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Capital Record, LLC v. Vimeo LLC

United States District Court, S.D. New York

March 31, 2018

CAPITAL RECORDS, LLC, et al, Plaintiffs,
v.
VIMEO, LLC, et al, Defendants. EMI BLACKWOOD MUSIC, INC., et al, Plaintiffs,
v.
VIMEO, LLC, et al, Defendants.

          OPINION AND ORDER

          RONNIE ABRAMS, United States District Judge.

         Plaintiffs bring this copyright-infringement action against Vimeo, LLC and Connected Ventures, LLC (collectively, "Vimeo"). In 2013, this Court granted in part and denied in part the parties' cross-motions for summary judgment and certified several questions to the Second Circuit for an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). See Op. and Order re: Motions for Summary Judgment ("2013 Op.") at 56 (Dkt. 119), as amended by Op. and Order re: Reconsideration, Amendment, and Interlocutory Appeal ("Recon. Op.") (Dkt, 139), The Second Circuit accepted the interlocutory appeal and affirmed in part and vacated in part this Court's decision, Capitol Records, LLC v. Vimeo, LLC, 826 F.3d 78, 81 (2d Cir. 2016), cert, denied, 137 S.Ct. 1374 (2017), Over the following months, the parties briefed new and renewed motions in light of the Circuit's decision. This Opinion addresses just one of those motions: Vimeo's motion to dismiss Plaintiffs' unfair-competition claims.[1] For the reasons explained below, that motion is granted in part and denied in part.

         BACKGROUND

         This Court and the Second Circuit have recounted this case's factual background and explained the relevant statutory scheme. See Vimeo, 826 F.3d at 82-87; 2013 Op. at 2-6. For the purposes of this Opinion, the Court assumes the reader's familiarity with the case and will restate only the basics relevant to this motion.

         The Digital Millennium Copyright Act of 1998 (the "DMCA") "gives qualifying Internet service providers protection from liability for copyright infringement when their users upload infringing material on the service provider's site and the service provider is unaware of the infringement." Vimeo, 826 F.3d at 81 (citing 17 U.S.C. § 512(c)). In effect, the DMCA provides a safe harbor to "insulate[] service providers from liability for infringements of which they are unaware, contained in material posted to their sites by users, so as to make it commercially feasible for them to provide valuable Internet services to the public." Id. at 82. The pertinent safe harbor protects certain qualifying service providers from being "liable, .. for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider." 17 U.S.C. § 512(c)(1).

         Plaintiffs own the rights to innumerable songs and seek relief from Vimeo for instances where their copyrighted songs were purportedly infringed by videos posted on Vimeo's website. Plaintiffs' copyrighted songs include both pre-1972 and post-1972 works, but they do not assert any federal claims as to the pre-1972 recordings. Rather, as to those recordings only, Plaintiffs seek relief under state law for "Common Law Copyright Infringement and Misappropriation" and "Unfair Competition." See Am. Comp. ¶¶ 61-75 (Dkt. 141). Plaintiffs have a good reason for not asserting federal claims for their pre-1972 works: under the Copyright Act, there is no federal copyright protection for sound recordings made before February 15, 1972. Vimeo, 826 F.3d at 87; see 17 U.S.C. § 301(c).

         The litigation in this case so far has focused on whether (and the extent to which) the DMCA safe harbor protects Vimeo from liability. This Court has already ruled on cross-motions for summary judgment on that affirmative defense. In doing so, the Court granted summary judgment to Plaintiffs on all the Videos-in-Suit featuring pre-1972 works on the theory that the DMCA safe harbor did not apply to pre-1972 works. See 2013 Op. at 55 & n.2l. The Court then certified several questions-including the question of whether the DMCA safe harbor could protect a service provider from liability based on pre-1972 recordings-to the Second Circuit for an interlocutory appeal, stayed the case, and granted Plaintiffs leave to amend their complaint to add additional Videos-in-Suit. Plaintiffs filed their Amended Complaint on January 9, 2014. See Am. Comp. (Dkt. 141). In light of the stay, the Court also permitted Vimeo until 30 days after the Second Circuit's decision on interlocutory appeal to respond to the Amended Complaint. See Endorsed Letter (Dkt. 143).

         On appeal, the Second Circuit vacated this Court's decision to the extent this Court had held that the DMCA safe harbor did not apply to pre-1972 recordings. The Circuit "conclude[d] that the safe harbor established by § 512(c) protects a qualifying service provider from liability for infringement of copyright under state law" as well as federal law. See Vimeo, 826 F.3d at 93.

         Thus, the safe harbor applies to liability based on infringement of pre-1972 recordings. In light of the Circuit's decision, and in response to Plaintiffs' Amended Complaint, Vimeo now moves to dismiss Plaintiffs' unfair-competition claims.

         LEGAL STANDARD

         To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must plead "enough facts to state a claim to relief that is plausible on its face, " Bell Ail. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557). On a Rule 12(b)(6) motion, the question is "not whether [the plaintiff] will ultimately prevail, " but rather "whether his complaint [is] sufficient to cross the federal court's threshold." Skinner v. Switzer, 562 U.S. 521, 529-30 (2011) (internal quotation marks omitted). In answering this question, the Court must "accept[] all factual allegations as true, but giv[e] no effect to legal conclusions couched as factual allegations." Stadnick v. Vivint Solar, Inc., 861 F.3d 31, 35 (2d Cir. 2017) (quoting Starr v. Sony BUG Music Entm % 592 F.3d 314, 321 (2d Cir. 2010)).

         In light of the procedural posture of this case, the usual motion-to-dismiss standards interact with the law of the case doctrine, which generally requires courts to adhere to their own decisions "in subsequent stages in the same case." Johnson v. Holder, 564 F.3d 95, 99 (2d Cir. 2009) (citation omitted). Where, as here, a case has been remanded to the district court, the doctrine also bars relitigation of issues that the appellate court expressly or impliedly decided on appeal. See Brown v. City of Syracuse, 673 F.3d 141, 147 (2d Cir. 2012).

         DISCUSSION

         Vimeo moves to dismiss Plaintiffs' unfair-competition claims on two grounds. First, Vimeo argues that it is protected from liability for unfair competition under the DMCA safe harbor and for other reasons. Second, it argues that Plaintiffs have failed to plead facts adequately supporting ...


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