Markham Concepts, Inc. v. Hasbro, Inc.RESPONSE In Opposition to 241 MOTION to Amend/Correct 240 Findings of Fact & Conclusions of LawD.R.I.March 8, 2019UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND MARKHAM CONCEPTS, INC., SUSAN GARRETSON, and LORRAINE MARKHAM, individually and in her capacity as Trustee of the Bill and Lorraine Markham Exemption Trust and the Lorraine Markham Family Trust, Plaintiffs, vs. HASBRO, INC., REUBEN KLAMER, DAWN LINKLETTER GRIFFIN, SHARON LINKLETTER, MICHAEL LINKLETTER, LAURA LINKLETTER RICH, DENNIS LINKLETTER, THOMAS FEIMAN, in his capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust, ROBERT MILLER, in his capacity as co- trustee of the Irvin S. and Ida Mae Atkins Family Trust, and MAX CANDIOTTY, in his capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust. Defendants. CA. No. 1:15-cv-419-S-PAS REUBEN KLAMER, Counterclaim Plaintiff, vs. MARKHAM CONCEPTS, INC., and LORRAINE MARKHAM, Counterclaim Defendants. LINKLETTER DEFENDANTS, THOMAS FEIMAN, ROBERT MILLER AND MAX CANDIOTTY’S OPPOSITION TO PLAINTIFFS’ MOTION TO AMEND THE COURT’S JANUARY 25, 2019 FINDINGS OF FACT AND CONCLUSIONS OF LAW In its Findings of Fact and Conclusions of Law (“Opinion” Dkt. No. 240), the Court followed clear First Circuit precedent when it applied the “instance and expense” test to determine that the Game of Life (“Game”) was a work for hire under the Copyright Act of 1909 (the “1909 Act”). See Forward v. Thorogood, 985 F.2d 604, 606 (1st Cir. 1993). It committed Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 1 of 10 PageID #: 8392 2 no error in applying binding law. Yet, Plaintiffs1 now ask the Court to reconsider its ruling or permit an immediate appeal, arguing that the Court should have applied a different test that neither the First Circuit nor any other Circuit has ever adopted with respect to the 1909 Act. The Court should deny both requests contained in Plaintiffs Motion to Amend the January 25, 2019 Findings of Fact and Conclusions of Law (“Motion,” Dkt. No. 241). First, the Markham Parties’ argument in favor of amendment and/or reconsideration rests on the faulty premise that the First Circuit has not ruled on the impact on the 1909 Act of the Supreme Court’s decision in Cmty. For Creative Non-Violence v. Reid (“CCNV”), 490 U.S. 730 (1989). It has. Relying on CCNV, the First Circuit determined that the Copyright Act of 1976 “altered the work-for-hire doctrine” but these new work-for-hire provisions only “operate prospectively.” Forward, 985 F.2d at 606 n.2. Thus, four years after CCNV, the First Circuit reaffirmed the application of the instance and expense test under the 1909 Act. Here, the Court examined the Forward precedent, including its statement about changes to the work-for-hire doctrine, and appropriately applied the instance and expense test. See Opinion at 16-17 (citing the second footnote in Forward and CCNV).2 Second, the Markham Parties seek exceptional relief through Fed. R. Civ. P. 54(b) and/or an interlocutory appeal 28 U.S.C. § 1292(b), but are unable to meet either standard. Granting either request would result in a disfavored, piecemeal appeal. Two additional factors counsel against allowing an immediate appeal: 1) the First Circuit precedent is clear on the appropriate test to apply; and 2) the Court rejected Plaintiffs’ factual theory. Therefore, this case does not present one of the sparing, exceptional situations that warrants a piecemeal appeal. 1 Plaintiffs Markham Concepts, Inc., Susan Garretson and Lorraine Markham are collectively referred to as “Plaintiffs” or the “Markham Parties” throughout this Opposition. 2 The Markham Parties’ argument concerning the proper test to apply is likely an academic exercise, because whichever test the Court applies leads to the same result. Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 2 of 10 PageID #: 8393 3 ARGUMENT The Markham Parties seek extraordinary relief by requesting: 1) reconsideration of the Court’s Opinion and 2) the right to an immediate appeal. Plaintiffs do not establish an entitlement to either remedy. I. Plaintiffs Fail to Establish a Basis for Reconsideration or Amendment “The granting of a motion for reconsideration is an extraordinary remedy which should be used sparingly.” Ruiz v. Rhode Island, No. CV 16-507 WES, 2018 WL 3647204, at *3 (D.R.I. Aug. 1, 2018).3 As this Court has explained, Plaintiffs face an “uphill battle” in moving for reconsideration or amendment, since “relief is available only in limited and rather extraordinary circumstances.” Pona v. Wall, No. C.A. 13-491 S, 2015 WL 792700, at *1 (D.R.I. Feb. 25, 2015). Specifically, the Court may only grant such a motion if the moving party can establish: “(1) manifest errors of law or fact (2) newly discovered or previously unavailable evidence, (3) manifest injustice, and (4) an intervening change in controlling law.” Ruiz, 2018 WL 3647204, at *3 (internal quotations omitted). In this posture, the Markham Parties acknowledge that the Court must reject efforts to repackage or regurgitate rejected arguments. Nat’l Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1990). Here, Plaintiffs claim that the Court committed a manifest error of law. It did not. A. The Court’s Application of Binding Precedent Is Not a Manifest Error of Law. First Circuit precedent required the Court to apply the instance and expense test to determine whether the Game was a work for hire under the 1909 Act. See Forward, 985 F.2d at 606. The Court applied this precedent (and others consistent with it) and rendered its decision. 3 Plaintiffs move under both Fed. R. Civ. P. 52(e) and 59(b). Under either rule, the thrust of their argument is that the Court made a manifest error in law that should be corrected as an amendment or through reconsideration. Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 3 of 10 PageID #: 8394 4 See Opinion at 16-24. This is a straightforward issue. The Motion tries to reinvigorate the Markham Parties’ already rejected argument that Supreme Court precedent, CCNV, precludes the application of First Circuit law. Plaintiffs also argue that the Court did not consider this issue in rendering its Opinion. Plaintiffs are wrong on both counts. In Forward, the First Circuit applied the instance and expense test to the question of a work for hire under the 1909 Act. See Forward, 985 F.2d at 606. The First Circuit applied that test aware of CCNV, which the Supreme Court had decided four years before. Id. at 606n.2. The First Circuit determined that the 1976 Copyright Act made changes to the work for hire doctrine that operated prospectively. Id. Ultimately, the First Circuit held: Although initially confined to the traditional employer-employee relationship, the doctrine has been expanded to include commissioned works created by independent contractors, with courts treating the contractor as an employee and creating a presumption of copyright ownership in the commissioning party at whose “instance and expense” the work was done. Id. at 606. In sum, while aware of CCNV, the First Circuit reaffirmed the instance and expense test. This Court was bound to follow this precedent. Additionally, the Court’s Opinion dispels the Plaintiffs’ claims that the Court failed to consider their argument concerning CCNV. When analyzing the applicable law under the work- for-hire doctrine, the Court cited both Forward and CCNV. Opinion at 17. Critically, the Court then relied repeatedly on Marvel Characters, Inc. v. Kirby, 726 F.3d 119 (2d Cir. 2013) and Twentieth Century Fox Film Corp. v. Entertainment Distrib., 429 F.3d 869 (9th Cir. 2005). Opinion at 18-22. Both cases reject the very argument the Markham Parties make here concerning the impact of CCNV on the 1909 Act. See Marvel, 726 F.3d at 139 n.8 and Twentieth Century, 429 F.3d at 879. Thus, while the Opinion may not contain an express statement that the Court was rejecting the Markham Parties’ CCNV argument, the import is clear, and the Court Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 4 of 10 PageID #: 8395 5 plainly relied on the exact case law the Markham Parties sought to avoid.4 The Court made no error in following precedent, and the Markham Parties have no basis to re-litigate this issue, which the Court has already decided. B. The Markham Parties Ignore That the Court’s Factual Findings Make Their Argument an Academic Exercise. The Court presided over a bench trial in this case. It heard four days of testimony, and ultimately rendered 12 pages of factual findings. The Motion overlooks the Court’s fact-finding, which rejected entirely Plaintiffs’ theory that Bill Markham created the Game on his own. By their telling, Grace Falco Chambers (“Chambers”) and Leonard Israel (“Israel”) performed no work at all on the Game prototype, or if they did work on it, their efforts were mechanical or routine requiring no creativity whatsoever.5 See e.g., Pls. and Countercl. Defs. The Markham Parties’ Final Conclusions of Law, Dkt. No. 231, at ¶¶ 102-106. The Court made factual findings rejecting the Plaintiffs’ theory such that their argument concerning the appropriate test is futile. See Opinion at 4-9. II. Plaintiffs Fail To Establish That An Immediate Appeal Is Appropriate The Motion seeks an immediate appeal under two different procedural avenues: Fed. R. Civ. P. 54(b) and 28 U.S.C. § 1292(b). The Court should not permit either. The Court must examine the Markham Parties’ request for judgment under Fed. R. Civ. P. 54(b) with “great circumspection given the disfavored view of piecemeal appeals.” Vill. W. 4 The Motion claims that M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486 (11th Cir. 1990) supports Plaintiffs’ position. That case, however, addresses the Copyright Act of 1976 – not the 1909 Act. 5 Plaintiffs “do not contest that Chambers and Israel were Markham’s employees.” See Pls. and Countercl. Defs. The Markham Parties’ Posttrial Mem., Dkt. No. 218, at 21. This admission alone, when viewed in light of the Court’s fact-finding, illustrates that whichever test the Court applied leads to the same result. Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 5 of 10 PageID #: 8396 6 Assocs. v. Rhode Island Hous. & Mortg. Fin. Corp., 641 F. Supp. 2d 135, 137 (D.R.I. 2009).6 Courts employ Rule 54(b) infrequently, only where problems and circumstances are exceptional. Id. Rule 54(b) protects against the “infrequent harsh case” and is used to protect against “hardship and injustice through delay.” Walden v. City of Providence, 450 F. Supp. 2d 172, 174 (D.R.I. 2006). To determine whether judgment under Rule 54(b) is appropriate, the Court must first inquire whether the judgement would dispose “of all the rights and liabilities of at least one party as to at least one claim.” Credit Francais Int'l, S.A. v. Bio-Vita, Ltd., 78 F.3d 698, 706 (1st Cir. 1996); see also Richardson v. City of Providence by & Through Lombardi, No. CV 18-253, 2018 WL 5619719, at *4 (D.R.I. Oct. 30, 2018). The Court must then examine the overlap between the adjudicated and un-adjudicated claims. Bio-Vita, 78 F.3d at 706. “It will be a rare case where Rule 54(b) can appropriately be applied when the contestants on appeal remain, simultaneously, contestants below.” Spiegel v. Trustees of Tufts Coll., 843 F.2d 38, 44 (1st Cir. 1988) (“In the first place, we remark the obvious: notwithstanding the order of dismissal, the action remains pending for trial in the district court as to all of the parties. This circumstance alone counsels hesitation in the use of Rule 54(b).”). Similarly, the “First Circuit has repeatedly warned district courts that interlocutory certification under 28 U.S.C. § 1292(b) should be used sparingly and only in exceptional circumstances.” Ruiz, 2018 WL 3647204, at *2. “A party seeking such interlocutory review must demonstrate that the district court’s prior ruling (1) ‘involves a controlling question of law,’ (2) ‘to which there is substantial ground for difference of opinion,’ and (3) ‘that an immediate appeal from the order may materially advance the ultimate termination of the litigation.’” Atrion Networking Corp. v. Marble Play, LLC, 31 F. Supp. 3d 357, 359 (D.R.I. 2014). 6 The Markham Parties cite Ninth Circuit precedent to argue granting a motion under Rule 54(b) is a “fairly routine act.” Motion at 5. The First Circuit, however, permits such judgment only in infrequent cases. Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 6 of 10 PageID #: 8397 7 A. This Case Is Not One of the Infrequent, Harsh Cases Warranting Judgement Under Rule 54(b). Judgment under Rule 54(b) would result in all parties remaining before the Court, while simultaneously litigating a piecemeal appeal in the First Circuit. This is the precise type of dynamic that counsels against judgment under Rule 54(b). Spiegel, 843 F.2d at 44. Therefore, the Court should deny judgment under Rule 54(b). Second, as discussed above, Plaintiffs argument concerning the instance and expense test is likely academic in light of the Court’s fact-finding. It does not warrant piecemeal adjudication, and is not one of the harsh outliers that warrants judgment under Rule 54(b). Finally, Plaintiffs would not suffer injustice if they take their appeal in the normal course. The Markham Parties present nothing that distinguishes their case from the litany of others the Court decides. However, Defendants could suffer injustice if the case is stayed awaiting a piecemeal appeal, since Defendant Rueben Klamer is now 95 years old.7 A delay could inhibit proper adjudication of the remaining claims. B. The Opinion Does Not Involve a Controlling Question of Law As To Which There Is A Substantial Ground for Difference of Opinion. The Court also should deny the Markham Parties’ request for an interlocutory appeal because Plaintiffs cannot establish that the Opinion involves a “controlling question of law” as to which there is “substantial ground for difference of opinion” under 28 U.S.C. § 1292(b). Atrion Networking Corp., 31 F. Supp. 3d at 359. First, “a legal question cannot be termed ‘controlling’ if litigation would be conducted in much the same manner regardless of the disposition of the question upon appeal.” Id. As discussed above, and based on the Court’s fact-finding, the issue presented in the Motion is not a 7 Plaintiffs filed the initial Complaint in 2015. The case is now in its fourth year before the Court. Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 7 of 10 PageID #: 8398 8 controlling question of law since the ultimate outcome would not change regardless of the ruling on appeal. Second, under the test for permitting an interlocutory appeal “[t]here exists a substantial ground for difference of opinion when the matter involves one or more difficult and pivotal questions of law not settled by controlling authority.” Id. at 360 (rejecting efforts by party to “obfuscate[] straight-forward principles of law.”) Here, the First Circuit has been clear about the appropriate test under the 1909 Act, and every other Circuit to address the question has agreed with its decision. Thus, there is not a substantial ground for difference of opinion under 28 U.S.C. § 1292(b). CONCLUSION In light of the foregoing, the Linkletter and Atkins Defendants respectfully requests that this Court deny the Motion. Respectfully submitted, Dawn Linkletter Griffin, Sharon Linkletter, Michael Linkletter, Laura Linkletter Rich and Dennis Linkletter, Robert Miller and Max Candiotty, in their capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust By Their Attorneys, /s/ Ryan M. Gainor Christine K. Bush (#5587) Ryan M. Gainor (#9353) HINCKLEY, ALLEN & SNYDER LLP 100 Westminster Street, Suite 1500 Providence, Rhode Island 02902 Phone: (401) 457-2000 Fax: (401) 277-9600 cbush@hinckleyallen.com rgainor@hinckleyallen.com Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 8 of 10 PageID #: 8399 9 Gary A. Wexler (pro hac vice) David Jinkins (pro hac vice) THOMPSON COBURN LLP 2029 Century Park East 19th Floor Los Angeles, CA 90067 Phone: (310) 282-9455 Fax: (310) 282-2501 GWexler@thompsoncoburn.com Dated: March 8, 2019 Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 9 of 10 PageID #: 8400 10 CERTIFICATE OF SERVICE I hereby certify that the foregoing document was filed through the ECF system on the 8th day of March, 2019, and will be sent electronically to the registered participants identified on the Notice of Electronic Filing. /s/ Ryan M. Gainor Case 1:15-cv-00419-WES-PAS Document 243 Filed 03/08/19 Page 10 of 10 PageID #: 8401