Friedman v. DirecTV

• Citation: 262 F.Supp.3d 1000
• Decision Date: 29 July 2015
• Docket Number: Case No. CV 15–00844–JEM
• Parties: Steven FRIEDMAN and FSZ Media, LLC, Plaintiffs, v. DIRECTV, a Delaware corporation; DirecTVholdings, LLC, a Delaware limited liability company; and Does 1 through 10, inclusive, Defendants.
• Court: U.S. District Court — Central District of California

262 F.Supp.3d 1000

Steven FRIEDMAN and FSZ Media, LLC, Plaintiffs,

v.DIRECTV, a Delaware corporation; DirecTVholdings, LLC, a Delaware limited liability company; and Does 1 through 10, inclusive, Defendants.

Case No. CV 15–00844–JEM

United States District Court, C.D. California.

Signed July 29, 2015

Glen L. Kulik, Natalie N. Mutz, Patricia Brum, Kulik Gottesman and Siegel LLP, Sherman Oaks, CA, for Plaintiff.

David Halberstadter, Gloria C. Franke Shaw, Joanna M. Hill, Katten Muchin Rosenman LLP, Los Angeles, CA, for Defendant.

SUPPLEMENTAL RULING ON DEFENDANTS' SPECIAL MOTION TO STRIKE COMPLAINT PURSUANT TO CALIFORNIA ANTI–SLAPP STATUTE

JOHN E. MCDERMOTT, UNITED STATES MAGISTRATE JUDGE

I. INTRODUCTION

On June 29, 2015, this Court issued a partial ruling on the Special Motion To Strike Complaint Pursuant To The California Anti–SLAPP Statute, California Civil Procedure § 425.16 ("Motion"), filed by Defendants DirecTV and DirecTV Holdings, LLC (collectively "DirecTV"). The Court will not repeat the Introduction to that ruling but incorporates it here. As noted in the June 29, 2015 Order, Plaintiffs Stephen Friedman and FSZ Media, LLC, did not have any opportunity to file a brief in response to DirecTV's late presented argument that Plaintiffs' breach of confidence claim must fail because Plaintiffs' ideas allegedly used in Fantasy Zone lack novelty. Plaintiffs were permitted to file a Second Supplemental Brief on novelty, which they did on July 10, 2015. DirecTV filed a Supplemental Reply Brief on June 17, 2015.

The Court concludes that DirecTV has met its burden to establish that Plaintiffs' breach of implied contract, breach of confidence, fraud, and negligent misrepresentation claims arise from an act in furtherance of DirecTV's right of free speech in connection with a public issue under § 425.16(b)(1) and (e). The Court also GRANTS DirecTV's Special Motion to Strike Plaintiffs' breach of confidence claim.

II. APPLICABILITY OF ANTI–SLAPP STATUTE

A. Plaintiffs' Breach Of Implied Contract And Breach Of Confidence Claims

In its first Claim for Relief, Plaintiffs allege an implied in fact contract that Plaintiffs were to be paid and credited if DirecTV "used" Plaintiffs' ideas for a fantasy sports channel. (Complaint, ¶ 33.) Plaintiffs further allege that DirecTV "used " Plaintiffs' ideas for its own Fantasy Zone Channel without paying or crediting Plaintiffs. (Id., ¶ 34.) In its Second Claim for Relief, Plaintiffs allege a breach of confidence claim for "disclosing the ideas submitted by Plaintiffs, without the latter's knowledge or consent, to third parties so that the FZC could be created and operate." (Id., ¶ 40.) Plaintiffs then allege that DirecTV used Plaintiffs' ideas for a fantasy sports channel without payment and disclosed those ideas without consent. DirecTV contends that the alleged use and disclosure of Plaintiffs' ideas in the development and creation of DirecTV's Fantasy Zone Channel is protected speech activity in connection with a public issue, and thus within § 425.16(b)(1) and (e). Plaintiffs disagree, arguing that their lawsuit is based on nonpayment and lack of consent which are not protected speech activity subject to the anti–SLAPP statute. The Court concludes that DirecTV has the better of the argument.

Section 425.16(b)(1) applies to a cause of action "arising from" any act in furtherance of First Amendment protected speech activity in connection with a public issue. In explaining the concept of "arising from," the California Supreme Court in City of Cotati v. Cashman, 29 Cal.4th 69, 78, 124 Cal.Rptr.2d 519, 52 P.3d 695 (2002), held that it "means simply that the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech ... the critical point is whether the plaintiff's cause of action itself was based on an act in furtherance of the defendant's right of petition or free speech." (Emphasis in text.) Courts disregard the labeling of a claim and examine the principal thrust or gravamen of a cause of action, which is assessed by identifying the "allegedly wrongful" and "core injuring-producing conduct" that provides the foundation for the claim. Hylton v. Frank E. Rogozienski, Inc., 177 Cal.App.4th 1264, 1272, 99 Cal.Rptr.3d 805 (2009). The anti–SLAPP statute, moreover, is not rendered inapplicable where both protected and unprotected activity are implicated by a cause of action. Scott v. Metabolife Intern., Inc., 115 Cal.App.4th 404, 414–15, 419, 9 Cal.Rptr.3d 242 (2004) ; Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal.App.4th 294, 308, 106 Cal.Rptr.2d 906 (2001) ; see also Trapp v. Naiman, 218 Cal.App.4th 113, 121, 159 Cal.Rptr.3d 462 (2013). In such instances, courts must examine the gravamen of each cause of action to determine whether the allegations of constitutionally protected activity are "merely incidental." Scott, 115 Cal.App.4th at 419, 9 Cal.Rptr.3d 242.

The Court finds DirecTV's arguments on the gravamen of the case persuasive. At the June 2, 2015 hearing, DirecTV's counsel contended that "based on Plaintiff's allegations, the gravamen of the breach of implied contract claim is the use of his ideas in Fantasy Zone without payment ... And for the breach of confidence claim, the gravamen is the disclosure of his ideas in Fantasy Zone without consent." (Tr. 34.) Counsel then argues that Plaintiff Friedman's allegations of the use and disclosure of his ideas is not merely incidental but "equally part of the gravamen of the claim." (Tr. 35.) Counsel further argues that "you can't have the claim without use or without the payment ... if there's no use, there's no claim. If there's no payment, there's no claim." Id.

DirecTV did not create or manufacture the allegations on which it relies to assert the applicability of § 425.16. The allegations are Plaintiffs' own creation. Plaintiffs allege that "Defendants failed to pay for their use of Plaintiffs' ideas" (Complaint, ¶ 34) and "committed a breach of confidence by disclosing the ideas submitted by Plaintiffs, without the latter's knowledge or consent." (Id., ¶ 40.) (Emphasis added.) Plaintiffs seek to recover $200,000,000 because DirecTV allegedly used Plaintiffs' ideas in Fantasy Zone (Complaint, ¶¶ 43, 48), which is an act in furtherance of protected speech. The allegations of use and disclosure are not merely incidental to unprotected conduct but essential to each cause of action. There cannot be a "breach" without the use or disclosure of Plaintiffs' ideas in DirecTV's own Fantasy Zone channel. Plaintiffs even refer to their own claim as an "idea theft" case, or, put differently, the case could be characterized as an unauthorized use and disclosure case as much as a nonpayment and nonconsent case. In regard to Plaintiffs' breach of implied contract claim, use by DirecTV of Plaintiffs' ideas in the development of Fantasy Zone without consent is as central to what is "allegedly wrongful" as nonpayment. The allegation of DirecTV's use of Plaintiffs' ideas is too intertwined with the nonpayment allegation to be separated or regarded as "merely incidental." The same analysis applies to Plaintiffs' breach of confidence claim in that Plaintiffs allege that DirecTV "disclosed" Plaintiffs' ideas "so that FSZ could be created and operated." (Complaint, ¶ 40.)

Plaintiffs' authority on the issue is also wanting. Plaintiffs provided the Court with the decision of Willens v. Kohan, 2008 WL 2026507, at *1 (Cal. Ct. App. May 13, 2008), which they contend is directly on point. Plaintiffs also provided the recent case of Jordan–Benal v. Universal City Studios, Inc., C.D. Cal. Case No. CV 14–5577 MWF (MRW), decided June 24, 2015. Willens, however, states on its face that it is not published and essentially is not authority in California courts under California Rules of Court, Rule 8.1115. Jordan–Benel has been appealed to the Ninth Circuit. Neither Willens nor Jordan–Benel addresses or discusses Scott, Fox Searchlight, or Trapp.

The Court also finds that DirecTV's alleged use of Plaintiffs' ideas in its Fantasy Zone channel is "in connection with a public issue or an issue of public interest." § 425.16(e)(4). In Nygard, Inc., v. Uusi–Kerttula, 159 Cal.App.4th 1027, 1042, 72 Cal.Rptr.3d 210 (2008), the court held that an issue of public interest is "any issue in which the public is interested... the issue need not be ‘significant’ ... it is enough that it is one in which the public takes an interest." (Emphasis in text.) See also Tamkin v. CBS Broadcasting, Inc., 193 Cal.App.4th 133, 143, 122 Cal.Rptr.3d 264 (2011) (public demonstrably interested in creation and broadcasting of episode of CSI ). The Shaw Declaration, ¶ 3, Exs. A–E, demonstrates substantial, widespread public interest in fantasy football, the sole focus of Fantasy Zone. Plaintiffs' own pitch materials demonstrate the widespread public interest in fantasy football and fantasy sports. The research section provides that "over 35 million North Americans play fantasy sports" and that fantasy sports is "a $1.1 billion a year industry." Stratton Decl., Ex. 28.¹

Plaintiffs try to blunt this evidence by arguing that the public has no interest in DirecTV's failure to pay and failure to disclose but the Court already has rejected that rationale. It is DirecTV's alleged use and disclosure of Plaintiffs' ideas in its Fantasy Zone channel that satisfies the public interest requirement. Plaintiffs also cite Dyer v. Childress, 147 Cal.App.4th 1273, 55 Cal.Rptr.3d 544 (2007), which involved a claim against the creators of the film Reality Bites for using the plaintiff's name as a character in the film. Tamkin, 193 Cal.App.4th at 144, 122 Cal.Rptr.3d 264, however, distinguished Dyer because it found no discernible public interest in the plaintiff's persona, whereas defendants showed public interest in the CSI episode. Similarly here, the ideas DirecTV are alleged to have used in Fantasy Zone are not personal or...