Glen Holly Entertainment, Inc. v. Tektronix
| Decision Date | 15 September 1999 |
| Docket Number | No. CV 99-02476SVWRCX.,CV 99-02476SVWRCX. |
| Citation | 100 F.Supp.2d 1086 |
| Parties | GLEN HOLLY ENTERTAINMENT, INC., a California corporation dba Digital Images Plaintiff, v. TEKTRONIX, INC., an Oregon corporation, and Avid Technology, Inc. a Delaware corporation, Defendants. |
| Court | U.S. District Court — Central District of California |
Jeffrey T. Makoff, Charlotte N. Makoff, Makoff Kinnear Law Offices, San Francisco, CA, for plaintiff.
Howard A. Kroll, Preston Gates & Ellis, Los Angeles, CA, Stanley M. Gorinson, John L. Longstreth, Jeffrey A. Marks, Preston Gates Willis & Rouvelas Meeds, Washington, DC, for Tektronix, Inc., defendant.
Gregory N. Pimstone, Stephen J. Newman, Lathan & Watkins, Los Angeles, CA, Peter A. Spaeth, James C. Burling, Ethan J. Brown, Hale & Dorr, Boston, MA, for Avid Technology, Inc., defendant.
ORDER DISMISSING WITHOUT PREJUDICE PLAINTIFFS' FIFTH, SIXTH, AND SEVENTH CLAIMS IN PLAINTIFF'S FIRST AMENDED COMPLAINT
Among other allegations in the present suit, Plaintiff Glen Holly Entertainment, Inc. ("Digital Images") alleges that Defendant Tektronix, Inc ("Tektronix") mislead Digital Images about the future of a key product. Tektronix brings the present motion to dismiss Plaintiff's claims for fraud and negligent misrepresentation. Tektronix argues that the claims fail to allege any actionable misstatements and, to the extent that they do allege actionable misstatements, that the claims do not meet the requirements of Fed.R.Civ.P. 9(b).
Tektronix also moves to dismiss the Plaintiff's claim for Promissory Estoppel on the grounds that Plaintiff has failed to allege specific, enforceable promises or the precise nature of Digital Images' reliance and resulting injury.
The Court has reviewed the allegations in the complaint, and concludes that very few actually constitute statements upon which a listener could have relied. For those few statements, the Court concludes that that Plaintiff has failed to adequately plead reliance. The Court therefore DISMISSES WITHOUT PREJUDICE Plaintiff's Fifth, Sixth, and Seventh claims.
On a motion to dismiss, the Court evaluates only the legal sufficiency of a complaint and not the weight of the evidence supporting it. Furthermore, a court must accept as true all factual allegations in the complaint. Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993).
Under that standard, the relevant allegations of Digital Images' First Amended Complaint are as follows:
Business of Digital Images: Non-linear digital video editing is a label that describes the process of using a computer to edit video and audio segments. Unlike traditional film editing, which required cutting and pasting bits of film together, non-linear digital editing allows video editors to easily arrange and re-arrange video and audio sequences. "Lightworks" is a line of digital imaging products in the same way that Apple Computer's Macintosh is a line of computer products.
In 1995, Digital Images began using Lightworks products as the core of its non-linear digital video editing business. Digital Images describes itself as a Lightworks "vendor," by which it means that its principal business consisted of renting digital imaging equipment to smaller film producers who did not have their own equipment.1 In addition to the principal business of renting equipment for others to edit video works, Digital Images also did some business in editing video works themselves.
At the times at issue in this Complaint, Tektronix was the manufacturer of the Lightworks line.
Starting in 1996 through 1998 Tektronix executives made representations and promises to Digital Images that Tektronix was making specific hardware, software and peripheral upgrades to the Lightworks products that would enable Lightworks to better compete with its only competitor Avid Technology, Inc. ("Avid"). According to the Complaint, these representations and promises were made to Digital Images through oral and written statements during: (1) Lightworks Owners' Group Meetings, (2) One-to-One Conversations, (3) Periodic Direct Communications, (4) Industry Conventions, and through (5) Public Statements.
1) Statements Made At The Lightworks Owners' Group Meetings
Digital Images alleges that from 1996 through 1998, named and unnamed Tektronix executives met with Digital Images and other Lightworks vendors in meetings of the Lightworks Owners' Group held in Los Angeles. During these meetings Digital Images alleges that Tektronix made certain representations and promises with regards to Lightworks products.
Included were representations that Tektronix had instructed its employees and committed its full corporate resources to complete high priority new product development and high priority existing product enhancements of the Lightworks products. These high priority developments and enhancements would be pursued full tilt until such products could be placed on the market to compete with Avid. Tektronix also represented that Tektronix had already developed technology superior to Avid's. Moreover, Tektronix represented that it would implement an aggressive program to create more market visibility for the existing Lightworks film editing line and would vastly increase the corporate resources allocated to advertising and promoting the Lightworks product line.
More specific representations included representations that Tektronix would complete and deliver new software for the Lightworks and Heavyworks film editing products (known as "Version 6.0"). The new software would include: (1) tilting capabilities, (2) improved effects, (3) cut-lists, and other editing features. The new hardware would include: (1) a Heavyworks Series 3 system that would deliver real-time effects, and (2) the Lightworks V.I.P. editing system that would offer both "on-line" and "offline" editing solutions with both 24 and 30-frame software. Furthermore, the completion of peripheral hardware would enhance Lightworks film editing, including among other important products (1) a "digistation", and (2) a fadar console.
2) Statements Made During One-To-One Conversations Between Digital Images and Tektronix
From 1996 through August 1998, Digital Images' President had numerous one-to-one conversations with named Tektronix sales representatives and executives. Digital Images alleges that Tektronix repeated and reaffirmed the same representations and promises made by unnamed high level executives at the Lightworks Owners' Group meetings.
Furthermore, Digital Images' President had a conversation with Tektronix sales representative Andrew Schneider on or about March 2, 1998 at a Tektronix sales meeting. During this conversation Andrew Schneider told Plaintiff's President that Tektronix was in a position to deliver 24-frame software for the V.I.P. system no later than September 1, 1998. Plaintiff's President advised Schneider that this information would be provided to Plaintiff's customers and therefore it had to be correct. Andrew Schneider stated that he had gotten the word directly from unnamed Tektronix executives. These unnamed Tektronix executives were present at the sales meeting with Andrew Schneider.
3) Statements Made During Periodic Direct Communications Between Digital Images' President and Tektronix (Compl.¶ 17)
From 1996 through August 1998, Plaintiff's President had periodic direct communications with named Tektronix research and development executives or sales and marketing executives located at Lightworks in London. During these conversations Tektronix again repeated and reaffirmed to Digital Images all of the representations and promises made at the Lightworks Owners' Group meetings.
4) Statements Made During Industry Conventions (Compl.¶ 18)
From 1996 through August 1998 Tektronix participated in a variety of industry conventions, including the annual National Association of Broadcasters Convention in Las Vegas ("NAB"), and typically the annual ShowBiz Expo in Los Angeles. During these conventions, unnamed high level Tektronix executives were available and continued to repeat and reaffirm to Digital Images the same representations and promises made at the Lightworks Owners' Group meetings.
5) Public Statements (Compl.¶ 26)
Digital Images alleges that Tektronix through public statements made promises and representations which publicly assured its customers (including Digital Images) that the Lightworks system was a leading system. Moreover, Tektronix represented that, through enhancements and upgrades that were nearly complete, Tektronix would seize substantial market share back from Avid.
For example in September 1997, Tektronix announced in a press release that imminent upgrades to the Lightworks system would "provide a price/performance package which is unmatched in the industry today." Then in February 1998, Tektronix stated in a press release that "[e]ven with strong competition, Lightworks systems are still favored by many of Hollywood's top editors." Next in March 1998, Tektronix stated in a press release that . Furthermore in June 1998, Tektronix stated in a press release that "the number of films edited on the Heavyworks system are a testament to the fact that Lightworks systems are favored by many of today's top editors."
Also...
To continue reading
Request your trial
-
UMG Recordings, Inc. v. Global Eagle Entm't, Inc.
...fraud and negligent misrepresentation must meet the heightened pleading requirements of Rule 9(b)." Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1093 (C.D.Cal.1999) ; see also U.S. Concord, Inc. v. Harris Graphics Corp., 757 F.Supp. 1053, 1058 (N.D.Cal.1991). Under......
-
Grant v. Aurora Loan Serv., Inc.
...weeks' does not adequately indicate when and where the alleged fraud took place"); see also Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1094 (C.D.Cal.1999) ("[A]llegations such as '[d]uring the course of discussions in 1986 and 1987,' and 'in or about May through ......
-
Romero v. Countrywide Bank, N.A.
...nor do they indicate which Countrywide Defendant allegedly made which false statements. Glen Holly Entm't, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1095 (C.D.Cal.1999) ("Mere conclusory allegations of fraud are insufficient. Statements of time, place, and nature of the fraudulent activi......
-
Glen Holly Entertainment, Inc. v. Tektronix, Inc.
...to amend. Glen Holly Entm't, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1073, 1085-86 (C.D.Cal. 1999); Glen Holly Entm't, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1101-02 (C.D.Cal.1999). Digital Images filed its second amended complaint on November 3, 1999, alleging the same claims as its f......