Monday, October 15, 2012

Arbitration Friend or Foe?

By Samuel Lewis Published in The Business of Photography
Arbitration Friend or Foe?
Each of Strick's agreements with the Times contained a relatively lengthy arbitration provision. Under the arbitration provision, Strick and the Times agreed "that any and all claims, disputes or controversies between them" would be resolved through mediation and binding arbitration, and this would be the "sole and exclusive remedy." Strick and the Times also "voluntarily and intelligently waive[d] and [gave] up any right to a jury trial." The arbitration provision also required the parties to demand arbitration within 90 days of making a formal claim against the other.

The last of Strick's agreements with the Times was for only six months, and in May 2010—shortly before the agreement was due to expire—the Times advised Strick that it was ending the relationship. In response, Strick notified the Times that it had no right to use any of the images uploaded to the Times' content-management system (FTP site). By this time, Strick had uploaded images for 10 stories, candidates for eventual publication in the event the Times renewed Strick's contract. The Times disagreed with Strick and proceeded to use Strick's images.

In May 2011, Strick sued the Times and its parent company for copyright infringement, alleging that they ultimately used 174 of Strick's images without his permission. Roughly five months later, Strick found his case shut out of court by virtue of the arbitration provision in his agreement with the Times. Although Strick's attorneys argued that the arbitration provision shouldn't apply to a claim for copyright infringement—indeed, there could be no infringement while the agreement was in place—U.S. District Judge Consuelo B. Marshall found that Strick's agreement with the Times required them to arbitrate "any and all claims, disputes, and controversies between them."

In early December 2011, Strick initiated arbitration. However, once in arbitration, matters quickly went from bad to worse for Strick. While Strick requested that the arbitrator make an early determination as to whether the arbitration provision applied to his claims for copyright infringement against the Times, the Times requested an early determination as to whether Strick's claims for copyright infringement were time-barred.

Under the Copyright Act, claims for infringement must be brought within three years after the claim accrues. However, Strick's agreement with the Times arguably reduced the time for bringing claims to 90 days. In a ruling issued June 18, 2012, the arbitrator found that Strick's claims were time-barred. According to the ruling, Strick's attorney triggered the dispute resolution provisions in his agreement with the Times in September 2010, and Strick failed to commence arbitration within 90 days thereafter. As the arbitrator explained, "[b]y not pursuing arbitration, at the first instance and by filing the [copyright infringement claim in court] Strick ran the risk of being wrong with respect to his interpretation of" his agreement with the Times.

In a statement issued following the arbitrator's ruling, Strick expressed his disappointment. "I am devastated by [the] ruling by Judge Lichtman, our JAMS arbitrator, and feel that I have truly been denied 'my day in court' as the merits of this case have yet to be heard."
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