unauthorized use of image from a digital image bank

[techbox]

What is the name of your state (only U.S. law)? California

This letter was received after the domain name was closed for 3 months.
But image was indeed been used. A tiny version of the original.
This "cease and desist" letter is asking for payment of $875 in 14 days.
4 days already lost on the way here.

Do I have any case on the domain name already expired for 3 months?

 

[The Occultist]

A domain going under doesn't somehow magically make images in the public domain. The image will be under copyright for 75 years AFTER the owner has passed away. It has nothing to do with domains.