Hilber v. Malley's Candies, LLC

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CAROLINE HILBER, Plaintiff/Counter-Defendant, v. MALLEY'S CANDIES, LLC, Defendant/Counter-Plaintiff.

No. 1:22-cv-2305

United States District Court, N.D. Ohio, Eastern Division

April 22, 2024

MEMORANDUM OPINION AND ORDER

BRIDGET MEEHAN BRENNAN UNITED STATES DISTRICT JUDGE

Before the Court is Plaintiff's Motion for Leave to Amend the Complaint (Doc. No. 33), which has been fully briefed (Doc Nos. 37, 40). Also before the Court is Plaintiff's Motion to Compel Civil Rule 30(b)(6) Deposition Regarding Ownership and Related Evidence (Doc. No. 39), which has been fully briefed (Doc. Nos. 41, 42). For the reasons below, leave to amend the Complaint is DENIED, and the motion to compel the Rule 30(b)(6) deposition is GRANTED in part.

I. Background

A. Pleadings

On December 22, 2022, Caroline Hilber (“Hilber” or “Plaintiff”) filed a complaint against Malley's Candies, Inc. (“Malley's” or “Defendant”). (Doc. No. 1.) Plaintiff is a graphic designer who prepared artwork showing various candy and food products offered by Defendant (“Works”). (Id. at 3-25 ¶¶ 11-77.) Plaintiff contends that she was the sole owner of the Works, for which she filed registrations with the U.S. Copyright Office. (Id. ¶¶ 79-81.)

Plaintiff - operating as an independent contractor - created Works for Malley's from 2018 to 2021. (Id. at 25 ¶ 80.)

Pursuant to Agreement, Hilber submitted more than sixty invoices to Malley's between 2018 and 2020 totaling more than $230,000, which until late 2021, were paid promptly and without question or concern by Malley's to Hilber for services.

In 2021, Malleys' requested to receive native files associated with Hilber's Work. Hilber informed Malley's that she was the owner of copyrights associated with her Work and therefore was not required to provide the requested native files associated with her Work.

Malley's continued the use of Hilber's services. However, upon information and belief, Malley's sought to obtain further services with the intention of not compensating Hilber under the Agreement.

In the Fall of 2021, Hilber prepared a substantial amount of Works requested by Malley's for the fall and winter holidays, including Sweetest Day, Halloween, Thanksgiving, Christmas, and Valentine's Day, which works were copyrighted.

(Id. ¶¶ 82-85.)

On October 1, 2021, Hilber submitted an itemized invoice to Malley's in the amount of $4,475.00 for prepared Works. (Id. ¶ 86.) On October 6, 2021, Hilber submitted an itemized invoice to Malley's in the amount of $17,125.00. (Id. ¶ 87.) Malley's allegedly refused to pay those invoices until Hilber brought suit in state court on January 19, 2022. (Id. ¶¶ 87-88.)

The Complaint alleges re-use of the Works by Defendant without authorization or permission from Plaintiff. (Id. at 27-35 ¶¶ 92-162.) “Malley's has published the Works in printed and electronic advertisements that have reached thousands, if not millions of customers, locally, nationally and internationally, and which published advertisements which were the subject of the two invoices that remained unpaid until Hilber brought suit ....” (Id. ¶ 89.) The Complaint details alleged copyright-infringing uses of the Works that occurred between December 2021 and December 2022. (Id. at 27-35 ¶¶ 92-162.)^[1] Hilber claims that Malley's had its designers extract elements out of Hilber's copyrighted native original files for use in Malley's ads over the past few years. The Complaint seeks declaratory relief and damages for deceptive practices, unfair competition, and copyright infringement. (Id. at 36-38 ¶¶ 166-91.)

On March 9, 2023, Defendant answered the Complaint and filed a Counterclaim. (Doc. No. 7.) In that pleading, Defendant says it paid for the equipment and resources used by Plaintiff to photograph Malley's products and create the Works. (Id. at 76 ¶¶ 8-9.) Defendant points out that Plaintiff also designed boxes and created advertisements for social media. (Id. at 76-79 ¶¶ 10-15.) These were understood and intended to be reused in the future, Defendant pleads. (Id. ¶ 12, 15.) Defendant asserts counterclaims of trademark dilution and infringement under federal and state law. Defendant alleges that Plaintiff used some of the Works - which feature Malley's products and trademarks - on her webpages to promote her own graphic design business. (Id. at 79-82 ¶¶ 17-21.) Finally, Defendant seeks a declaratory judgment recognizing an implied license. (Id. at 84-85 ¶¶ 38-45.) “Malley's contends that it has a license to use all of the designs, advertisements and photographs that Hilber created during the term of her engagement with Malley's.” (Id. ¶ 42 (emphasis added).)^[2]

B. Procedural History

In the parties' Fed.R.Civ.P. 26(f) report of their planning meeting (Doc. No. 13), they indicated that the “case should be completed within fifteen (15) months or less after filing.” (Id. at 133.) The parties recommended June 15, 2023 as the deadline for amending pleadings and adding parties. (Id. at 134.)

On July 25, 2023, Plaintiff served her First Set of Requests for Production of Documents (“First Discovery Requests”) on Defendant. (Doc. No. 39 at 430.) On November 16, 2023, Defendant served its written response to the First Discovery Requests. (Id.; Doc. No. 39-1.) On December 5, 2023, Defendant produced its first set of documents. (See id.)

On September 11, 2023, in an effort to cooperate in discovery, Defendant provided Plaintiff with a list of search terms. (Doc. No. 37 at 413.) On September 15, counsel for Defendant asked counsel for Plaintiff whether he wanted to discuss the list of search terms, so that Defendant could similarly begin collecting and culling documents from its own server. (Id. at 413-14.) Counsel for Plaintiff did not provide a reciprocal list. (Id. at 414.) Three weeks later, counsel for Defendant again approached counsel for Plaintiff on October 3, 2023, asking to discuss potential search terms. (Id.) Although the lawyers traded dates for an upcoming discovery conference, counsel for Plaintiff still provided no search terms. (Id.) Counsel for Defendant requested search terms again on October 30, 2023, and on November 1, 2023, but did not receive a response from Plaintiff. Defendant then proceeded with production of documents without the benefit of winnowing down records pursuant to relevant, agreed-upon terms. (Id.; cf. Doc. No. 40 at 523.)^[3]

On September 25, 2023, the parties jointly requested a 90-day extension of all case management scheduling dates. (Doc. No. 18.) As shown in the following excerpt from the joint motion, the parties expressly did not seek any modification of the deadline for new pleadings or parties.

Event

Current Date

Requested Date

Amendment of Pleadings and New Parties

June 15, 2023

No change

Non-expert discovery

September 29, 2023

December 28, 2023

(Doc. No. 18 at 148.) The Court granted that motion the following day. (See Docket Order Sept. 26, 2023.)

Less than a month later, on October 31, 2023, the parties jointly moved for an additional 90-day extension beyond what previously was granted. (Doc. No. 19.) That motion largely mirrored the prior extension motion. (See id.) The Court denied the second motion. (Doc. No. 20.) In its Order, the Court noted:

A 180-day extension may be warranted in some cases, but not here....The parties' proposed deadlines, which were adopted by this Court on September 26, 2023, remain.

(Doc. No. 20 at 155-56.)

On December 6, 2023, a telephonic status conference was held at the joint request of the parties. “The parties summarized the status of ongoing discovery and expressed the need for an extension of the present deadlines. The Court stated that a motion for extension of time must be filed with the Court.” (Minute Order December 6, 2023.)

On December 7, 2023, the parties jointly moved -

for an additional sixty days of the current discovery cutoff from December 28, 2023 to February 28, 2024. This would result in a commensurate request for extension of subsequent case management dates as well. The proposed amendment of current case management dates is therefore as follows.

Event

Current Date

Requested Date

Amendment of Pleadings and New Parties

June 15, 2023

No change

Non-expert discovery

December 28, 2023

February 28, 2024

Expert Report(s) for party bearing the burden of proof

January 29, 2024

March 29, 2024

Responsive Expert report(s)

February 28, 2024

April 24, 2024

Expert discovery deadline

April 29, 2024

June 28, 2024

Dispositive motion deadline

May 29, 2024

July 29, 2024

The Parties acknowledge that no additional requests for extension will be made or allowed.

(Doc. No. 23 at 162.)

On January 5, 2024, after completing the review of the First Documents, Hilber advised Malley's of its failure to produce documents from the period of time when infringing uses occurred. (Doc. No. 39 at 430-31.) Between January 22 and 26, 2024 - i.e., one month before the second-extended discovery cutoff - Plaintiff filed deposition notices for: Dan Malley, Sharra Hlavac, Karen Schauer, Amanda Nugent, Dave Haney, and Miranda Tulcewicz. (See Doc. Nos. 25-32.) From January 22, 2024 onward, the parties communicated regarding Plaintiff's desire to conduct a Rule 30(b)(6) deposition. (Doc. Nos. 39-2, 39-3.) On January 25, 2024, Plaintiff filed a notice of service of a second set of interrogatories and production requests. (Doc. No. 31.) On January 27, 2024, Plaintiff filed a notice of service of a subpoena for documents on a third-party called Doe Media. (Doc. No. 34.)

On February 9, 2024, Malley's deposed Dan Malley, a former Malley's executive who primarily directed Malley's use of Hilber's work during much of the alleged infringing uses. (Doc. No. 39 at 430-31.) On February 15 2024, Malley's provided additional documents,...