Feldhacker v. Homes

173 F.Supp.3d 828

Christopher Feldhacker, Plaintiff,

v.Giovanti Homes ; MRD, L.L.; and Michael Demaris, Defendants.

No. 4:15–cv–00169–JEG

United States District Court, S.D. Iowa, Central Division.

Signed March 23, 2016

David Wayne Nelmark, Christine E. Bestor Townsend, Belin McCormick, P.C. Des Moines, IA, for Plaintiff.

Bradley M. Beaman, David N. May, Mitchell Garrett Nass, Bradshaw Fowler Proctor & Fairgrave, P.C., Matthew Sease, Kemp & Sease, Des Moines, IA, for Defendants.

ORDER

JAMES E. GRITZNER, Senior Judge, U.S. DISTRICT COURT

Before the Court is a Motion for Partial Dismissal pursuant to Fed. R. Civ. P. 12(b)(6) brought by Defendants Giovanti Homes (Giovanti), MRD, L.L. (MRD), and Michael DeMaris (DeMaris) (collectively, Defendants). Plaintiff Christopher Feldhacker (Feldhacker) resists. The Court conducted a hearing on the motion on February 22, 2016. Attorney David Nelmark was present representing Feldhacker. Attorneys Bradley M. Beaman and Mitchell Nass were present representing Giovanti. Attorney Matthew Sease was present on behalf of MRD and DeMaris. The Court granted Mr. Sease's oral motion on behalf of MRD and DeMaris to join Giovanti's motion. The matter is fully submitted and ready for disposition.

I. BACKGROUND

In reviewing the sufficiency of a complaint, “[the Court] accept[s] the plaintiff's factual allegations as true, but the allegations must supply facts sufficient to state a claim that is plausible on its face.” M.M. Silta, Inc. v. Cleveland Cliffs, Inc., 616 F.3d 872, 876 (8th Cir.2010).

On April 22, 2012, Feldhacker and his wife purchased design software for the purpose of designing a custom floor plan to be used in the construction of their new home. By May 18, 2012, after going through several drafts that consumed considerable time and effort, Feldhacker had a finalized floor plan (the Feldhacker Plan). Feldhacker, who is not an architect, commissioned DeMaris to make the Feldhacker Plan compliant with building codes and standards and to that end, on May 18, 2012, Feldhacker shared the Feldhacker Plan with DeMaris and gave him some additional specifications, including ceiling heights and a grocery pass-through door. On the same day, Feldhacker emailed DeMaris the Feldhacker Plan in electronic PDF format. On June 5, 2012, DeMaris produced a finalized floor plan (the Buildable Feldhacker Plan), for which Feldhacker paid DeMaris by check made payable to “Mike DeMaris.”

In 2012, Liz Wilson, one of the owners of Giovanti, and Jennifer Schuller asked DeMaris to add technical specifications to a redesigned plan that Schuller had used to build her home. DeMaris subsequently provided Giovanti with a plan that Giovanti named the Naples Plan. Feldhacker alleges that DeMaris blatantly, willfully, and wrongfully copied substantial portions of the Buildable Feldhacker Plan into the Naples Plan. Feldhacker asserts that in the Buildable Feldhacker Plan and in the Naples Plan, several rooms and spaces are exactly the same, some of the rooms differ only slightly, and other rooms are substantially similar. According to Feldhacker, Giovanti used the Naples Plan, or derivations thereof, to construct and sell several houses in Iowa.

Feldhacker alleges that neither Giovanti nor DeMaris informed Feldhacker that his work had been copied into the Naples Plan. Rather, on January 29, 2015, Feldhacker first learned that Giovanti was selling homes substantially similar to Feldhacker's custom designed home when his wife discovered photos and plans on Giovanti's website and Facebook page.

Feldhacker's attorney provided notice to Giovanti and DeMaris of their copyright infringement by letters dated February 17, 2015, and March 10, 2015, respectively. Feldhacker argues that despite notification of infringement, Giovanti continues to promote, advertise, and seek to profit from the infringing Naples Plan.

On June 1, 2015, Feldhacker filed this lawsuit against Defendant pursuant to 17 U.S.C. § 101 et seq. alleging that at all relevant times, he has been the copyright owner with respect to the Feldhacker Plan; the Feldhacker Plan is the subject of a valid certificate of Copyright Registration effective February 10, 2015; Defendants have wrongfully copied constituent material from the Feldhacker Plan; Giovanti and DeMaris have both acted in willful disregard of Feldhacker's rights; and Feldhacker has suffered monetary harm and emotional distress as a result of Defendants' conduct. Feldhacker alleges he is entitled to actual damages and profits pursuant to § 504(b) for each infringing work commenced before the copyright registration effective date, statutory damages pursuant to § 504(c) for each infringing work commenced on or after the copyright registration effective date, and attorney fees and costs pursuant to § 505. Feldhacker further alleges he is entitled to injunctive relief pursuant to §§ 502 and 503.

Giovanti filed this motion to dismiss Feldhacker's claim for statutory damages and attorney fees under Rule 12(b)(6). Giovanti argues that under § 412, Feldhacker is not entitled to statutory damages and attorney fees because the copyright at issue in this case was registered after commencement of the infringement and that this rule applies to alleged acts of infringement that occurred before and after the registration of the copyright. Giovanti also moves to dismiss Feldhacker's request for emotional distress damages arguing those damages are not available under the Copyright Act.

II. DISCUSSION

A. Jurisdiction

Feldhacker brings this action alleging violations of the Copyright Act, 17 U.S.C. § 101 et. seq. The Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1331. (“The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.”).

B. Standard for the Motion

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” United States ex rel. Raynor v. Nat'l Rural Utils. Co-op. Fin., Corp., 690 F.3d 951, 955 (8th Cir.2012) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ).

C. Statutory Damages and Attorney Fees under the Copyright Act

Section 504(c) of the Copyright Act provides:

(c) Statutory Damages—

(1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.

(2) In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000. In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200. The court shall remit statutory damages in any case where an infringer believed and had reasonable grounds for believing that his or her use of the copyrighted work was a fair use under section 107, if the infringer was: (i) an employee or agent of a nonprofit educational institution, library, or archives acting within the scope of his or her employment who, or such institution, library, or archives itself, which infringed by reproducing the work in copies or phonorecords; or (ii) a public broadcasting entity which or a person who, as a regular part of the nonprofit activities of a public broadcasting entity (as defined in section 118(f)) infringed by performing a published nondramatic literary work or by reproducing a transmission program embodying a performance of such a work.

(3)(A) In a case of infringement, it shall be a rebuttable presumption that the infringement was committed willfully for purposes of determining relief if the violator, or a person acting in concert with the violator, knowingly provided or knowingly caused to be provided materially false contact information to a domain name registrar, domain name registry, or other domain name registration authority in registering, maintaining, or renewing a domain name used in connection with the infringement.

(B) Nothing in this paragraph limits what may be considered willful infringement under this subsection....

17 U.S.C. § 504(c)(1)-(3).

Section 505 of the Copyright Act provides that in a civil action, the court has the discretion to “allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs.” Id. § 505 (emphasis added).

However, Section 412 of the Copyright Act...