Sullivan, Amy v. Flora, Inc. et al

Filing 342

ORDER on Limited Remand. Defendant Flora, Inc.'s response to plaintiff Amy Sullivan's motion for summary judgment on the issue of whether her 33 copyrighted illustrations constitute separate works for determining a statutory damages award is due on or before January 21, 2020; plaintiff's reply is due January 31, 2020. Signed by District Judge William M. Conley on 12/20/2019. (kwf)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
AMY LEE SULLIVAN,
Plaintiff,
v.

ORDER
15-cv-298-wmc

FLORA, INC.,
Defendant.

Following a jury trial, the court entered judgment in favor of plaintiff Amy Lee
Sullivan on her copyright infringement claims and related unjust enrichment claims against
defendant Flora, Inc. On appeal, the Seventh Circuit affirmed in part and vacated in part,
remanding this case “for further proceedings consistent with” its opinion. (Mandate (dkt.
#335).) Sullivan v. Flora, Nos. 17-2241 & 18-2534, slip op. at *24 (7th Cir. Aug. 21,
2019) (dkt. #335-1). In particular, with respect to the vacated part of the judgment, the
Seventh Circuit held that this court erred in relying on Sullivan’s copyright applications to
determine that her 33 illustrations constituted 33 separate “works.” Sullivan, slip op. at
*5. Instead, as an issue of first impression for this Circuit, the Seventh Circuit held that
the appropriate question is “whether the protected works have value only in and through
their composite whole (and thus meet the definition of a ‘compilation’ in § 101)” or
whether each has “standalone value at the level of ‘one work.’” Sullivan, slip op. at *15.
The opinion went on to explain that “[a] protected work has standalone value if the
evidence shows that work has distinct and discernable value to the copyright holder.” Id.
Accordingly, the Seventh Circuit advised “[o]n remand the district court will have ample

flexibility to structure the proceedings to enable the requisite findings pertinent to
statutory damages.” Id. at *17.
After the mandate issued, therefore, this court directed the parties to “meet and
confer as to the appropriate further proceedings on remand and file a joint submission, if
possible, setting forth the parties’ recommendation,” or, if the parties were not able to
reach an agreement, the court asked the parties to file their own respective submissions
and invited responses. (Dkt. #336.) Not surprisingly, the parties could not reach an
agreement; indeed, they have very different views as to the appropriate next steps on
remand. Plaintiff argues that the court can decide the remaining issue on the factual record
before it, pointing to undisputed expert testimony as to the economic value of each
illustration submitted in support of plaintiff’s request for actual damages at trial. (Pl.’s Br.
(dkt. #338) 5-11.) For its part, defendant contends that the court should: (1) reopen
discovery on the issue of whether the 33 illustrations have distinct and discernable
economic value; (2) set expert disclosure deadlines to address this issue; (3) allow for a
second round of dispositive motions; and (4) retry damages, including the jury’s award of
$350,000 for unjust enrichment based on defendant’s use of the illustrations outside of
the United States. (Def.’s Br. (dkt. #337).)
Starting with plaintiff’s position, the court agrees that plaintiff has pointed to
evidence in the record to support a finding that each of the 33 illustrations has distinct
and discernable economic value. Specifically, plaintiff’s damages expert, Daniel Mager,
testified that in his opinion “the market value of a use of Amy Sullivan’s illustrations” were
“[b]etween 3 and $6,000” for “each illustration.” (Pl.’s Br. (dkt. #338) 8 (quoting Trial
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Tr. (dkt. #277) 33).) On cross-examination, Mager rejected Flora’s attempt to value the
illustrations together and reiterated that his estimation of market value was “per
illustration.” (Id. at 9 (quoting Trial Tr. (dkt. #277) 34.) Moreover, in his closing
argument, defendant’s counsel stated, “[w]e don’t have an expert because we basically
agree with Mr. Mager. When I questioned him, I can find no point of real disagreement.”
(Id. (quoting Trial Tr. (dkt. #277) 70).) Plaintiff also testified at trial as to her view that
the reuse value for each of the infringed illustrations was $5,000. (Id. (quoting Trial Tr.
(dkt. #277) 43).) Finally, defendant also acknowledged both Mager’s and Sullivan’s
testimony at trial as to the economic value of each illustration, and it did not challenge it
in its brief in support of motions after verdict. (Id. at 7-8 (citing Def.’s Br. (dkt. #296)
14-15).)1
While defendant’s concession of Mager’s testimony about the economic value of
each illustration suggests that there is no dispute of fact as to this issue, the court readily
acknowledges that whether each illustration had distinct and discernable economic value
for purposes of determining whether they were each “works” was not an issue during the
first trial given the court’s motion ruling during the course of trial, which relied on the form
of the registration applications, rather than this economic value test. As such, defendant
should at least have the opportunity to demonstrate a disputed issue of fact as to plaintiff’s
position that each illustration has distinct and discernable economic value. However, the

The court also notes that trial exhibits included examples of Flora’s use of individual, isolated
illustrations in its infringing advertisements, which provides further support as to their separate
economic value.

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court completely disagrees with defendant’s suggestion that reopening discovery on this
issue is required.
Certainly, the Seventh Circuit found that “the record as it presently stands does not
allow us to resolve as a factual matter whether all or part of Sullivan’s 33 illustrations are
separate works with distinct and discernable value of part of two broader compilations,”
Sullivan, slip op. at *17, and the court will allow defendant the opportunity to make that
record, but defendant has already had plenty of opportunity to seek whatever discovery it
wished on this issue, as well as name experts and produce reports. With both expert and
discovery deadlines long since passed, defendant will need to make its record with what is
already available.
Moreover, neither party raised the issue of whether plaintiff’s illustrations
constituted separate works for purposes of determining a statutory damages award in their
summary judgment briefs or in motions in limine. Instead, plaintiff filed objections to
defendant’s proposed jury instruction for “registration as a single work,” arguing that
“individual works registered in groups under 17 U.S.C. § 408(c) and 37 C.F.R. § 202.3 are
each separately protected by copyright and are each entitled to separate statutory damages
awards.” (Pl.’s Objs. (dkt. #186) 12.) In its initial response on proposed jury instructions,
defendant did not even argue that this question turned on whether the individual
illustrations each had distinct and discernable economic value; rather, defendant relied on
the statutory scheme to argue that plaintiff registered two collections, entitling her to only
one statutory damages award per collection. (Def.’s Resp. (dkt. #210) 4.) Plaintiff then
filed a response reiterating her position that “collections of works registered pursuant to
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17 U.S.C. § 408(c)(1) and 37 C.F.R. § 202.3(b)(4)(i) are entitled to individual collection
protection related to each discrete work within the collection.” (Pl.’s Reply (dkt. #223)
1.) Up until this point, therefore, the parties’ briefing -- consistent with this court’s
ultimate determination -- solely concerned Sullivan’s applications and the statutory regime,
with again neither party addressing the economic value test now adopted by the Seventh
Circuit on appeal.
Indeed, during the final pretrial conference after hearing argument from defendant
on this issue, the court further invited defendant to file a supplemental brief on this issue.
(4/14/17 Order (dkt. #226).) In its supplemental brief, submitted on the first day of trial,
defendant pointed out for the first time that some circuits had adopted a “separate
economic value” test for determining the number of “works” for purposes of a statutory
damages award, and argued that “each of the illustrations in 7-Sources Illustration
Calculation Registration and the Flor-Essence Illustration Collection Registration do not
have separate economic value from the contributions of Designomotion and Flora to the
illustrations.” (Def.’s Suppl. Br. (dkt. #237) 5.) Only then did the court have reason to
consider this test, which it then rejected in a short decision issued the next day. (4/17/17
Order (dkt. #240).) Of course, the Seventh Circuit has now determined that this was in
error.
The court recounts this history to point out that all of this occurred at the start of
trial and well after the close of all discovery, including expert discovery. (Prelim. Pretrial
Conf. Order (dkt. #16) 3 (setting Sept. 7, 2016, as discovery cutoff date).) In other words,
the court made no determination -- and committed no error -- while discovery was open
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that would have limited its scope or otherwise justified either parties’ belief that this was
an issue they should not explore. As such, defendant had every opportunity to develop
evidence and offer expert testimony to rebut plaintiff’s claim that each of her illustrations
has distinct and discernable economic value or otherwise show that the economic value of
plaintiff’s illustrations lies in the combined assembly of those illustrations. On this record,
the court will not reopen discovery nor will it permit new experts to be named or disclosed
on this issue. The parties already had their chance.
Still, as mentioned above, defendant is entitled to respond to plaintiff’s evidence
submitted in her brief in response to this court’s text order requiring a plan on remand.
(See Pl.’s Br. (dkt. #338) 7-13.) Accordingly, the court will treat that portion of plaintiff’s
brief as a motion for summary judgment. Defendant’s response is due on or before January
21, 2020; and plaintiff’s reply is due January 31, 2020.

After reviewing the parties’

submissions, the court will determine whether there is a factual dispute requiring a trial or
whether the court can conclude that on the undisputed record a reasonable jury would
necessarily find the illustrations to be separate works. If so, the court will reenter the
original judgment. If not, the court will promptly schedule a retrial on statutory damages.
One final note: in its response, defendant argues that a retrial is also required on
the jury’s award of $350,000 in damages for unjust enrichment, based on use of the
copyrighted illustrations outside of the United States. This argument makes no sense. The
jury’s determination of a damages award for unjust enrichment of the illustrations in no
way concerned whether those illustrations should be viewed as separate works or as two
compilations. Instead, the jury simply focused on Flora’s use of the illustrations outside of
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the United States. As such, the Seventh Circuit’s limited remand does not appear to
implicate that portion of the award. Indeed, the Seventh Circuit’s instructions on remand
were limited to the court structuring proceedings “to enable the requisite findings pertinent
to statutory damages.” Sullivan, slip op. at *17 (emphasis added). There is nothing in that
decision that requires the court or a jury to revisit the unjust enrichment award.

ORDER
IT IS ORDERED that defendant Flora, Inc.’s response to plaintiff Amy Sullivan’s
motion for summary judgment on the issue of whether her 33 copyrighted illustrations
constitute separate works for determining a statutory damages award is due on or before
January 21, 2020; plaintiff’s reply is due January 31, 2020.
Entered this 20th day of December, 2019.
BY THE COURT:

/s/
__________________________________
WILLIAM M. CONLEY
District Judge

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