Optima Media Grp. Ltd. v. Bloomberg L.P.

• Decision Date: 29 March 2019
• Docket Number: 17-cv-1898(AJN)
• Citation: 383 F.Supp.3d 135
• Parties: OPTIMA MEDIA GROUP LIMITED, et al., Plaintiffs, v. BLOOMBERG L.P., Defendant.
• Court: U.S. District Court — Southern District of New York

383 F.Supp.3d 135

OPTIMA MEDIA GROUP LIMITED, et al., Plaintiffs,

v.BLOOMBERG L.P., Defendant.

17-cv-1898(AJN)

United States District Court, S.D. New York.

Signed March 29, 2019

Filed April 17, 2019

Mark Daehee Lee, Watson, Farley & Williams, LLP, Robert Mantel, Joshua Samuel Sohn, Stroock & Stroock & LaVan LLP, New York, NY, for Plaintiffs.

Brad Scott Karp, Lorin L. Reisner, Paul Weiss, New York, NY, Justin Anderson, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC, for Defendant.

OPINION & ORDER

ALISON J. NATHAN, District Judge:

This case arises from a contract between Optima Media Group Limited ("Optima") and Optima Sports Management International (UK) Limited ("Optima Sports") and Bloomberg L.P. ("Bloomberg"). Bloomberg contracted with Optima to produce and distribute Africa-specific business news programming. Optima Sports served as Optima's guarantor. After Bloomberg terminated the contract, Optima and Optima Sports sued. Bloomberg counterclaimed, contending that Optima and Optima Sports breached the contract, that Bloomberg was fraudulently induced to enter the contract, and that Optima used Bloomberg's trademarks without authorization. Optima has moved to dismiss these counterclaims on several grounds. For the reasons explained below, Optima's motion is granted in part and denied in part.

I. Background

The Court takes the following facts from Bloomberg's Answer ("Ans."). Dkt. No. 49, and its Amended Counterclaims ("Am. Counter."), Dkt. 58. The Court also considers the January 2012 contract at issue in this case (the "Agreement"), a May 2012 amendment to the Agreement (the "Amendment"), and a press release that Bloomberg incorporated in its Answer. Harris v. Coleman , 863 F. Supp. 2d 336, 341 (S.D.N.Y. 2012) ("In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the counterclaim, documents attached to the counterclaim as exhibits, and documents incorporated by reference in the complaint.") (quoting DiFolco v. MSNBC Cable L.L.C. , 622 F.3d 104, 111 (2d Cir. 2010) (internal brackets omitted)).

Bloomberg is a media company that produces television programming and distributes content, with a principal place of business in New York. Agreement at 1; Am. Counter. ¶ 2. Optima is a Nigerian media company with a principal place of business in Lagos, Nigeria. Am. Counter. ¶ 3. Optima Sports is an English Corporation and has its principal place of business in London, England. Id. ¶ 4. Bloomberg sought to contract with Optima to produce Africa-related business news and to distribute that content, along with other Bloomberg television programming, in Africa. Bloomberg alleges that leading up to the execution of the January 2012 contract between the parties (the "Agreement"). Optima represented to Bloomberg that "it was financially solvent and fully capable of assuming responsibility for the production, administration, and management necessary to offer live programming meeting Bloomberg brand standards." Id. ¶ 8. Optima also allegedly presented itself as having experience in the acquisition and distribution of television channels and satellite programming. Id. Bloomberg alleges that during the course of negotiations it relied on Optima's claims. Id. ¶ 9.

A. The Agreement

In January 2012, the parties signed the Agreement, contracting "to create original live programming with the editorial, technical and substantive style of BTV" that would be branded as "Bloomberg West Africa" and distributed into certain African markets. Agreement at 1, Under the Agreement, on or before June 30, 2012, Optima would produce "a live weekday programming window or windows of not more than four (4) hours per day in duration (‘the Channel Window’)" that would consist primarily of business news, general news, and current affairs programming for a West African audience. Agreement ¶¶ 1(a)(i), 1(a)(iv)(a). As to the Channel Window, Optima was responsible for "all production and administration," "management of al day-to-day operations," "payment of all ‘set up’ and maintenance costs," and "such other administrative functions as are customary for the operation of a channel or programming similar to the Channel Window." Agreement ¶¶ 1(a)(ii)(b)(i), (ii), (xii), 1(a)(ii)(a). Optima agreed to obtain and maintain, at its own expense "any and all rights, licenses, approvals, clearances, releases, [and] local[ ] and international authorizations" necessary to perform its contractual obligations and to operate its business under the Agreement. Agreement ¶ 12(b)(iv), (1)(a)(ii)(b)(xi); Amendment ¶ 2. Optima also represented that it would comply with all applicable laws with respect to its rights and obligations under the Agreement. Agreement ¶ 12(b)(v). Finally, Optima generally represented that it would "fulfill its obligations to Bloomberg ... [as] set forth in the Agreement." Agreement ¶ 12(b)(i).

The Agreement also contained a number of provisions on the use of Bloomberg's marks, names, and other intellectual property, including " ‘Bloomberg,’ ‘Bloomberg Television,’ and ‘BTV,’ and any variations or derivatives thereof." Agreement ¶ 9; Am. Counter. ¶ 13. Optima was prohibited from using these marks in any manner that "would tend to devalue, injure or dilute the goodwill or reputation of Bloomberg, its Affiliated Companies, its licensors or the Bloomberg Marks." Agreement 4(b)(ii). The Agreement also required that Optima strictly adhere to the Bloomberg Editorial Code of Ethics, that programming be consistent with Bloomberg's journalistic integrity and standards, and that the programming not be inappropriate or embarrassing to Bloomberg. Agreement ¶¶ 1(a)(ii)(b)(viii), 1(a)(iii)(b), 2, 2(b), 2(c). Upon termination of the Agreement, Optima's rights to Bloomberg's marks would terminate immediately and Optima was required to immediately cease representing to the public any affiliation with Bloomberg in connection with the Agreement. Agreement ¶ 8(b)(iv).

B. Optima and Optima Sport's Alleged Failures to Perform

Under the Agreement, Optima was to begin producing content by June 2012, but it did not begin doing so until at least November 2013. Am. Counter. ¶ 21. Bloomberg alleges that Optima never produced a live weekday programming window on a weekly basis with the "editorial, technical, and substantive style" of Bloomberg Television. Id. (quoting Agreement ¶ 1(a)(i); Agreement at 1). This was allegedly attributable in large part to Optima's persistent failure to make payments to its staff, as well as vendors, governments, and other third parties. Id. ¶ 22. This led to a host of problems, which Bloomberg details at length: work stoppages and staff departures, loss of access to content, cancellation of programming, threats of lawsuits by unpaid vendors, unpaid taxes, and other delays. Id. ¶¶ 23-37. Some of these affected Bloomberg directly, such as Optima's failure to pay hundreds of thousands of dollars in fees Bloomberg had invoiced and the cancellation of an interview that Bloomberg had helped to arrange. Id. ¶¶ 30, 35-36.

Bloomberg also alleges that Optima failed to comply with the Nigerian regulatory process and obtain the requisite approvals for the exchange of large amounts of foreign currency. Id. ¶ 39. This was despite the fact that "other commercial entities" in Nigeria were able to perform foreign exchange transactions and convert currency. Id. ¶ 40. Optima's inability to convert currency was part of the reason for its failure to pay its staff and vendors. Id. ¶ 39. Optima also failed to obtain approvals to shoot in certain public areas but did so anyway. Id. ¶ 41. Finally, Bloomberg received complaints that persons affiliated with Optima were benefiting financially from stories that they produced and Bloomberg was informed by third parties that Optima had "developed a poor reputation" and that there were concerns over the quality of Bloomberg TV Africa. Id. ¶¶ 42-43.

Bloomberg terminated the Agreement on May 7, 2015. Id. ¶ 47. Weeks after this termination, Bloomberg received information from an Optima employee, Richard Harrison, detailing Optima's outstanding debts, allegations of fraud against Optima's CEO, and purported pending government investigations into Optima. Id. ¶ 48.

For at least seven months after the termination of the Agreement, Optima continued to use several communication channels that included the Bloomberg name including: www.bloombergtvafrica.com; www.bloomberg-optimamedia.com; the email address for Bloomberg-optimamedia.com; a Facebook page for Bloomberg TV Africa ("btvafrica"); a btvafrica YouTube page; and a @bloombergtvafri Twitter feed. Am. Counter. ¶ 53-54. Bloomberg sent Optima several cease and desist letters regarding Optima's use of the registered marks "Bloomberg" and "BTV." Am. Counter. ¶¶ 56-57. Bloomberg also petitioned Youtube and Facebook to take down the allegedly infringing pages. Am. Counter. ¶ 55. Optima continues to operate a live YouTube page entitled "BTVA Newsroom," a live Facebook account called "BTVA Newsroom," a live Instagram page named "@btvanewsroom," and a live Twitter feed at "@btvanews." Am. Counter. ¶ 58. Each of these bears "an orange logo evocative of Bloomberg's brand, and each display[s] on-screen visual elements belonging to Bloomberg." Am. Counter. ¶ 58. Bloomberg alleges that Optima's actions have undermined goodwill towards Bloomberg and its reputation for quality broadcasting, as well as deterred potential Bloomberg licensees.

II. Legal Standard

"A motion to dismiss a counterclaim is evaluated under the same standard as a motion to dismiss a claim in a complaint." Dentsply Int'l Inc. v. Dental Brands for Less LLC, No. 15-cv-8775 (LGS), 2016 WL 6310777, at *2 (S.D.N.Y. Oct. 27, 2016) (citing Keep on Kicking Music, Ltd. v. Hibbert, No. 15-cv-7464 (WHP), 2016 WL 4386047, at *2 (S.D.N.Y. Aug. 17, 2016) ). To survive a motion to dismiss for failure to state a claim under Rule 12(b)(6), the complaint must...