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Bill G Perry Family Design LLC v. New Generation Homes, LLC

United States District Court, W.D. Oklahoma

March 25, 2019

(1) BILL G. PERRY FAMILY DESIGN, LLC, an Oklahoma limited liability company; and (2) BILLY PERRY, JR., an individual, Plaintiffs,
(1) NEW GENERATION HOMES, LLC, an Oklahoma limited liability company; (2) MATTHEW ANDERSON, an individual; (3) SAND PROPERTIES, LLC, an Oklahoma limited liability company; (4) DEREK SHANNON, an individual; and (5) JOHN DOES 1-99, true names unknown, Defendants.



         Before this Court is Defendants' Motion to Dismiss Plaintiffs' Amended Complaint (Doc. 46).[1] For the reasons stated herein, Defendants' motion is DENIED.

         I. Background

         Plaintiffs filed this suit on December 20, 2017, asserting copyright infringement and breach of contract claims. See Doc. 1; see also First Am. Compl., Doc. 40. Taking as true all well-pleaded factual allegations in the complaint and viewing them in the light most favorable to Plaintiffs, see Burnett v. Mortg. Elec. Registration Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013), Plaintiff Bill Perry, Jr., “creates and authors architectural works, pictorial works, and graphic works” for Plaintiff Bill G. Perry Family Design, LLC (“Family Design”). Doc. 40, at 2-3. These works include “house designs, house design plans, blueprints, and related pictorial and graphic works.” Id. at 3. Family Design licenses these works for profit. Plaintiffs allege that Defendants “advertised, constructed, offered and at various times sold houses” based on Plaintiffs' works, thereby infringing on the works' copyright. Id. at 6-12; see also Doc. 40-2. Plaintiffs identify these purportedly infringing houses by street address, along with codes used by the parties to denote the designs on which the houses are based. Doc. 40, at 6-12.; see also Doc. 40-1.[2] Plaintiffs also allege that Defendant breached the single-use licenses to which these plans and others were subject by constructing additional houses based on the plans and copying or otherwise producing derivations of the plans. See Doc. 40, at 12-13; see also Doc. 40-1; Doc. 40-3.

         II. Legal Standards for a Fed.R.Civ.P. 12(b)(6) Motion to Dismiss

         A legally-sufficient complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a).[3] Operationalizing the Rule, a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face'” to survive a motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This standard “is ‘a middle ground between heightened fact pleading . . . and allowing complaints that are no more than labels and conclusions or a formulaic recitation of the elements of a cause of action.'” Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012) (quoting Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)). That is, the plaintiff's complaint “need only give the defendant fair notice of what the claim is and the grounds upon which it rests.” Id. at 1192 (internal quotation marks and citations omitted). While assessing plausibility is “a context-specific task . . . requir[ing] . . . court[s] to draw on [their] judicial experience and common sense, ” Iqbal, 556 U.S. at 679, complaints “‘plead[ing] factual content that allows the court to . . . reasonabl[y] infer[] that the defendant is liable for the misconduct alleged'” are facially plausible. See S.E.C. v. Shields, 744 F.3d 633, 640 (10th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).

         III. Discussion

         In their motion to dismiss, Defendants offer four arguments, or “propositions”: (1) Plaintiffs' allegations of willful and intentional copying fail to state a claim, (2) Plaintiffs' allegations that Defendants are “legally interchangeable” fail to state a claim, (3) Plaintiffs fail to state an actionable claim of copyright infringement, and (4) Plaintiffs' breach of contract claim is preempted by the Copyright Act. Doc. 46, at 4-11. All of Defendant's “propositions” fail to show that Plaintiffs' amended complaint is fatally deficient.

         (A) Propositions I-III

         Defendants' first three propositions rest on the same legal argument: portions of Plaintiffs' amended complaint are pled formulaically and implausibly, such that they fail to satisfy Fed.R.Civ.P. 8(a)(2). Doc. 46, at 4-6. Specifically, Defendants argue under Proposition I that Plaintiffs' allegations of willful, intentional, and malicious copyright infringement are the types of “conclusory allegations” that the United States Supreme Court held insufficient to state a claim in Ashcroft v. Iqbal. See Doc. 40, at 7-13; Doc. 46, at 4-5; see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Similarly, Proposition II asserts that Plaintiffs' allegations relating to the liability of each Defendant-that is, that they are “legally interchangeable and are the alter egos [of one] another”-are conclusory and, thus, insufficient. Doc. 46, at 5-6. Finally, Proposition III attacks the sufficiency of Plaintiffs' copyright claims as pled. Id. at 6-8.

         The elements of a copyright infringement claim are straightforward: Plaintiffs must prove “‘(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.'” Savant Homes, Inc. v. Collins, 809 F.3d 1133, 1138 (10th Cir. 2016) (quoting Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)). Plaintiffs have alleged ownership of a valid copyright, and Defendants do not appear to contest this. See Doc. 40, at 6 (“The Plaintiffs have registered with the United States Copyright Office . . . the architectural works, house designs, and house design plans at issue herein . . . .”); Doc. 40-2, at 1 (stating works at issue registered under designation “VA-1-381-273”); see also Doc. 46, at 6-8. Rather, Defendants argue that Plaintiffs insufficiently pled the second element of copyright infringement: that Defendant copied original elements of the work. See Doc. 46, at 6-8.[4]

         As to whether Defendants “copied” the works in question, Plaintiffs clearly allege that they did. See Doc. 40, at 8 (“Defendants have infringed upon several of the Plaintiffs' copyrights by copying and duplicating the Plaintiffs' . . . works . . . .” (emphasis added)). And as to whether those elements copied were sufficiently “original, ” this issue involves factual questions inappropriate for resolution at the motion-to-dismiss stage. See McNeese Photography, L.L.C. v. Access Midstream Partners, L.P., No. CIV-14-0503-HE, 2014 WL 3919575, at *2 (W.D. Okla. Aug. 11, 2014) (“A determination of whether plaintiffs' works contain sufficient originality to entitle them to copyright protection, however, involves questions of fact not ordinarily appropriate for resolution on a motion to dismiss.”); see also, Inc. v., Inc., 679 F.Supp.2d 312, 320 (E.D.N.Y. 2010) (noting that originality is “a factual issue . . . inappropriate for determination on a motion to dismiss” and one best resolved “on a motion for summary judgment, after the parties have conducted discovery and had the opportunity to submit evidence on the issue”). Accordingly, the Court concludes that it is premature to resolve issues of originality and that Plaintiffs have pled sufficient factual content to state copyright infringement claims.

         Defendants' Propositions I and II fare no better. As to Proposition I, the Court finds that Plaintiffs sufficiently pled willful copyright infringement. “Willfully” in the copyright infringement context means that Defendants knew their conduct constituted copyright infringement or recklessly disregarded Plaintiffs' rights. Moos v. Craft Outlet, Inc., No. CIV-16-750-C, 2017 WL 238445, at *1 (W.D. Okla. Jan. 19, 2017). The willfulness of the infringement, if proven, is germane to the damages available to Plaintiffs. See 17 U.S.C. § 504(c)(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 . . . .”); Rocking Chair Enters., L.L.C. v. Macerich SCG Ltd. P'ship, 407 F.Supp.2d 1263, 1269 (W.D. Okla. 2005) (“Enhanced statutory damages are available when plaintiff sustains the burden of proving that the copyright infringement was committed willfully.”). While Plaintiffs could have alleged “willfulness” with greater clarity or detail, the Court is satisfied that the factual content in the amended complaint makes out a claim for willful copyright infringement. See, e.g., Doc. 40, at 6-11 (noting that Defendants intentionally used Plaintiffs' works in unauthorized ways).

         As to Proposition II, Defendants' arguments are unavailing. In asserting that Plaintiffs' liability theories are deficiently pled, Defendants greatly emphasize language from an unpublished Sixth Circuit Court of Appeals decision, Trustees of Detroit Carpenters Fringe Benefit Funds v. Patrie Construction Co. (“Patrie”). See Doc. 46, at 5- 6. In Patrie, the Sixth Circuit noted that “generalized and conclusory allegations regarding common ownership, employees, management, control, and decisionmaking are essentially a recitation of the legal standard and are plainly insufficient to state a claim of alter ego status.” Patrie, 618 Fed.Appx. 246, 254 (6th Cir. 2015) (internal quotation marks, citations, brackets, alterations, and ellipsis omitted). Defendants surely know that Sixth Circuit decisions-especially unpublished ones-do not bind this Court. Moreover, Patrie deals with the equitable “alter-ego doctrine” at play in the collective bargaining context. Id. at 252. This doctrine “developed to prevent employers from evading obligations under the National Labor Relations Act” and “operates to bind an employer to a collective bargaining agreement if it is found to be an alter ego of a signatory employer.” Trs. ...

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