JW & JJ Entm't, LLC v. Sandler, Civil Action No. 8:13-cv-01609-AW

CourtUnited States District Courts. 4th Circuit. United States District Court (Maryland)
Writing for the CourtAlexander Williams
PartiesJW & JJ ENTERTAINMENT, LLC et al., Plaintiffs, v. MARK SANDLER, Defendant.
Decision Date26 September 2013
Docket NumberCivil Action No. 8:13-cv-01609-AW

JW & JJ ENTERTAINMENT, LLC et al., Plaintiffs,
v.
MARK SANDLER, Defendant.

Civil Action No. 8:13-cv-01609-AW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOUTHERN DIVISION

Date: September 26, 2013


MEMORANDUM OPINION

Plaintiffs have filed a Complaint for Declaratory Judgment and Preliminary and Permanent Injunctive Relief ("Complaint"). Plaintiffs' Complaint involves a contract dispute. Defendant has filed a Motion to Dismiss. The Court has reviewed the record and deems a hearing unnecessary. For the following reasons, the Court GRANTS IN PART AND DENIES IN PART Defendant's Motion to Dismiss.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs are an assemblage of individuals and corporate entities who are movie producers. Plaintiffs are in the process of producing a movie based on the life story of boxer Roberto Durán Samaniego ("Roberto Duran" or "Duran"). Plaintiffs plead that Duran is widely regarded as one of the greatest boxers of all time. Defendant Mark Sandler ("Sandler" or "Defendant") is an individual who lives in Maryland. Basically, Plaintiffs allege that Sandler has indicated that he will sue them if they make their movie without paying him.

The dispute has its origins in a business relationship gone awry between Sandler and Duran. On February 12, 1995, Sandler, Duran, and Duran's wife, Felicida Durán, entered into a

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management contract ("Sandler-Duran Agreement" or "Agreement"). The Agreement generally provides that Sandler would manage all of Duran's business affairs and that, to effectuate these purposes, Duran would grant Sandler certain rights.

Section 5 of the Agreement contains one such grant. As the dispute centers on the meaning and effect of Section 5, the Court reproduces it in its entirety:

Duran grants to Sandler the exclusive right worldwide to use the name "Roberto Duran" or any form thereof and any image or likeness of Duran in any form whether photographic, electronic, videotape, audio or audio tape, literary, news clipping, magazine or otherwise for whatever purpose Sandler deems appropriate. Duran warrants that Sandler has exclusive rights to the Duran name, image, and likeness and that he has given and will give no other party said property. Duran expressly gives to Sandler the rights to Duran's life story and understands that Duran's life story may be documented in book, movie and/or television form. Duran will cooperative [sic] with Sandler to create Duran's life story.

Doc. No. 7-6 § 5, at 3.

Sandler asserts that Duran breached the Agreement. Sandler further states that, after giving Duran notice and an opportunity to cure, he terminated the Agreement and reserved all of his rights under it. Section 15 of the Agreement states that Sandler could terminate it if Duran breached it and that Sandler would retain all rights under it if he elected to terminate it based on Duran's breach. See id. § 15, at 6.

After Duran's alleged breach, Sandler states that he sued Duran and his wife in the Circuit Court for Montgomery County, Maryland. Although "Duran Enterprises, LLC" was the plaintiff in that suit, Sandler asserts that Duran assigned all of his rights under the Agreement to

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Duran Enterprises pursuant to a term of the Agreement. On February 19, 1997, a default judgment was entered in favor of Duran Enterprises against Duran and his wife in the amount of $356,390.19. Doc. No. 7-10.

Plaintiffs allege that, in March 2007, Duran and a company named Compadre, LLC entered into a contract pursuant to which Duran purported to grant certain rights to Compadre, including his "exclusive life story rights." Doc. No. 1 ¶ 12; see also Doc. No. 1-2 at 2-3. Allegedly, through a series of transactions whose details are irrelevant here, Duran's life story rights were transferred to Plaintiffs. See generally Doc. No. 1 ¶¶ 13-28. Pursuant to some of these transactions, Plaintiffs allege that, starting in 2009, they have been working diligently to make a movie based on Duran's life story, the working title of which is "Hands of Stone." Plaintiffs add that they have paid hundreds of thousands of dollars for the rights to make Hands of Stone and have incurred millions of dollars in production costs. See id. ¶¶ 26, 28.

In October 2012, Sandler allegedly spoke with Plaintiff Weisleder by telephone and told him that he owns the rights to Duran's life story. Plaintiffs generally allege that Sandler has stated that he will sue them unless Plaintiffs pay him a certain amount of money.

On June 4, 2013, Plaintiffs filed a Complaint based on the foregoing allegations. Plaintiffs allege that the Court has both diversity and federal question jurisdiction over the case. Federal question jurisdiction allegedly arises from a First Amendment challenge that Plaintiffs would make if Sandler asserted his rights to Duran's life story pursuant to the Sandler-Duran Agreement. Under Count I, Plaintiffs request a judgment declaring that:

i. Defendant has no right to interfere with the production and marketing of Hands of Stone;

ii. Defendant does not have a viable cause of action against Plaintiffs;

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iii. The Sandler-Duran Agreement is void for vagueness;

iv. The Sandler-Duran Agreement is an illegal contract of adhesion;

v. Duran did not breach the Sandler-Duran Agreement by purporting to assign his life story rights to Plaintiffs;

vi. Defendant cannot state a claim for tortious interference with contract;

vii. The First Amendment would bar Sandler's claims.

Doc. No. 1 ¶ 50, at 13-15. For its part, Count II contains a request for preliminary and permanent injunctive relief. Id. ¶¶ 51-52.

On July 19, 2013, Defendant filed a Motion to Dismiss with Prejudice or, in the Alternative, for Complete or Partial Summary Judgment ("Motion to Dismiss"). Doc. No. 7. Defendant asserts that the Agreement gives him exclusive rights to Duran's life story and argues that Plaintiffs' claims are therefore unfounded. Defendant also raises a res judicata argument based on the state court litigation. Plaintiffs filed their Opposition on August 23, 2013. Doc. No. 10. Plaintiffs more or less make the same arguments that they allege under Count I of their Complaint. Defendant has filed a Reply. Doc. No. 11.

II. STANDARD OF REVIEW

The purpose of a 12(b)(6) motion to dismiss is to test the sufficiency of the plaintiff's complaint. See Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). In two recent cases, the U.S. Supreme Court has clarified the standard applicable to Rule 12(b)(6) motions. Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). These cases make clear that Rule 8 "requires a 'showing,' rather than a blanket assertion, of entitlement to relief." Twombly, 550 U.S. at 556 n.3 (quoting Fed. R. Civ. P. 8(a)(2)). This

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showing must consist of at least "enough facts to state a claim to relief that is plausible on its face." Id. at 570.

In deciding a motion to dismiss, the court should first review the complaint to determine which pleadings are entitled to the assumption of truth. See Iqbal, 129 S. Ct. at 1949-50. "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. In so doing, the court must construe all factual allegations in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999). The Court need not, however, accept unsupported legal allegations, Revene v. Charles County Commissioners, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979).1

III. LEGAL ANALYSIS

A. Federal Jurisdictional Question

Plaintiffs assert that the Court has both federal question and diversity jurisdiction over their claims. Plaintiffs ground this assertion on a First Amendment argument. The essence of this argument is that the Court would violate their First Amendment rights by enforcing the Sandler-Duran Agreement because Duran is famous and they have a constitutional right to make a movie based on his life story. Defendant responds that there is no governmental action because the

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dispute is between private parties. Although jurisdiction does not depend on this question, the Court answers it because it is dispositive of Plaintiffs' substantive First Amendment argument.

It is well-established that "[t]he Constitution's protections of individual liberty and equal protection apply in general only to action by the government." See, e.g., Edmonson v. Leesville Concrete Co., Inc., 500 U.S. 614, 619 (1991) (citing Nat'l Collegiate Athletic Ass'n v. Tarkanian, 488 U.S. 179, 191 (1988)). Thus, "[i]n our constitutional scheme, [the] state action doctrine protects the private sector from the restrictions imposed on the conduct of government." Andrews v. Fed. Home Loan Bank of Atlanta, 998 F.2d 214, 216 (4th Cir. 1993). However, "[i]n certain circumstances, a private actor can still be bound by constitutional limitations because its conduct is fairly attributable to the state." Id. at 217 (citation and internal quotation marks omitted). "In order to show state action by a private entity, . . . it must be demonstrated that the private party charged with the deprivation could be described in all fairness as a state actor." Id. (citation and internal quotation marks omitted). One can deem a private party a governmental actor in four contexts, one of which is relevant here. See id. This occurs "when the state has committed an unconstitutional act in the course of enforcing a right of a private citizen." Id.

"Court enforcement of private agreements may constitute state action." USA Techs. Inc. v. Tirpak, Civil Action No. 12-2399, 2012 WL 1889157, at *8 (E.D. Pa. May 24, 2012)...

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