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Scholastic, Inc. v. Bob Daemmrich and Bob Daemmrich Photography, Inc.

United States District Court, S.D. New York

June 8, 2017

SCHOLASTIC, INC., Plaintiff,
v.
BOB DAEMMRICH and BOB DAEMMRICH PHOTOGRAPHY, INC., Defendants.

          Beth I. Goldman Craig B. Whitney Edward H. Rosenthal Frankfurt, Kurnit, Klein & Selz PC New York, New York Counsel for Plaintiff.

          Christopher Seidman Maurice J. Harmon Harmon & Seidman LLC Grand Junction, Colorado Counsel for Defendants.

          MEMORANDUM & OPINION

          VERNON S. BRODERICK, United States District Judge.

         Before me is the motion of Defendants Bob Daemmrich and Bob Daemmrich Photography, Inc. (“Defendants”) under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) to dismiss Plaintiff's complaint for declaratory relief. (Doc. 26.) Because I find that Plaintiff's complaint is an improper anticipatory declaratory judgment action, Defendants' motion is GRANTED, and this case is dismissed without prejudice. Defendants' concurrent request for oral argument on their motion is denied as moot.

         I. Background[1]

         Scholastic is “the world's largest publisher and distributor of children's books and a leader in educational publications and children's media.” (Compl. ¶ 14.)[2] Scholastic regularly licenses stock images to include in its publications. (Id.) Bob Daemmrich, through his photo agency or through Stock Photo Houses, [3] supplies photographs to publishers for use in their publications. (Id. ¶ 15.)

         Scholastic has a relationship with each of the Stock Photo Houses, and has previously entered into comprehensive agreements that permit Scholastic to use the images represented by the Stock Photo Houses under specific terms and conditions, including the images at issue in this case. (Id. ¶ 16.) “In the regular course of its business dealings with the Stock Photo Houses, Scholastic provided the Stock Photo Houses with good faith, pre-publication estimates of the type of use that would be made of a particular Stock Photo House-represented photograph, including the estimated print run, ” and “[t]he amount invoiced by the Stock Photo House and paid by Scholastic would be based upon such estimates.” (Id. ¶ 17.) If Scholastic thereafter exceeds some aspect of its estimates, the Stock Photo House is entitled to seek additional payment from Scholastic on behalf of the photographer it represents. (Id. ¶ 18.) However, none of the Stock Photo Houses has ever made a demand for payments related to the images Daemmrich claims were infringed. (Id. ¶ 19.)

         On November 30, 2015, Daemmrich's counsel sent an email seeking an “audit” of Scholastic's use of 446 images licensed to Scholastic by the Stock Photo Houses. (Id. ¶ 20.) The email included five separate spreadsheets listing the uses for each Stock Photo House, (id. ¶ 20 & n.1), and attached a six-month tolling agreement. The email also requested that Scholastic “advise by December 10, 2015 if Scholastic will disclose its uses (print runs, image size, geographic distribution area, textbook language, electronic uses) of Daemmrich images, and sign the attached tolling agreement so that the parties may negotiate a settlement of Scholastic's infringements.” (Id. Ex. A.) The email noted that Daemmrich would fully cooperate with any reasonable requests by Scholastic for more information from Daemmrich to evaluate these claims. (Id.) Daemmrich also promised to provide registration certificate numbers and dates of registration for the Corbis-licensed images as soon as Daemmrich received that information from Corbis. (Id.) The email further stated that if Scholastic was “not interested in tolling and pre-filing negotiations to resolve Daemmrich's claims” that Scholastic should advise Daemmrich's counsel, who would “file a lawsuit forthwith.” (Id.) Finally, the email noted that if Daemmrich did not hear from Scholastic by December 10, 2015, counsel would assume that Scholastic was not interested in a pre-filing resolution and would “proceed with litigation in Daemmrich's home district, ” which Scholastic presumes in the Complaint is the Western District of Texas.[4] (Id. ¶¶ 21, 27, 29, Ex. A.)

         Daemmrich's email did not identify the basis for the assertion of copyright infringement or include the copyright registration details for the images allegedly infringed upon. (Compl. ¶ 22.) In fact, in “many instances” Daemmrich did not identify the Scholastic publication in which the images were allegedly used and/or the date of the publication. (Id.) According to Scholastic, it is “possible” that Daemmrich's copyright infringement claims include images used in publications Scholastic is currently selling or intends to sell in the future. (Id. ¶ 24.)

         As a result of the foregoing, Scholastic brought a claim for declaratory relief, including a judgment declaring that Daemmrich has no legal basis to “audit” Scholastic's use of its images and a judgment declaring non-infringement. (Id. at 8.) Scholastic further asserts that it has numerous defenses to Daemmrich's copyright infringement claims. (Id. ¶ 30.)

         II. Procedural History

         Plaintiff commenced this action by filing its Complaint for declaratory relief on December 7, 2015. (Doc. 1.) On January 6, 2016, Defendants submitted a letter requesting a pre-motion conference on their anticipated motion to dismiss, (Doc. 9), and on January 11, 2016, Plaintiff filed its letter in response, (Doc. 12). I set a pre-motion conference for February 25, 2016, (Doc. 13), but after receiving a joint request on February 24, 2016 to adjourn the conference to give the parties “the opportunity to pursue settlement discussions and possible mediation, ” (Doc. 20), I adjourned the pre-motion conference until April 14, 2016, (Doc. 21.)

         After receiving two letters from Defendants attaching supplemental authority in advance of the pre-motion conference, (Docs. 22, 23), I held the pre-motion conference on April 14, 2016, (see Dkt. Entry Apr. 14, 2016). In accordance with the briefing schedule set during that conference, Defendants filed their motion to dismiss on May 16, 2016, (Docs. 26-29), Plaintiff filed its opposition on June 14, 2016, (Docs. 30-32), and Defendants filed their reply on June 24, 2016, (Docs. 33-34). Defendants also filed five notices of supplemental authority, on July 25, 2016, October 21, 2016, December 5, 2016, April 24, 2017, and May 31, 2017. (Docs. 35-39.)

         III. Le ...


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