Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 1 of 18 PageID #:5736
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`No. 11 CV 5319
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`Judge Manish S. Shah
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`ROBERT FRERCK,
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`Plaintiff,
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`v.
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`PEARSON EDUCATION, INC.,
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`Defendant.
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`MEMORANDUM OPINION AND ORDER
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`Plaintiff Robert Frerck, a professional photographer, claims defendant
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`Pearson Education infringed his copyrights by publishing and distributing his
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`photographs beyond the scope of the parties’ agreements. Plaintiff also contends
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`defendant infringed his rights by using some photographs with no permission at all.
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`Plaintiff finally alleges defendant defrauded him by understating its plans for some
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`of his photographs so they would cost less to license.
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`Plaintiff has moved for partial summary judgment as to liability on a subset
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`of infringement claims. Defendant has moved for partial summary judgment on
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`plaintiff’s fraud claims. For the following reasons, I grant both motions.
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`I.
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`Legal Standard
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`A party seeking summary judgment must show there is no genuine dispute
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`as to any material fact and that it is entitled to judgment as a matter of law. See
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`Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Fed. R. Civ. P. 56(a). There is a
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`genuine dispute as to a material fact if “the evidence is such that a reasonable jury
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 2 of 18 PageID #:5737
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`could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
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`477 U.S. 242, 248 (1986). In opposing summary judgment, a nonmoving party “must
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`do more than simply show that there is some metaphysical doubt as to the material
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`facts.” Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corporation, 475
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`U.S. 574, 586 (1986). Likewise, if the nonmoving party’s evidence is “merely
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`colorable or is not significantly probative,” summary judgment may be granted.
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`Anderson, 477 U.S. at 249-50 (internal citations omitted). On cross-motions for
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`summary judgment, all facts are construed and all reasonable inferences are drawn
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`in favor of the nonmoving party. Garofalo v. Village of Hazel Crest, 754 F.3d 428,
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`430 (7th Cir. 2014).
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`II. Background
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`Plaintiff Robert Frerck was a professional photographer engaged in the
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`business of selling stock photographs for nonexclusive use. Dkt. 145-2 ¶ 2, Plaintiff’s
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`Response to Defendant’s Separate Statement of Facts. Defendant Pearson
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`Education was a publisher of school textbooks and other educational materials. Id.
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`¶ 1. The parties had been doing business with each other since 1992. Id. ¶¶ 3-4.
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`Whenever defendant wanted to publish some of plaintiff’s photographs, it had
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`an image permission coordinator send him a written “billing request.” Id. ¶¶ 10, 13-
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`14. The billing request identified the photographs being requested and the
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`publications in which they were going to appear. Id. Plaintiff claims the billing
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`requests also provided the maximum number of copies defendant intended to
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`publish, while defendant claims they provided only an estimate. Id. ¶ 10, 14.
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`2
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 3 of 18 PageID #:5738
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`Plaintiff responded to the billing request by sending defendant’s image
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`permission coordinator an invoice, which contained limitations on print quantities
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`and geographical distributions for the publications at issue. Id. ¶ 11; Dkt. 106-2 ¶ 9,
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`Defendant’s Response to Plaintiff’s Separate Statement of Facts. The parties
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`dispute
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`the significance of
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`the
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`invoice. Defendant describes
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`it as an
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`acknowledgement of the billing request, a request for payment, and only one part of
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`the parties’ licensing agreement. Dkt. 145-2 ¶ 11; Dkt 106-2 ¶11. Plaintiff thinks of
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`it as the license in its entirety—granting and setting forth specifically limited
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`rights. Dkt. 145-2 ¶ 11; Dkt 106-2 ¶11. Plaintiff also believes that at the time
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`defendant transmitted certain billing requests, it knew its demand for the
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`requested photographs would be—or already was—in excess of the requested
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`licenses. Dkt. 146-2 ¶¶ 15-16.
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`The parties maintained this back-and-forth for almost 20 years, but in July
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`2011 plaintiff brought suit. Plaintiff’s Amended Complaint alleges two sets of
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`claims. The first set comprises 3,582 separate claims of copyright infringement in
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`violation of 17 U.S.C. § 501, et seq. Dkt. 105 ¶¶ 10-11, 25; Dkt. 105-1–105-4. In most
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`instances, plaintiff acknowledges defendant had a valid nonexclusive license to copy
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`his photos, but plaintiff claims defendant nevertheless infringed by (1) printing too
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`many copies of the photographs, or (2) distributing the photographs too broadly.
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`Dkt. 105 ¶¶ 10-11; Dkt. 105-1–105-4. In other instances, plaintiff claims defendant
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`infringed by publishing his photographs with no permission whatsoever. Dkt. 105
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`¶ 12; Dkt. 105-1–105-4.
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`3
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 4 of 18 PageID #:5739
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`The second set of 12 separate claims alleges defendant committed common-
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`law fraud under Illinois law because defendant intentionally misrepresented the
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`number of reproductions it would make and the geographic areas in which it would
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`distribute them, intending that plaintiff would rely on those misrepresentations to
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`his detriment by charging a lower fee. Dkt. 105 ¶¶ 11, 28; Dkt. 105-1–105-4.
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`Plaintiff has moved for partial summary judgment as to liability on a subset1
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`of his copyright claims. Dkt. 98; Dkt. 98-13. Defendant has moved for partial
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`summary judgment on plaintiff’s fraud claims. Dkt. 130.
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`III. Analysis
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`A.
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`Plaintiff’s Motion for Partial Summary Judgment
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`Plaintiff believes no material fact is genuinely in dispute and that he is
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`entitled to judgment as a matter of law. Defendant disagrees and identifies four
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`threshold areas of dispute: (1) defendant’s affirmative defenses generally, (2) the
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`statute of limitations, (3) the doctrine of laches, and (4) implied license. Defendant
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`also believes elements of plaintiff’s copyright claims remain genuinely in dispute.
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`1.
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`Threshold Issues
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`a.
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`Affirmative Defenses
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`Plaintiff is not entitled to summary judgment, defendant argues, because his
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`opening brief does not preemptively tackle all of its affirmative defenses. Defendant
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`1 Plaintiff requested “a judgment of liability against [defendant] for 439 claims of copyright
`infringement . . . [as] identified in Exhibit 1 to the Declaration of Alex Kerr filed with [plaintiff’s]
`motion.” Dkt. 98 at 1. That exhibit, however, identifies only 347 claims. Dkt. 98-13. Additionally,
`plaintiff has withdrawn his motion as to lines 80, 96, 166, and 347 of Exhibit 1 to the Kerr
`Declaration. Dkt. 111 at 15; Dkt. 98-13. Thus, I understand plaintiff to be requesting a judgment of
`liability on 343 claims.
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`4
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 5 of 18 PageID #:5740
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`identifies two decisions in which courts have held that a plaintiff’s opening brief
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`must refute affirmative defenses. Amwest Surety Insurance Co. v. Szabo, 2001 WL
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`1230643, *4 (N.D. Ill. Oct. 11, 2001); Navistar International Tranportation Corp. v.
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`Freightliner Corp., 1998 WL 786388, *2 (N.D. Ill. 1998).
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`Respectfully, I am not persuaded by these cases. Instead, I agree with those
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`decisions in which courts have required the defendants to raise their affirmative
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`defenses in their opposition briefs. See, e.g., United Mine Workers v. Pittston Co.,
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`984 F.2d 469, 478 (D.C. Cir. 1993); Pandrol USA, LP v. Airboss Railway Products,
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`Inc., 320 F.3d 1354, 1366 (Fed. Cir. 2003); United Central Bank v. Wells Street
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`Apartments, LLC, 957 F.Supp.2d 978, 987-88 (E.D. Wis. 2013). First, when a
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`plaintiff moves for judgment as a matter of law on an entire claim, he implicitly
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`contends there is no genuine dispute about any fact material to the defendant’s
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`affirmative defenses. Indeed, a dispute over a fact material to an affirmative
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`defense precludes summary judgment. Second, when—as here—the defendant takes
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`a shotgun approach to affirmative defenses, judicial economy is best served by
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`forcing it to identify and argue only those defenses that matter.2
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`b.
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`Statute of Limitations
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`Defendant argues that a genuine dispute over whether plaintiff’s claims are
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`time-barred precludes summary judgment. Under 17 U.S.C. § 507(b), no action for
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`copyright infringement “shall be maintained . . . unless it is commenced within
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`three years after the claim accrued.” In determining when a copyright claim
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`2 I note that many of defendant’s “affirmative defenses” are actually not—they are “argumentative
`denials,” which would not require plaintiff’s attention even under defendant’s proposed rule.
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`5
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 6 of 18 PageID #:5741
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`accrues, courts in the Seventh Circuit apply the “discovery rule.” The “statute of
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`limitations starts to run when the plaintiff learns, or should as a reasonable person
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`have learned, that the defendant was violating his rights . . . .” Gaiman v.
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`McFarlane, 360 F.3d 644, 653 (7th Cir. 2004) (emphasis added).3 Because plaintiff
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`filed his complaint on August 5, 2011, Dkt. 1, any claims he reasonably should have
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`learned of before August 5, 2008, are barred.
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`In July 2008, Julie Orr, defendant’s Manager of Image Permissions, notified
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`plaintiff that defendant had exceeded the print run relating to several products in
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`the Realidades series.4 Dkt. 106-7 at 49:7-21, Deposition of Robert Frerck. Orr then
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`came back to plaintiff and told him that, in fact, there had been no overrun on two
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`of the “Levels” within that series. Dkt. 111-3 at 57:24-58:10. Plaintiff provided
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`defendant a retroactive license to cover the overrun that had occurred. Dkt. 106-14.
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`Plaintiff did not ask Orr if defendant was overrunning his photographs on other
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`products, but Orr testified that—had he asked—she would have told him that they
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`were. Dkt. 106-13 at 29:3-10, Deposition of Julie Orr. On this evidentiary basis,
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`defendant sees a genuine dispute of fact over whether a reasonable person in
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`3 In Petrella v. Metro-Goldwyn-Mayer, Inc., ___ U.S. ___, 134 S. Ct. 1962 (2014), the Supreme Court
`said “[a] copyright claim . . . arises or ‘accrue[s]’ when an infringing act occurs.” 134 S. Ct. at 1969.
`Defendant takes this to mean that I should not apply the discovery rule in this case. Dkt. 138 at 1-2,
`Defendant’s Notice of Supplemental Authority. I disagree. In Petrella, the Supreme Court explicitly
`said it was not passing on the question of the “nine Courts of Appeals [who] have adopted, as an
`alternative to the incident of injury rule, a ‘discovery rule,’ which starts the limitations period when
`‘the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis
`for the claim.’” Id. at 1969 n. 4. Since the Court did not take up this issue—and because I am bound
`to follow Seventh Circuit precedent—I will continue to apply the discovery rule.
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` None of the Realidades claims are at issue in plaintiff’s motion for summary judgment. Dkt. 111 at
`8.
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` 4
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`6
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 7 of 18 PageID #:5742
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`plaintiff’s position would have actively investigated overruns on defendant’s other
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`products. Dkt. 106 at 10-12.
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`I find no genuine dispute on this score. No reasonable jury could conclude
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`that plaintiff, based on the experience he had with defendant, should have inquired
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`into whether it was infringing his copyrights. Orr’s disclosure was voluntary and
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`proactive. Defendant seemed to take it upon itself to remedy an occurrence that
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`was—from plaintiff’s perspective—the first of its kind over a nearly 20-year
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`relationship. Dkt. 111-3 at 58:11-59:9. Furthermore, after her initial report, Orr told
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`plaintiff the overrun had actually been smaller than first believed. Again, the
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`fulsome communication belied any hint of wrongdoing.
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`In sum, nothing in the record suggests that a person in plaintiff’s shoes
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`reasonably should have learned that defendant was “violating his rights.” Gaiman,
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`360 F.3d at 653.5
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`c.
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`Laches
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`Defendant argues that plaintiff’s delay in filing suit creates a genuine issue of
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`fact concerning the defense of laches. For laches to apply, the party asserting the
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`defense must demonstrate: (1) an unreasonable lack of diligence by the party
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`against whom the defense is asserted, and (2) prejudice arising therefrom. Hot Wax,
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`Inc. v. Turtle Wax, Inc., 191 F.3d 813, 820 (7th Cir. 1999). “A defendant has been
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`5 Defendant’s argument fails for another reason. Even if I were to find a genuine dispute concerning
`what a reasonable person would have done, defendant has provided insufficient evidence for me to
`determine which of plaintiff’s 343 claims would be barred and which would not. In other words, for
`any given publication-license pairing, I cannot identify the date on which defendant published or
`distributed the first infringing book. The statute of limitations is an affirmative defense, see Fed. R.
`Civ. P. 8(c), and so it is defendant’s burden to “make a showing sufficient to establish the existence of
`an element essential to that party’s case, and on which that party will bear the burden of proof at
`trial,” Celotex, 477 U.S. at 322-23.
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`7
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 8 of 18 PageID #:5743
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`prejudiced by a delay when the assertion of a claim available some time ago would
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`be ‘inequitable’ in light of the delay in bringing that claim . . . [and] prejudice
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`ensues when a defendant has changed his position in a way that would not have
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`occurred if the plaintiff had not delayed.” Id. at 824 (internal quotation omitted).
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`As with defendant’s statute of limitations defense discussed above, I find
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`plaintiff did not demonstrate an unreasonable lack of diligence. Defendant has also
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`provided no evidence that it changed its position in any way due to plaintiff’s delay.
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`Defendant argues only that it “could have taken steps to remove and replace
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`[plaintiff’s] photographs.” Dkt. 106 at 12. This unsupported statement is insufficient
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`given defendant’s burden at this stage.
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`d.
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`Implied License
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`Plaintiff’s motion must be denied, defendant argues, because there is a
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`genuine dispute of material fact regarding whether—through the parties’ course of
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`conduct—defendant was granted an implied license to use plaintiff’s photographs
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`beyond the scope of the invoices. An implied license is an affirmative defense to a
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`claim of copyright infringement. I.A.E., Inc. v. Shaver, 74 F.3d 768, 776 (7th Cir.
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`1996).
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`The Seventh Circuit has so far recognized only a narrow circumstance in
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`which an implied license is granted. See Kennedy v. National Juvenile Detention
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`Association, 187 F.3d 690, 694 (7th Cir. 1999) (citing Shaver, 74 F.3d at 776). “An
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`implied nonexclusive license has been granted when (1) the licensee requests the
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`creation of a work; (2) the licensor creates the work and delivers it to the licensee
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`8
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 9 of 18 PageID #:5744
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`who asked for it; and (3) the licensor intends that the licensee copy and distribute
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`the work.” Id. Here, there is no evidence that defendant requested the creation of
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`plaintiff’s photographs. Under Seventh Circuit precedent, therefore, defendant’s
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`argument for an implied license fails.
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`Relying on decisions from outside this circuit, defendant argues that implied
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`licenses may arise in situations other than the narrow work-for-hire arrangement
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`found in Shaver. Dkt. 106 at 7. Specifically, defendant relies on a decision from the
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`Ninth Circuit in which the court affirmed a finding of implied license on the basis of
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`the parties’ course of conduct. Falcon Enterprises, Inc. v. Publishers Service, Inc.,
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`438 Fed. App’x 579 (9th Cir. 2011). In Falcon, the court held that the parties’
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`conduct “demonstrate[d] that [copyright holder] granted Publishers an ongoing
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`nonexclusive implied license to use its content for a fee.” Id. at 581. The court found
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`several factors to be relevant: (1) the “frequent and informal interactions between
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`the parties” in lieu of “express license[s]”; (2) that “[m]ost images that [copyright
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`holder] submitted to Publishers . . . were previously published ‘second rights’
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`images worth little and offered to Publishers without any restrictions or promises of
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`exclusivity”; (3) the copyright holder “never declined to give Publishers a
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`nonexclusive license to publish its images”; and (4) that “Publishers owed [the
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`copyright holder] payment only after it published [the] copyrighted images”. 438
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`Fed. App’x at 581.
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`I do not reach the question of whether the broader rule articulated in Falcon
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`is consistent with Seventh Circuit precedent because I hold that, in any event,
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`9
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 10 of 18 PageID #:5745
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`defendant fails to present a genuine dispute of material fact under the Falcon test
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`as well. In contrast to the “frequent and informal interactions between the parties”
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`in Falcon, plaintiff and defendant abided by a formal protocol: First, defendant
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`issued billing requests to plaintiff asking to reproduce his photographs in
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`defendant’s publications. Second, in response to these requests, plaintiff issued
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`limited licenses in the form of invoices.
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`Additionally, in nearly every transaction, defendant was required to pay for
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`the license before publishing the photographs. To be sure, on one occasion plaintiff
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`expressly granted defendant a retroactive license after defendant exceeded the
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`original license. Dkt. 106 at 6; Dkt. 106-12 ¶ 10, Plaintiff’s Objections and
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`Responses to Defendant’s First Set of Interrogatory Requests. And three times6
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`plaintiff completed permission-related documentation after photographs had been
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`published. Dkt. 106 at 6; Dkt. 106-12 ¶ 11. But these limited exceptions over a
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`nearly 20-year relationship nevertheless do not amount to a “course of conduct,” nor
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`could a reasonable jury find as much.
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`Finally, the mere fact plaintiff never refused defendant a license does not
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`mean defendant was free to use plaintiff’s photographs beyond the scope of those
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`licenses or that plaintiff was barred from refusing a request. Defendant has offered
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`no authority that goes so far.
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`Defendant also cites two district court opinions in which the judge denied a
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`motion for partial summary judgment because the parties’ course of conduct created
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`6 One of these three publications, Realidades Levels A, B, 2, by Boyles-Met-Sayers-Sargin is the
`publication for which plaintiff granted defendant a retroactive license. Dkt. 106-12 ¶¶10-11.
`10
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 11 of 18 PageID #:5746
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`a genuine issue of material fact about an implied license. Alaska Stock, LLC v.
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`Pearson Education, Inc., 975 F.Supp.2d 1027, 1041-43 (D. Alaska 2013); Psihoyos v.
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`Pearson Education, Inc., 855 F.Supp.2d 103, 124-125 (S.D.N.Y. 2012).
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`In Alaska Stock, the court found a factual dispute due to an admission by the
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`plaintiff’s president that, even after the he knew Pearson was over-printing
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`photographs, the plaintiff continued to send the defendant license agreements post-
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`publication. 975 F.Supp.2d at 1042. Here, however, there is no evidence of plaintiff
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`knowingly and continuously ratifying an inverted licensing protocol, so Alaska
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`Stock does not apply.
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`In Psihoyos, the court applied a “meeting of the minds” test. 855 F.Supp.2d at
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`124. Even if I were to adopt that approach in this case, there is no evidence the
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`parties both believed defendant could use plaintiff’s photographs beyond the scope
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`of the written invoices. To the contrary, the undisputed record shows both sides
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`believed defendant needed to operate within the bounds of those terms. For
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`example, Orr testified that (1) it was her “practice” to obtain permission before
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`using images, (2) once defendant exceeded a license limit it “essentially ha[d] no
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`permission to use that photograph,” and (3) if the print quantity was over the
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`licensed quantity defendant was “to get additional permissions.” Dkt. 111-2 at
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`16:12–20, 22:3–6, 28:13–19. For his part, plaintiff declared that he “trusted and
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`expected that [defendant] would comply with the license limits or seek license
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`renewals as needed.” Dkt. 98-3 ¶ 9.
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`11
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 12 of 18 PageID #:5747
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`In sum, this case clearly does not fit the narrow Seventh Circuit definition of
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`implied license, but even applying the broader tests of other courts, defendant has
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`failed to demonstrate a genuine dispute of fact on this defense.
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`2.
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`Copyright Infringement
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`To prove copyright infringement a plaintiff must demonstrate: “(1) ownership
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`of a valid copyright, and (2) copying of constituent elements of the work that are
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`original.” Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340,
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`361 (1991). If the plaintiff has granted the defendant a license, the second element
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`is satisfied by showing that the license was limited in scope and that it has been
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`exceeded. See Shaver, 74 F.3d at 775 (“The licensee violates the copyright by
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`exceeding the scope of [the] license”).
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`Plaintiff presents proof that he created the photographs at issue and that he
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`holds a copyright to each one. Dkt. 98-2 ¶¶ 6-7. Defendant does not dispute that
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`plaintiff created these photographs. Dkt. 106-2 ¶ 6. And though defendant does not
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`admit either that plaintiff holds a legal copyright to the photos, or that the photos
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`are the subject of a valid Certificate of Copyright Registration, Dkt. 106-2 ¶ 6-7,
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`defendant has not presented any evidence to contrary. Nor has it substantively
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`argued to the contrary in its brief. I therefore find that plaintiff has satisfied the
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`first prong of the copyright infringement test with regard to the images identified in
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`Exhibit 1 to the Declaration of Alex Kerr.
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`Next, plaintiff points to business records defendant produced in discovery to
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`support his claim that defendant exceeded the scope of the licenses. Dkt. 98 at 7-8;
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`12
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 13 of 18 PageID #:5748
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`Dkt. 98-12 ¶¶ 2-8. According to plaintiff, “Global Rights Data Warehouse” reports
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`show how many copies defendant made of the publications at issue, see Dkt. 98-14–
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`98-39, while “Geography Reports” show where in the world defendant distributed
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`the publications at issue, see Dkt. 98-40–98-46. For every claim in plaintiff’s motion,
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`these reports show defendant printed more copies than the pertinent license
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`allowed (when defendant had a license), distributed the photos in more countries
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`than the pertinent license allowed (when defendant had a license), or both. See Dkt.
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`98-13. In addition, plaintiff declared under penalty of perjury that for each of the
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`publications at issue, he “reviewed a copy of the student or teacher editions and
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`confirmed that the Photographs are included in the publications . . . .” Dkt. 98-3
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`¶ 15.
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`Defendant argues plaintiff’s evidence is insufficient. It dismisses as
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`“conclusory” plaintiff’s declaration that he personally checked each publication. Dkt.
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`106 at 13. To that end, defendant notes that neither party produced six of the
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`publications at issue (underlying 25 claims), which makes it impossible to verify
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`whether plaintiff’s 25 photographs were actually published. Id. at 13-14. Along this
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`same line, defendant generally disputes how probative the Global Rights Data
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`Warehouse evidence is of how often defendant actually used plaintiff’s photographs
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`because, according to defendant’s Rule 30(b)(6) designee, (1) images can be “dropped
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`at the last minute in a last minute editorial change,” and (2) defendant “‘has been
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`going through a replacement process’ to determine where defendant’s images were
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`13
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 14 of 18 PageID #:5749
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`potentially used and has tried to ‘replace those images for future printings.’” Dkt.
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`106 at 14 n. 7 (quoting Dkt. 106-11 at 68:3-9, 73:20-74:11).
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`In response, plaintiff says he stands by his declaration, but also supplements
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`the record with scans of the publications at issue (including the missing six). Dkt.
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`111 at 14. Plaintiff further explains that he did not make the six publications
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`available to defendant because “in certain instances, he returned copies to resellers
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`or he examined the books at a public library.” Id. at 14-15 n. 75.
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`Plaintiff’s evidence satisfies his initial burden of demonstrating that no
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`genuine dispute exists as to whether defendant exceeded the scope of the licenses.
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`Defendant’s own business records plainly show that the publications at issue were
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`produced and distributed in excess of what the relevant licenses allowed. Plaintiff
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`submitted a declaration swearing that he personally reviewed a copy of each
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`publication and verified that it contained the subject photos.7
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`Defendant’s evidence fails to satisfy its counter-burden of presenting a
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`genuine dispute of material fact. The record is devoid of any evidence that
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`defendant actually removed any of plaintiff’s photographs during last-minute
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`7 To that end, this case differs materially from one of defendant’s other infringement cases, Pacific
`Stock, Inc. v. Pearson Education, Inc., in which the district court held that “questions of fact about
`Pearson’s actual use of the stock photographs preclude[d] a grant of summary judgment to Pacific
`Stock.” 927 F.Supp.2d 991, 992 (N.D. Ill. 2013). As here, defendant argued in Pacific Stock that the
`Global Rights Data Warehouse report “d[id] not speak to whether any of the images [were] actually
`used in a textbook” because “images may not have been included in the textbooks as a result of last-
`minute editorial decisions” and also because “when Pacific Stock began questioning Pearson’s use of
`the images, Pearson began removing the photographs from the textbooks.” Id. at 995. Significantly,
`in Pacific Stock, “it turn[ed] out that no one, not even Pacific Stock, ha[d] actually reviewed the
`textbooks to determine whether the images [were] actually included in them.” Id. The plaintiff failed
`to undertake that effort even though “Pearson admitted at the hearing that, if the textbooks
`contained the images, Pearson had exceeded the numerical limits of various licenses.” Id. Finding the
`plaintiff had presented “an insufficient basis for summary judgment,” the court denied the plaintiff’s
`motion. Id. at 998.
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`editorial changes. Likewise, there has been no proof presented that defendant’s
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`“replacement process” actually resulted in any of plaintiff’s photographs being
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`pulled so as to affect the accuracy of the data contained in the Global Rights Data
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`Warehouse report or Geography Report. The evidence defendant has presented on
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`that score is “not significantly probative” because it does not assert that plaintiff’s
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`photographs were actually removed under either of the two theories. Anderson, 477
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`U.S. at 249-50.
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`Although reasonable inferences must be construed in defendant’s favor on
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`plaintiff’s motion, it would not be reasonable to infer from defendant’s Rule 30(b)(6)
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`testimony that plaintiff’s photographs were actually removed. In sum, I find that
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`“the record taken as a whole could not lead a rational trier of fact to find for
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`[defendant],” and thus “there is no ‘genuine issue for trial.’” Matsushita, 475 U.S. at
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`587.
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`B. Defendant’s Motion for Partial Summary Judgment
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`
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`A claim of common-law fraud under Illinois law requires proof of five
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`elements: (1) a false statement of material fact; (2) defendant’s knowledge that the
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`statement was false; (3) defendant’s intent that the statement induce the plaintiff to
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`act; (4) plaintiff’s reliance upon the truth of the statement; and (5) plaintiff’s
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`damages resulting from the reliance on the statement. Massuda v. Panda Express,
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`Inc., __ F.3d __, 2014 WL 3566419, *4 (7th Cir. July 21, 2014). “[A] party can satisfy
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`the fraudulent intent element by proving that a misrepresentation was made
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`Case: 1:11-cv-05319 Document #: 161 Filed: 08/11/14 Page 16 of 18 PageID #:5751
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`knowingly or with a reckless disregard for its truth or falsity.” Orix Credit Alliance,
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`Inc. v. Taylor Machine Works, Inc., 125 F.3d 468, 479 (7th Cir. 1997).
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`
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`Plaintiff alleges defendant committed fraud several times by telling him it
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`would use his photographs to a small extent when, in fact, defendant knew it would
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`use the photographs to a greater extent. Dkt. 145 at 1, Plaintiff’s Response in
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`Opposition to Defendant’s Motion for Partial Summary Judgment. Defendant’s
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`alleged aim was to pay less for the licenses. Id.
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`
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`According
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`to plaintiff,
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`“the
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`identity of
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`the persons making
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`the
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`misrepresentations, the time, place, and content of the misrepresentations, and the
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`method by which the misrepresentations were communicated to [him]” are all
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`contained in Exhibits E–P of his Amended Complaint. Dkt. 105 ¶ 10. Each contains
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`a billing request from defendant along with the corresponding invoice-license from
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`plaintiff. Dkt. 105-8–105-19. The only people named in the billing requests—and so
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`the only “persons making the misrepresentations”—are defendant’s
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`image
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`permission coordinators. Id.; see also Dkt 145-2 ¶ 17 (“The only alleged
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`misrepresentation that [plaintiff] relies on for the basis of his fraud claims are
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`[defendant’s] billing requests issued by specific image permission coordinators at
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`[defendant]”).
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`
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`Plaintiff seeks to prove “Pearson’s” knowledge, or reckless indifference, with
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`reference to defendant’s
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`internal forecasts, which—according to plaintiff—
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`demonstrate that at the time of the requests “Pearson” knew it would print more
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`copies than it was requesting permission to print. Dkt. 145 at 1; Dkt. 145-9, -11, -12.
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`“Pearson” allegedly also knew it had sold more copies of prior versions of the
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`publications than were being requested for the new versions. Dkt. 145 at 1-2; see
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`e.g., Dkt 145-14.
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`
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`Plaintiff claims it was defendant’s image permission coordinators who made
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`the false representations, though he deposed none but Julie Orr and asked her
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`nothing about her alleged misrepresentation. Dkt. 145-2 ¶¶ 18-61. Plaintiff provides
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`no evidence of the image permission coordinators’ day-to-day job. He also provides
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`no evidence linking a specific higher up, whose wrongful intent could perhaps be
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`inferred, with a coordinator’s specific misrepresentation.
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`
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`Without any of this evidence, Plaintiff is forced to rely on the theory that
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`defendant as a corporation had the collective wrongful intent required to support
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`his fraud claims. Dkt. 145 at 9. The parties debate whether this is tenable and cite
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`to the Seventh Circuit decisions, Pugh v. Tribune Co., 521 F.3d 686, 697 (7th Cir.
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`2008) and Makor Issues & Rights, Ltd. v. Tellabs Inc., 513 F.3d 702, 707-08 (7th Cir.
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`2008),8 which pertain to pleading standards under the Private Securities Litigation
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`Reform Act. Plaintiff’s claim, however, arises under Illinois common-law not the
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`PSLRA. Pugh and Makor are thus inapposite.
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`
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`I have found no decision in which the Illinois Supreme Court or the Seventh
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`Circuit Court of Appeals (applying Illinois law) applies the collective corporate
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`intent concept. What the Illinois Supreme Court does recognize, though, is the basic
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`principle that a corporation is liable for the actions of its agents when the alleged
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`conduct falls within the scope of the agent’s employment. See Wilson v. Edward
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`8 The parties discuss other decisions on this issue, but none binds or persuades me.
`17
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`Case: 1:11-cv-0