Pacific Stock, Inc. v. Pearson Education, Inc.

Filing 136

ORDER DENYING PEARSON EDUCATION, INC.'S MOTION FOR RECONSIDERATION re 128 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 4/30/13. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
PACIFIC STOCK, INC.,

)
)
Plaintiff,
)
)
vs.
)
)
PEARSON EDUCATION, INC.,
)
)
Defendant.
)
_____________________________ )

CIVIL NO. 11-00423 SOM/BMK
ORDER DENYING PEARSON
EDUCATION, INC.’S MOTION FOR
RECONSIDERATION

ORDER DENYING PEARSON EDUCATION, INC.’S
MOTION FOR RECONSIDERATION
I.

INTRODUCTION.
Defendant Pearson Education, Inc., seeks

reconsideration of this court’s order of February 26, 2013.
Pearson asks that the order be changed in two respects.
First, Pearson requests that the court grant it summary
judgment on Plaintiff Pacific Stock, Inc.’s claims of fraud and
fraudulent inducement in connection with Pearson’s alleged use of
151 images.

That request is denied.

Pacific Stock asserts a

single claim of fraud and a single claim of fraudulent
concealment.

As set forth in this court’s order of February 26,

2013, Pacific Stock has submitted evidence supporting its fraud
and fraudulent concealment claims sufficient to send the matter
to trial, even if the claims relate to only some of the 151
images.

Pearson’s preparation for trial would clearly be aided

if Pacific Stock specifically detailed the scope of its fraud and

fraudulent inducement claims, and Pearson appears to be entitled
to receive such detail in discovery.
Second, Pearson requests that this court reconsider its
ruling regarding Pacific Stock’s right to bring this action based
on photographs taken by Doug Perrine and James Watt.

Pointing to

Minden Pictures, Inc. v. Pearson Education, Inc., 2013 WL 812412
(N.D. Cal. Mar. 5, 2013), Pearson argues that Pacific Stock lacks
standing to assert copyright claims.

Because Minden is

distinguishable, and because Pacific Stock has demonstrated
standing to assert copyright claims for pictures taken by Perrine
and Watt, reconsideration of this part of the order is not
warranted.
II.

RECONSIDERATION STANDARD.
A successful motion for reconsideration must accomplish

two goals.

First, it must demonstrate some reason that the court

should reconsider its prior decision.

See White v. Sabatino, 424

F. Supp. 2d 1271, 1274 (D. Haw. 2006).

Second, it must set forth

facts or law of a strongly convincing nature that induces the
court to reverse its prior decision.

Id.

Courts have established three grounds justifying
reconsideration: (1) an intervening change in controlling law;
(2) the availability of new evidence; and (3) the need to correct
clear error or prevent manifest injustice.

Mustafa v. Clark

Cnty. Sch. Dist., 157 F.3d 1169, 1178-79 (9th Cir. 1998).

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The

District of Hawaii has implemented these standards in Local Rule
60.1, which governs motions for reconsideration of interlocutory
orders such as the denial of a motion for summary judgment.

In

relevant part, Local Rule 60.1 states:
Motions for reconsideration of interlocutory
orders may be brought only upon the following
grounds:
(a)

Discovery of new material facts not
previously available;

(b)

Intervening change in law;

(c)

Manifest error of law or fact.

Motions asserted under Subsection (c) of this
rule must be filed not more than fourteen
(14) days after the court’s written order is
filed.
“Mere disagreement with a previous order is an
insufficient basis for reconsideration.”

Comeaux v. State of

Hawaii, Civ. No. 06-00341 SOM-BMK, 2007 WL 2300711, at *1 (D.
Haw. Aug. 8, 2007) (citing Leong v. Hilton Hotels Corp., 689 F.
Supp. 1572 (D. Haw. 1988)).

Furthermore, “reconsideration may

not be based on evidence and legal arguments that could have been
presented at the time of the challenged decision.”

Id. (citing

Kona Enter., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th
Cir. 2000)).

“Whether or not to grant reconsideration is

committed to the sound discretion of the court.”

White, 424

F. Supp. 2d at 1274 (citing Navajo Nation v. Confederated Tribes

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& Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th
Cir. 2003)).
III.

ANALYSIS.
A.

Reconsideration of Pearson’s Request for Summary
Judgment As to the Fraud and Fraudulent
Concealment Claims is Not Warranted.

Pearson argues that this court erred in not
adjudicating claims of fraud and fraudulent inducement with
respect to each of 151 images.

This court is not persuaded.

This court reads the Complaint as asserting a single claim of
fraud (Second Cause of Action) and a single claim of fraudulent
concealment (Third Cause of Action).

For such claims to proceed,

it is not necessary that every fraud or fraudulent inducement be
shown with respect to every image.

Pearson moved for summary

judgment on the ground that there was absolutely no evidence
supporting any fraud or fraudulent concealment claim.

The court

rejected that argument, ruling that Pacific Stock had some
evidence sufficient to allow it to proceed on those claims.

See

ECF No. 119 at 29-31.
As noted in the order, with respect to image 14,
Pearson sent Pacific Stock a billing request on July 30, 2002,
asking for a license to use the image in “Up to 40,000” copies of
a textbook.

See ECF No. 79, PageID # 1142.

However, Pearson

appears to have forecast in October of 2001 that it would print
more than 55,000 copies of the textbook using image 14.

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See ECF

No. 100-2, PageID # 2054.

It appears that Pearson did, in fact,

exceed 40,000 copies of that textbook.
# 1589.

See ECF No. 84-5, Page ID

A trier of fact could rely on such evidence to find by

clear and convincing evidence (1) that false representations were
made by the defendant, (2) with knowledge of their falsity (or
without knowledge of their truth or falsity), (3) in
contemplation of the plaintiff’s reliance upon them, and (4) that
the plaintiff detrimentally relied on them.

See Hawaii’s

Thousand Friends v. Anderson, 70 Haw. 276, 286, 768 P.2d 1293,
1301 (1989).
Having determined that Pacific Stock had raised triable
issues with respect to the fraud and fraudulent concealment
claims, the court was not compelled to examine each of the images
at issue in this case to determine whether some sort of fraud
claim could be based on each image.

Instead, the court stated,

“The extent of the fraud that Pacific Stock will be able to prove
at trial is unclear, but the court concludes that there are, at
the very least, triable factual issues as to fraud.”
As conceded by Pacific Stock at the hearing, Pacific
Stock lacked evidence supporting a fraud claim with respect to
each of the images at issue in this case.

However, to the extent

Pacific Stock intends to rely on any such evidence and is
required to so inform Pearson as part of discovery, Pacific Stock
certainly must do so, including by complying with its duty under

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Rule 26(e) of the Federal Rules of Civil Procedure to supplement
its discovery disclosures and/or responses.

Pacific Stock will

not satisfy such an obligation by simply referring to Exhibit A
of the Complaint.

Instead, any such obligation requires

identification of the images and statements on which the fraud
and fraudulent concealment claims are based and explanations as
to why the statements were fraudulent.

Any failure by Pacific

Stock to satisfy its Rule 26 obligations may limit what it is
permitted to offer at trial as evidence of fraud and fraudulent
inducement.
B.

Reconsideration of Pearson’s Request for Summary
Judgment As to the Claims of Perrine and Watts is
Not Warranted.

Citing Minden Pictures, Inc. v. Pearson Education,
Inc., 2013 WL 812412 (N.D. Cal. Mar. 5, 2013), Pearson repeats
arguments already rejected by this court concerning the images
taken by Perrine and Watts.

Pearson again challenges the

copyright assignments for those images, ECF Nos. 76-16 and 76-17.
Pearson notes that the district court in Minden found
substantially similar language to be ineffective to convey
standing.

However, Minden is distinguishable.
In Minden, the stock photography company was caught

asking its photographers to backdate some of the copyright
assignments at issue in that case to “help insure against some
nit picking judge from finding fault” with the agreements.

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Minden, 2013 WL 812412, at *2.

The stock photography company

submitted the declarations of three individuals involved with the
scheme to backdate the assignments.

These declarations evinced

an intent to make whatever assignments were necessary to pursue
copyright infringement claims against Pearson.

Id. at *7.

The

declarations did not show any intent to transfer legal ownership
of any copyright to the stock photography company.

Instead, the

court determined that the declarations’ “objective was to create
the mere appearance of standing in this lawsuit.”

Id.

The court

assumed that the declarations were indicative of the intent
behind all of the copyright assignments, see id., and determined
that, when viewed as a whole, “the clear and unambiguous intent
of the parties was to assign to Minden the bare right to sue,”
not actual co-ownership of any exclusive copyright right.

Id. at

*6.
This court has before it language nearly identical to
that in the copyright assignments at issue in Minden.

However,

this court is not faced with any evidence contradicting the plain
language of Perrine’s assignment of “co-ownership” of copyright
or Watt’s assignment of “ownership” of copyright to Pacific
Stock.

Nothing before this court suggests that these copyright

assignments were executed for the sole purpose of establishing
Pacific Stock’s standing to assert copyright claims.

To the

contrary, the evidence indicates that the assignments long

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preceded any thought by Pacific Stock of asserting the present
claims against Pearson.

Under these circumstances, Pearson’s

reliance on Minden is unpersuasive.
IV.

CONCLUSION.
As set forth above, the court denies Pearson’s motion

for reconsideration.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, April 30, 2013.

/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge

Pacific Stock, Inc. v. Pearson Education, Inc., Civ. No. 11-00423 SOM/BMK; ORDER
DENYING PEARSON EDUCATION INC.’S MOTION FOR RECONSIDERATION

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