PDK Commercial Photographers, Ltd. v. Eagle Transfer Corp.

Background

PDK Commercial Photographers, Ltd. brought a copyright-infringement claim against Eagle Transfer Corp. under the Copyright Act. Both parties are New York companies. After Eagle Transfer initially failed to respond, PDK moved for a default judgment. Eagle Transfer later obtained counsel and extensions of time to respond.

On June 19, 2020, PDK filed a notice stating that the parties had reached a settlement in principle and asked the court to dismiss the case while allowing reopening if the parties did not file a final dismissal agreement within 30 days. On June 22, 2020, the court dismissed the action without costs and without prejudice to restoring it to the court’s calendar if an application was made within 30 days. The order warned that an application filed later could be denied solely because it was untimely.

The Motion

PDK moved to reopen the action on November 2, 2020. PDK said Eagle Transfer had failed to make the settlement payment and had not responded after the parties exchanged revisions to a draft settlement agreement. PDK argued that the settlement was enforceable because the parties had agreed on its material terms and payment. PDK also argued that the case should be reopened to allow it to pursue the copyright claim if the settlement was not enforceable or the federal court lacked authority to enforce it.

Eagle Transfer argued that the motion was untimely and that the parties had reached only a settlement in principle, not a final agreement that bound them. Eagle Transfer also sought sanctions against PDK. The opinion does not state a separate ruling on the sanctions request.

Ruling

Judge Lewis J. Liman denied the motion to reopen. The deadline was July 22, 2020, but PDK filed its motion 161 days later. The court found that PDK had not shown excusable neglect or another basis under Federal Rule of Civil Procedure 60(b) for reopening the case. The court also rejected PDK’s claim that Eagle Transfer’s lack of response to the July 13 revisions amounted to malfeasance. The court noted that the parties could have asked for more time before the 30-day period expired, but they did not.

The court further explained that, if the parties’ discussions or drafts formed an enforceable settlement agreement, an action to enforce that agreement belonged in state court. The federal court had not expressly retained authority over the settlement or incorporated its terms into the dismissal order. The parties were not diverse, and a contract dispute over the settlement would arise under state law, so the opinion found no independent basis for federal jurisdiction. The Clerk of Court was directed to close the docket entry for the motion to reopen.