IP Law Daily, COPYRIGHT—1st Cir.: Dismissal for failure to register is not a dismissal on the merits, (May 12, 2023)

By Matthew Hersh, J.D.

The decision clears the way for a precedent-making decision on broader res judicata doctrine

The dismissal of a copyright infringement lawsuit on the grounds that the plaintiff failed to register her work with the Copyright Office did not preclude that plaintiff from bringing a similar claim in another court even where the dismissal was with prejudice, the U.S. Court of Appeals for the First Circuit has ruled. The court’s decision, in reversing a Massachusetts district court, enabled it to reach a thornier civil procedure question about the preclusive effect of a decision that is based partially on the merits and partially on other factors (Foss v. Eastern States Exposition, May 10, 2023, Montecalvo, L.).

The “lengthy path to this appeal,” the court of appeals observed, began with a lawsuit in 2018. In that lawsuit, Cynthia Foss alleged that an exposition company, Eastern States Exposition, had used copyrighted works of her “photo-realistic artistic compilations and art installation pieces” in marketing videos. The lawsuit was dismissed without prejudice because the artist had failed to allege that she registered her work with the Copyright Office, a statutory precondition for filing a copyright lawsuit.

But the artist was not deterred. She filed two more lawsuits against the same entity (adding some more defendants as well), this time in state court. The two actions were removed to federal court and then dismissed without prejudice once again. But when the artist amended her complaint in one of those actions, the district court decided it had enough and dismissed the lawsuit with prejudice. The basis for the dismissal, the district court explained, was three-fold: the artist had not adequately described the allegedly infringed work, had failed to plausibly allege that the exposition copied original elements of that work, and had failed—again—to allege that she had registered her work with the Copyright Office.

Yet the artist was still not deterred. She filed one more lawsuit with the district court, again alleging copyright infringement. The district court dismissed again, this time on the grounds that the claim was precluded by the earlier decision. That led to this appeal.

Preclusive effect of failure to register. The court of appeals reversed. In doing so, it had to confront two different questions. First, to the extent the district court had dismissed because of the artist’s failure to register her work, was that a dismissal on the merits with preclusive effect? Second, even if the failure-to-register dismissal was not on the merits, would the artist be precluded from bringing another lawsuit because of the other two grounds for dismissal? The court decided both of these questions in the artist’s favor.

The court had little trouble finding that the artist’s failure to register the copyright did not preclude future lawsuits based on the same work. To be sure, the court noted, a court’s order dismissing a case, at least if done with prejudice, would ordinarily have preclusive effect. Thus, to the extent the district court’s dismissal was grounded on the artist’s failure to adequately describe her work or the original elements of it that were allegedly infringed, that would be the end of the line for her. But the failure to register was something different, the court noted. While it is true that the Copyright Act bars lawsuits over unregistered works, the court noted, registration was not an element of an infringement claim per se but rather a mere “precondition” to a lawsuit. Thus, even though the dismissal was denominated as with prejudice, that would only end the current case, but would not preclude the artist from opening a new case—such as this one—that brought the same claim.

Alternative-Determinations Doctrine. Having determined that the failure-to-register dismissal did not, on its own, have preclusive effect, the court of appeals then turned to a thornier problem—one of interest not merely to copyright law specialists but also to legal advocates of all stripes. The dismissal below had been based not merely on failure to register, the court of appeals noted, but also on the failure to plead several elements of the infringement claim on their merits. That meant the dismissal was based on two rulings that had preclusive effect but one ruling that did not have preclusive effect. Given that there were three different potential grounds for the district court’s decision, with only two of them sufficient to give the decision preclusive effect, would the entire decision as a whole have preclusive effect? The court of appeals determined that it would not.

In finding that the decision below did have preclusive effect, the court relied on a doctrine known as the “alternative-determinations doctrine.” Under that doctrine, the court of appeals noted, as long as a decision to dismiss had been based on at least one ground that was not claim preclusive, then the entire claim was not precluded. Although the First Circuit had not yet passed directly on the doctrine, it followed naturally from basic Restatement principles as well as decisions from other circuit. That might be enough on its own, the court noted.

The doctrine also made sense as a practical solution, the court of appeals found. Assume that the district court had dismissed with prejudice solely on the failure-to-register ground. The artist—or any litigant in the same situation—could appeal that decision and, if successful, cure the shortcoming and bring a new lawsuit. But now assume that the district court had thrown in, without a great deal of consideration (which is what appeared to have happened here, the court noted), two other grounds for dismissal that had preclusive effect. Now the litigant would have to appeal the potentially ill-thought aspects of the decision below just to be able to preserve its ability bring the same case again in the same court below. That would be “an inefficient use of judicial resources,” the court noted, because it would spare appellate courts from having to weigh in on “cases that, in practical reality, may be of no real consequence.” Moreover, the court noted, litigants would in practice be unlikely to appeal because of the likelihood that the decision would be upheld on at least one of the alternative grounds, and thus claim preclusion in such a case “could result in the freezing in place of potentially bad law.”

But the court’s decision also came with a potential limitation. The decision giving preclusive effect in this case, the court noted, appeared to be based on a thorough consideration of the non-preclusive registration issue and a less-than-thorough analysis of the preclusive issues. In a footnote, the court warned, that might not be the case if the preclusive aspects of the decision were fully reasoned: “We refrain from ruling on whether the alternative-determinations doctrine applies in the separate but related scenario in which a merits-based ground for adjudicating a claim in a prior action was rigorously considered.” Thus, the artist would get another chance to bring her claim here, but others in her situation might not.

The Case is No. 22-1313.

Attorneys: Stephen J. Gordon (Stephen Gordon & Assoc.) for Cynthia Foss, d/b/a Hunter Foss Design & Interest. James C. Duda (Bulkley Richardson & Gelinas LLP) for Eastern States Exposition.

Companies: Cynthia Foss, d/b/a Hunter Foss Design & Interest; Eastern States Exposition

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