Berkovitz v. Home Box Office, Inc.

• Decision Date: 06 June 1996
• Docket Number: No. 95-2335,95-2335
• Citation: 89 F.3d 24
• Parties: , 39 U.S.P.Q.2d 1679 Donald M. BERKOVITZ, et al., Plaintiffs, Appellants, v. HOME BOX OFFICE, INC., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 24

89 F.3d 24

35 Fed.R.Serv.3d 1023, 39 U.S.P.Q.2d 1679

Donald M. BERKOVITZ, et al., Plaintiffs, Appellants, v. HOME BOX OFFICE, INC., et al., Defendants, Appellees.

No. 95-2335.

United States Court of Appeals, First Circuit.

Heard June 6, 1996.

Decided July 22, 1996.

Joseph L. Kociubes, with whom Peter J. Mancusi and Bingham, Dana & Gould, Boston, MA, were on brief, for appellants.

Kim J. Landsman, with whom Carin G. Reynolds, Patterson, Belknap, Webb & Tyler LLP, Andrea J. Pollack, New York City, Cornelius J. Moynihan, Jr., and Peabody & Brown, Boston, MA, were on brief, for appellee Home Box Office, Inc.

Cornelius J. Moynihan, Jr., with whom Peabody & Brown, Boston, MA, Joseph J. Santora, Leonard F. Lesser, and Schneck Weltman Hashmall & Mischel LLP, New York City, were on brief, for appellees Viacom International, Inc. and MTV Networks.

Before SELYA, CYR and BOUDIN, Circuit Judges.

SELYA, Circuit Judge.

In this appeal, plaintiff-appellant Donald M. Berkovitz challenges the district court's spontaneous entry of judgment in favor of the defendants Home Box Office, Inc. (HBO) and Viacom International, Inc. (Viacom). ¹ Although we applaud the district court's innovative case management and its Briarean efforts to refine the issues for trial, we believe that in one crucial respect the court went awry. Consequently, we vacate the judgment and remand for further proceedings.

I. FACTUAL PREDICATE

We frame the facts in the aspect most beneficial to the party against whom the district court entered judgment, consistent with record support. See, e.g., Quaker State Oil Refining Corp. v. Garrity Oil Co., 884 F.2d 1510, 1513 (1st Cir.1989).

In early 1984, Berkovitz hit upon an idea for a cable television channel. He dubbed this concept "The Entertainment Network" (or, for short, "the TEN plan"). The concept envisioned a round-the-clock commercial television channel highlighting lesser-known musical and comedic acts supplemented by talk shows, movies, and other staples. The concept embodied interactive features through which the viewing audience could participate in contests and offer programming suggestions telephonically.

In February 1985, Berkovitz offered a copy of the TEN plan to an HBO vice president, Larry Carlson, who accepted the offer. He then sent the document (which, like all other copies of the TEN plan mentioned herein, bore the legend "confidential" on its cover page) to Carlson. Approximately three months later, HBO disclaimed any interest and returned the submission (although Berkovitz intimates that HBO retained a copy). In July 1987, Berkovitz attempted to interest Viacom in the TEN plan. The chairman's secretary suggested that he forward a copy to Viacom. He claims to have done so on the express condition that the submission was "for [the chairman's] eyes only." He also claims to have furnished extra copies at Viacom's request and to have met with an MTV vice-president, Lee Masters, anent the proposal. Although Masters "raved" about certain aspects of the plan, the meeting came to naught.

Little daunted, Berkovitz resumed his courtship of HBO. During the fall of 1987 he met with Carlson, who, Berkovitz maintains, perused the TEN plan, praised it, agreed to keep its contents in confidence, and led him to believe that HBO would help launch the new enterprise and share the fruits with him. Despite these encomia, and several subsequent telephone conversations in the same vein, HBO never followed through. ²

HBO inaugurated "The Comedy Channel" in November of 1989. Viacom shortly followed suit with "Ha! The Comedy Network." Late in 1990 the two merged to become "Comedy Central." Berkovitz insists that these offerings all drew their inspiration from the TEN plan, and that they did so in blatant disregard of his proprietary rights.

II. TRAVEL OF THE CASE

The procedural aspects of this litigation are of decretory significance. We divide our account into two parts.

A. Initial Proceedings.

Invoking diversity jurisdiction, 28 U.S.C. § 1332, Berkovitz filed suit in federal district court on January 28, 1991. Judge Skinner drew the case. In the complaint, the plaintiff alleged that HBO and Viacom pirated his concept without compensating him, unjustly enriched themselves at his expense, breached implied-in-fact contracts to pay him if they used the TEN plan to productive ends, and committed unfair trade practices. The defendants denied these allegations.

The novelty (or lack thereof) of the TEN plan and its constituent elements soon became a protuberant bone of contention. The defendants, positing that New York's substantive law governed, maintained that Berkovitz had to prove the novelty of his idea in order to recover under any actionable theory of the case. Berkovitz, positing that the substantive law of Massachusetts governed, attempted to parry this thrust on two levels: he asserted both that his idea was in fact novel, and that in all events a plaintiff whose idea was misappropriated in contravention of an implied-in-fact contract need not prove novelty in order to recover.

In time, the defendants moved for summary judgment. Judge Skinner considered the parties' arguments and reserved decision. In a rescript dated May 18, 1994, he held (1) that Massachusetts law supplies the rule of decision, (2) that Massachusetts does not require a showing of novelty when the plaintiff alleges the existence of a contractual relationship, and (3) that the defendants' motions for summary judgment should therefore be denied on all but the unfair trade practices claim. The court entered an appropriate order.

B. The Pretrial Conferences.

After Judge Skinner elected senior status, many of his cases were redrawn. Judge Keeton assumed responsibility for this case in mid-1994. Although the defendants moved for reconsideration of the earlier denial of brevis disposition, Judge Keeton did not act upon these motions. He instead convened a series of pretrial conferences in a commendable effort to bring matters to a head. During the last four conferences (all of which took place in 1995), the judge concentrated on clarifying and delimiting the issues to be tried. Because the events that transpired at these conferences shed considerable light on this appeal, we set out a brief chronology.

1. The March 21 Conference. The first of the four conferences focused primarily on the parties' agreement to bifurcate the trial, separating the issues of liability and damages. But Judge Keeton also seized this opportunity to instruct the parties to spell out their legal theories (avoiding forensic jargon), and directed them to develop a verdict form suitable for submission to a jury. ³

2. The April 27 Conference. At the next conference the parties wrangled over a proposed verdict form. The debate led Judge Keeton to remark that "we're going to have to get specific" about what elements of the TEN plan were "substantially used" by the defendants. The judge explained that this degree of particularization would assist in "structuring the claims and defenses so that I can understand them, so the jury can understand them, [and] so that [the litigants] can understand each other."

3. The June 1 Conference. At the third conference the judge cautioned that he would not allow the jury to consider "a fuzzy claim" and urged the plaintiff's lawyer to "communicat[e] to me clearly ... your legal and factual theory." After some additional discourse (during which the defendants unsuccessfully sought leave to file fresh motions for summary judgment), plaintiff's counsel reformulated his position. He pledged that he would prove (1) an implied agreement between Berkovitz and each of the defendants for confidential disclosure of the TEN plan, and (2) the defendants' appropriation of the plan in derogation of this agreement. The court reiterated its concern that this reformulation did not enumerate which elements of the plan were novel and which were used by the defendants. In addition, the court asked the plaintiff to list the legal elements of his implied-in-fact contract claim, and plaintiff's counsel agreed to try again.

4. The July 18 Conference. The plaintiff's outright abandonment of any cause of action based on the putative novelty of any of the elements contained in the TEN plan dominated the early stages of the final conference. Novelty aside, the defense maintained that the plaintiff still had not specified the elements of his remaining implied contract claim. ⁴ The court reaffirmed its desire that Berkovitz state his cause of action with particularity. Noting that Berkovitz's proposed jury instructions, if given, would require the jury to find that HBO and/or Viacom made "substantial use" of the TEN plan, the court asked Berkovitz to specify what this portended.

More discussion ensued, but the judge remained dissatisfied; he reminded Berkovitz's counsel that he had the authority to require a plaintiff to state with particularity the theory underpinning his claim, and warned that he might dismiss the case because Berkovitz had failed to comply with the particularization orders. The defendants moved orally for summary judgment on the ground that all the elements of the TEN plan were in the public domain. The court expressed no interest in strolling down this road, and the oral motions languished.

In a last-ditch effort to satisfy the court's demands, Berkovitz's attorney again attempted to articulate his theory of the case. The lawyer delineated what he termed Berkovitz's position "from day one": Berkovitz gave the defendants copies of the TEN plan under circumstances in which a reasonable person would expect compensation if they (or either of them) used his work product. Thus, if a defendant had made some beneficial use of some part of that document, Berkovitz would be entitled to relief. The court described this iteration of Berkovitz's theory as postulating an "all factors" approach because it did not differentiate among the...