Stross v. Rowehl et al

Filing 57

ORDER DENYING 49 Motion for Summary Judgment; MOOTING 55 Motion for Leave to File. Signed by Judge Sam Sparks. (dm)

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

ZUIØ

SEP

9

AM 9:00

ALEXANDER STROSS,
Plaintiff,
CAUSE NO.:
AU-17-CA-00676-SS

-vs-

EUGENE ROWEHL and CENTERRA
HOMES OF TEXAS, LLC,
Defendants.

1) 1 I)

BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,
and specifically Defendants Eugene Rowehl and Centerra Homes of Texas, LLC (collectively,

Centerra)'s Motion for Summary Judgment [#49], Plaintiff Alexander Stross's Response and
Cross-Motion for Summary Judgment [#52] in opposition, and Centerra's Reply [#54] in
support. Having reviewed the documents, the relevant law, and the file as a whole, the Court now

enters the following opinion and orders.

Background
This copyright lawsuit revolves around the ownership of photographs uploaded by Stross
to the Austin/Central Texas Realty Information Service (ACTRIS) and later used by Centerra, a

homebuilder, to market various real estate properties. ACTRIS is a multiple listing service
(MLS) accessed over the internet and used by real estate professionals to upload, search, and

disseminate real estate listings. Stross has been a participant in ACTRIS since 2006. Mot. Summ.
J. [#49] at 4.'

Normally, in order to gain access to ACTRIS, would-be participants must complete a

registration process and agree to abide by the ACTRIS "Terms of Use." Id. at 4-5. When signing

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In the interest of consistency, all page citations refer to CM/ECF pagination.
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up for an online ACTRIS account, these registrants are presented with an electronic copy of the

Terms of Use which they are required to read. Id. After they have read the Terms of Use,
registrants manifest assent by clicking an "I Agree" button on an ACTRIS web page. Id.
The parties dispute whether Stross ever agreed to the ACTRIS Terms of Use. Though

there is no record of Stross agreeing to the Terms of Use, Centerra argues Stross must have
agreed to the Terms of Use because he could not otherwise have completed the registration

process or began to use his ACTRIS account.

See

Reply [#54-1] Ex. A at 14 ("[Each] member

record has an MLS Flag Yes/No Field. And if that doesn't have a positive Y value, then.

. .

[he]

would not have been authenticated [to use the system]."). For his part, Stross contends there was
a problem with the ACTRIS online registration process when he attempted to register in 2006,

and he was instead provided with a paper application and log-in credentials. Resp. [#52-1] Stross
Deci. at 1. Stross states this paper application did not contain the Terms of Use. Id.

The Terms of Use contain two provisions relevant to the pending motion. First, they
contain an assignment provision which states that participants who submit content to ACTRIS

"thereby assign to ACTRIS" all rights and interest in the content, "including, without limitation,
any photos." Mot. Sumin. J. [#49-4] Ex. 2-A (Terms of Use) at 3. Second, the Terms of Use

contain a choice of law provision which states that in the event of an "unavoidable conflict"
between the Terms of Use and the ACTRIS Rules and Regulations, "the Rules and Regulations
shall control." Id. at 3.

The ACTRIS Rules and Regulations, in turn, contain two relevant provisions. First,
Section 7.10 states that participants who submit content to ACTRIS grant ACTRIS an
irrevocable right and license to include such content "in the MLS Compilation" and to use such
content "for any purpose consistent with the facilitation of the sale, lease and valuation of real

property or such other use." Resp. [#52-2] McKinney Decl. at 67 (Rules and Regulations).
Second, Section 7.11 states ACTRIS "shall own all right, title, and interest in the MLS

Compilation, including all intellectual property rights." Id.
In January and February 2015, Stross took photographs of several homes built by

Centerra and uploaded these photographs to ACTRIS for incorporation into a real estate listing
managed by a third party. Second Am. Compi. [#30] at 2. Shortly thereafter, however, Centerra
decided to sell the homes itself, and on February 10, 2015, Stross removed the photographs from

ACTRIS. Id.
Some time later, Stross discovered his photographs had been uploaded to Centerra's

website for marketing purposes and incorporated into sales flyers distributed by Centerra. Id. at

4-5. Centerra did not seek Stross's permission to use the photographs nor did it compensate
Stross in any way. Id.
In July 2017, Stross brought this lawsuit alleging Centerra infringed upon his copyrights

in the photographs by copying, distributing, and displaying the photographs without Stross's
consent. Second Am. Compl. [#30] at 7-9. Centerra now brings a motion for summary judgment

arguing Stross lacks standing to bring his copyright claims because he assigned all of his rights
in the photographs to ACTRIS when he allegedly agreed to the ACTRIS Terms of Use. Mot.
Summ. J. [#49] at 3-5. In response, Stross has brought a cross motion for summary judgment

asking the Court to rule Stross owns the copyrights in question as a matter of law. Resp. [#52] at
14. These pending motions are ripe for review.

Analysis
I.

Summary Judgment Standard

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Summary judgment shall be rendered when the pleadings, the discovery and disclosure

materials on file, and any affidavits show that there is no genuine dispute as to any material fact
and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504 F.3d 505, 508
(5th Cir. 2007). A dispute regarding a material fact is "genuine"

if the evidence is such that a

reasonable jury could return a verdict in favor of the nonmoving party. Anderson

v.

Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the

court is required to view all inferences drawn from the factual record in the light most favorable
to the nonmoving party. Matsushita Elec. Indus. Co.

v.

Zenith Radio, 475 U.S. 574, 587 (1986);

Washburn, 504 F.3d at 508. Further, a court "may not make credibility determinations or weigh

the evidence" in ruling on a motion for summary judgment. Reeves

v.

Sanderson Plumbing

Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.
Once the moving party has made an initial showing that there is no evidence to support

the nonmoving party's case, the party opposing the motion must come forward with competent
summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at
586. Mere conclusory allegations are not competent summary judgment evidence, and thus are

insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr.,
476 F.3d 337, 343 (5th Cir. 2007).

Unsubstantiated assertions, improbable inferences, and

unsupported speculation are not competent summary judgment evidence.

The party

Id.

opposing summary judgment is required to identify specific evidence in the record and to
articulate the precise manner in which that evidence supports his claim. Adams
Indem. Co.

of Conn., 465 F.3d

v.

Travelers

156, 164 (5th Cir. 2006). Rule 56 does not impose a duty on the

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court to "sift through the record in search of evidence" to support the nonmovant's opposition to
the motion for summary judgment. Id.

"Only disputes over facts that might affect the outcome of the suit under the governing
laws will properly preclude the entry of summary judgment."

Anderson, 477

U.S. at

248.

Disputed fact issues that are "irrelevant and unnecessary" will not be considered by a court in

ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing
sufficient to establish the existence of an element essential to its case and on which it will bear

the burden of proof at trial, summary judgment must be granted.

Celotex,

477 U.S. at 322-23.

Centerra's Motion for Summary Judgment

II.

Centerra argues Stross lacks standing to bring his copyright claims because he assigned
all

of his rights in the photographs to ACTRIS when he allegedly agreed to the Terms of Use.

Mot. Summ. J.
Resp.

[#52]

at

[#49]

5.

at

4-5.

In response, Stross contends he never agreed to the Terms of Use.

Stross also contends the Terms of Use could not have effected an assignment in

the first place. Id. at

12-13.

According to Stross, there is a conflict between the Terms of Use

and the Rules and Regulations because the former purports to effect an assignment while the

latter effects only a license. Id. And under the choice of law provision contained within the
Terms of Use, the Rules and Regulations control in the event of conflict between the Terms of

Use and the Rules and Regulations. Id.
The Court need not decide whether Stross ever accepted the ACTRIS Terms of Use
because the Court concludes the assignment provision within the Terms of Use conflicts with

Section

7.10

of the ACTRIS Rules and Regulations. The Terms of Use provide that ACTRIS

users assign all rights in submitted content to ACTRIS. Terms of Use at
7.10

3.

Meanwhile, Section

of the Rules and Regulations provides that users who submit content merely grant ACTRIS

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an irrevocable right and license to include such content "in the MLS Compilation" and to use
such content "for any purpose consistent with the facilitation of the sale, lease and valuation of
real property or such other use." Rules and Regulations. The Court concludes the assignment

provision of the Terms of Use is in "unavoidable conflict" with the license provision of the Rules
and Regulations in effect when Stross uploaded his photographs to ACTRIS. Thus, under the

choice of law provision contained within the Terms of Use, Section 7.10 of the Rules and
Regulations controls, and Stross retained ownership rights in his photographs.
Centerra protests that no unavoidable conflict exists because the Rules and Regulations
also contain an assignment provision, Section 7.11, which provides ACTRIS "shall own all right,

title, and interest in the MLS Compilation, including all intellectual property rights." Reply [#54]
at 10-11. Rules and Regulations. This argument fails for several reasons. First, Section 7.11

makes no mention of assignment.

See

id. Second, Section 7.11 concerns ACTRIS's ownership of

the MLS Compilation itself, not the content submitted by ACTRIS users. Under 17 U.S.C.
§

201(c), "[c]opyright in each separate contribution to a collective work is distinct from

copyright in the collective work as a whole," and "the owner of copyright in the collective work
is presumed to have acquired only the privilege of reproducing and distributing the contribution
as part of that particular collective work." Third, the Austin Board of

Realtorsof

which

ACTRIS is a wholly owned subsidiaryhas previously indicated that the Rules and Regulations
do not require users to assign their rights in submitted content. Resp. [#52-2] McKinney Decl.
at 60 (Austin Board of Realtors Meeting Agenda) (noting ACTRIS had been "operating with

conflicting rules and terms of use" because the Rules and Regulations grant "a broad license"
while the Terms of Use "contained an absolute assignment of ownership"). In sum, Section 7.11
is not an assignment provision and has no bearing on the matter at issue here.

Because Centerra has failed to show Stross lacks ownership over the photographs, its
standing challenge fails. The Court therefore denies Centerra' s motion for summary judgment.

III.

Stross's Motions for Summary Judgment
hi his response, Stross has included a cross-motion for partial summary judgment arguing

there is no genuine dispute of material fact that Stross owns the photograph copyrights and that
Stross has standing to bring this suit. Resp. [#52] at 14. The Court denies Stross's motion for

partial summary judgment on the ground Stross has presented no argument with respect to his
summary judgment motion and has failed to carry his burden of demonstrating the absence of a

genuine dispute of material fact.

Conclusion
The Court denies Centerra's motion for summary judgment for lack of standing and
concludes Stross did not assign his rights in his photographs by uploading them to ACTRIS.
Further, the Court denies Stross's motion for summary judgment on the ground Stross has failed
to demonstrate the absence of a genuine dispute of material fact.

Accordingly,
IT IS ORDERED that Centerra's Motion for Summary Judgment [#49] is

DENIED;
IT IS FURTHER ORDERED that Stross's Cross Motion for Summary Judgment
[#52] is DENIED; and

IT IS FINALLY ORDERED that Stross's Motion for Leave to File Surreply [#55]

is DISMISSED AS MOOT.

SIGNED this the

/7&y of September 2018.
SAM SPARKS
SENIOR UNITED STATES DISTRICT JUDGE
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