Oliver v. Meow Wolf, Inc.

• Decision Date: 12 September 2022
• Docket Number: Civ. 20-237 KK/SCY
• Parties: LAUREN ADELE OLIVER, Plaintiff, v. MEOW WOLF, INC., et al., Defendants.
• Court: U.S. District Court — District of New Mexico

LAUREN ADELE OLIVER, Plaintiff,
v.
MEOW WOLF, INC., et al., Defendants.

Civ. No. 20-237 KK/SCY

United States District Court, D. New Mexico

September 12, 2022

MEMORANDUM OPINION AND ORDER

KIRTAN KHALSA UNITED STATES MAGISTRATE JUDGE

THIS MATTER is before the Court on Defendants' Motion for Partial Summary Judgment Dismissing Plaintiff's Claim of Copyright Infringement for Displaying Ice Station Quellette at the House of Eternal Return (Doc. 278) (“Motion for Summary Judgment”), filed January 7, 2022. Also before the Court are the following procedural motions related to the Motion for Summary Judgment: (1) Defendants' Renewed Motion to File Under Seal Exhibit F to their Motion for Partial Summary Judgment (Doc. 292) (“Motion to Seal Exhibit F”), filed February 9, 2022; (2) Plaintiff's Motion for Leave to File Under Seal Pursuant to Protective Order (Doc. 294) (“Motion to Seal Summary Judgment Response”), filed February 11, 2022; (3) Plaintiff's Request for Surreply to Defendants' Reply in Support of their Motion for Summary Judgment (Doc. 352) (“Motion for Surreply”), filed April 13, 2022; (4) Defendants' Unopposed Motion to File Exhibit and Response Under Seal (Doc. 399) (“Motion to Seal Surreply Response”), filed May 6, 2022; (5) Plaintiff's Motion for Leave to File Surreply for the Limited Purpose of Supplementing the Record on Pending Motions for Summary Judgment with Recently-Discovered Evidence (Doc. 486) (“Motion to Supplement”), filed August 11, 2022; and, (6) Plaintiff's Unopposed Motion to File Under Seal (Doc. 484) (“Motion to Seal Supplement”), filed August 10, 2022.

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Having reviewed the parties' submissions, the record, and the relevant law, and being otherwise sufficiently advised, the Court FINDS that: (1) Defendants' Motion to Seal Exhibit F should be GRANTED; (2) Plaintiff's Motion to Seal Summary Judgment Response should be GRANTED IN PART and DENIED IN PART; (3) Plaintiff's Motion for Surreply should be GRANTED; (4) Defendants' Motion to Seal Surreply Response should be GRANTED IN PART and DENIED IN PART; (5) Plaintiff's Motion to Supplement should be GRANTED; (6) Plaintiff's Motion to Seal Supplement should be GRANTED IN PART and DENIED IN PART; and, (7) Defendants' Motion for Summary Judgment should be GRANTED.

I. Factual Allegations and Procedural History

In her amended complaint, Plaintiff Lauren Oliver alleges the following. From 2006 to 2015, Plaintiff created and exhibited versions of “the Space Owl,” a character at the center of a project entitled “Ice Station Quellette” (“ISQ”). (Doc. 148 at 3-4.) Plaintiff holds registered copyrights relating to the Space Owl and ISQ. (Id. at 11.) Defendant Meow Wolf, Inc. (“MWI”) is a Delaware corporation with a principal place of business in New Mexico. (Id. at 2.) Defendant Vince Kadlubek was at relevant times a director and/or officer of Defendant MWI. (Id.) Before Defendant MWI's incorporation, “Meow Wolf”^[1] was an “artists' collective” that acted through Defendant Kadlubek and other representatives. (See id. at 3-6.)

In early 2015, “Meow Wolf” representatives asked Plaintiff to install ISQ at a permanent exhibition in Santa Fe, New Mexico, called the “House of Eternal Return” (“HoER”). (Id. at 4.) “In exchange for [Plaintiff's] timely installation of ISQ at [the] HoER without initial

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compensation,” these representatives, including Defendant Kadlubek, “offered [Plaintiff] membership in the Meow Wolf artists' collective and a right to receive a share of Meow Wolf's revenue.” (Id. at 5, 19.) Accepting this offer, Plaintiff designed and installed ISQ and the Space Owl at the HoER. (Id. at 5-6.) The HoER opened in March 2016 and was highly successful. (Id. at 6, 11, 12.) “Meow Wolf” grew into a multi-million-dollar enterprise, and the Space Owl became an iconic element of the HoER. (Id.)

In 2017 or 2018, Defendants began to call artists' compensation a bonus program rather than a revenue share. (Id. at 6.) Also, in 2018, Plaintiff discovered that Defendants were violating her intellectual property (“IP”) rights by, e.g., including images of the Space Owl in books sold in the HoER gift shop. (Id. at 6-7, 12-13.) Plaintiff tried to negotiate a formal agreement with Defendants without success, and in June 2018, she asked “Meow Wolf” to stop using the Space Owl until an agreement was reached. (Id.) Nevertheless, in December 2018, Plaintiff learned that “Meow Wolf” had used the Space Owl in a documentary. (Id. at 7.)

At a meeting in June 2019, Defendant Kadlubek demanded that Plaintiff either sell Defendants all rights to the Space Owl “for a nominal sum” or remove ISQ from the HoER without additional compensation. (Id. at 8, 14.) “Because of the way it is constructed, removal of the installation would require its destruction.” (Id. at 10.) Although a significant portion of “Meow Wolf's” value is due to ISQ and the Space Owl, to date, Plaintiff has received only $2,000 from “Meow Wolf” for her work. (Id. at 8, 15.)

Plaintiff filed her original complaint against Defendants on March 16, 2020. (Doc. 1 at 12.) In it, Plaintiff asserted claims for copyright infringement, violation of the Visual Artists Rights Act, breach of contract and of the implied covenant of good faith and fair dealing, unjust enrichment, conversion, intentional and negligent misrepresentation, and constructive trust. (Id. at 15-21.)

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Based on these claims, she sought injunctive relief, compensatory, punitive, and statutory damages, equitable relief including disgorgement of unjust enrichment and conveyance of an ownership interest in the Meow Wolf artists' collective, and attorney's fees and costs. (Id. at 2224.) On Defendants' motion, the Court dismissed Plaintiff's conversion claims on November 25, 2020. (Doc. 59.) On June 1, 2021, Plaintiff amended her complaint to add promissory estoppel claims against Defendants. (Doc. 148.)

On July 6, 2021, Defendant MWI filed a declaratory judgment counterclaim admitting that there was a contract between the parties but asserting different terms. (Doc. 183.) In support, Defendant MWI alleges the following. “Meow Wolf began in 2008 as a group of artists working together to build art shows, host music shows, and be a social group.” (Id. at 18.) Plaintiff participated in the group in 2008, but not between 2009 and 2015. (Id.) After a financially successful show in 2011, “the first Meow Wolf company was formed.” (Id. at 18-19.) In 2014, “Meow Wolf” began making plans to open the HoER as a permanent exhibition. (Id. at 19.)

“Meow Wolf” purchased the materials for artists' installations at the HoER and in some cases provided “small up-front stipends.” (Id.) It also “created a deferred compensation program initially informally referred to as the artist revenue sharing program, and formally named [the] Artist Bonus Program (ABP).” (Id.) The ABP “earmarked $1 million in future profits” to pay artists who installed pieces at the HoER. (Id.)

The 113 artists in the program were each given an individual cap on their share of the ABP based on the scope and amount of work they were to build. In each year that HoER rev[e]nue passed a set cost number, 11% of profits would flow into the ABP to pay artists.. Once an artist's cap was reached that artist would drop out of the ABP pool and the remaining artists would be paid until each artist had received her set share stipend.

(Id. at 19-20.) “Meow Wolf told artists that ... after [the] HoER was built ... an artist's cap would be adjusted if he or she underperformed or overperformed.” (Id. at 20.)

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Having solicited and accepted Plaintiff's proposal to install ISQ at the HoER, “Meow Wolf, through its CEO [Defendant] Kadlubek,” sent Plaintiff an e-mail in April 2015 proposing to pay Plaintiff $1,000 as an “up-front stipend” and $10,000 as a “revenue share stipend,” in addition to buying the materials for Plaintiff's installation. (Id. at 21.) Defendant Kadlubek also indicated that Plaintiff would own the IP rights in ISQ but “Meow Wolf would own ISQ as tangible property.” (Id.) Plaintiff responded, “Hey. Awesome. Good luck tonight.” (Id.) She did not object to the terms of this e-mail or ask to change them during the time she spent installing ISQ at the HoER. (Id. at 21-22.)

Another artist, Cary Cluett, helped Plaintiff to install ISQ without charge. (Id. at 22.) Plaintiff directed that her $1,000 personal stipend be paid to Mr. Cluett; and, “[i]n recognition of [Mr.] Cluett's substantial contribution to ISQ as well as other HoER areas, Meow Wolf gave him a $10,000 participation stipend in [the] ABP and adjusted [Plaintiff's] participation stipend down to $7,000.” (Id. at 22-23.) In March 2017, “Meow Wolf” paid Plaintiff $2,000 under the ABP. (Id. at 23.) Between 2016 and 2019, she also “cashed more than $20,000” in checks from “Meow Wolf” for the sale of consigned items in the HoER's gift shop. (Id.)

In 2018, Defendant MWI tried to pay Plaintiff an additional $2,750 under the ABP but Plaintiff asked for space to deal with family issues. (Id. at 24.) In 2019, “Meow Wolf” tried to pay Plaintiff “her entire remaining balance of $5,000.” (Id.) It told her that to receive this check she would have to execute an IP assignment; however, she knew “Meow Wolf” was not trying to buy her IP rights for $5,000 because a month earlier it had offered to buy these rights for $35,000. (Id.) Based on these allegations, Defendant MWI seeks a declaration that Defendant “MWI and Plaintiff entered into a contract whereby Plaintiff was entitled to $10,000[,]” rather than “an unlimited

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share in [Defendant] MWI's revenue” and/or “an ownership interest in [Defendant] MWI.” (Id. at 26-27.)

Defendants filed their Motion for Summary Judgment on January 7, 2022. (Docs. 277, 278.) In it, Defendants seek summary judgment on Plaintiff's copyright infringement claims based on Defendant MWI's display of ISQ at the HoER. (Id.) Plaintiff responded in opposition to the...