Richards v. Multinex Co. Ltd.

Background

Thomas Richards sued Multinex Co. Ltd., doing business as Nerdy, over the company’s alleged use of a photograph of Richards as a five-year-old. Richards alleged that when he was 16, Multinex representatives asked him for a “baby” picture to use on a sticker. He provided the photograph and participated in two photo shoots. He later alleged that Multinex used the photograph on a T-shirt and sold the shirts without his consent.

Richards asserted claims under Section 51 of the New York Civil Rights Law, as well as claims for fraudulent misrepresentation, fraud in the inducement, fraud, negligent misrepresentation, and an accounting. Multinex did not appear or defend the lawsuit. The Clerk entered Multinex’s default, and Richards moved for default judgment.

Jurisdiction and Default Judgment Standard

Before considering default judgment, the court determined that it had subject-matter jurisdiction based on diversity jurisdiction. The opinion states that Richards was a New York resident and that Multinex was incorporated and had its principal place of business in South Korea. Richards alleged damages exceeding $75,000.

The court explained that a default judgment may establish liability based on well-pleaded factual allegations, but a defaulting defendant does not admit legal conclusions. The court therefore still had to determine whether Richards’s allegations established liability as a matter of law. The court also noted that default judgments are generally disfavored and that courts prefer resolving cases on their merits.

Section 51 Claim

The court dismissed Richards’s Section 51 claim as time-barred. Section 51 prohibits using a person’s name, portrait, picture, or voice in New York for advertising or trade without written consent. The court explained that such claims generally have a one-year limitations period and accrue when the offending material is first published.

Richards alleged that he saw the T-shirt with his photograph on Multinex’s Instagram page and website in August 2017, while he filed the lawsuit on July 17, 2019. The court concluded that the claim accrued before or, at the latest, in August 2017, making the lawsuit untimely.

Fraud-Related Claims

The court found that the complaint did not plead sufficient facts to support the fraud, fraudulent-misrepresentation, and fraud-in-the-inducement claims under Federal Rule of Civil Procedure 12(b)(6), which addresses whether a complaint states a legally sufficient claim.

The court explained that these claims require facts supporting an intent to deceive. Richards alleged that Multinex said the photograph would be used for a sticker but later used it on a T-shirt. The court found that the complaint did not explain how this showed an intent to deceive Richards to obtain the photograph. The court also noted that Richards’s declaration said he had been shown a sticker containing the photograph, which contradicted his statement that no sticker had been made. The court concluded that the allegations were conclusory and insufficient to establish the required intent.

Negligent Misrepresentation and Accounting Claims

The complaint also asserted negligent-misrepresentation and accounting claims. Richards did not seek default judgment on those claims and did not discuss them in his supporting memorandum. The court therefore deemed them abandoned and did not address them.

Disposition

The court found that Richards was not entitled to default judgment on any cause of action and denied his motion for default judgment. The court stated that Richards could file an amended complaint consistent with the opinion by October 27, 2023.