KRIST v. SCHOLASTIC, INC.

Filing 16

MEMORANDUM OPINION. SIGNED BY HONORABLE CYNTHIA M. RUFE ON 5/30/2017. 5/30/2017 ENTERED AND COPIES E-MAILED.(amas)

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BOB KRIST,
Plaintiff,

MAY 30 2017

SCHOLASTIC, INC.,
Defendant.

By_KATE BARKMAN,

'CJerk

MEMORANDUM OPINION
RUFE,

FILED

CIVILACTIONN0.16-6251

v.

J.

Dep. Clerk
----MAY30,2017

Before the Court is Defendant Scholastic, Inc.' s Motion to Dismiss Plaintiff's Complaint
or, in the Alternative, to Transfer Venue. For the reasons that follow, the motion will be denied.
I.

BACKGROUND

Plaintiff Bob Krist is a professional photographer who seeks to hol4 Defendant, the
world's largest publisher and distributor of children's books, liable for infringements of
copyrights on forty-five of his photographs, all of which have been registered with the United
States Copyright Office. 1 Plaintiff alleges he entered-into a licensing agreement with Corbis
Corporation, a "stock photo agency," that granted Corbis limited rights to sublicense the
photographs to third parties in exchange for a percentage of the fees Corbis received.2 Corbis
licensed Plaintiff's photographs to Defendant under Preferred Pricing Agreements ("PP As") that
limited Scholastic's use by setting limits on the "number of copies, distribution area, image size,
language, duration and/or media (print or electronic)."

3

These allegations are drawn from Plaintiffs complaint, Doc. No. 1, and are taken as true for purposes of this
motion.
1

2

3

'if 8.
Id. 'if 11.

Id.

Plaintiff alleges Defendant infringed his copyrights by: (1) "printing or distributing more
copies of the Photographs than authorized"; (2) "distributing publications containing the
Photographs outside the authorized distribution area"; (3) "publishing the Photographs in
electronic, ancillary, or derivative publications without permission"; (4) "publishing the
Photographs in international editions and foreign publications without permission"; and (5)
4

"publishing the Photographs beyond the specified time limits." Plaintiff also alleges Defendant
has been sued at least ten times by other plaintiffs for similar alleged copyright infringements.

5

Defendant has moved to dismiss, arguing that Plaintiff has failed to plead the elements of
infringement. In the alternative, Defendant seeks to transfer this case to the Southern District of
New York. Defendant also argues that if this case proceeds, discovery should be limited to
whether Plaintiffs complaint is barred by the statute of limitations.

II.

LEGAL STANDARD
Dismissal for failure to state a claim is appropriate if the complaint fails to allege facts
6

sufficient to establish a plausible entitlement to relief. In evaluating Defendant's motion, the
Court "take [s] as true all the factual allegations of the [complaint] and the reasonable inferences
that can be drawn from them," but "disregard[s] legal conclusions and recitals of the elements of
7

a cause of action, supported by mere conclusory statements." Instead, to prevent dismissal,
complaints must "set out sufficient factual matter to show that the claim is facially plausible."

4

Id. ~~ 13(a)-(e).

5

8

Id. ~~ 16(a)-G).

See Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009) (citing Bell Atl. Corp. v. Twombly, 550
U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009)).
6

Santiago v. Warminster Twp., 629 F.3d 121, 128 (3d Cir. 2010) (quoting Iqbal, 556 U.S. at 678) (internal quotation
marks omitted).
7

8

Fowler, 578 F.3d at 210 (citation and internal quotation marks omitted).

2

"A cla:i.m has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged. " 9

III.

ANALYSIS
A. Motion to Dismiss for Failure to State a Claim
To state a claim for copyright infringement, Plaintiff must allege: "(l) ownership of a

valid copyright; and (2) unauthorized copying of original elements of the plaintiffs work." 10
Defendant argues the second element is lacking because Plaintiff has not alleged "by what acts
and during what time" infringement occurred. 11 However, Plaintiff alleges Defendant infringed
his copyrights in five ways shortly after Defendant licensed his works, which is sufficient to state
a claim. 12 Courts routinely deny motions to dismiss similar copyright claims, and the same result
obtains here. 13
Defendant also argues that Plaintiff fails to plead adequately the time period of
infringement. But Plaintiff alleges infringement occurred "shortly after" Defendant licensed
9

Santiago, 629 F.3d at 128 (citations and internal quotation marks omitted).

10

Malibu Media, LLC v. Doe, 82 F. Supp. 3d 650, 653 (E.D. Pa. 2015) (citing Dun & Bradstreet Software Servs.,
Inc. v. Grace Consulting, Inc., 307 F.3d 197, 206 (3d Cir. 2002)).
11

Doc. No. 9-1 (Memorandum of Law in Support of Defendant's Motion to Dismiss) at 5.

12

The Court declines to adopt Defendant's suggestion that a heightened pleading standard applies based on Gee v.
CBS, Inc., 4 71 F. Supp. 600, 643 (E.D. Pa. 1979), which predates Twombly and Iqbal by decades. Even if the Court
were to apply such a standard, Plaintiff has adequately alleged specific violations of his copyrights.
13

See Clifton v. Houghton Mifflin Harcourt Publ'n Co., 152 F. Supp. 3d 1221, 1224 (N.D. Cal. 2015) ("After
Twombly and Iqbal, in the book publishing context, numerous courts have denied motions to dismiss copyright
infringement claims where the plaintiff alleged ... that the defendant exceeded the limitations in licenses for
photographs by, for example, printing more copies of the publication than authorized, publishing the photographs in
derivative publications without permission, and distributed the publication outside of the authorized distribution
area.") (collecting cases; citations omitted); Quadratec, Inc. v. Turn 5, Inc., Civil Action No. 13-6384, 2015 WL
4876314, at *4 (E.D. Pa. Aug. 13, 2015) (denying motion to dismiss copyright claim and explaining that "[a]lthough
Plaintiff did not provide the exact date of infringement for each of the" copyrighted images, "it is not fatal to
[Plaintiffs] copyright claim that the Complaint fails to specify how each particular photograph has been infringed")
(quoting Warren v. John Wiley & Sons, Inc., 952 F. Supp. 2d 610, 618 (S.D.N.Y. 2013)) (internal quotation marks
omitted); Young-Wolffv. McGraw-Hill Sch. Ed Holdings, LLC, No. 13-CV-4372 (KMW), 2015 WL 1399702, at
*3-4 (S.D.N.Y. Mar. 27, 2015) (denying motion to dismiss similar copyright claim); see also Briggs v. Gall, Civil
Action No. 13-5395, 2014 WL 12616828, at *5 (E.D. Pa. Apr. 21, 2014) (rejecting argument that complaint failed to
plead infringement where plaintiff alleged that defendant reproduced, distributed, and displayed copyrighted works
without permission).

3

Plaintiffs works, which other courts have found sufficient at the pleading stage. 14 That makes
sense in copyright cases such as this, where the Plaintiff alleges that specific facts regarding
infringement are uniquely within Defendant's control and cannot be pleaded with specificity
prior to discovery. 15 Defendant's motion to dismiss will be denied.

B. Motion to Transfer Venue
Alternatively, Defendant seeks to transfer this case to the Southern District of New York.
Defendant argues primarily that transfer is warranted because the PP As between Corbis and
Defendant (to which Plaintiff is not a party) contain forum-selection clauses designating the
Southern District of New York as the venue for disputes regarding those agreements. Defendant
also argues that, independent of the forum-selection clauses, transfer is warranted under 28
U.S.C. § 1404(a). 16

1. The Forum-Selection Clauses in the PPAs Do Not Mandate Transfer
Defendant argues that forum-selection clauses in the PP As mandate transfer. In general,
"a plaintiffs choice of forum should rarely be disturbed" and a plaintiffs choice of his home
forum, in particular, is "entitled to greater deference." 17 But "[w]hen the parties have agreed to a
valid forum-selection clause, a district court should ordinarily transfer the case to the forum
specified in that clause," barring exceptional circumstances. 18
Forum-selection clauses identical to those at issue here have engendered considerable
14

Young-Woif.f, 2015 WL 1399702 at *2 (allegation that infringement occurred "shortly after" the defendants
licensed plaintiff's work was sufficient to state a copyright claim). But see Yamashita v. Scholastic, Inc., No. 16CV-9201(KBF),2017 WL 74738, at *2 (S.D.N.Y. Jan. 5, 2017) (dismissing similar copyright claim).
15

See Clifton, 152 F. Supp. 3d at 1225 (rejecting argument that plaintiff should have better investigated copyright
claim before filing suit because the facts needed to substantiate plaintiff's allegations were "peculiarly within the
possession and control" of the defendant) (internal quotation marks omitted).
16

Section 1404(a) provides that "[t]or the convenience of parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any district or division where it might have been brought ...."
17

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 255 (1981) (citations omitted).

18

At/. Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568, 581 (2013) (footnote omitted).

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litigation, and courts in this district are split regarding whether the clauses apply to copyright
claims by non-parties such as Plaintiff. 19 However, in two recent cases-Steinmetz v. McGraw-

Hill and Krist v. Pearson (another lawsuit brought by Plaintiff)-courts have rejected arguments
similar to those raised by Defendant and held that the forum-selection clauses do not govern
copyright claims asserted by non-parties. 20 As explained below, the Court agrees with the
reasoning in Steinmetz and Pearson and concludes that the forum-selection clauses do not apply
to Plaintiffs claim for two reasons: (1) the clauses do not govern Plaintiffs copyright claim
because it is not a dispute regarding the PPAs; and (2) Plaintiff is not a party to the PP As and so
cannot be bound by their terms.

a. The Forum-Selection Clauses Do Not Govern Plaintiff's Copyright
Claim
First, the forum-selection clauses do not apply to Plaintiffs claim because they govern
only "dispute[s] regarding this agreement," meaning disputes regarding the PPAs.

21

As the

court explained in Steinmetz, copyright claims are not disputes "regarding" the PPAs because
they seek to enforce rights under the Copyright Act, not contractual rights under the PPAs.

22

19

Compare Krist v. Pearson Educ., Inc., Civil Action No. 16-6178, 2017 WL 1344396, at *3 (E.D. Pa. Apr. 12,
2017) (holding Corbis forum-selection clauses did not govern similar copyright claim by Plaintiff against publisher)
and Steinmetz v. McGraw-Hill Glob. Educ. Holdings, LLC, Civil Action No. 15-6600, 2016 WL 7048951, at *7
(E.D. Pa. Dec. 5, 2016) (same), with Keller v. McGraw-Hill Glob. Educ. Holding, LLC, No. 16-1778, 2016 WL
4035613, at *6 (E.D. Pa. July 28, 2016) (reaching the opposite conclusion in copyright case brought by a different
plaintiff but involving substantially similar forum-selection clauses).
20

See Krist, 2017 WL 1344396, at *3; Steinmetz, 2016 WL 7048951, at *7.

21

The clause provides, in relevant part: "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 in
New York, New York regardless ofconflicts oflaws." Doc. No. 9-3 (Ex. A to Seidenfeld Deel.) at 9; Doc. No. 9-4
(Ex. B to Seidenfeld Deel.) if 21; Doc. No. 9-5 (Ex. C to Seidenfeld Deel.) if 21 (PPAs). As Defendant
acknowledges, the forum-selection clauses may, at most, cover 24 of the 45 allegedly infringing uses of Plaintiffs
works. Doc. No. 9-1 at 8.
22

See Steinmetz 2016 WL 7048951, at *7; see also Light v. Taylor, 317 F. App'x 82, 83-84 (2d Cir. 2009) (summary
order) ("Forum selection clauses are enforced only when they encompass the claim at issue. The relevant clause
here applies only to disputes 'regarding' the agreement. [The plaintiff]'s copyright claims are not governed by the
forum selection clause because they do not encompass a dispute with respect to the Corbis agreement.") (citation
omitted).

5

Defendant argues that Plaintiffs claim necessarily depends on the PP As because the
complaint alleges that Defendant exceeded licenses for the use of Plaintiffs photographs
contained in the PP As. 23 This argument conflates the issue of whether the PPAs provide a
defense to Plaintiffs copyright claim with the issue of whether the PP As give rise to Plaintiffs
claim in the first instance, which they plainly do not. As the court held in Steinmetz, "Plaintiffs
ownership of his photographs is premised not upon any contract, but rather upon his status as
creator of the photographs." 24 Although the PPAs "may provide a defense to Plaintiffs
complaint of unauthorized copying," they do "not give rise to an action under the Copyright
Act. " 25 Thus, because Plaintiffs claim does not depend on or arise under the PP As, it is not
subject to their forum-selection clauses.

b. The Forum-Selection Clauses Do Not Bind Non-Parties Such as
Plaintiff
Second, the forum-selection clauses do not bind non-parties such as Plaintiff, as the court
held in Pearson, which concerned a similar copyright claim.

26

As the court in Pearson

explained, the forum-selection clauses are prefaced by the phrase "the parties agree" and thus by
their plain terms have no bearing on copyright claims brought by non-parties.

27

Defendant

nevertheless argues that Plaintiff should be bound by the forum-selection clauses because: (1)
Corbis was acting as Plaintiffs agent when it entered into the PPAs; and (2) Plaintiff was a
beneficiary of the PPAs. Both of these arguments were rejected in Pearson and they are
unavailing here as well.
23

Doc. No. 9-1 at 10.

Steinmetz, 2016 WL 7048951, at *7; see also Muhammad-Ali v. Final Call, Inc., 832 F.3d 755 (7th Cir. 2016)
("[A] plaintiff is not required to prove that the defendant's copying was unauthorized in order to state a prim a facie
case of copyright infringement.") (citations omitted), cert. denied, 137 S. Ct. 681 (2017).

24

25

Steinmetz, 2016 WL 7048951, at *7.

26

Pearson, 2017 WL 1344396, at *3 (E.D. Pa. Apr. 12, 2017).

21

Id.

6

Plaintiff cannot be bound to the PPAs under the theory that Corbis was his agent because
Plaintiff "did not retain" the requisite "continued control or direction over Corbis" to create a
principal-agent relationship. 28 Plaintiffs agreement with Corbis gave Corbis "sole discretion" to
determine the terms and conditions of any licenses to use Plaintiffs work, making clear that
Plaintiff had no direct control over Corbis's licensing practices. 29 Plaintiffs agreement with
Corbis also expressly allowed Corbis to act as Plaintiffs agent only for the "purpose of making
[certain] settlements and collections," suggesting that Corbis was not otherwise Plaintiffs
agent. 30 Plaintiff thus cannot be held to the forum-selection clauses under an agency theory.
Nor was Plaintiff a beneficiary of, or closely related to, the PPAs such that he can be held
to their terms. In rare circumstances, forum-selection clauses are enforceable against nonparties, but "only ifthe [non-]party is a third-party beneficiary to the contract or it is
'foreseeable' that it will be," meaning the non-party "is closely related to the contractual
relationship." 31 That is not the case here. The PPAs were not entered into for Plaintiffs benefit,
Plaintiff does not assert rights based on their terms, and Plaintiff has not attempted to interfere
with the PPAs such that it would be reasonable to force him to litigate under their terms. 32 That

28

Id. at *3.

29

Doc. No. 13-2 (Motion Representation Agreement between Plaintiff and Corbis) § 1 ("Corbis may accept or reject
submitted Content for representation under this Agreement in its sole discretion."); id. § 8 ("Corbis may determine
at our sole discretion the terms and conditions of any license, marketing or distribution of your Accepted
Content ... ").

30

Id § 17 (stating that Plaintiff"authorizes Corbis to act as its agent and attorney-in-fact for the purpose of making
such settlements and collections"); see also Pearson, 2017 WL 1344396, at *4 (in similar lawsuit brought by
Plaintiff, concluding that agreement between Plaintiff and Corbis did not create principal-agent relationship).
31

Beth Schiffer Fine Photographic Arts, Inc. v. Co/ex Imaging, Inc., No. 10-cv-5321 (WHW), 2014 WL 1908500, at
*3 (D.N.J. Nov. 25, 2015) (citations omitted).

32

See Pearson, 2017 WL 1344396, at *3 (finding Plaintiff was not beneficiary of or closely related to agreement
between Pearson and Corbis because Plaintiff asserted only copyright claims and did not seek to enforce the terms
of the agreement); see also Beth Schiffer Fine Photographic Arts, Inc., 2014 WL 1908500, at *4-5 (finding plaintiff
was not a third-party beneficiary of or closely related to warranty containing forum-selection clauses because the
warranty was not intended to benefit plaintiff and plaintiff was not employed by or the principal of any of the

7

distinguishes this case from those in which courts have found forum-selection clauses
enforceable against a non-signatory. 33 As in Pearson, the Court concludes that Plaintiff cannot
be bound to forum-selection clauses he did not assent to and has not sought to enforce.

c. Transfer Is Not Warranted Under§ 1404(a)
Defendant also argues briefly that, even absent the forum-selection clauses, this case
should be transferred to the Southern District of New York under§ 1404(a). "The burden of
establishing the need for transfer ... rests with the movant."34 In evaluating motions to transfer,
courts consider a multitude of public and private interests. Among the relevant private interests
are the parties' forum preferences, where the claim arose, the convenience of the parties, the
convenience of witnesses, and the location of relevant documents. 35 The relevant public interests
include the enforceability of the judgment, various practical considerations, and court congestion
in the relevant fora. 36
A review of these factors easily demonstrates that Defendant has not met its burden. The
balance of private interests tilts heavily in favor of Plaintiff. His choice of his home state as a
forum is entitled to deference, he has sued a corporate defendant that doubtless has the
wherewithal to defend itself in this Court, and Defendant has not argued that its documents and
signatories to the warranty). Compare Lefkowitz v. McGraw-Hill Cos., Civil Action No. 13-1661, 2013 WL
3061549, at *4 (E.D. Pa. June 19, 2013) (holding that forum-selection clauses in Corbis licensing agreements bound
non-signatory plaintiff because the plaintiff asserted a claim for breach of those licensing agreements).
33

For example, in Synthes, Inc. v. Emerge Medical, Inc., 887 F. Supp. 2d 598 (E.D. Pa. 2012), relied upon by
Defendant, the court found that the non-signatory defendant was "closely related" to a non-compete agreement
containing a forum-selection clause because the defendant allegedly interfered with that agreement by forming a
competing business with employees who had signed the agreement. Id. at 610-12. In Synthes, unlike the present
case, much of the dispute concerned the interpretation of the non-compete agreement and the defendant's alleged
efforts to interfere with it, not a standalone copyright claim. See id.; see also Pearson, 2017 WL 1344396, at *3
(explaining that most cases, including Synthes, that have bound non-signatories to forum-selection clauses have
done so on the basis that "the nonsignatories there were defendants who allegedly either interfered with ... or made
misrepresentations to induce entering into ... contracts with forum selection clauses").
34

Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (citations and internal quotation marks omitted).

35

Id. (citations omitted).

36

Id (citations omitted).

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witnesses would be unavailable for trial here. The public interest factors are more neutral, but to
the extent they favor of Defendant at all, it is not enough to meet Defendant's burden of showing
that transfer is warranted. 37 Defendant's motion to transfer will be denied.

C. Motion to Limit Discovery
Finally, Defendant argues that Plaintiff's claim is barred by the statute of limitations and
requests that discovery be limited to that issue. 38 Federal copyright claims are subject to a threeyear statute of limitations. 39 "[l]n the case of successive violations of the Copyright Act, the
limitations period runs separately from the date of each violation."

40

"Under the Third Circuit

discovery rule, the statute of limitations is subject to equitable tolling until 'the plaintiff
discovers, or with due diligence should have discovered, the injury that forms the basis for the
claim. "'

41

Defendant appears to acknowledge that dismissal on statute-of-limitations grounds would
be inappropriate given the factual dispute regarding when Plaintiff discovered his claims.

42

Instead, Defendant argues that because Plaintiff's claims may be time-barred, discovery should
be limited to that issue. Defendant also argues that even if Plaintiff's complaint was timely,
Plaintiff should be limited to recovering damages for infringements that occurred within the

Litigation in either forum would inevitably be somewhat inconvenient for one of the parties, and while cases in
this District tend to be resolved, on average, more quickly than in the Southern District of New York, the Court is
confident that either venue would be capable of overseeing this lawsuit and enforcing any judgment resulting from
it. See Doc. No. 13-15 (Albrecht Deel. Ex. L) ("judicial caseload profile" showing that the average time from filing
to disposition in the Southern District ofNew York is 9.2 months, compared with 5 months in this district).

37

38

Doc. No. 9-1at12.

39

17 u.s.c. § 507(b).

Raucci v. Candy & Toy Factory, 145 F. Supp. 3d 440, 449 (E.D. Pa. 2015) (citing Petrella v. Metro-GoldwynMayer, Inc., 134 S. Ct. 1962, 1969 (2014)).

40

Grant Heilman Photography, Inc. v. McGraw-Hill Cos., 28 F. Supp. 3d 399, 411 (E.D. Pa. 2014) (quoting
William A. Graham Co. v. Haughey, 568 F.3d 425, 438 (3d Cir. 2009)).

41

See Raucci, 145 F. Supp. 3d at 449-50 (declining to dismiss copyright claim where there was a "factual dispute
whether the limitations period was tolled").

42

9

three years before the complaint was filed.
Defendant's request to limit discovery will be denied because it is unclear whether
Defendant will prevail on its statute-of-limitations defense, and the Court sees no reason to
preclude Plaintiff from seeking discovery regarding the merits of his claim while Defendant
explores its defenses. Indeed, the evidence necessary to prove infringement-including the dates
on which infringement occurred-will likely overlap with evidence relevant to the timeliness of
Plaintiffs claims, meaning that limiting Plaintiffs ability to seek discovery is unlikely to
promote efficiency. 43
Nor can the Court conclude on the current record that Plaintiff is barred from recovering
for infringements that occurred more than three years before he filed suit. Claims based on such
infringements may be timely under the Third Circuit discovery rule so long as Plaintiff filed suit
within three years of discovering them. 44 Thus, the Court will not limit the scope of Plaintiffs
claims at this early stage.

IV.

CONCLUSION

For the reasons set forth above, Defendant's motion will be denied. An appropriate
Order will follow.

43

Cf Frerck v. John Wiley & Sons, Inc., Case No.l 1-cv-2727, 2014 WL 3512991, at *6 (N.D. Ill. July 14, 2014)
(explaining that the circumstances and date of copyright infringements must be established in order for a court to
determine whether claims based on such infringements are time-barred).
44

See Raucci, 145 F. Supp. 3d at 449-50 (denying motion to dismiss copyright claims relating to alleged violations
that occurred more than three years before plaintiff filed suit because "the discovery rule and equitable tolling may
apply" to allow plaintiff to recover for such violations).
Defendant relies on the Supreme Court's decision in Petrella v. Metro-Goldwyn-Mayer, Inc., which held that laches
does not bar otherwise-timely copyright claims. See 134 S. Ct. at 1969. However, other courts have rejected similar
arguments based on Petrella, as Petrella did not expressly address the discovery rule. See Energy Intelligence Grp.,
Inc. v. Scotia Capital (USA) Inc., 16-cv-00617 (PKC)(KNF), 2017 WL 432805, at *2 (S.D.N.Y. Jan. 30, 2017)
("[U]nder no reasonable reading of Petrella could the opinion be interpreted to establish a time limit on the recovery
of damages separate and apart from the statute of limitations."); see also Grant Heilman Photography, 28 F. Supp.
3d at 411 ("[T]his Court does not find that Petrella overruled the Third Circuit discovery rule[.]").

10