Design Basics, LLC v. Spahn & Rose Lumber Co.

DESIGN BASICS, LLC, and CARMICHAEL & DAME DESIGN, INC., Plaintiffs, v. SPAHN & ROSE LUMBER CO., Defendant.

No. 19-CV-1015-CJW-MAR

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA EASTERN DIVISION

February 10, 2021

ORDER

This matter is before the Court on defendant's Motion for Partial Summary Judgment. (Doc. 35). Plaintiffs timely filed a resistance (Doc. 40) and defendant timely filed a reply (Doc. 44). On January 8, 2021, the Court held a telephonic hearing on the motion and the parties presented oral arguments. (Doc. 46).

For the following reasons, defendant's motion for partial summary judgment is granted in part and denied in part.

I. BACKGROUND

This case involves alleged infringements of copyrighted architectural works. The following facts are undisputed unless otherwise noted. The Court will discuss additional facts as they become necessary to its analysis.

Design Basics, LLC ("DB") is a Nebraska company engaged in creating, publishing, and licensing architectural plans and designs. (Docs. 32, at 2; 35-5, at 1). Carmichael & Dame Design, Inc. ("CDD") is a Texas corporation that is in the business of designing home plans to be licensed to builders and consumers. (Doc. 35-5, at 1). CDD and DB (collectively "plaintiffs") have overlapping ownership and all CDD's operations run through DB. (Id., at 2). Spahn & Rose Lumber Company ("defendant") is an Iowa corporation that markets, distributes, and sells lumber and building supplies. (Id, at 1-2).

Since the early 1980s, DB has created residential home building plans and marketed its plans through catalogs, industry publications, marketing partners, and client-specific publications. (Doc. 45, at 1-2). DB also marketed its plans via a company website after internet marketing became viable in the mid-1990s. (Id., at 7). DB's customers license the home plans for construction projects and for other purposes. DB owns the copyright to over 2,000 home designs. (Doc. 40-1, at 3).

Plaintiffs allege, but defendant disputes, that plaintiffs first became aware that defendant was infringing on their copyrighted architectural works in 2016 when plaintiffs discovered that defendant had copied three of their works. (Doc. 45, at 4-5). In late 2018, CDD sent a licensed investigator to defendant's Dubuque, Iowa location to further investigate possible copyright infringements. (Id., at 5). Plaintiffs claim the investigator uncovered at least one additional copyright violation during his investigation. (Id., at 5-6). The investigation led to formal discovery, the findings of which serve as the basis of plaintiffs' amended complaint here. (Id., at 6).

Plaintiffs allege in their amended complaint that defendant "unlawfully copied seventeen (17) of their copyright protected works and contributed in the construction of infringing [houses] therefrom . . . by supplying the lumber and/or other construction materials to various builders." (Doc. 40, at 1-2). Plaintiffs' designs at issue here are DB's "2285 Prairie," "1380 Paterson," "8055 Autumn Hills," "2761 Mayberry," "2315 Harrisburg," "2245 Tyndale," "8089 Chandler Hills," "42060 Furyk," "8065 Hannifan Lane," "2311 Pinehurst," "1748 Sinclair," "42006 Haskell," "2332 Corinth," "8530 Calverton," "42035 Saffron," and "3010 Quimby," and CDD's "9207 Briar Manor."¹(Docs. 35-5, at 3; 40, at 2). The parties do not dispute that the designs have valid copyrights. Plaintiffs raise their claims as copyright violations and as violations of the Digital Millennium Copyright Act ("DMCA"). (Doc. 32).

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). When asserting that a fact is undisputed or is genuinely disputed, a party must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials." FED. R. CIV. P. 56(c)(1)(A); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Alternatively, a party may show that "the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." FED. R. CIV. P. 56(c)(1)(B). More specifically, a "party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." FED. R. CIV. P. 56(c)(2).

A fact is "material" if it "might affect the outcome of the suit under the governing law[.]" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (citation omitted). "An issue of material fact is genuine if it has a real basis in the record," Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citation omitted), or "when a reasonable jury could return a verdict for the nonmoving party on the question," Wood v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (internal quotation marks and citation omitted). Evidence that presents only "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586(1986), or evidence that is "merely colorable" or "not significantly probative," Anderson, 477 U.S. at 249-50, does not make an issue of fact genuine. In sum, a genuine issue of material fact requires "sufficient evidence supporting the claimed factual dispute" that it requires "a jury or judge to resolve the parties' differing versions of the truth at trial." Id. at 249 (citation and internal quotation marks omitted).

The party moving for summary judgment bears "the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue." Hartnagel, 953 F.2d at 395 (citation omitted). Once the moving party has met this burden, the nonmoving party must go beyond the pleadings and by depositions, affidavits, or other evidence designate specific facts showing that there is a genuine issue for trial. See Mosley v. City of Northwoods, 415 F.3d 908, 910 (8th Cir. 2005).

In determining whether a genuine issue of material fact exists, courts must view the evidence in the light most favorable to the nonmoving party, giving that party the benefit of all reasonable inferences that can be drawn from the facts. Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014); Matsushita, 475 U.S. at 587-88 (citation omitted); see also Reed v. City of St. Charles, 561 F.3d 788, 790 (8th Cir. 2009) (stating that in ruling on a motion for summary judgment, a court must view the facts "in a light most favorable to the non-moving party—as long as those facts are not so 'blatantly contradicted by the record . . . that no reasonable jury could believe' them") (alteration in original) (quoting Scott v. Harris, 550 U.S. 372, 380 (2007)). A court does "not weigh the evidence or attempt to determine the credibility of the witnesses." Kammueller v. Loomis, Fargo & Co., 383 F.3d 779, 784 (8th Cir. 2004) (citation omitted). Rather, a "court's function is to determine whether a dispute about a material fact is genuine[.]" Quick v. Donaldson Co., 90 F.3d 1372, 1376-77 (8th Cir. 1996). When considering a motion for summaryjudgment, the court "need consider only the cited materials, but it may consider other materials in the record." FED. R. CIV. P. 56(c)(3).

III. DISCUSSION

Defendant's motion for partial summary judgment argues there is no genuine issue of material fact and that it is entitled to judgment on all but one of plaintiffs' infringement claims. (Doc. 35). Plaintiffs agree not to pursue several of their claims, but they resist summary judgment on the rest. (Doc. 40). The Court will first consider which of the original 17 claims remain before discussing the relevant law and its application to the claims here.

A. Unresisted & Remaining Claims

Several of the designs are not substantially at issue here. First, defendant does not move for summary judgment on plaintiffs' infringement claims involving the "9207 Briar Manor" design. (Doc. 35-5, at 4). Second, defendant does not appear to seek summary judgment on any of plaintiffs' DMCA claims. (Docs. 35-5, at 4; 40, at 7 n.5).

Third, plaintiffs do not resist summary judgment on several of the designs. Plaintiffs state they will drop their infringement claims for the "2285 Prairie," "1380 Paterson," and "8055 Autumn Hills" designs because they "ha[ve] been unable to develop sufficient evidence to show that Defendant knowingly participated in designing the corresponding accused plans." (Doc. 40, at 2). Plaintiffs also state they are no longer pursuing their claims for the "42060 Furyk" design and the "3010 Quimby" design. (Id., at 2-3). Thus, the Court grants defendant's motion for summary judgment on the claims for these five designs.

After granting judgment of the above claims and excluding the "9207 Briar Manor" design on which defendant does not seek summary judgment, the remaining claims at issue here are as follows:

• Defendant's "3479-CG Dick Schlitz" and "3533-CG James Hermsen" infringe on DB's "2761 Mayberry"

• Defendant's "3499-CG Shawn Stackis" infringes DB's "2315 Harrisburg"

• Defendant's "3699-CG Jack Stackis 2 Story" infringes DB's "2245 Tyndale"

• Defendant's "UIC -Spec 1" infringes DB's "8089 Chandler Hills"

• Defendant's "JES-REMMERT (chad)-10" infringes DB's "8065 Hannifan Lane"

• Defendant's "JES-SHAHID-10" infringes DB's "2311 Pinehurst"

• Defendant's "JES-ZLOTKO (dolic)-10" infringes DB's "1748 Sinclair"

• Defendant's "CHAR-MICHAELS (dave)-11" infringes DB's "42006 Haskell"

• Defendant's "JES-KASIM (2-STORY)-11" infringes DB's "2332 Corinth"

• Defendant's "GRUNDY CTR HOUSING SPEC" infringes DB's "8530 Calverton"

• Defendant's "JES-WRIGHT (wendi)-13" infringes DB's "42035 Saffron"

(Doc. 40, at 3-4); see also (Doc. 35-5, at 3-4).

B. ...