High Sch. Servicos Educacionais, LTDA. v. Choi

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HIGH SCHOOL SERVICOS EDUCACIONAIS, LTDA., Plaintiff, v. MUN Y. CHOI, et al., Defendants.

No. 4:21-CV-00029-DGK

United States District Court, W.D. Missouri, Western Division

January 16, 2024

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

GREG KAYS, JUDGE UNITED STATES DISTRICT COURT

This case arises from a soured business relationship involving educational services provided to Brazilian schoolchildren. Plaintiff High School Servicos Educacionas, LTDA (“HSE”) is a Brazilian corporation that contracted with the University of Missouri (“MU”) to provide Brazilian K-12 schoolchildren with a curriculum and diploma that aligned with United States educational standards. This relationship allegedly allowed MU to create a pipeline for Brazilian students to matriculate to its university. Plaintiff alleges that the employees of Mizzou Academy^[1]-an academic program within MU's College of Education and Human Development that worked with Plaintiff-allegedly infringed Plaintiff's copyrighted educational materials and unlawfully acquired Plaintiff's client list so it could do business directly with the Brazilian schools.

The Court previously dismissed various claims and defendants, ECF Nos. 76, 132, but the employees who allegedly committed infringing acts remain, including Defendants Angela Hammons Tamara Regan, Kathryn Fishman-Weaver, and Stephanie Walter (collectively “Defendants”). Out of the seven claims in Plaintiff's Second Amended Complaint, five remain copyright infringement, 17 U.S.C. § 101, against Defendants (Count I); copyright infringement under Brazilian law against Defendants (Count II); a violation of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C § 1202, by Defendants (Count III); a procedural due process claim against Defendant Regan (Count V); and a substantive due process claim against Defendant Regan (Count VI).

Now before the Court are the parties' cross motions for summary judgment on Counts I, III, V, and VI. ECF Nos. 202 220. Neither party moved for summary judgment on Count II. For the following reasons, Defendants' motion for summary judgment is GRANTED, and Plaintiff's motion for partial summary judgment is DENIED. Finally, on its own motion, the Court extends the deadline for Defendants to move for summary judgment on Count II.

Standard

A movant is entitled to summary judgment if he “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). Material facts are those facts “that might affect the outcome of the suit under the governing law,” and a genuine dispute over material facts is one “such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court makes this determination by viewing the facts in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party's favor. Tolan v. Cotton, 572 U.S. 650, 656 (2014); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588-89 (1986). “In reaching its decision, a court should not weigh the evidence, make credibility determinations, or attempt to determine the truth of the matter.” Leonetti's Frozen Foods, Inc. v. Rew Mktg., Inc., 887 F.3d 438, 442 (8th Cir. 2018). To survive summary judgment, the nonmoving party must substantiate his allegations with “sufficient probative evidence that would permit a finding in his favor based on more than mere speculation, conjecture, or fantasy.” Mann v. Yarnell, 497 F.3d 822, 825 (8th Cir. 2007) (internal quotations and citations omitted).

Undisputed Material Facts

To resolve the motion, the Court must first determine the material undisputed facts. The Court has limited the facts to those that are undisputed and material to Defendants and the pending summary judgment motions on Counts I, III, V, and VI. See Fed.R.Civ.P. 56(c); L.R. 56.1(a).

Mizzou Academy is an academic program housed within MU's College of Education and Human Development. At all times relevant to this dispute, Defendants, as employees of Mizzou Academy, were employed and paid through MU.

Plaintiff HSE is an educational service provider within the Federative Republic of Brazil and does not maintain any offices in the Unites States.

In 2015, MU entered into various agreements with Plaintiff to provide educational services in Brazil through Mizzou Academy. These agreements ensured non-disclosure of certain information and outlined the intellectual property sharing and protections for the parties. None of the agreements defined the amount of money that either party would pay the other, but the parties reached an informal agreement for reasonable payments from Plaintiff to MU.

As part of the partnership, Mizzou Academy employees, including Defendants, provided yearly input into the joint “HSE-MK12 Operational Manual.” Plaintiff alleges this input was rarely incorporated into the final document.

On May 12, 2018, Mizzou Academy billed Plaintiff $4,085,048, including retroactive billing from 2015-2017. On January 1,2019, Mizzou Academy provided a replacement invoice that raised the amount to $5,162,638. These retroactive bills for “services” were not based on any written agreement. Plaintiff responded by saying the amounts had already been paid. The parties dispute whether Defendant Regan prepared and submitted the invoices. Further, Plaintiff alleges Defendant Regan did not offer a procedure or method for HSE to challenge the amount in the invoices. Plaintiff has not paid either invoice.

In early 2019, MU decided to terminate its relationships with Plaintiff and to operate its own program in Brazil without Plaintiff's involvement. As part of this process, Mizzou Academy employee Tanya Haeussle began the process of creating a new Operational Manual.

On January 4, 2019, Haeussler sent a “Highly Confidential” email to Defendants. The email gave them a link to the “INTERNAL 2019 MK12 Operation Manual Google Doc” and told them to “go through the entire document and make sure any changes that are needed are included, including removing all HSE references.” Ex. D at 1, ECF No. 203-4. The email indicated each Defendant had only “access to comment” in the document, id., meaning they could only make suggested revisions via comment which could be accepted or rejected by Haeussler. Further, Haeussler was the only person with administrative rights to edit the content of the document.

On February 14, 2019, MU sent a letter to HSE stating their contract would be terminated by February 14, 2020.

On March 12, 2019, Hauessler sent an email stating that the changes to the Operational Manual were complete and that “in light of the IP concern with HSE, the ‘Operational Manual' has been completely revised and we now have a DRAFT 2020 Mizzou Academy Handbook!” Ex. D at 1, ECF No. 203-6. The email further asked Defendants to “review the Handbook” and “turn on TRACK CHANGES if you make any edits and return to me.” Id. During their review, Defendants allegedly removed references to Plaintiff from the Operational Manual but left in Plaintiff's copyrighted photograph and multiple pieces of text from Plaintiff.

Discussion

Defendants argue summary judgment is appropriate because they are entitled to qualified immunity. Plaintiff does not dispute qualified immunity could apply to Defendants but argues their statutory and constitutional violations were clearly established, so Defendants are not entitled to qualified immunity.

Qualified immunity protects public officials, including employees of state universities, from “lawsuits where the officials' conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Hovick v. Patterson 37 F.4th 511, 516 (8th Cir. 2022) (citation and internal quotations omitted); Intervarsity Christian Fellowship/USA v. Univ. of Iowa, 5 F.4th 855, 862 (8th Cir. 2021) (applying qualified immunity to multiple university employees including the Coordinator for Student Organization Development and the Student Misconduct and Title IX Investigator). The qualified immunity analysis involves two inquires: “(1) whether the facts, viewed in the light most favorable to the plaintiff, demonstrate the deprivation of a constitutional or statutory right; and (2) the right was clearly established at the time of the deprivation.” Stark v. Lee Cnty., IA, 993 F.3d 622, 625 (8th Cir. 2021). Plaintiff bears the burden at each step, and the Court may address either inquiry first. See Wilson v. Lamp, 901 F.3d 981, 986 (8th Cir. 2018); Hovick, 37 F.4th at 516.

“A right is clearly established when it is sufficiently clear that every reasonable official would have understood that what he is doing violates that right.” Hovick, 37 F.4th at 516 (citation and internal quotations omitted). “This inquiry must be undertaken in light of the specific context of the case . . . [and the Court] must not define clearly established law at a high level of generality, since doing so avoids the crucial question whether the official acted reasonably in the particular circumstances that he or she faced.” Id. at 517 (cleaned up). Plaintiff can demonstrate a law is clearly established based on “existing circuit precedent with sufficiently similar facts,” a “robust consensus of . . . persuasive authority,” or a “general constitutional rule that applies with obvious clarity.” Id. (internal quotation marks omitted).

I. Defendants are entitled to qualified immunity on Counts I and III.

In Counts I and III, Plaintiff asserts claims for copyright infringement and violation of the DMCA against Defendants. Defendants maintain qualified immunity applies to these claims. Although the...