Jose Luis Pelaez, Inc. v. Mcgraw-Hill Global Educ. Holdings LLC

• Decision Date: 02 August 2019
• Docket Number: 16-cv-5393 (KMW)
• Citation: 399 F.Supp.3d 120
• Parties: JOSE LUIS PELAEZ, INC. and Jose Pelaez, Plaintiffs, v. MCGRAW-HILL GLOBAL EDUCATION HOLDINGS LLC and McGraw-Hill School Education Holdings LLC, Defendants.
• Court: U.S. District Court — Southern District of New York

399 F.Supp.3d 120

JOSE LUIS PELAEZ, INC. and Jose Pelaez, Plaintiffs,

v.MCGRAW-HILL GLOBAL EDUCATION HOLDINGS LLC and McGraw-Hill School Education Holdings LLC, Defendants.

16-cv-5393 (KMW)

United States District Court, S.D. New York.

Signed August 2, 2019

Maurice James Harmon Pro Hac Vice Harmon & Seidman LLC (PA) New Hope, PA Amanda Leigh Bruss Pro Hac Vice Harmon & Seidman, LLC Denver, CO Christopher Seidman Harmon & Seidman LLC (CO) Grand Junction, CO for Plaintiffs.

Michael Beylkin, Fox Rothschild LLP, Denver, CO, Cali Roth Spota, Fox Rothschild LLP, Lawrenceville, NJ, Shireen Nasir, Fox Rothschild, LLP (NYC), New York, NY, Christopher Perry Beall, Westminster, CO, for Defendants.

OPINION & ORDER

KIMBA M. WOOD, United States District Judge:

Plaintiffs Jose Luis Pelaez, Inc. and Jose Pelaez (collectively, "Pelaez") bring this action for copyright infringement against Defendants McGraw-Hill Global Education Holdings LLC and McGraw-Hill School Education Holdings LLC (collectively, "McGraw-Hill"). McGraw-Hill moves for summary judgment on all of Pelaez's claims. Pelaez moves for summary judgment on 129 of his 573 infringement claims and requests a ruling that the infringement he alleges was willful. For the reasons below, both parties' motions are GRANTED in part and DENIED in part.

BACKGROUND

I. Factual Background

The following facts are not genuinely disputed unless otherwise noted.

Jose Pelaez is a commercial photographer and president and sole owner of Jose Luis Pelaez Inc., a corporation organized under New York law. (Pls.' Resp. to Defs.' Statement of Undisputed Material Facts ("Pelaez 56.1 Response"), ECF No. 155, ¶ 3.) McGraw-Hill is a publisher of textbooks and educational products. (Id. ¶ 1.)

Beginning in 1990, Pelaez entered into representation agreements with non-parties Corbis and its predecessor-in-interest The Stock Market (collectively, "Corbis"), authorizing Corbis to sub-license Pelaez's photographs on his behalf. (Defs.' Resp. to Am. Statement of Undisputed Material Facts ("McGraw-Hill's 56.1 Resp.") ¶ 8, ECF No. 132.) The agreements authorized Corbis to issue limited licenses for the use of Pelaez's images by third parties in exchange for reasonable license fees. (Id. ¶ 9.)

During the time period relevant to this suit, Corbis and McGraw-Hill entered into a series of preferred pricing agreements (collectively, the "PPAs"), including:

• An agreement entitled "Textbook rates Glencoe valid through 5-1-2001," effective as of June 29, 2000 (the "2000 PPA");

• An agreement entitled "Special Volume-Based Pricing Agreement," effective as of January 1, 2003 (the "2003 PPA");

• An agreement entitled "Special Volume-Based Pricing Agreement," effective as of May 1, 2006 (the "2006 PPA");

• An agreement entitled "Preferred Pricing Agreement" effective as of February 27, 2009 (the "2009 PPA"); and

• An agreement entitled "Preferred Pricing Agreement," effective as of April 1, 2014 (the "2014 PPA").

(Pelaez's Counterresp. to Defs.' Counterstatement of Additional Material Facts ("Pelaez 56.1 Counterresp.") ¶¶ 69, 116, ECF No. 143.) The PPAs set varying fees for different tiers of anticipated use, typically based on ranges of estimated print runs. (Id. ¶ 113.)

Initially, Corbis provided Pelaez's photographs to McGraw-Hill in collections of slide transparencies or online image collections from which McGraw-Hill could review and select photographs. (Id. ¶¶ 71–72.) Beginning by at least 2004, however, McGraw-Hill had access to high-resolution versions of Pelaez's photographs suitable for printing. (Id. )

In the event McGraw-Hill decided to use a photograph from Corbis's collection in one of its textbooks, McGraw-Hill would request an invoice from Corbis. (Id. ) The request provided Corbis with information regarding the anticipated print run, geographic distribution, language(s), and format(s) of the textbook that was expected to contain the selected photograph. (Id. )

The invoices issued by Corbis generally set forth the "rights" granted to McGraw-Hill (e.g. , "[o]ne time non-exclusive, North America, English") the "usage" (e.g. , "Books: Text, Trade Reference"), the "distribution quantity" (e.g. , 45,000), the license's start date, and the license's expiration date. (See Kerr Decl., Ex. 65, ECF No. 123.) Generally, McGraw-Hill requested an invoice from Corbis prior to publication of the textbook expected to contain the photograph. (Pelaez 56.1 Counterresp. ¶ 81.) However, if McGraw-Hill did not request an invoice prior to publication, Corbis would later issue a "back-dated" invoice acknowledging rights beginning prior to the invoice date. (Id. ¶ 82.)

Pelaez contends that, from 1992 through 2017, McGraw-Hill repeatedly exceeded the limitations contained on the invoices issued by Corbis, thereby infringing his copyrights. (Id. ¶ 10.) The photographs on which Pelaez's claims are based are included in Exhibits 1, 2 and 3 to the Third Amended Complaint ("TAC"). (ECF No. 117.) With respect to the photographs contained in Exhibits 1 and 2 to the TAC, Pelaez alleges that McGraw-Hill exceeded the limitations on the licenses it was granted 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) publishing the photographs beyond the specified time limits. (Id. ¶ 15.) With respect to the photographs in Exhibit 3, Pelaez alleges that McGraw-Hill never obtained a license to use those photographs, and thus that each use of those photographs by McGraw-Hill constituted copyright infringement. (Id. ¶ 16.)

The core of the parties' disagreement is what significance should be ascribed to the invoices exchanged between Corbis and McGraw-Hill, the PPAs, and the course of conduct between McGraw-Hill and Corbis. According to Pelaez, McGraw-Hill's authorization to use Pelaez's photographs was limited by the terms included in the invoices. According to McGraw-Hill, the invoices did not control the scope of its license to use a given photograph; rather, they at most provided estimates of McGraw-Hill's anticipated use of a photograph and the applicable billing level for such use.

II. Procedural Background

Pelaez filed the initial complaint in this suit on July 6, 2016. (ECF No. 1.) He filed an amended complaint on September 22, 2016 and subsequently filed a second amended complaint on February 3, 2017. (ECF Nos. 22, 35.)

On June 23, 2017, both parties moved for partial summary judgment. (ECF Nos. 57, 64.)

On February 26, 2018, Pelaez was granted leave to file a further amended complaint. (ECF No. 111.)

On March 8, 2018, Pelaez filed the TAC. (ECF No. 117.)

On March 12, 2018, Pelaez moved for partial summary judgment on 129 of his copyright infringement claims alleged in the TAC. (ECF No. 120.)

On March 14, 2018, McGraw-Hill answered the TAC. (ECF No. 129.)

On March 26, 2018, McGraw-Hill filed its memorandum in opposition to Pelaez's motion. (Mem. Law Opp'n Pls.' Mot. Partial Summ. J. ("McGraw-Hill Opp'n"), ECF No. 131.) On April 2, 2018, Pelaez filed his reply. (Pls.' Reply Mem. Supp. Mot. Summ. J. ("Pelaez Reply"), ECF No. 142.)

On April 10, 2018, McGraw-Hill moved for summary judgment on all of Pelaez's claims and filed a memorandum in support of its motion. (Mem. Law. Supp. Defs.' Mot. Summ. J. ("McGraw-Hill Mem."), ECF No. 149.) On April 24, 2018, Pelaez filed his memorandum in opposition to McGraw-Hill's motion. (Mem. Law Opp'n Defs.' Mot. Summ. J. ("Pelaez Opp'n"), ECF No. 154.) On May 1, 2018, McGraw-Hill filed its reply. (Reply in Further Supp. Defs.' Mot. Summ. J. ("McGraw-Hill Reply"), ECF No. 157.)

Pelaez subsequently filed five letters providing supplemental authority in support of his motion for partial summary judgment and in opposition to McGraw-Hill's motion for summary judgment. (ECF Nos. 175–78; ECF Nos. 187–88.) McGraw-Hill filed one letter providing supplemental authority in support of its motion for summary judgment and in opposition to Pelaez's motion for partial summary judgment. (ECF No. 179.)

LEGAL STANDARDS

"Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ " Viacom Int'l, Inc. v. YouTube, Inc. , 676 F.3d 19, 30 (2d Cir. 2012) (quoting Fed. R. Civ. P. 56(a) ). "When both sides have moved for summary judgment, ‘each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration.’ " Lyons v. Lancer Ins. Co. , 681 F.3d 50, 57 (2d Cir. 2012) (quoting Law Debenture Tr. Co. of N.Y. v. Maverick Tube Corp. , 595 F.3d 458, 468 (2d Cir. 2010) ).

"The moving party bears the initial burden of showing that there is no genuine dispute as to a material fact." Jaffer v. Hirji , 887 F.3d 111, 114 (2d Cir. 2018) (quoting CILP Assocs., L.P. v. PriceWaterhouse Coopers LLP , 735 F.3d 114, 123 (2d Cir. 2013) ). "But where ‘the burden of proof at trial would fall on the nonmoving party,’ the moving party can shift the initial burden by ‘point[ing] to a lack of evidence to go to the trier of fact on an essential element of the nonmovant's claim.’ " Id. (alteration in Jaffer ) (quoting Simsbury-Avon Pres. Soc'y, LLC v. Metacon Gun Club, Inc. , 575 F.3d 199, 204 (2d Cir. 2009) ). It follows that, where a plaintiff's motion for summary judgment would be meritorious absent the assertion of an affirmative defense, in order to avoid summary judgment, the defendant "must adduce evidence which, viewed in the light most favorable to and drawing all reasonable inferences in favor of [it], would permit judgment for [it] on the basis of that defense." Frankel v. ICD Holdings...