Bowery v. Best Little Sites
| Decision Date | 09 June 2022 |
| Docket Number | 2:21-cv-00567-DBB |
| Parties | GREAT BOWERY, d/b/a TRUNK ARCHIVE, Plaintiff, v. BEST LITTLE SITES, d/b/a www.comicbookmovie.com; NATHAN BEST; MARK CASSIDY; JOSHUA WILDING; and DOES 1 through 10 Defendants. |
| Court | U.S. District Court — District of Utah |
GREAT BOWERY, d/b/a TRUNK ARCHIVE, Plaintiff,
v.
BEST LITTLE SITES, d/b/a www.comicbookmovie.com; NATHAN BEST; MARK CASSIDY; JOSHUA WILDING; and DOES 1 through 10 Defendants.
No. 2:21-cv-00567-DBB
United States District Court, D. Utah
June 9, 2022
MEMORANDUM DECISION AND ORDER DENYING [16] DEFENDANTS' MOTION TO DISMISS COMPLAINT OR SUSPEND CASE
David Barlow United States District Judge
Great Bowery (doing business as Trunk Archive) brought a suit against Best Little Sites (doing business as comicbookmovie.com, or “CBM”), Nathan Best, Mark Cassidy, Joshua Wilding, and Does 1 through 10 for copyright infringement.[1] Defendants CBM and Best moved to dismiss on the basis that Trunk Archive's claims against CBM were barred by the doctrine of claim-splitting and that Trunk Archive failed to state a claim against Best.[2] Alternatively, CBM and Best requested that the court stay the current case pending the resolution of a related case.[3]Because Trunk Archive's claims are not barred and the complaint states a claim against Best, the Motion to Dismiss or Stay the Case is DENIED.
BACKGROUND
On May 9, 2019, CBM filed suit against Trunk Archive for a declaratory judgment that it had not infringed on Trunk Archive's copyright when allegedly copyrighted photos were posted on CBM's website (Trunk Archive I).[4] In response, Trunk Archive filed a counterclaim for copyright infringement in which it alleged that CBM had published an article on May 24, 2017 that included eight copyrighted photographs from an upcoming Star Wars movie.[5] After no dispositive motions were filed, Trunk Archive I was set for trial on December 2, 2022.[6]
On September 27, 2021, Trunk Archive filed the current suit against CBM, Nathan Best, Mark Cassidy, and Joshua Wilding for copyright infringement (Trunk Archive II).[7] Trunk Archive alleged that the Defendants had published 15 articles that collectively included 18 copyrighted photographs from an upcoming Star Wars movie.[8] Although the articles were all distinct from the article at issue in Trunk Archive I, three of the photographs were the same in both actions.[9] On May 5, 2022, this case was transferred to this court because “the factual and legal underpinnings” of this case are similar to those of Trunk Archive I.[10]
Now, CBM and Best move to dismiss the claims against them in Trunk Archive II.[11] They argue that the claims against CBM are barred by the doctrine of claim-splitting and that the
complaint fails to state a claim against Best.[12] Alternatively, they argue that the case should be stayed pending resolution of Trunk Archive I.[13]
STANDARD
Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when the complaint, standing alone, is legally insufficient to state a claim on which relief may be granted.[14] Each cause of action must be supported by sufficient, well-pleaded facts to be plausible on its face.[15] In reviewing a complaint on a Rule 12(b)(6) motion to dismiss, the court accepts all well-pleaded (“that is plausible, non-conclusory, and non-speculative”)[16] facts as true and draws all reasonable inferences from the pleadings in favor of the nonmoving party.[17] But the court disregards “assertions devoid of factual allegations” that are nothing more than “conclusory” or “formulaic recitation[s]” of the law.[18]
DISCUSSION
CBM and Best make three arguments in their motion to dismiss: first, that the court should dismiss the claims against them because the claims violate the doctrine of claim-splitting;[19] second, that the claims against Best should be dismissed for failure to state a claim;[20]and third, that, if the court permits the case to go forward, it should postpone the case until the resolution of Trunk Archive I.[21] These arguments are addressed in turn.
I. Trunk Archive's claims against CBM are not barred by the doctrine of claimsplitting.
“The rule against claim-splitting requires a plaintiff to assert all of its causes of action arising from a common set of facts in one lawsuit.”[22] This doctrine is predicated on the district court's “discretion to control their dockets by dismissing duplicative cases” and is justified because if parties spread claims around in multiple lawsuits, “parties waste ‘scarce judicial resources' and undermine ‘the efficient and comprehensive disposition of cases.'”[23]
The Tenth Circuit directs the court to analyze claim-splitting as an aspect of res judicata, or claim preclusion.[24] The test for whether a claim is barred by the doctrine of claim-splitting is “not whether there is finality of judgment, but whether the first suit, assuming it were final, would preclude the second suit.”[25] “Under Tenth Circuit law, claim preclusion applies when three elements exist: (1) a final judgment on the merits in an earlier action; (2) identity of parties or privies in the two suits; and (3) identity of the cause of action in both suits.”[26]
The parties do not dispute that Trunk Archive and CBM are identical to the parties in Trunk Archive I.[27] As such, the court will consider whether the causes of action in this case are identical to the causes of action in Trunk Archive I.
To determine what constitutes an identical “cause of action” for preclusion purposes, the Tenth Circuit applies the “transactional approach” from the Second Restatement of Judgments.[28]Under this approach, “a cause of action includes all claims or legal theories of recovery that arise from the same transaction.”[29] “What constitutes the same transaction or series of transactions is ‘to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.'”[30]
Generally, a claim should not be precluded merely because it is based on facts that arose prior to the entry of judgment in a previous action.[31] As the Tenth Circuit explains in Hatch v. Boulder Town Council:
The filing of the plaintiff's complaint frames the scope of litigation, establishing a transactional nexus into which facts and claims are fitted or excluded for purposes of claim preclusion. “New” claims, arising after the complaint has been filed, but before judgment, may be excluded from this transactional nexus, and thus be litigated in a subsequent action.[32]
In Hatch, the court quotes the Second Circuit for the proposition that:
The res judicata doctrine does not apply to new rights acquired during the action which might have been, but which were not litigated. Although a plaintiff may seek leave to file a supplemental pleading to assert a new claim based on actionable conduct which the defendant engaged in after a lawsuit is commenced, he is not required to do so.[33]
The Hatch court clarified:
This does not mean, however, that a plaintiff can avoid supplementing his complaint with facts that are part of the same transaction asserted in the complaint, in the hope of...
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