SuperMedia LLC v. Yellow Pages Photos, Inc. (In re SuperMedia LLC)

540 B.R. 85
CourtUnited States Bankruptcy Court, D. Delaware
DecidedOctober 27, 2015
DocketCase No. 13-10546(KG); Adv. Proc. No. 15-50044(KG)
StatusPublished
Cited by1 cases

This text of 540 B.R. 85 (SuperMedia LLC v. Yellow Pages Photos, Inc. (In re SuperMedia LLC)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SuperMedia LLC v. Yellow Pages Photos, Inc. (In re SuperMedia LLC), 540 B.R. 85 (Del. 2015).

Opinion

MEMORANDUM OPINION

KEVIN GROSS, U.S.B.J.

The parties in this case and adversary proceeding, SuperMedia, LLC (“SuperMedia”) and Yellow Pages Photos, Inc. (‘YPPI”), have cross-moved for summary judgment. For the sake of time and because the parties are familiar with the nature of these cases, the Court will not discuss the facts in detail at the outset, except to note that the Court previously issued its opinion (the “Opinion”) on the liability of SuperMedia for the administrative expense claim filed by YPPI. See In re SuperMedia, Inc., 2014 WL 7403448 (Bankr.D.Del.2014). The Court will instead discuss the facts in the discussion of the parties’ arguments. The Court is also aware that its decision draws from two separate sources. First is YPPI’s proof of claim. Second is SuperMedia’s now Second Amended Complaint which it filed in the captioned adversary proceeding.

SuperMedia moved for leave to file a Second Amended Complaint which the parties argued immediately before the Court heard argument on the summary judgment motions. In the Second Amended Complaint SuperMedia alleges two new facts. First, SuperMedia alleges that the transfers to AMDOCs and ASEC occurred in 2005-2006, and well before AdMedia Systems, Inc. (AdMedia”) (discussed below) registered the copyright. Second Amended Complaint, ¶25. Second, Su-perMedia alleges that on or about November 3, 2006, Yellow Pages Photos, Inc. changed its name to AdMedia Systems, Inc., and the same day Trent Moore, YPPI’s principal, incorporated a new Yellow Pages Photos, Inc., the defendant YPPI. AdMedia thereafter assigned its copyrights to YPPI. Second Amended Complaint, ¶ 8.

The Court granted leave to SuperMedia to file the Second Amended Complaint over YPPI’s strenuous objection. YPPI argued that the findings of fact in the Opinion collaterally estopped SuperMedia from raising the issues, the motion to amend was a belated Rule 60 motion and SuperMedia knew- earlier about the name change and the creation of YPPI, and the Court’s Opinion was collateral estoppel against the allegations.

Prejudice to the non-moving party, here YPPI, is the touchstone of whether to. permit amendment, and significant delay— unjustified or undue — is sufficient prejudice to denying the motion to amend. Zen Ins. v. Unbreakable Lock Co., 276 Fed. Appx. 200, 202 (3d Cir.2008); CMR D.N. Corp. v. City of Philadelphia, 703 F.3d 612, 629 (3d Cir.2013). There is, however, a general presumption in favor of allowing amendments. Boileau v. Bethlehem Steel, 730 F.2d 929 (3d Cir.1984). Further, permitting amendments to correct a pleading is desirable because it enables the trial court to make its determination on the merits of the case. West Run Student Housing Assoc. v. Huntington Nat’l Bank, 712 F.3d 165, 171 (3d Cir.2013). Here, the Court was satisfied that SuperMedia was entitled to amend to bring the facts to a head.

Summary Judgment Standard

“The court shall grant summary judgment if the movant 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) (made applicable to this proceeding pursu[88]*88ant to Fed. R. Bankr. P. 7056). The moving party bears the burden of establishing that no genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). While the non-moving party must itself come forward with facts showing that a genuine issue exists, Matsushita, 475 U.S. at 587, 106 S.Ct. 1348, courts will view all facts and draw all reasonable inferences most favorably to the non-moving party. Pa. Coal Ass’n v. Babbitt, 63 F.3d 231, 236 (3d Cir.1995). The “mere existence” of a factual dispute does not defeat a properly supported motion for summary judgment. The evidence must be significantly probative. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where, as here, there are cross-motions for summary judgment, the Court must ensure that the nonmoving party on each theory has the inferences to be drawn from the underlying facts viewed in the light most favorable to it as the party opposing the motion. Matsushita, 475 U.S. at 578-88, 106 S.Ct. 1348.

THE OPINION

The Court’s findings in the Opinion are material to its summary judgment ruling because YPPI is attempting to employ collateral estoppel to halt many of SuperMedia’s arguments. Therefore, it is important for the Court to describe its “findings” at the outset. As the Court discusses in the Opinion, the issue in the liability trial was the “allowance and payment of an administrative expense [claim] under Section 503(b)(1) of the Bankruptcy Code”. Opinion at * 1. It is important to remember that the issue tried was whether SuperMedia “breached a license agreement and committed copyright infringement during the 43 days between the date of SuperMedia’s bankruptcy petition and the effective date of its confirmed plan, i.e., between March 18, 2013 and April 30, 2013 (the “Administrative Claim Period”).” Id. Important to this ruling for the summary judgment motions, the Court found after four days of trial and an additional day to allow SuperMedia to supplement the record that

• In 2009, SuperMedia transferred all of the images it licensed from YPPI to Tata, MPS, AMDOCS and ASEC, and later to BieMedia, Web.com, Hostopia, DexMedia, Facebook and Google. Opinion at * 14.
• The transfers were willful. Opinion at * 19.

These were findings of fact by the Court, but whether SuperMedia is collaterally estopped from litigating the “findings” is governed by cases discussed below.

STATUTORY DAMAGES OR ATTORNEYS' FEES UNDER COPYRIGHT ACT SECTION 412

AdMedia did not register the Licensed Images with the Copyright Office until January 2007. SuperMedia Exhibits I and J. SuperMedia claims that its infringing conduct commenced in 2005 or 2006 (SuperMedia Ex. G, Dale Decl. ¶¶ 3-4) and that 17 U.S.C. § 412(2) prohibits statutory damages or attorneys’ fees for any infringements if the copyright holder fails to register the copyrights before the infringement at issue commences. Johnson v. Jones, 149 F.3d 494, 506 (6th Cir.1998). YPPI does not challenge the factual allegation that the transfers of the Licensed Images to AMDOCS and ASEC took place in 2005-2006.

The bar of Section 412(2) applies even for post-registration infringements where the first infringing act occurred before the copyright was registered. Mason v. Montgomery Data, Inc.,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
540 B.R. 85, Counsel Stack Legal Research, https://law.counselstack.com/opinion/supermedia-llc-v-yellow-pages-photos-inc-in-re-supermedia-llc-deb-2015.