Design Basics, LLC v. R.J. Moreau Communities, LLC
Filing
24
ORDER granting 16 Motion to Amend 1 Complaint. Within 48 hours counsel shall electronically refile the pleading attached to the Motion to Amend using the appropriate event in CMECF. So Ordered by Judge Landya B. McCafferty. Amended Pleadings due by 3/31/2016.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Design Basics, LLC
v.
Civil No. 15-cv-309-LM
Opinion No. 2016 DNH 069
R.J. Moreau Communities, LLC
O R D E R
Design Basics, LLC brings a copyright infringement claim
against R.J. Moreau Communities, LLC (“R.J. Moreau”), alleging
that R.J. Moreau used its copyrighted designs to market, sell,
and build residential homes.
Currently before the court is
Design Basics’s motion to amend its complaint (doc. no. 16) to
add Reginald Moreau and Jon Lariviere as defendants and to add
allegations concerning additional infringements.
R.J. Moreau
objects (doc. no. 17).
Legal Standard
Under Federal Rule of Civil Procedure 15(a), a plaintiff
can amend its complaint “once as a matter of course” up to 21
days after a motion to dismiss or answer has been served.
Fed. R. Civ. P. 15(a)(1).
See
When a plaintiff seeks to amend its
complaint after that time, as Design Basics does here, it may do
so “only with the opposing party’s written consent or the
court’s leave.”
Fed. R. Civ. P. 15(a)(2).
“The court should
freely give leave when justice so requires.”
Id.
“A proposed
amendment seeking to add new parties ‘is technically governed by
[Federal Rule of Civil Procedure] 21,’ but the ‘same standard of
liberality’ applies under either rule.”
Podkulski v. Doe, No.
11-CV-102-JL, 2014 WL 5662780, at *1 (D.N.H. Nov. 3, 2014)
(quoting Garcia v. Pancho Villa's of Huntington Vill., Inc., 268
F.R.D. 160, 165 (E.D.N.Y. 2010)).
If, however, the deadline for amending pleadings contained
in a scheduling order has lapsed, a motion to amend a pleading
is assessed under Federal Rule of Civil Procedure 16, which
governs the modification of scheduling orders.
U.S. ex rel.
D'Agostino v. EV3, Inc., 802 F.3d 188, 192 (1st Cir. 2015); see
also Fed. R. Civ. P. 16(b)(4).
Under Rule 16, a party must show
“good cause” to amend its pleading after the deadline for doing
so has lapsed.
Fed. R. Civ. P. 16(b)(4).
The parties dispute
whether the motion to amend complies with the deadline in the
relevant scheduling order, and therefore the applicable legal
standard is in dispute.
Background
Design Basics brought a copyright infringement claim
against R.J. Moreau on August 4, 2015 under 17 U.S.C. §§ 101, et
seq. (the “Copyright Act”).
The complaint alleges that R.J.
Moreau infringed Design Basics’s copyrights in its architectural
2
designs and technical drawings by using those works to market,
sell, and build residential homes for consumers.
R.J. Moreau
answered Design Basics’s complaint on September 8, 2015.
Answer (doc. no. 6).
See
Pursuant to Federal Rule of Civil
Procedure 26(f), the parties submitted a proposed joint
discovery plan on October 16, 2015.
See Prop. Disc. Plan (doc.
no. 14); see also Fed. R. Civ. P. 26(f)(2)&(3).
Under that
plan, Design Basics was required to “join any additional parties
on or before January 21, 2016.”
¶ 21(A).
Prop. Disc. Plan (doc. no. 14)
The plan also provides that Design Basics must “file
amendments to pleadings on or before February 25, 2016.”
Id. ¶
23(A).
Three days after the parties filed the discovery plan, the
magistrate judge issued an endorsed order on the docket
approving the plan as a pretrial scheduling order subject to
certain modifications.
That order provided, in pertinent part,
that the “[p]roposed discovery plan . . . [was] [a]pproved and
adopted as a pretrial scheduling order with the following
modification[]: The deadline for disclosure of claims against
unnamed parties is set for December 22, 2015.”
See Order, Oct.
19, 2015.
On January 21, 2016, Design Basics moved to amend its
complaint.
The proposed amended complaint, which is attached to
the motion as an exhibit, see Mot. Amend Compl., Ex. A (doc. no.
3
16-2), adds new claims against Moreau and Lariviere, who are
alleged to be managing members of R.J. Moreau, for copyright
infringement based on the doctrine of vicarious liability.
The
proposed amended complaint also adds an allegation concerning
additional acts of infringement by R.J. Moreau.
R.J. Moreau
objects.
Discussion
R.J. Moreau argues that Design Basics’s motion should be
denied because it does not comply with the deadline in the
pretrial scheduling order, which, it contends, prohibits Design
Basics from adding new parties after December 22.
R.J. Moreau
also contends that the court should deny Design Basics’s motion
to amend because the new proposed claims would prejudice Moreau
and Lariviere and would be futile.1
In response, Design Basics
argues that its motion to amend complies with the scheduling
order and that the claims against Moreau and Lariviere are
neither prejudicial nor futile.
R.J. Moreau does not challenge Design Basics’s motion to
amend as it pertains to the proposed new allegation. That
portion of Design Basics’s motion is presumably timely under the
scheduling order, which adopted the parties’ proposed deadline
of February 25 for Design Basics to amend its pleadings.
1
4
I.
The Deadline to Join Parties
R.J. Moreau argues that the scheduling order modified the
parties’ proposed January 21, 2016 deadline for Design Basics to
join new parties by moving it to December 22, 2015.
In support
of this argument, R.J. Moreau points to the provision in the
scheduling order that requires the “disclosure of claims against
unnamed parties” by December 22, 2015.
Design Basics, on the
other hand, argues that the scheduling order did not alter the
discovery plan’s proposed deadline for it to add parties.
It
contends that the provision in the scheduling order setting a
deadline for the “disclosure of claims against unnamed parties”
applies only to claims under state law where the defendant
contends that an unnamed party is responsible.
The court
agrees.
The local rules of this district require that “[t]he
discovery plan referenced in Fed. R. Civ. P. 26(f) shall
substantially conform to Civil Form 2, Discovery Plan.”
26.1.
L.R.
Civil Form 2, which is a form discovery plan, contains
the following provision:
DISCLOSURE OF CLAIMS AGAINST UNNAMED PARTIES: If
defendant(s) claim that unnamed parties are at
fault on a state law claim (see DeBenedetto v.
CLD Consulting Engineers, Inc., 153 N.H. 793
(2006)), defendant(s) shall disclose the identity
of every such party and the basis of the
allegation of fault no later than [no later than
30 days before the Joinder of Additional Parties
deadline and 45 days before the Plaintiff’s
5
Expert Disclosure deadline]. Plaintiff shall then
have 30 days from the date of disclosure to amend
the complaint.
See L.R., App. Forms, Civil Form 2, at 3.
The parties’ discovery plan did not contain this deadline.
To ensure substantial compliance with Civil Form 2, as required
under L.R. 26.1, the scheduling order modified the parties’
proposed discovery plan by including a corresponding “deadline
for disclosure of claims against unnamed parties” on December
22.
See Order, Oct. 19, 2015.
That deadline has no bearing on
this action, as it is currently pled.
As the language in Civil
Form 2 suggests, the deadline to add unnamed parties applies
only to defendants of state law claims who seek to prove that a
party not named in the action is at fault.
See L.R., App.
Forms, Civil Form 2; see also DeBenedetto v. CLD Consulting
Eng’rs, Inc., 153 N.H. 793, 804 (2006).
Here, Design Basics is the plaintiff, and it brings only
federal claims.
Accordingly, the scheduling order did not alter
the January 21 deadline in the parties’ discovery plan for
Design Basics to join additional parties.
Because Design Basics
moved to add Moreau and Lariviere by the January 21, 2016
deadline, its motion to amend the complaint complies with the
deadlines in the scheduling order.
6
II.
Leave to File an Amended Complaint
As discussed above, approval to file an amended pleading
prior to the deadline in a scheduling order is freely given
“when justice so requires.”
Podkulski, 2014 WL 5662780, at *1
(internal quotations omitted).
Under this standard, leave to
amend should be granted absent “any apparent or declared reason—
such as 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, futility of amendment,
etc.”
Klunder v. Brown Univ., 778 F.3d 24, 34 (1st Cir. 2015)
(quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
R.J. Moreau contends the court should not allow Design
Basics to amend its complaint because the addition of the
vicarious infringement claims would prejudice Moreau and
Lariviere and because the new claims would be futile.2
Neither
of these reasons is persuasive.
A. Prejudice
R.J. Moreau argues that Moreau and Lariviere would be
prejudiced because Design Basics is attempting to bring claims
R.J. Moreau also argues that the court should decline to
grant Design Basics leave because it “delay[ed] in moving to add
claims against unnamed parties.” Obj. (doc. no. 17) 1. But, as
discussed above, there was no such delay under the scheduling
order.
2
7
“long after the alleged acts occurred.”
Obj. (doc. no. 17) 1-2.
R.J. Moreau further argues that because some of the acts at
issue here occurred nearly a decade ago, Moreau and Lariviere
“could be deprived of evidence critical to their defense.”
Surreply (doc. no. 21) 2.
“The question of [a claim’s]
timeliness is governed by the applicable statute of limitations,
subject to the relation back doctrines of Rule 15(c).”
Indus. Knife Co., 620 F.3d 38, 43 (1st Cir. 2010).
Coons v.
R.J. Moreau
does not contend that the claims that Design Basics seeks to add
are barred under the Copyright Act’s statute of limitations.
Therefore, R.J. Moreau has failed to show prejudice based on the
timeliness of the claims against Moreau and Lariviere.
B. Futility
R.J. Moreau also argues that the court should deny Design
Basics’s motion because the claims against Moreau and Lariviere
would be futile.
“To determine whether a proposed amended
complaint would be futile, the court uses the standard for
motions to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6).”
Drew v. New Hampshire, No. 14-CV-462-JD, 2015 WL
847449, at *1 (D.N.H. Feb. 26, 2015).
“Under the Rule 12(b)(6)
standard, the court must take the factual allegations in the
complaint as true, with reasonable inferences in the plaintiff’s
favor, and ‘determine whether the factual allegations in the
8
plaintiff's complaint set forth a plausible claim upon which
relief may be granted.’”
Id. (quoting Foley v. Wells Fargo
Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014)).
“Vicarious copyright infringement occurs when a defendant
has both the right and ability to supervise the infringing
activities and an obvious and direct financial interest in the
exploitation of copyrighted materials.”
Broad. Music, Inc. v.
PJML, Inc., No. 13-cv-12212-IT, 2015 WL 5737140, at *2 (D. Mass.
Sept. 30, 2015) (internal quotation marks omitted); see also MGM
Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005)
(“One . . . infringes vicariously by profiting from direct
infringement while declining to exercise a right to stop or
limit it.”).3
Further, to plead vicarious copyright
infringement, a plaintiff must also allege direct copyright
R.J. Moreau relies on Dangler v. Imperial Mach. Co., 11
F.2d 945, 947 (7th Cir. 1926), which held that an officer must
“act willfully and knowingly” to be liable for a corporation’s
infringement. Dangler, however, is inconsistent with First
Circuit precedent, which allows liability for vicarious
copyright infringement even when the infringement occurs without
the defendant’s knowledge. See Famous Music Corp. v. Bay State
Harness Horse Racing & Breeding Ass'n, Inc., 554 F.2d 1213,
1214-15 (1st Cir. 1977). Further, Dangler is in tension with
the “widely accepted” two-prong standard for vicarious copyright
infringement. See White v. Marshall, 693 F. Supp. 2d 873, 887
(E.D. Wis. 2009) (reconciling Dangler with the modern standard
for vicarious copyright liability). For these reasons, the
court concludes that Dangler is inapplicable.
3
9
infringement.
Int'l Diamond Importers, Inc. v. Oriental Gemco
(N.Y.), Inc., 64 F. Supp. 3d 494, 516 (S.D.N.Y. 2014).
The proposed amended complaint alleges that R.J. Moreau
infringed Design Basics’s copyrights by using its designs and
technical drawings to market, sell, and build residential homes.
It also alleges that Moreau and Lariviere were members of R.J.
Moreau and had “primary responsibility for [R.J. Moreau’s]
operation and management” during the infringing activity.
Amend Compl. (doc. no. 16-2) ¶¶ 3-4, 22.
Mot.
Therefore, it is
reasonable to infer that both Moreau and Lariviere had the right
and ability to supervise the alleged infringing activity.
In addition, the proposed amended complaint alleges that
Moreau and Lariviere had “an obvious and direct financial
interest” in R.J. Moreau.
Id.
Based on that allegation, it is
reasonable to infer that the infringing activity, which
allegedly facilitated R.J. Moreau’s sale of residential homes,
also financially benefitted Moreau and Lariviere.
For these
reasons, the proposed amended complaint states a plausible claim
for vicarious infringement.
10
Conclusion
For the foregoing reasons, Design Basics’s motion to amend
the complaint (doc. no. 16) is granted.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
March 29, 2016
cc:
Edric Bautista, Esq.
Michael C. Harvell, Esq.
Jennie C. Knapp, Esq.
Michael J. Lambert, Esq.
Rick I. Lambert, Esq.
Scott T. Ober, Esq.
John Piegore, Esq.
Sean J. Taylor, Esq.
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?