Perea v. Editorial Cultural, Inc.

• Decision Date: 13 September 2021
• Docket Number: 19-2129,Nos. 19-2119,s. 19-2119
• Citation: 13 F.4th 43
• Parties: Roberto Ramos PEREA, Plaintiff, Appellee/Cross Appellant, Beatriz Laguerre Saavedra; Beatriz Alexia Alvarez Laguerre; Rafael Enrique Alvarez Laguerre; Gabriel Ortiz Laguerre; Fabian Antonio Charron Alvarez; Carla Victoria Charron Alvarez, Plaintiffs, Appellees, v. EDITORIAL CULTURAL, INC., Defendant, Appellant/Cross Appellee.
• Court: U.S. Court of Appeals — First Circuit

13 F.4th 43

Roberto Ramos PEREA, Plaintiff, Appellee/Cross Appellant,Beatriz Laguerre Saavedra; Beatriz Alexia Alvarez Laguerre; Rafael Enrique Alvarez Laguerre; Gabriel Ortiz Laguerre; Fabian Antonio Charron Alvarez; Carla Victoria Charron Alvarez, Plaintiffs, Appellees,

v.EDITORIAL CULTURAL, INC., Defendant, Appellant/Cross Appellee.

Nos. 19-2119

19-2129

United States Court of Appeals, First Circuit.

September 13, 2021

Luz Yanix Vargas-Pérez, with whom Manuel Porro-Vizcarra was on brief, for appellant and cross-appellee Editorial Cultural, Inc.

José A. Hernández Mayoral, for appellee and cross-appellant Roberto Ramos Perea.

Patricia Rivera MacMurray, for appellees Beatriz Laguerre Saavedra, Beatriz Alexia Álvarez Laguerre, Rafael Enrique Álvarez Laguerre, Gabriel Ortiz Laguerre, Fabián Antonio Charrón Álvarez, and Carla Victoria Charrón Álvarez.

Before Thompson and Lipez, Circuit Judges, and Laplante,^* District Judge.

Thompson, Circuit Judge.

In these cross-appeals the issue we must resolve is whether a publishing company, Editorial Cultural, Inc. ("Editorial" or "Editorial Cultural"), is liable for copyright infringement after it printed and sold 20,000 copies of the theatrical adaptations of two novels -- La Llamarada and La Resaca -- ("the Adaptations") written by prominent Puerto Rico author Enrique Laguerre. But first, we must resolve the determinative question: which party owns the publishing rights to the Adaptations. At the outset of this case, Laguerre's heirs and Roberto Ramos Perea (the playwright who adapted each novel for the stage) joined forces to sue Editorial Cultural. What followed was litigation which took a twisted course towards final resolution before landing here. Early on, the district court eliminated the playwright as the copyright owner and, following a jury trial, entered a judgment against Editorial Cultural awarding damages to Laguerre's heirs. For reasons explained below, we vacate the Opinion and Order entered on September 30, 2017, and part of the amended judgment entered on September 19, 2019, and we direct the entry of an amended judgment in favor of Ramos¹ on his claim of copyright infringement.

I. Background

A. Facts

Enrique Laguerre published the novel La Llamarada in 1934 and the novel La Resaca in 1949. In September 2001, Laguerre and Producciones Teatro Caribeño, Inc. ("Caribeño") entered into a contract which expressly authorized Ramos (who was not a party to the contract) to create "an adaptation ... for theatrical presentation" of La Resaca and allowed Ramos to retain the moral rights² to this adaptation.³ The agreement authorized Caribeño to stage the theatrical adaptation in Puerto Rico at any time over the next four years. The agreement also specified that Laguerre retained the exclusive right to print the play scripts. Ramos completed the adaptation of La Resaca the same year. On April 29, 2003, Laguerre and Caribeño signed an addendum extending the term of the original contract until 2010. On this same day, Laguerre and Caribeño entered into a similar agreement authorizing Ramos to create an "adaptation ... for theatrical representation" of La Llamarada. Again, Ramos, a non-party, retained the moral rights, and Laguerre retained the printing rights, to the adaptation. Ramos completed the adaptation of La Llamarada the same year. He registered copyrights for the Adaptations in 2015.

Meanwhile, in January 2002, Laguerre entered into a contract with Editorial Cultural purportedly giving it the right to print "one edition" of "the dramatic adaptation of ... La Resaca" for seven consecutive years from the first printing date. Then on April 29, 2003, Laguerre, on the same day he contracted with Caribeño, entered into an agreement with Editorial Cultural which, again, purportedly gave Editorial the right to print up to 25,000 copies of La Llamarada in exchange for royalties. According to Editorial, both agreements were intended to provide it with the exclusive right to publish the Adaptations of La Llamarada and La Resaca (even though the agreement about printing La Llamarada did not specifically mention the theatrical adaptation).

Laguerre died in June 2005. Editorial Cultural published print versions of the Adaptations a few times, most recently -- and most relevant for this litigation -- in 2013, after receiving a purchase order from Puerto Rico's Department of Education.

B. Procedural History

In 2015, Ramos and Laguerre's daughter, Beatriz Laguerre Saavedra, initiated this suit against Editorial Cultural, their complaint evolving over a few iterations. The Corrected Second Amended Complaint was filed by Ramos and Laguerre's other heirs,⁴ who had been joined as plaintiffs. The plaintiffs alleged Ramos owned the copyrights to both Adaptations and claimed Editorial infringed the copyrights when it printed and sold the publications to the Puerto Rico Department of Education in 2013.⁵ In Editorial's answer, it admitted Ramos held the Adaptations' moral copyrights but "affirmatively alleg[ed]" Laguerre "reserved" the publication rights.

Both sides moved for partial summary judgment on the infringement claim. In its motion, Editorial Cultural repeated its assertion that, pursuant to the Laguerre-Caribeño contracts, Laguerre reserved the printing rights to the Adaptations to himself exclusively, and Ramos was therefore not entitled to damages for infringement.⁶ The plaintiffs claimed that Ramos owned the copyrights over the Adaptations, and thus was entitled to recover for infringement because 1) Laguerre authorized Ramos to create the Adaptations, therefore those creative works belonged to him, or, alternatively, 2) La Resaca and La Llamarada were in the public domain when the Adaptations were written (meaning they were available for public use) and as such Laguerre's authorization was not required.⁷

In granting Editorial's summary judgment motion on Ramos's infringement claim, the district court's ruling relied exclusively on the language of the Laguerre-Caribeño contracts and did not directly address the legal status of Laguerre's original novels at the time the contracts were signed.⁸ In so relying, the court concluded the Laguerre-Caribeño contracts unequivocally demonstrated Ramos was not the owner of the right to publish the theatrical adaptations he'd created because Laguerre had expressly retained this right in his contract with Caribeño:

If Ramos-Perea had any right over printouts of [the] adaptations, he would prevail in case of infringement. But the agreements authorizing him to prepare theatrical adaptations for stage performance grant him rights over the theatrical representations, not the right to authorize printouts of the adaptations, which corresponds to Laguerre. That being so, it was up to Laguerre, not Ramos-Perea, to authorize the sale of the theatrical adaptations.

Following summary judgment, some additional procedural wrangling ensued and eventually a third amended complaint was filed. In it, the plaintiffs added an allegation that in addition to Ramos not authorizing the 2013 printing of the Adaptations neither had Laguerre or the Laguerre heirs. And it repeated the allegation that Ramos owned the copyrights over the Adaptations.⁹ The third amended complaint also acknowledged the district court's summary judgment conclusion that, based on the Laguerre-Caribeño contracts, Laguerre had the sole authority to allow the publication and sale of the Adaptations but, nonetheless, the pleading continued to allege that Editorial Cultural had engaged in copyright infringement in 2013 pursuant to 17 U.S.C. § 106.

Although this third amended complaint did not explicitly substitute Laguerre's heirs for Ramos as the alleged owners of the Adaptations' copyrights, the heirs did contend they owned the copyrights to Laguerre's original and revised works because, as his testate heirs, they had ownership rights to these works. Based on the district court's summary judgment finding, Laguerre's heirs took up the mantle of the infringement claim and brought it to a jury to decide who owned the patrimonial right to the Adaptations and whether Editorial Cultural had infringed this right when it printed and sold the Adaptations to the Department of Education in 2013. After a three-day trial held in February 2019, a jury returned a verdict for the heirs and against Editorial on the infringement claim and awarded them damages in the amount of $266,350.¹⁰

A couple of days later, Editorial Cultural renewed its Rule 50 motion for judgment as a matter of law (originally argued at the close of the Laguerre heirs' case but held in abeyance) primarily asserting that Laguerre's heirs had failed to introduce sufficient evidence at trial to demonstrate that Laguerre transferred the right to publish the Adaptations to them. Convinced by Editorial's argument the district court granted Editorial's motion and vacated the jury verdict as to the heirs' copyright infringement claim. Down but not out, Laguerre's heirs filed a Rule 59(e) motion to alter or amend the judgment, which caused the court to rethink its ruling. Concluding Editorial's argument that Laguerre could have bequeathed the printing rights to someone other than the Laguerre heirs should have been raised at trial and thus was waived, the district court granted the plaintiffs' motion and reinstated the jury verdict.¹¹ These cross-appeals followed.

Before us, Editorial Cultural challenges the district court's order granting the Laguerre heirs' Rule 59(e) motion reinstating the infringement verdict. For his part, Ramos challenges the district court's order granting summary judgment to Editorial on his copyright infringement claim. The determinative question in these cross-appeals continues to be which party owned the publishing rights to the Adaptations when Editorial Cultural sold them to the Department of Education in 2013. To find the answer, we take a fresh look at the parties' cross-motions for partial summary judgment and the...