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Meltzer v. Stier

United States District Court, S.D. New York

November 2, 2017

ERICA MELTZER, Plaintiff,
v.
DEBBIE STIER and THE PERFECT SCORE PROJECT, LLC, Defendants.

          OPINION AND ORDER

          KATHERINE POLK FAILLA UNITED STATES DISTRICT JUDGE

         The events underlying this litigation prove the adage that friends and business do not mix. Erstwhile friends Erica Meltzer and Debbie Stier both work in the Scholastic Aptitude Test (“SAT”) tutoring business and both publish SAT preparation materials. In 2015, Plaintiff Meltzer commenced this action against Defendant Stier and her single-member limited liability company, The Perfect Score Project, LLC (collectively, “Defendants”), alleging copyright infringement.[1] It is not the merits of Plaintiff's claims that bring the parties before the Court, but rather a dispute concerning their purported resolution. Following three settlement conferences before Magistrate Judge James C. Francis IV, the parties discussed and revised a proposed settlement agreement; Defendant refused to enter the agreement, and thus began a protracted fight over the whether this lawsuit had nonetheless settled. Now before the Court is Plaintiff's motion to enforce the purported settlement agreement. For the reasons that follow, Plaintiff's motion is denied.

         BACKGROUND[2]

         Plaintiff commenced this action on August 6, 2015. After reciting her copyright in a book entitled The Critical Reader: The Complete Guide to SAT Critical Reading, Plaintiff alleged that, beginning in January 2015, Defendants published a tutorial on their website under the title “28-Day Critical Reading Intensive” that infringed on Plaintiff's copyright. (Compl. ¶¶ 2, 8). In particular, Plaintiff alleged that this section of Defendants' website “infringes on Plaintiff's copyright in each version of The Critical Reader” insofar as it is “copied from The Critical Reader in substance, style, and organization.” (Id. at ¶¶ 10, 23). To compensate Plaintiff for the resulting damage and “irreparable harm, ” Plaintiff sought an order enjoining any further infringement by Defendants and directing Defendants to remove the offending material from their website and deliver to the Court all infringing material for destruction or other disposition. (Id. at ¶¶ 25-26(a)-(c)). Plaintiff also sought monetary damages “in excess of $1, 000, 000” and attorneys' fees and costs. (Id. at ¶ 26(d)-(e)).

         In the early stages of this litigation, Defendants were represented by counsel, who proposed filing a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). (See Dkt. #14). Shortly thereafter, counsel moved to withdraw, citing Defendants' inability to pay; the Court granted the motion in December 2015, and allowed Defendant Stier, but not her corporation, to proceed pro se. (Dkt. #20-21). By letter dated January 8, 2016, the parties jointly informed the Court that they wished to pursue a settlement conference with Magistrate Judge Francis. (Dkt. #22). The Court referred this case to Magistrate Judge Francis for a settlement conference but noted that because the corporate defendant did not have counsel, it would not participate. (Dkt. #23). And so began the series of events giving rise to the present dispute.

         On February 24, 2016, Magistrate Judge Francis held a settlement conference with the parties. (February 24, 2016 Minute Entry). Though there is no entry on the docket reflecting a second settlement conference, the parties agree that Magistrate Judge Francis held a second conference on March 21, 2016. (See Pl. Aff. ¶¶ 15, 18; id. at Ex. K). On March 22, 2016, the Court ordered the parties to submit a joint letter by March 28, 2016, regarding the status of settlement discussions. (Dkt. #24). On March 24, 2016, Magistrate Judge Francis held a telephonic conference with the parties. (March 24, 2016 Minute Entry). Following the March 24, 2016 telephonic conference, a law clerk for Magistrate Judge Francis circulated a Stipulation and Order of Settlement (the “Stipulation”) to the parties that had been “revised as discussed in your call with Judge Francis this morning.” (Pl. Aff., Ex. A). She asked that the parties “review it and contact Chambers … to inform Judge Francis if it is acceptable.” (Id.). The Stipulation provided as follows:

(i) As of April 15, 2016, Defendants would remove and would not restore or disseminate the “28-day Critical Reading Intensive” from their website;
(ii) The parties would be permitted to continue to operate in the SAT tutoring and test preparation field;
(iii) The parties would seek the other's written permission to use any part of the other's works “in a manner that legally requires attribution”;
(iv) The parties would not infringe on the other's works;
(v) The parties would refrain from defaming one another;
(vi) The parties would “exchange mutual general releases upon the execution of this Stipulation”;
(vii) The action would be dismissed “[u]pon exchange of said mutual general releases[] and execution of this Stipulation[.]”

(Pl. Aff., Ex. A). The Stipulation contained signature blocks for Plaintiff, her counsel, Defendant Stier, and the corporate Defendant. Plaintiff's counsel, Bonnie P. Josephs, responded about 30 minutes later stating, “Ms. Meltzer is satisfied with the revised language of the proposed settlement stipulation” and noted further that Plaintiff would sign the agreement. (Id. at Ex. B). About one hour following, Defendant Stier wrote back and said: “Looks great to me.” (Id. at Ex. C).

         The next morning, on March 25, 2016, Defendant sent an email with the subject line “a concern” to Magistrate Judge Francis's Chambers, on which Plaintiff and her counsel were copied. (Pl. Aff., Ex. V). Defendant Stier informed Chambers that she had received a phone call from a representative of the legal department at The New York Times, who claimed to have gotten “a second call from a woman ‘reporting me' for copyright violation.” (Id.).[3] At that time, Defendant observed that “this is not germane to the settlement, ” but that she felt “it is important to put this development on the record.” (Id.).

         About one hour later, a law clerk wrote to the parties that Magistrate Judge Francis was pleased that the parties “have agreed to sign the Stipulation, ” and instructed Plaintiff's counsel to send a finalized release to Defendant; the parties were to separately sign releases and mail the originals to Chambers. (Pl. Aff., Ex. H). That afternoon, Plaintiff's counsel sent to Magistrate Judge Francis's Chambers an electronic copy of a Settlement Stipulation and Order signed by Plaintiff and her counsel, as well as a release executed by Plaintiff. (Id. at Ex. I). Plaintiff's counsel sent to Defendant the cover page of her transmission to Chambers. (Id.). Plaintiff's counsel then wrote an email to Defendant asking her to prepare a joint letter to inform the Court that the parties had settled the case. (Stier Decl., Ex. B). Defendant did not respond to the email. (Id. at ¶ 10).

         On March 28, 2016, the Court received a submission from Plaintiff's counsel styled as a “proposed joint letter” stating “[t]he parties to this action, with the assistance of Magistrate Judge Francis, have settled the action as of March 25, 2016, ” and would “compl[y] … with the March 25, 2016 direction of Magistrate Judge Francis as to the means of submitting the signed Settlement Stipulation and Order and cross releases.” (Dkt. #25 (attached as Exhibit J to Plaintiff's Affidavit)). Defendant Stier did not sign this letter, and the cover page to the letter stated that Defendant told Josephs that “she ‘needs more time' to determine whether to co-sign the proposed letter.” (Id.). Also on March 28, 2016, the Court received a letter from Defendant Stier explaining her hesitance to sign. (Dkt. #26 (attached as Exhibit K to Plaintiff's Affidavit)). She informed the Court that Magistrate Judge Francis had “circulated a draft settlement stipulation that I was prepared to execute, ” but that she was reluctant to sign in light of the phone call she received from The New York Times - a call that prompted concern that Plaintiff would not abide by the terms of the agreement. (Id.).

         In light of the parties' divergent positions on settlement, the Court ordered the parties to appear for a conference on April 5, 2016. (Dkt. # 26 (Attached as Exhibit L to Plaintiff's Affidavit)). At the conference, Defendant Stier made clear her opposition to entering a settlement with Plaintiff without clear enforcement mechanisms. (Conference Tr. 29:12-13, 35:24-36:6). Plaintiff's position was that the Stipulation represented the totality of the agreement between the parties and was final. (Id. at 5:18-6:5). Plaintiff's counsel stated she would file a motion to enforce the settlement (id. at 8:4-6), but Defendant requested additional time to consider whether she would sign the Stipulation or move forward with motion practice - either on Plaintiff's proposed motion to enforce or Defendants' proposed motion to dismiss (id. at 48:24-49:1). Thereafter, the parties continued settlement negotiations - including two additional settlement conferences - for several months; when those ...


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