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Fey v. Panacea Management Group LLC

United States District Court, N.D. Georgia, Atlanta Division

May 18, 2017




         This matter is before the Court on Defendants Panacea Management Group LLC (“Panacea”) and Lee Schulman's (“Schulman”) (together, “Defendants”) Motion for Summary Judgment [32], Plaintiff Floyd Anthony Fey's (“Plaintiff”) Motion for Leave to file Plaintiff's Local Rule 56.1(B)(2) Response to Statement of Undisputed Material Facts and Plaintiff's Local Rule 56.1(B)(2)(b) Statement of Additional Material Facts [42] (“Motion for Leave”), and Defendants' Daubert Motion to Exclude Proposed Expert Testimony of Anna Fey [31] (“Daubert Motion”).

         I. BACKGROUND

         A. Facts

         Plaintiff is a professional artist in Atlanta, Georgia. (Defendants' Statement of Undisputed Material Facts [32.2] (“DSMF”) ¶¶ 1-2). In 1994, Tommy Turrentine (“Turrentine”) commissioned Plaintiff to create a drawing of the Old Vinings Inn restaurant (the “Restaurant”) for $125. (DSMF ¶¶ 12, 20). Turrentine owned the Restaurant at the time. (DSMF ¶ 12). Plaintiff completed the drawing and told Turrentine that “the picture of the restaurant could only be hung as wall art.” ([27] at 37; DSMF ¶ 18). The drawing depicted the exterior of the Restaurant, was eleven by fourteen inches, and was done using graphite pencil on paper. ([32.8] at 1). Plaintiff's name appeared in the bottom-left corner of the drawing. ([1.1]). Turrentine displayed the drawing on the Restaurant's wall.

         Later in 1994, Turrentine asked Plaintiff to update the drawing to reflect architectural changes to the Restaurant. (DSMF ¶ 22). Plaintiff used an overlay to make the requested modification to the drawing. (DSMF ¶ 23). This increased the drawing's dimensions to eleven by eighteen inches. ([32.8] at 1). Plaintiff gave Turrentine a photostatic print of the modified drawing (the “Drawing”) but kept the original in his possession. (DSMF ¶¶ 26-27). Plaintiff did not charge Turrentine for the modification because he was happy with the publicity he received from having the drawing on display in the Restaurant. (DSMF ¶ 24). Plaintiff's name remained in the bottom-left corner of the Drawing. ([1.2]). Plaintiff is unwilling to sell the Drawing-or prints of the Drawing-to third parties because it is a commissioned work. (DSMF ¶¶ 15-17).

         In April 2013, Panacea leased the Restaurant building and purchased the Restaurant's remaining assets, including its intellectual property. (DSMF ¶¶ 8, 10; [28] at 18-19).[1] Although the photostatic print of the Drawing no longer hung in the Restaurant at the time of the purchase, Schulman, the sole member of Panacea, found a copy of the Drawing in a Restaurant advertisement in a local newspaper dated February 1996. (DSMF ¶¶ 9, 38, 43; [28] at 55). Plaintiff's name was not visible or legible on this version of the Drawing. (DSMF ¶ 46). Schulman located the advertisement in a scrapbook in a museum across the street from the Restaurant. (DSMF ¶ 38). He made a copy of the Drawing, with the permission of the museum curator, and began using the Drawing to promote the Restaurant. (DSMF ¶ 39). Schulman did not know who created the Drawing, and believed that Panacea was authorized to use it because Panacea had acquired the Restaurant's intellectual property. (DSMF ¶¶ 40-41).

         On September 11, 2013, Plaintiff visited the Restaurant for the first time since 1994, and met with Schulman. (DSMF ¶¶ 27, 29-30). Plaintiff noticed that a copy of the Drawing, taken from the newspaper advertisement, was displayed on the Restaurant's gift cards and menus. (DSMF ¶¶ 31, 36). Plaintiff told Schulman that he created the Drawing. (DSMF ¶ 32). Schulman told Plaintiff he could “show his work at the restaurant . . . at no charge, ” and gave Plaintiff a business card that had a version of the Drawing on it. ([28] at 76; DSMF ¶¶ 33, 37). Plaintiff did not ask Schulman to stop displaying the Drawing. ([27] at 74).

         After the meeting, Plaintiff sent Schulman a letter expressing “concern that [his] name was nowhere associated with the [Drawing] at all.” ([27] at 58; DSMF ¶ 44). Plaintiff asked Schulman to “ensure that his name was always associated with the [Drawing] in the future.” ([27] at 75; DSMF ¶ 44). Plaintiff did not receive a response. ([32.8] at 2). Shortly after sending the letter, Plaintiff saw a copy of the Drawing on the Restaurant's website. (DSMF ¶ 48).

         About a year later, on October 31, 2014, Plaintiff's counsel sent Schulman a letter, noting that the Drawing appeared on the Restaurant's website and social media accounts, and on third party websites such as ([32.8] at 2). The letter stated that Plaintiff's name did not appear on these versions of the Drawing, and demanded payment of a $23, 000 license fee or a $30, 000 purchase price for the Drawing. ([32.8] at 2-3; DSMF ¶ 49).

         On November 17, 2014, Defendants' counsel responded to Plaintiff's letter and agreed to investigate the alleged copyright infringements. (DSMF ¶ 52). The same day, Plaintiff registered his Drawing with the United States Copyright Office. (DSMF ¶ 60). In December 2014, Panacea offered to purchase an unlimited license to the Drawing. (DSMF ¶ 61). Plaintiff declined the offer, and Defendants immediately began to remove the Drawing from the Restaurant's website and social media accounts, third party websites featuring the Restaurant, and the Restaurant's marketing materials, including gift cards, business cards, and menus. (DSMF ¶ 61). Defendants replaced the Drawing with a monochromatic version (“Monochromatic Photograph”) of a color photograph (“Color Photograph”) of the Restaurant. (DSMF ¶ 53; [28.1] at 84-85; [37] at 5). Panacea acquired the Color Photograph when it purchased the Restaurant's assets and intellectual property. (DSMF ¶ 54).[2] Panacea made the Monochromatic Photograph appear green and white to reflect the colors of the Restaurant. (DSMF ¶ 59).

         On March 31, 2016, more than a year later, Plaintiff's counsel sent a second letter to Defendants, alleging that the Monochromatic Photograph infringed Plaintiff's copyright interest in the Drawing. (DSMF ¶ 62). On April 8, 2016, Defendants' counsel responded to Plaintiff's letter, denying the alleged copyright infringement on the grounds that the Monochromatic Photograph and the Drawing are materially different. ([32.13] at 1-2). Defendants' counsel also confirmed that Panacea had ceased “reproducing, distributing or displaying the [Drawing] in any medium that it controls” and that it had “no interest” in using the Drawing in the future. ([32.13] at 2).

         B. Procedural History

         On August 6, 2016, Plaintiff filed his Complaint [1], asserting six claims for relief. Counts 1 and 2 assert claims for copyright infringement on the grounds that Defendants used the Drawing and the Monochromatic Photograph, allegedly a derivative of the Drawing, without Plaintiff's permission. Count 3 alleges that that, in violation of 17 U.S.C. § 1202, Defendants intentionally “removed, covered or replaced the inscription ‘Tony Fey'” on the Drawing. (Compl. ¶ 68). Count 4 seeks attorney's fees, under 17 U.S.C. § 505, on the grounds that “Defendants' conduct in this dispute has been objectively unreasonable and unduly litigious.” (Compl. ¶ 76). Count 5 asserts a state law claim for unjust enrichment on the grounds that “equity and good conscience demand that Plaintiff be compensated for the benefits received by Defendants with regard to Plaintiff's work.” (Compl. ¶ 81). Count 6 seeks a permanent injunction, under 17 U.S.C. § 502 and O.C.G.A. § 10-1-370 et seq., enjoining Defendants “from making future infringing uses of the Plaintiff's protected work.” (Compl. at 23; Compl. ¶¶ 83-86).

         On February 2, 2017, Defendants filed their Daubert Motion, seeking to exclude the testimony of Anna Fey (“Fey”), Plaintiff's wife and proposed damages expert, on the grounds that her methodology is not reliable. Also on February 2, 2017, Defendants filed their Motion for Summary Judgment, seeking summary judgment on Plaintiff's claims. On February 27, 2017, Plaintiff filed his response brief but, in violation of the Local Rules, did not file his response to Defendants' Statement of Undisputed Material Facts [32.2]. On March 28, 2017, two weeks after Defendants filed their reply brief, Plaintiff sought leave to untimely file his response to Defendants' Statement of Undisputed Material Facts and his statement of additional material facts. Defendants oppose Plaintiff's request.


         A. Legal Standard

         The admission of expert evidence is governed by Federal Rule of Evidence 702, which provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.

         Fed. R. Evid. 702. This provision requires district courts to “act as gatekeepers, excluding evidence unless is it reliable and relevant.” Hughes v. Kia Motors Corp., 766 F.3d 1317, 1328 (11th Cir. 2014). “District courts are charged with this gatekeeping function to ensure that speculative, unreliable expert testimony does not reach the jury under the mantle of reliability that accompanies the appellation ‘expert testimony.'” Id. at 1328-29. “The decision to exclude expert testimony is committed to the sound discretion of the District Court.” Id. at 1331.

         The Eleventh Circuit “has set out three requirements that an expert must meet before his opinions may be admitted. First, the expert must be qualified on the matter about which he intends to testify. Second, he must employ reliable methodology. Third, the expert's testimony must be able to assist the trier of fact through the application of expertise to understand the evidence or fact in issue.” Id. at 1329 (internal citations omitted). “The proponent of the expert opinion must carry the burden of establishing qualification, reliability, and helpfulness.” Id.

         “Whether an expert's testimony is reliable depends on the particular facts and circumstances of the particular case, ” including “(1) whether the methodology can be and has been tested, (2) whether the theory or technique has been subjected to peer review, (3) the known or potential rate of error of the methodology employed, and (4) whether the methodology is generally accepted.” Id. These factors are only general guidelines, and the trial judge has “considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999).

         B. Analysis

         Plaintiff has identified Fey, his wife, as an expert witness on the issue of damages in this action. Fey produced her expert report on November 24, 2016. Defendants ...

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