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Urban Textile, Inc. v. Specialty Retailers, IInc..

United States District Court, C.D. California

May 5, 2017

URBAN TEXTILE, INC., Plaintiff,
v.
SPECIALTY RETAILERS, INC.; MARK-EDWARDS APPAREL INC.; and DOES 1-10, inclusive, Defendants.

         ORDER GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT [52]; SUA SPONTE ENTERING SUMMARY JUDGMENT AS TO PLAINTIFF'S REMAINING CLAIMS; AND DENYING AS MOOT PLAINTIFF'S MOTIONS FOR SUMMARY JUDGMENT [54], FOR LEAVE TO AMEND [62], AND FOR SANCTIONS [63]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Four motions are currently pending before the Court. Defendants Specialty Retailers, Inc. and Mark-Edwards Apparel Inc. (together, “Defendants”) have moved for partial summary judgment against Plaintiff Urban Textile, Inc. (“Urban”) (ECF No. 52), and Urban has moved for summary judgment (ECF No. 54), leave to amend the complaint (ECF No. 62), and sanctions against Defendants (ECF No. 63). After these motions were briefed but before their respective hearing dates, the Court entered partial summary judgment in a related case styled as Urban Textile, Inc. v. Mark-Edwards Apparel Inc. et al. (“Mark-Edwards”) (case number 2:14-cv-8285). In light of its decision in Mark-Edwards, the Court requested additional briefing from the parties on issues of collateral estoppel. (ECF No. 76.) The parties have now provided the Court with supplemental briefing, and the matters are ready for decision.[1] For the reasons discussed below, the Court GRANTS Defendants' motion for partial summary judgment, sua sponte ENTERS SUMMARY JUDGMENT as to Plaintiff's remaining claims, and DENIES AS MOOT Plaintiff's motions for summary judgment, for leave to amend the complaint, and for sanctions.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         In this copyright action, Urban alleges infringement of four of its fabric textile designs, numbered UB-4694; UB-4638; UB-4701; and UB-4672. (See generally First Am. Compl. (“FAC”).) This is not Urban's only copyright action in the Central District of California. Other than Mark-Edwards and the instant case, Urban has also filed a case titled Urban Textile, Inc. v. Rue 21 Inc., et al. (“Rue 21”) (case number 2:16-cv-9155). The defendants in these related actions overlap to varying degrees with the defendants in the instant case.

         On March 31, 2017, the Court entered partial summary judgment against Urban in Mark-Edwards as to eleven out of the twelve designs Urban asserted in that case. (See Order Granting Partial Summ. J., ECF No. 139 in Mark-Edwards.) The Court based its decision on a finding that Urban could not, as a matter of law, prove that it owned valid copyright registrations for the designs at issue. (See Id. at 5.) This finding was brought about by the imposition of discovery sanctions. When Urban refused to produce any information regarding publication, the Magistrate Judge determined as a matter of law that Urban had “published” its copyrighted designs prior to registration as part of an unpublished collection. (Id.; see also Recomm. of Magistrate Judge Mumm, ECF No. 136.)

         The designs in Mark-Edwards overlap with all of the designs at issue in this case.[2] Because the basis for summary judgment in Mark-Edwards goes to the registration of the designs, the Court ordered the parties in this case to submit supplemental briefing on the possibility of collateral estoppel. In their supplemental briefing, Defendants argue convincingly that because the Court already determined in Mark-Edwards that Urban cannot demonstrate ownership of valid copyright registrations for the designs at issue, it should reach the same result in the present case. (Def. Supp. Br. 1, ECF No. 78.) Urban did not address the collateral estoppel issue but instead asked the Court to stay the instant case pending the resolution of Mark-Edwards on appeal to the Ninth Circuit. (Pl. Supp. Br. 1, ECF No. 77.)

         III. LEGAL STANDARD

         Federal courts will not relitigate issues in a second action that have already been litigated-and were necessary to the outcome-in a prior action. Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 n.5 (1979). This doctrine, called “issue preclusion, ” applies when

(1) the issue necessarily decided at the previous proceeding is identical to the one which is sought to be relitigated; (2) the first proceeding ended with a final judgment on the merits; and (3) the party against whom [issue preclusion] is asserted was a party or in privity with a party at the first proceeding.

Paulo v. Holder, 669 F.3d 911, 917 (9th Cir. 2011) (brackets in original; quoting Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000). Moreover, invocation of claim preclusion requires that the first adjudication offered a “full and fair opportunity to litigate.” Garity v. APWU Nat'l Labor Org., 828 F.3d 848, 859 (9th Cir. 2016) (quoting Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481 & n.22 (1982)).

         IV. DISCUSSION

         In their motion for partial summary judgment, Defendants request that the Court enter judgment as to designs UB-4701 and UB-4694. (Mot. for Partial Summ. J. 1.) However, as discussed below, the Court finds that summary judgment is appropriate not only ...


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