Leonard v. Stemtech Health Sciences Inc. et al

Filing 155

MEMORANDUM ORDER ADOPTING REPORT AND RECOMMENDATION -- granting 101 Motion for Summary Judgment; adopting 149 Report and Recommendation. Signed by Judge Leonard P. Stark on 3/28/12. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ANDREW PAUL LEONARD,
Plaintiff,
C.A. No. 08-067-LPS-CJB

v.

STEMTECH HEALTH SCIENCES, INC.
and DOES 1-100, Inclusive,
Defendants.

MEMORANDUM ORDER

WHEREAS, Magistrate Judge Christopher J. Burke issued a Report and
Recommendation ("Report") (D.I. 149), dated December 5, 2011, recommending that the Court
grant the Motion for Summary Judgment ("Motion") (D.I. 101), which had been filed by
Defendant Stemtech Health Sciences, Inc. ("Stemtech") on December 30, 2010;
WHEREAS, Plaintiff Andrew Paul Leonard ("Leonard") submitted Objections (D.I. 150)
to the Report on December 22, 2011;
WHEREAS, Leonard does not object to the Report's recommendation that the Motion be
granted as to the infringement of Leonard's image 2 and Leonard's claim for statutory damages
(id. at 1);

WHEREAS, Leonard does, however, object to the Report's recommendation that the
Motion also be granted with respect to Leonard's claim for actual damages and additional profits
(id.);

WHEREAS, the Court has considered the Motion de novo, including by reviewing the

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Report, Leonard's Objections, Stemtech's Response (D.I. 152), and the record evidence; 1

NOW THEREFORE, IT IS HEREBY ORDERED that:
1.

Leonard's Objections (D.I. 150) are OVERRULED, Magistrate Judge Burke's

Report (D.I. 149) is ADOPTED, and Stemtech's Motion (D.I. 101) is GRANTED.
2.

The 49-page Report is thorough and well-reasoned. Accordingly, most of the

points raised by Leonard do not require discussion.
3.

Leonard contends that he "has shown that Stemtech did place significant value on

the infringing work, as Mr. Drapeau testified." (D.I. 150 at 4) However, the Court concludes
that the evidence of record is not such that a reasonable factfinder could find, by a preponderance
of the evidence, that - while perhaps "valuable" - the images contributed to sales. In other
words, the Court agrees with the Report that Leonard has failed to meet his burden to establish
the requisite causal nexus. (See Report at 39-48)
4.

Leonard contends that "the Magistrate Judge takes the position that there can only

be one reason why someone purchases a product, and from that proposition seems to justify
instituting a higher burden for the plaintiff to meet its actual burden under [17 U.S.C.] § 504(b)."
(D.I. 150 at 6) The Court finds that the Report does not take such a position. Instead, the Report
accurately delineates, and applies, the proper burden, including that Leonard must establish that
the images "helped to sell" Stemtech's products, not that they were the sole reason someone
purchased such products. (See Report at 46) (emphasis added)

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When reviewing the decision of a magistrate judge on a dispositive matter, the Court
conducts a de novo review. See 28 U.S.C. § 636(b)(l)(B); Fed. R. Civ. P. 72(b)(3). A motion for
summary judgment is considered a dispositive matter and, therefore, the conclusions of the
magistrate judge in connection with such a motion are reviewed de novo.
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5.

Leonard contends that the Report "failed to consider material facts and draw all

reasonable inferences in favor of" him, citing to testimony of Stemtech' s Chief Science Officer
(Mr. Drapeau) and President (Ray Carter), as well as of Stephen Gerard ofPhoto Researchers.
(D.I. 150 at 7-9) To the contrary, it is evident from the Report- and from the Magistrate Judge's
overall handling of the proceedings before him, which included (in the less than four months
between the referral order (D.I. 131) and the issuance ofthe Report) a teleconference (see D.I.
132), oral argument (see D.I. 134; D.I. 137), and additional post-hearing briefing (D.I. 138, 139)
-that all of the record evidence was considered. (See, e.g., Report at 44-48) Additionally, the
Court concludes that, even crediting the cited testimony and drawing all reasonable inferences in
Leonard's favor, a reasonable factfinder could not find the necessary causal nexus between
Stemtech's infringing use ofLeonard's images and any ofStemtech's profits.
6.

Finally, Leonard contends that the Report "failed to properly take into account Mr.

Leonard's expert's report," asserting that this error stems, at least in part, from "a fundamental
misunderstanding of the facts,§ 504(b) of the Copyright Act, and of human nature." (D.I. 150 at
9) The Court does not agree. It is evident from the Report that the Magistrate Judge considered
the entirety of the expert's report; it is also dear that the Magistrate Judge correctly identified
(and excerpted) the only portion of the expert report to discuss causation. (See Report at 44-45)
(quoting D.I. 140 Ex. 1 at 30) The Court finds in the expert's report no additional discussion of
causation. (See, e.g., D.I. 140 Ex. 1 at 26-27) (section entitled "Actual Damages" but containing
no discussion of causation) The Report properly rejected the expert report's "entirely
conclusory" opinion. (Report at 4 7)
7.

Notwithstanding the Court's overruling of Leonard's Objections, a few points

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raised by Stemtech also require comment. Stemtech contends that Leonard's Objections should
be overruled, without reaching the merits, because Leonard has "exceed[ed] the permissible page
limit" and has "at this extremely late stage ... inappropriately attemp[ed] to put additional
evidence before the Court." (D.I. 152 at 2) The Court rejects these contentions. Leonard has
"exceeded" the 10-page page limit on Objections only to the de minimis extent that he placed his
one-sentence (three-line) "Conclusion" on page 11, along with a signature block, even though
there was room to squeeze this one sentence onto page 10. Likewise, Leonard's Exhibit A to his
Objections does not contain inappropriate "new evidence." Rather, Exhibit A consists of pages
of deposition testimony (and an exhibit discussed in that testimony) which Leonard inadvertently
omitted from the appendix he had filed in opposition to the Motion.
8.

Finally, Stemtech objected to Leonard's request for oral argument (D.I. 153), on

the basis that oral argument is only available "on the actual motion," and not also when a
District Judge reviews a Magistrate Judge's Report and Recommendation. (D.I. 154 at 2)
(emphasis added) Stemtech is wrong for at least four reasons: (i) the Report does not (and
cannot) dispose ofthe Motion, which remains pending unless and until the District Judge acts on
the Motion, so the request for oral argument is a request for argument on the Motion; (ii) the
Federal Rules of Civil Procedure contemplate that a District Judge may conduct any additional
proceedings, if necessary, in order to rule on objections to a Report and Recommendation
received from a Magistrate Judge, see Fed. R. Civ. P. 72(b) ("The district judge must determine
de novo any part of the magistrate judge's disposition that has been properly objected to. The
district judge may accept, reject, or modify the recommended disposition; receive further
evidence; or return the matter to the magistrate judge with instructions."); (iii) nothing in Local

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Rule 7.1.4, nor any other Local Rule or Federal Rule of Civil Procedure, precludes oral argument
on review of a Report and Recommendation; and (iv) the Local Rules of this District expressly

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recognize the discretion of any judge to act "in the interests of justice" in any particular case, see
D. Del. LR 1.1(d) ("The application ofthe Rules in any case or proceeding may be modified by
the Court in the interests of justice.").
9.

Nothing stated in paragraphs 7 and 8 above alters the conclusions reached by the

Court on the merits of Stemtech's Motion, which the Court hereby GRANTS.

March 28, 2012
Wilmington, Delaware

-(~~'~

UNITED

sfATES DISTRICT JUDGE

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