YAMASHITA et al v. SCHOLASTIC, INC.
Filing
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OPINION. Signed by Judge Stanley R. Chesler on 11/21/2016. (JB, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
MICHAEL YAMASHITA and MICHAEL :
:
YAMASHITA, INC.,
:
Plaintiffs, :
:
:
v.
:
:
SCHOLASTIC INC.,
:
Defendant. :
:
Civil Action No. 16-3839 (SRC)
OPINION
CHESLER, District Judge
This matter comes before the Court upon the motion filed by Defendant Scholastic Inc.
(“Scholastic”) to dismiss the Complaint or, in the alternative, to transfer this action to the United
States District Court for the Southern District of New York, pursuant to 28 U.S.C. § 1404(a).
For the reasons discussed below, the Court will grant the motion to transfer the action to the
Southern District of New York.
This case arises from a dispute over alleged copyright infringement. The Complaint
alleges that Plaintiffs Michael Yamashita and Michael Yamashita, Inc. (collectively,
“Yamashita”) own the copyrights in certain photographs, and that Plaintiffs entered into
agreements with a stock photography agency, Corbis Corporation (“Corbis”), to license use of
the photographs to others. The Complaint alleges that Plaintiffs, acting through Corbis, granted
limited licenses for use of the photographs to Scholastic. The Complaint alleges that Scholastic
used the photographs in ways that violated the terms of the licenses and infringed the copyrights.
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Scholastic has moved both to dismiss the Complaint for failure to state a valid claim for
relief, pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, to transfer this
action to the Unites States District Court for the Southern District of New York, pursuant to 28
U.S.C. § 1404(a). Because this Court will grant the motion to transfer, it does not reach the
motion to dismiss.
Scholastic contends that the case should be transferred pursuant to a valid forum
selection clause in agreements it made with Corbis, termed “Preferred Vendor Agreements”
(“PVAs”). Scholastic asserts that it has found four PVAs that apply to over 70% of the uses at
issue in this case, and that all four contain a forum selection clause that provides that the parties
have chosen to litigate any disputes in the Southern District of New York.
Yamashita opposes the motion to transfer on four grounds: 1) the PVAs have not been
authenticated; 2) the copyright disputes do not fall within the scope of the forum selection
clauses; 3) Yamashita had no notice of the PVAs and it would be fundamentally unfair to bind
him to their provisions; and 4) Atlantic Marine does not apply to this motion, and the Jumara
factors weigh against transfer.
Section 1404(a) states: “For the convenience of parties and witnesses, in the interest of
justice, a district court may transfer any civil action to any other district or division where it
might have been brought or to any district or division to which all parties have consented.”
As to the first argument, Yamashita cites no authority to support the proposition that
Scholastic must authenticate the PVAs. The Supreme Court has held that “a valid
forum-selection clause should be given controlling weight in all but the most exceptional cases.”
Atl. Marine Constr. Co. v. United States Dist. Court, 134 S. Ct. 568, 581 (2013) (quotation
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omitted). Note that the phrase used in Atlantic Marine, and generally in this jurisprudence, is
“valid forum-selection clause.” Atlantic Marine does not require authentication to find a valid
clause, nor has Yamashita pointed to any authority that does.1
Yamashita next argues that this copyright dispute does not fall within the scope of the
forum selection clause, which states: “Any dispute regarding this Agreement shall be governed
by the laws of the State of New York . . . and the parties agree to accept the exclusive
jurisdiction of the state and federal courts located in New York, New York . . .” (Rosenthal Dec.
Ex. C § 21.) One PVA begins with this statement: “this agreement . . . sets forth the
understanding between Corbis . . . and Scholastic . . . with respect to future licensing by
Scholastic of images from the Corbis Collection . . .” (Id. at 1.) A second PVA begins with this
statement: “this Agreement sets forth the understanding between Corbis . . . and Scholastic . . .
with respect to future licensing by Scholastic . . . of images . . .” (Rosenthal Dec. Ex. D at 1.)
The Complaint alleges:
10. Between 1999 and 2011, in response to permission requests from Scholastic,
Yamashita – acting through Corbis – sold Scholastic limited licenses to use
copies of the Photographs in particular educational publications identified in
Scholastic’s requests, as itemized in Exhibit 1.
...
Yamashita cites to one district court decision in which the court denied a § 1404(a) motion
because a factual dispute over the forum selection clause needed to be resolved, and one with a
similar result involving a Rule 12(b)(3) motion. Reinke Mfg. Co., Inc. v. Barksdale, Inc., No.
4:15CV3072, 2015 WL 8665331, at *3 (D. Neb. Dec. 11, 2015) (§1404(a) motion); Bean v.
Pearson Educ., Inc., No. CV 11-8030-PCT-PGR, 2011 WL 1882367, at *9 (D. Ariz. May 17,
2011), vacated and remanded, 585 F. App'x 461 (9th Cir. 2014) (Rule 12(b)(3) motion). This
Court need not consider the persuasiveness of these cases because both rested on raising a
material factual dispute about the forum selection clause, and Yamashita has not pointed to any
evidence in this case that raises a material factual dispute over the applicability or validity of the
forum selection clauses.
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13. Upon information and belief, after obtaining the licenses, Scholastic exceeded
the licenses and infringed Yamashita’s copyrights in the Photographs in various
ways . . .
This case arises from a dispute over whether Scholastic used Plaintiff’s photographs outside the
terms of the licenses obtained under the PVAs. This dispute is a dispute regarding the PVA
agreement and falls within the scope of the forum selection provisions.
Plaintiffs next contend that Yamashita had no notice of the forum selection clauses.
Without reaching the question of whether notice of the provision is necessary for enforcement,
this Court notes that Section 5.03 of the Restatement (Third) of Agency states: “For purposes of
determining a principal’s legal relations with a third party, notice of a fact that an agent knows or
has reason to know is imputed to the principal if knowledge of the fact is material to the agent’s
duties to the principal.” Knowledge of the agreement between Corbis and Scholastic is thus
imputed to Plaintiffs, since Plaintiffs are principals and Corbis is their agent.
Last, this Court turns to Plaintiffs’ argument that the Jumara balancing analysis produces
a result that weighs against transfer. As the parties recognize, the predicate question is whether
Atlantic Marine applies to this case: if it does, the Supreme Court’s decision is controlling
authority. Plaintiffs contend that Atlantic Marine does not apply to a case where only some of
the claims are subject to the forum selection clause.2 This Court need not reach most of the
In support of this proposition, Plaintiffs cite two district court decisions. In Eastcott v.
McGraw-Hill Glob. Educ. Holdings, LLC, No. CV 16-904, 2016 WL 3959076, at *1 (E.D. Pa.
July 22, 2016), the court weighed heavily the fact that only 7% of the claims were subject to the
forum selection clause; in the instant case, Scholastic contends that the majority of the claims –
over 70% – are subject to the provision. Samuels v. Medytox Sols., Inc., No. CIV.A. 13-7212
SDW, 2014 WL 4441943, at *4 (D.N.J. Sept. 8, 2014), involved two conflicting forum selection
clauses and is inapposite. Neither case provides persuasive authority for the proposition that
Atlantic Marine does not apply to a case in which the majority of the claims are subject to a
forum selection clause.
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issues involved in this argument, for two principal reasons: 1) Plaintiffs have provided no basis
for this Court to believe that they have brought any claims not subject to the forum selection
provisions; and 2) this argument runs contrary to the principles stated in Atlantic Marine:
The enforcement of valid forum-selection clauses, bargained for by the parties,
protects their legitimate expectations and furthers vital interests of the justice
system. For that reason, and because the overarching consideration under
§1404(a) is whether a transfer would promote the interest of justice, a valid
forum-selection clause should be given controlling weight in all but the most
exceptional cases.
134 S. Ct. at 581. Plaintiffs have not contended, much less persuaded, that the instant case is
exceptional, and this Court finds no basis to view it as such. Furthermore, the holding of
Atlantic Marine makes clear that, in the presence of a valid forum selection clause, the general
rule is that a § 1404(a) motion should be granted: “When a defendant files such a motion, we
conclude, a district court should transfer the case unless extraordinary circumstances unrelated to
the convenience of the parties clearly disfavor a transfer.” Id. at 575. The implication of
Plaintiffs’ argument is that, if any claims are not subject to the forum selection clause, that
constitutes an exceptional case and transfer must be denied. This Court does not agree. Even if
Plaintiffs are correct that, perhaps, they may eventually discover some instances in which the
forum selection clause does not apply, they still have not persuaded this Court that such a
circumstance suffices to make this an exceptional case. Because Plaintiffs have not persuaded
this Court that this is an exceptional case, under Atlantic Marine, the forum selection clauses
must be given controlling weight.
Moreover, in Atlantic Marine, the Supreme Court held: “as the party defying the
forum-selection clause, the plaintiff bears the burden of establishing that transfer to the forum
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for which the parties bargained is unwarranted.” 134 S. Ct. at 581. Plaintiffs here have not met
that burden.
For the reasons stated above, the motion to transfer is granted, and this case shall be
transferred to the United States District Court for the Southern District of New York, pursuant to
28 U.S.C. § 1404(a).
s/ Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
Dated: November 21, 2016
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