kast incorporates all of the preceding admissions,

3
4

denials, and allegations in his pleading and then essentially asserts that there was no way for him

5

to know that using the photos violated anyone’s copyright because they did not bear copyright

6

notices he says are required by 17 U.S.C. § 401. (Dkt. 22, ¶¶ 20-22). Plaintiffs argue that this

7

defense should be stricken because it is merely a negation of plaintiffs’ claims.
To the extent Kast is attempting to forge a defense against liability based upon his intent,

8
9

plaintiffs’ motion to strike is granted. See Monge, 688 F.3d at 1170 (“the innocent intent of the
defendant constitutes no defense to liability”); Shropshire v. Canning, 809 F. Supp.2d 1139, 1147

11
United States District Court
Northern District of California

10

(N.D. Cal. 2011) (“Direct infringement does not require intent or any particular state of mind.”).

12

Nevertheless, insofar as Kast’s mental state bears on the issue of remedies, the court will

13

allow this defense to stand. See Shropshire, 809 F. Supp.2d at 1147 n.2 (“Defendant’s mental

14

state, however, is relevant to the issue of remedies.”); 17 U.S.C. § 504(c)(2) (“In a case where the

15

infringer sustains the burden of proving, and the court finds, that such infringer was not aware and

16

had no reason to believe that his or her acts constituted an infringement of copyright, the court in

17

its discretion may reduce the award of statutory damages to a sum of not less than $ 200.”)

ORDER

18
19

Based on the foregoing, plaintiffs’ motion to strike is granted in part and denied in part.

20

Leave to amend is limited to the fair use defense and consistent with the rulings above. Kast’s

21

amended pleading, should he choose to file one, is due no later than May 7, 2014. 4

22

SO ORDERED.

23

Dated: April 23, 2014

24

_____________________________________
HOWARD R. LLOYD
UNITED STATES MAGISTRATE JUDGE

25
26
27
28

4

To the extent Kast intends to assert new or different defenses or add new parties, he must make
an appropriate application pursuant to Fed. R. Civ. P. 15. Failure to comply with this order may
result in sanctions.
8

1

5:13-cv-05472-HRL Notice has been electronically mailed to:

2

Kevin P McCulloch

[e-mail], [e-mail]

3

Paul William Reidl

[e-mail]

4

Robert K Wright

[e-mail]

5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9