Kid Stuff Marketing, Inc. v. Creative Consumer Concepts, Inc. et al

Filing 152

ORDER overruling 136 Plaintiff's and 137 Defendants' Objections to the 134 Nunc Pro Tunc Pretrial Order. Signed by Magistrate Judge Teresa J. James on 3/30/2017. (byk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
KID STUFF MARKETING, INC.,
Plaintiff,
v.
CREATIVE CONSUMER CONCEPTS, INC.,
and STEAK N SHAKE OPERATIONS, INC.
Defendants.

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CIVIL ACTION
No. 15-cv-2620-TJJ

ORDER OVERRULING OBJECTIONS
TO NUNC PRO TUNC PRETRIAL ORDER
This matter is before the Court on the parties’ cross objections (ECF Nos. 136 and 137) to the
Nunc Pro Tunc Pretrial Order of December 14, 2016 (ECF No. 134) (the “Pretrial Order”).1 On
February 22, 2017, while the objections were pending, all parties consented to the exercise of
jurisdiction by the undersigned Magistrate Judge, pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P.
73, to conduct all proceedings in this case including the jury trial in Kansas City, the entry of final
judgment, and all post-trial proceedings.2 Pursuant to the parties’ consent, the undersigned
Magistrate Judge addresses the parties’ Fed. R. Civ. P. 72(a) objections to the Pretrial Order.3
Plaintiff objects to the exclusion of its claims that Defendants’ Ketchup car, Pickle car, and
Mustard car (the “Condiment Car Series”) infringe Plaintiff’s copyrights in its “Future Car”
assembly instructions and die lines. Plaintiff specifically objects to footnotes 6–7, 11–12, and 16–17
1

Magistrate Judge Gale, who sits in Wichita, was the magistrate judge initially assigned to conduct
pretrial proceedings in this case and who entered the Nunc Pro Tunc Pretrial Order.
2

3

See Notice, Consent, and Reference of a Civil Action to a Magistrate Judge, ECF No. 148.

See 28 U.S.C. § 636(c)(1) (“Upon the consent of the parties, a . . . magistrate judge . . . may conduct
any or all proceedings in a jury or nonjury civil matter and order the entry of judgment.”).

of the Pretrial Order, in which Judge Gale sustained Defendants’ objections to Plaintiff’s assertion of
direct infringement claims concerning the Condiment Car Series and “at a minimum” qualifiers,
finding these claims were beyond what Plaintiff asserted in the First Amended Complaint.
Defendants object to the inclusion of Plaintiff’s claims identifying paperboard cars that
Defendants argue were not identified in Plaintiff’s First Amended Complaint, i.e., any paperboard
car series other than the Land Spy Cruiser, the Sea Spy Sub Car, and the Space Spy Rocket Car (the
“Spy Car Series”). Specifically, they object to the inclusion of the following paperboard cars as
infringing products: the Mustard car, the Pickle car, the Birthday Cake Shake car, the Chocolate
Fudge Brownie Shake car, the Chocolate Covered Strawberry car, the Sizzle 4x4, the Shaker 4x4,
the Goldie 4x4, the Indy car, and “other consumer-facing materials” featuring the copyrighted
Sizzle, Shaker, or Goldie cartoon characters. 4
Federal Rule of Civil Procedure 72(a) provides that timely objections to a magistrate judge’s
order on a non-dispositive pretrial matter are reviewed under a “clearly erroneous or contrary to law”
standard.5 The clearly erroneous standard “requires that the reviewing court affirm unless it ‘on the
entire evidence is left with the definite and firm conviction that a mistake has been committed.’”6 A
magistrate judge’s order is contrary to law if it “fails to apply or misapplies relevant statutes, case
law or rules of procedure.”7

4

Defendants object to the inclusion of these paperboard cars in Section 4.a., Subsections 1–3, 6–8,
and 11–13, of the Pretrial Order.
5

Fed. R. Civ. P. 72(a); First Union Mortg. Corp. v. Smith, 229 F.3d 992, 995 (10th Cir. 2000);
Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1461–62 (10th Cir. 1988).
6

Ocelot Oil, 847 F.2d at 1464 (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).

7

Dinkins v. Apria Healthcare Grp., Inc., No. 12-2112-JAR-JPO, 2013 WL 593661, at *2 (D. Kan.
Feb. 15, 2013).

2

In contrast, timely objections to a magistrate judge’s disposition of a “pretrial matter
dispositive of a claim or defense” are reviewed under the less deferential de novo standard.8 Under
de novo review, no special weight is given to the magistrate judge’s determination and the reviewing
judge independently determines the issues.9 In conducting its review, the reviewing court may
“accept, reject, or modify” the recommended disposition.10
Judge Gale’s decision—that both allowed and excluded certain alleged copyright
infringement claims from the Pretrial Order—implicates both review standards; it is non-dispositive
as to the former, and dispositive as to the latter. Case law from this District suggests that objections
to a magistrate judge’s rulings with respect to what the parties can include in the pretrial order are
reviewed under the more deferential standard.11 However, other cases—typically when the
magistrate judge denies a motion seeking to add claims on futility grounds—have focused on the
claim-dispositive nature of the magistrate judge’s order in applying a de novo review.12

8

See Fed. R. Civ. P. 72(b)(3) (“The district judge must determine de novo any part of the magistrate
judge’s disposition [of a pretrial matter dispositive of a claim or defense] that has been properly objected
to.”); 28 U.S.C. § 636(b)(1)(C) (“A judge of the court shall make a de novo determination of those portions of
the report or specified proposed findings or recommendations to which objection is made.”).
9

Navegante Grp., Inc. v. Butler Nat. Serv. Corp., No. 09-2466-JWL, 2011 WL 1769088, at *3 (D.
Kan. May 9, 2011) (citing Ocelot Oil, 847 F.2d at 1464).
10

Fed. R. Civ. P. 72(b)(3).

11

See White v. Union Pac. R. Co., No. 09-1407, 2013 WL 6728383, at *1 (D. Kan. Dec. 19, 2013)
(reviewing the magistrate judge’s inclusion of more specific liability allegations in the pretrial order under a
clearly erroneous or contrary to law standard); Sprint Commc'ns Co. L.P. v. Vonage Holdings Corp., 500 F.
Supp. 2d 1290, 1349 (D. Kan. 2007) (reviewing objections to magistrate judge’s deletion of affirmative
defenses in pretrial order under a clearly erroneous or contrary to law standard); Beam v. Concord Hosp., Inc.,
No. 93-4188-SAC, 1996 WL 455020, at *4 (D. Kan. July 8, 1996) (reviewing objections to magistrate judge’s
rulings with respect to what claims should be included in the pretrial order under a clearly erroneous or
contrary to law standard).
12

Cuenca v. Univ. of Kan., 205 F. Supp. 2d 1226, 1229 (D. Kan. 2002) (“Because that part of the
order here denying leave to amend has the identical effect as an order dismissing potential claims and parties
from the suit, the court shall make a de novo determination upon the record.”); Five Rivers Ranch Cattle
Feeding LLC v. KLA Envtl. Servs., Inc., No. 08-2185-EFM, 2009 WL 6621481, at *3 (D. Kan. Nov. 24, 2009)
(“Because the court's decision to deny leave to amend has the identical effect of an order dismissing a

3

The Court here need not make a determination regarding which standard of review is
applicable. Regardless of the review standard applied, there was no error in Judge Gale’s decision to
include some and exclude other claims regarding paperboard cars from the Pretrial Order.
Judge Gale described the parties’ objections and his decision with respect to those objections
in the preliminary matters section of the Pretrial Order:
The Defendants object that some claims asserted by Plaintiff in this Pretrial Order are
beyond those alleged in the First Amended Complaint (Doc. 18), and beyond those
represented by the Plaintiff during the previous motion to dismiss and in discovery.
Defendants object that Plaintiff’s claims attempt to improperly include, without leave
of Court, an additional copyright (Goldie) that is not asserted in Plaintiff’s Amended
Complaint, and object that claim was not what KSM represented to this Court was
asserted in this case in its Response in Opposition to Defendants’ Motion to Dismiss.
(Doc. 15, at 11.) Defendants object that Plaintiff did not seek permission to add the
Goldie character copyright claim to the case when it sought leave to amend its
complaint. (Doc. 47.) Defendants also object that Plaintiff further adds additional
accused products, also not identified in Plaintiff’s Amended Complaint and for which
Plaintiff has never sought amendment to add to this case. Plaintiff’s Complaint
accuses C3’s Spy Series cars—the Land Spy Cruiser, the Sea Spy Sub Car, and the
Space Spy Rocket Car—as the infringing products. (Doc. 18, at ¶ 37.) It is
Defendants’ position that Plaintiff’s claims are limited to the copyright and products
identified in its Amended Complaint.
The Magistrate Judge heard and considered arguments from counsel on these issues.
The Court overrules the objection concerning the allegations of copyright
infringement concerning the “Goldie” character, as that claim was alleged in the First
Amended Complaint (Doc. 18, paragraphs 22 and 24). However, the Court sustains
the objection as claim of direct infringement concerning “cars” not identified in the
First Amended Complaint. The Court overrules the objections concerning those same

potential claim, it can be considered dispositive, and [plaintiff] is entitled to a de novo review of that
decision”); Jackson v. Kansas Cty. Ass'n Multiline Pool, No. 03-4181 JAR, 2005 WL 3307215, at *1 (D. Kan.
Dec. 6, 2005) (magistrate judge’s order denying leave to amend the claims already dismissed under a futility
standard is a dispositive ruling subject to de novo review); Pedro v. Armour Swift-Eckrich, 118 F. Supp. 2d
1155, 1157 (D. Kan. 2000) (denial of leave to amend is a dispositive decision at least in situations where the
denial is premised on futility). But see Navegante Grp., 2011 WL 1769088, at *3 (declining to apply the de
novo standard of review to the magistrate judge’s denial of motion for leave to amend to add claim).

4

cars regarding indirect infringement, as part of infringement concerning subject
characters. Paragraphs affected by these rulings will be noted in footnotes, infra.
These rulings were implemented in the Legal Claims section of the Pretrial Order where the
Condiment Car Series were deleted from Plaintiff’s direct and contributory copyright infringement
claims pertaining to the assembly instructions and die lines. All the other paperboard car references
inserted by Plaintiff were allowed to remain in the Pretrial Order.
Plaintiff objects to the deletion of the Condiment Car Series from its claims for infringement
related to the assembly instructions and die lines.13 After reviewing the parties’ briefing and the First
Amended Complaint, the Court finds that Plaintiff’s assertion of direct infringement claims
concerning the Condiment Car Series and “at a minimum” qualifiers in Plaintiff’s assembly
instructions and die lines were beyond what had been alleged in the First Amended Complaint.
Plaintiff alleged in its First Amended Complaint (ECF No. 18) that it created original designs for
paperboard cars to be included in kids’ meals:
Among [Plaintiff] KSM’s original designs are 9015 Concept Car 1 – SHAKER, 9015
Concept Car 2 – GOLDIE, and 9015 Concept Car 3 – SIZZLE (the 9015 designs).
The 9015 designs were used to produce the “Future Car” series of cars for SNS. They
are protected by copyright as 2-D artwork under Registration No. VA 1-924-909. A
copy of this Registration with deposit materials is attached hereto as Exhibit A.
Each of the 9015 designs includes illustrations showing how the cars are to be
assembled. These illustrations are protected by copyright as 2-D artwork under
Registration No. VA 1-942-813. A copy of this Registration with deposit materials is
attached hereto as Exhibit B.
KSM’s original car designs, including the 9015 designs, were accompanied by
paperboard cartoon characters intended to create affinity for the product. These
characters, which predate the relationship between KSM and SNS, were named
Shaker, Goldie and Sizzle. The character Shaker is protected by copyright as 2-D
artwork under Registration No. VA 1-917-720. A copy of this Registration with
13

The Court rejects Defendants’ argument that Plaintiff’s objections are untimely because Plaintiff
did not object to the original pretrial order. In his December 13, 2016 Order (ECF No. 133), District Judge
Lungstrum set a December 30, 2016 deadline for all parties to file any objections to the Nunc Pro Tunc
Pretrial Order. Plaintiff timely filed its objections on December 23, 2016.

5

deposit materials is attached hereto as Exhibit C. The character Sizzle is protected by
copyright as 2-D artwork under Registration No. VA 1-926-570. A copy of this
Registration with deposit materials is attached hereto as Exhibit D.14
Plaintiff further alleged in the First Amended Complaint that in disregard of its copyrights,
Defendant Creative Consumer Concepts, Inc. copied the 9015 designs to produce paperboard cars
known as the “Land Spy Cruiser,” the “Sea Spy Sub Car” and the “Space Spy Rocket Car” for
Defendant Steak N Shake Operations, Inc., which began offering these cars at each of its restaurant
locations.15 The Spy Car Series are the only paperboard cars mentioned in the First Amended
Complaint.
Judge Gale determined that Plaintiff’s assembly instructions and die lines do not include or
feature any of Plaintiff’s copyrighted Sizzle, Shaker, and/or Goldie cartoon characters. Therefore,
Plaintiff would not be permitted to assert infringement claims for the assembly instructions and die
lines pertaining to cars other than those specifically alleged in the First Amended Complaint.
Plaintiff’s infringement claims related to the assembly instructions and die lines were therefore
limited to the Spy Car Series.
Plaintiff argues that the assembly instructions for the Condiment Car Series are identical “in
relevant aspects” to the Spy Car Series, and Defendants should not have been surprised when
Plaintiff sought to add the Condiment Car Series to the Pretrial Order. However, Plaintiff never
moved to amend its First Amended Complaint to add the Condiment Car Series as infringing
products. The Condiment Car Series were not mentioned in the First Amended Complaint, and the
assembly instructions and die lines do not feature cartoon characters similar to Plaintiff’s Sizzle,
Shaker, and/or Goldie cartoon characters. Defendants contend they were not put on notice of

14

First Am. Compl. ¶¶ 22–24, ECF No. 18.

15

Id. at ¶ 37.

6

Plaintiff’s Condiment Car Series claims and that they were not given the opportunity to conduct
discovery concerning them. Discovery has closed and it does not appear discovery was conducted
relative to the Condiment Car Series. By waiting until the Pretrial Order to claim that the Condiment
Car Series infringe its copyrights, Plaintiff acted too late to burden the Court and Defendants with
these new claims for relief.16 The Court therefore finds the Condiment Car Series are properly
excluded from the assembly instructions and die line infringement claims in the Pretrial Order.
Defendants have also objected to the Pretrial Order. They object to Judge Gale’s ruling
allowing Plaintiff’s references to paperboard cars other than the Spy Car Series to remain in the
Pretrial Order. Defendants argue that Plaintiff is required to provide notice about what cars it is
alleging infringe upon Plaintiff’s copyrights, and Plaintiff’s First Amended Complaint only identifies
Defendants’ Spy Car Series. Defendants argue that Plaintiff never moved to amend its complaint or
otherwise give notice to Defendants that it was also alleging the other paperboard car series
infringed upon Plaintiff’s copyrights. They also argue Plaintiff’s attempt to add claims that
Defendants’ other paperboard cars infringe Plaintiff’s copyrights by including them for the first time
in their proposed Pretrial Order prejudices Defendants’ ability to defend in this case.
Judge Gale allowed Plaintiff to include paperboard cars other than the Spy Car Series in its
direct and contributory infringement based upon his finding that the allegations of Plaintiff’s First
Amended Complaint were sufficient to encompass Defendants’ paperboard cars with cartoon
characters derived from Plaintiff’s copyrighted Shaker, Sizzle, and/or Goldie characters. Plaintiff
points out that it alleged in the First Amended Complaint that Defendants copied, prepared, sold,
16

See Capital Sols., LLC v. Konica Minolta Bus. Sols. U.S.A., Inc., No. 08-2027-JWL-DJW, 2009
WL 3711574, at *5–*7 (D. Kan. Nov. 3, 2009) (sustaining objections to claims asserted in the pretrial order).
See also Evans v. McDonald's Corp., 936 F.2d 1087, 1091 (10th Cir. 1991) (permitting plaintiffs to wait until
the last minute to ascertain and refine the theories on which they intend to build their case would waste the
parties' resources, as well as judicial resources, on discovery aimed at ultimately unavailing legal theories and
would unfairly surprise defendants, requiring the court to grant further time for discovery or continuances).

7

offere for sale and/or distrib
ed
buted copies of “derivativ works ba
ve
ased on the 9
9015 designs and
s
illustr
rations.”17 The Court ag
T
grees that the First Amen
e
nded Compla put Defe
aint
endants on n
notice that
Plain
ntiff’s infring
gement claim were not limited to th Spy Car S
ms
l
he
Series and ex
xtended to ot
ther
paper
rboard cars with milksha hamburg and fren fry carto character that were similar to
w
ake,
ger,
nch
oon
rs
Plain
ntiff’s Shaker Sizzle, and Goldie copyrighted cartoon cha
r,
d/or
c
aracters. Unl the asse
like
embly
instru
uctions and die lines infr
d
ringement claims, the Co finds De
ourt
efendants wo
ould have be on
een
notice that Plaintiff was claim
ming infringe
ement of all Defendants’ paperboard cars that fe
d
eature
rs
om
f’s
haker, and/or Goldie cart
r
toon charact
ters. The
cartoon character derived fro Plaintiff Sizzle, Sh
t
e
erly
he
ms
of
al
Court finds Judge Gale prope allowed Plaintiff to include in th legal claim section o the Pretria
Order paperboard cars other than the Spy Car Series that feature cartoon char
r
d
t
y
racters deriv from
ved
Plain
ntiff’s copyrighted Sizzle Shaker, an
e,
nd/or Goldie characters.
HEREFORE ORDERE THAT P
E
ED
Plaintiff’s ob
bjections (EC No. 136) to the Nunc
CF
)
c
IT IS TH
Pro Tunc Pretria Order and Defendants objections (ECF No. 137) to the Nunc Pro T
T
al
d
s’
s
Tunc Pretria
al
Order (ECF No. 134) are OV
r
VERRULED.
IT IS SO ORDERED.
s
s
sas.
Dated this 30th day of March, 2017 at Kansas City, Kans

T
Teresa J. Jam
mes
U S. Magistr Judge
U.
rate

17

First Am Compl. ¶¶ 64–65.
m.

8