Court Opinion

ID: 4433969
Source: CourtListenerOpinion
Date Created: 2019-08-28 15:00:41.342814+00
Date Added: 2024-06-11T14:53:09.582000
License: Public Domain

17-1957-cv
Yamashita v. Scholastic Inc.

                                     UNITED STATES COURT OF APPEALS
                                        FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 28th day of August, two thousand nineteen.

PRESENT:
           ROSEMARY S. POOLER,
           ROBERT D. SACK,
           SUSAN L. CARNEY,
                       Circuit Judges.
_________________________________________

MICHAEL YAMASHITA, MICHAEL YAMASHITA, INC.,

                     Plaintiffs-Appellants,

                               v.                                                     No. 17-1957-cv

SCHOLASTIC INC.,

           Defendant-Appellee.*
_________________________________________

FOR APPELLANTS:                                              MAURICE HARMON (Christopher
                                                             Seidman, Gregory N. Albright, on the brief),
                                                             Harmon Seidman Bruss & Kerr, LLC,
                                                             Grand Junction, CO.

*   The Clerk of Court is directed to amend the official caption to conform to the above.
FOR APPELLEE:                                        EDWARD H. ROSENTHAL (Craig B.
                                                     Whitney, on the brief), Frankfurt Kurnit
                                                     Klein & Selz, P.C., New York, NY.

       Appeal from a judgment of the United States District Court for the Southern District
of New York (Forrest, J.).

       UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment entered on June 7, 2017, is
AFFIRMED.

       Plaintiffs-Appellants Michael Yamashita and Michael Yamashita, Inc. (collectively,
“Yamashita”) appeal from a judgment entered principally in favor of Defendant-Appellee
Scholastic Inc. (“Scholastic”). Yamashita contends that the District Court erred by: (1)
dismissing his one-count Original Complaint, which alleged that Scholastic exceeded the
terms of the limited licenses it purchased from a stock photography agency, Corbis
Corporation (“Corbis”), in order to use Yamashita’s photographs; (2) ruling that his
proposed amendment to the copyright infringement claim did not cure the defects in the
Original Complaint and denying leave to amend this claim; and (3) denying leave to plead
four new common-law claims.1 We address the first two of these arguments in the Opinion
that accompanies this Order. Here, we focus on the third.

       We review de novo a district court’s denial of leave to amend a complaint that rests on
a conclusion that amendment would be futile. See Pyskaty v. Wide World of Cars, LLC, 856
F.3d 216, 224–25 (2d Cir. 2017). In this Order, we assume the parties’ familiarity with the
underlying facts, the procedural history, and the issues on appeal, and refer to them here
only as necessary to explain our decision to affirm the district court’s judgment.

       In addition to attempting to replead his copyright infringement claim in the Proposed
Amended Complaint (“PAC”) that accompanied his motion for reconsideration, Yamashita
sought to add four common-law claims that did not appear in the Original Complaint:

1
 Neither party appeals from that part of the District Court’s judgment that dismissed Yamashita’s
claim as to the Row-80 image under the parties’ stipulation under Fed. R. Civ. P. 41.
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(A) Breach of contract; (B) “Bailment/breach of duties of bailee”; (C) “Conversion”; and
(D) “Accounting.” See J.A. at 312–18, ¶¶ 25–65. We address each in turn.

         A.     Breach of contract

         The District Court denied leave to add the proposed breach-of-contract claim in part
on the ground that Yamashita is not a party to the contracts executed by Corbis and
Scholastic and whose use limits Yamashita claimed were breached. See Special App. at 4.
(These were the “Preferred Vendor Agreements,” or “PVAs,” between Corbis as vendor and
Scholastic as publisher.) Yamashita argues that this was error because the ruling conflicted
with the prior decision of the United States District Court for the District of New Jersey, in
which that court transferred the proceedings to the Southern District of New York. As a
basis for that transfer, the New Jersey court determined that Yamashita was bound by the
PVAs’ forum selection clause identifying the Southern District of New York as the venue
for resolving disputes. See Yamashita v. Scholastic Inc., No. 16-cv-3839 (SRC), 2016
WL 6897781, at *2 (D.N.J. Nov. 21, 2016) (“Knowledge of the agreement between Corbis
and Scholastic is thus imputed to Plaintiffs, since Plaintiffs are principals and Corbis is their
agent.”) Even if Yamashita’s argument has merit, however, we may “affirm [the district
court’s decision] on any basis supported by the record.” Coulter v. Morgan Stanley & Co., 753
F.3d 361, 366 (2d Cir. 2014). We find other support for the district court’s rejection of this
claim.

         The PAC alleges that Scholastic breached its contract with Corbis by “refus[ing] to
provide the usage information that Yamashita requested.” J.A. at 315, ¶ 41. Yamashita
alleges that he requested information from Scholastic regarding “print quantity, geographic
distribution, language, and electronic uses of Yamashita’s images by Scholastic and any third
parties to whom it supplied his images,” J.A. at 408; he identified four PVA provisions as
having been breached by Scholastic when it failed to comply. These were the following.

         First, the “Terms and Conditions” attached to the 2001 PVA provided as follows:
“Copies: As a condition subsequent to this Agreement, Client shall provide to Corbis, upon

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first release or publication, free of charge, three (3) copies of any product or publication
created by Client in which the images are used.” J.A. 313–14, ¶ 33 (quoting Ex. 7).

       Second, the “Corbis Traditional Licensing Terms and Conditions” attached to the
2004 PVA provided in its “Attachment A”: “Copies: At Corbis’ request, you shall provide
to Corbis free of charge, up to three (3) copies of any printed product or publication you
create using the Images, or if electronic use is permitted, the URL and any required
passwords or the screen captures for our records.” J.A. at 314, ¶ 34 (quoting Ex. 8).

       Third, paragraph 12 of the “Corbis / Scholastic Library Publishing Content License
Agreement” attached to the 2008 and 2011 PVAs stated: “12. Payment/Reporting. You
hereby agree to and are required to pay Corbis for all Content that You obtain under the
terms of this Agreement, regardless of whether You use the Content (except as may be
provided in Section 15 entitled ‘Cancellation/Termination’). This may, as set forth in the
applicable Invoice, include an obligation to pay Corbis a use[-]based royalty and to submit to
an accounting or other records verifying Your use of the Content.” J.A. at 314, ¶ 35 (quoting
Exs. 9–10) (“¶ 35(a)”).

       Fourth, the “Corbis / Scholastic Library Publishing Content License Agreement”
attached to the 2008 and 2011 PVAs provided: “16. Copies. At Corbis’ reasonable request,
You shall provide Corbis free of charge one (1) copy of any use made of the Content as
authorized hereunder.” J.A. at 314, ¶ 35 (quoting Exs. 9–10) (“¶ 35(b)”).

       None of these provisions, however, provides a foundation for the breach-of-contract
claim Yamashita has pleaded. He has not pleaded a breach of ¶ 33 because he did not allege
that Scholastic failed to provide Corbis with three copies of the publications in which his
images appeared. He has not pleaded a breach of ¶ 35(a) because this provision requires
Scholastic to provide an “accounting or other records” only “as set forth in the applicable
Invoice.” Yamashita did not attach any invoices setting forth an accounting obligation, nor has
he alleged that any invoice contained such a requirement. Last, Yamashita’s allegations with
respect to ¶¶ 34 and 35(b) also fall short. These provisions permit Corbis to request a copy
of any use of Yamashita’s images. Even assuming that Yamashita may stand in Corbis’s

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shoes for purposes of enforcing the PVA, he has not alleged that he requested copies of the
uses made of his images. Instead, he requested information about “print quantity, geographic
distribution, language, and electronic uses of Yamashita’s images.” J.A. at 408. Accordingly,
the PAC does not plead a plausible breach-of-contract claim.

        B.       Bailment

        We turn next to Yamashita’s bailment claim.2 Yamashita argues that the District
Court erred in denying him leave to plead this claim. He faults the court for concluding that
he did not have the requisite bailment relationship with Scholastic. We identify no error in
that conclusion.

        Even if, as Yamashita urges, “a bailment contract may be implied,” Appellants’ Reply
Br. at 28 (internal quotation marks omitted), any potential bailments implied by the facts as
stated in the PAC rest on the PVAs and Invoices executed between Corbis and Scholastic.
See, e.g., J.A. at 316, ¶ 45 (incorporating by reference allegations regarding breach-of-contract
claim); id. at 317, ¶ 51 (“Scholastic’s rights to use the Bailed Property were limited as
provided in the PVAs and Corbis invoices.”); id. at ¶ 55 (referencing PVAs and Corbis
Invoices). Although Yamashita alludes to contractual restrictions on Scholastic’s use of the
licensed images, Yamashita has not plausibly pleaded that the PVAs give rise to a bailment
between him and Scholastic. Indeed, the 2001 PVA between Corbis and Scholastic expressly
provides that the “Agreement is not considered a bailment.” J.A. at 64, ¶ 5.

        Apart from the use limitations to which he points, Yamashita does not highlight any
provisions of the PVAs or of any relevant invoices suggesting that Corbis and Scholastic
intended to create a bailment relationship. See 8A Am. Jur. 2d Bailments § 1 (“[A] bailment is
ordinarily created by the agreement of the parties. . . .”). Nor has Yamashita alleged a duty
on the part of Scholastic to account to him directly for its uses of the images, apart from the
contract-based theories we rejected above. See 9 N.Y. Jur. Bailments & Chattel Leases § 1

2 Yamashita is a New Jersey resident. J.A. at 11. The District Court for the District of New Jersey applied
New York law in its written decision transferring the case, and the parties’ briefs cite to New York law in
their arguments about the common-law claims; they do not address choice of law. We therefore assume
without deciding that New York law applies to these claims.
                                                       5
(“It is the element of lawful possession, however created, and duty to account for the thing as the
property of another that creates the bailment . . . .”). We therefore identify no error in the
District Court’s denial of leave to plead a bailment claim.

        C.     Conversion

        Yamashita also contends that the District Court erred in denying him leave to plead a
claim for conversion. Oddly, Yamashita alleges that Scholastic converted his property not by
engaging in unauthorized copying of his photographs, but rather “by failing and refusing to
disclose to Yamashita all of the uses that Scholastic has made of the Bailed Property.” J.A.
at 318, ¶ 60. Yamashita’s reply brief on appeal clarifies that this claim derives from his
breach-of-contract and bailment claims. Appellant’s Reply Br. at 35–36 (arguing conversion
claim is not preempted and characterizing it as a “bailment-related claim[ ]”). Having already
concluded that Yamashita’s breach-of-contract and bailment claims fail, we now conclude
that his conversion claim fails as well. The District Court did not err in denying leave to
plead it.

        D.     Accounting

        Last, we turn to Yamashita’s demand for an accounting. Much like his conversion
claim, Yamashita grounds Scholastic’s alleged “duty to account to Yamashita for all of [its]
uses of the Bailed Property” in “the terms of the PVAs and/or the law of bailment.”
J.A. at 318, ¶ 64. We have already rejected Yamashita’s arguments that he plausibly alleged a
breach-of-contract claim (under the PVAs) or a bailment-based claim (under the law of
bailment). Accordingly, pleading this claim, too, would have been futile, and the District
Court did not err in denying him leave to do so.

                                              * * *

        For the foregoing reasons, as well as those set forth in the Opinion that accompanies
this summary order, the judgment of the District Court is AFFIRMED.

                                                      FOR THE COURT:
                                                      Catherine O’Hagan Wolfe, Clerk of Court

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