United States District Court, D. Minnesota
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For plaintiff: Damon L. Ward, WARD LAW GROUP, Minneapolis, MN.
For defendants: Brian J. Slovut, UNIVERSITY OF MINNESOTA OFFICE OF THE GENERAL COUNSEL, Minneapolis, MN.
MEMORANDUM OPINION AND ORDER
JOHN R. TUNHEIM, United States District Judge.
This case arises out of Plaintiff Olga Issaenko's brief tenure as a research scientist
in the laboratory of Defendant Dr. Martina Bazzaro at the University of Minnesota's Masonic Cancer Center. The heart of Issaenko's claims is tat, without Bazzaro's knowledge or assistance, she developed written materials and figures based on experiments and research that she performed during her employment at the Masonic Cancer Center and that Bazzaro later claimed to own the copyrights in those materials. Issaenko brings eleven statutory, constitutional, and common law claims against Bazzaro in her official and individual capacities, the University of Minnesota and the Regents of the University of Minnesota (collectively, " the University" ), as well as seventeen employees and regents of the University (" the Individual Defendants" ) in their official capacities.
Defendants move to dismiss the First Amended Complaint in its entirety. Issaenko later moved for leave to file a second amended complaint. Finally, Issaenko brought a motion seeking preliminary injunctive relief based on her copyright infringement claim. Because the Court concludes that it lacks subject matter jurisdiction over a number of Issaenko's claims and that, with the exception of Issaenko's claims for promissory estoppel and tortious interference, the First Amended Complaint fails to state claims upon which relief can be granted, the Court will grant Defendants' motion to dismiss, except to the extent it seeks dismissal of the promissory estoppel and tortious interference claims brought against Bazzaro in her individual capacity. The Court also concludes that amendment of the complaint would be futile with respect to all claims except the tortious interference claim to the extent it is asserted against Defendants Frances Lawrenz and Tucker LeBien in their individual capacities, and therefore will grant the motion to amend only with respect to that claim. Finally, the Court will deny Issaenko's motion for a preliminary injunction, as she has failed to demonstrate either likelihood of success on the merits or irreparable harm.
I. THE RESEARCH SCIENTIST POSITION
Issaenko holds a Ph.D. in biology and has worked in the area of academic cancer research for a number of years. (Am. Compl. ¶ 30, Jan. 16, 2014, Docket No. 7.) On September 14, 2009, the University offered Issaenko a position as a scientist in Dr. Martina Bazzaro's laboratory at the University's Masonic Cancer Center. ( Id., Ex. 4 at 8, Ex. 5 at 11.) Issaenko accepted the job on September 28, 2009. ( Id. ¶ 36.) In that position, Issaenko was responsible for employing " molecular biology approaches for studying the role of protein degradation pathways in cancer setting for targeted treatment of ovarian and cervical cancer." ( Id., Ex. 5 at 11.) The position involved the following duties and responsibilities:
70%: Responsible to conduct research investigations from experimental design and reagent preparation to interpretation of experimental results. Evaluate, suggest alternate methods, modify or develop new procedures and techniques to aid in the investigation of a total research problem or program.
20%: Analyze research data. Write reports and papers on research results. Author or co-author manuscripts for publication. Make presentations at professional meetings. Discuss and plan new avenues of investigation. Assist in drafting proposals to procure research funding. Required meetings with supervisor.
10%: Laboratory management including inventory of laboratory supplies, reagents, and equipments. Train new personnel, including undergraduate and graduate students. Ensure compliance with necessary record keeping for all members of the Lab.
( Id. ¶ 37, Ex. 5 at 11.)
II. ISSAENKO'S INDEPENDENT RESEARCH
Issaenko alleges that for the first three months after beginning her job, she " managed the lab (ordering chemical supplies and equipment)." ( Id. ¶ 42.) Between January and March 2010 Issaenko alleges that Bazzaro would instruct Issaenko as to what work to perform but Issaenko " expanded experiments to correct incorrect assumptions, modify the protocol deficiencies, or enhance the experiments." ( Id. ¶ 43.) Issaenko alleges that Bazzaro " provided little to no input to the development of research projects," " refused to provide certain, necessary software and support for Plaintiff to perform . . . experiments" and " was dismissive of the work/experimentation Plaintiff was conducting." ( Id. ¶ 44.)
Between January and April 2010 Issaenko worked on two projects " under the general supervision of Defendant Bazzaro." ( Id. ¶ 47.) The first project related to the survival of ovarian and cervical cancer cells after certain types of treatments. ( Id. ¶ 48.) For this project, Issaenko obtained raw data from Dr. Polunovsky, her former supervisor in a different department at the University, and provided the data to Bazzaro. ( Id.) Issaenko then, " without Defendant Bazzaro's knowledge or input or instruction," used this data to compile tables and graphs at home. ( Id. ¶ 49.) With respect to this project, Issaenko suggested to Bazzaro in March 2010 that they perform experiments using a certain type of cell sorting, which Bazzaro declined to do after deciding that such experiments " were not needed." ( Id. ¶ 50.) Issaenko proceeded to perform these experiments and the resulting analysis with the help of Dr. Polunovsky. ( Id. ¶ ¶ 51-55.) Issaenko alleges that she performed the analysis " at her own initiative after hours on her free and unpaid time at home, on which she used her own software [or Dr. Polunovsky's computer] to generate tables and figures." ( Id. ¶ ¶ 55-56.)
Issaenko shared her data and analysis resulting from these experiments with Bazzaro. ( Id. ¶ 53.)
With respect to the second " independent" project discussed in the First Amended Complaint, Issaenko alleges that she " provided raw data to Defendant Bazzaro and also worked at home on compilations of tables and graphs, and draft[s] of a joint manuscript," which Issaenko and Bazzaro planned to submit to the Journal of Medicinal Chemistry (" JMC" ) in May 2010. ( Id. ¶ 57.) Issaenko conducted numerous experiments related to the second project, and alleges that when she asked Bazzaro for help, Bazzaro either did not provide it or asked for more information about Issaenko's questions. ( Id. ¶ ¶ 58, 63.) Issaenko alleges that Bazzaro was unaware of the nuances of many of these experiments and Issaenko " worked on statistical analyses for this project at her own home us[ing] her own software because none was provided [by] Defendants" and that " Defendants did not pay for this after hours work." ( Id. ¶ 60; see also id. ¶ ¶ 59-62.) Issaenko alleges that, also without Bazzaro's instruction, she " conceived, designed and performed additional experiments." ( Id. ¶ 62.) Issaenko alleges that based on her independent experiments she " created compilations of tables, graphs and images," and asked Bazzaro to include them in the joint manuscript to be submitted to the JMC. ( Id. ¶ 63.) Issaenko continued to conduct experiments that Bazzaro determined were unnecessary, and submitted to Bazzaro the figures she made at home as a result of these experiments. ( Id. ¶ ¶ 64-65.) Bazzaro denied Issaenko's request to have this material included in the joint manuscript. ( Id. ¶ 66.)
In May and June 2010, Bazzaro went on vacation. ( Id. ¶ 79.) During this time period, Issaenko alleges that she performed experiments that had been requested by Bazzaro and provided her with the raw data and compilations that resulted from those experiments. ( Id. ¶ ¶ 77-79.) During Bazzaro's vacation Issaenko also " conceived ideas and designed several additional experiments" but was unable to work on them in Bazzaro's lab as she did not have the financial resources to purchase the necessary supplies and certain equipment was not functioning. ( Id. ¶ 78.) Instead, Issaenko decided to conduct these experiments in Dr. Polunovsky's laboratory. ( Id. ¶ 79.) Issaenko compiled the results of these experiments into tables, graphs, and images using her own software. ( Id. ¶ 80.) Later in June, when Bazzaro returned from vacation, Issaenko presented Bazzaro with the independent work she had done in Dr. Polunovsky's lab. ( Id. ¶ ¶ 82, 84.) Bazzaro requested that Issaenko provide her with copies of her work and raw data so that Bazzaro could draft a joint manuscript on which Issaenko would be listed as the first author. ( Id. ¶ 87.) Issaenko provided the requested information. ( Id. ¶ 88.) Issaenko alleges that afterward, when Issaenko returned to work from vacation on July 1, 2010,
she was escorted out of the building and her job appointment was terminated before its expiration. Defendants never returned Plaintiff's research binder, an envelope with x-ray films she produced in Dr. Polunovsky's lab[,] and the USB drive with digital files of all of her compilations and now Copyrighted Images and Works. Plaintiff never received back her CD with the software for Plaintiff's personal $450.00 Canon digital camera (which she cannot use now because Defendant Bazzaro has the software). Defendants also never returned Plaintiff's handwritten notes where Plaintiff drafted future grant proposals.
( Id.) It is unclear from Issaenko's allegations whether she was actually terminated on July 1, 2010, because she also alleges, as discussed below, that she was terminated in early 2011. It does not appear, however, that the timing of Issaenko's termination is critical to any of her claims, and the Court therefore need not resolve this discrepancy in the allegations in ruling on the present motions.
IV. THE JOINT MANUSCRIPT
Issaenko alleges that in August 2010 Bazzaro used Issaenko's research findings and figures in the joint manuscript submitted to the JMC and although she told Issaenko that Issaenko had been listed as an author, Bazzaro in fact did not list Issaenko as an author. ( Id. ¶ ¶ 67-68; see also id., Ex. 15 at 41.) Bazzaro also signed a publishing license agreement with the JMC, which Issaenko alleges transferred to the journal Issaenko's copyright in the works she had created. ( Id. ¶ 67, Ex. 16 at 43.) But Issaenko also alleges that pursuant to this agreement, Issaenko " retained non-exclusive copyrights and all proprietary rights on the research presented with that article." ( Id. ¶ 68.)
Because of her concerns over authorship of the joint manuscript Issaenko contacted several University professors regarding Bazzaro's behavior, and ultimately on August 26, 2010, Issaenko submitted a letter to Defendant Linda Carson, head of the Department of Obstetrics, Gynecology and Women's Health at the University indicating her belief that Bazzaro had violated the University of Minnesota Policy -- Code of Conduct. ( Id. ¶ 69, Ex. 18 at 59-60.) Issaenko's letter stated that " [r]esults of my work were included in one manuscript submitted for publication in Journal of Medicinal Chemistry (JMC), one manuscript in preparation (or already submitted for publication in JMC or elsewhere) and 2 or 3 additional manuscript[s] were planned in the future." ( Id., Ex. 18 at 59.) In the letter Issaenko requested that her co-authorship be reflected as to the compilations she had created that were included in the manuscript and requested that " this matter be investigated by your Office, and my authorship in current manuscript and corresponding patent, and all future publications . . . be properly assigned." ( Id., Ex. 18 at 60.)
Defendants Carson, Douglas Yee (the director of the Masonic Cancer Center) Frances Lawrenz (associate vice president for research), and Tucker LeBien (associate vice president of the Academic Health Center Office of Research) responded to Issaenko's complaint by letter dated September 10, 2010. ( Id., Ex. 19 at 63-64.) In the letter Defendants indicated that if the joint manuscript was accepted by the JMC for publication, Issaenko would " be included as a co-author" provided that Issaenko reviewed the manuscript and agreed to its publication, and subject to a final decision by the Editor of the JMC. ( Id. ¶ 71, Ex. 19 at 63.) With respect to authorship on future publications the letter explained:
There are published guidelines established at the University of Minnesota and most scientific journals for authorship on any publication. Decisions on authorship are under the authority of the senior author/PI/Head of the laboratory. In this case, the final decision about the intellectual contributors rests with Dr. Bazzaro. If she felt you should be included as a co-author on any future publications, you would be contacted. However, the fact that you were an employee in her laboratory who generated data that could be used in future manuscript submissions does not entitle you to authorship, nor does it obligate Dr. Bazzaro to include you as a co-author.
( Id., Ex. 19 at 63.) The letter also informed Issaenko that she was not permitted to share, send, or present " preliminary data to individuals that are not part of Dr. Bazzaro's laboratory" both because the data was preliminary and therefore " not suitable for publication or communication in any form" and because " these data are not owned by you; they are the property of Dr. Bazzaro and, ultimately, the University of Minnesota." ( Id., Ex. 19 at 64.)
Issaenko alleges that at some point during this time period Bazzaro " made damaging statements to the University Administration that Plaintiff 'improperly shared' with her co-authors . . . Plaintiff's independently created works." ( Id. ¶ ¶ 72-73.)
V. COPYRIGHT APPLICATIONS AND POST-TERMINATION EVENTS
In early 2011 Issaenko sought and was granted copyrights in three different compilations related to the projects described above (collectively, " the Copyrighted Works" ). ( Id. ¶ 90, Exs. 1-3.) In a letter dated January 28, 2011 Issaenko notified the University that she had sought this copyright protection, and also responded to the September 10, 2010 letter, noting that she still had concerns about her authorship rights particularly over work that she had performed on her own " personal and un-paid time and not at the direction or knowledge of Dr. Bazzaro or any other University representative." ( Id., Ex. 24 at 89; see also id. ¶ 91.) Issaenko also responded that she had never " inappropriately shared data" and had only presented or discussed data with " authors of the corresponding manuscript(s) and/or patent(s) on which I was working at the time." ( Id., Ex. 24 at 90.) Issaenko also noted that she " consider[ed] any communication that states or implies that I acted inappropriately or unethically regarding my work to be defamatory, and I expressly reserve all my rights and claims in that regard as well" ( id.) and requested that the University place this " rebuttal letter" into her personnel file ( id., Ex. 24 at 91).
Issaenko alleges that in January and February 2011 she performed additional experiments in the laboratory of Dr. Zukowska's -- another University professor -- who gave her permission to perform the experiments and publish the results. ( Id. ¶ 93.) Issaenko alleges that after she notified the University on January 28, 2011, that she intended to seek copyright protection for her work she was terminated. ( Id.)
After her termination Dr. Polunovsky continued to perform work on Issaenko's data samples, and Issaenko used those results as well as her previous research to generate figures for an article which she drafted in April 2011. ( Id. ¶ ¶ 94-95.) Issaenko alleges that " [w]hen Defendants learned of Plaintiff's intent to publish her authors' works, they engaged in intimidation and threats and allegations of unlawful and/or illegal activity." ( Id. ¶ 96.)
Despite these apparent threats, Issaenko alleges that she sought and received approval from the other contributors to her research and submitted her article to the Journal of Molecular Cancer Therapeutics in the fall of 2011. ( Id. ¶ 97.) Issaenko alleges that the journal refused to publish her article because " Defendant Bazzaro made false allegations to the journal that Plaintiff was under a 'misconduct investigation' by the University of Minnesota." ( Id. ¶ 97 (citing id., Ex. 25 at 93).)
Issaenko then published the article in the Cell Cycle journal's May 1, 2012 issue. ( Id. ¶ 98.) After the article's publication, the University contacted Cell Cycle and notified the journal that " Dr. Bazzaro and the University of Minnesota did not give Dr. Issaenko permission to use the data or materials from Dr. Bazzaro's laboratory for independent publication purposes. In fact, University officials explicitly informed Dr. Issaenko that she was not authorized to submit manuscripts based on research or materials from Dr. Bazzaro's laboratory." ( Id., Ex. 25 at 93; see also id. ¶ 98.) In the letter to Cell Cycle, Defendant LeBien explained that " [b]ased on my review of the above referenced paper and my knowledge of the research reported by Dr. Issaenko, it is my opinion that a substantial portion of the data reported in the paper were generated in Dr. Bazzaro's laboratory," and therefore requested that Cell Cycle " review this matter and determine whether the published paper meets the journal's authorship and publication requirements in view of the information I have provided." ( Id., Ex. 25 at 93.)
In response, Cell Cycle published a retraction of Issaenko's manuscript on May 1, 2013, noting that the University had reviewed the manuscript and determined that the tables and figures in the paper were generated by Issaenko " while working as a staff member in the laboratory of Dr[.] Martina Bazzaro from September 2009 to July 2010 and were used by Dr[.] Issaenko without permission from Dr[.] Bazzaro or the University." ( Id., Ex. 25 at 94.) Issaenko alleges that the article was only temporarily retracted, and that " Defendants then threated [sic] the journal and demanded that it publish defamatory statements about Plaintiff and her work." ( Id. ¶ 98.) Specifically, Cell Cycle published an expression of concern regarding the May 1, 2012 manuscript, noting that in October 2012 Issaenko " claimed copyright infringement of her work by a competing researcher Dr[.] Martina Bazzaro of the University of Minnesota," and that " [i]n return, the University of Minnesota performed a review of Dr[.] Bazzaro's laboratory materials from 2010 and claim ownership of data from Table 1 and Parts of Figures 1-6. These claims have been denied, and the dispute is ongoing." ( Id., Ex. 26 at 98 (emphases omitted).)
The University objected to the language used in this expression of concern, and suggested that the expression of concern should read:
The University of Minnesota claims ownership of data in this paper and reports that its faculty member, Dr[.] Martina Bazzaro, alerted UMN officials to the fact that data published in the paper was generated during the time Dr[.] Issaenko was a staff member/employee in the laboratory of Dr[.] Bazzaro. University officials evaluated Dr[.] Bazzaro's computer files and laboratory notebooks and confirmed ownership of data from Table 1 and parts of Figures 1-6. Dr[.] Issaenko disputes the University's claim of data ownership.
( Id., Ex. 26 at 98 (emphases omitted); see also id. ¶ 98.) The journal noted that " [t]his conflict appears to extend past the bounds of this journal, and the publisher wishes to remain impartial. We leave it to the two parties involved to settle this matter in an appropriate venue." ( Id., Ex. 26 at 98.)
VI. ISSAENKO'S CLAIMS
Issaenko initiated this action on December 23, 2013. (Compl., Dec. 23, 2013, Docket No. 1.) On January 16, 2014, Issaenko filed the First Amended Complaint
bringing claims against the University, all of the University's Regents in their official capacities, a variety of University officials in their official capacities (Senior Vice President of Academic Affairs and Provost Karen Hanson, Director of the Masonic Cancer Center Douglas Yee, Associate Vice President of the Academic Health Center Office of Research Tucker W. LeBien, Professor and Head of the Department of Obstetrics, Gynecology, and Women's Health Linda Carson, and Associate Vice President for Research Frances Lawrenz), and Bazzaro in her personal, individual, and official capacity as faculty of the University. (Am. Compl. at 1.)
The First Amended Complaint alleges that all Defendants are liable for copyright infringement, violation of Minnesota's Uniform Deceptive Trade Practice Act, unfair competition, unjust enrichment, defamation, tortious interference with a prospective business advantage, promissory estoppel, violations of the Privileges and Immunities Clause, and violations of the Due Process Clause. Issaenko seeks injunctive relief as well as damages. ( Id. at 56-57.) Specifically, Issaenko alleges that Defendants' actions resulted in her inability " to secure employment in academic science or the scientific industry and . . . to further develop her research or procure funding to support such research with grant applications." ( Id. ¶ 99.) Issaenko further contends that Defendants' actions " irreparably harmed Plaintiff's professional reputation and standing as well as her career development" and " destroyed all of the Plaintiffs['] educational investments, hard work and effort to advance the knowledge in her field of cancer research science." ( Id. ¶ ¶ 100-101.)
I. MOTION TO DISMISS/MOTION TO AMEND
Defendants bring a motion to dismiss Issaenko's First Amended Complaint in its entirety under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Mot. to Dismiss, Feb. 14, 2014, Docket No. 10.) Several months later, Issaenko filed a motion to amend seeking permission to file a Proposed Second Amended Complaint (" Second Amended Complaint" ) which dismisses the Individual Defendants that are regents of the University, seeks to sue the remaining Individual Defendants in their individual as well as official capacities, and adds some factual allegations regarding the identities of the various Individual Defendants and additional details with respect to the defamation claim. (Mot. to Amend, June 5, 2014, Docket No. 38; see also id., Ex. 2 (" Second Am. Compl." ).) In response to the motion to amend, Defendants argue that the Court should deny the motion because amendment would be futile. ( See generally Defs.' Mem. in Opp'n to Mot. to Amend, June 26, 2014, Docket No. 47.) As explained more fully below, deciding a motion to dismiss and determining whether amendment would be futile employ the same standard of review. Because these motions employ an identical standard of review and raise identical substantive issues, with respect to each claim or relevant group of claims, this Order will first discuss whether dismissal of the claims raised in the First Amended Complaint is appropriate. With that law and analysis in mind, the Order will then address whether anything in the Second Amended Complaint alters the conclusion
reached with respect to the First Amended Complaint.
A. Motion to Strike Responsive Memorandum
Before considering the merits of the motions to dismiss and for leave to amend, the Court will address an initial procedural matter. Prior to oral argument on the pending motions Issaenko filed a motion to strike Defendants' memorandum in response to her motion seeking leave to file the Second Amended Complaint. (Mot. to Strike, July 1, 2014, Docket No. 58.) Issaenko argues that the memorandum must be struck because it was untimely. Specifically, Issaenko argues that because a motion to amend is a nondispositive matter, the memorandum in opposition should have been filed seven days after service of the motion, which occurred on June 5, 2014, and was therefore due on June 12, 2014, but was not filed until June 26, 2014. (Pl.'s Mem. in Supp. of Mot. to Strike at 2, July 1, 2014, Docket No. 60); see also D. Minn. LR 7.1(b)(2) (providing that " [w]ithin 7 days after filing of a nondispositive motion and its supporting documents . . . the responding party must file and serve" a memorandum of law and any accompanying affidavits or exhibits). Issaenko explains that " Defendants have neither offered excusable neglect nor requested an extension of the filing and service date" and that " [t]herefore Defendants' submissions were untimely and should be stricken." (Pl.'s Mem. in Supp. of Mot. to Strike at 2.) Issaenko also asks for a general award of " her expenses" and " fees," although she does not specify an amount of fees, or to what those fees are related. ( Id. at 3.)
Defendants concede that their memorandum was untimely filed, but explain that the mistake was made in good faith and their confusion about the deadline for that memorandum was caused, to some extent, by Issaenko's filing of a motion for preliminary injunction shortly before the hearing and the Court's entry of a briefing schedule with respect to that motion. (Defs.' Mem. in Opp'n to Mot. to Strike at 2, July 2, 2014, Docket No. 62.) Defendants argue, however, that their brief should not be stricken because Issaenko has suffered no prejudice. Defendants also argue that striking the memorandum will only unnecessarily delay the case because if the Court declines to consider their arguments that the motion to amend is futile and allows Issaenko to file her Second Amended Complaint, it will require that another motion to dismiss that complaint be filed, which will raise the same arguments found in Defendants' current memorandum in opposition to the motion to amend.
The Court agrees that, although Defendants' memorandum was untimely, that untimeliness is harmless under these circumstances. The lack of prejudice to Issaenko is demonstrated in particular by the fact that Defendants' arguments against the filing of the Second Amended Complaint are almost identical to their arguments made in connection with the motion to dismiss the First Amended Complaint. In other words, the late-filed memorandum primarily explains how the proposed amendments do not cure the deficiencies identified in the original motion to dismiss. Therefore there does not appear to be any unfair surprise, nor has Issaenko argued that the late-filing caused her to be unable to prepare for the hearing on the motion or otherwise prejudiced her case. Here, the sanction requested -- exclusion of the entire memorandum -- is out of proportion to any possible inconvenience suffered by Issaenko. Because Issaenko has failed to demonstrate any prejudice caused by the Court's consideration of Defendants' memorandum, the Court will deny the motion to strike, and will also
deny Issaenko's general request for fees and costs.
B. Standards of Review
Rule 15(a) of the Federal Rules of Civil Procedure provides that " [t]he court should freely give leave [to amend a pleading] when justice so requires." Fed.R.Civ.P. 15(a)(2). But " [a] district court may appropriately deny leave to amend where there are compelling reasons such as undue delay, bad faith, or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the non-moving party, or futility of the amendment." Moses.com Sec., Inc. v. Comprehensive Software Sys., Inc., 406 F.3d 1052, 1065 (8th Cir. 2005) (internal quotation marks omitted). Where, as here, futility is raised as a basis for opposing proposed amendments to a complaint, the Court must determine whether the proposed claims state a claim for relief at this stage of the case. See Briscoe v. Cnty. of St. Louis, Mo., 690 F.3d 1004, 1015 (8th Cir. 2012) (" When the court denies leave to amend on the basis of futility, it means the district court has reached the legal conclusion that the amended complaint could not withstand a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure . . . ." (alteration and internal quotation marks omitted)); Zutz v. Nelson, 601 F.3d 842, 850 (8th Cir. 2010). Thus, the question in determining whether to permit amendment is " whether the proposed amended complaint states a cause of action under the Twombly pleading standard." Zutz, 601 F.3d at 850-51.
In reviewing a motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6), the Court considers all facts alleged in the complaint as true to determine if the complaint states " 'a claim to relief that is plausible on its face.'" Magee v. Trs. of Hamline Univ., Minn., 747 F.3d 532, 535 (8th Cir. 2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). To survive a motion to dismiss, a complaint must provide more than " 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action . . . .'" Iqbal, 556 U.S. at 678 (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. " Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility," and therefore must be dismissed. Id. (internal quotation marks omitted). Finally, Rule 12(b)(6) " authorizes a court to dismiss a claim on the basis of a dispositive issue of law." Neitzke v. Williams, 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989).
Defendants have also moved to dismiss for lack of subject matter jurisdiction on sovereign immunity grounds pursuant to Federal Rule of Civil Procedure 12(b)(1). See Hagen v. Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 1043 (8th Cir. 2000) (explaining that " sovereign immunity is a jurisdictional question" and properly addressed as a Rule 12(b)(1) motion to dismiss (alteration and internal quotation marks omitted)). A motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) may challenge the plaintiff's complaint either on its face or on the factual truthfulness of its averments. See Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1999). Defendants' jurisdictional argument based on sovereign immunity is a facial challenge because it does not call upon the Court to " engage in a factual review" by " inquir[ing] into and
resolv[ing] factual disputes." Faibisch v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002). In a facial challenge to jurisdiction, the court " determine[s] whether the asserted jurisdictional basis is patently meritless by looking to the face of the complaint, and drawing all reasonable inferences in favor of the plaintiff." Biscanin v. Merrill Lynch & Co., 407 F.3d 905, 907 (8th Cir. 2005) (citation omitted). With these standards in mind, the Court proceeds to address Issaenko's claims in the context of Defendants' motion to dismiss and Issaenko's motion to amend.
C. Copyright Infringement (Count I)
With respect to her copyright infringement claim, in the First Amended Complaint Issaenko alleges generally that she " has not authorized Defendants to copy, reproduce, solicit for grants, duplicate, disseminate, distribute, sell, offer for sale, use, or display images that are the same, substantially similar, or confusingly similar to any of Plaintiff's works of authorship, including her Copyrighted Images and Works," but that Defendant has in fact so used the Copyrighted Works. (Am. Compl. ¶ ¶ 102-105.) In Count I Issaenko alleges that Defendants infringed her copyrights in the Copyrighted Works " by using, making grant applications, soliciting for grants, seeking patents, distributing, publicly displaying, offering for sale, and/or selling images that were copied, caused to be copied from, or constitute derivative works of Dr. Olga Issaenko's Copyrighted Images and Works, and which are virtually identical and/or substantially similar to those Copyrighted Images." ( Id. ¶ 121.) Issaenko lists specific uses made of her Copyrighted Works -- including Bazzaro's submission of a patent application, various presentations of Bazzaro's, and various of the University's grant applications. ( Id. ¶ 106.) The only Defendant specifically named in any of these allegations is Bazzaro. ( See id. ¶ ¶ 102-111.) Issaenko further alleges that " Defendants possessed the right and ability to supervise the infringing activity and possessed an obvious and direct financial interest in Dr. Olga Issaenko's exploited works of authorship and/or her Copyrighted Images and Works" ( id. ¶ 122) and that
Defendants['] direct, indirect, contributory and/or vicarious copyright infringement has caused, and will continue to cause Dr. Olga Issaenko to suffer substantial injuries, loss, and damage to her proprietary and exclusive rights to the Copyrighted Images and Works, and has damaged Dr. Olga Issaenko's reputation and goodwill, diverted her potential trade, and caused lost opportunities, and lost profits, all in an amount yet to be determined
( id. ¶ 124). Issaenko seeks statutory and actual damages, profits made by Defendants, and injunctive relief " that the infringing copies of the Copyrighted Images be seized, impounded and destroyed." ( Id. ¶ 132; see id. ¶ ¶ 125-128.)
1. Eleventh Amendment
Defendants first argue that the copyright infringement claim must be dismissed against the University and all of the Individual Defendants and Bazzaro to the extent they are sued in their official capacities because those Defendants are immune from suit under the Eleventh Amendment.
a. Eleventh Amendment Immunity
The Eleventh Amendment bars suits against state governments brought in
federal court unless the state has clearly and unequivocally waived its immunity, Faibisch, 304 F.3d at 800, or Congress has abrogated the states' Eleventh Amendment immunity with respect to that particular cause of action, see Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 54-56, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). Eleventh Amendment immunity extends to the University of Minnesota because it is " an instrumentality of the state." Humenansky v. Regents of Univ. of Minn., 152 F.3d 822, 824 (8th Cir. 1998) (internal quotation marks omitted). " Additionally, the Eleventh Amendment prohibits federal-court lawsuits seeking monetary damages from individual state officers in their official capacities because such lawsuits are essentially 'for the recovery of money from the state.'" Treleven v. Univ. of Minn., 73 F.3d 816, 818 (8th Cir. 1996) (footnote omitted) (quoting Ford Motor Co. v. Dep't of the Treasury, 323 U.S. 459, 464, 65 S.Ct. 347, 89 L.Ed. 389 (1945)); see also Grand River Enters. Six Nations, Ltd. v. Beebe, 467 F.3d 698, 701 (8th Cir. 2006) (" The Eleventh Amendment protects states from being sued in federal court without their consent and also bars suits against state officers acting in their official capacities when the state itself is 'the real, substantial party in interest.'" (quoting Ford Motor Co., 323 U.S. at 464)).
Issaenko does not dispute that Defendants have not clearly and unequivocally waived their Eleventh Amendment immunity. Instead, the parties dispute whether Congress abrogated the states' Eleventh Amendment immunity with respect to violations of the Copyright Act. To determine whether Congress has abrogated immunity, the Court employs " a two-prong analysis." Alsbrook v. City of Maumelle, 184 F.3d 999, 1005 (8th Cir. 1999) (citing Seminole Tribe, 517 U.S. at 55). First, the Court must " determine whether Congress has unequivocally expressed its intent to abrogate the immunity." Id. Second, the Court must ascertain whether, when Congress effectuated that abrogation, it acted pursuant to a valid exercise of its power under the enforcement provision found in Section 5 of the Fourteenth Amendment. Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 364, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001) (" [T]he Eleventh Amendment, and the principle of state sovereignty which it embodies, are necessarily limited by the enforcement provisions of § 5 of the Fourteenth Amendment. As a result . . . Congress may subject nonconsenting States to suit in federal court when it does so pursuant to a valid exercise of its § 5 power." (citations and internal quotation marks omitted)). Where Congress has failed to act pursuant to a proper exercise of its power under Section 5 of the Fourteenth Amendment " there is no valid abrogation" of states' Eleventh Amendment immunity from private suit in federal court, and accordingly the district court will lack subject matter jurisdiction over claims relying on such abrogation. See Alsbrook, 184 F.3d at 1010 (holding " that the extension of Title II of the ADA to the states was not a proper exercise of Congress's power under Section 5 of the Fourteenth Amendment. Consequently, there is no valid abrogation of Arkansas' Eleventh Amendment immunity from private suit in federal court and the district court lacked subject matter jurisdiction over the ADA claim." ).
b. Waiver of Immunity in the CRCA
In the Copyright Remedy Clarification Act (" CRCA" or " Copyright Act" ), under which Issaenko brings her copyright claims, Congress clearly expressed an intent to abrogate state immunity. Section 511 of the Act states:
Any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his or her official capacity, shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal court by any person, including any governmental or nongovernmental entity, for a violation of any of the exclusive rights of a copyright owner provided by sections 106 through 122 . . . or for any other violation under this title.
17 U.S.C. § 511(a); see also 17 U.S.C. § 501(a) (" Any State, and any such instrumentality, officer, or employee, shall be subject to the provisions of this title in the same manner and to the same extent as any nongovernmental entity." ). Therefore, the relevant question for purposes of Defendants' motion is whether that abrogation was made pursuant to a valid exercise of Congress' power under Section 5 of the Fourteenth Amendment.
The Fourteenth Amendment provides, in relevant part, that " [n]o State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. Section 5 of the Amendment provides that " The Congress shall have power to enforce, by appropriate legislation, the provisions of this article." U.S. Const. amend. XIV, § 5. Section 5 is " a positive grant of legislative power" to Congress. Katzenbach v. Morgan, 384 U.S. 641, 651, 86 S.Ct. 1717, 16 L.Ed.2d 828 (1966). But that power is a " remedial" one, which " extends only to enforcing the provisions of the Fourteenth Amendment." City of Boerne v. Flores, 521 U.S. 507, 519, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997) (alterations and internal quotation marks omitted), superseded on other grounds by statute as stated in Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751, 189 L.Ed.2d 675 (2014). In other words, Congress " has been given the power 'to enforce,' not the power to determine what constitutes a constitutional violation. Were it not so, what Congress would be enforcing would no longer be, in any meaningful sense, the 'provisions of [the Fourteenth Amendment].'" Id. ...