Stay Frosty Enterprises LLC v. Teespring, Inc.

Background

Stay Frosty Enterprises LLC owns a portfolio of copyrights that includes military-themed artwork and images. Teespring, Inc. operates a website that allows individuals to create custom t-shirts and other apparel. Since 2018, Frosty had asserted a right to recover actual damages resulting from Teespring’s alleged infringement of its copyrights.

After fact discovery closed, Teespring moved for partial summary judgment on Frosty’s claim for actual damages. Summary judgment is a ruling entered when the record shows that no genuine dispute of material fact requires a trial on the issue presented. Teespring argued that Frosty could not recover actual damages because Frosty had produced no evidence that it had suffered any.

Discovery and Rule 56(d) request

During discovery, Teespring asked Frosty for information about the annual revenue and profits Frosty earned from the asserted copyrights, as well as documents concerning any damages or harm Frosty claimed to have suffered. Teespring agreed twice to extend Frosty’s response deadline. When Frosty still did not provide responses, Teespring moved to compel. The court denied that motion as untimely under Civil Local Rule 37-3. Teespring did not appeal that discovery ruling.

In opposing summary judgment, Frosty did not identify a fact, possible evidence, or even a conclusory assertion showing that it had suffered actual damages. Instead, Frosty invoked Federal Rule of Civil Procedure 56(d), which permits a court to defer consideration of summary judgment when the opposing party shows by affidavit or declaration that it cannot present facts essential to oppose the motion.

The court explained that a party seeking relief under Rule 56(d) must identify the specific evidence it hopes to obtain and explain why that evidence matters to its claims. Frosty argued generally that the case was still in its early stages and that delaying the motion would not prejudice Teespring, but it did not identify any specific fact it expected additional discovery to uncover.

Ruling

Judge Seeborg denied Frosty’s Rule 56(d) request. He concluded that the record contained no evidence, either already available or expected from further discovery, supporting actual damages. The court therefore granted Teespring’s motion for partial summary judgment, ruling that Frosty was not entitled to recover actual damages.

The court did not reach Teespring’s additional argument that Frosty was required, as a matter of law, to provide particular kinds of damages evidence, including testimony from percipient or expert witnesses, because the absence of any evidence of actual damages was sufficient to resolve the motion.