Herrick v. Shutterstock, Inc.

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CYNTHIA HERRICK, individually and on behalf of all others similarly situated, Plaintiff, v. SHUTTERSTOCK, INC., Defendant.

No. 23 Civ. 3191 (JPC)

United States District Court, S.D. New York

March 29, 2024

OPINION AND ORDER

JOHN P. CRONAN, UNITED STATES DISTRICT JUDGE

Cynthia Herrick proceeds against Shutterstock, Inc. (“Shutterstock”) in this putative class action alleging (1) copyright infringement under the Copyright Act 17 U.S.C. §§ 106, 501; (2) vicarious and/or contributory copyright infringement; and (3) falsification of copyright management information (“CMI”) under the Digital Millenium Copyright Act (“DMCA”), 17 U.S.C. §§ 1202, 1203. Before the Court are Shutterstock's motion to dismiss Count Three, the falsification of CMI cause of action, for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and its motion to strike the class allegations under Rule 12(f). For the reasons set forth below, the Court grants Shutterstock's motion to dismiss. The Court dismisses Count Three without prejudice, and grants Herrick leave to amend the Complaint, which leave Herrick is advised to take only if she is able to correct the deficiencies identified in this Opinion and Order and only after she carefully considers all the substantive challenges raised by Shutterstock-many of which the Court does not address herein. The Court denies Shutterstock's motion to strike the class allegations without prejudice to renewal.

I. Background

A. Facts^[1]

Herrick, a wildlife photographer, owns the two copyrighted photographs at issue in this lawsuit. Complaint ¶ 32. The first photograph, bearing U.S. Copyright Registration Number VA 2-291-805, is entitled “Snowy Plover Baby's First Step” (the “Plover Photo”). Id. ¶ 33, Exh. A. The second, bearing U.S. Copyright Registration Number VAu 1-461-254, is entitled the “Snowy Flowy Egret” (the “Egret Photo”). Id. ¶ 49, Exh. B.

Shutterstock is a licensing company. Id. ¶ 60. It markets and sells photography and video licenses-in the form of subscription packages or individual licenses-through an online platform, which includes “content [that] is provided by a community of contributors from around the world.” Id. ¶¶ 60, 67. As described by Herrick, a “contributor” is “a person or business that submits their copyrighted photographs, illustrations, music, videos clips, and images to Shutterstock.” Id. at 2 n.1. Shutterstock serves as the contributor's licensing agent, offering the copyrighted work for licensing and licenses to third-party customers. Id. Shutterstock pays contributors 15-40% of the fee it receives for licensing the contributor's works, and thus retains up to 85% of all revenue generated from the licenses sold. Id. Contributor submissions undergo a “rigorous vetting process [which] enables [Shutterstock] to provide confidence and indemnification to its customer/licensees that the images it licenses from its library have been appropriately licensed from copyright holders for commercial or editorial use.” Id. ¶ 64; see also id. ¶ 67 (alleging that Shutterstock “boasts” that its “collection of content is provided by a community of contributors from around the world and is vetted through [Shutterstock's] proprietary technology and by a specialized team of reviewers to ensure that it meets [Shutterstock's] standards of quality and licensability”).

In January 2022, Herrick discovered that her Plover Photo was being displayed and offered for licensing on Shutterstock's website by a contributor account named “MTKhaledMahmud,” as shown below, with the arrow designating her photograph:

(Image Omitted)

Id. ¶ 33. She noticed that the photo had received a Shutterstock designation of “High Usage,” indicating that Shutterstock had already sold numerous licenses for the Plover Photo. Id. ¶ 37. Herrick further discovered that her Plover Photo had been licensed by Shutterstock to CRC Press, an offshoot of the publisher Routledge. Id. ¶¶ 38-39. CRC Press has published a textbook, Human-Wildlife Interactions: From Conflict to Coexistence, using the Plover Photo with a source description underneath it that reads, “plover photo by MTKhaled mahmud, Shutterstock 1726619095”, as shown below:

(Image Omitted)

On January 24, 2022, Herrick notified Shutterstock through email of MTKhaledMahmud's infringement of her Plover Photo, following up on her email that same day with screenshots of the unauthorized use and the original raw photo file with metadata showing the date, time, camera, body, lens, and settings that were used to capture the image. Id. ¶¶ 34-35. Herrick demanded that Shutterstock compensate her with all profits from the licensing of her photograph. Id. ¶ 36. Despite this demand, Shutterstock failed to provide Herrick with an accounting or compensate her with all profits from unauthorized licensing fees it received from the Plover Photo. Id. ¶ 40.

As alleged, Shutterstock “generally suspends additional unauthorized licensing of the copyright works upon receiving notification from a copyright owner of infringement.” Id. ¶ 7. But it “refuses to terminate the unauthorized licenses issued through its platform and retains its share of the ill-gotten licensing fees.” Id. As further alleged, with respect to the instant matter, Shutterstock has refused to terminate or void its license with CRC Press, which continues to sell the book displaying Herrick's photograph, as well as any other of the unauthorized licenses it granted to its licensee/customers, for that matter. Id. ¶¶ 41-43.

Herrick soon thereafter found that her Egret Photo had also been uploaded to the same Shutterstock contributor account, “MTKhaledMahmud,” as shown below, with the arrow designating her photograph:

(Image Omitted)

Id. ¶¶ 49-50. Herrick asserts that she “does not know whether this photo generated unauthorized licensing fees for Shutterstock. Only Shutterstock does.” Id. ¶ 50.

In connection with the above-described conduct, Herrick seeks to hold Shutterstock directly and contributorily liable for copyright infringement, Id. ¶¶ 125-149, and directly liable for the falsification of CMI, Id. ¶¶ 150-161. As to the latter claim, Herrick alleges that Shutterstock affixed false CMI in the form of “Shutterstock's name and/or watermark as well as the name of the contributor who does not hold the copyright to the work in connection with the reproduction, distribution, public display and unauthorized licenses to unauthorized licensees” of her copyrighted photographs. Id. ¶ 151.

Although she has not yet moved for class certification, Herrick alleges that she intends to represent the following two classes, the first under Federal Rule of Civil Procedure 23(b)(3) and the second under Rule 23(b)(2). The putative Rule 23(b)(3) class consists of:

All persons and entities whose copyrighted work was licensed by Shutterstock, who sent Shutterstock a notice to take down copyrighted works, and from which Shutterstock generated and retained licensing revenue from a Shutterstock contributor who did not have authorization to exploit any class members' copyrighted work, from three years before the date of filing of this Complaint to the present (“the Class”). The Class also includes all persons and entities whose copyrighted work was licensed by Shutterstock from a Shutterstock contributor who did not have authorization to exploit any class members' copyrighted work and unauthorized licensees who continued to distribute the copyrighted works which contain false copyright management information.

Id. ¶ 113. The putative Rule 23(b)(2) class consists of:

All persons and entities whose copyrighted work has been made available for distribution and display by Shutterstock without a lawful license or the express authority of the copyright holder. Id. According to Herrick, common questions of law and fact among these proposed classes include:

[1] Whether the class members had their copyrighted works licensed by Shutterstock through Shutterstock's licensing platform after being uploaded to the Shutterstock platform (or a Shutterstock partner) by a contributor account that did not have permission or authorization from the copyright holder to copy, distribute, license and/or make display the works available for distribution in exchange for licensing fees;

[2] Whether Shutterstock violated the Act by having actual knowledge of infringing works of any and all [c]lass members, including Plaintiff, and whether Shutterstock retained any direct benefit from licensing the copyrighted works without authorization from Plaintiff and the class members after being sent a takedown notice;

[3] Whether Shutterstock knew or acted in reckless disregard that its actions infringed any of Plaintiffs and the class members' exclusive rights in their copyrighted works by retaining 100% of the revenue generated from licensing fees collected from infringed works after Shutterstock received a takedown notice; [4] Whether Shutterstock refused to compensate Plaintiff and each class member with the revenue generated from the infringing activity and whether Shutterstock was unjustly enriched by the ill-gotten gains;

[5] Whether Shutterstock terminated any of the unauthorized licenses it granted to its customers/unauthorized licensees;

[6] Whether actual or statutory damages apply for each infringement and for CMI violations; and

[7] Whether Shutterstock's acts and/or omissions justify injunctive relief, other equitable remedies, and/or punitive damages.

Id. ¶ 116. Finally, Herrick alleges that her claims are typical of the claims of the other class members Id. ¶ 117, that she will fairly and adequately protect the interest of the class, Id. ¶ 118, and that membership in the class is ascertainable because determining inclusion in the class “can...