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Lefkowitz v. McGraw-Hill Companies, Inc.

United States District Court, Third Circuit

June 19, 2013

LESTER LEFKOWITZ, Plaintiff,
v.
THE MCGRAW-HILL COMPANIES, INC., Defendant.

MEMORANDUM

Berle M. Schiller, J.

Photographer Lester Lefkowitz charges that McGraw-Hill Companies, Inc. (“McGraw-Hill”) is improperly using many of Lefkowitz’s photos in violation of licensing agreements. Lefkowitz seeks to enforce his copyrights and has also brought a breach of contract claim against McGraw-Hill. Presently before the Court is McGraw-Hill’s motion to dismiss, or in the alternative, to transfer venue to the Southern District of New York, based on the presence of a forum selection clause in the agreements at issue in this litigation. Because the Court decides that a number of the factors relevant to the transfer analysis, including the forum selection clause, warrant transfer, this litigation will develop in the Southern District of New York.

I. BACKGROUND

A. Copyright and Contract Claims

Lefkowitz, who resides in New York, is a professional photographer who owns the registered copyrights to a number of photos that are the subject of this litigation. (Compl. ¶¶ 2, 6-7.) Lefkowitz entered into agreements with a company called The Stock Market, a stock photo licensing agency. (Id. ¶ 9.) The agreements allowed The Stock Market to issue limited licenses to third parties for the use of Lefkowitz’s photos, in exchange for reasonable licensing fees. (Id.) The agreements forbade The Stock Market from issuing exclusive licenses for Lefkowitz’s photos without prior consent. (Id. ¶ 10.) The agreements were later assigned to Corbis Corporation with the understanding that the terms of the agreement remained unchanged. (Id. ¶ 11.) Lefkowitz later entered into a representation agreement with Corbis, which allowed Corbis to grant third-party limited-use licenses for his photos. (Id. ¶ 12.) Lefkowitz did not permit The Stock Market or Corbis to grant unlimited, royalty-free licenses of his work. (Id. ¶¶ 13-14.)

Between 1998 and 2011, The Stock Market and Corbis sold McGraw-Hill limited licenses to use copies of Lefkowitz’s photos in numerous educational publications. (Id. ¶ 15.) These licenses were limited by the number of copies, distribution area, image size, language, duration, and media. (Id. ¶ 16.) McGraw-Hill, however, knowingly exceeded the scope of these limited licenses. (Id. ¶¶ 17-18, 27.) McGraw-Hill has sold and distributed millions of publications that infringe on Lefkowitz’s copyrights, “generating billions in revenue and profits.” (Id. ¶ 20.)

Lefkowitz claims that under the licensing agreements between Corbis and McGraw-Hill, McGraw-Hill must pay Lefkowitz ten times the licensing fee for any unauthorized use of Lefkowitz’s photos. (Id. ¶ 29.) Additionally, Corbis’s end user license agreements, which were incorporated into the Corbis-McGraw-Hill licensing agreements, give Corbis the right to bill McGraw-Hill ten times the normal licensing fee for any unauthorized use of Lefkowitz’s photos. (Id.) Lefkowitz and Corbis also agreed that Corbis had the authority to make and settle claims in Lefkowitz’s name based on the unauthorized use of his photos, but that if Corbis failed to do so after Lefkowitz notified it of unauthorized use, Lefkowitz could make and settle such claims in his own name. (Id. ¶ 34.) Despite such notification, Corbis has failed to take any action against McGraw-Hill. (Id. ¶¶ 36-37.)

The Complaint includes a charge of copyright infringement against McGraw-Hill, as well as a breach of contract claim against it for breaching the Corbis-McGraw-Hill contracts.

B. Forum Selection Clauses

The agreements at issue in this litigation include forum selection clauses. The forum selection clauses contained in the 1997 and 2000 agreements between Lefkowitz and The Stock Market read:

This Agreement and all matters collateral thereto shall be construed according to the laws of the State of New York as if this Agreement were to be performed in New York. Any controversy relating to this Agreement shall be litigated solely in a court of competent jurisdiction in the State of New York. TSM and you each agree that said court will have personal jurisdiction over each of us in any action commenced by either of us with respect to this Agreement.

(Def.’s Mot. to Dismiss or, in the Alt., to Transfer Venue [Def.’s Mot.] Ex. 2 [1997 Agreement] ¶ 16(d) & Ex. 3 [2000 Agreement] ¶ 16(e).) The photographer representation agreement between Corbis and Lefkowitz also contains a forum selection clause in which the parties to that agreement “consent to personal jurisdiction and the exclusive venue of the state and federal courts sitting in New York City, New York.” (Id. Ex. 5 [Photographer Representation Agreement] ¶ 12.3.) Finally, the end user license agreements, upon which Lefkowitz bases his breach of contract claim, contain the following forum selection clause: “Any dispute regarding this Agreement shall be governed by the laws of the State of New York and Titles 15, 17, and 35 of the U.S.C., as amended, and the parties agree to accept the exclusive jurisdiction of the state and federal courts located in New York, USA, regardless of conflicts of laws.” (Id. Ex. 7 [End User License Agreements] at 2 & ¶ 21.)

II. STANDARD OF REVIEW

A party may file a 12(b)(6) motion in an effort to enforce a forum selection clause. See Salovaara v. Jackson Nat’l Life Ins. Co., 246 F.3d 289, 298-299 (3d Cir. 2001) (citing Crescent Int’l Inc. v. Avatar Communities, Inc., 857 F.3d 943 (3d Cir. 1988)). However, “as a general matter, it makes better sense, when venue is proper but the parties have agreed upon a not-unreasonable forum ...


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