Navarro v. Procter & Gamble Co.

• Citation: 529 F.Supp.3d 742
• Decision Date: 29 March 2021
• Docket Number: Case No. 1:17-cv-406
• Parties: Annette NAVARRO, et al., Plaintiffs, v. PROCTER & GAMBLE COMPANY, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

529 F.Supp.3d 742

Annette NAVARRO, et al., Plaintiffs,

v.PROCTER & GAMBLE COMPANY, et al., Defendants.

Case No. 1:17-cv-406

United States District Court, S.D. Ohio, Western Division.

Signed March 29, 2021

John Charles Greiner, Graydon Head & Ritchey LLP, Cincinnati, OH, Charles E. Fowler, Jr., Pro Hac Vice, McKool Smith, P.C., Austin, TX, Chelsea Priest, Pro Hac Vice, Gary Cruciani, Pro Hac Vice, Patrick William Pijls, Pro Hac Vice, McKool Smith, P.C., Dallas, TX, Robert E. Allen, Pro Hac Vice, Glaser Weil, Los Angeles, CA, for Plaintiff Annette Navarro.

John Charles Greiner, Graydon Head & Ritchey LLP, Cincinnati, OH, Charles E. Fowler, Jr., Pro Hac Vice, McKool Smith, P.C., Austin, TX, Gary Cruciani, Pro Hac Vice, Patrick William Pijls, Pro Hac Vice, McKool Smith, P.C., Dallas, TX, Robert E. Allen, Pro Hac Vice, Glaser Weil, Los Angeles, CA, for Plaintiff Navarro Photography, LLC.

Andrew B. Barras, Department of Justice, Fraud Section, Criminal Division, Ft. Mitchell, KY, Brian Scott Sullivan, Jaci L. Overmann, Liane Harmon Rousseau, Karen Kreider Gaunt, Michael Joseph Wheeler, Robert Martin Zimmerman, Dinsmore & Shohl LLP, Cincinnati, OH, Benjamin C. Mizer, Pro Hac Vice, Charlotte H. Taylor, Pro Hac Vice, Jones Day, Washington, DC, for Defendant Procter & Gamble Company.

Andrew B. Barras, Department of Justice, Fraud Section, Criminal Division, Ft. Mitchell, KY, Brian Scott Sullivan, Jaci L. Overmann, Liane Harmon Rousseau, Karen Kreider Gaunt, Michael Joseph Wheeler, Dinsmore & Shohl LLP, Cincinnati, OH, for Defendant Walmart Inc.

OPINION AND ORDER

DOUGLAS R. COLE, UNITED STATES DISTRICT JUDGE

This matter is currently before the Court on Defendants’ Motion to Strike Jury Demand and Bifurcate Trial (Mot. to Strike, Doc. 248). In that motion (the "Motion"), Defendants P&G and Walmart ("Defendants") argue that Plaintiffs ("Navarro") are not entitled to a jury on the question of recovering the infringer's profits under 17 U.S.C. § 504(b). The basic argument is that (1) the statute does not itself create a right to a jury determination on this issue, and (2) because disgorgement of profits is an equitable, rather than a legal, remedy, the Seventh Amendment does not mandate a jury. Defendants then argue that, as Navarro is not entitled to a jury determination on disgorgement, the Court should bifurcate the trial, holding a bench trial on that issue down the road, if the jury finds Defendants liable for infringing Navarro's copyright. They base this request on a desire to narrow the issues, to avoid jury confusion, and to avoid what they perceive as the potential prejudice that may arise if the jury receives evidence as to the revenues P&G generated based on products whose packaging includes the allegedly infringing photographs. For the reasons set forth more fully below, the Court GRANTS the Motion to the extent that it seeks to strike the jury demand on the issue of recovering profits, but DENIES the Motion on the issue of bifurcating the trial. Instead, the Court will exercise its authority under Federal Rule of Civil Procedure 39(c)(1) to try the question of profits to an advisory jury.

BACKGROUND

As already reflected in the Court's previous Opinion and Order on Summary Judgment (Op. & Order on Summ. J., Doc. 247), this case presents a host of thorny and unsettled issues relating to copyright law. The current motion is no exception.

Navarro seeks relief in this copyright infringement action under 17 U.S.C. § 504(b). That statute provides two types of relief, "actual damages" and "any profits of the infringer that are attributable to the infringement":

The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.

Id. (emphasis added). Navarro seeks both types of relief here, most recently in her Fifth Amended Complaint. (See Doc. 133, #4108). She also "demand[s] a trial by jury in this case on all issues so triable." (Id. ). It is the intersection between those two requests that gives rise to the instant motion.

A. Defendants Move To Strike The Jury Demand On Disgorgement, And To Have The Trial Bifurcated.

In their motion, Defendants seek two forms of relief. First, they claim that Navarro does "not have a federal right to a jury trial on the issue of disgorgement of profits in this case." (Mot. to Strike, Doc. 248, #13742). Any such right, they say, must arise either from statute or from the Seventh Amendment. As to the former, Defendants note that § 504(b) does not mention juries, or otherwise indicate that Congress intended to create a jury right as to the profit-based remedy. The Seventh Amendment, on the other hand, has been interpreted to create a jury right only for "legal," as opposed to "equitable," remedies. And Defendants maintain that the profit-based disgorgement remedy under § 504(b) is inherently equitable in nature.

Second, assuming that the Court agrees with Defendants on the jury trial issue, Defendants also request that the Court bifurcate the trial. Doing so, they say, would "promote judicial economy," "prevent potential confusion to the jury," and "prevent any unfair prejudice to Defendants." (Id. , #13743). They claim that the profits-based remedy issue will "involve a host of evidence and expert testimony that is completely unrelated to issues of liability and actual damages." (Id. , #13751). This includes voluminous survey evidence that Defendants contend "could overwhelm a jury." (Id. ). As a result of the confusion surrounding all of this evidence, the jury may end up "consider[ing] improper evidence in its deliberations" on liability and actual damages. (Id. , #13753). That is particularly harmful, Defendants claim, in that the evidence as to P&G's profits could include "evidence respecting hundreds of millions of dollars in revenue from the products at issue," creating the risk of grave prejudice to the Defendants. (Id. ).

B. Navarro Opposed Defendants’ Motion, Arguing That There Is A Constitutional And Statutory Right To A Jury Trial.

Not surprisingly, Navarro argues that Defendants are wrong, both on the jury issue and the need for bifurcation. As to the former, Navarro claims that she has a right to a jury trial both by statute and under the Seventh Amendment. In terms of the statute, she notes that in various other copyright remedy provisions, such as statutory damages, see 17 U.S.C. § 504(c), Congress specifically included reference to "the court" as the entity responsible for deciding the matter. The lack of such language in § 504(b), she says, means that Congress assigned both actual damages and lost profits under that provision to the jury. She also notes that multiple Sixth Circuit decisions have reviewed, apparently approvingly, jury awards of lost profits under § 504(b). And on the Seventh Amendment front, Navarro points to language in Feltner v. Columbia Pictures Television, Inc. , 523 U.S. 340, 346, 118 S.Ct. 1279, 140 L.Ed.2d 438 (1998), a case on which both parties rely extensively, in which the Court noted that "awards of actual damages and profits [under § 504(b) ] generally are thought to constitute legal relief."

On the bifurcation issue, Navarro first argues that the issue of Defendants’ profits and infringement are not "wholly unrelated," as Defendants claim, because recovery of profits is expressly predicated on showing "some connection between the infringement and the profits." (Mot. to Strike Resp., Doc. 249, #13779). Second, Navarro claims that there is no reason to believe that the profits evidence will confuse the jury, nor that the evidence of the "hundreds of millions of dollars in revenue from the products at issue" will cause unfair prejudice to defendants. (Id. , #13781).

The matter is now fully briefed and before the Court.

LAW AND ANALYSIS

The parties largely agree on the basic framework for deciding whether there is a right to a jury on the question of the infringer's profits. First, the Court must consider whether a statute creates that right. If so, the analysis stops there. But, if not, the Court must separately consider whether the Seventh Amendment creates that right. Here, while the statutory question is admittedly a close call, the Court concludes, as further described below, that neither the statute at issue, 17 U.S.C. § 504(b), nor the Seventh Amendment, creates a jury right here. That being said, the Court declines to grant bifurcation on the profits issue, and instead elects to exercise its power under Fed. R. Civ. P. 39(c) to employ an advisory jury on the question.

A. There Is No Statutory Right To A Jury Trial

Congress has the authority to create a right to a jury trial for any cause of action, or any remedy, as to which it so chooses. Generally speaking, though, Congress exercises that power expressly. See, e.g. , 31 U.S.C. § 5323(g)(3)(B)(i) ("A party to an action brought under paragraph (2)(B) shall be entitled to a trial by jury."); 28 U.S.C. § 2402 ("any action against the United States under section 1346(a)(1) shall, at the request of either party to such action, be tried by the court with a jury"); 42 U.S.C. § 1981a(c) ("If a complaining party seeks compensatory or punitive damages under this section ... any party may demand a trial by jury"); 21 U.S.C. § 467b(a)(4) (similar). To be sure, in some circumstances, a statute can give rise to an implied right to a jury. See, e.g. , Lorillard v. Pons , 434 U.S. 575, 583, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978) (finding an implied right to a jury under the ADEA where that statute incorporated FLSA procedures). But the Supreme Court has clarified that for that to occur there must be a solid basis for inferring a "congressional intent to grant ... the right to a jury trial." See Feltner , 523 U.S. at 345, 118 S.Ct. 1279 (quoting Tull v. United States , 481 U.S. 412, 417 n.3, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987) ...