Vincent, Veronica v. City Colleges Chicag ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-3082
VERONICA VINCENT,
Plaintiff-Appellant,
v.
CITY COLLEGES OF CHICAGO, EZEKIEL
MORRIS, and CHICAGO ASSOCIATION
OF REALTORS, INC.,
Defendants-Appellees.
____________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 04 C 7641—Harry D. Leinenweber, Judge.
____________
SUBMITTED MARCH 29, 2007—DECIDED APRIL 30, 2007
____________
Before EASTERBROOK, Chief Judge, and FLAUM and
EVANS, Circuit Judges.
EASTERBROOK, Chief Judge. Veronica Vincent wrote
Smart Foreclosure Buying and has registered her copy-
right in that work, which the Chicago Association of
REALTORS® published through its educational arm the
Real Estate Education Company. (The Real Estate Educa-
tion Company has since been consolidated with the
Chicago REALTORS® Real Estate School; for simplicity
we use “the Association” to refer to the Chicago Associa-
tion of REALTORS® and all of its affiliates.) The Associa-
2 No. 06-3082
tion promised to pay Vincent 15% of the book’s selling
price. Vincent used the book as the text in a class she
taught at the City Colleges of Chicago. The course title was
the same as the book’s.
In 1995 Vincent stopped teaching this class. The City
Colleges continued to offer a course with the same title,
taught by Ezekiel Morris—though a prospective student
might have thought that Vincent was the instructor, as
her initials appeared next to the course description in
the college catalog. In 2001 Vincent told the Association
by phone, fax, and letter to stop publishing her book.
The Association promptly stopped paying her royalties,
but it did not stop printing and selling copies of the
book. Vincent also asked the City Colleges to stop offering
any course using her book, or at least to cease using the
book’s title as the name of the course. When Vincent
discovered that the Association was continuing to print
the book for use not only in the college courses but also
in a self-directed educational program it offers for real
estate brokers, she demanded that the Association pay
her a portion of the revenue from these endeavors; it
refused but did remit several years’ back royalties.
According to Vincent’s complaint, from which this
narration has been drawn, the Association, the City
Colleges, and Morris have violated the federal copyright
and trademark laws. Vincent’s complaint named “Harold
Washington College” and “Wilbur Wright College” as
defendants, but these are just parts of the City Colleges’
operations. One could not sue Harvard College, as opposed
to the larger institution (Harvard University) of which
it is a component. Cf. Schiavone v. Fortune, 477 U.S. 21(1986). But the City Colleges received the papers and
responded to the complaint, so we have reformed the
caption. (It is unclear whether the City Colleges or its
governing body the Board of Trustees of Community
College District No. 508 is the real party in interest;
No. 06-3082 3
nothing turns on the answer, so we do not pursue it.)
Vincent also named the City of Chicago as a defendant
but never served the City with process; it has been dis-
missed as a party, and that decision does not require
further discussion. Quite apart from the lack of service,
the City of Chicago has nothing to do with the events of
which Vincent complains.
The district court dismissed most of the complaint
under Fed. R. Civ. P. 12(b)(6). The complaint is fatally
deficient, the judge wrote, because it does not plead facts
that show an entitlement to relief. 2005 U.S. Dist. LEXIS
42963 (N.D. Ill. Apr. 6, 2005). The only well-pleaded claim,
the district court concluded, is Vincent’s contention that
the Association violated the copyright laws by print-
ing copies of her book after she withdrew consent. With
respect to that claim, the district court later granted
summary judgment in the Association’s favor, ruling
that Vincent had failed to establish that the Association
received written notice of her decision. 2006 U.S. Dist.
LEXIS 44737 (N.D. Ill. June 15, 2006).
The district judge faulted Vincent for failing to demon-
strate beyond peradventure that the Association had
received written notice. But why must notice be in writing?
The license to print the book was oral; an oral contract
may be modified or terminated orally. Nothing in the
Copyright Act requires all transactions to be written—if
it did, then the Association would not have had authority
to publish the book in the first place! Because there are no
distinctive federal rules for how parties reach contracts
concerning copyrights, see T.B. Harms Co. v. Eliscu, 339
F.2d 823 (2d Cir. 1964) (Friendly, J.), oral licenses and
oral terminations are valid to the extent allowed by
state statutes of frauds. The Association does not con-
tend that an oral termination of an oral license is invalid
as a matter of Illinois contract law, which governs here.
And although the Association insists that one term of the
4 No. 06-3082
oral contract was that termination would be in writing,
that contention is itself contested.
A dispute about whether the Association received
written notice would preclude summary judgment even if
a writing were essential. Vincent provided evidence that
she mailed the Association a letter of termination. The
Association denies receiving this letter, which was sent
to its old offices: the Association had moved without
notifying Vincent. But the Postal Service forwards letters
for one year after a move and should have forwarded this
one. (The Association moved in September 2001; Vincent
maintains that she mailed her letter that December; the
Association does not contend that it failed to provide the
Postal Service with a forwarding address.) Vincent main-
tains that the letter did not come back to her, as it
should have done if the Postal Service could not deliver it.
Maybe the letter arrived but was misfiled, or maybe
someone at the Association threw it away because it did
not correspond to a written contract in the Association’s
files.
Evidence of mailing is evidence of delivery. See Hagner
v. United States, 285 U.S. 427 (1932); Henderson v.
Carbondale Coal & Coke Co., 140 U.S. 25 (1891). Although
almost any evidence may be refuted, the trier of fact
determines whether the presumption of delivery has been
overcome. Certainly a jury could infer that the Association
received some notice; why else did it stop remitting
royalties? If the Association were utterly in the dark, as
it purports to have been, then it would have continued
paying Vincent.
That’s not all. Vincent testified by deposition that she
sent the Association a termination notice by fax. The
Association asserts that its old fax machine had been
disconnected as part of the move, but that just sets up
another factual dispute. Vincent testified that the fax
went through (senders can tell the difference between
No. 06-3082 5
reaching a fax machine and reaching a disconnected line).
Fax and phone numbers usually are changed at the same
time, or not at all, when a business moves. A new machine
at the old number would have received the fax. The
Association kept its old numbers for voice lines (the move
of about five city blocks did not affect the area code), and
Vincent was able to leave a termination message on its
voice-mail system; a trier of fact could conclude that the
fax number carried over too. Proof from the phone com-
pany’s records that the fax number was out of service
could be deemed incontrovertible, but all the Association
offered was its say-so.
Summary judgment on the copyright claim was proper,
however, with respect to Morris and the City Colleges.
Vincent appears to believe that a copyright entitles the
author to determine how a work is used and thus to
prevent the book’s adoption as a teaching text. Not at all.
An author has the exclusive right to control copying, but
once a given copy has been sold its owner may do with it
as he pleases (provided that he does not create another
copy or a derivative work). See Quality King Distributors,
Inc. v. L’anza Research International, Inc., 523 U.S. 135(1998) (discussing 17 U.S.C. §109(a) and the first-sale
doctrine). When Smart Foreclosure Buying is out of print,
students may read it in the library or buy used copies from
those who took the class in earlier years. Authors capital-
ize on the durability of the printed word not by charging
for each extra person’s use but by setting a price for new
copies that reflects the work’s value to multiple readers.
See Stanley M. Besen & Sheila N. Kirby, Private Copying,
Appropriability & Optimal Copyright Royalties, 32 J.L. &
Econ. 255 (1989).
As for the rest of the case: a judicial order dismissing
a complaint because the plaintiff did not plead facts has
a short half-life. “Any decision declaring ‘this complaint
is deficient because it does not allege X’ is a candidate for
6 No. 06-3082
summary reversal, unless X is on the list in Fed. R. Civ. P.
9(b).” Kolupa v. Roselle Park District, 438 F.3d 713, 715
(7th Cir. 2006). Civil Rule 8 calls for a short and plain
statement; the plaintiff pleads claims, not facts or legal
theories. See Bartholet v. Reishauer A.G. (Zürich), 953
F.2d 1073, 1077-78 (7th Cir. 1992). Factual detail comes
later—perhaps in response to a motion for a more definite
statement, see Fed. R. Civ. P. 12(e), perhaps in response
to a motion for summary judgment. Until then, the
possibility that facts to be adduced later, and consistent
with the complaint, could prove the claim, is enough for
the litigation to move forward. See Swierkiewicz v. Sorema
N.A., 534 U.S. 506 (2002); Hishon v. King & Spalding,
467 U.S. 69 (1984).
Facts that substantiate the claim ultimately must be
put into evidence, but the rule “plaintiff needs to prove
Fact Y” does not imply “plaintiff must allege Fact Y at the
outset.” That’s the difference between fact pleading
(which the courts of Illinois use) and claim pleading under
Rule 8. See, e.g., Christensen v. Boone County, No. 04-4162
(7th Cir. Mar. 21, 2007), slip op. 18-19; Hefferman v. Bass,
467 F.3d 596, 599 (7th Cir. 2006); Simpson v. Nickel,
450 F.3d 303, 305-06 (7th Cir. 2006); AXA Corporate
Solutions v. Underwriters Reinsurance Corp., 347 F.3d 272,
277 (7th Cir. 2003); Hoskins v. Poelstra, 320 F.3d 761, 764
(7th Cir. 2003).
Rule 8 was adopted in 1938, and Conley v. Gibson, 355
U.S. 41 (1957), stressed that it does not require fact
pleading. It is disappointing to see a federal district judge
dismiss a complaint for failure to adhere to a fact-pleading
model that federal practice abrogated almost 70 years ago.
As citations in the preceding paragraphs show, however,
this is among many similar dispositions that the Su-
preme Court and this court have encountered recently
No. 06-3082 7
and been obliged to reverse.† Although we appreciate
the pressure that a heavy flux of litigation creates, and
the temptation to get rid at the earliest opportunity of
claims that do not seem likely to pan out, Rule 12(b)(6)
does not serve this function. Sometimes a feeble com-
plaint may be dismissed on the pleadings under Rule 12(c),
and judges should remember that it is possible to grant
summary judgment under Rule 56 in advance of dis-
covery. Dismissal under Rule 12(b)(6) is reserved for
complaints that do not state legally cognizable claims,
including the situation in which the plaintiff pleads
himself out of court by making allegations sufficient to
defeat the suit. But Vincent did not plead too much, to her
own detriment, nor did she omit anything on the list in
Rule 9(b).
“Any district judge (for that matter, any defendant)
tempted to write ‘this complaint is deficient because it
does not contain. . .’ should stop and think: What rule
of law requires a complaint to contain that allegation?”
†
This court has issued at least 12 opinions or orders during the
last year alone reversing decisions that had dismissed complaints
for failure to plead facts. Christensen v. Boone County, 2007 U.S.
App. LEXIS 6451 *27-29 (7th Cir. Mar. 21, 2007); Miller v. Fisher,
2007 U.S. App. LEXIS 5982 (7th Cir. Mar. 12, 2007) (nonpreceden-
tial disposition); Edwards v. Snyder, 478 F.3d 827 (7th Cir. 2007);
Thomas v. Kalu, 2007 U.S. App. LEXIS 4280 (7th Cir. Feb. 27,
2007) (nonprecedential disposition); Argonaut Insurance Co. v.
Broadspire Services, Inc., 2006 U.S. App. LEXIS 31209 (7th Cir.
Dec. 18, 2006) (unpublished order); Tompkins v. The Women’s
Community, Inc., 203 Fed. Appx. 743 (7th Cir. 2006) (unpub-
lished order); McCann v. Neilsen, 466 F.3d 619 (7th Cir. 2006);
Hefferman v. Bass, 467 F.3d 596 (7th Cir. 2006); Pratt v. Tarr,
464 F.3d 730 (7th Cir. 2006); Floyd v. Aden, 184 Fed. Appx. 575(7th Cir. 2006) (unpublished order); Simpson v. Nickel, 450 F.3d
303 (7th Cir. 2006); Marshall v. Knight, 445 F.3d 965 (7th Cir.
2006).
8 No. 06-3082
Doe v. Smith, 429 F.3d 706, 708 (7th Cir. 2005) (emphasis
in original). That question should have been asked in this
case but wasn’t. Take, for example, Vincent’s contention
that “Smart Foreclosure Buying” is a service mark, so that
only she may teach a course under that banner. The
district judge found the complaint defective because it
“failed to state [Vincent’s] registered U.S. Patent and
Trademark number or provide any [similar] information”.
What rule requires that information to be in a complaint?
None that we know of. If registration is essential to
prevail, then Vincent must prove it eventually, but it
need not be alleged; only the claim—which is to say,
enough to alert the defendant to the nature of the
grievance—need be pleaded.
What’s more, trade and service marks are protected
whether or not they are registered. See Wal-Mart Stores,
Inc. v. Samara Bros., Inc., 529 U.S. 205, 209 (2000); Two
Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992).
Because the phrase “Smart Foreclosure Buying” is descrip-
tive, it cannot be protected under trademark law without
proof that consumers associate its use with the plaintiff ’s
product. In trademark parlance, this is called “secondary
meaning.” See, e.g., Custom Vehicles, Inc. v. Forest River,
Inc., 476 F.3d 481 (7th Cir. 2007) (discussing authority).
See also, e.g., Herbko International, Inc. v. Kappa Books,
Inc., 308 F.3d 1156, 1162 n.2 (Fed. Cir. 2002) (applying
this approach to a book title that was said to do double
duty as a service mark for a product related to the book).
Defendants do not contend that they, rather than Vincent,
own the intellectual property in the phrase “Smart Fore-
closure Buying” as applied to a course of instruction.
The chance that Vincent will succeed in establishing
secondary meaning may be slim, but her complaint does
not concede the point or demonstrate that proof is im-
possible, and the pleading therefore cannot be dismissed
under Rule 12(b)(6).
No. 06-3082 9
Vincent’s remaining claims stem from the initials “V.V.”
that the City Colleges continued to append to the course
description after Vincent was no longer the instructor. She
characterizes this as false advertising, fraud, a deceptive
business practice, and other state-law theories. Because
each of these theories entails deceit, there is at least some
potential for invoking the specificity requirement of Fed.
R. Civ. P. 9(b). Neither the district court nor defendants
relies on that rule, however, likely because the complaint
alleges precisely the statement—the use of plaintiff ’s
initials—that is asserted to be false, and the exact
reason—that no one answering to the initials “V.V.” taught
the class after plaintiff stopped doing so—why the state-
ment was false. The complaint does not go into detail
about the intent with which the defendants applied these
initials, but Rule 9(b) provides that states of mind may
be alleged generally. The complaint is sufficient.
None of the defendants maintains that students are the
only persons injured by this falsehood. Just about all the
defendants say in this court is that one particular theory,
which relies on the Illinois version of the Uniform Decep-
tive Trade Practices Act, 815 ILCS 510/2, is no longer
tenable because that statute authorizes only prospective
relief, and none of the defendants today offers or teaches
a class under the name “Smart Foreclosure Buying” or the
initials “V.V.” This must be an argument that a claim for
prospective relief is moot, although the defendants do not
use that word. No matter what the argument is called,
however, it is not a sufficient reason to dismiss the
complaint. Voluntary cessation of unlawful activity does
not moot every request for prospective relief; the court
must decide whether the complained-of conduct may be
resumed. See United States v. W.T. Grant Co., 345 U.S.
629 (1953); United States v. Raymond, 228 F.3d 804, 813-
15 (7th Cir. 2000). It is not possible to determine on the
complaint’s allegations whether recurrence is sufficiently
10 No. 06-3082
likely to justify prospective relief. Vincent’s other state-law
theories, which could lead to damages, would survive
even if the court ultimately concludes that recurrence is
very unlikely. (Defendants also maintain that the com-
plaint is deficient because Vincent did not attach copies
of the college catalog with the “V.V.” initials, but this is
a demand that complaints prove, as well as allege, facts;
that confuses Rule 12(b)(6) with Rule 56.)
The order dismissing the City of Chicago for lack of
service (and thus absence of personal jurisdiction) is
affirmed. The judgment with respect to the other defen-
dants is affirmed to the extent that Morris and the City
Colleges prevailed on the copyright claim. The remainder
of the judgment is reversed, and the case is remanded
for proceedings consistent with this opinion.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-30-07