Snow v. WRS Group, Inc. , 73 F. App'x 2 ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit July 17, 2003
No. 02-50118 Charles R. Fulbruge III
Clerk
ELAINE SNOW,
Plaintiff - Appellant,
VERSUS
WRS GROUP, INC., WRS GROUP LTD.,
D/B/A WRS GROUP INC., D/B/A CHILDBIRTH GRAPHICS,
Defendants- Appellees.
_________________________________________
consolidated with
No. 02-50812
WRS GROUP LTD.,
Plaintiff - Appellee,
VERSUS
ELAINE SNOW,
Defendant - Appellant.
1
Appeal from the United States District Court
For the Western District of Texas
(00-CV-213 & 02-CV-17)
Before HIGGINBOTHAM, EMILIO M. GARZA, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:*
These two consolidated appeals concern the commercial use of
photographs taken of appellant Elaine Snow during the birth of her
child. The district court dismissed her copyright infringement and
state law claims and later enjoined the prosecution of her state
court actions in state court. Snow’s first appeal challenges the
district court’s dismissal of her state law claims against
defendant-appellee, WRS Group, Ltd. (“WRS”) on statute of
limitations grounds. Her second appeal contests whether her state
court suit may be enjoined under the re-litigation exception to the
Anti-Injunction Act, 28 U.S.C. § 2283. For the following reasons,
we AFFIRM IN PART, but VACATE the district court’s injunction of
Snow’s state court suit.
I. Background
On July 12, 1982, Elaine Snow and her husband William Henry
Snow III hired a photographer while living in California to take
photographs of the birth of their son. In 1983, the Snows moved to
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
2
Oregon. While there, William, without telling Elaine, gave
permission to Candace Palmo, the mid-wife who delivered the Snow’s
child, to show the photographs to her childbirth class in
California and forwarded her the photograph negatives.
Palmo used these photographs in her childbirth class and in
1986 also began displaying the photographs in a slide show entitled
“Joyous Beginnings. Later, Elaine searched for and was unable to
locate the negatives to these photographs. At this point, William
told Elaine that he had given the negatives to Palmo to use in her
childbirth class.
In 1988, Childbirth Graphics, Ltd. purchased the marketing and
distribution rights to the “Joyous Beginnings” presentation from
Palmo. Palmo told Jamie Bolane, president of Childbirth Graphics,
that all of the individuals shown in the slide show had consented
to the use of their photographs. In 1992, WRS, a Texas entity,
purchased “Joyous Beginnings” from Childbirth Graphics. From 1992
on, WRS marketed and sold this product through various means,
including on-line.
On August 22, 1998, Snow learned that the photographs were
being used in “Joyous Beginnings” when her sister purchased the
product from WRS’s website and recognized her in the presentation.
After this discovery, Snow sent WRS a demand letter on January 5,
1999 ordering it to cease using and to return the photographs. On
August 11, 2000, Snow filed a complaint in the Western District of
3
Texas against WRS and Palmo. She also filed an amended complaint
on August 18, 2000 adding Ortega Recording Studios and John Ortega
as defendants.2 In this suit, she brought a copyright infringement
claim and state law claims for intentional infliction of emotional
distress, invasion of privacy, negligence, and conversion. She
sought damages and an injunction against the further use of the
photographs.
Snow did not immediately serve the amended complaints. On
January 11, 2001, the district court, pursuant to Rule 4(m) of the
Federal Rules of Civil Procedure (“FRCP”), ordered her to show
cause why the amended complaints should not be dismissed for want
of prosecution. Snow filed a motion to enlarge the time for
service, which the court granted, and on March 6, 2001, she served
her amended complaints on the defendants.
On August 1, 2001, WRS moved for summary judgment on Snow’s
claims. The district court granted WRS’s motion on December 26,
2001 and dismissed Snow’s claims. In dismissing these claims, the
district court held: (1) Snow did not possess a copyright in these
photographs; (2) her state law claims were barred by the Oregon
statute of limitations; and (3) WRS had not violated any duty in
displaying the photographs. Snow has only appealed the district
court’s dismissal of the state law claims.
2
The district court dismissed Palmo, Ortega, and Ortega
Recording Studios from the suit based on a lack of personal
jurisdiction. Snow has not appealed this decision and these
defendants are not parties on appeal.
4
Five days after the district court’s decision, Snow filed suit
in Texas state court bringing claims against WRS for invasion of
privacy, intentional infliction of emotional distress, negligence,
conversion, and civil conspiracy based on WRS’s continued use of
her photographs after Snow had terminated any previously given
consent. On January 15, 2002, WRS filed suit in the Western
District of Texas to enjoin the state court suit. WRS moved for
summary judgment, which the district court granted on June 25,
2002. The court enjoined Snow from litigating any of her claims in
the state court suit based on the re-litigation exception to the
Anti-Injunction Act. Snow timely appealed, and on January 23,
2003, this court consolidated the two appeals.
II. Analysis
Snow challenges both the dismissal of her state law claims on
statute of limitation grounds and the injunction preventing her
from litigating her claims in state court. Because both decisions
were granted on summary judgment, we review them de novo, applying
the same standards used by the district court. See Walker v.
Thompson, 214 F.3d 615, 624 (5th Cir. 2000).
A. Statute of Limitations
Snow contends that her state law claims were timely filed and
thus should not have been dismissed by the district court. First,
she argues that the district court erred by applying Oregon, rather
than Texas or California, law to her claims. Second, she maintains
5
that even if Oregon law does apply, her claims were timely because
her claims are continuing torts. Therefore, she argued the statute
of limitations period did not begin to run until WRS stopped using
the photographs. Finally, she argues that even if her claims are
not continuing torts, the district court tolled the statute of
limitations period when it granted an enlargement of time to serve
her complaints. Because these arguments are ultimately without
merit, we affirm the district court’s decision to dismiss these
claims.
(1) Choice of Law
Initially, Snow contends that Oregon law should not apply to
her state law claims because Texas and California have more
significant contacts with the litigation than Oregon. She argues
that it is more significant to the choice-of-law analysis that the
photographs were taken in California, were given to a California
resident, and then marketed in Texas by a Texas corporation than
the fact that she was injured in Oregon, established her
relationship with WRS in Oregon, and was domiciled in Oregon. We
disagree.
When a federal court is presented with state law claims
pursuant to its diversity jurisdiction, the court will follow the
conflict of law rules of the forum state. See Klaxon v. Stentor
Electric Manufacturing Co., 313 U.S. 487, 496 (1941). This rule
also applies to state law claims that, as here, are before the
6
federal court based on supplemental jurisdiction. See Baltimore
Orioles, Inc. v. Major League Baseball Players Ass’n, 805 F.2d 663,
681 (7th Cir. 1986). Because suit was filed in a Texas federal
court, the Texas conflict of law rules will apply to Snow’s state
law claims.
Texas uses the “most significant relationship” test of the
Restatement (Second) of Conflict of Laws. See Gutierrez v.
Collins, 583 S.W.2d 312, 318 (Tex. 1979); RESTATEMENT (SECOND) OF
CONFLICTS §§ 6, 145 (1969). Under the “most significant
relationship” test, the “rights and liabilities of the parties with
respect to an issue in tort are determined by the local law of the
state which, with respect to that issue, has the most significant
relationship to the occurrence and the parties.” RESTATEMENT (SECOND)
OF CONFLICTS § 145(1). Under this test, the contacts to be taken
into account include: (1) the place where the injury occurred; (2)
the place where the conduct causing the injury occurred; (3) the
domicile and residence of the parties; and (4) the place where the
relationship between the parties is centered. Id. § 145(2). But
“[i]n situations involving the multistate publication of matter
that ... invades [a] right of privacy, ... the place of the
plaintiff’s domicil[e]... is the single most important contact for
determining the state of the applicable law.” Id. § 145, cmt. f;
see also Wood v. Hustler Magazine, 736 F.2d 1084, 1087 (5th Cir.
1984).
7
Our situation is similar to that in Wood v. Hustler Magazine,
in which we applied the Texas conflicts rules to an invasion of
privacy tort claim based on the unauthorized publication of
explicit photographs. 736 F.2d at 1087. In Wood, the plaintiff,
a Texas resident, had a number of private photographs that were
stolen by a third party and published in the defendant’s magazine,
which was based in California. Id. at 1085-86. The court found
that Texas law applied because the plaintiff resided in Texas, the
injury occurred in Texas, and the relationship of the parties was
centered in Texas, although the defendant, a California
corporation, marketed the photographs from California. Id. at
1087.
Similar facts are present in this case. First, Snow has been
an Oregon resident since 1983. Second, Snow’s injury took place in
Oregon because this is where she allegedly suffered emotional
distress upon learning that WRS was marketing her photographs.
Third, the relationship between Snow and WRS is centered in Oregon
because Snow’s only contact with WRS came from its marketing of her
photographs on-line, which she discovered while in Oregon.
Although the photographs were taken in California, were given to
Palmo, a California resident, and were marketed in Texas by WRS, a
Texas corporation, Oregon still has the most significant contacts
with this litigation. Therefore, the district court properly
applied Oregon law to Snow’s state law claims.
(2) Continuing Torts
8
Snow next contends that even if Oregon law applies, her state
law claims were timely filed because these claims were continuing
torts. She maintains that as continuing torts, the statute of
limitations period did not commence until WRS’s tortious conduct
ceased, which is when it stopped marketing her photographs. She
argues that because WRS continued to market her photographs within
two years of her commencing suit, her claims were timely. This
argument is not persuasive.
Because Snow’s state law claims are based on Oregon law,
Oregon law will determine the applicable statute of limitations and
whether the limitations period has been tolled. Vaught v. Showa
Denko K.K., 107 F.3d 1137, 1145-46 (5th Cir. 1997). Oregon has a
two-year statute of limitations period for tort claims. OR. R.S.
§ 12.110. Under Oregon law, there are both filing and service
requirements for commencing an action. Id. § 12.020. If the
complaint is served within 60 days of suit being filed, then the
action is considered commenced on the date of filing. Id. §
12.020(1). But if the complaint is served more than 60 days after
filing, then the action is considered commenced on the date service
is effected. Id. § 12.020(2).
Under Oregon law, the statute of limitations period begins to
run when the cause of action accrues. Duyck v. Tualatin Valley
Irrigation District, 742 P.2d 1176, 1181-82 (Or. 1987). A cause of
action accrues when the plaintiff is able to sue upon the tort.
9
Id. at 1181. However, if the plaintiff is unaware that she has a
cause of action, then the statute of limitations will not run until
she knew or should have known of the injury. Id. at 1181-82.
The statute of limitations period for continuing torts also
commences upon accrual. A continuing tort is a tort that requires
the cumulative effect of the defendant’s activities to give rise to
a claim. See Davis v. Bostick, 580 P.2d 544, 547 (Or. 1978)
(holding that recovery for a continuing tort “is for the cumulative
effect of wrongful behavior, not for discrete elements of that
conduct.”). Therefore, a plaintiff, who would otherwise not have
a valid claim if the defendant’s separate acts are considered in
isolation, can bring suit if those acts are considered together.
Because all of the defendant’s acts are necessary to constitute the
tort, the statute of limitations period does not commence until the
last act is completed because this is the first time the plaintiff
is able to bring a claim and thus when the claim accrues.
But that is not the case here. Snow cannot rely upon a
continuing tort theory because no further acts were needed for the
accrual of her action after she discovered that WRS was marketing
her photographs on August 22, 1998. No others acts were necessary
for her to bring invasion of privacy, negligence, and conversion
claims once she learned that WRS had obtained and marketed her
photographs. She was also able to sue upon her intentional
infliction of emotional distress claim when she learned of WRS’s
10
activities because that claim is based on her realization that the
photographs were available to the general public. Therefore, the
statute of limitations period for all of Snow’s claims commenced no
later than August 22, 1998.
Snow failed to serve either her original or amended complaint
within 60 days of filing suit. Consequently, her action did not
commence until March 6, 2001, when she served WRS with her suit.
Because this was more than two years after Snow’s claims had
accrued, her claims are barred under the Oregon statute of
limitations.
(3) Grant of Enlargement of Time
Snow next argues that even if the statute of limitations
period commenced when she discovered WRS’s activities, the district
court tolled this period when it granted her an enlargement of time
to serve her complaint. On January 23, 2001, the district court
granted Snow’s motion for enlargement of time to effectuate service
based on FRCP Rule 4(m). Under this rule, if the complaint is not
served within 120 days, the district court may either dismiss the
complaint or order that service be effectuated by a certain date.
FED. R. CIV. P. 4(m). Here, after Snow failed to serve either her
complaint or amended complaint within 120 days of filing, the
district court granted her an enlargement of time to serve the
defendants and she complied. Snow maintains that the additional
time the district court granted to serve her complaint extended the
11
60-day period in which to serve her claims under the Oregon
statute.
This is incorrect. The district court’s grant of an
enlargement of time to serve the complaint under FRCP Rule 4(m)
does not affect the Oregon statute of limitations period. State
service requirements control unless they directly conflict with a
federal rule. Walker v. Armco Steel, 446 U.S. 740, 752-53 (1980)
(“In the absence of a federal rule directly on point, state service
requirements which are an integral part of the state statute of
limitations should control in an action based on state law which is
filed in federal court.”). Therefore, the application of the
federal procedural rule will not affect any state service
requirement unless the service requirement directly conflicts with
that rule.
But Oregon’s service requirement does not conflict with FRCP
Rule 4(m) or any other federal rule. See Torre v. Brickey, 278
F.3d 917 (9th Cir. 2001); see also Habermehl v. Potter, 153 F.3d
1137 (10th Cir. 1998). “There is no conflict between Rule 4(m) and
Oregon law because Rule 4(m) merely sets a procedural maximum time
frame for serving a complaint, whereas [the Oregon statute] is a
statement of substantive decision by that State that actual service
on, and accordingly actual notice to, the defendant is an integral
part of the several policies served by the statute of limitations.”
Torre, 278 F.3d at 919 (quoting Habermehl, 153 F.3d at 1139
12
(quotations omitted)). Therefore, the district court’s grant of
additional time under Rule 4(m) to serve her suit had no effect on
the 60-day period to effectuate service under the Oregon statute.
Accordingly, Snow’s state law claims were untimely and we affirm
the district court’s dismissal of these claims.3
B. State Court Suit Injunction
Snow also contests the district court’s decision to enjoin her
from proceeding with her state court suit because this suit raises
issues not addressed in the initial federal court litigation.
Therefore, she maintains that an injunction is not proper under the
Anti-Injunction Act. WRS counters that under the re-litigation
exception to the Anti-Injunction Act the injunction was proper
because the claims and underlying issues in Snow’s state court suit
were presented to and decided by the district court.
There are two separate issues involving WRS’s marketing of
Snow’s photographs. The first issue is whether WRS had permission
to publish Snow’s photographs. If WRS could market Snow’s
photographs, then this affirmative defense will preclude Snow’s
3
Snow also argues that because the district court found in
its December 26, 2001 order that Snow had no good cause for failing
to timely serve the complaint, it was required under FRCP Rule 4(m)
to dismiss her suit without prejudice. Therefore, the court could
not reach the merits of her claims on summary judgment. However,
even if Snow lacked good cause for the delay, it was still within
the district court’s discretion to allow the enlargement of time
instead of dismissing the complaint. See Thompson v. Brown, 91
F.3d 20, 21 (5th Cir. 1996). Thus, Snow’s argument is without
merit.
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state law claims. This issue focuses on whether Snow’s husband,
William Henry, gave Palmo consent to use the photographs in the
“Joyous Beginnings” slide show and whether Palmo’s representation
to Childbirth Graphics that she had such consent sufficed to allow
WRS to market the photographs without seeking Snow’s express
permission.
The second issue concerns whether consent, if given, was
terminated prior to WRS’s later publication. “A person who gives
consent may terminate or revoke it at any time by communicating
this revocation to those who may act upon the consent.... [O]nce
the consent is withdrawn [the defendant] becomes liable for any act
that would be tortious without consent.” 1 DAN B. DOBBS, THE LAW OF
TORTS § 104, at 244-45 (2001); see RESTATEMENT (SECOND) OF TORTS § 892A.
This issue focuses on whether Snow terminated consent with her
January 5, 1999 letter and whether WRS continued to market these
photographs after Snow terminated consent. If so, then WRS could
still be subject to liability even if it was not liable before the
termination. Because they address different questions, emphasize
different facts, and have different bases for liability, these two
issues are clearly different.
Snow maintains that although the district court may have
decided the first issue, it did not decide the second. Because
this second issue formed the basis of her state court suit, she
asserts that the re-litigation exception to the Anti-Injunction Act
14
could not be used to enjoin this state court suit. We agree.
The Anti-Injunction Act prevents a federal court from granting
an injunction to stay a state court proceeding except under certain
limited circumstances. 28 U.S.C. § 2283. The re-litigation
exception is one of these circumstances and allows the federal
court to grant an injunction in order “to protect or effectuate its
judgments.” Id. Its purpose is to “permit a federal court to
prevent state litigation of an issue that was previously presented
to and decided by the federal court.” Chick Kam Choo v. Exxon
Corp., 486 U.S. 140, 147 (1988).
In determining whether an issue has been presented to and
decided by the district court, we apply a four-part test. The suit
may be enjoined only if: “(1) the parties in a later action must be
identical to (or at least in privity with) the parties in a prior
action; (2) the judgment in the prior action must have been
rendered by a court of competent jurisdiction; (3) the prior action
must have concluded with a final judgment on the merits; and (4)
the same claim or cause of action must be involved in both suits.”
New York Life Ins. Co. v. Gillespie, 203 F.3d 384, 387 (5th Cir.
2000). In deciding whether to enjoin the state court proceedings,
the emphasis is on the record and what the initial court stated,
not on the subsequent court’s post hoc assessment of what the
previous judgment intended to say. Chick Kam Choo, 486 U.S. at
148. In addition, the issue must actually be raised in the
15
previous litigation. Id. It is irrelevant whether this claim
merely could have been raised in the previous litigation. Finally,
any doubts about the applicability of this exception are to be
resolved in favor of allowing the state court action to proceed.
Texas Employers’ Ins. Ass’n v. Jackson, 862 F.2d 491, 501 (5th Cir.
1988).
The only dispute here is whether the second issue identified
by Snow has been presented to and decided by the district court in
the initial suit. We find that it was not. Therefore, the
district court improperly enjoined Snow’s state court suit.
First, Snow never presented the issue of terminated consent to
the district court. The term “terminated consent” or any language
that WRS was liable to Snow for failing to cease the marketing of
these photographs after receiving the demand letter is wholly
absent from the complaint. WRS argues that Snow pleaded this issue
when her first amended complaint stated: “Demand has previously
been made on the Defendants to cease publication of the
photographs, but no significant action has been taken to the best
of the Plaintiffs knowledge.” 8/18/2000 Amended Complaint, at 4.
But this factual statement, listed under the heading “Facts: Tort
Claims,” does not mean that Snow raised the issue. As Snow
contends, the purpose of that statement was not to allege a claim
for terminated consent, but to support her tort claim for
conversion, in which she alleged that WRS has refused to return the
16
photographs, and her request for injunctive relief based on her
copyright infringement claim. Therefore, this statement by itself
is not sufficient to find that Snow presented the issue of
terminated consent in the initial litigation.
This is further supported by the fact that Snow presented no
evidence on summary judgment to support this issue. As WRS
acknowledges, Snow never even introduced the January 5, 1999 demand
letter sent to WRS. Because this piece of evidence is critical to
proving that WRS continued to market her photographs after she
expressly forbade them to do so, its absence provides strong
evidence that the issue was not presented to the district court.
Second, even if Snow’s brief statement in her complaint was
sufficient to present the issue of terminated consent, this issue
was never decided by the district court. WRS contends that the
court’s decision disposed of this issue when it stated:
“Plaintiff’s state tort claims are equally without merit as she
identified no duty possessed or violated by WRS.” 12/26/01 Order,
at 9. But when the statement is considered in context, it is clear
that it only resolved the issue of whether WRS was liable for its
actions before Snow sent the January 5 letter. After stating that
Snow “identified no duty possessed,” the district court went on to
explain that WRS had no duty because Snow “has presented nothing
that would put WRS on notice that Palmo’s representation was not
true or that it needed to make further inquiry into whether those
depicted in the slide show had actually consented to have their
17
images displayed.” From this statement it is clear that the court
was only deciding whether WRS had a duty before Snow demanded that
it cease marketing her photographs because the demand letter surely
constituted such notice. Therefore, there is no evidence in the
record to indicate that the district court decided that the letter
did not terminate consent.4
Because the terminated consent issue was neither presented to
nor decided by the district court, the state court suit cannot be
enjoined under the re-litigation exception to the Anti-Injunction
Act. Accordingly, we vacate its injunction.
III. Conclusion
Because Snow’s claims brought in federal court were barred by
the Oregon statute of limitations, we AFFIRM the district court’s
grant of summary judgment as to these claims. But because the
issue of terminated consent was neither presented to nor decided by
the district court, we VACATE its injunction of the Texas state
court proceeding, thus allowing the terminated consent claim to
proceed in state court.
4
WRS also argued that because the district court decided
the duty issue, Snow’s state court action could not prevail and
thus the re-litigation exception applied because an essential
element of her claims had already been determined. See Next Level
Communications v. DSC Communications Corp., 179 F.3d 244, 256-57
(5th Cir. 1999). But because the district court only addressed the
duty issue with respect to WRS’s actions before Snow terminated
consent, this argument lacks merit.
18