Notice of Electronic Filing. Arc Music, lnc. v. Wayne Henderson Sr. et al 2:09-cv DSF-CW

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1 Third Story Music, Inc. v. Wayne Henderson Sr. et al Doc. 57 Att. 4 3t24t2010 Activity in Case 2:09-cv DSF-CW... From : cacd_ecfm a i l@cacd. us co u rts.gov To: ecfnef@cacd. u s cou rts.gov Subject: ActiMty in Case 2:09-cv DSF-CWArc Music, Inc. v. Wayne Henderson Sr. et al Order on Motion to Dismiss Date: Wed, \llar 24,20109:48 am This is an automatic message generated by the cm/ecf system. please Do NoT REspoND to this e- mail because the mail box is unattended. "**NOTE TO PUBLIC ACCESS USERS*** Judicial Conference of the United States policy permits attorneys of record and parties in a case (including pro se litigants) to receive one free electronictopy of all documents filed electronically, if receipt is required by law or directed by the filer. pacer access fees apply to all other users. To avoid later charges, download a copy of each document during thisfirst viewing. However, if the referenced documentisa transcript, the free copyand 30 page limitdo notapply. Notice of Electronic Filing UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA The following transaction was entered on at g:46 AM pdt and filed on Gase Name: Gase Number: Filer: Document Number:53 Docket Text: Arc Music, lnc. v. Wayne Henderson Sr. et al 2:09-cv DSF-CW MINUTES (ln CHAMBERS): ORDER GRANTING in partand DENYING in partarc Music, Inc.s Motion to Dismiss (Docket No. 22lby Judge Dale S. Fischer: Arcs motion to dismiss is GRANTED in part and DENIED in part. Henderson isgranted teave to amend in conformity with this Order. The amended counterclaims must be filed and serued no later than May 31,2010. Failure to file by that date will waive Henderson's right to do so. lf Henderson fails to file amended counterclaims by that date, Arc must answer the remaining counterclaims by June 21,2010. lt ls SO ORDERED. (See minute orderfor further details) (yl) 2:09-cv DSF-CW Notice has been electronically mailed to: Michael B Ackerman mackermanesq@aol.com AlanS Gutman alangutman@gutmanlaw.com Jeffrey D Goldman igoldman@imbm.com, tf1@imbm.com S Martin Keleti damdandmartin@gmail.com, keleti@manifesto.com EwnSethCohen ecohen@manifesto.com Donald A Miller dmiller@loeb.com, vrnanssourian@loeb.com Sommer A lssaq sommeri@gmail.com 2:09-cv DSF-CW Notice has been delivered by First Class U. S. Mail or by fax to: : webmail.aol.com/.../printmessage.aspx 1t1 Dockets.Justia.com

2 Case 2:09-cv DSF-CW Document 53 Filed Page 1 of 5 LINITED STATES DISTRICT COURT CENTRAL DISTzuCT OF CALIFORNIA Case No. CV DSF (CWx) Date 3l22ll0 Title Arc Music, Inc. v. Wayne Henderson, Sr., et al. Present: The Honorable Debra Plato Deputy Clerk Attorneys Present for Plaintiffs: Proceedings: Not Present DALE S. FISCHER. United States District Judse Not Present Court Reporter Attorneys Present for Defendants: Not Present (In Chambers) Order GRANTING in part and DENYING in part Arc Music, Inc.'s Motion to Dismiss (Docket No. 22) I. FACTUAL BACKGROUND Wayne Henderson alleges that Arc Music, Inc. has, "[b]etween 1998 and the present,... collected and retained monies emanating from the reproduction, sale or exploitation of certain songs owned by Henderson and/or Relaxed Music." (Henderson Answer tl'fl 101, 106, ) He has alleged that he has copyright registration certificates for these songs. (Id. at fl 102.) All of Henderson's claims against Arc stem from its alleged violation of a 1998 settlement agreement between Arc and Henderson that resolved previous litigation over these songs. (Id. at flfl ) II. LEGAL STANDARD Federal Rule of Civil Procedure l2(bx6) allows an attack on the pleadings for failure to state a claim upon which relief can be granted. "Federal Rule of Civil Procedure 8(aX2) requires only a short and plain statement of the claim showing that the pleader is entitled to relief. Specific facts are not necessary;the statement need only give the defendant fair notice of what the... claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89,93 (2007)(internal quotation marks and citation omitted; ellipsis in original). But Rule 8 "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombl),, 550 U.S. 544, 555 (2007). cv-90 (i 2/02) Page I of5

3 Case 2:09-cv DSF-CW Document 53 Filed Page 2 of 5 LTNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA The plaintiff bears the burden of pleading sufficient facts to state a claim. Courts will not supply essential elements of a claim that are not initially pled. Richards v. Harper, 864 F.2d 85, 88 (9th Cir. 1988). At this stage, though, the Court accepts the facts alleged in the complaint as true, and draws all reasonable inferences favor of the plaintiff. al-kidd v. Ashcroft, 580 F.3d 949,956 (9th Cir. 2009). Even so, a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S.Ct. 1937, (2009)."Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Id. at 1949 (internal quotation marks omitted). A complaint must "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 557. This means that the complaint "pleads factual contenthat allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbl, 129 S.Ct. at "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. Ruling on a motion to dismiss will be "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'shown'- 'that the pleader is entitled to relief."' Id. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)). When a party moves to dismiss a complaint on statute of limitations grounds, the fact that the dates as alleged in the complaint fall outside of the limitations period is not enough for dismissal. The motion "can be granted only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled." Cervantes v. Citv of San Diego, 5 F.3d 1273,1275 (9th Cir. 1993) (citation and internal quotation marks omitted). "If a complaint is dismissed for failure to state a claim, leave to amend should be granted unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393,1401 (9th Cir. 1986). Leave to amend should be granted even if the plaintiff did not request leave, unless it is clear that the complaint cannot be cured by the allegation of different facts. Doe v. United States, 58 F.3d 494, 497 (gth Cir. 1995). III. DISCUSSION A. The Court has Subject-Matter Jurisdiction Over the Copyright Claims Arc argues that the Court lacks subject-matter jurisdiction over Henderson's copyright claims because Henderson's complaint fails to allege copyright registration cv-90 (12102) Page 2 of 5

4 Case 2:09-cv DSF-CW Document 53 Filed Page 3 of 5 LINITED STATES DISTRICT COURT CENTRAL DISTzuCT OF CALIFORNIA sufficiently. After this motion was filed, the Supreme Court issued a decision holding that failure to comply with copyright registration requirements does not deprive courts of subject-matter jurisdiction over copyright claims. Reed Elsevier, Inc. v. Muchnick, 130 S.Ct (2010).r Even if such registrations were required for subject-matter jurisdiction, Henderson's allegations, which the Court must accept as true at this stage of the proceedings, would have sufficed. (Henderson Answer at u 102.) B. Henderson's Fifth Cause of Action States a Claim "[A] plaintiff who claims copyright infringement must show: (1) ownership of a valid copyright; and (2) that the defendant violated the copyright owner's exclusive rights under the Copyright Act." Ellison v. Robertson,357 F.3d I 072, 1076 (9th Cir. 2004). In general, "the owner of copyright... has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; (a) in the case of... musical... works, to performthecopyrightedworkpublicly; (5)inthecaseof...musical...works,...to display the copyrighted work publicly; and (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission." 17 u.s.c. $ 106. Arc argues that this claim should be dismissed because it does not allege that Arc "granted any license, made any reproductions, or authorized anyone to do anything with regard to copyrights that Henderson claims he owns." (Pl.'s Mot. to Dismiss at 5.) However, a reasonable inference could be drawn from Henderson's factual allegations that Arc engaged in those very actions. (See Def.'s Answer fl'l] ) The Court rejects this argument. (Def.'s Answer '{ll'{lt ) Arc alternatively argues that this claim should be dismissed because it is baned by the statute of limitations. (Pl.'s Mot. to Dismiss at 5-6.) This argument also fails because it is reasonable to draw the inference from the facts alleged that this claim could have accrued within the statute of limitations period for copyright actions, or that the statute of limitations on these claims may have been tolled. See 17 U.S.C. $ 507(b). ' The Court addresses this issue first because a "federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the category of claim in suit (subject-matter jurisdiction) and the parties (personal jurisdiction)." Sinochem Int'l Co. v. Malaysia IntllShipBineloru, 549 U.S (2007). cv-e1 (12/02) Page 3 of 5

5 Case 2:09-cv DSF-CW Document 53 Filed Paqe 4 of 5 LINITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA C. Henderson's Sixth Cause of Action Fails to State a Claim "If, on a motion under Rule 12(b)(6) or l2(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. l2(d). Although the parties did not present matters outside the pleadings with this specific motion, they have submitted such matters on this very issue as part of Arc's motion for summary adjudication, which was filed the same day as this motion. (Docket Nos. 2l-22.) In light of those submitted materials, the Court views this part of Arc's Motion to Dismiss as one for summary judgment under Rule 56. For the reasons noted in the Court's order granting Arc's motion for summary adjudication, this claim against Arc fails. D. Henderson's Tenth Cause of Action Fails to State a Claim To state a breach of fiduciary duty claim, a plaintiff must allege "the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach." See Roberts v. Lomanto, ll2 Cal. App. 4th 1553, 1562 (2003)(intemal quotation marks omitted). Henderson's breach of fiduciary duty claim is premised on nothing more than legal conclusions couched as factual allegations that fail to show that this claim is plausible, rather than merely possible. (See Def.'s Answer fln ) For this reason, it is dismissed without prejudice.2 E. Henderson's Fourteenth Cause of Action Fails to State a Claim Henderson's fourteenth cause of action alleges a violation of California's Unfair Competition Law ("UCL").3 The UCL "broadly prohibt[s] unlawful, unfair, and fraudulent business acts." Sybersound Records, Inc. v. UAV Corp., 517 F.3d I 137, ll52 (9th Cir. 2008). "Unlawful acts are anything that can properly be called a business practice and that at the same time is forbidden by law... be it civil, criminal, federal, state, or municipal, statutory, regulatory, or court-made." Id. (internal quotation marks omitted). "Unfair acts among competitors means 'conducthat threatens an incipient 2 If Henderson chooses to amend this claim, he should do so in a way that does not require Arc or the Court to sift through 133 incorporated paragraphs - many of which have absolutely no bearing on the claim - to determine whether he has pled sufficient facts to support the claim. 3 Although the complaint alleges violations of both Cal Bus. & Prof. Code $$ and 17500, Henderson does not dispute Arc's contention that this claim is based only on $ (Henderson Opp'n at ) cv-e0 (12i02) Page 4 of 5

6 Case 2:09-cv DSF-CW Document 53 Filed page 5 of 5 TINITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA violation of an antitrust law, or violates the spirit or policy of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition."' Id. at li52 (quoting Cel-Tech Comm'cns. Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 187 (1999)."[F]raudulent acts are ones where members of the public are likely to be deceived." Id. Arc argues this claim is analogous to the UCL claim the Ninth Circuit held was "properly dismissed" in Slrbersound. The Court agrees. Aside from various legal conclusionstated as factual allegations, Henderson's UCL claim rests on the validity of his copyright claims. However, as noted in Sybersound, when the improper business acts a plaintiff relies on for a UCL claim are based on copyright infringement, that claim is preempted. See S)rbersound, 517 F.3d at However, because it is unclear whether Henderson could state a UCL claim against Arc, this claim is dismissed without prejudice. Henderson has until May 31,2010, to file an amended UCL claim as well. E. Hendersonts Request for Leave to Amend His Seventh, Ninth, Eleventh, Twelfth, and Thirteenth Causes of Action Henderson agrees that these claims were the result of "inartful drafting," and requests leave to amend. (Def.'s Opp'n at 14-15,17-19.) The Court grants the requests, and dismisses these claims without prejudice. IV. CONCLUSION Arc's motion to dismiss is GRANTED in part and DENIED in part. Henderson is granted leave to amend in conformity with this Order. The amended counterclaims must be filed and served no later than May 31,2010. Failure to file by that date will waive Henderson's right to do so. If Henderson fails to file amended counterclaims by that date, Arc must answer the remaining counterclaims by June 2r,2010. IT IS SO ORDERED. cv-90 (t2102) Page 5 of 5