Threadgill, et al v. Orleans Parish Sch, et al

Filing 156

ORDER granting Defendant's 133 Motion to Dismiss plaintiffs' claims against the City of New Orleans. Plaintiffs have until 3/10/13 to amend their complaint.. Signed by Chief Judge Sarah S. Vance. (Reference: ALL CASES)(jjs, )(copy sent to Thomas Weems at [e-mail])

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
BUTCH THREADGILL, TOM WEEM
AND GENERAL CONTRACTING AND
CONSULTING SERVICES, LLC

CIVIL ACTION

VERSUS

NO: 02-1122

ORLEANS PARISH SCHOOL BOARD,
ET AL.

SECTION: R

ORDER AND REASONS
Before the Court is the motion to dismiss of the City of New
Orleans. For the following reasons, the Court GRANTS defendant’s
motion. The Court GRANTS plaintiffs leave to amend their
complaint within 14 days.

I.

BACKGROUND
On January 23, 2000, a severe hail storm caused significant

roof damage to Orleans Parish schools. The City of New Orleans
contracted with Mitchell Crusto d/b/a Angelic Asset Management,
Inc. to adjust the insurance claims for the roof damage with the
City’s insurer, CNA Insurance Company, and to contract on an
emergency basis to repair the damaged roofs.1

Crusto contracted

with Butch Threadgill and Tom Weems through their business,
General Contracting and Consulting Services, LLC, to prepare bids
and estimates for loss and damage to the schools’ roofs.2
1

No. 02-1460, R. Doc. 1.

2

Id. at 3.

In 2002, plaintiffs filed suit against Crusto and the
Orleans Parish School Board.3 They then filed a second suit
against Crusto, the City of New Orleans, and the City’s
insurers.4 The two suits were consolidated.5

Plaintiffs allege

that they submitted repair estimates and bid proposals to Crusto
that were copyrighted to Tom Weems, all rights reserved.6
Plaintiffs also state that they negotiated damage estimates with
CNA Insurance Company.7 Plaintiffs claim that Crusto did not pay
plaintiffs for the work done, unlawfully displayed the
copyrighted work on his website, and distributed the bids to the
City as his own for approval. Plaintiffs assert claims under
federal and state copyright law, the Louisiana Unfair Trade
Practices Act, and state tort and contract law.
In 2003, plaintiffs and Crusto entered into arbitration, and
all of the proceedings were stayed. The Court entered a judgment
confirming an arbitration award on June 17, 2009.8 Plaintiffs
then sought to lift the stay to allow the case to proceed among

3

R. Doc. 1.

4

No. 02-1460, R. Doc. 1.

5

R. Doc. 31.

6

No. 02-1460, R. Doc. 1 at 4.

7

Id.

8

R. Doc. 84.
2

the remaining parties, which the Court granted.9 As the parties
prepared for trial, they discovered that the City had never been
notified that the stay had been lifted and trial set. After being
served, the City moved to dismiss plaintiffs’ claims or, in the
alternative, for summary judgment.

II.

STANDARD10
When a defendant attacks the complaint because it fails to

state a legally cognizable claim, Rule 12(b)(6) provides the
appropriate challenge. To survive a Rule 12(b)(6) motion to
dismiss, the plaintiff must plead enough facts “to state a claim
to relief that is plausible on its face.” Ashcroft v. Iqbal, 129
S.Ct. 1937, 1960 (2009)(quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is facially plausible when the
plaintiff pleads facts that allow the court to “draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. at 1949. A court must accept all wellpleaded facts as true and must draw all reasonable inferences in
favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d
228, 239 (5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th

9

R. Doc. 106.

10

The Court finds that summary judgment is not
appropriate at this time, given that no discovery has been
exchanged by the City and plaintiffs. Moreover, the Court finds
that it need not examine the exhibit submitted by defendant to
decide the motion.
3

Cir. 1996). But the Court is not bound to accept as true legal
conclusions couched as factual allegations. Iqbal, 129 S.Ct. at
1949.

III. DISCUSSION
A.

Indemnity

As a threshold matter, the Court rejects defendant’s
contention that plaintiffs’ claims must be dismissed because
Crusto agreed to fully indemnify the City. Although this may be
the case, any such indemnity does not bear on plaintiffs’ ability
to bring claims against the City. Indeed, “the duty-to-indemnify
issue [is] not ripe when the underlying . . . lawsuit has not yet
been completed.” Travelers Cas. & Sur. Co. of Am. v. Univ.
Facilities, Inc., No.

10-1682, 2012 WL 1198611, at *11

(E.D.

La. Apr. 10, 2012) (citing Coregis Ins. Co. v. Sch. Bd. Of Allen
Parish, No. 07-30844, 2008 WL 2325632, at *2 (5th Cir. June 6,
2008)). Therefore, at this time, the Court need not decide the
issue of whether Crusto would indemnify the City if the City were
found liable on plaintiffs’ claims.
B.

Copyright Claims

Defendant argues that plaintiffs have failed to state a
claim for copyright infringement, because plaintiffs have no
standing to assert copyright ownership under the “work for hire”
doctrine and their bid proposals are not subject to copyright
4

protection. Defendant also asserts more broadly that plaintiffs
have failed to plead any specific facts regarding the City’s
actions.
1.

Standing

Under the “work for hire” doctrine, “the employer or other
person for whom the work was prepared is considered the author”
of work created. 17 U.S.C. § 201(B). Defendant contends that
because plaintiffs created the materials at issue pursuant to a
contract with Crusto, they are not the authors and lack standing
to pursue a copyright claim. But, the definition section of the
Copyright Act of 1976 defines a “work made for hire” as “a work
prepared by an employee within the scope of his or her
employment” or “a work specially ordered or commissioned for use
as a contribution to a collective work . . . if the parties
expressly agree in a written instrument signed by them that the
work shall be considered a work made for hire.” 17 U.S.C. § 101;
Easter Seal Soc. for Crippled Children & Adults of Louisiana,
Inc. v. Playboy Enterprises, 815 F.2d 323, 334-35 (5th Cir. 1987)
(“[A] work is ‘made for hire’ within the meaning of the Copyright
Act of 1976 if and only if the seller is an employee within the
meaning of agency law, or the buyer and seller comply with the
requirements of § 101(2).”). The complaint does not indicate in
any way that plaintiffs were the employees of Crusto or that the
bids were part of a collective work or designated as work made

5

for hire. Thus, the Court finds that on the face of the
complaint, the doctrine of “work for hire” does not render
plaintiffs without standing. See, e.g., Qualey v. Caring Center
of Slidell, No. 95-1360, 1996 WL 3915, at *2 (E.D. La. Jan. 3,
1996) (denying defendant’s motion for summary judgment on the
grounds that plaintiff put forth evidence that he worked as an
independent contractor).
2. Failure to state a claim
Defendant also contends that plaintiffs have not asserted
any facts about the City in their complaint and that the
materials allegedly copied by Crusto and the City are not subject
to copyright protection. To establish a claim for copyright
infringement, a plaintiff must show that (1) he owns a valid
copyright and (2) the allegedly infringing parties copied
constituent elements of the work that are original. Feist Publ’n,
Inc. v. Rural Tel. Service Co., Inc., 499 U.S. 340 (1991). The
Court must make two separate inquiries to determine whether
actionable copying occurred. See Bridgmon v. Array Systems Corp.,
325 F.3d 572, 576 (5th Cir. 2003). The Court first evaluates
“whether the alleged infringer copied, or actually used the
copyrighted material in his own work.” Id. (citations and
quotations omitted). “A plaintiff may make this showing either
with proof of direct evidence of copying or through
circumstantial evidence demonstrating both (1) that the defendant

6

had access to the copyrighted work and (2) that the two works are
‘probatively similar.’”

Gen. Universal Sys., Inc. v. Lee, 379

F.3d 131, 141 (5th Cir. 2004). The Court then considers “whether
substantial similarity exists between the copyrighted work and
the allegedly infringing work.” Bridgmon, 325 F.3d at 576
(citing Engineering Dynamics, Inc. v. Structural Software, Inc.,
26 F.3d 1335, 1343 (5th Cir. 1994)).
Copyright registration is a condition precedent to filing
suit for copyright infringement. 17 U.S.C. § 411(a); Real Estate
Innovtions, Inc. v. Houston Ass’n of Realtors, Inc., 422 Fed.
Appx. 344, 348 (5th Cir. 2011) (“If a plaintiff does not have a
copyright registration, her claim may be dismissed for failure to
state a claim.”). Plaintiffs assert that all repair estimates and
bid proposals state “copyright, Tom Weems 2000, all rights
reserved”11 and were properly registered. Although the phrase
“Contents of file and photographs are Copyright 2001" appears on
the estimates, plaintiffs’ certificate of registration states
that the nature of the work is “photographs”.12 Thus, it is not
clear whether the estimates as a whole were registered or only
the photographs. Nevertheless, defendant does not argue that
plaintiffs’ action is precluded due to a lack of registration,
and so the Court will accept as unchallenged plaintiffs’

11

No. 02-1460, R. Doc. 1. at 4.

12

Id. at 15.
7

assertion that the materials in question were properly
registered.
Plaintiffs argue that they produced original photographs and
detailed damage assessment estimates that are protected by
copyright. The originator of a photograph may claim copyright in
his work, see Burrow-Giles Lithographic Co. v. Sarony, 111 U.S.
53 (1884), so long as it fulfils the requirement of originality
by “possess[ing] at least some minimal degree of creativity.”
Feist, 499 U.S. at 345. Plaintiffs’ photographs appear to serve a
utilitarian rather than expressive purpose.13 Through the images,
plaintiffs sought to illustrate the damage and necessary repairs
described in the rest of their proposal, as evidenced by the
numerous photographs that depict a defect circled in yellow.14
See, e.g., Oriental Art Printing, Inc. v. Goldstar Printing
Corp., 175 F. Supp. 2d 542 (S.D.N.Y. 2001) (denying motion for
preliminary injunction because photographs of food on menu did
not possess requisite originality to be protected). Nevertheless,
the copyright registration of the images constitutes prima facie
evidence of the copyright’s validity. See 17 U.S.C. § 410(c).
Defendant does not address plaintiffs’ photographs in its motion

13

See R. Doc. 136-3 at 18-38. Plaintiffs did not include
the photographs in their original complaint, but the Court may
consider them as they are central to plaintiffs’ claim and were
referred to extensively in the pleadings. See Scanlan v. Texas A
& M Univ., 343 F.3d 533, 536 (5th Cir. 2003).
14

Id.
8

to dismiss and thus does not rebut this presumption of
originality. Moreover, the originality of images is a factual
determination inappropriate for a motion to dismiss. See, e.g.,
FragranceNet.com v. FrangranceX.com, 679 F. Supp. 2d 312, 320
(E.D.N.Y. 2010) (holding that motion to dismiss was not proper
juncture at which to determine images’ originality). The Court
therefore finds that plaintiffs have pleaded sufficient facts to
suggest that they own a valid copyright. Defendant argues that
components of bid proposals are not subject to copyright
protection, because they contain details regarding property
damage and price estimates, which as facts cannot be copyrighted.
But, because the Court finds it to be facially plausible that
plaintiffs’ photographs merit copyright protection, the Court
need not determine at this time whether plaintiffs have stated a
claim for protection of their other materials.15
Nevertheless, the Court finds that plaintiffs’ claims of
copyright infringement must be dismissed due to an absence of
facts related to the City’s alleged copying of plaintiffs’
materials. Plaintiffs’ complaint states that Crusto distributed
plaintiffs’ copyrighted bids to the City as his own work and that

15

The Court also will not consider defendant’s arguments
regarding the doctrines of implied license and fair use, which
defendant raised for the first time in its reply to plaintiffs’
opposition. See, e.g., Mitsui & Co., Ltd. v. M/V Hermann Schulte,
95-3270, 1996 WL 365660, at *3 (E.D. La. July 1, 1996) (“A reply
memorandum is not adequate to raise entirely new arguments for
dismissal.”).
9

he used the bids in promotional materials.16 Plaintiffs allege
that he “passed the work off as his own, receiving compensation
from the City of New Orleans.”17 Plaintiffs thus have stated a
claim for copyright infringement against Crusto. But, no facts
alleged in the complaint state that the City actually used
plaintiffs’ material in its own work or that “substantial
similarity exists between the copyrighted work and the allegedly
infringing work.” Bridgmon, 325 F.3d at 576.
In fact, plaintiffs make no mention whatsoever of the City’s
alleged infringement. They state only that the City should have
known that the information submitted by Crusto was copyrighted
material and that they are entitled to damages due to
“unauthorized use of the information by third parties.”18

That

Crusto distributed plaintiffs’ bid proposals to the City does not
automatically implicate the City’s liability for copyright
infringement. Without pleadings suggesting that the City
impermissibly copied plaintiffs’ protected materials, the
complaint fails to set forth a facially plausible claim of
copyright infringement. See, e.g., Richards v. British Petroleum,
869 F. Supp. 2d 730, 738 (E.D. La. 2012) (granting motion to
dismiss copyright claims since plaintiff pleaded no facts

16

No. 02-1460, R. Doc. 1 at 4.

17

No. 02-1460, R. Doc. 1 at 4.

18

Id. at 6-7.
10

concerning how defendant copied or used her work). Moreover,
plaintiffs’ argument that the City used plaintiffs’ repair
estimates without authorization to obtain high reimbursements,
presented in their opposition memorandum, is not supported by the
facts pleaded. The complaint instead states that plaintiffs
negotiated damage estimates with the City’s insurers, without
mention of the City’s involvement.19 Because plaintiffs rely on
facts outside of the pleadings, the Court will not consider their
contention concerning the City’s use of plaintiffs’ materials.20
The Court thus finds that plaintiffs have failed to state a claim
for copyright infringement against the City.
C. State Law Claims
The Court has determined that plaintiffs’ claim arising
under federal law should be dismissed. Accordingly, the Court
must consider whether to continue to exercise supplemental
jurisdiction over plaintiffs’ remaining state law claims. See 28
U.S.C. § 1367. One of the reasons for which a district court may
decline to exercise supplemental jurisdiction is if it has
dismissed all claims over which it has original jurisdiction. 28
U.S.C. § 1367(c). In addition to the statutory factors, the court

19

No. 02-1460, R. Doc. 1. at 4.

20

Plaintiffs attach exhibits to their opposition but
simultaneously argue that summary judgment is premature. Thus,
the Court will not consider materials that were not referred to
in the complaint.
11

must also balance the factors of judicial economy, convenience,
fairness, and comity.
(5th Cir. 2002).

Smith v. Amedisys, Inc., 298 F.3d 434, 446

The Court has “wide discretion in determining

whether to retain supplemental jurisdiction over a state claim
once all federal claims are dismissed.”

Noble v. White, 996 F.2d

797, 799 (5th Cir. 1993). Here, the Court finds that judicial
economy and fairness weigh in favor of its exercise of
supplemental jurisdiction, given that the suit was filed over ten
years ago and must be resolved in a timely manner. Further, the
Court finds that plaintiffs’ pleadings regarding their state law
claims suffer from the same defects as their cause of action for
copyright infringement.
To succeed on a claim under the Louisiana Unfair Trade
Practices Act (LUTPA), a plaintiff must show that the alleged
conduct “offends established public policy and . . . is immoral,
unethical, oppressive, unscrupulous, or substantially injurious.”
Cheramie Servs. v. Shell Deepwater Prod., 35 So.3d 1053, 1059
(La. 2010) (quoting Moore v. Goodyear Tire & Rubber Co., 364
So.2d 630, 633 (La. Ct. App. 1978)). “[O]nly egregious actions
involving elements of fraud, misrepresentation, deception, or
other unethical conduct will be sanctioned based on LUTPA.” Id.
at 1060. Plaintiffs state that Crusto passed plaintiffs’
materials to the City as his own work and that the City paid
Crusto, not plaintiffs. But plaintiffs do not allege that the

12

City had an obligation to pay them. Rather, plaintiffs were to be
paid pursuant to their contract with Crusto, who in turn was paid
by the City. Therefore, even accepting as true plaintiffs’
contention that the City should have known that the bids were
prepared by plaintiffs does not establish that the City acted
fraudulently in possessing the bids, in light of the contractual
arrangements among the parties. Moreover, as discussed above,
plaintiffs do not plead facts describing in any particularity the
way in which the City used plaintiffs’ materials. Accordingly,
the Court finds that the facts alleged by plaintiffs do not
invite an inference of unethical or fraudulent behavior by the
City and that plaintiffs thus fail to state a claim under LUTPA.
Plaintiffs’ complaint also does not contain facts
establishing a facially plausible claim of conversion or
misappropriation. “The tort of conversion is committed when one
wrongfully does any act of dominion over the property of another
in denial of or inconsistent with the owner's rights.” Aymond v.
State, Dept. of Revenue & Taxation, 672 So. 2d 273, 275 (La. Ct.
App. 1996). Once again, plaintiffs have failed to plead any facts
regarding the City’s use of plaintiffs’ property. In describing
the basis for plaintiffs’ conversion claim, the complaint states
that defendants acted wrongfully in making plaintiffs’ bid and
bid process “widely available to competing interests and through

13

promotional brochures.”21 But, the complaint identifies Crusto as
the tortfeasor who allegedly distributed plaintiffs’ bid
estimates without payment. Therefore, plaintiffs have not pleaded
facts consistent with the contention that the City committed an
act of dominion over plaintiffs’ property.22
Lastly, the Court finds that plaintiffs have failed to state
a claim for unjust enrichment. Among other elements, an unjust
enrichment claim depends on an enrichment of one party that is
connected to the impoverishment of another. See Drs. Bethea,
Moustoukas & Weaver LLC v. St. Paul Guardian Ins. Co., 376 F.3d
399, 407 (5th Cir. 2004) Plaintiffs have stated that they
received no payment for their bids and that Crusto was paid by
the City. Yet, their complaint contains no facts related to the
City’s enrichment at the expense of plaintiffs and addresses only
Crusto’s enrichment at their expense. Thus, plaintiffs have
failed to state a claim for unjust enrichment against the City.

21

No. 02-1460, R. Doc. 1 at 6.

22

To the extent that plaintiffs assert a claim for
misappropriation separate from their conversion claim, plaintiffs
cannot maintain such a claim, because they have not pleaded the
existence of a trade secret as required. See La. Rev. Stat. Ann.
§ 51:1431 (defining misappropriation as the acquisition of a
trade secret).
14

IV.

LEAVE TO AMEND
The Court has discretion to grant plaintiffs leave to amend

their complaints “when justice so requires.” See Fed. R. Civ. P.
15(a). The Supreme Court has held that “[i]f the underlying facts
or circumstances relied upon by a plaintiff may be a proper
subject of relief, he ought to be afforded an opportunity to test
his claim on the merits.” Foman v. Davis, 371 U.S. 178, 182, 83
S.Ct. 227 (1962). Leave to amend, however, is not automatic.
Halbert v. City of Sherman, 33 F.3d 526, 529 (5th Cir. 1994).
Factors the Court should consider include “undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to
cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the
amendment, [and] futility of amendment.” Foman, 371 U.S. at 182;
Lozano v. Ocwen Federal Bank, FSB, 489 F.3d 636 (5th Cir. 2007).
After consideration of these factors, the Court grants
plaintiffs leave to amend their complaint. Plaintiffs have not
previously amended their complaint. Further, plaintiffs have
successfully pleaded that they have a valid copyright.
Accordingly, the Court finds that justice is served by permitting
plaintiffs to amend their complaint.

15

V.

CONCLUSION
For the foregoing reasons, the Court GRANTS defendant’s

motion to dismiss plaintiffs’ claims against the City. Plaintiffs
have until March 10, 2013 to amend their complaint.

New Orleans, Louisiana, this 28th day of February, 2013.
__

_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

16