United States District Court, D. Arizona
Dominic W. Lanza, United Slates District Judge.
before the Court is Defendant Scholastic Incorporated's
(“Scholastic”) motion to dismiss. (Doc. 10.) For
the following reasons, the Court denies the
Stephen Krasemann, Darrell Gulin, Johnny Johnson, and Daniel
R. Krasemann (“Plaintiffs”), on behalf of
themselves and others similarly situated, bring this
copyright infringement action against Scholastic for the
unlicensed use of their photographs. The facts alleged by
Plaintiffs in the complaint (Doc. 1), taken as true for the
purpose of ruling on Scholastic's motion to dismiss, are
own copyrights in various photographs. (Id. ¶
12.) Plaintiffs entered into “representation
agreements” with DRK Photo-a stock photo
agency-granting DRK Photo the right to license their
photographs to third parties in exchange for a percentage of
the fees they negotiated. (Id. ¶¶ 2, 13.)
1993 and 2011, DRK Photo provided Scholastic-the world's
largest publisher and distributor of children's
books-with Plaintiffs' photographs “for the limited
purpose of enabling Scholastic to select specific images for
subsequent licensing requests.” (Id.
¶¶ 11, 14.) DRK Photo expressly prohibited
Scholastic from using the photographs “until submission
of and payment of an invoice” indicating that
Scholastic was authorized to use the photographs.
(Id. ¶ 14.)
requested and secured limited-use licenses for 166
photographs belonging to Plaintiffs. (Id. ¶
15.) Each license was expressly limited by
“publication, number of copies, distribution area,
image size, language, duration and/or media (print or
electronic).” (Id. ¶ 18.)
after obtaining licenses for Plaintiffs' photographs,
Scholastic: (1) printed or distributed the photographs
without permission after the licenses obtained from DRK Photo
were exhausted; (2) distributed the photographs in geographic
locations not covered by the licenses; (3) published the
photographs in electronic, ancillary, or derivative products
not covered by the licenses; (4) printed and distributed the
photographs in unlicensed international editions and foreign
language products; and (5) printed and/or distributed the
photographs after expiration of temporal limits in the
licenses obtained from DRK Photo. (Id. ¶ 16.)
moves to dismiss the complaint for three reasons. Each reason
applies to a subset of the photographs at issue in this case,
but not to each photograph. Specifically, Scholastic argues
that: (1) the claims concerning 54 of the photographs are
subject to arbitration agreements; (2) the claims concerning
67 of the photographs must be asserted as breach-of-contract
claims, not copyright infringement claims; and (3) any claims
concerning the remaining photographs are barred by the
statute of limitations. (Doc. 10.)
survive a motion to dismiss, a party must allege
‘sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.'”
In re Fitness Holdings Int'l, Inc., 714 F.3d
1141, 1144 (9th Cir. 2013) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. (quoting Iqbal, 556 U.S. at 678).
“[A]ll well-pleaded allegations of material fact in the
complaint are accepted as true and are construed in the light
most favorable to the non-moving party.” Id.
at 1144-45 (citation omitted). However, the court need not
accept legal conclusions couched as factual allegations.
Iqbal, 556 U.S. at 679-80. The court also may
dismiss due to “a lack of a cognizable legal
theory.” Mollett v. Netflix, Inc., 795 F.3d
1062, 1065 (9th Cir. 2015) (citation omitted).
argues that the disputes regarding 54 of the photographs
(those for which licenses were issued before June 18, 1997)
are subject to arbitration agreements, so the Court must
dismiss the claims related to those photographs. (Doc. 10 at
4-6.) 1. Scope of Review Scholastic has moved under
Rule 12(b)(6) to dismiss the disputes regarding the
photographs it claims are subject to arbitration agreements,
rather than moving to compel
arbitration. This approach is unusual because
“[t]he question of arbitrability usually arises in the
context of a motion to compel arbitration.” Nicosia
v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016).
See also Guidotti v. Legal Helpers Debt Resolution,
L.L.C., 716 F.3d 764, 771 (3d Cir. 2013) (“The
issue typically arises when one of the parties files a motion
to compel arbitration.”).
approach also raises questions concerning what evidence the
Court may consider when ruling on Scholastic's motion.
When considering a motion to compel arbitration, district
courts are permitted to consider evidence outside the
pleadings. Regents of Univ. of California v. Japan Sci.
& Tech. Agency, 2014 WL 12690187, *3 n.24 (C.D. Cal.
2014) (“Although the court normally cannot consider
matters outside the pleadings in deciding a Rule 12(b)(6)
motion to dismiss . . . it may consider such evidence in
deciding a motion to compel arbitration.”);
Breckenridge Edison Dev., L.C. v. Sheraton Operating
Corp., 2014 WL 4892885, *1 n.2 (S.D.N.Y. 2014)
(“Courts may consider documents outside the pleadings
when deciding a motion to compel arbitration.”). In
contrast, when considering a motion to dismiss under Rule
12(b)(6), district courts normally can't consider matters
outside the pleadings without converting the motion into a
motion for summary judgment.
neither party has addressed which standard should apply. The
Court also hasn't identified any Ninth Circuit case law
addressing this issue. Thus, the Court will follow the
approach established by the Second Circuit in
Nicosia. There, the defendant “did not move to
compel arbitration and instead moved pursuant to Rule
12(b)(6) to dismiss the complaint for failure to state a
claim upon which relief may be granted, relying on the
arbitration provision in [underlying contract].” 834
F.3d at 229-30. The Second Circuit explained that, because
the “motion to dismiss neither sought an order
compelling arbitration nor indicated that [the defendant]
would seek to force [the plaintiff] to arbitrate in the
future, it was proper not to construe the motion to dismiss
as a motion to compel arbitration, to which the summary
judgment standard would apply.” Id. at 230.
The Second Circuit further concluded that, because the