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Boehm v. Getty Images (US), Inc.

United States District Court, W.D. Wisconsin

October 19, 2016

SCOTT BOEHM and DAVID STLUKA, Plaintiffs,
v.
GETTY IMAGES (US), INC. and JOHN GEORGE, Defendants.

          OPINION & ORDER

          JAMES D. PETERSON District Judge.

         Plaintiffs Scott Boehm and David Stluka accuse defendants Getty Images (US), Inc. and John George of inappropriately delivering copies of plaintiffs' photographs to customers, resulting in infringement of plaintiffs' copyrights. The question now before the court is whether these claims must be arbitrated.

         Plaintiffs both entered into contracts containing a broad arbitration clause with Getty. Based on those contracts, defendants moved to dismiss plaintiffs' first amended complaint, or in the alternative, to stay the case pending arbitration. Dkt. 31 and Dkt. 34.[1] The arbitration clauses at issue incorporate rules that provide that the arbitrator has the power to determine the arbitrability of claims. Because the arbitration clause clearly and unmistakably provides that threshold arbitrability questions are for the arbitrator, the court will grant both defendants' motions and dismiss the lawsuit. The court will dismiss as moot Getty's motion to stay discovery pending resolution of these motions. Dkt. 44.

         BACKGROUND

         As explained below, the court will treat defendants' motions as motions to dismiss under Federal Rule of Civil Procedure 12(b)(3). When deciding such a motion, the court should draw reasonable inferences from the facts in the plaintiffs' favor, Faulkenberg v. CB Tax Franchise Sys, LP, 637 F.3d 801, 806 (7th Cir. 2011), and need not limit its consideration to the pleadings. Continental Cas. Co. v. Am. Nat'l Ins. Co., 417 F.3d 727, 733 (7th Cir. 2005).

         Plaintiffs, freelance photographers, licensed their work to Getty. Plaintiffs' relationships with Getty were governed by contracts. An identical arbitration clause in these contracts provides that “[a]ny dispute arising out of or in connection with the Brand Agreement shall be finally settled under the Commercial Rules of the American Arbitration Association (‘AAA') or International Chamber of Commerce (‘ICC') in Seattle, Washington, U.S.A., New York, New York, U.S.A., London, England, Paris, France or Frankfurt, Germany.” Dkt. 25, at 27 and Dkt. 26, at 27. Plaintiffs' contracts expressly provide that the arbitration clause “will survive any expiration or termination” of the contract, Dkt. 25, at 26 and Dkt. 26, at 26, and that the contracts are to be governed by New York law.

         The substantive terms of the contract authorized Getty to sell licenses to plaintiffs' works. In exchange, Getty paid a percentage of the licensing fees to each plaintiff. Boehm and Getty amended Boehm's contract in 2005, assigning all future rights and obligations under the contract to Boehm Creative, Inc., the corporate entity through which Boehm licenses his works. Getty terminated Stluka's contract in 2009 and told Stluka that it was removing all of his images from Getty's licensing systems. Likewise, Getty terminated Boehm Creative's contract in 2012 and told Boehm that it was removing all of his images from Getty's licensing systems.

         Plaintiffs allege that Getty and its former employee, George, provided copies of plaintiffs' photographs (photographs that plaintiffs had supplied to Getty for licensing under the terms of their contracts) to persons and businesses without a license or under forms of licenses not identified in plaintiffs' contracts with Getty. These persons and businesses created infringing, counterfeit products using plaintiffs' photographs. Thus, Getty and George contributed to a massive counterfeiting scheme infringing plaintiffs' copyrights. Getty continued to provide copies of plaintiffs' photographs to the infringing customers after terminating Stluka's contract with Getty.

         George, specifically, while “acting on behalf of Getty Images and within the scope of his employment duties, ” provided copies of plaintiffs' photographs to a Getty customer through “comp” licenses (licenses granted for free to potential customers who may use the photographs only for internal mock-up or layout purposes) and other means of access despite knowing that the customer intended to use these photographs in copyright infringing products. Id. ¶ 128. George also provided copies of plaintiffs' photographs to other customers under “Editorial-Newspaper” licenses, even though Getty should have known that these customers intended to use these photos for commercial sports memorabilia, not newspapers, in violation of the license. George and other Getty employees provided comp licenses and unlicensed photographs to customers to establish and build Getty's customer relationships and in exchange for personal gifts and other benefits from the customers. Getty encouraged this behavior.

         Plaintiffs filed suit against Getty and George, alleging direct, contributory, and vicarious infringement of plaintiffs' copyrights and requesting a declaratory judgment that plaintiffs' contracts with Getty are invalid and unenforceable and that plaintiffs own exclusive copyrights in the photographs at issue. Getty and George moved to stay or dismiss the case in favor of arbitration pursuant to the arbitration clause contained in plaintiffs' contracts.

         ANALYSIS

         A. Plaintiffs' claims against Getty

         Plaintiffs signed contracts with Getty that contained a broad arbitration clause. Getty and George contend that the arbitration clause in plaintiffs' contracts not only requires arbitration of plaintiffs' claims against Getty, but also requires that any threshold questions of arbitrability, such as the scope of the arbitration clause, go to the arbitrator as well. Threshold questions of arbitrability are typically questions for the court, “[u]nless the parties clearly and unmistakably provide otherwise.” AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986). In this case, the arbitration clause clearly and unmistakably submits threshold arbitrability questions to the arbitrator, so plaintiffs cannot pursue their claims against Getty in court.

         The arbitration clause in plaintiffs' contracts refers to the International Chamber of Commerce Rules of Arbitration and the Commercial Rules of the American Arbitration Association. The AAA Rules state that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.”[2] The ICC Rules contain a similar provision.[3] Although the Seventh Circuit has yet to address the question, the consensus view is that reference to the AAA's Rules in an ...


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