Simon J. Burchett Photography, Inc. v. A.P. Moller Maersk A/S

Background

Simon J. Burchett Photography, Inc. sued Maersk Line Ltd. and Maersk A/S. The complaint asserted direct, contributory, and vicarious copyright infringement involving three photographs, as well as claims under the Digital Millennium Copyright Act based on alleged removal of copyright-attribution information.

The plaintiff’s corporate entity had entered into a 2007 licensing agreement with the defendants’ parent company, A.P. Moller-Maersk A/S, concerning photographs of the ship “Estelle Maersk.” After alleged unauthorized use of one photograph, the plaintiff and Maersk entered into a December 2018 settlement agreement. That agreement released Maersk and its subsidiaries and affiliates from specified claims concerning unauthorized publication of the plaintiff’s copyrighted images that existed as of December 18, 2018. It also required arbitration of “any dispute under, concerning or relating to” the agreement’s terms or enforcement.

The plaintiff alleged that infringing conduct continued after the settlement, including the posting of three images on social-media and other websites and the defendants’ alleged authorization of third parties to use the images. Some alleged incidents occurred before the settlement’s effective date, and others occurred afterward.

Motion and Report and Recommendation

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that the settlement agreement required arbitration. They also requested, as alternative relief, that the case be stayed pending arbitration. Magistrate Judge Robert W. Lehrburger recommended staying the case. No party objected to the Report and Recommendation.

Because the defendants’ motion did not show an intent to compel arbitration, the court reviewed the motion under the standard used for a motion to dismiss for failure to state a claim. The court noted that both parties accepted the existence of a valid, enforceable settlement agreement containing a binding arbitration clause.

Court’s Analysis

The court agreed that the settlement’s arbitration clause delegated questions about whether a dispute was arbitrable to the arbitrator. The agreement incorporated JAMS Expedited Procedures, and the court stated that JAMS Rule 11(b) gives the arbitrator authority to decide arbitrability questions.

The court also agreed that the arbitration clause was broad because it covered any dispute under, concerning, or relating to the settlement agreement’s terms or enforcement. It concluded that the plaintiff’s allegations could properly be understood as a continuation or maintenance of past conduct covered by the settlement agreement. As a result, the court found that most, if not all, of the claims fell within the arbitration agreement.

The court further agreed that the defendants, although not themselves signatories to the settlement agreement, could be bound by it. The parent company had executed the agreement on behalf of its subsidiaries and affiliates, and the court found the defendants appropriately bound regarding the claims at issue.

Ruling

Judge Daniels reviewed the unobjected-to Report and Recommendation for clear error and found none. He adopted the Report in full. The defendants’ motion to dismiss was GRANTED to the extent that the case is stayed pending arbitration, based on the defendants’ requested alternative relief. The court stated that the arbitrator should first address the arbitrability of the plaintiff’s claims. The Clerk of Court was directed to close the motion and the case. The opinion did not decide the underlying copyright or Digital Millennium Copyright Act claims on their merits.