Talavera v. Glob. Payments

• Decision Date: 24 April 2023
• Docket Number: 21-CV-1585 TWR (MSB)
• Parties: CHRISTOPHER E. TALAVERA, an individual formerly doing business as TURNKEY WEB TOOLS; and TURNKEY WEB TOOLS, INC., a California corporation, Plaintiffs, v. GLOBAL PAYMENTS, INC., a Georgia corporation; ACTIVE NETWORK, LLC, a Delaware limited liability company; HEARTLAND PAYMENT SYSTEMS, LLC, a Delaware limited liability company; and DOES 1 through 229, inclusive, Defendants.
• Court: U.S. District Court — Southern District of California

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CHRISTOPHER E. TALAVERA, an individual formerly doing business as TURNKEY WEB TOOLS; and TURNKEY WEB TOOLS, INC., a California corporation, Plaintiffs,
v.
GLOBAL PAYMENTS, INC., a Georgia corporation; ACTIVE NETWORK, LLC, a Delaware limited liability company; HEARTLAND PAYMENT SYSTEMS, LLC, a Delaware limited liability company; and DOES 1 through 229, inclusive, Defendants.

No. 21-CV-1585 TWR (MSB)

United States District Court, S.D. California

April 24, 2023

ORDER (1) DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND (2) GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT

(ECF NOS. 55, 60)

Honorable Todd W. Robinson United States District Judge

Presently before the Court are the Cross-Motions for summary judgment filed by Plaintiffs Christopher E. Talavera and Turnkey Web Tools, Inc. (ECF No. 60, “Pls.' MSJ”) and Defendants Active Network, LLC; Global Payments, Inc.; and Heartland Payment

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Systems, LLC^[1] (ECF No. 55; ECF No. 55-1, “Defs.' MSJ”). The Cross-Motions are fully briefed, (see ECF Nos. 55, 60-63), and the Court held a hearing on March 2, 2023, (see ECF No. 66). Having carefully considered the Parties' arguments, the record, and the applicable law, the Court DENIES Plaintiffs' Motion and GRANTS Defendants' Motion.

BACKGROUND

I. Facts

This action arises out of a dispute over a software program called “SunShop.” (ECF No. 63, “Jt. Stmt.” ¶ 3.) In 2001, Plaintiff Christopher Talavera created the source code for the SunShop software program. (Id.) From 2002 to 2003 Talavera operated under the business name “Turnkey Web Tools, Inc.” (“TWT”). (ECF No. 16, “FAC” ¶ 4.)^[2] In June 2003, Talavera incorporated and registered TWT to do business in California. (Jt. Stmt. ¶ 2.) Talavera is the President of TWT. (Id. ¶ 1.)

In February 2004, Talavera obtained a copyright registration certificate for the SunShop software and underlying source code (Copyright No. TX 5-896-387). (Id. ¶ 5; see also FAC ¶ 2.) And in September 2021, Talavera obtained a second copyright registration certificate for a revised version of the SunShop software and source code (Copyright No. TX 9-010-501). (Jt. Stmt. ¶ 6; FAC ¶ 3.) Although TWT does not own these copyrights, (Jt. Stmt. ¶ 8), since its incorporation, TWT has purportedly been authorized by Talavera to act as the exclusive copyright and license administrator for

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SunShop, (FAC ¶ 9; see also ECF No. 61 at 29). This authorization is not memorialized in a written agreement. (Jt. Stmt. ¶ 9.)

From approximately 2007, (Defs.' MSJ at 6; Pls.' MSJ at 8), to 2012,^[3] Blue Bear Corporation (“Blue Bear”) paid Plaintiffs to license the SunShop software program to offer “shopping cart services” to school districts selling merchandise, event tickets, and other online goods and services, (FAC ¶¶ 21, 29). In 2008, Defendant Active Network, LLC (“Active”) wholly acquired Blue Bear, including all license agreements. (ECF No. 8-2, “Loch Decl.” ¶ 12.)^[4] In 2017, Active merged with Defendant Global Payments, Inc. (“GPI”). (Id. ¶ 11.) Now, GPI wholly owns Active as well as Defendant Heartland Payment Systems, LLC (“Heartland”). (Id. ¶ 3.)

In 2013, Active stopped making licensing fee payments to Plaintiffs for the SunShop software, (id. ¶ 13), but Active has continued to use the software through the present day, (id. ¶ 14; see also ECF No. 8 at 10).

II. Procedural History

Plaintiffs initiated this action on September 8, 2021, (see ECF No. 1), and filed a First Amended Complaint on November 9, 2021, (see ECF No. 16). The First Amended Complaint brings eight claims: (1) copyright infringement; (2) induced copyright infringement; (3) violation of the Digital Millenium Copyright Act (“DMCA”) § 1201(a)(2) (Circumvention); (4) violation of the DMCA § 1202 (False/Removed Copyright Management Information); (5) false designation of origin; (6) trade dress infringement;

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(7) unfair competition; and (8) unjust enrichment. (See generally FAC.) Defendants answered on December 20, 2021, (see ECF No. 22), and the Parties completed discovery approximately one year later, (see ECF No. 53).

On December 19, 2022, Defendants filed a Motion for Partial Summary Judgment on Plaintiffs' Fifth, Sixth, and Eighth Claims for Relief. (See Defs.' MSJ.) At Plaintiffs' request, (see ECF No. 57), the Court set a consolidated briefing schedule allowing Plaintiffs to file a Cross-Motion for Summary Judgment, (ECF No. 59). On January 19, 2023, Plaintiffs filed a consolidated Cross-Motion and Opposition to Defendants' Motion. (ECF No. 60.) Defendants then filed a consolidated Opposition to the Cross-Motion and Reply in support of their affirmative Motion, (ECF No. 61), and Plaintiffs filed a Reply in support of their Cross-Motion, (ECF No. 62). The Parties also filed a Joint Statement of Undisputed Facts. (ECF No. 63.) The Court held a hearing on the Cross-Motions on March 2, 2023. (See ECF No. 66.)

LEGAL STANDARD

Under Federal Rule of Civil Procedure 56, a party may move for summary judgment as to a claim or defense or part of a claim or defense. Fed.R.Civ.P. 56(a). Summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Although materiality is determined by substantive law, “[o]nly disputes over facts that might affect the outcome of the suit . . . will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, (1986). A dispute is “genuine” only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. When considering the evidence presented by the parties, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. At 255.

The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex, 477 U.S. at 323. The moving party may meet this burden by “identifying those portions of ‘the pleadings, depositions, answers to interrogatories,

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and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.” Id. “When the party moving for summary judgment would bear the burden of proof at trial, ‘it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.'” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)).

Once the moving party satisfies this initial burden, the nonmoving party must identify specific facts showing that there is a genuine dispute for trial. Celotex, 477 U.S. at 324. This requires “more than simply show[ing] that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, to survive summary judgment, the nonmoving party must “go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,' designate ‘specific facts'” that would allow a reasonable fact finder to return a verdict for the non-moving party. Celotex, 477 U.S. at 324; see also Anderson, 477 U.S. at 248. Accordingly, the nonmoving party cannot oppose a properly supported summary judgment motion by “rest[ing] upon mere allegations or denials of his pleading.” Anderson, 477 U.S. at 256.

Where, as here, the parties have filed cross-motions, the court considers each motion “separately, giving the nonmoving party in each instance the benefit of all reasonable inferences.” See SEC v. Feng, 935 F.3d 721, 728 (9th Cir. 2019). The Court must “consider the appropriate evidentiary material identified and submitted in support of both motions, and in opposition to both motions, before ruling on each of them.” Tulalip Tribes of Wash. v. Washington, 783 F.3d 1151, 1156 (9th Cir. 2015).

ANALYSIS

I. Evidentiary Objections

As a preliminary matter, Defendants raise several objections to the evidence submitted in support of Plaintiffs' Cross-Motion for Summary Judgment, (see ECF No. 616), and Reply in Support of that Cross-Motion, (see ECF No. 64). The Court addresses

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each set of objections in turn.

A. Defendants' Objections to Plaintiffs' Cross-Motion

Pursuant to Section III.B.4 of the undersigned's Standing Order for Civil Cases, “[o]bjections to evidence submitted in support of a motion must be contained within the opposition brief” and “[n]o separate statements of objections will be allowed.” See Standing Order for Civil Cases § III.B.4. Here, Defendants filed their evidentiary objections to Plaintiffs' Cross-Motion in a separate document, (see ECF No. 61-1), rather than in their consolidated Opposition brief, (see ECF No. 61). Defendants' separate statement of objections is ten pages in length, (see generally ECF No. 61-6), on top of Defendants' twenty-six-page briefing, (see generally ECF No. 61). Although Defendants' separate statement of objections violates the undersigned's Standing Order for Civil Cases, in this limited instance the Court will consider Defendants' objections on the merits. The Court, however, cautions Defendants that further violations of the Standing Order will not be excused.

1. Exhibit A

In support of their Cross-Motion, Plaintiffs filed Exhibit A, (ECF No. 60-1, “Pls.' Ex. A”), along with a Declaration from Plaintiffs' counsel Mandana Jafarinejad (the “Jafarinejad Declaration”), which identifies the Exhibit as a “true and correct copy of the First Amended Complaint [ECF No. 16], filed on November 9, 2021,” (ECF No. 60-2, “Jafarinejad Decl.” at 2).^[5] Defendants object to the Exhibit on the grounds that it lacks foundation, lacks authentication, and constitutes...