Gasery v. Kalakuta Sunrise, LLC

422 F.Supp.3d 807

Rameen B. GASERY, Plaintiff,

v.KALAKUTA SUNRISE, LLC, et al., Defendants.

16-CV-510 (ALC)

United States District Court, S.D. New York.

Signed November 26, 2019

Gregory Alexander Sioris, New York, NY, for Plaintiff.

Alexander P. Hartnett, Law Office of Alexander P. Hartnett Esq., Philip Dimola, Norton Rose Fulbright US LLP, Robert William Clarida, Reitler Kailas & Rosenblatt, L.L.C., New York, NY, Abbe David Lowell, Norton Rose Fulbright, Washington, DC, for Defendants.

OPINION & ORDER

ANDREW L. CARTER, JR., District Judge:

Plaintiff Rameen B. Gasery brings this suit against Defendants Kalakuta Sunrise, LLC, ("Kalakuta"), Fela Broadway, LLC ("FB"), Stephen Hendel ("Hendel"), and John Does 1-10. The Second Amended Complaint ("SAC") pleads seven Causes of Action: (1) Accounting; (2) Breach of Contract; (3) Breach of Fiduciary Duty; (4) Copyright Infringement against FB; (5) Copyright Infringement against Hendel; (6) Declaratory Relief; and (7) Attorney's Fees. Defendants Kalakuta, FB, and Hendel have moved to dismiss the Second Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim and Fed. R. Civ. P. 12(b)(1) for lack of subject-matter jurisdiction. For the reasons that follow, Defendants' motion to dismiss is GRANTED IN PART and DENIED IN PART .

INTRODUCTION

Plaintiff is a photographer and graphic artist who took photographs of a theatrical musical and entered into an agreement with Defendant Kalakuta that governed the intellectual property rights of the photographs. This agreement established that Plaintiff and Kalakuta were co-owners of the copyright to the photographs and provided terms for the sale and licensing of these rights. Plaintiff commenced this action against Defendants based on the alleged violation of this agreement and copyright infringement after Kalakuta allegedly distributed the photographs to Hendel and Fela Broadway for use in advertising and marketing the musical. Defendants' motion to dismiss proceeds in three parts: (1) challenging Plaintiff's federal copyright infringement claims for failure to state a claim; (2) challenging Plaintiff's breach of fiduciary duty claims for failure to state a claim; and (3) challenging the remaining state-law causes of action for lack of diversity jurisdiction.

In this case, there are two bases for original jurisdiction: first, Federal Question Jurisdiction pursuant to Plaintiff's claims under the Copyright Act, 28 U.S.C. § 1331 ; and second, diversity jurisdiction pursuant to 28 U.S.C. § 1332. If the Court were to sustain Plaintiff's claims under the Copyright Act, it could exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over the remainder of Plaintiff's claims, and Defendants' challenge to the amount-in-controversy would be rendered moot. However, for the reasons discussed below, Plaintiff's claims under the Copyright Act are dismissed. Therefore, while courts generally consider subject matter jurisdiction before turning to other matters, this Court first addresses Plaintiff's Copyright Act claims, and then after dismissing them, turns to whether the Court has diversity jurisdiction over Plaintiff's state law claims. Finally, the Court addresses Plaintiff's state-law breach of fiduciary duty claims.

BACKGROUND

I. Factual Background

Plaintiff is a photographer and graphic artist who created photographic images of an actor playing the late Fela Kuti on stage in the theatrical musical Fela! ("the Production"). SAC (ECF No. 72) ¶ 8. Starting in January of 2013, the Production, which had previously run on Broadway, toured in several U.S. cities and at Yale University. Id. In advertising and promoting these road shows, Defendants disseminated and profited from photographs created by Plaintiff, without informing, providing profit to, or otherwise receiving consent from Plaintiff. Id. The images appeared in "playbills, flyers, lobby cards, theater marquees, digital signage, billboards and as posters for sale in theater lobbies." Id. at ¶20. Defendants did not account for or compensate Plaintiff for this usage, and "Plaintiff [was] not provided with a copyright attribution of the images ... providing the false impression that the images published are in the public domain or have otherwise been dedicated to the public." Id. at ¶22. Moreover, without Plaintiff's consent or license, Defendants "reproduced, licensed, disseminated and sold copies of the images to third parties whose identity or identities [Plaintiff] is not aware of, but which are listed in the caption as John Does and whose identities will be ascertained through discovery and against who plaintiff reserves the right to further amend the complaint to make further claims." Id. at ¶25.

Plaintiff and Kalakuta entered into an agreement on October 4, 2012 which provided that both Plaintiff and Kalakuta have "an undivided fifty percent (50%) interest in and to the copyright and other intellectual property rights of every kind (now or hereafter recognized) in and to each Fela Project Photograph." Id. at ¶15; see Declaration of Rameen Gasery in Opposition to Defendants' Motion to Dismiss (ECF No. 103) Ex. 2, § 5.1(a) (hereinafter, "October 2012 Agreement"). This agreement also provided Kalakuta the authority to "set the sales/licensing price(s) with regard to the sale, or license other commercial exploitation of the Fela Project Photographs." October 2012 Agreement § 5.1(c). However, in exercising that authority, Kalakuta was required to "consult[ ] with [Plaintiff] with respect to the material terms and conditions of any proposed agreement with a third party relating to any sale, licensing or exploitation of rights related to such Fela Project Photograph(s)." Id. The Agreement also provided Kalakuta non-exclusive rights to use the Fela Project Photographs, but required Kalakuta to "place appropriate copyright notices on the Fela Project Photographs (as well as on any posters, programs and/or other promotional [sic] using or embodying Fela Project Photographs) and take such other steps reasonably required to protect the copyrights and other proprietary rights of [Plaintiff] and [Kalakuta]." October 2012 Agreement § 9.2(c).

The Agreement referenced Hendel and directed Plaintiff to "liaise with and take direction from Steven Hendel ("Hendel") as Hendel deems appropriate." October 2012 Agreement § 1. The Agreement also acknowledged a $15,000 loan from Hendel to Plaintiff and provided terms for repayment of this loan to Hendel before Plaintiff was paid for profits from the licensing, sale, or exploitation of any photographs. See id. Finally, the Agreement included an indemnification provision in which Kalakuta agreed to indemnify Plaintiff for all costs and expenses (including attorneys' fees) arising out of or connected to breach or threatened breach of agreement, warranty, or representation by Kalakuta. See id. at § 10.2.

II. Procedural Background

This case was originally before the late Judge Robert W. Sweet. Judge Sweet passed away on March 24, 2019, and this case was reassigned to this Court. ECF No. 95.

On January 22, 2016, Plaintiff filed this action pro se against Defendants. ECF No. 2. Plaintiff then filed an Amended Complaint on March 9, 2016. ECF No. 6. Upon the recommendation of Judge Sweet, Plaintiff retained counsel on October 26, 2016. See ECF No. 34. Judge Sweet then referred the case to Magistrate Judge Kevin Nathaniel Fox on June 13, 2017. ECF No. 45. A settlement conference was held before Judge Fox on January 10, 2018, at which no settlement was reached. Subsequently, on April 26, 2018, Plaintiff reached a settlement with Defendant Shakespeare Theater, and Judge Sweet entered the Stipulation and Order of Dismissal with Prejudice as to Defendant Shakespeare Theater. ECF No. 63. Plaintiff then filed a Second Amended Complaint on September 19, 2018. ECF No. 74.

Upon Judge Sweet's passing, this case was reassigned to this Court on April 8, 2019. On May 8, 2019, this Court dismissed Defendants' pending motion to dismiss as moot, Plaintiff's motion to strike as moot, and Defendants' motion for a continuance. ECF No. 97. This Court Ordered parties to re-file their memoranda and documents in support of and in opposition to Defendants' motion to dismiss. ECF No. 97. Defendants Kalakuta, FB, and Hendel filed the instant motion to dismiss on May 20, 2019. ECF No. 98. Plaintiff filed his opposition to Defendants' motion to dismiss on June 4, 2019. ECF No. 105. Defendants Kalakuta, FB, and Hendel filed their reply on June 11, 2019. ECF No. 108.

STANDARD OF REVIEW

"When considering a motion to dismiss for lack of subject matter jurisdiction under Fed R. Civ. P. 12(b)(1), the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc. , 752 F.3d 239, 243 (2d Cir. 2014). Where jurisdictional facts are at issue, " ‘the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits.’ " Id. (citing APWU v. Potter , 343 F.3d 619, 627 (2d Cir. 2003) ). But, "the party asserting subject matter jurisdiction ‘has the burden of proving by a preponderance of the evidence that it exists.’ " Id. (citing Makarova v. United States , 201 F.3d 110, 113 (2d Cir. 2000) ).

On the other hand, when resolving a motion to dismiss under Fed. R. Civ. P 12(b)(6), a court should "draw all reasonable inferences in [the plaintiff's] favor, assume all well-pleaded factual allegations to be true, and determine whether they plausibly give rise to an entitlement to relief." Faber v. Metro. Life Ins. Co. , 648 F.3d 98, 104 (2d Cir. 2011) (internal quotation marks omitted). Thus, "[t]o survive a motion to dismiss [under Rule 12(b)(6) ], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face’."...