Jules Jordan Video Inc v. 144942 Canada Inc
| Decision Date | 16 August 2010 |
| Docket Number | No. 08-55075,08-55126.,08-55075 |
| Citation | 617 F.3d 1146 |
| Parties | JULES JORDAN VIDEO, INC., a California corporation; Ashley Gasper, an individual, Plaintiffs-Appellees,v.144942 CANADA INC., a Canadian corporation d/b/a Kaytel Video Distribution; Alain Elmaleh, an individual; Leisure Time Video Canada, Inc., a Canadian corporation, Defendants-Appellants,andJacky's One Stop Distribution, Inc., a Canadian corporation; Jacky Elkeslassy, an individual; Sylhet Distribution, Inc., a Canadian corporation; Gerald Ouzzan, an individual, Defendants.Jules Jordan Video, Inc., a California corporation; Ashley Gasper, an individual, Plaintiffs-Appellants,v.144942 Canada Inc., a Canadian corporation d/b/a Kaytel Video Distribution; Alain Elmaleh, an individual; Leisure Time Video Canada, Inc., a Canadian corporation, Defendants-Appellees,andJacky's One Stop Distribution, Inc., a Canadian corporation; Jacky Elkeslassy, an individual; Sylhet Distribution, Inc., a Canadian corporation; Gerald Ouzzan, an individual, Defendants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
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Michael M. Plotkin (argued), Law Offices of Michael M. Plotkin, Los Angeles, CA, Charles M. Coate, Costa, Abrams & Coate, LLP, Santa Monica, CA, for the appellants.
Jens Koepke (argued), Greines, Martin, Stein & Richland LLP, Los Angeles, CA, Mark J. Poster, Sheila A. Wirkus, Greines, Martin, Stein & Richland, LLP, Los Angeles, CA, for the appellees.
Appeal from the United States District Court for the Central District of California, S. James Otero, District Judge, Presiding. D.C. No. CV-05-06771-SJO.
Before ALEX KOZINSKI, Chief Judge, WILLIAM A. FLETCHER, Circuit Judge, and ROBERT W. GETTLEMAN,* Senior District Judge.
Ashley Gasper is an adult movie actor who performs under the stage name Jules Jordan, and is the president and sole shareholder of Jules Jordan Video (“JJV”), the creator of the videos in which Gasper appears. He and his company sued defendants 144942 Canada, Inc., d/b/a Kaytel Video Distribution (“Kaytel”), Leisure Time Video Canada, Inc. (“Leisure Time”), Alain Elmaleh, the principal shareholder of each of the corporate defendants (collectively the “Kaytel defendants”), Jacky's One Stop and the other defendants named in this consolidated appeal. Gasper alleged that the Kaytel defendants had copied and sold thirteen copyrighted adult DVDs owned by JJV or Gasper and featuring Gasper's performances (the “JJV action”). The complaint alleged claims for copyright infringement, contributory copyright infringement, violation of unfair business practice, unfair competition under California law, false and misleading advertising, and violation of Gasper's right of publicity. The claims for unfair business practices and false advertising were dismissed prior to trial, leaving only the claims for copyright infringement based on the replication and distribution of the thirteen DVDs, and the claim for violation of Gasper's right of publicity under California law.
After a lengthy and contentious trial, the jury returned a verdict for plaintiffs on both issues.1 After the verdict the court granted the Kaytel defendants' motion for judgment as a matter of law (“JMOL”) in part, concluding that neither Gasper nor JJV had standing to assert the copyright claims, and denied plaintiffs' motion for JMOL. The court rejected the Kaytel defendants' claim that Gasper's right of publicity claim was preempted by copyright law. Both parties have appealed. We disagree with the district court on both issues, concluding that Gasper's right of publicity claim is preempted by the Copyright Act, but that Gasper and JJV had standing to assert the copyright claims in question.
Both Gasper and Stagliano are adult film performers of some stature. Stagliano's company, JSI, distributed the works of many producers including Stagliano and Gasper, under the brand names Evil Angel and Evil Empire. Gasper started making adult films in 1994. He produces, directs and performs in his films under the stage name Jules Jordan. He also writes the scripts and films the scenes. JJV, which he formed in 2001, is basically a one-man shop with Gasper as the president and sole shareholder. During the period in question, he received from JJV a $6,000 monthly salary and year-end bonuses based on company income.
In 2001 Gasper agreed with Stagliano that JSI would distribute the Jules Jordan films in the United States, but Gasper retained ownership of the copyright. JSI prepared Gasper's copyright registration paperwork. In 2006 Gasper and JJV ended their relationship with JSI and began to distribute their own movies.
Elmaleh is the sole or majority shareholder in all of the Kaytel companies, and formed 2918919 Canada, Inc. as a Canadian holding company that owns both Kaytel Video Distribution and Leisure Time, major adult entertainment distributors in the Canadian market. Elmaleh also owned a number of retail adult entertainment stores in Canada. He controlled all of the Kaytel defendant entities, and at least some of the employees were shared among the companies.
In spring 2005, JSI began receiving a higher than normal rate of return of Jules Jordan videos. Upon review of the returned merchandise, Gasper learned that the returns were “counterfeit” copies of his DVDs. The counterfeit works were inferior and were replicated and compressed to fit on a smaller DVD, reducing the quality of the video.
Gasper and JSI discovered that Kaytel used Media Mastering Services to produce unauthorized masters of a number of JSI titles, including the 13 JJV titles involved in the instant case. Using replication broker Gerald Ouzzan and his company Sylnet, Kaytel contracted with Diadem Digital to replicate thousands of copies of the counterfeit DVDs. Elmaleh, individually and on behalf of Kaytel, signed documents representing that they owned the rights to the DVDs. One of Kaytel's employees, Jacky Elkeslassy, formed a Canadian company called Jacky's One Stop, that sold the copied DVDs to distributors, primarily Direct Distributors in New York (“Direct”). Although the sales were ostensibly between Direct and Jacky's One Stop, Direct dealt exclusively with Elmaleh and sent payments to Kaytel. Direct distributed the counterfeit DVDs throughout the United States.
Gasper and JJV sued. On the same day that Gasper filed suit, a companion case John Stagliano, Inc. v. Alain Elmaleh, et al. (the “JSI action”), was filed, also alleging that the Kaytel defendants had replicated and distributed a number of Stagliano's copyrighted DVDs without license or authority.
The two cases, along with a third case brought by JJV against Canadian Multimedia Entertainment, Inc. (the “CME action”), were all originally assigned to Judge Matthew Byrne, whose untimely death resulted in reassignment to Judge Dickran Tevrizian. Judge Tevrizian consolidated the cases for discovery but retired from the bench prior to the trial. The cases were then reassigned to Judge S. James Otero, who consolidated the three cases for all purposes including trial. Prior to the trial, the plaintiffs settled with and dismissed their claims against Elmaleh, Gerald Ouzzan and Sylnet Distributors, Inc. Just before trial the CME action settled, leaving only the JJV and JSI actions against the Kaytel defendants to be tried. The plaintiffs in both cases settled with Media Mastering Services, Diaden, Sylnet, Elkeslassy and Jacky and Direct in exchange for monthly payments and promises to provide documentation and testimony. JSI settled with Kaytel after trial.
The JJV action went to trial on the two remaining issues, copyright infringement and violation of Gasper's right of publicity under California law. The jury found that all three defendants infringed Gasper's/JJV's copyrights, awarding $30,000 in statutory damages for each of the thirteen DVDs against Kaytel, $30,000 for each DVD against Leisure Time and $140,000 for each DVD against Elmaleh. The jury also found that defendants violated Gasper's right of publicity and awarded Gasper varying amounts in damages, lost profits and punitive damages against each defendant totaling just under $2.85 million, including $2.5 million in punitive damages.
Prior to trial, the Kaytel defendants had moved in limine to exclude evidence in support of Gasper and JJV's copyright claims, arguing that both Gasper and JJV lacked standing to assert any copyright infringement claim because the complaint alleged that Stagliano's company, EA Productions, had the “exclusive rights to manufacture and distribute Plaintiffs' copyrighted products....” The district court denied the motion because the evidence could have been admissible if relevant to claims brought by other plaintiffs, but dismissed sua sponte JJV and Gasper's copyright infringement claims.
During a recess on the first day of trial the court granted plaintiffs' motion to reconsider and reinstated the copyright claims, concluding that JJV and Gasper could be “beneficial owners under their license agreement with JSI,” and if so, would have standing under 17 U.S.C. § 501(b). The court's order specifically noted that defendants “may revisit the issue should Plaintiffs fail to perfect standing prior the close of Plaintiffs' cases in chief.” Defendants attempted to raise the issue at the close of plaintiffs' case, but the court did not want to delay the trial and instructed defendants to file written motions that would be entertained at the appropriate time.
When the case was first reassigned to Judge Otero, he informed the parties both orally and in written orders that no dispositive motions were to be filed. Prior to trial defendants moved in limine to preclude plaintiffs from introducing evidence in support of their common law claims and sought dismissal of those claims as preempted by the Copyright Act, 17 U.S.C. § 301. The court...
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