Fastcase, Inc. v. Lawriter LLC

Filing 20

RESPONSE in Opposition re 17 MOTION for Summary Judgment filed by Lawriter LLC. (Attachments: # 1 Exhibit 1 - Affidavit of David Harriman)(Rozelsky, Kurt)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
C.A. NO. 1:16-CV-00327-TCB
FASTCASE, INC.,

)
)
PLAINTIFF,
)
)
vs.
)
)
LAWRITER, LLC d/b/a Casemaker, )
)
DEFENDANT.
)
)

DEFENDANT LAWRITER, LLC’S
RESPONSE TO PLAINTIFF’S
MOTION FOR SUMMARY
JUDGMENT

Defendant, Lawriter, LLC d/b/a Casemaker (“Lawriter”), submits the
following Memorandum of Law and Facts in response to Plaintiff’s Motion for
Summary Judgment. (Doc. 17).
SUMMARY OF ARGUMENT
Plaintiff’s Complaint, as amended on February 16, 2016, seeks a declaratory
judgment that Plaintiff is not liable for copying certain materials from a website
found at http://rules.sos.ga.gov/ (the “Website”) and operated by Lawriter. Plaintiff’s
Motion for Summary Judgment should be denied for no fewer than four reasons.
First, this court lacks subject matter jurisdiction over this matter. This court lacks
because Lawriter has not registered a copyright in any of the files or data at issue in
this case, Plaintiff’s Complaint presents no federal question under copyright law and

there is no diversity jurisdiction because the amount in controversy does not exceed
$75,000. Second, this case no longer presents a justiciable case or controversy
because Lawriter has dismissed its counterclaims and has given Plaintiff a covenant
not to sue with respect to any demands and claims that Lawriter made or might have
made based on Plaintiff’s conduct that is at issue in this matter. As a result, under the
voluntary-cessation doctrine, Plaintiff’s claims are moot. Third, as to Plaintiff’s claim
for declaratory judgment related to Plaintiff’s copying of materials from the Website
prior to April 7, 2016, summary judgment should be denied based on disputes as to
material fact, as well as the need for discovery as to certain material facts of which
knowledge is in the possession of Plaintiff. Fourth, as to any aspect of Plaintiff’s
claim based on activities occurring after April 7, 2016, Plaintiff has not pleaded any
facts supporting such a claim. On that date, Lawriter altered the Website to require
users to agree to express terms of use (“Terms of Use”). As a result, Lawriter
anticipates that, if Plaintiff were allowed to amend or supplement its Complaint to
state a claim based on the period after April 7, 2016, Lawriter would present a claim
for breach of contract that would not be preempted by the Copyright Act, along with
a claim for copyright infringement, depending on whether Plaintiff copied any
materials authored by Lawriter. For the reasons set for the herein, Plaintiff’s Motion
for Summary Judgment should be denied.

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STATEMENT OF UNDISPUTED FACTS
Lawriter, LLC d/b/a Casemaker and Plaintiff are competitors in the on-line,
legal research subscription business. Decl. of Walters, ¶ 2. Each provides online
searchable databases of public law in one or more states and federal jurisdictions.
Id. at ¶¶ 5-6.
With regard to Georgia, Lawriter has entered into a contract with the State of
Georgia to publish the Georgia Rules and Regulations and Monthly Bulletins. Doc.
4-2. Although previously Lawriter represented on the Georgia Secretary of State
website link that it was the “designated publisher” of said Rules and Regulations,
since April 7, 2016, the website link has no longer used such language. Doc. 14-1;
see also Affidavit of David Harriman (“Harriman Aff.”), attached hereto as
Exhibit 1.
In December 2015, Lawriter wrote a cease and desist letter to Plaintiff
seeking to stop Plaintiff’s unauthorized use of “Electronic Files … incorporating
the [Georgia Regulations] without Lawriter’s consent. Doc. 4-3. Thereafter,
Lawriter informed Plaintiff that it “does not intend to commence, institute and/or
file any litigation regarding any use of the Electronic Files by Plaintiff prior to
April 7, 2016.” Doc. 14, ¶ 23. Lawriter currently has no counterclaims asserted
against Plaintiff. Id. at ¶¶ 1-37.

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On or about April 7, 2016, Lawriter modified its website link to the Georgia
Rules and Regulations to require users to enter a private contract to obtain access
to these materials obtained and posted by Lawriter. Doc. 14-1; see also Harriman
Aff. at 4, ¶9, Exhibit B.
STANDARD FOR SUMMARY JUDGMENT
A court may only grant summary judgment when there is “no genuine
dispute as to any material fact.” Fed. R. Civ. P. 56(a). In order to determine if a
genuine dispute exists, the court must construe the facts in “the light most
favorable” to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007);
Johnson v. Clifton, 74 F.3d 1087, 1091 (11th Cir. 1996). The moving party has the
burden of proving that, even with the facts construed in favor of the non-movant,
the preponderance of the evidence indicates that the moving party should win as a
matter of law. Scott, 550 U.S. at 378. Thus, the court should grant a motion for
summary judgment only when the record as a whole leads to the situation where no
reasonable jury could decide against the moving party based on the law. See id. at
380 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 58687 (1986)).

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ARGUMENT
I.

Plaintiff’s Motion for Summary Judgment should be Denied because
this Court has neither Federal Question nor Diversity Jurisdiction.
Plaintiff’s Motion for Summary Judgment should be denied because this

court lacks subject-matter jurisdiction over the case. A lack of subject-matter
jurisdiction may be raised and considered by the Court at any time.
A.

Federal Question Jurisdiction

The Declaratory Judgment Act is solely procedural in operation and does not
confer jurisdiction onto the federal courts. Skelly Oil Co. v. Phillips Petroleum Co.,
339 U.S. 667, 671 (1950).

Therefore, the court must have independent

jurisdictional grounds to hear the case. See id. In a declaratory judgment action,
“the normal position of the parties is reversed,” and, therefore, courts look to the
underlying anticipated action instead of the face of the declaratory judgment
complaint when determining whether or not a federal question exists. Stuart
Weltzman, LLC v. Microcomputer Res., Inc., 542 F.3d 859, 862 (11th Cir. 2008).
Therefore, the court “must analyze the assumed coercive action by the declaratory
judgment defendant” that could have taken place absent the declaratory judgment
action. Id. (internal citations omitted).
Although the Plaintiff claims copyright preemption, the Eleventh Circuit has
clearly held that there cannot be federal question jurisdiction if there is not an
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actual copyright registration, and that case is controlling in this matter. Id. at 863.
“[F]ederal courts are without jurisdiction to hear infringement claims unless the
disputed copyright has been registered.” Id. at 867. Lawriter does not have a
copyright registration for the HTML Electronic Files or for the regulations of the
State of Georgia. Therefore, under the law of the Eleventh Circuit, Plaintiff’s
claim of preemption does not give rise to federal-question jurisdiction.
B.

Diversity Jurisdiction.

This Court lacks diversity jurisdiction because Plaintiff has not demonstrated
damages in this case would reach the jurisdictional threshold of exceeding
$75,000. See 28 U.S.C. § 1332; St. Paul Mercury Indemnity v. Red Cab Co., 303
U.S. 283, 289 (1938) (stating that while ordinarily the sum claimed by plaintiff in
good faith will be accepted as the amount in controversy, when there is “legal
certainty that the claim is really for less than the jurisdictional amount,” the case
must be dismissed). Plaintiff’s method for reaching this threshold is to argue that
the damages impact “not the price of a single subscription, but the entire value of
the aspect of the business.” Doc. 17. However, if Plaintiff were precluded from
copying the materials at issue in this case from the Website, Plaintiff would only
be required to hire an individual to create its own electronic version of the Georgia
statutes and regulations. Lawriter’s contract with the Georgia Secretary of State is
for payment of $20,000 per year. Harriman Aff. at 1, ¶4, Ex. A. Given this, there
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is a legal certainty that Plaintiff’s damages would not reach the jurisdictional
threshold of over $75,000; therefore there cannot be diversity jurisdiction.
II.

Plaintiff’s Motion for Summary Judgment should be denied because the
Cause of Action stated in Plaintiff’s Amended Complaint is moot.
As explained above, Plaintiff’s claims relate to a prior version of the

Website, used until April 7, 2016, that did not require a user to enter a contract to
access the website by consenting to the “Terms of Use”. Lawriter has withdrawn
its counterclaims that were based on Plaintiff’s copying from the pre-April 7, 2016
version of the website and has provided a Covenant Not to Sue to Plaintiff.
Harriman Aff. at 4, ¶¶9-10. Therefore, the controversy that arose under the former
version of the Website prior to April 7, and that is the subject of Plaintiff’s
Amended Complaint filed February 16, 2016, is now moot.
Plaintiff argues that a case or controversy must exist at the time of filing and
argues that subsequent actions cannot deprive the court of its subject-matter
jurisdiction, citing GTE Directories Publ’g Corp. v. Trimen Am., Inc., 67 F.3d,
1563 (11th Cir. 1995). However, contrary to Plaintiff’s argument, GTE Directories
does not state or imply that, because a case or controversy exists at the time of
filing, the case or controversy cannot be rendered moot by subsequent events.
Indeed, the fact that subsequent actions can deprive the court of subject-matter
jurisdiction is the very definition of the mootness doctrine – a doctrine not
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addressed in GTE Directories but well established in the jurisprudence.

See

Already, LLC v. Nike, Inc., 133 S.Ct. 721, 727, 184 L.Ed 2d 553 (2013).
At issue in this case is whether a declaratory judgment action can be
rendered moot upon a defendant’s agreement it will not pursue any counterclaims
and the amendment of its filings to reflect such agreement. A case becomes moot
“when the issues presented are no longer ‘live’ or the parties lack a legally
cognizable interest in the outcome.” Murphy v. Hunt, 455 U.S. 478, 481 (1982).
The voluntary-cessation doctrine recognizes that a controversy becomes moot
when the defendant voluntarily ceases the actions that gave rise to the controversy.
See Already, LLC v. Nike, Inc., 133 S.Ct. 721, 727, 184 L.Ed 2d 553 (2013). In
order to employ this doctrine, “a defendant claiming that its voluntary compliance
moots a case bears the formidable burden of showing that it is absolutely clear the
allegedly wrongful behavior could not reasonably be expected to recur.” Friends of
the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 190
(2000).

In this case, Plaintiff complains that Lawriter’s wrongful conduct is

demanding that Plaintiff cease the distribution of materials copied from the website
prior to February 16, 2016, the date of Plaintiff’s most recent amendment of its
Complaint. Lawriter has met this burden through its voluntary abandonment of its
counterclaims and providing Plaintiff a Covenant Not to Sue that releases Plaintiff,
any of its related business entities, and its customers from all claims “of any sort
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on account of, or in any way growing out of” the facts alleged in Plaintiff’s
Amended Complaint—namely, claims for “any copying, distribution, or use of
materials obtained through the Website prior to April 7, 2016, or with respect to
any copying, distribution, or use at any time of the text or numbering of the
regulations of the State of Georgia.” Harriman Aff. at 4, ¶9. Further, Lawriter’s
Covenant Not to Sue obligates Lawriter not to make any demands or bring any
lawsuits against Plaintiff based on these same claims. Id. As a result, under
Already, LLC v. Nike, Inc., supra, Plaintiff’s claims are moot.
III.

There Remain Disputes of Material Fact and Additional Discovery is
Needed Regarding Plaintiff’s claim for Declaratory Judgment Related to
pre- April 7, 2016 Copying from Lawriter’s website.
Lawriter agrees with Plaintiff that public law must remain public as a matter

of due process. Plaintiff goes to great lengths to describe how the statutes and
regulations adopted as law are not subject to copyright, and Lawriter does not
dispute this contention. However, Plaintiff concedes that the rule that the public
laws are not subject to copyright applies only to the text and numbering of the
laws. Doc. 17-1 at p. 9.
The material facts that remain in dispute here are the precise materials that
Plaintiff copied from the Website. Plaintiff seeks a declaratory judgment that its
copying incurs no liability because what Plaintiff says it copied was public law.
Lawriter disputes Plaintiff’s assertion that what is posted on the Website is merely
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the text and numbering of regulations adopted by the State of Georgia. To the
contrary, the Website includes additional copyrighted material necessary to
incorporate the statutory text and numbering into HyperText Markup Language
(“HTML”) that is displayable in a user’s web browser.
Summary judgment is appropriate only if “there is no genuine issue as to any
material fact.” Fed. R. Civ. P. 56(c). A court must “view the evidence and all
factual inferences therefrom in the light most favorable to the non-moving party,
and resolve all reasonable doubts about the facts in favor of the non-movant.”
Carter v. City of Melbourne, Fla., 731 F.3d 1161, 1166 (11th Cir. 2013) (internal
quotations omitted).
Plaintiff has failed to establish exactly what it copied from the Website, how
the copying was accomplished, and when it was accomplished. In this case, the
“how” of the copyright affects the “what.” For example, Plaintiff may have
downloaded copies of documents from the Website, or it may have copied the
regulations by some other method, such as photography or digital imaging. This
knowledge is in the hands of Plaintiff because, prior to April 7, 2016, the website
did not require users to identify themselves. Harriman Aff. at 3, ¶7. Plaintiff has
not identified the materials it copied and whether it only copied materials that were
not authored by Lawriter and to which Lawriter has no claim. Lawriter believes
Plaintiff copied materials beyond the statutory text and numbering, and this fact
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remains in dispute. Doc. 14. Therefore, Plaintiff has not demonstrated that no
material facts are in dispute, and Plaintiff’s Motion for Summary Judgement
should be denied. Alternatively, discovery is necessary in order to learn whether
Plaintiff’s copying was limited to regulatory text and numbering or includes other
material found on the same pages of the website and protected by copyrights
owned by Lawriter. F.R.C.P. Rule 56(d).
IV.

Plaintiff’s Claim is Not Supported by the Allegations of its Amended
Complaint as to any Activity after the Terms of Use were added to the
Website.
To the extent that Plaintiff seeks summary judgment based on activities

occurring after April 7, 2016, Plaintiff has not pleaded any facts supporting such a
claim. Plaintiff has not amended its Complaint since February 16, 2016. Plaintiff’s
Amended Complaint does not make any allegations about the Terms of Use
agreement required of persons accessing the Website since April 7, 2016. As a
result, Plaintiff has not pleaded a case or controversy based upon facts arising from
under the post-April 7, 2016 version of the website.
If Plaintiff were to be permitted to amend its Amended Complaint to allege
that it has or wished to copy materials from the Website in violation of the Terms
of Use, then Lawriter would be in a position to plead in response to those facts.
Despite the lack of a pleaded case or controversy with respect to April 7, 2016 and
afterward, Lawriter will briefly address Plaintiff’s position that any claim that
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Lawriter might have under the Terms of Use is preempted by the Copyright Act.
Such a claim by Lawriter, which would sound in breach of contract, is not
preempted because such a claim requires an additional element—consent to the
Terms of Use on the Website—beyond the elements of a claim for copyright
infringement.
On April 7, 2016, Lawriter began requiring persons accessing the Website to
consent to an express contract entitled “Terms of Use.” Harriman Aff. at 4, ¶9,
Ex. B. “An express contract is one where the intention of the parties and the terms
of the agreement are declared or expressed by the parties, in writing or orally, at
the time it is entered into.” Davidson v. Maraj, 609 Fed. Appx. 994, 998 (11th Cir.
2015) (citing Thomas v. Lomax, 61 S.E.2d 790, 791 (Ga. Ct. App. 1950)).
Beginning April 7, 2016, Lawriter included express terms and conditions to which
a user must express consent before accessing the Website. Doc. 14-1; Harriman
Aff. at 4, ¶9, Ex. B. In exchange for access to the Website, and before obtaining
access to the Website, the user agrees to an express contract not to copy certain
information and to restrict certain potential uses of any information obtained
through the website. Harriman Aff. at 4, ¶9, Ex. B. With respect to copying or
other use of the text and numbering of the Georgia regulations, Lawriter claims
only that persons accepting the Terms of Use and subsequently breaching them are
liable to Lawriter. Harriman Aff. at 4, ¶9, Ex. B. Lawriter does not claim
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copyright in the Georgia regulations and specifically does not claim that persons
copying those regulations are liable to Lawriter based on the fact of copying alone.
Instead, Lawriter, in exchange for the opportunity to easily view the regulations via
the Website, requires the user to accept the Terms of Use Contract, thus, giving
Lawriter the user’s enforceable agreement as a basis to limit the use of the
regulations as made available by Lawriter in electronic form. Id.. A cause of
action for breach of the Terms of Use Contract cannot arise absent the user’s
consent to the contract, and a breach of contract is a basic state law claim not
preempted by Copyright law. Furthermore, Lawriter’s Terms of Use do not purport
to prohibit or restrict any copies of the Georgia regulations, other than those
obtained from the Website maintained and published by Lawriter.
As recognized by the Eleventh Circuit Court of Appeals, a state law claim is
not preempted by the federal Copyright Act “if an extra element is required instead
of or in addition to the acts of reproduction, performance, distribution or display, in
order to constitute a state-created case of action, then the right does not lie within
the general scope of copyright and there is no preemption.” Lipscher v. LRP
Publications, 266 F.3d 1305, 1311-12 (11th Cir. 2001) (internal citations omitted);
see also Telecomm Technical Servs., Inc. v. Siemens Rolm Commc’ns, Inc., 66 F.
Supp. 2d 1306, 1326 (N.D. Ga. 1998) (“The contractual restrictions on use of the
programs constitutes an extra element that makes this cause of action qualitatively
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different from one for copyright.”) (internal citations omitted). A breach of
contract claim requires more than simple reproduction or distribution—it requires
there to be a contract between the parties.

See Nimmer on Copyright §

19D.03[C][2][a] (“As a general rule, contract claims require proof of a significant
‘extra element’: the existence of an actual agreement between the plaintiff and
defendant….”).
In fact, the Eleventh Circuit has held that a breach of contract claim is not
equivalent to an action founded on copyright. Id. at 1318-19. Thus, Lawriter’s
claim for breach of contract does not create rights that are equivalent to copyright,
and a claim by Lawriter for breach of the Terms of use would not be preempted.1
Moreover, even if this Court finds there is not an “extra element” in a breach
of contract claim, there is an exception to the rule of preemption that allows an
individual to bring a state law claim where the claim is based on actions more than
is just republication. In National Basketball Ass’n v. Motorola, Inc., 105 F.3d 841
(2d Cir. 1997), the Second Circuit refused to apply the preemption rule where the
alleged misappropriation constituted a free ride on the work of others. The court
held the elements central to such a claim are whether: (1) the plaintiff generates or
1

As noted above, Plaintiff has not pleaded or proved that it took or plans to take
any materials from the website at issue in breach of the Terms of Use (as added to
the website on April 7, 2016), so there is no case or controversy with respect to
those Terms of Use.
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collects information, at some cost or expense, (2) the value of the information is
highly time sensitive, (3) the defendant’s use of the information constitutes freeriding on the plaintiff’s costly efforts to generate or collect it, (4) the defendant’s
use of the information is in direct competition with a product or service offered by
the plaintiff, and (5) the ability of other parties to free-ride on the efforts of the
plaintiff would so reduce the plaintiff’s incentive to produce the product that its
existence or quality would be substantially threatened.

Id. at 845; see also

International News Serv. v. Associated Press, 248 U.S. 215 (1918).
As in these “free ride” cases, Plaintiff seeks to directly compete with
Lawriter through its misappropriation of HTML Electronic Files. Lawriter does not
contend that Plaintiff is prohibited from copying the Georgia Rules and
Regulations, just that Plaintiff cannot be allowed to take a “free ride” on Lawriter’s
efforts in coding the information into a searchable database. A breach of contract
claim is a state law claim similar to a state law misappropriation action, thus this
claim is not preempted under federal copyright law.
CONCLUSION
Plaintiff’s Motion for Summary Judgment should be denied because this
Court does not have subject-matter jurisdiction based on either diversity
jurisdiction or federal question jurisdiction. Moreover, Plaintiff’s claims present no
case or controversy because Plaintiff’s allegations have been rendered moot by
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Lawriter’s abandonment of its counterclaims and agreement to not pursue any
claims arising prior to April 7, 2016. Even if there is a finding of case or
controversy, there are numerous material facts at issue, specifically regarding what
material was copied by Plaintiff. Finally, Plaintiff’s Motion fails, since a breach of
contract, if subsequently alleged, would not be preempted by the Copyright Act.
For these reasons, Lawriter respectfully submits that summary judgment is
inappropriate and requests the Court deny Plaintiff’s Motion.
Respectfully submitted this the 9th day of June, 2016.
SMITH MOORE LEATHERWOOD, LLP
By: s/ Kurt M. Rozelsky
Kurt M. Rozelsky (Bar No. 617932)
Joseph W. Rohe (Bar No. 727154)
2 West Washington Street, Suite 1100
P.O. Box 87, Greenville, SC 29602
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Attorneys for Defendant Lawriter, LLC

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