Case 1:17-cv-05452-JPO Document 85 Filed 03/08/19 Page 1 of 10
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`CADY NOLAND,
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`Plaintiff,
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`-v-
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`GALERIE MICHAEL JANSSEN, et al.,
`Defendants.
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`17-CV-5452 (JPO)
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`OPINION AND ORDER
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`J. PAUL OETKEN, District Judge:
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`Plaintiff Cady Noland, an artist, initiated this copyright action in connection with the
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`display and attempted sale of what she alleges to have been an unauthorized copy of one of her
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`wooden sculptures. Defendants are two German art galleries, the owner of one of the galleries,
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`and a German art collector. Noland’s allegations are largely based on Defendants’ replacement
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`of the sculpture’s wooden parts after years of outdoor exposure had caused the sculpture to begin
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`to rot. (Dkt. No. 71 (“SAC”) ¶¶ 28–34, 38–40.) Before the Court now is Defendants’ motion to
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`dismiss the operative Second Amended Complaint. (Dkt. No. 74.) For the reasons that follow,
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`Defendants’ motion is granted.
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`I.
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`Background
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`Plaintiff Cady Noland is a visual artist. (SAC ¶ 1.) This suit is about Noland’s 1990
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`sculpture called “Log Cabin Façade.” (SAC ¶ 4.) The artwork (“the Log Cabin”) resembles the
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`front facade of a log cabin in size and structure, with two short side walls for support. (SAC
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`¶ 5.) The facade’s discernible features include a door-shaped opening, two window-shaped
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`openings with American flags hung below them, and a triangular-shaped top. (Id.) Noland
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`included the following photograph of the artwork as part of her Second Amended Complaint:
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`(SAC at 3.)
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`Noland claims to own a copyright to the Log Cabin. (SAC ¶ 8.) However, when she
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`applied to the Copyright Office for registration of a copyright in the artwork, the Copyright
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`Office denied her application. (Id.) Noland has requested reconsideration of the Copyright
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`Office’s denial of her registration application, and her request remained pending at the time the
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`Second Amended Complaint was filed. (SAC ¶ 8.)
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`In 1990, Defendant Wilhelm Schurmann, a German art collector, bought the Log Cabin.
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`(SAC ¶ 11.) Schurmann exhibited the Log Cabin at various locations in Germany, including a
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`ten-year stint at a museum in Aachen, Germany. (SAC ¶¶ 25, 28, 46, 51.) With Noland’s
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`permission, the Aachen museum displayed the Log Cabin outdoors. (SAC ¶¶ 26–29.) Prior to
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`displaying the work outdoors, Schurmann obtained Noland’s leave to stain the wood a darker
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`2
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`color. (SAC ¶¶ 26–27.) Noland alleges that this newly stained artwork constituted a derivative
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`work as defined by Section 101 of the United States Copyright Act. (SAC ¶¶ 6, 27.)
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`In displaying the artwork outside, the Aachen museum placed the work directly on the
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`bare ground without a protective foundation, causing some of the wood to rot and deteriorate.
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`(SAC ¶¶ 30–31, 33.) After hiring an art conservator in December 2010 to inspect the damage to
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`the artwork, Schurmann and Defendant KOW, a German art gallery, replaced all of the
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`sculpture’s original wooden components with new wooden parts. (SAC ¶¶ 12, 36–40.)1
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`Sometime after the wood was replaced, Schurmann and KOW recruited the Galerie
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`Michael Janssen (“the Janssen Gallery”) to help sell the work. (SAC ¶ 50.) The Janssen Gallery
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`is also a German art gallery, located in Berlin. (SAC ¶ 9.) Defendant Michael Janssen owns the
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`gallery. (SAC ¶ 10.) After being engaged by Schurmann and KOW, Janssen subsequently
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`displayed the work at his gallery in Berlin. (SAC ¶¶ 52, 67.)
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`Acting on behalf of Schurmann, in July 2014 the Janssen Gallery found an American
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`collector willing to purchase the work for $1.4 million. (SAC ¶ 55.) The resulting contract of
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`sale included a New York choice-of-law provision and called for delivery of the sculpture to
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`Ohio, but it also provided that if Noland “refuses to acknowledge or approve of the legitimacy of
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`the Work,” or “seeks to disassociate her name from the Work,” or “claims that her moral rights,
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`rights under the Visual Artists Rights Act or other similar legislation have been violated,” the
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`American buyer could elect to have Janssen buy back the work.2 (SAC ¶¶ 56–57.) After Noland
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`1 The Second Amended Complaint refers to the sculpture with all new wooden
`components as the “Log Cabin Copy.” (SAC ¶ 43.) Without deciding whether the replacement
`of the wood did create a copy under the law, the Court refers to the work resulting from the wood
`replacement as the “work,” “artwork,” or “Log Cabin.”
`2 Noland attaches a copy of the contract of sale to her Second Amended Complaint. (Dkt.
`No. 71-1.)
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`disavowed the legitimacy of the refurbished Log Cabin, the American buyer elected to have
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`Janssen buy back the artwork. (SAC ¶ 58.) Noland does not allege that the work was ever
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`actually transferred out of Germany to the United States.
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`Noland claims that the refurbished Log Cabin that Defendants displayed and offered for
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`sale was not her artwork but an unauthorized copy. (Id.) She asserts claims against Defendants
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`under the following legal theories: (1) violations of her moral rights under the Visual Artists
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`Rights Act (“VARA”), 17 U.S.C. § 106A, and the German Copyright Act (SAC ¶¶ 24–41); (2)
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`copyright infringement in violation of the U.S. Copyright Act and the German Copyright Act
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`(SAC ¶¶ 42–59), as well as attendant claims of contributory infringement and vicarious liability
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`for infringement (SAC ¶¶ 60–68); and (3) negligence on the part of Schurmann for breach of his
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`duty to maintain the work (SAC ¶¶ 69–78). Noland seeks a declaratory judgment (SAC ¶¶ 79–
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`80), as well as injunctive relief and damages (SAC at 16–18).
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`II.
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`Legal Standard
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`“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
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`accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
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`U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In ruling
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`on a motion to dismiss, a court must “accept as true all factual allegations” in the complaint.
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`Nielsen v. Rabin, 746 F.3d 58, 62 (2d Cir. 2014) (citation omitted). And while “[t]hreadbare
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`recitals of the elements of a cause of action, supported by mere conclusory statements, do not
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`suffice,” Iqbal, 556 U.S. at 678, courts must “draw all inferences in the light most favorable to
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`the non-moving party[],” In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir. 2007). In
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`addition to the complaint, courts considering a Rule 12(b)(6) motion may also rely on
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`“documents that are referenced in the complaint, documents that the plaintiff relied on in
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`bringing suit and that are either in the plaintiff’s possession or that the plaintiff knew of when
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`bringing suit, or matters of which judicial notice may be taken.” Jovani Fashion, Ltd. v.
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`Cinderella Divine, Inc., 808 F. Supp. 2d 542, 545 (S.D.N.Y. 2011).
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`III. Discussion
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`A.
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`Territorial Limitations of the U.S. Copyright Act
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`All of the conduct underlying the Copyright Act violations alleged by Noland—including
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`Defendants’ “destruction” of her original work, their “copying” of that work by replacing all of
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`its wooden logs, their continued display of the “copied” work, and their efforts at effectuating a
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`sale of the “copied” work—are alleged to have been performed by Defendants exclusively in
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`Germany. Defendants assert, therefore, that Noland cannot properly bring claims in this Court
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`for violations of U.S. copyright law. (Dkt. No. 75 at 5.)
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`“It is well established that copyright laws generally do not have extraterritorial
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`application.” Update Art, Inc. v. Modiin Publ’g, Ltd., 843 F.2d 67, 73 (2d Cir. 1988). There are,
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`however, some exceptions to the territorial limitations on the applicability of the U.S. Copyright
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`Act. Most relevant here is the “predicate act” exception, which provides that “an individual, who
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`commits an act of infringement in the U.S., which permits further reproduction outside of the
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`U.S. . . . is liable for infringement under the U.S. Copyright Act.” Levitin v. Sony Music Entm’t,
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`101 F. Supp. 3d 376, 384–85 (S.D.N.Y. 2015); see also 5 Melville B. Nimmer & David Nimmer,
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`Nimmer on Copyright § 17.02 (2018).
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`Importantly, in order for a “predicate act” to render a foreign infringer “liable for
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`infringement under the U.S. Copyright Act . . . , the copyright infringement plaintiff ‘must first
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`demonstrate that the domestic predicate act was itself an act of infringement in violation of the
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`copyright laws.’” Levitin, 101 F. Supp. 3d at 385 (quoting Fun–Damental Too, Ltd. v. Gemmy
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`Indus. Corp., No. 96 Civ. 1103, 1996 WL 724734, at *5 (S.D.N.Y. Dec. 17, 1996)). Courts in
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`this Circuit have strictly adhered to this requirement, refusing to apply the U.S. Copyright Act to
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`foreign incidents of infringement even when foreign-made infringing products are based on
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`models obtained and transported from the United States, see Fun–Damental Too, 1996 WL
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`724734, at *5, or when an infringing dance performance is “assembled and arranged” in the
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`United States, see Robert Stigwood Grp., Ltd. v. O’Reilly, 530 F.2d 1096, 1100–01 (2d Cir.
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`1976), because such alleged “predicate acts” did not themselves amount to copyright
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`infringement.
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`Noland argues that her claims satisfy the “predicate act” exception to the territorial
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`limitation on the applicability of the U.S. Copyright Act. (Dkt. No. 79 at 17.) The Court
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`therefore must determine whether Noland has pleaded a “domestic predicate act [that] was itself
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`an act of infringement in violation of the copyright laws.” Fun–Damental Too, 1996 WL
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`724734, at *5. Noland identifies two such possible predicate acts: (1) Defendants’ purchasing
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`of wood in the United States for purposes of refurbishing the work; and (2) Defendants’
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`attempted sale of the work to an American buyer pursuant to a contract calling for delivery of the
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`work to the United States. (Dkt. No. 79 at 17–18.) The Court addresses each of these two acts in
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`turn.
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`First, Noland asserts that Defendants’ act of purchasing the wood used to refurbish her
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`artwork from a Montana company constitutes a predicate act sufficient to trigger the applicability
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`of U.S. copyright law. (Dkt. No. 79 at 17.) But buying wood is clearly not an act of copyright
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`infringement; if anything, it was only Defendants’ subsequent use of that wood to reconstruct
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`Noland’s artwork that could qualify as “an act of infringement in violation of the copyright
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`laws.” Fun–Damental Too, 1996 WL 724734 at *5. Defendants’ purchase of wood from the
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`United States is thus like the dance arrangements and shipment of a model that were rejected as
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`predicate acts in prior cases. See id.; see O’Reilly, 530 F.2d at 1100–01. Because the act of
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`purchasing wood from Montana also did not by “itself violate[] the Copyright Act, there is no
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`cause of action under the U.S. Copyright Act for foreign copyright infringement” on this basis.
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`Levitin, 101 F. Supp. 3d at 385 (internal quotation marks and citation omitted).
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`Second, Noland argues that Defendants’ failed attempts to sell the artwork to a U.S.
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`buyer might also satisfy the exception, because “[i]nternational actions that potentially result in
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`the distribution of works in the U.S. are also predicate acts of infringement.” (Dkt. No. 75 at 17.)
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`But neither of the two cases cited by Noland in support of her theory requires adopting her broad
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`view of the “predicate act” rule, and their facts are only marginally similar to the case at hand.
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`In the first, an unpublished out-of-Circuit case, a Canadian toy company was held liable for
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`copyright infringement under U.S. law on the basis of the Canadian company’s “significant
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`activity in the United States,” including its actual shipment of infringing products into the United
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`States. See Liberty Toy Co., Inc. v. Fred Silber Co., 149 F.3d 1183 (Table), 1998 WL 385469, at
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`*3–4 (6th Cir. June 29, 1998). Here, Noland does not allege any—let alone any significant—
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`activities by Defendants within the United States, nor she does allege that Defendants actually
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`delivered any infringing work to the United States. (SAC ¶¶ 55, 58.)
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`In the second case on which Noland relies, the Second Circuit upheld the application of
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`U.S. copyright law to a foreign entity on the basis of evidence showing that a specific act of
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`infringement, namely the “illegal reproduction of the [copyrighted work, first] occurred in the
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`United States and then was exported abroad.” Update Art, Inc., 843 F.2d at 73. Unlike in
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`Update Art, however, here Noland does not allege any domestic act of infringement, because she
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`does not allege that an infringing work was ever “reproduce[d],” “display[ed],” or “distribute[d]”
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`in the United States. 17 U.S.C. § 106. Moreover, because Update Art’s holding was premised
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`on the conclusion that there was in fact a domestic act of infringement, it in no way supports her
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`broad assertion that an infringement that occurs abroad that could potentially lead to a domestic
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`distribution of an infringing work may constitute a predicate act. (See Dkt. No. 75 at 17.)
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`The remaining facts alleged by Noland alleges―namely that the German Defendants
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`signed a contract with an American buyer that included a New York choice-of-law provision and
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`that called for eventual delivery of the work to the United States―are by themselves insufficient
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`to establish that a “distribution” occurred within the United States. If Noland had alleged that
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`Defendants’ conduct in fact touched the United States—such as through marketing of the work
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`from within the United States or through reaching out to potential buyers when present in the
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`United States—this might present a closer question. There is a developing doctrine in copyright
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`law, not yet addressed by the Second Circuit, regarding whether an unconsummated offer to
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`distribute a copy of a work for sale can by itself constitute a “distribution” of an unauthorized
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`copy in violation of 17 U.S.C. § 106(3).3 However, because Noland has not alleged that any
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`conduct in relation to the offered sale of the Log Cabin occurred within the United States, she
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`has not plausibly pleaded a qualifying “domestic predicate act [that] was itself an act of
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`infringement in violation of the copyright laws.” Levitin, 101 F. Supp. 3d at 385. Accordingly,
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`her claims brought under the U.S. Copyright Act must be dismissed.
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`In sum, because “[t]he U.S. Copyright Act does not have extraterritorial application,” id.
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`at 384, and all the relevant conduct alleged in the Second Amended Complaint occurred abroad,
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`3 Compare Elektra Entm’t Grp., Inc. v. Barker, 551 F. Supp. 2d 234, 239–45 (S.D.N.Y.
`2008) (holding that unconsummated “offers” of distribution of infringing music files violate
`Section 106(3) but that merely “making available” such files does not), with Atl. Recording
`Corp. v. Howell, 554 F. Supp. 2d 976, 984–85 (D. Ariz. 2008) (“An offer to distribute does not
`constitute distribution . . . [because the] plain meaning of [Section 106(3)] requires an
`identifiable copy of the work to change hands in one of the [statute’s] prescribed ways for there
`to be a distribution.”); see also 2 Nimmer § 8.11 (describing this issue as an “interpretive puzzle”
`but concluding that “the offer to distribute” a work alone, even absent an “actual act of
`distribution,” is by itself sufficient to “implicate the copyright owner’s distribution right”).
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`the alleged copyright violations Noland challenges in this case are not actionable under the U.S.
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`Copyright Act.4 Accordingly, all of Noland’s federal copyright claims must be dismissed for
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`failure to state a claim upon which relief can be granted.5
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`B.
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`Noland’s Remaining Claims
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`Because Noland’s federal copyright claims have been dismissed, this Court must
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`determine whether to exercise supplemental jurisdiction over her remaining claims. In addition
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`to the Copyright Act and VARA claims, Noland also alleges violations of the German Copyright
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`Act6 and negligence claims under New York and German law. (SAC ¶¶ 34, 41, 44, 48, 53, 59,
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`63, 68, 69–78.) Where a district court has original jurisdiction over certain claims in an action,
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`and additional claims “form part of the same case or controversy,” the court has supplemental
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`4 Because “VARA is part of the Copyright Act,” Mass. Museum of Contemporary Art
`Found., Inc. v. Buchel, 593 F.3d 38, 51 (1st Cir. 2010), this conclusion applies with equal force
`to both her infringement and VARA claims.
`5 District courts in this Circuit have previously held that where the alleged infringing
`conduct was extraterritorial and no exception applied, the court lacked subject matter jurisdiction
`over the claims. Levitin, 101 F. Supp. 3d at 384; Hutson v. Notorious B.I.G., LLC, No. 14 Civ.
`2307, 2015 WL 9450623, at *6 (S.D.N.Y. Dec. 22, 2015). However, the Supreme Court has
`made clear that “the question of extraterritorial application [i]s a ‘merits question,’ not a question
`of jurisdiction.” Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 116 (2013) (quoting
`Morrison v. National Australia Bank Limited, 561 U.S. 247, 253–54 (2010)). Accordingly, the
`Court considers Noland’s failure to adequately allege relevant domestic conduct in this case to
`constitute a failure to allege sufficient facts to satisfy an element of her claims on the merits. See
`Geophysical Serv., Inc. v. TGS-NOPEC Geophysical Co., 850 F.3d 785, 790–91 (5th Cir. 2017)
`(holding that the extraterritorial application of federal copyright law is not a jurisdictional issue).
`6 The Second Amended Complaint briefly asserts jurisdiction over the German Copyright
`Act claims based on “the Berne Convention Implementation Act of 1988, and the Universal
`Copyright Convention.” (SAC ¶ 18.) However, Noland cites no specific legal provisions or
`precedent establishing a source of jurisdiction over foreign copyright claims in that act or
`convention. As such, she has failed to meet her burden of establishing federal question
`jurisdiction over the German copyright claims. Blockbuster, Inc. v. Galeno, 472 F.3d 53, 57 (2d
`Cir. 2006) (“It is well-settled that the party asserting federal jurisdiction bears the burden of
`establishing jurisdiction.) Accordingly, the Court considers whether to assert supplemental
`jurisdiction over the German copyright claims.
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`jurisdiction over the additional claims. See 28 U.S.C. § 1367(a). However, a court “may decline
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`to exercise supplemental jurisdiction over” the additional claims on various grounds, including
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`where “the district court has dismissed all claims over which it has original jurisdiction.” Id.
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`§ 1367(c)(3). Here, the Court declines in its discretion to exercise supplemental jurisdiction over
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`the German copyright claims and the negligence claims in this action. Accordingly, Noland’s
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`remaining claims are dismissed.
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`IV. Conclusion
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`For the foregoing reasons, Defendants’ motion to dismiss the Second Amended
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`Complaint is GRANTED.
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`Because the Court did not reach the merits of either of Defendants’ two prior motions to
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`dismiss, Noland is granted leave to replead one final time, provided that she does so in a manner
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`consistent with this opinion. Any such amended complaint must be filed within 21 days of the
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`date of this opinion.
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`Counsel for Defendants is directed to serve a copy of this Opinion on the unrepresented
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`Defendants.
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`The Clerk of Court is directed to close the motion at Docket Number 74.
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`SO ORDERED.
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`Dated: March 8, 2019
`New York, New York
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`____________________________________
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` J. PAUL OETKEN
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` United States District Judge
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