YellowCake, Inc. v. Dashgo, Inc.
| Decision Date | 19 January 2022 |
| Docket Number | 1:21-CV-0803 AWI BAM |
| Court | U.S. District Court — Eastern District of California |
| Parties | YELLOWCAKE, INC., a California corporation, Plaintiffs v. DASHGO, INC., a Delaware corporation, and AUDIOMICRO, INC. d/b/a ADREV, a Delaware corporation, Defendants |
ORDER ON DEFENDANT'S MOTIONS TO DISMISS, TO STRIKE, AND FOR MORE DEFINITE STATEMENT (DOC. NO 10)
This is a copyright infringement action that stems from the alleged improper infringement by Defendants Dashgo, Inc. (“Dashgo”) and Audiomicro, Inc. d/b/a Adrev (“Adrev”) (collectively “Defendants”) of hundreds of domestic and foreign copyrighted works owned by Plaintiff Yellowcake, Inc. (“Yellowcake”). The operative complaint is the First Amended Complaint (“FAC”). Currently before the Court is a Rule 12(b)(6) motion to dismiss, a Rule 12(e) motion for more definite statement, and a Rule 12(f) motion to strike, all filed by Defendants. For the reasons that follow, the Rule 12(b)(6) motion will be granted.
Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In reviewing a complaint under Rule 12(b)(6), all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Kwan v. SanMedica, Int'l 854 F.3d 1088, 1096 (9th Cir. 2017). However, complaints that offer no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Johnson v. Federal Home Loan Mortg. Corp., 793 F.3d 1005, 1008 (9th Cir. 2015). The Court is “not required to accept as true allegations that contradict exhibits attached to the Complaint or matters properly subject to judicial notice, or allegations that are merely conclusory unwarranted deductions of fact, or unreasonable inferences.” Seven Arts Filmed Entm't, Ltd. v. Content Media Corp. PLC, 733 F.3d 1251, 1254 (9th Cir. 2013). To avoid a Rule 12(b)(6) dismissal, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678; Mollett, 795 F.3d at 1065. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678; Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). “Plausibility” means “more than a sheer possibility, ” but less than a probability, and facts that are “merely consistent” with liability fall short of “plausibility.” Iqbal, 556 U.S. at 678; Somers, 729 F.3d at 960. If a motion to dismiss is granted, “[the] district court should grant leave to amend even if no request to amend the pleading was made . . . .” Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th Cir. 2016). However, leave to amend need not be granted if amendment would be futile or the plaintiff has failed to cure deficiencies despite repeated opportunities. Garmon, 828 F.3d at 842.
Rule 12(e) allows a party to “move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response.” Fed.R.Civ.P. 12(e). That is, if a “pleading fails to specify the allegations in a manner that provides sufficient notice, a defendant can move for a more definite statement under Rule 12(e) before responding.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002). A Rule 12(e) movant “must point out the defects complained of and the details desired.” Fed.R.Civ.P. 12(e); Gillibeau v. Richmond, 417 F.2d 426, 431 & n.5 (9th Cir. 1969); Estate of Prasad v. County of Sutter, 958 F.Supp.2d 1101, 1124 (E.D. Cal. 2013). Rule 12(e) motions attack “the unintelligibility of the complaint, not simply the mere lack of detail, and is only proper when a party is unable to determine how to frame a response to the issues raised by the complaint.” Neveau v. City of Fresno, 392 F.Supp.2d 1159, 1169 (E.D. Cal. 2005); see also Estate of Prasad, 958 F.Supp.2d at 1124. Rule 12(e) motions are disfavored and rarely granted. Sanchez v. City of Fresno, 914 F.Supp.2d 1079, 1122 (E.D. Cal. 2012). Where a party understands the substance of the claim asserted and can obtain the details sought in the Rule 12(e) motion through discovery, a Rule 12(e) motion need not be granted. Medrano v. Kern Cnty. Sheriff's Office, 921 F.Supp.2d 1009, 1018 (E.D. Cal. 2013); Sanchez, 914 F.Supp.2d at 1122.
Rule 12(f) of the Federal Rules of Civil Procedure allows the court to strike from “any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). The purpose of a Rule 12(f) motion is to avoid the costs that arise from litigating spurious issues by dispensing with those issues prior to trial. See Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir 2010); Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir.1983). The grounds for the motion to strike must appear on the face of the pleading or from matters that are properly the subject of judicial notice. See Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1528 (9th Cir. 1993).[1] Motions to strike are generally viewed with disfavor, and will usually be denied unless the allegations in the pleading have no possible relation to the controversy. Hawkins, 62 F.Supp.3d at 1149; Sliger v. Prospect Mortg., LLC, 789 F.Supp.2d 1212, 1216 (E.D. Cal. 2011).
From the Complaint, Yellowcake is in the business of exploiting intellectual property rights, including digital music distribution. Yellowcake and its predecessors-in-interest have always owned the exclusive copyrights in inter alia 165 domestic copyrighted sound recordings[2](“the Domestic Works”) and 1, 075 foreign copyrighted sound recordings (“the Foreign Works”).
Yellowcake or its predecessors have registered with the United States Copyright Office the Domestic Works and received Certificates of Registration for each sound recording. Yellowcake acquired all of its predecessors-in-interest's rights associated with the Domestic Works. The Foreign Works were duly registered in Mexico, which is the country of first publication. Yellowcake acquired all of its predecessors-in-interest's rights associated with the Foreign Works. The Foreign Works are subject to copyright protection in the United States pursuant to The Berne Convention for the Protection of Literary and Artistic Works and the Copyright Act of 1976, as amended. Yellowcake is the exclusive owner of all rights in the Domestic Works and the Foreign Works, including the exclusive rights to sell, distribute, and publicly perform those works.
Dashgo sells and distributes music throughout the world using internet distribution and retail channels. Adrev performs business, administrative, distribution, and technological functions in connection with Dashgo's business operations. Dashgo is a wholly owned subsidiary of Adrev, and Adrev dominates the management of Dashgo. Dashgo had a contractual right to exploit the Domestic Works and Foreign Works pursuant to two distribution agreements. One agreement was between Dashgo and Colonize Media (the “Colonize Agreement”), and the other agreement was between Dashgo and MAR International Records (“the MAR Agreement”). Both of these agreements were validly terminated under the terms of those agreements after Yellowcake had acquired the exclusive ownership of all rights in the Domestic Works and the Foreign Works. Dashgo acknowledged in writing that both the Colonize Agreement and the MAR Agreement were validly terminated in writing and that it would cease distributing the Domestic Works and the Foreign Works. Yellowcake did not enter another distribution agreement with Dashgo, and Dashgo did not obtain any valid rights to exploit the Domestic Works and Foreign Works from any third party after Yellowcake terminated the Colonize Agreement and the MAR Agreement. Whatever rights Dashgo may have had in the Domestic Works and Foreign Works no longer exist.
Despite the termination of the two distribution agreements, Dashgo has engaged in a number of unauthorized exploitations of the Domestic Works and Foreign Works, all in violation of Yellowcake's exclusive rights under 17 U.S.C. § 106. Dashgo has inter alia sold, distributed, reproduced, synchronized, created derivative works, and publicly performed Domestic Works and Foreign Works through digital transmission on online Digital Distribution Platforms (i.e. iTunes, Apple Music, Spotify, Amazon Music, and YouTube) without Yellowcake's authorization. Dashgo created and/or uploaded or caused to be created and/or uploaded videos containing unauthorized derivative works of the Domestic Works and Foreign Works. Dashgo continues to benefit from the unauthorized exploitations of the Domestic Works and Foreign Works. Adrev performed inter alia distribution and technological functions for Dashgo in connection with the unauthorized exploitation of the Domestic Works and Foreign Works.
On multiple occasions, Yellowcake through its agent Colonize Music has notified either Dashgo or its agent/business affiliate Adrev, of the unauthorized exploitation of the Domestic Works and Foreign Works and demanded that Defendants cease their infringing conduct. Adrev contacted Colonize to discuss unauthorized exploitations by Dashgo. Nevertheless, Dashgo and Adrev continue their unauthorized exploitation. Despite confirming that all unauthorized uses would cease, Defendants have engaged in at least 165 unauthorized uses of the Domestic Works.
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