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Jose Luis Pelaez Inc. v. McGraw-Hill Global Education Holdings LLC

United States District Court, S.D. New York

March 1, 2018

JOSE LUIS PELAEZ, INC. and JOSE PELAEZ, Plaintiffs,
v.
MCGRAW-HILL GLOBAL EDUCATION HOLDINGS LLC and MCGRAW-HILL SCHOOL EDUCATION HOLDINGS LLC, Defendants.

          OPINION & ORDER

          KIMBA M. WOOD United States District Judge

         Plaintiffs Jose Luis Pelaez, Inc., and Jose Pelaez bring this copyright infringement lawsuit against Defendants McGraw-Hill Global Education Holdings LLC and McGraw-Hill School Education Holdings LLC. Plaintiffs allege that Defendants infringed Plaintiffs' copyrights in certain photographs (the "Photographs"). Defendants deny this. Before the Court is Plaintiffs' Motion for Leave to File a Third Amended Complaint ("TAC").

         The Court GRANTS Plaintiffs' Motion for Leave to File a TAC because (i) dismissal of certain claims in the SAC is warranted because (a) dismissal of the Missing-Invoice Claims without prejudice does not subject Defendants to plain legal prejudice and satisfies the Zagano factors, and (b) dismissal with prejudice of claims other than the Missing-Invoice Claims that were withdrawn from the SAC is unopposed; and (ii) Plaintiffs are permitted to add updated copyright registration information to the TAC, because the Court finds no evidence of undue delay, undue prejudice, bad faith, or futility.

         I. BACKGROUND

         A. Facts

         Jose Pelaez is a professional photographer and the president and sole owner of Jose Luis Pelaez, Inc. (Second Am. CompL, ECF No. 3 8, ¶ 2.) Defendants publish and distribute textbooks. (See Id. ¶¶ 3, 9.) Plaintiffs entered into agreements with, inter alia, stock photography agency Corbis Corporation ("Corbis"), authorizing Corbis to grant limited licenses for use of the Photographs to third parties, including Defendants. (Id. ¶ 8.) These agreements authorized Corbis to register the Photographs with the Copyright Office, which Corbis did. (See Pelaez Decl., ECF No. 106-2 ¶ 3.)

         Plaintiffs filed this copyright infringement lawsuit on July 6, 2016. Plaintiffs allege that Defendants exceeded their license by "printing or distributing more copies of the Photographs than authorized, " distributing the Photographs in unauthorized areas, and publishing the Photographs at unauthorized times in unauthorized media. (Second Am. Compl., ECF No, 38, ¶ 15.)

         On January 12, 2017, Mr. Pelaez was deposed in connection with this case. (See Pelaez Dec!., ECF No. 106-2 ¶ 5.) During his deposition, Mr. Pelaez learned from defense counsel that the registration certificates for some of the Photographs were inaccurate. (See id.) On February 3, 2017, Plaintiffs began the process of obtaining new registrations for some of the Photographs, (Id.)

         B. Procedural History

         On February 24, 2017, Defendants filed an Answer to Plaintiffs' Second Amended Complaint ("SAC") and a Motion to Dismiss in part. (ECF Nos. 45, 43.) On June 23, 2017, while Defendants' Motion to Dismiss was still pending, the Parties each moved for partial summary judgment. (ECFNos. 57, 64.) On August 4, 2017, while all three motions were pending, Plaintiffs requested a pre-motion conference for permission to file a Motion to File a . Third Amended Complaint. (ECF No. 95.) On August 9, 2017, the Court denied Defendants' Motion to Dismiss. (ECF No. 99.) That same day, Defendants filed a letter opposing Plaintiffs' request for a pre-motion conference on the Motion to File a TAC. (ECF No. 100.) On January 12, 2018, the Court waived the requirement for a pre-motion conference for Plaintiffs' Motion to File a TAC. (ECF No. 102.) Plaintiffs now move for leave to file a TAC. (ECF No. 106.)

         II. DISCUSSION

         Plaintiffs move to file a TAC that differs materially from the SAC in two respects. First, the TAC would not include three categories of claims that are present in the SAC:

(1) claims with respect to photographs for which neither [Defendants] nor Corbis produced invoices, which precluded Plaintiffs from identifying corresponding infringing publications (the "Missing-Invoice Claims");
(2) claims with respect to photographs for which Plaintiffs found no evidence of unauthorized use; and
(3) claims with respect to (i) photographs that were not used in identified publications, or (ii) publishers that are not affiliated with Defendants.

(See Pis.' Mot., ECF No. 106, at 1; PL's Ltr., ECF No. 104, at 1.) Second, the TAC would add copyright registration information for some of the Photographs. These registrations were sought and obtained following Mr. Pelaez's deposition. Defendants oppose the amendment.

         For the reasons stated below, the Court GRANTS in full Plaintiffs' motion for leave to file their proposed TAC.

         A. ...


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