Montz v. Pilgrim Films & Television Inc

• Decision Date: 03 June 2010
• Docket Number: No. 08-56954.,08-56954.
• Citation: 606 F.3d 1153
• Parties: Larry MONTZ; Daena Smoller, Plaintiffs-Appellants,v.PILGRIM FILMS & TELEVISION, INC.; NBC Universal, Inc.; Craig Piligian; Jason Conrad Hawes; Universal Television Networks, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

606 F.3d 1153

Larry MONTZ; Daena Smoller, Plaintiffs-Appellants,v.PILGRIM FILMS & TELEVISION, INC.; NBC Universal, Inc.; Craig Piligian; Jason Conrad Hawes; Universal Television Networks, Defendants-Appellees.

No. 08-56954.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 4, 2010.

Filed June 3, 2010.

COPYRIGHT MATERIAL OMITTED

Howard B. Miller, of Girardi Keese, Los Angeles, CA, argued the cause for the plaintiffs-appellants. Joseph C. Gjonola, of Girardi Keese, Los Angeles, CA, filed the briefs. Graham B. LippSmith, of Girardi Keese, Los Angeles, CA, was also on the briefs.

Gail Migdal Title, of Katten Muchin Rosenman LLP, Los Angeles, CA, argued the cause for the defendants-appellees. Joel R. Weiner, of Katten Muchin Rosenman LLP, Los Angeles, CA, filed a brief. Gail Migdal Title and Gloria C. Franke, of Katten Muchin Rosenman LLP, Los Angeles, CA, were also on the brief.

Appeal from the United States District Court for the Central District of California, Florence-Marie Cooper, District Judge, Presiding. D.C. No. 2:06-cv-07174-FMC-MAN.

Before: DIARMUID F. O'SCANNLAIN and RICHARD C. TALLMAN, Circuit Judges, and JOAN HUMPHREY LEFKOW, District Judge.^*

OPINION

O'SCANNLAIN, Circuit Judge:

We consider whether federal copyright law preempts state-law claims alleging the unauthorized use of screenplays, videos, and other materials in the production of a cable television series.

IA

In November 2006, plaintiffs Larry Montz, a parapsychologist, and Daena Smoller, a publicist, filed a complaint in federal district court. They claimed that in 1981, Montz conceived of the concept for a new reality television program featuring a team of “paranormal investigators.” As allegedly envisioned by Montz, each hour-long episode would follow the team's members to a different real-world location, where they would use magnetometers, infrared cameras, and other devices to investigate (and occasionally debunk) reports of paranormal activity.

The complaint alleges that between 1996 and 2003, the plaintiffs presented screenplays, videos, and other materials relating to their proposed show to representatives of NBC Universal, Inc., and the Sci-Fi Channel (now the Syfy Channel), “for the express purpose of offering to partner ... in the production, broadcast and distribution of the Concept.” The representatives were allegedly not interested in the concept for the show. According to the complaint, however, NBC Universal subsequently partnered with Craig Piligian and Pilgrim Films & Television, Inc., to produce a series on the Sci-Fi Channel based on the plaintiffs' materials. The show, called Ghost Hunters, stars Jason Hawes as the leader of a team of investigators who travel across the country to study paranormal activity.

The plaintiffs brought various causes of action against NBC Universal, Pilgrim Films, Piligian, Hawes, and ten unknown other defendants. The complaint alleges that the defendants engaged in unauthorized use of the plaintiffs' materials, in violation of their exclusive rights under federal copyright law. In addition, it alleges several state-law claims, two of which are relevant here: (1) that “by producing and broadcasting” Ghost Hunters, the defendants breached an “implied agreement not to disclose, divulge or exploit the Plaintiffs' ideas and concepts without the express consent of the Plaintiffs, and to share with the Plaintiffs ... the profits and credit for their idea and concepts”; and (2) that the defendants breached the plaintiffs' confidence “[b]y taking the Plaintiffs' novel ideas and concepts, exploiting those ideas and concepts, and profiting therefrom to the Plaintiffs' exclusion.”

B

In April 2007, the defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. The district court granted in part and denied in part the defendants' motion in July 2007. The court concluded that the complaint alleged facts sufficient to state a federal copyright claim, but that federal copyright law preempted the plaintiffs' state-law breach-of-implied-contract and breach-of-confidence claims. The court dismissed the state-law claims with prejudice and without leave to amend.

In August 2008, the plaintiffs amended their copyright claim and added Universal Television Networks as a defendant. The parties, however, subsequently stipulated to voluntary dismissal of the amended copyright claim with prejudice, and the district court dismissed the claim accordingly. With no remaining claims to be adjudicated, the district court entered final judgment in favor of the defendants.

II

The plaintiffs timely appeal the dismissal of their state-law breach-of-implied-contract and breach-of-confidence claims. In their view, the district court erred in ruling their claims preempted by 17 U.S.C. § 301(a), which provides:

[A]ll legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103 ... are governed exclusively by this title.... [N]o person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

By its terms, § 301(a) sets forth two conditions for preemption. First, the state-law claim must assert rights in “works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by [17 U.S.C. §§ 102 and 103].” Second, the rights asserted under state law must be “equivalent” to the exclusive rights of copyright owners specified by 17 U.S.C. § 106. A state-law claim is preempted under § 301(a) only if both conditions are satisfied. See

Laws v. Sony Music Entm't, Inc., 448 F.3d 1134, 1137-38 (9th Cir.2006).

A

We begin with the plaintiffs' breach-of-implied-contract claim. The district court ruled that the claim-which asserts rights in screenplays, videos, and other tangible media-comes within the “subject matter of copyright” and thus satisfies the first condition for preemption. The plaintiffs do not challenge this ruling on appeal. Our inquiry is therefore limited to whether the claim satisfies the second condition-that is, whether the rights asserted under the claim are “equivalent” to the exclusive rights of copyright owners under § 106.

Section 106 confers upon copyright owners the exclusive rights to reproduce, to distribute, and to display original works of authorship, and to prepare works derived from the originals. 17 U.S.C. § 106. Section 106 also gives copyright owners the exclusive right to authorize such reproduction, distribution, display, and preparation. Id. “To survive preemption, the state cause of action must protect rights which are qualitatively different from the copyright rights. The state claim must have an extra element which changes the nature of the action.” Laws, 448 F.3d at 1143 (internal quotation marks omitted).

The plaintiffs' breach-of-implied-contract claim consists of the following allegations: that “[t]he Plaintiffs presented their ideas for the ‘Ghost Hunter’ Concept to the Defendants[ ] in confidence ... for the express purpose of offering to partner with the Defendants in the production, broadcast and distribution of the Concept”; that “by accepting the Plaintiffs' disclosure of its concept,” the defendants agreed that they “would not disclose, divulge or exploit the Plaintiffs' ideas and concepts without compensation and without obtaining the Plaintiffs' consent”; and that “by producing and broadcasting the Concept,” “[t]he Defendants breached their implied agreement not to disclose, divulge or exploit the Plaintiffs' ideas and concepts without the express consent of the Plaintiffs, and to share with the Plaintiffs ... the profits and credit for their idea and concepts.” The gravamen of the claim is that the defendants used the plaintiffs' work, without authorization, to create (and then profit from) a new television program. The rights asserted by the plaintiffs under the implied contract are thus equivalent to the rights of copyright owners under § 106-namely, the exclusive rights to use and to authorize use of their work.

The plaintiffs counter that Grosso v. Miramax Film Corp., 383 F.3d 965 (9th Cir.2004), compels a different conclusion. Grosso involved a particular type of breach-of-implied-contract claim, the elements of which the California Supreme Court elucidated in Desny v. Wilder, 46 Cal.2d 715, 299 P.2d 257 (1956). To state a Desny claim, the plaintiff must plead that he “prepared the work [at issue], disclosed the work to the offeree for sale, and did so under circumstances from which it could be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and the reasonable value of the work.” Grosso, 383 F.3d at 967 (citing Faris v. Enberg, 97 Cal.App.3d 309, 158 Cal.Rptr. 704, 709 (1979)). “[M]irror[ing] the requirements of Desny,” the complaint in Grosso alleged that the plaintiff had given the defendants an idea for a movie “with the understanding and expectation ... that [he] would be reasonably compensated for its use by Defendants.” Id. (internal quotation marks omitted). We concluded that the defendants' “implied promise to pay” for use of the plaintiff's idea constituted “an ‘extra element’ for preemption purposes.” Id. at 968. Accordingly, we held that the plaintiff's Desny claim survived preemption under § 301 Id.

Contrary to the plaintiffs' assertion, however, the present case is distinguishable from Grosso. There, the plaintiff allegedly disclosed his idea to the defendants for the express purpose of offering it for sale; the defendants allegedly accepted the offer and, in return, made an implied promise to pay for use of the idea. Here, by contrast, the plaintiffs...