Dance Theatre of Harlem, Inc. v. ChromaDiverse, Inc.

Background

Dance Theatre of Harlem, Inc. brought this case seeking a declaration that it owns physical images and copyrights in photographs and related content created by Margaret Elizabeth Schnare under the work-for-hire doctrine. The physical images are located in the Southern District of New York. ChromaDiverse, Inc. contends that it owns Schnare’s entire photography collection based on a copyright assignment agreement executed by Sherry Gagnon and Harriet Gilbert, identified as Schnare’s heirs.

Before this federal case, ChromaDiverse filed an action against Plaintiff in San Francisco Superior Court. ChromaDiverse alleged that a deed of gift and copyright assignment agreement transferred Schnare’s work, including copyright interests, and that Plaintiff had refused to transfer prints, negatives, and documents to ChromaDiverse.

Defendants later filed a motion in the federal case seeking dismissal for lack of personal jurisdiction, transfer to the Northern District of California, or a stay of the federal case while the San Francisco action proceeded. Defendants also requested a stay of discovery while that motion was pending. The opinion addresses only the discovery request, not the separate request to stay the entire action.

Legal standard

Under Federal Rule of Civil Procedure 26(c), a court may stay discovery for “good cause.” Courts consider the amount and burden of the requested discovery, the possible harm to the party opposing the stay, and the strength of the pending motion that forms the basis for the request. The party seeking the stay bears the burden of showing good cause. Filing a motion to dismiss does not automatically justify stopping discovery.

Court’s reasoning

The court first noted that Plaintiff had not yet served discovery requests, so it could not assess the requests’ scope or the burden of responding to them. The court nevertheless concluded that discovery concerning ownership of Schnare’s photographs and copyrights would be necessary in one forum or another. Plaintiff had agreed that discovery obtained in this case could be used in whichever case ultimately adjudicated the parties’ rights. Therefore, discovery would not be wasted even if the federal case were transferred.

The court also observed that Defendants were not challenging the merits of the copyright claims against ChromaDiverse in their motion. Instead, they sought to transfer those claims to federal court in California. Because the copyright claims would proceed and require discovery regardless of the motion’s outcome, this factor weighed against a stay.

The court found no demonstrated prejudice to Defendants from allowing discovery to proceed. By contrast, it found that Plaintiff could be prejudiced by delay. Although the San Francisco action had been filed in 2023, discovery there had only recently resumed, no discovery schedule had been set, and a motion to dismiss was expected. The dispute involves photographs created as early as 1969 and witnesses who are elderly, creating a risk that witnesses could become unavailable or memories could fade. The court also noted that Plaintiff could not freely use the disputed works while ownership remained unresolved.

Disposition

The court denied Defendants’ request for a stay of discovery. It did not rule in this opinion on Defendants’ separate motion to dismiss, transfer the case, or stay the entire action.