Kourtis v. Cameron
| Decision Date | 15 August 2005 |
| Docket Number | No. 03-56703.,03-56703. |
| Citation | 419 F.3d 989 |
| Parties | Filia KOURTIS; Con Kourtis, Plaintiffs-Appellants, v. James CAMERON; International Creative Management; Mario P. Kassar; Jeffrey Berg; Joseph Rosenberg, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Patricia J. Barry, Los Angeles, CA, argued the cause for the appellants and filed the briefs.
Marisa G. Westervelt, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro LLP, Los Angeles, CA, and Charles N. Shephard, Greenberg, Glusker, Fields, Claman, Machtinger & Kinsella LLP, Los Angeles, CA, argued the cause for the appellees; Louis R. Miller, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro LLP, Los Angeles, CA, and Howard L. Horwitz, Oberstein, Kibre & Horwitz, LLP, Los Angeles, CA, were on the briefs.
Appeal from the United States District Court for the Central District of California; William Matthew Byrne, Senior District Judge, Presiding. D.C. No. CV-02-02906-WMB.
Before O'SCANNLAIN and WARDLAW, Circuit Judges, and LOVELL,* District Judge.
We must decide whether the creators of the yet-unproduced film The Minotaur are collaterally estopped from pursuing a copyright infringement claim against the producers of Terminator II.
In 1987, Filia and Constantinos Kourtis developed the concept for a film entitled The Minotaur, which details the exploits of a half-man, half-bull that can transform itself into various human and inanimate forms. The Kourtises set forth their ideas in a thirty-page "treatment" that provides a synopsis of the prospective film. They registered this material with the Worldwide Register of Copyrights and then hired William Green to write a screenplay based upon their treatment. The agreement between Green and the Kourtises provided that the Kourtises would own the screenplay's rights.
In 1989, the Kourtises began to shop the screenplay around to various Hollywood production companies. Jeffrey Berg, an employee of International Creative Management ("ICM"), received a copy, and he informed the Kourtises that he would share the materials with film maker James Cameron, who was an ICM client. Cameron contacted the Kourtises and initially expressed an interest in The Minotaur, but ultimately neither Cameron nor anyone else agreed to produce the project.
In 1991, Cameron released the film Terminator II: Judgment Day, which—like The Minotaur—features a character that can transform its appearance into both human and nonhuman forms. Green responded by filing a copyright infringement action in the United States District Court for the Central District of California against Cameron and other persons associated with Terminator II. Green v. Schwarzenegger, No. CV 93-5893(WMB) (C.D. Cal. filed Sept. 29, 1993). Green alleged that he—not the Kourtises—owned the copyright to the Minotaur screenplay and that Cameron had misappropriated The Minotaur's concept of a shape-changing character.
Although Filia Kourtis was deposed by Cameron, the Kourtises did not intervene in Green's suit. The court ultimately found that Terminator II and The Minotaur are not substantially similar and granted summary judgment to Cameron and the other defendants on Green's copyright infringement claim. Green v. Schwarzenegger, No. CV 93-5893(WMB) (C.D.Cal. July 1, 1994), at 8.
The Kourtises, who reside in Australia, then brought suit against Green in an Australian court to determine ownership of the Minotaur materials. After the Kourtises prevailed in that action, see Kourtis v. Green, No. 8497 (Vict. Mar. 19, 1998), they filed their own suit against Cameron1 in the Central District of California, alleging copyright infringement, breach of implied contract, breach of oral contract, and breach of confidence. Like Green, the Kourtises alleged that Cameron had utilized The Minotaur's shape-changing concept in Terminator II without providing payment or attribution.
The district court granted Cameron's motion to dismiss the Kourtises' complaint. The court concluded that the Kourtises are collaterally estopped by the Green decision from relitigating the copyright infringement issue. The court further held that the Kourtises' state law claims are barred by the statute of limitations. The Kourtises timely appealed.
The Kourtises argue that the Green litigation does not preclude their copyright infringement claim because Green's allegations differ from their own and because they were not a party to the earlier proceedings.2
The doctrine of collateral estoppel (or issue preclusion) "prevents relitigation of issues actually litigated and necessarily decided, after a full and fair opportunity for litigation, in a prior proceeding." Shaw, 56 F.3d at 1131. A federal court decision has preclusive effect where
(1) the issue necessarily decided at the previous proceeding is identical to the one which is sought to be relitigated; (2) the first proceeding ended with a final judgment on the merits; and (3) the party against whom collateral estoppel is asserted was a party or in privity with a party at the first proceeding.
Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir.2000).
We address these elements in turn.
There are several factors that guide our determination of whether an issue litigated in a prior case is identical to one raised in later proceedings. Relevant considerations include whether there is a substantial overlap between the evidence in the two cases and whether both suits involve application of the same rule of law. See Resolution Trust Corp. v. Keating, 186 F.3d 1110, 1116 (9th Cir.1999).
Green's suit alleged that Cameron infringed upon The Minotaur's copyright by incorporating a shape-changing character into Terminator II.3 According to the district court's written decision in that case, Green Green, No. CV 93-5893(WMB), at 1-2. Green argued that the "defendants have copied several unique aspects of his screenplays," including the Minotaur's ability to change shape. Id. at 6. After reviewing the screenplays, the Green court granted summary judgment to the defendants because no rational trier of fact could have found substantial similarity between The Minotaur and Terminator II. Id. at 8.
The sole basis for the Kourtises' copyright infringement claim is the allegation that Cameron misappropriated The Minotaur's shape-changing concept for use in Terminator II. See Compl. ¶ 53 ( ); id. ex. 1 (). Notwithstanding the substantial overlap between their arguments and those advanced by Green, the Kourtises contend that collateral estoppel does not attach because their copyright claim is premised upon both the original Minotaur treatment and the screenplay, whereas Green relied exclusively upon the screenplay. The Minotaur treatment, however, contributes nothing new to the infringement inquiry because the treatment's shape-changing elements are also prominently featured in the screenplay considered by the Green court. Indeed, Green's screenplay was wholly based upon the Kourtises' treatment.
The copyright infringement claim asserted by the Kourtises is therefore identical to the one adjudicated in the Green litigation.
Collateral estoppel does not attach merely because the same issue is raised in successive suits. Indeed, "[w]e have in this nation a deep-rooted historic tradition that everyone should have his own day in court," and we accordingly presume that "a judgment or decree among parties to a lawsuit resolves issues as among them, but it does not conclude the rights of strangers to those proceedings." Headwaters Inc. v. U.S. Forest Serv., 399 F.3d 1047, 1050 (9th Cir.2005) (internal quotation marks omitted). Because the Kourtises were not a party to the Green litigation, they are free to relitigate the copyright infringement issue unless they were in privity with Green.4
Privity "is a legal conclusion designating a person so identified in interest with a party to former litigation that he represents precisely the same right in respect to the subject matter involved." United States v. Schimmels, 127 F.3d 875, 881 (9th Cir.1997) (internal quotation marks omitted). Because the concept of privity extends the reach of a judicial decision to nonparties and thereby deprives them of their own day in court, due process considerations make adequacy of representation a prerequisite to privity. Indeed, the Supreme Court has repeatedly emphasized that "it would violate the Due Process Clause . . . to bind litigants to a judgment rendered in an earlier litigation to which they were not parties and in which they were not adequately represented." Richards v. Jefferson County, 517 U.S. 793, 794, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996); see also Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 329, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971) ( ...
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