Zalewski et al v. T.P. Builders, Inc. et al
Filing
133
MEMORANDUM-DECISION and ORDER - That defendants' motions to dismiss (Dkt. Nos. 76, 77, 101, 105, 106, 107, 109) are GRANTED to the exten that plaintiffs complaint is DISMISSED for failure to meet the pleading requirements under FED. R. CIV. P. 8 . That defendants' motions are otherwise DENIED. That plaintiffs are GRANTED leave to file a third amended complaint, in full compliance with the terms of this Order, within thirty (30) days from the date of the filing of this Order, after whi ch defendants may renew or supplement their motions, or otherwise respond to teh complaint as permitted under the Fedreal Rules of Civil Procedure. That if plaintiffs fail to file an amended complaint within thirty (30) days from the date of the filing of this Order, the clerk of the Court shall enter judgment dismissing this action without further order of the court. Signed by Judge Gary L. Sharpe on 8/2/2011. (jel, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
_______________________________________
JAMES E. ZALEWSKI and DRAFTICS, LTD.,
Plaintiffs,
1:10-cv-876
(GLS/RFT)
v.
T.P. BUILDERS, INC.; THOMAS PAONESSA;
ROXANNE K. HELLER; DERAVEN DESIGN &
DRAFTING; V.S. SOFIA ENGINEERING;
SOFIA ENGINEERING, PLLC; VINCENZO S.
SOFIA; CICERO BUILDING DEV., INC.; LUIGI
CICERO; SHELROC HOMES, LLC; CAPITAL
FRAMING, INC.; JOSEPH M. CLARK; CILLIS
BUILDERS, INC.; and THEODORE CILLIS III,
Defendants.
_______________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PLAINTIFFS:
Delain Law Office, PLLC
107 North College Street
Schenectady, NY 12305
FOR THE DEFENDANTS:
T.P. Builders and Thomas Paonessa
Schmeiser, Olsen Law Firm
22 Century Hill Drive, Suite 302
Latham, NY 12110
Roxanne Heller and DeRaven Design
Heslin, Rothenberg Law Firm
5 Columbia Circle
Albany, NY 12203
NANCY B. DELAIN, ESQ.
ARLEN L. OLSEN, ESQ.
ANNETTE I. KAHLER, ESQ.
CAROLINE B. AHN, ESQ.
SUSAN E. FARLEY, ESQ.
V.S. Sofia Engineering, Sofia
Engineering, and Vincenzo Sofia
Sugarman, Wallace Law Firm
211 West Jefferson Street
Syracuse, NY 13202
KEVIN R. VAN DUSER, ESQ.
SAMUEL M. VULCANO, ESQ.
Shelroc Homes, Capital Framing,
and Joseph Clark
Harris, Beach Law Firm
One Park Place, 4th Floor
300 South State Street
Syracuse, NY 13202
JAMES R. MULDOON, ESQ.
Cillis Builders and Theodore Cillis
DeGraff, Foy Law Firm
90 State Street
Albany, NY 12207
GEORGE J. SZARY, ESQ.
Cicero Building Dev. and Luigi Cicero
NO APPEARANCE
Gary L. Sharpe
District Court Judge
MEMORANDUM-DECISION AND ORDER
I. Introduction
Plaintiffs James Zalewski and Draftics, Ltd. commenced this action
for copyright infringement under the Copyright Act of 19761 against
defendants T.P. Builders, Inc. and Thomas Paonessa (T.P. defendants);
1
17 U.S.C. § 101, et seq.
2
Roxanne Heller and DeRaven Design & Drafting (DeRaven defendants);
V.S. Sofia Engineering, Sofia Engineering, PLLC, and Vincenzo Sofia
(Sofia defendants); Cicero Building Dev., Inc. and Luigi Cicero (Cicero
defendants); Shelroc Homes, LLC, Capital Framing, Inc., and Joseph Clark
(Shelroc defendants); and Cillis Builders, Inc. and Theodore Cillis (Cillis
defendants). (See 2d Am. Compl., Dkt. No. 60.) Pending are Shelroc
defendants’ motion to dismiss, (Dkt. Nos. 76, 77); T.P. defendants’ motions
to dismiss DeRaven defendants’ cross-claims, (Dkt. No. 101), and motion
to dismiss or, in the alternative, for summary judgment on plaintiffs’ claims,
(Dkt. No. 107); DeRaven defendants’ motion to dismiss, (Dkt. No. 104);
Cillis defendants’ motion to dismiss, (Dkt. No. 106); and Sofia defendants’
motion to dismiss or, in the alternative, for summary judgment, (Dkt. No.
109). For the reasons that follow, defendants’ motions are granted insofar
as plaintiffs’ complaint is dismissed as insufficiently pled, and plaintiffs are
granted limited leave to amend their complaint a third time.
II. Background
Plaintiff James Zalewski is a building designer who specializes in the
architectural and floor-plan design of residential homes. (See 2d Am.
Compl. ¶ 2, Dkt. No. 60.) Plaintiff Draftics is a New York corporation, of
3
which Zalewski is the sole shareholder. (See id. at ¶¶ 3, 26.) Draftics
develops, drafts, and sells home designs for use in new home construction.
(See id. at ¶ 4.)
Between 1994 and 1998, Zalewski made the following home designs:
DRA210; DRA211; DRA212; DRA213; DRA216a; DRA217; DRA218;
DRA219; DRA313; DRA 316; and DRA327. (See id. at ¶ 27.) According to
Zalewski, at some point he “made one single-use license per design to
[T.P. defendants] to build each of the homes Zalewski designed.” (Id. at ¶
28.) Zalewski ceased doing business with T.P. defendants in 1998. (See
id. at ¶ 33.) Since then, Zalewski has not made any assignment or transfer
of copyright or “any license to use with any other contractor, builder,
architect, engineer, or home designer.” (Id. at ¶¶ 29, 31.) Nor has
Zalewski entered into any type of agreement with any person or entity
“outside of the normal course of business wherein [they] license their
customers (who are not parties to the present action) to build one (1) house
based on one (1) of [their] designs.” (Id. at ¶¶ 30, 32.)
On July 16, 2010, plaintiffs commenced this action, naming ninety
defendants, including the owners of record of numerous homes. (See
Compl., Dkt. No. 1.) Shortly thereafter, on August 24, 2010, plaintiffs filed
4
an amended complaint to add an additional defendant. (See Am. Compl.,
Dkt. No. 11.) Acting on the court’s advice, plaintiffs stipulated to the
dismissal of all but the T.P. defendants, DeRaven defendants, Sofia
defendants, Cicero defendants, and Shelroc defendants. (See Dkt. Nos.
47, 51, 52, 53, 56, 61, 64, 68, 85.) Plaintiffs subsequently filed a second
amended complaint, which additionally included Cillis defendants. (See 2d
Am. Compl., Dkt. No. 60.)
With minimal detail, plaintiffs allege that after successfully registering
copyrights of their original home designs, (see id. at ¶¶ 35-38), the
defendants unlawfully infringed on these designs. Plaintiffs seek (1)
preliminary and permanent injunctive relief against all defendants; (2)
actual damages under 17 U.S.C. § 504(b) for each infringement; (3)
statutory damages under § 504(c) for each qualifying infringement; (4)
treble damages under § 504(c)(2) for each qualifying infringement; and (5)
attorneys’ fees and costs under § 505. (See id. at 22-23.)
In the first cause of action, plaintiffs allege that T.P. defendants
currently advertise homes that are being constructed or can be built in
accordance with DRA210, DRA211, DRA212, DRA216a, DRA217, and
DRA313. (See id. at ¶¶ 42-44.) Similarly, plaintiffs allege that Cicero
5
defendants are advertising to build homes in accordance with DRA217 on
the lots available in the “Kaleen Manor” development. (See id. at ¶ 45.)
As to the second cause of action, plaintiffs allege that, in reliance on
the DRA211 design, Cicero defendants constructed and Sofia defendants
designed and drew plans for a home constructed at 9 Kaleen Drive,
Ballston Spa, New York. (See id. at ¶ 52.) According to plaintiffs, Cicero
defendants and Sofia defendants “were, upon information and belief, aware
of [his] DRA211 design at the time they made the designs[,] drawings[,]
and specifications for ... and [began] construction of the [DRA211 home].”
(Id. at ¶ 55.) In like conclusory fashion, plaintiffs allege that Cicero
defendants and Sofia defendants had access to the DRA211 design
through the T.P. defendants’ single-use license, and that they knowingly,
willfully, and intentionally participated in the infringing activities. (See id. at
¶¶ 56-59.)
In the third cause of action, plaintiffs allege that, based on the
DRA212 design, Cillis defendants constructed and DeRaven defendants
made the drawings for a home constructed at 11 Nicole Court, Clifton Park,
New York. (See id. at ¶ 68.) Like the second cause of action, plaintiffs
allege that Cillis defendants and DeRaven defendants, “were, upon
6
information and belief, aware of [his] DRA212 design at the time they made
the design and the construction of the [DRA212 home].” (Id. at ¶¶ 72-73.)
According to plaintiffs, Cillis defendants and DeRaven defendants had
access to the DRA212 design because Thomas Cillis had received a copy
of the design from Zalewski, whereby Cillis and DeRaven defendants
copied the DRA212 design in preparing the architectural drawings and
constructing the DRA212 home. (See id. at ¶¶ 74-76.) And again, plaintiffs
conclusorily allege that Cillis defendants and DeRaven defendants
knowingly, willfully, and intentionally participated in the infringing activities.
(See id. at ¶ 78.) But unlike the second cause of action, plaintiffs allege
that construction of the DRA212 home commenced after Zalewski obtained
copyright protection of the DRA212 design. (See id. at ¶ 68.)
Plaintiffs’ fourth and fifth causes of action largely mirror the second.
In the fourth cause of action, plaintiffs allege that T.P. defendants, Shelroc
defendants, and DeRaven defendants “[j]ointly and severally, upon
information and belief,” designed and constructed two homes based on the
DRA217 design, the first located at 24 Arch Street, Albany, New York, and
the second at 4186 Albany Street, Albany. (Id. at ¶¶ 87-97.) In the fifth
cause of action, plaintiffs allege that, using the DRA210 design, DeRaven
7
defendants made the drawings for and T.P. defendants are currently
constructing a home at 23A Thoroughbred Circle, Bethlehem, New York.
(See id. at ¶¶ 106-13.)
On November 19, 2010, Shelroc defendants filed a motion to dismiss,
asserting, among other things, that plaintiffs’ claims are barred under the
three-year statute of limitations set forth by 17 U.S.C. § 507(b). (See
Shelroc Defs. Mem. of Law at 5-7, Dkt. No. 76:6.) Presented with obvious
questions regarding when plaintiffs’ causes of action accrued, and
forecasting a flurry of motions to dismiss from the other defendants,
Magistrate Judge Randolf F. Treece ordered that Zalewski submit to a
deposition limited to the accrual issue. (See Dec. 7, 2010 Order, Dkt. No.
83.) On December 22, 2010, Zalewski participated in a pre-discovery
deposition. (See Delain Jan. 2, 2011 Letter, Dkt. No. 90.) As expected,
DeRaven defendants, Cillis defendants, T.P. defendants, and Sofia
defendants then moved on Zalewski’s claims. (Dkt. Nos. 104, 106, 107,
109.) T.P. defendants also moved to dismiss DeRaven defendants’ crossclaims. (Dkt. No. 101.)
III. Standards of Review
The standards of review under the Federal Rules of Civil Procedure
8
12(b)(6) and 56 are well established and will not be repeated here. For a
full discussion of the standards, the court refers the parties to its previous
opinions in Ellis v. Cohen & Slamowitz, LLP, 701 F. Supp. 2d 215, 217-18
(N.D.N.Y. 2010) (Rule 12(b)(6)); and Bain v. Town of Argyle, 499 F. Supp.
2d 192, 194-95 (N.D.N.Y. 2007) (Rule 56).
In bringing a copyright infringement action, the courts in the Second
Circuit are generally in agreement that a heightened pleading standard
must be met. To sufficiently plead a copyright infringement claim, a plaintiff
must allege: “(1) which specific original works are the subject of the
copyright claim; (2) that plaintiff owns the copyrights in those works; (3) that
the copyrights have been registered in accordance with the statute; and (4)
by what acts during what time the defendant infringed the copyright.”
Plunket v. Doyle, No. 99 Civ. 11006, 2001 WL 175252, at *4 (S.D.N.Y. Feb.
22, 2001) (citing, inter alia, Kelly v. L.L. Cool J., 145 F.R.D. 32, 36
(S.D.N.Y. 1992)); see also Jacobs v. Carnival Corp., No. 06 Civ. 0606,
2009 WL 856637, at *4 (S.D.N.Y. Mar. 25, 2009); Krasselt v. Joseph E.
Seagram & Sons, Inc., No. 01 CV 2821, 2002 WL 1997926, at *1 (S.D.N.Y.
Aug. 29, 2002); In re “Santa Barbara Like It Is Today” Copyright
Infringement Litig., 94 F.R.D. 105, 108 (D. Nev. 1982); Gee v. CBS, Inc.,
9
471 F. Supp. 600, 643 (E.D. Pa. 1979). At a minimum, “a plaintiff [must]
plead with specificity the acts by which a defendant has committed
copyright infringement.” Marvullo v. Gruner & Jahr, 105 F. Supp. 2d 225,
230 (S.D.N.Y. 2000).
Rule 15(a) provides that where a party seeks to amend his pleading
before trial, “[t]he court should freely give leave when justice so requires.”
FED. R. CIV. P. 15(a)(2). “A motion to amend should be denied only for
such reasons as undue delay, bad faith, futility of the amendment, and
perhaps most important, the resulting prejudice to the opposing party.”
Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 653 n.6 (2d Cir.
1987) (internal quotation marks and citation omitted). “An amendment to a
pleading will be futile if a proposed claim could not withstand a motion to
dismiss pursuant to Rule 12(b)(6).” Dougherty v. Town of N. Hempstead,
282 F.3d 83, 88 (2d Cir. 2002) (citation omitted). Accordingly, where the
plaintiff submits a proposed amended complaint, “the district judge may
review that pleading for adequacy and need not allow its filing if it does not
state a claim upon which relief can be granted.” Ricciuti v. N.Y.C. Transit
Auth., 941 F.2d 119, 123 (2d Cir. 1991). However, the court “should not
deny leave to file a proposed amended complaint ... unless it appears
10
beyond doubt that the plaintiff can prove no set of facts in support of his
claim which would entitle him to relief ....” Id. (internal quotation marks and
citation omitted).
IV. Discussion
At the threshold, the court is faced with several preliminary legal and
procedural issues that must be resolved before this case can move
forward. While these issues are specific to an action sounding in copyright
infringement, they largely are a result of the manner in which plaintiffs have
pursued this action. Particularly concerning is the fact that (1) over
seventy-five defendants—many of whom were clearly not amenable to
suit—have been dismissed from this action, (2) plaintiffs have already been
given two opportunities to amend their complaint, and (3) plaintiffs continue
to provide facially insufficient allegations and seek relief that is clearly
unavailable under federal law. Stressing the continued insufficiency of
plaintiffs’ pleadings, defendants contend that the second amended
complaint fails to meet the heightened specificity standard required in
copyright infringement actions under FED. R. CIV. P. 8. (See Shelroc Defs.
Mem. of Law at 3-5, Dkt. No. 76:6; DeRaven Defs. Mem. of Law at 13-14,
Dkt. No. 104:1; Cillis Defs. Mem. of Law at 4-7, Dkt. No. 106:9; T.P. Defs.
11
Mem. of Law at 5-6, Dkt. No. 107:1; Sofia Defs. Mem. of Law at 9-10, Dkt.
No. 109:6.) In response, plaintiffs counter that they should not be held to a
heightened pleading requirement, but that if a heightened standard is found
to apply, the complaint satisfies—or can be amended to satisfy—such a
standard. (See Pls. Resp. Mem. of Law at 7-11, Dkt. No. 89:1; Pls. 2d
Resp. Mem. of Law at 14-23, Dkt. No. 122.)
The court fully concurs with defendants that plaintiffs’ second
amended complaint is woefully underpled.2 See Salahuddin v. Cuomo, 861
F.2d 40, 42 (2d Cir. 1988) (“Dismissal ... is usually reserved for those
cases in which the complaint is so confused, ambiguous, vague, or
otherwise unintelligible that its true substance, if any, is well disguised.”
(citation omitted)). Nonetheless, the court will afford plaintiffs one more
opportunity to amend their complaint in full compliance with the abovearticulated pleading standards. Additionally, the court offers the following
guiding principles and directives.
First, plaintiffs are advised that “an amended complaint supersedes
2
Insofar as plaintiffs contend that a heightened pleading standard is not appropriate in
copyright cases, the court highlights plaintiffs’ second amended complaint as a perfect
example of why a heightened pleading standard is both appropriate and necessary. Because
the complaint wholly fails to enable the court to evaluate the claims under the motion to
dismiss framework, there can be no question that the complaint equally fails to provide the
defendants with any meaningful notice of those claims.
12
the original complaint,” Pac. Bell Tel. Co. v. Linkline Commc’ns, Inc., 129
S.Ct. 1109, 1122 n.4 (2009) (citation omitted), and “renders it of no legal
effect,” Int’l Controls Corp. v. Vesco, 556 F.2d 665, 668-69 (2d Cir. 1977)
(citations omitted). Consequently, the court will not consider any of the
allegations contained in plaintiffs’ three prior complaints in future motion
practice. Moreover, should plaintiffs wish to have any documents attached
as exhibits to the complaint, those exhibits must be filed with the newly
amended complaint; any already filed exhibits will not relate forward. And
having reviewed the myriad exhibits filed with the original complaint, (see
Dkt. Nos. 1:1-83), the court warns plaintiffs that any future filings must be
clearly labeled and germane to the action and allegations in the complaint.
“The [c]ourt will not search through [the] documents looking for evidence
....” W. Supreme Buddha Ass’n Inc. v. Oasis World Peace & Health
Found., No. 08-CV-1374, 2010 WL 3488134, at *1 (N.D.N.Y. Aug. 30,
2010). Nor will the court permit a dump of irrelevant documents into the
record.
Second, the court is highly skeptical of whether plaintiffs have an
adequate factual basis to establish each defendant’s actual involvement
and susceptibility to suit. See Peter F. Gaito Architecture, LLC v. Simone
13
Dev. Corp., 602 F.3d 57, 63 (2d Cir. 2010); Hamil Am. Inc. v. GFI, 193 F.3d
92, 99-100 (2d Cir. 1999); Innovative Networks, Inc. v. Young, 978 F.
Supp. 167, 176 (S.D.N.Y. 1997); Demetriades v. Kaufmann, 680 F. Supp.
658, 664 (S.D.N.Y. 1988). The court will not accept conclusory allegations,
conjecture, or vague group pleading to serve as a basis for liability. The
same goes for the relief and damages sought. In particular, while the
request for injunctive relief currently stands on what appears to be infertile
ground, the record evidences few—if any—bases for the statutory and
treble damages and attorneys’ fees sought by plaintiffs.3
Third, as to the issues regarding accrual under the statute of
limitations, the court can only provide some legal observations. There is no
dispute that civil actions brought pursuant to the Copyright Act are subject
to a three-year statute of limitations, which precludes any action “unless it
is commenced within three years after the claim accrued.” 17 U.S.C. §
507(b); see also Merchant v. Levy, 92 F.3d 51, 56 (2d Cir. 1996).
However, the parties ardently dispute the scope of the term “accrued”
3
In their response papers, plaintiffs essentially admit that various aspects of their relief
demands are not actually available. (See Pls. Resp. Mem. of Law at 18-19, Dkt. No. 89:1.)
However, plaintiffs argue that it is defendants who “misconstrued” the complaint to assert any
unavailable demands. (See id.) Again, it is not the defendants’ misconstruction but rather the
plaintiffs’ poor draftsmanship that has given rise to the current problems.
14
under the statute. Plaintiffs contend that accrual is governed by the
“discovery rule,” such that a copyright claim begins to accrue when the
plaintiff “knows or has reason to know of the injury upon which the claim is
premised.” Merchant, 92 F.3d at 56 (citation omitted). Defendants, on the
other hand, contend that the “injury rule” applies, whereby a claim accrues
at the time of the infringement. Defendants’ contention is based principally
on the Supreme Court’s decision in TRW Inc. v. Andrews, 534 U.S. 19
(2001), and derivatively on a line of decisions that have emerged from the
Southern District of New York.
Historically, operating under a presumption that the discovery rule
applies “when a statute is silent on the issue,” federal courts have generally
followed the discovery rule in the copyright context. See, e.g., Stone v.
Williams, 970 F.2d 1043, 1048 (2d Cir. 1992); Lyons P’ship, L.P. v. Morris
Costumes, Inc., 243 F.3d 789, 796 (4th Cir. 2001); Daboub v. Gibbons, 42
F.3d 285, 291 (5th Cir. 1995); Zurick v. First Am. Title Ins. Co., 833 F.2d
233, 234-35 (10th Cir. 1987). In 2001, however, the Supreme
Court—without deciding whether and to what extent the discovery rule
presumption still endures—found it erroneous to imply a general discovery
rule into the Fair Credit Reporting Act’s statute of limitations where the
15
statute’s text and structure “evince[d] Congress’[s] intent to preclude
judicial implication of a discovery rule” by, inter alia, expressly providing a
more limited discovery rule exception. See TRW, 534 U.S. at 27-28, 33.
Following the TRW decision, several Circuit Courts continued to
apply the discovery rule in copyright cases without addressing TRW’s
applicability. See, e.g., Comcast of Ill. X v. Multi-Vision Elecs., Inc., 491
F.3d 938, 944 (8th Cir. 2007); Polar Bear Prods., Inc. v. Timex Corp., 384
F.3d 700, 706-07 (9th Cir. 2004); Bridgeport Music, Inc. v. Rhyme
Syndicate Music, 376 F.3d 615, 621 (6th Cir. 2004); Gaiman v. McFarlane,
360 F.3d 644, 653 (7th Cir. 2004); cf. Guilbert v. Gardner, 480 F.3d 140,
149 (2d Cir. 2007) (“A federal court generally employs the ‘discovery rule’
....” (citation omitted)). Not surprisingly, it was the district courts that began
confronting the interplay of § 507(b) and TRW, with the majority finding that
the discovery rule still applies in copyright infringement cases. See, e.g.,
Frank Betz Assocs., Inc. v. J.O. Clark Constr., LLC, No. 3-08-0159, 2009
WL 47143, at *1-2 (M.D. Tenn. Jan. 7, 2009); Thornton v. J Jargon Co.,
580 F. Supp. 2d 1261, 1286 (M.D. Fla. 2008); Home Design Servs., Inc. v.
B&B Custom Homes, LLC, 509 F. Supp. 2d 968, 972 (D. Colo. 2007);
Crane Design, Inc. v. Pac. Coast Constr., LLC, No. C05-251, 2006 WL
16
692019, at *4 (W.D. Wash. Mar. 17, 2006). The courts of the Southern
District of New York, on the other hand, generally found that the legislative
history of § 507(b) demonstrated that “Congress intended to adopt a threeyear limitations period running from the date of the infringement.” See
Auscape Int’l v. Nat’l Geographic Soc’y, 409 F. Supp. 2d 235, 244-47
(S.D.N.Y. 2004); see also Harris v. Simon & Schuster, Inc., 646 F. Supp.
2d 622, 630 (S.D.N.Y. 2009); Broadvision Inc. v. Gen. Elec. Co., No. 08
Civ. 1478, 2009 WL 1392059, at *6 (S.D.N.Y. May 5, 2009); Med. Ecuc.
Dev. Servs., Inc. v. Reed Elsevier Grp., PLC, No. 05 Civ. 8665, 2008 WL
4449412, at *10 (S.D.N.Y. Sept. 30, 2008); Vasquez v. Torres-Negron, No.
06 Civ. 619, 2007 WL 2244784, at *5-7 (S.D.N.Y. July 11, 2007); Roberts
v. Keith, No. 04 Civ. 10079, 2006 WL 547252, at *2-4 (S.D.N.Y. Mar. 7,
2006). In C.A. Inc. v. Rocket Software, Inc., the Eastern District of New
York followed suit, holding that a copyright “claim accrues with the act of
infringement.” 579 F. Supp. 2d 355, 360 (E.D.N.Y. 2008). Thus, the
district courts in the Second Circuit who have grappled with TRW’s impact
on § 507(b) have embraced what can best be described as the minority
approach. This court, however, is reluctant to do the same.
Although the Auscape decision—exhaustive and well reasoned as it
17
is—is persuasive, this court finds the Third Circuit’s opinion in William A.
Graham Co. v. Haughey convincingly so. See 568 F.3d 425 (3d Cir. 2009).
Most importantly, as to civil copyright claims, the discovery rule best
comports with the text and structure of the Copyright Act. See id. at 43435. Specifically, a comparison of the Act’s criminal limitations period, which
begins to run when the “cause of action arose” and therefore embodies the
injury rule, 17 U.S.C. § 507(a), with the Act’s civil limitations period, which
begins to run when “the claim accrued,” id. § 507(b), dictates that the term
“accrued” carries a meaning different from “arose” and therefore embodies
a different rule, namely the discovery rule. See Haughey, 568 F.3d at 43435. Moreover, while the Auscape court points out that Congress’s
consideration of a statutory exception for fraudulent concealment implicitly
demonstrates that Congress intended for accrual to occur at the time of the
infringement, since a discovery rule would render a fraudulent concealment
exception “superfluous,” Auscape, 579 F. Supp. 2d at 246-47, the Haughey
court highlights “the important fact ... that Congress rejected inclusion of
any statutory exceptions to the statute of limitations period,” Haughey, 568
F.3d at 436. And despite the policy interest in achieving national
consistency with a bright-line rule, the court shares the Third Circuit’s
18
concern that certain types of infringement may not constitute truly “public
acts” that are readily subject to detection. See id. at 437.
In sum, notwithstanding the court’s receptiveness to the discovery
rule’s continued viability,4 plaintiffs are advised to reevaluate their case, the
basis for their claims, and their manner of execution. And the court warns
plaintiffs that any further failure to adhere to the above-outlined directives
will not be tolerated.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that defendants’ motions to dismiss (Dkt. Nos. 76, 77,
101, 104, 106, 107, 109) are GRANTED to the extent that plaintiffs’
complaint is DISMISSED for failure to meet the pleading requirements
under FED. R. CIV. P. 8; and it is further
ORDERED that defendants’ motions are otherwise DENIED; and it is
further
ORDERED that plaintiffs are GRANTED leave to file a third amended
4
The court’s discussion of accrual under § 507(b) is simply that, a discussion, and
should not be interpreted to cut off future argument on the issue or otherwise preclude the
parties from attempting to modify the court’s viewpoint. Nor should the court’s observations be
interpreted to relieve plaintiffs of their burden to adequately plead their causes of action.
19
complaint, in full compliance with the terms of this Order, within thirty (30)
days from the date of the filing of this Order, after which defendants may
renew or supplement their motions, or otherwise respond to the complaint
as permitted under the Federal Rules of Civil Procedure; and it is further
ORDERED that if plaintiffs fail to file an amended complaint within
thirty (30) days from the date of the filing of this Order, the Clerk of the
Court shall enter judgment dismissing this action without further order of
the court; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
August 2, 2011
Albany, New York
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