AVKO Educational Research Foundation v. Morrow
1:11-cv-13381
E.D. Mich.Apr 5, 2013Background
- AVKO Educational Research Foundation and McCabe sue Morrow and Wave 3 Learning (W3L) over AVKO works; HSH and Home School, Inc. were initially named but not parties to the operative complaint; contract dispute centers on HSH Contract granting publishing rights to AVKO works; Morrow/W3L continued publishing AVKO materials after alleged negotiations; AVKO’s 990-EZ indicated sale of non-exclusive publishing rights to W3L; plaintiffs sought multiple remedies including declaratory relief and injunctive relief; court grants summary judgment for defendants, vacates show-cause and default orders relating to dismissed defendants, and denies discovery-related motions as untimely; the court also clarifies the status of HSH/HSI and upholds dismissal of remaining claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Copyright infringement viability | AVKO claims Morrow/W3L infringed rights by publishing without license and failing to credit AVKO | License existed (non-exclusive); attribution not required; no infringement | Summary judgment for defendants on copyright claim |
| Fraud in inducement | Morrow made misrepresentations during contract negotiations to induce AVKO | Plaintiffs failed to plead or prove false statements or intent | Summary judgment for defendants; claim dismissed |
| Breach of contract and veil piercing | HSH contract breached; seeks damages and reversion of rights | Morrow not a party to HSH contract; veil piercing not shown | Breach claim dismissed; no veil piercing; HSH not party to litigation |
| Intentional infliction of emotional distress | Defendants’ conduct was outrageous and caused severe distress | Conduct not extreme or severe enough; actions within business negotiations | Summary judgment for defendants; distress claim dismissed |
| Declaratory judgment appropriate? | Reversion of publishing rights upon contract breaches | No actionable breaches; declaratory relief unwarranted | Declaratory judgment not appropriate; claims meritless |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. Supreme Court 1986) (standard for summary judgment; evidence must show genuine disputes of material fact)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. Supreme Court 1986) (reaffirms summary judgment standard and burden on movant)
- Graham v. James, 144 F.3d 229 (2d Cir. 1998) (nonexclusive license may waive copyright infringement rights)
- Johnson v. Jones, 149 F.3d 494 (6th Cir. 1998) (implied license evidence; burden on alleged infringer)
- Hi-Way Motor Co. v. International Harvester Co., 247 N.W.2d 813 (Mich. 1976) (promises of future action actionable only if made in bad faith)
- Erie R. Co. v. Tompkins, 304 U.S. 64 (U.S. Supreme Court 1938) (federal courts apply state substantive law in diversity cases)
- Gage Prods. Co. v. Henkel Corp., 393 F.3d 629 (6th Cir. 2004) (fraudulent misrepresentation elements under Michigan law)