Zilyen, Inc. v. Rubber Mfrs. Ass'n

• Decision Date: 02 April 2013
• Docket Number: Civil Action No. 12–0433 (RBW).
• Citation: 935 F.Supp.2d 211
• Parties: ZILYEN, INC., Plaintiff, v. RUBBER MANUFACTURERS ASSOCIATION, Defendant.
• Court: U.S. District Court — District of Columbia

935 F.Supp.2d 211

ZILYEN, INC., Plaintiff,

v.RUBBER MANUFACTURERS ASSOCIATION, Defendant.

Civil Action No. 12–0433 (RBW).

United States District Court,

District of Columbia.

April 2, 2013.

Rachel L. Tripp Rodriguez, Richard S. Toikka, Farkas & Toikka, LLP, Washington, DC, for Plaintiff.

John J. Hathway, Whiteford, Taylor & Preston, LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

REGGIE B. WALTON, District Judge.

This case arises from a dispute concerning a contract between the parties for the production of Compact Discs (“CDs”) by the plaintiff, ZilYen, Inc., for the defendant, the Rubber Manufacturers Association (“the defendant” or “the Association”). First Amended Complaint (“Am. Compl.”) ¶ 6; Rubber Manufacturers Association's Counterclaim (“Countercl.”) ¶¶ 6–7. The plaintiff asserts claims against the defendant for breach of contract and for copyright infringement pursuant to 17 U.S.C. § 501 (2006). Am. Compl. ¶¶ 38–55. The defendant responds by asserting counterclaims for common law breach of contract, breach of warranty of merchantability, breach of warranty of fitness for particular purpose, and breach of contract pursuant to the District of Columbia Uniform Commercial Code, D.C. Code § 28:2–601 (2013). Countercl. ¶ ¶ 31–60. The parties' cross-motions to dismiss are now before the Court. See generally Further Motion to Dismiss Statutory Copyright Infringement Claim (“Def.'s Mot.”); Plaintiff ZilYen, Inc.'s Rule 12(b)(6) Motion to Dismiss Rubber Manufacturers Association's Counterclaims I–IV (“Pl.'s Mot.”). After carefully considering the parties' submissions,¹ the Court concludes that it must grant the defendant's motion to dismiss, dismiss sua sponte the remaining claims over which it has only supplemental jurisdiction, and deny the plaintiff's motion to dismiss as moot.

I. BACKGROUND

The following facts are taken from the plaintiff's amended complaint unless otherwise noted, and are accepted as true as required by Rule 12(b)(6) of the Federal Rules of Civil Procedure.² The parties, two corporations whose principal place of business is in the District of Columbia, Am. Compl. ¶ 1; Countercl. ¶ 1, entered into a contract under which the plaintiff “would design, produce, and deliver” 200,000 CDs to the defendant “for distribution among its members,” Am. Compl. ¶ 6. The CDs were to contain content supplied by the defendant. See id. ¶¶ 12–13. The contract provided that the defendant would tender a payment of fifty percent of the estimated cost of the CDs upon execution of the contract, with the remaining balance “due upon delivery.” Id. ¶¶ 9–10; Am. Compl. Exhibit (“Ex.”) A at 2.³ The agreement also included the following indemnification provision: “[The Association] recognizes that ZilYen cannot be held responsible for the accuracy of the information supplied to it by the [Association]—or the accuracy of the information included in material prepared by ZilYen and approved by the [Association].” Am. Compl. ¶ 12; Am. Compl. Ex. A at 2. Upon execution of the contract, the defendant paid the plaintiff fifty percent of the estimated cost of the CDs. See Am. Compl. Ex. A at 4 (acknowledging previous receipt of $53,450.00).

The plaintiff repeatedly consulted the defendant about the CDs' content and software during the production stage. Am. Compl. ¶¶ 14, 15, 20. On September 20, 2011, the plaintiff provided a final draft CD for the defendant to review before production of the copies. Id. ¶ 20. A representative of the defendant approved the final draft CD by email that same day. Id. ¶ 21. Upon receipt of the defendant's approval of the final draft CD, the plaintiff submitted a master copy of the approved CD to a printer to produce the copies. Id. ¶ 22.

On September 27, 2011, the plaintiff provided the defendant with an amended contract that increased the number of CDs to be produced and included additional packaging for the CDs, both modifications made at the defendant's request. Id. ¶¶ 7–8. The amended contract included final costs for the production and packaging of the CDs and indicated that a signature on behalf of the defendant was needed to approve “payment as COD.” Id. ¶ 11; Am. Compl. Ex. A at 4. The amended agreement also contained a new provision which had not been included in the original contract, which stated:

Every effort will be made on the part of ZilYen to proofread documents and test functional components prior to printing/production and distribution. Final responsibility for proofreading and approval of drafts, artwork and CD function are entirely the [Association's] responsibility. Prior to document printing and distribution, [the Association] shall sign all proofs/drafts.

Am. Compl. ¶ 13; Am. Compl. Ex. A at 4. On September 28, 2011, a representative of the defendant signed the amended contract. Am. Compl. ¶ 8; see Am. Compl. Ex. A at 5.

On September 28, the defendant received four hundred copies of the CD, with the remainder of the copies shipped to a delivery agent, pursuant to the defendant's request. Am. Compl. ¶¶ 26, 28. Upon receipt of the CDs, employees of the defendant “ran the CD software on their computers,” which “require[d] a copy to be made on the random access memory ... of the user's computer in order to properly run the application.” Id. ¶ 54. That same day, the defendant contacted the plaintiff “alleging that the CDs as delivered contained an error in the link to the Adobe Reader X software on the CD.” Id. ¶ 31. The CDs functioned properly in all other respects. Id. ¶ 32. The defendant did not pay the remaining balance of the contract amount upon delivery of the CDs, and the balance remains outstanding. Id. ¶¶ 29, 30, 37.

The plaintiff brought suit alleging breach of contract and copyright infringement. Id. ¶¶ 38–55. The plaintiff invokes this Court's jurisdiction over the copyright infringement claim pursuant to 28 U.S.C. § 1338, and over the breach of contract claim pursuant to 28 U.S.C. § 1367. Id. ¶ 3. The defendant has filed counterclaims for common law breach of contract, breach of warranty of merchantability, breach of warranty of fitness for particular purpose, and breach of contract under the District of Columbia Uniform Commercial Code. Countercl. ¶¶ 31–60.

The defendant asserts that the Court has jurisdiction over its counterclaims because its claims “arise out of the same transaction and occurrence that is the subject matter of Plaintiff's claims.” Id. ¶ 3. After filing suit, the plaintiff registered a copyright for the CD software. Am. Compl. ¶ 36.

The defendant has now filed a motion to dismiss the plaintiff's copyright infringement claim. Def.'s Mot. at 1. The plaintiff thereafter filed a motion to dismiss all of the defendant's counterclaims. Pl.'s Mot. at 1.

II. STANDARD OF REVIEW

A Rule 12(b)(6) motion to dismiss tests whether the complaint “state [s] a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss [under Rule 12(b)(6) ], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In making this assessment, a plaintiff receives the “benefit of all inferences that can be derived from the facts alleged,” Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C.Cir.2011) (internal quotation marks and citation omitted), and the Court “may consider only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint[,] and matters of which [the Court] may take judicial notice,” EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C.Cir.1997) (footnote omitted). But raising a “sheer possibility that a defendant has acted unlawfully” fails to satisfy the facial plausibility requirement. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Rather, a claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). While the Court must accept the plaintiff's factual allegations as true, any conclusory allegations are not entitled to an assumption of truth, and even those allegations pleaded with factual support need only be accepted to the extent that “they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. A defendant may raise an affirmative defense in a motion under Rule 12(b)(6) “when the facts that give rise to the defense are clear from the face of the complaint.” Smith–Haynie v. Dist. of Columbia, 155 F.3d 575, 578 (D.C.Cir.1998). And dismissal of a plaintiff's claims based on the assertion of an affirmative defense is proper under Rule 12(b)(6). See, e.g., Kursar v. Transp. Sec. Admin., 442 Fed.Appx. 565, 567 (D.C.Cir.2011) (upholding dismissal under Rule 12(b)(6) based on affirmative defense of statute of limitations because “the complaint on its face is conclusively time-barred”) (citation omitted); Burroughs Payment Sys., Inc. v. Symco Grp., Inc., No. C–11–06268, 2012 WL 1670163, at *6 (N.D.Cal. May 14, 2012) (finding that a court may consider the affirmative defense of § 117(a) on a motion to dismiss when the facts alleged in the complaint give rise to the affirmative defense); see also Summit Tech., Inc. v. High–Line Med. Instruments Co., 922 F.Supp. 299, 315–16 (C.D.Cal.1996) (dismissing copyright infringement claim on motion under Rule 12(b)(6) based on § 117(a) defense apparent from facts alleged in complaint).

III. ANALYSIS

A. Copyright infringement

In order to establish a prima facie claim of copyright infringement under 17 U.S.C. § 501, a plaintiff must demonstrate “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Feist Pubs., Inc. v....