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concluding that the plaintiff had alleged false representations with specificity by identifying which statements were false, detailing who made the statements, the date on which they were made, and in what form they were said
Summary of this case from Ketayi v. Health Enrollment Grp.Opinion
Case No. 13–CV–2714 JLS KSC.
2014-04-25
CELEBRITY CHEFS TOUR, LLC, a California limited liability company; and Promark Productions, LLC, a California limited liability company, Plaintiffs, v. MACY'S, INC, a Delaware corporation; Whirlpool Corporation, a Delaware corporation; LEC Media, LLC, an Illinois limited liability company; Executive Program Services, Inc., a Washington corporation; Jack O'Donnell, an individual; Scott Dummler, an individual; Devin Alexander, Inc., a California corporation; Devin Alexander, a.k.a. Renee Simone, an individual; and Does 1–10, inclusive, Defendants.
Richard Michael Wirtz, Wirtz Law APC, Thomas Daniel Foster, TD Foster, San Diego, CA, for Plaintiffs. Cynthia Tsai Brady, Macy's Inc., St. Louis, MO, Christine M. LaPinta, Trevor Brian Potter, Seltzer Caplan McMahon Vitek, San Diego, CA, for Defendants.
Richard Michael Wirtz, Wirtz Law APC, Thomas Daniel Foster, TD Foster, San Diego, CA, for Plaintiffs.
Cynthia Tsai Brady, Macy's Inc., St. Louis, MO, Christine M. LaPinta, Trevor Brian Potter, Seltzer Caplan McMahon Vitek, San Diego, CA, for Defendants.
ORDER: (1) GRANTING DEFENDANT MACY'S, INC.'S REQUEST FOR JUDICIAL NOTICE; AND (2) GRANTING IN PART AND DENYING IN PART DEFENDANT MACY'S, INC.'S MOTION TO DISMISS PLAINTIFFS' COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) (ECF No. 19)
JANIS L. SAMMARTINO, District Judge.
Presently before the Court is Defendant Macy's, Inc.'s (“Macy's”) Motion to Dismiss (“MTD”) Plaintiffs Celebrity Chefs Tour, LLC (“CCT”) and Promark Productions, LLC's (“Promark,” and, collectively, “Plaintiffs”) Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 19.) Also before the Court are Macy's Request for Judicial Notice (“RJN”) (ECF No. 19–2), Plaintiffs' RJN (ECF No. 36), and Plaintiffs' Response in Opposition to (ECF No. 39) and Macy's Reply in Support of (ECF No. 42) the Motion. The hearing for the Motion was vacated and the matter taken under submission without oral argument pursuant to Civil Local Rule 7.1.d.1. (ECF No. 54.) Having considered the parties' arguments and the law, the Court GRANTS Macy's RJN and GRANTS IN PART AND DENIES IN PART Macy's MTD.
The Court has already granted Plaintiffs' RJN. (See Order 8–9, ECF No. 78.)
BACKGROUND
The Court thoroughly summarized the factual and procedural background of this case in ruling on a related motion to dismiss, and accordingly the Court hereby incorporates by reference the background as set forth therein. (See Order 2–7, ECF No. 78.) REQUEST FOR JUDICIAL NOTICE
Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” “Judicially noticed facts often consist of matters of public record.” Botelho v. U.S. Bank, N.A., 692 F.Supp.2d 1174, 1178 (N.D.Cal.2010) (citations omitted); see also W. Fed. Sav. & Loan Ass'n v. Heflin Corp., 797 F.Supp. 790, 792 (N.D.Cal.1992). While “a court may take judicial notice of the existence of matters of public record, such as a prior order or decision,” it should not take notice of “the truth of the facts cited therein.” Marsh v. Cnty. of San Diego, 432 F.Supp.2d 1035, 1043 (S.D.Cal.2006).
Macy's asks the Court to judicially notice the eleven (11) documents the Court judicially noticed in its April 25, 2014 Order. (RJN 2–4, ECF No. 19–2; see Order 8–9, ECF No. 78.) In addition, Macy's requests that the Court judicially notice the following two (2) documents: (1) State Bar of California Attorney Search for Gary Ravet; and (2) California Secretary of State Business Entity Detail for Promark Productions, LLC. (See RJN 4, ECF No. 19–2.) All of these documents are available to the public and are certified and maintained by an official office. Their accuracy cannot therefore be reasonably disputed. Accordingly, the Court GRANTS Macy's RJN as to all thirteen (13) documents. However, the Court does not take notice of the truth of the facts asserted therein.
MOTION TO DISMISS
I. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint “fail[s] to state a claim upon which relief can be granted,” generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not require ‘detailed factual allegations,’ ... it [does] demand[ ] more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In other words, “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) ). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955 ).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ); see also Fed.R.Civ.P. 12(b)(6). A claim is facially plausible when the facts pled “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). That is not to say that the claim must be probable, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. Facts “ ‘merely consistent with’ a defendant's liability” fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955 ). Further, the Court need not accept as true “legal conclusions” contained in the complaint.Id. This review requires context-specific analysis involving the Court's “judicial experience and common sense.” Id. at 679, 129 S.Ct. 1937 (citation omitted). “[W]here 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 ‘show[n]’—‘that the pleader is entitled to relief.’ ” Id.
Where a motion to dismiss is granted, “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.’ ” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir.1992) (quoting Schreiber Distrib. Co. v. Serv–Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986) ). In other words, where leave to amend would be futile, the Court may deny leave to amend.
II. Analysis
Plaintiffs assert the following seventeen claims: (1) breach of contract (Macy's); (2) breach of contract (Dummler, LEC, and O'Donnell); (3) breach of contract (Alexander); (4) intentional misrepresentation (Alexander, DAI, Dummler, LEC, Macy's, and O'Donnell); (5) negligent misrepresentation (Alexander, DAI, Dummler, LEC, Macy's, and O'Donnell); (6) conversion (all Defendants); (7) trademark infringement (all Defendants); (8) false designation of origin (all Defendants); (9) trademark dilution (all Defendants); (10) common law unfair competition (all Defendants); (11) unfair competition in violation of California Business and Professions Code § 17200 (all Defendants); (12) misappropriation of ideas (all Defendants); (13) intentional interference with contractual relations (EPS, Dummler, LEC, Macy's, O'Donnell, and Whirlpool); (14) intentional interference with prospective economic advantage (EPS, Dummler, LEC, Macy's, O'Donnell, and Whirlpool); (15) negligent interference with contractual relations (EPS, Dummler, LEC, Macy's, O'Donnell, and Whirlpool); (16) negligent interference with prospective economic advantage (EPS, Dummler, LEC, Macy's, O'Donnell, and Whirlpool); and (17) declaratory relief (EPS, LEC, Macy's, and Whirlpool). The Court addresses each in turn.
Macy's does not seek to dismiss this seventeenth claim, and accordingly this Order does not address it.
The parties address these claims in a haphazard order in their briefs, but the Court will address the claims in the order in which they appear in the Complaint.
A. Claim 1: Breach of Contract
Macy's first argues that Promark fails to allege all of the elements required for a breach-of-contract claim. “Under California law, the elements required to establish actionable breach of contract are the existence and terms of the contract, plaintiff's performance, defendant's breach, and damages therefrom.” Student Loan Mktg. Ass'n v. Hanes, 181 F.R.D. 629, 633 (S.D.Cal.1998) (citing M.G. Chamberlain & Co. v. Simpson, 173 Cal.App.2d 263, 343 P.2d 438 (1959) ).
Macy's notes that CCT was not a party to the Alexander Contract. (MTD 12 n. 5, ECF No. 19–1.) Because Plaintiffs attached the Purchase Order to their Complaint, the Court may properly consider it in ruling on this MTD. See Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir.2010) (citations omitted). On its face, the Purchase Order is only between Macy's and Promark. Accordingly, the MTD is GRANTED WITHOUT PREJUDICEfor this claim as to CCT.
In its MTD, Macy's concedes that Promark alleges the existence of a contract. (MTD 12, ECF No. 19–1 (“Promark alleges it entered into a contract with Macy's.”).) In its Reply, however, Macy's argues that the Declaration of Gary Ravet (“the Ravet Declaration”), which the Court has judicially noticed, establishes that Promark was not a party to any contract with Macy's. (Reply 6, ECF No. 42; see Order 8–9, ECF No. 78.) The Court finds it somewhat puzzling that Macy's makes this argument in light of its contention, also found in its Reply, that the Court may not actually consider in deciding this MTD the “lengthy recitation of questionable remembrances with no foundation” that is the Ravet Declaration. (Reply 3, ECF No. 42.) As the Court has already acknowledged, it can notice the existence of the Ravet Declaration, but not the disputed facts contained therein. (See supra p. 1147.) See also Rezentes v. Sears, Roebuck & Co., 729 F.Supp.2d 1197, 1206 (D.Haw.2010) (explaining that a court may only take judicial notice of the existence of a prior declaration). Accordingly, the Court disregards Macy's spurious argument—which seemingly questions the merits of Promark's claim rather than the sufficiency of the allegations, anyway—and determines that Promark sufficiently alleges the existence of a contract. (See, e.g., Compl. ¶¶ 29–37, 43–45, 66, ECF No. 1.) Whether discovery will reveal that said contract was legitimate is, of course, a question for another day.
The Court also finds that Promark alleges performance. (Id. ¶ 91.) However, Macy's argues that the Complaint states that Alexander breached the Alexander Contract, rather than that Macy's breached the Purchase Order. (MTD 12, ECF No. 19–1.) Promark counters that this is a typographical error, and that it nonetheless alleges breach by stating that Macy's refused to send the third sponsorship payment and that Plaintiffs sent Macy's written notice of Macy's breach of the Purchase Order. (Pls.' Resp. in Opp'n 8, ECF No. 39 (citing Compl. ¶¶ 58, 71, ECF No. 1).) The Court agrees with Promark that its factual allegations are sufficient to allege breach. Further, the Court notes that, despite the typographical error, the Complaint nonetheless specifically alleges that “[a]s a direct, proximate, and legal result of the breaches by Macy's and Does 1 through 100, inclusive, Plaintiffs have been damaged.” (Compl. ¶ 93, ECF No. 1 (emphasis added).) Accordingly, Promark has alleged each of the elements of a claim for breach of contract, and therefore the Court DENIES Macy's MTD for this claim as to Promark.
B. Claim 4: Intentional Misrepresentation
The elements of a claim for intentional misrepresentation are: “(1) a misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.” Robinson Helicopter Co. v. Dana Corp., 34 Cal.4th 979, 22 Cal.Rptr.3d 352, 102 P.3d 268, 274 (2004) (citing Lazar v. Superior Court, 12 Cal.4th 631, 638, 49 Cal.Rptr.2d 377, 909 P.2d 981 (1996) ).
Because a claim for misrepresentation sounds in fraud, the heightened pleading standards of Federal Rule of Civil Procedure 9(b) apply. For misrepresentation claims, this standard is met when a party specifies the time, place and specific content of the alleged fraudulent representation; the identity of the person engaged in the fraud; and “ ‘the circumstances indicating falseness' ” or “ ‘the manner in which [the] representations were false and misleading.’ ” Genna v. Digital Link Corp., 25 F.Supp.2d 1032, 1038 (N.D.Cal.1997) (quoting In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547–48 (9th Cir.1994) ). However, “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b). But, where multiple defendants are accused of fraud, the claim “must inform each defendant of his alleged participation in the fraud.” Ricon v. Recontrust Co., No. 09cv937–IEG–JMA, 2009 WL 2407396, at *3 (S.D.Cal. Aug. 4, 2009) (quoting Di Vittorio v. Equidyne Extractive Indus., 822 F.2d 1242, 1247 (2d Cir.1987) ). Moreover, merely attributing a misrepresentation to a corporate entity is inadequate; a specific person must be ... identified. See Kriendler v. Chem. Waste Mgmt., Inc., 877 F.Supp. 1140, 1155 (N.D.Ill.1995).
Macy's argues that Plaintiffs' claim for intentional misrepresentation fails because Plaintiffs do not allege with the requisite level of specificity: (1) the purported false representations, (2) intent to induce reliance or actual reliance, and (3) damage. (MTD 16–19, 20, ECF No. 19–1.) Plaintiffs counter that the Complaint adequately pleads Macy's fraud. The Court agrees with Plaintiffs. First, Plaintiffs allege that, inter alia, the following statements by Macy's agents constitute false representations: that the sponsorship had been approved (Compl. ¶¶ 29–32, ECF No. 1), that sponsorship payments were being processed and/or were ready to be sent (id. ¶¶ 36, 38, 41), that Macy's “hoped to make this a multi-year arrangement” (id. ¶ 37), that Macy's created the “Macy's GACT” logo for its in-store promotions (id. ¶ 53), that Rosenthal would stay at Macy's until the Tour was finished (id. ¶ 54), that Macy's would make the second sponsorship payment (id. ¶ 59), that Macy's would sign the Purchase Order (id. ¶ 65), and that Macy's would make the third sponsorship payment (id. ¶ 73). (Pls.' Resp. in Opp'n 11, ECF No. 39.) These factual allegations are detailed and specify who said them, the date on which they were said, and whether they were said via telephone or in person (and, if in person, where).
Second, Plaintiffs allege that Macy's knew these representations were false. (Pls.' Resp. in Opp'n 11–12, ECF No. 39 (citing, inter alia, Compl. ¶¶ 105, 113, ECF No. 1).) Third, Plaintiffs allege Macy's intent to defraud or induce reliance. (Id. at 12 (citing, inter alia, Compl. ¶¶ 106, 113, ECF No. 1).) Contrary to Macy's arguments, knowledge and intent may be pled generally. See Fed.R.Civ.P. 9(b).
Fourth, Plaintiffs allege justifiable reliance by stating, inter alia, that: Macy's requested that Plaintiffs send it the Purchase Order and various invoices (Compl. ¶¶ 34–35, ECF No. 1), Macy's assured Plaintiffs that it would make its sponsorship payments (id. ¶¶ 36, 41, 59, 73), and Macy's told Plaintiffs that it would sign the Purchase Order (id. ¶¶ 38, 73). (Pls.' Resp. in Opp'n 12, ECF No. 39.) Given these allegations, Plaintiffs' reliance seems objectively justifiable. Finally, Plaintiffs allege resulting damage. (Id. (citing Compl. ¶¶ 75, 109, 115, ECF No. 1).) Macy's appears to have caused Plaintiffs' harm, as Macy's failure to make its sponsorship payments forced Plaintiffs to suspend the Tour and the editing of the footage prior to completion. As a whole, the Complaint satisfactorily gives Macy's notice of its purported fraud and makes out a prima facie claim for intentional misrepresentation. Accordingly, the Court finds that these allegations are sufficient to survive Macy's MTD and DENIES Macy's MTD as to this claim. C. Claim 5: Negligent Misrepresentation
To allege a claim for negligent misrepresentation, a plaintiff must plead: “(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” Wells Fargo Bank, N.A. v. FSI, Fin. Solutions, Inc., 196 Cal.App.4th 1559, 1573, 127 Cal.Rptr.3d 589 (2011) (citation and internal quotation marks omitted). Moreover, under California law, “[t]he existence of a duty of care is necessary to support a negligent misrepresentation claim.” Jackson v. Fischer, 931 F.Supp.2d 1049, 1068 (N.D.Cal.2013) (citations omitted).
Macy's makes the same arguments against this claim as against Plaintiffs' intentional misrepresentation claim. (See MTD 16–19, 20, ECF No. 19–1.) For the reasons provided above, the Court believes that Plaintiffs have adequately pleaded the five elements of a claim for negligent misrepresentation, including Macy's agents' lack of reasonable grounds for believing their statements to be true. (See Compl. ¶ 113, ECF No. 1.) However, Macy's also argues that Plaintiffs' claim must fail because Plaintiffs do not allege that Macy's owed them a duty of care. (MTD 19, ECF No. 19–1.) The Court agrees that, on its face, the Complaint fails to allege that Macy's owed Plaintiffs a duty of care. Accordingly, the Court GRANTS Macy's MTD as to this claim. However, because a duty of care can derive from a contract, such dismissal is WITHOUT PREJUDICE. See, e.g., J'Aire Corp. v. Gregory, 24 Cal.3d 799, 157 Cal.Rptr. 407, 598 P.2d 60, 62 (1979) (“A duty of care may arise through statute or by contract.”); Eads v. Marks, 39 Cal.2d 807, 249 P.2d 257, 261 (1952) (“[T]he agreement between plaintiffs and defendant created a duty of care.”).
D. Claim 6: Conversion
Macy's next argues that Plaintiffs' conversion claim fails because Plaintiffs do not allege “that Macy's took ownership of Plaintiff's property by a wrongful act,” as Plaintiffs voluntarily gave the CCT Assets to LEC. (MTD 24, ECF No. 19–1.) Macy's claims that, as an “innocent receiver” of the CCT Assets, it cannot be held liable for conversion. (Id. ) Plaintiffs argue that they properly allege conversion because “[a]n action for conversion lies not only in the taking of another's property, but also in the wrongful use of that property.” (Pls.' Resp. in Opp'n 15, ECF No. 39.) The Court agrees with Plaintiffs.
The elements of a claim for conversion consist of (1) ownership or a right to possession, (2) wrongful disposition of the property, and (3) damages. G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896, 906 (9th Cir.1992). Moreover, § 229 of the Restatement (Second) of Torts provides:
One who receives possession of a chattel from another with the intent to acquire for himself or for a third person a proprietary interest in the chattel which the other has not the power to transfer is subject to liability for conversion to a third person then entitled to the immediate possession of the chattel.
California Courts have cited approvingly to § 229. See, e.g., Moore v. Regents of Univ. of Cal., 51 Cal.3d 120, 157 n. 4, 271 Cal.Rptr. 146, 793 P.2d 479 (1990) ; Strutt v. Ontario Sav. & Loan Ass'n, 28 Cal.App.3d 866, 874–75, 105 Cal.Rptr. 395 (1972).
First, Plaintiffs repeatedly assert their ownership of the GACT copyright, trademark, and content. (Compl. ¶¶ 14–16, 28, 48, 118, ECF No. 1.) While Plaintiffs purportedly “consented to LEC holding the CCT Assets temporarily until it could be determined where they should be sent,” Plaintiffs have since requested the return of the CCT Assets. (Id. ¶¶ 75, 77.) Thus, Plaintiffs had a right to immediate possession of the CCT Assets, including the Tour footage.
Second, Plaintiffs allege that Macy's created and used, without Plaintiffs' permission, a “Macy's GACT” logo, and that Macy's released a press release that “quoted verbatim the copyrighted text describing the TV Show that was written by [Plaintiffs].” (Id. ¶¶ 53, 60, 76, 80.) Further, despite Plaintiffs' requests, the CCT Assets have not been returned. (Id. ¶ 77.) Rather, Plaintiffs claim that Macy's has released GACT footage to public broadcast stations under the “Macy's GACT” name, purporting to be the owner and producer of Plaintiffs' content. (Id. ¶¶ 80, 85.) Although LEC had possession of the CCT Assets, it lacked the authority to transfer them. And Macy's appears to have acquired the Tour footage from LEC with the intent to make the footage its own. That Macy's may not have ever possessed the physical is of no consequence, as it gained possession and claimed ownership of the intellectual property contained therein.
“In short, California does not follow the Restatement ‘s strict requirement that some document must actually represent the owner's intangible property right. On the contrary, courts routinely apply the tort [of conversion] to intangibles without inquiring whether the are merged in a document.” Kremen v. Cohen, 337 F.3d 1024, 1033 (9th Cir.2002) (explaining that California jurisprudence “recognizes conversion of music recordings, radio shows, customer lists, regulatory filings, confidential information and even domain names”).
Macy's also contends, however, that the claim must be dismissed because Plaintiffs improperly seek compensatory damages rather than the damages for conversion mandated by California Civil Code § 3336. (MTD 24–25, ECF No. 19–1.) However, Plaintiffs allege that they “ha[ve] been damaged” by their loss of the CCT Assets and their inability to distribute GACT themselves. (Compl. ¶¶ 102, 122, ECF No. 1.) This is all that is required on a motion to dismiss. See Summit Tech., Inc. v. High–Line Med. Instruments, Co., 933 F.Supp. 918, 927–28 (C.D.Cal.1996) (citation, alteration, and internal quotation marks omitted) (“[A] Rule 12(b)(6) motion will not be granted merely because a plaintiff requests a remedy to which he or she is not entitled.”) Accordingly, Plaintiffs have stated a prima facie claim for conversion, and the Court DENIES Macy's MTD as to this claim.
E. Claims 7 & 8: Trademark Infringement and False Designation of Origin
To state a claim for federal trademark infringement under the Lanham Act, a plaintiff must show: “ ‘(1) that it has a protectible ownership interest in the mark; and (2) that the defendant's use of the mark is likely to cause consumer confusion.’ ” Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1144 (9th Cir.2011) (citation omitted). A claim for false designation of origin is subject to “[t]he same standard,” except a claim for false designation of origin does not require that the mark be registered. See Brookfield Commc'ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1046 n. 6 (9th Cir.1999) (citing 15 U.S.C. §§ 1114(1) (trademark infringement), 1125(a)(1) (false designation of origin)). Thus, the Court analyzes these claims jointly. As to the first element, Macy's argues that judicially noticeable records establish that only CCT owns the GACT trademark. (MTD 26 n. 6, ECF No. 19–1.) Macy's, however, is mistaken. The public records at issue are dated June 2011 through May 2012. Thus, it is possible that CCT assigned the GACT mark to Promark sometime after May 22, 2012 but prior to or during the acts comprising Plaintiffs' allegations. Thus, the Court declines at this time to dismiss the trademark claims against Promark on this basis. Plaintiffs allege ownership of the mark as to both CCT and Promark, and thus Plaintiffs have sufficiently alleged the first element of their trademark infringement claim. (See Compl. ¶¶ 16, 125, ECF No. 1.)
As to the second element, Macy's argues that Plaintiffs fail to allege “that Macy's is using a trademark, let alone using CCT's trademark or a colorable imitation of CCT's mark on goods in commerce without CCT's consent or that such use is likely to cause confusion, mistake or deceive the public.” (MTD 26, ECF No. 19–1.) The Court disagrees. When evaluating likelihood of confusion on a motion to dismiss, “[i]f the court determines as a matter of law from the pleadings that the goods are unrelated and confusion is unlikely, the complaint should be dismissed.” Murray v. Cable Nat'l Broad. Co., 86 F.3d 858, 860 (9th Cir.1996) (citing Toho Co. Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 790–91 (9th Cir.1981) ). But, while likelihood of confusion is capable of being decided as a matter of law, “[w]hether confusion is likely is a factual determination woven into the law” that courts “routinely treat ... as [an issue] of fact” best left for determination by a jury. Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1356, 1356 n. 5 (9th Cir.1985).
It does not appear as a matter of law that consumer confusion is unlikely. Plaintiffs allege that “Defendants have used and are using [Plaintiffs'] registered mark.” (Compl. ¶ 126, ECF No. 1.) Plaintiffs claim that Defendants are using the mark in commerce, “in connection with the distribution[ ] and/or advertising of a television show.” (Id. ) More specifically, Plaintiffs allege that Macy's created and used, without Plaintiffs' permission, the “Macy's GACT” logo, and that Macy's has released GACT footage to public broadcast stations and the public under this name while purporting to be the owner and producer of the content. (Id. ¶¶ 53, 60, 76, 80, 85.) Confusion seems particularly likely given that the goods are so similar—indeed, Plaintiffs claim that Defendants are really marketing Plaintiffs' television show as Defendants' own. (Id. ¶¶ 79–87.) Accordingly, the Court finds that Plaintiffs have satisfactorily alleged federal trademark infringement and false designation of origin claims and accordingly DENIES Macy's MTD as to these claims.
F. Claim 9: Trademark Dilution
To plead a claim for federal trademark dilution, a plaintiff must show that it owns a famous and distinctive trademark, that the defendant began using the mark in commerce after the mark became famous, and that the defendant's use of the mark is likely to cause dilution by blurring or tarnishment. Visa Int'l Serv. Ass'n v. JSL Corp., 610 F.3d 1088, 1089–90 (9th Cir.2010) (citing Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634 (9th Cir.2007) ); see also 15 U.S.C. § 1125(c).
The parties disagree as to whether Plaintiffs adequately allege a famous mark. “A mark is famous if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner.” 15 U.S.C. § 1125(c)(2)(A). In determining whether a mark is famous, a court may consider “all relevant factors,” including: (1) “[t]he duration, extent, and geographic reach of advertising and publicity of the mark”; (2) “[t]he amount, volume, and geographic extent of sales of goods or services offered under the mark”; (3) “[t]he extent of actual recognition of the mark”; and (4) whether the mark is registered. Id. § 1125(c)(2)(A)(i)-(iv). Macy's urges that Plaintiffs do not allege that a large percentage of the general consuming public recognizes the GACT mark, only that it was presented to several television stations in 2011 and at a public television industry event. (MTD 29, ECF No. 19–1.) Plaintiffs counter that Macy's arguments go to the merits of the case rather than the sufficiency of the Complaint. (Pls.' Resp. in Opp'n 18, ECF No. 39.) The Court, however, agrees with Macy's.
The Court notes that the GACT mark is federally registered, and thus the fourth factor favors a finding of fame. However, Plaintiffs make no allegations about any advertising and publicity efforts; Plaintiffs apparently made no sales of any GACT content; and Plaintiffs fail to allege any facts concerning wide-reaching access to, much less recognition of, their mark. Plaintiffs allege that their mark was well-received by television stations and had a “substantial presence” at the APT Fall Marketplace, which appears to have been attended primarily by persons in the entertainment industry. (Compl. ¶ 138, ECF No. 1.) Plaintiffs also argue that the show was filmed over the course of ten live events in several major cities. (Id. ) However, these allegations fall short of “wide recognition,” and at most suggest that the mark might be famous in the insufficient “niche” market of the entertainment industry. See Planet Coffee Roasters, Inc. v. Dam, No. SACV 09–00571–MLG, 2009 WL 2486457, at *3 (C.D.Cal. Aug. 12, 2009) (citations omitted). Thus, even applying the relatively lax standard governing Rule 12(b)(6) motions, the Court finds that Plaintiffs' conclusory allegations of fame are fatally defective to stating a “facial[ly] plausib[le]” claim for trademark dilution. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Accordingly, the Court GRANTS WITHOUT PREJUDICE Macy's MTD as to this claim.
G. Claim 10: Common Law Unfair Competition
“ ‘The common law tort of unfair competition is generally thought to be synonymous with the act of “passing off” one's goods as those of another ... [, or] acts analogous to “passing off,” such as the sale of confusingly similar products, by which a person exploits a competitor's reputation in the market.’ ” Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1147 (9th Cir.1997), not followed on other grounds by McKendall v. Crown Control Corp., 122 F.3d 803 (1997) (alteration in original) (quoting Bank of the W. v. Superior Court, 2 Cal.4th 1254, 1263, 10 Cal.Rptr.2d 538, 833 P.2d 545 (1992) ); see also Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 1153 (9th Cir.2008). “The tort developed as an equitable remedy against the wrongful exploitation of trade names and common law trademarks that were not otherwise entitled to legal protection.” Bank of the W., 2 Cal.4th at 1263, 10 Cal.Rptr.2d 538, 833 P.2d 545 (citation omitted). “The decisive test of common law unfair competition is whether the public is likely to be deceived about the source of goods or services by the defendant's conduct.” Hokto Kinoko Co. v. Concord Farms, Inc., 810 F.Supp.2d 1013, 1032 (C.D.Cal.2011) (citations omitted).
Macy's argues that Plaintiffs' claim of common law unfair competition must be dismissed because Plaintiffs hold a valid, registered trademark. (See MTD 21, ECF No. 19–1; Reply 8, ECF No. 42.) However, courts have routinely entertained claims for both trademark infringement and common law unfair competition, implying that the two causes of action are not mutually exclusive, particularly at the pleading stage. See, e.g., Hokto Kinoko, 810 F.Supp.2d 1013 ; Wecosign, Inc. v. IFG Holdings, Inc., 845 F.Supp.2d 1072, 1079 (C.D.Cal.2012) (“[T]he Ninth Circuit ‘has consistently held that state common law claims of unfair competition and actions pursuant to California Business and Professions Code § 17200 are “substantially congruent” to claims under the Lanham Act.’ ... Therefore, the Court jointly analyzes Plaintiff's trademark infringement, false designation of origin, state statutory unfair competition, and state common law unfair competition claims.”); Moroccanoil, Inc. v. Allstate Beauty Prods., Inc., 847 F.Supp.2d 1197 (C.D.Cal.2012) ; Vallavista Corp. v. Amazon.com, Inc., 657 F.Supp.2d 1132 (N.D.Cal.2008) ; Microsoft Corp. v. Nop, 549 F.Supp.2d 1233 (E.D.Cal.2008) ; Area 55, Inc. v. Pandamerican LLC, No. 10–CV–269–H (NLS), 2010 WL 3564715 (S.D.Cal. Sept. 10, 2010) ; Mallard Creek Indus., Inc. v. Morgan, 56 Cal.App.4th 426, 65 Cal.Rptr.2d 461 (1997). Thus, the Court does not believe that Plaintiffs' common law unfair competition claim is precluded as a matter of law. Moreover, because the Court has already determined that Plaintiffs have plausibly alleged possible consumer confusion (see supra p. 1153 ), the Court DENIES Macy's MTD as to this claim.
H. Claim 11: Violation of California Business and Professions Code § 17200
California's Unfair Competition Law (“UCL”) prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof.Code § 17200.
Plaintiffs argue that, because Macy's actions constitute business practices, and because those acts “form the basis of several other claims for relief” in the Complaint, they have satisfactorily alleged unlawful business activities. (Pls.' Resp. in Opp'n 13–14, ECF No. 39.) The Court agrees. “An unlawful business activity includes anything that can properly be called a business practice and that at the same time is forbidden by law.” Blank v. Kirwan, 39 Cal.3d 311, 216 Cal.Rptr. 718, 703 P.2d 58, 69 (1985) (internal quotation marks omitted) (quoting People v. McKale, 25 Cal.3d 626, 631–32, 159 Cal.Rptr. 811, 602 P.2d 731 (1979) ). The act of promoting a television show as one's own is certainly a business practice, and because the Court has found that Plaintiffs have plausibly alleged several violations of law, those violations can serve as predicate unlawful business activities under the UCL. See Cel–Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 83 Cal.Rptr.2d 548, 973 P.2d 527, 539–40 (1999) (internal quotation marks and citations omitted) (“[S]ection 17200 ‘borrows' violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.”).
Plaintiffs also claim to have pleaded unfair business practices by “alleg[ing] that [Plaintiffs] invented, developed, and shot a television show, and that Defendants took that television show (including both the concept and the raw footage), made a very slight change to its name and then began airing Plaintiff's [sic ] footage as a competing television show.” (Pls.' Resp. in Opp'n 13, ECF No. 39.) Plaintiffs claim that this is a question of fact best left to the jury. (Id. ) Macy's, however, argues that Plaintiffs' “subjective characterizations of what is ‘unfair’ ” fail to address unfairness as it pertains to the UCL. (MTD 21–22, ECF No. 19–1.) The Court agrees with Macy's. Under the UCL, “the word ‘unfair’ ... means conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one 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.” Cel–Tech Commc'ns, Inc., 83 Cal.Rptr.2d 548, 973 P.2d at 544. Plaintiffs' allegations, if true, allege unfair acts in a more generalized moral sense. See F.T.C. v. Sperry & Hutchinson Co., 405 U.S. 233, 244 n. 5, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972) (explaining that “a practice that is neither in violation of the antitrust laws nor deceptive [can] nonetheless [be] unfair” if it is “immoral, unethical, oppressive, or unscrupulous”). However, Plaintiffs' allegations fail to allege acts that more narrowly violate the spirit of the antitrust laws, such as horizontal price fixing, exclusive dealing, or monopolization. See Holmes & Mangiaracina, Antitrust Law Handbook § 7:2. Accordingly, Plaintiffs do not allege unfair business practices within the meaning of the UCL.
Finally, Plaintiffs argue that Macy's has engaged in fraudulent business practices by promoting the show under a confusingly similar name. (Pls.' Resp. in Opp'n 14, ECF No. 39.) Plaintiffs claim that “chefs are likely to be confused [as to] which show they are agreeing to be a part of, sponsors are likely to be confused [as to] whose show they are sponsoring, and viewers are likely to be confused as to whose show they are watching.” (Id. ) The Court agrees. “The fraud prong of the UCL is unlike common law fraud or deception. A violation can be shown even if no one was actually deceived[or] relied upon the fraudulent practice.... Instead, it is only necessary to show that members of the public are likely to be deceived.” Schnall v. Hertz Corp., 78 Cal.App.4th 1144, 1167, 93 Cal.Rptr.2d 439 (2000) (internal quotation marks, citations, and alteration omitted). Accepting Plaintiffs' allegations as true, Defendants are actively trying to deceive the public into believing that Plaintiffs' show is their own. And, the Court has found that Plaintiffs have plausibly alleged possible consumer confusion. (See supra p. 1153.) Accordingly, Plaintiffs have pleaded with adequate specificity that Macy's engaged in unlawful and fraudulent acts plausibly violating the UCL, and thus the Court DENIES Macy's MTD as to this claim.
Contrary to Macy's arguments (see MTD 23, ECF No. 19–1; Reply 9, ECF No. 42), the Court has already explained with regards to Plaintiffs' claim for conversion that “a Rule 12(b)(6) motion will not be granted merely because a plaintiff requests a remedy to which he or she is not entitled.” Summit Tech., 933 F.Supp. at 927–28 (citation, alteration, and internal quotation marks omitted).
I. Claim 12: Misappropriation of Ideas
The Court finds that Plaintiffs' twelfth claim is preempted by the Copyright Act of 1976 (“the Act”). “Preemption occurs when (1) the work at issue comes within the subject matter of copyright and (2) the rights granted under state law are ‘equivalent to any of the exclusive rights within the general scope of copyright’ set forth in the Act.” Selby v. New Line Cinema Corp., 96 F.Supp.2d 1053, 1057 (C.D.Cal.2000) (quoting Del Madera Props. v. Rhodes & Gardner, Inc., 820 F.2d 973, 976 (9th Cir.1987) ).
First, because Plaintiffs' ideas have been affixed in a tangible, copyrighted work—the GACT footage—Plaintiffs' twelfth claim falls within the scope of federal copyright law. See id. at 1057–59. Second, the rights afforded by the Act are equivalent because Plaintiffs “allege an implied-in-fact contract not to use [their] ideas and concepts ... without compensating [them],” rather than a contract that “protects or creates any rights not equivalent to the Act's exclusive prohibitions of unauthorized reproduction, performance, distribution, or display.” Id. at 1062, 1060–61 (citation omitted). Accordingly, Plaintiffs' twelfth claim is preempted, and therefore this Court GRANTS WITH PREJUDICE Macy's MTD as to this claim.
J. Claim 13: Intentional Interference with Contractual Relations
According to the Supreme Court of California,
“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's of this contract; (3) defendant's intentional acts designed to induce a breach [or] disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.”
Quelimane Co. v. Stewart Title Guar. Co., 19 Cal.4th 26, 77 Cal.Rptr.2d 709, 960 P.2d 513, 530 (1998) (quoting Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118, 1126, 270 Cal.Rptr. 1, 791 P.2d 587 (1990) ). The third element incorporates a requirement that the defendant's “alleged wrongful or unjustified conduct caused the breach.” Bank of N.Y. v. Fremont Gen. Corp., 523 F.3d 902, 909 (9th Cir.2008).
Macy's argues that Plaintiffs' general allegations “fail to provide any specifics about: (1) the various contracts or the terms thereof; (2) the identity of the defendant that allegedly interfered with which contract; (3) whether there was an actual breach of any contract ... [;] and (4) the intentional act that was independently wrongful.” (MTD 14, ECF No. 19–1.) Macy's further suggests that Plaintiffs cannot allege damages at all, much less that Macy's actions caused any damages, because “the television series at issue was going to air on PBS and it is nearly axiomatic that PBS does not pay for content.” (Id. ) Plaintiffs, on the other hand, claim to have adequately pleaded all five elements. (Pls.' Resp. in Opp'n 9, ECF No. 39.)
The Court finds that Plaintiffs have failed to sufficiently plead the third element of the tort. In paragraph 162 of the Complaint, Plaintiffs claim to allege intentional acts on Macy's part designed to induce third parties to breach their contracts with Plaintiffs: “Despite knowing of these contracts and existing business relationships, said Defendants, and each of them, intentionally interfered with those contracts and business relationships.” (Pls.' Resp. in Opp'n 9, ECF No. 39.) Neither this statement nor any other part of the Complaint, however, identifies what acts Macy's purportedly undertook to induce third parties to breach their contracts with Plaintiffs, or why Macy's, rather than other forces, was the cause of said breach(es). For instance, LEC purportedly breached its contract with Plaintiffs by, among other things, refusing to turn over the CCT Assets to Plaintiffs. (See Compl. ¶ 95, ECF No. 1.) However, the Complaint in no way suggests that Macy's urged LEC to hang on to the CCT Assets. On the face of the Complaint, it is just as possible that LEC decided on its own to refuse to return the CCT Assets. Thus, Plaintiffs fail to allege either Macy's intentional acts or causation. Accordingly, Plaintiffs fail to state a plausible claim for intentional interference with contractual relations, and thus the Court GRANTS
WITHOUT PREJUDICE Macy's MTD as to this claim.
K. Claims 14 and 16: Intentional and Negligent Interference with Prospective Economic Advantage
To state a claim for intentional interference with prospective economic advantage, a plaintiff must allege:
(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.
Youst v. Longo, 43 Cal.3d 64, 233 Cal.Rptr. 294, 729 P.2d 728, 733 n. 6 (1987) (citing Buckaloo v. Johnson, 14 Cal.3d 815, 827, 122 Cal.Rptr. 745, 537 P.2d 865 (1975) ). Similarly, a plaintiff pleads a claim for negligent interference with prospective economic advantage if he alleges:
(1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware of should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship.
N. Am. Chem. Co. v. Superior Court, 59 Cal.App.4th 764, 786, 69 Cal.Rptr.2d 466 (1997) (citations omitted).
“However, as a matter of law, a threshold causation requirement exists for maintaining a cause of action for either tort, namely, proof that it is reasonably probable that the lost economic advantage would have been realized but for the defendant's interference.” Id. (emphasis in original). But the Court has already found, with regards to Plaintiffs' thirteenth claim, that Plaintiffs fail to establish that Macy's caused Plaintiffs' harm. (See supra p. 1157.) Additionally, as to the intentional form of the tort, the Court has determined that Plaintiffs fail to allege Macy's intentional acts designed to disrupt the relationship (see id. ), and as to the negligent form of the tort, the Court has determined that Plaintiffs fail to allege that Macy's owed them a duty of care (see supra p. 1151). Accordingly, Plaintiffs fail to state claims for interference with prospective economic advantage, and therefore the Court GRANTS WITHOUT PREJUDICE Macy's MTD as to both claims.
L. Claim 15: Negligent Interference with Contractual Relations
Finally, Macy's argues that this claim must be dismissed because California does not recognize the tort of negligent interference with contractual relations. (MTD 12–13, ECF No. 19–1.) The Court agrees, and accordingly GRANTS WITH PREJUDICE Macy's MTD as to this claim. See Fifield Manor v. Finston, 54 Cal.2d 632, 636–37, 7 Cal.Rptr. 377, 354 P.2d 1073 (1960) (explaining that California courts “have quite consistently refused to recognize a cause of action based on negligent, as opposed to intentional, conduct which interferes with the performance of a contract between third parties,” and refusing to recognize said cause of action because “to so hold would constitute an unwarranted extension of liability for negligence”); see also Express Diagnostics Int'l, Inc. v. Tydings, No. C 06–01346 JW, 2009 WL 111736, at *7 n. 14 (N.D.Cal. Jan. 15, 2009) (citation omitted) (“[T]he Supreme Court [of California] has yet to disapprove Fifield. ”).
CONCLUSION
In light of the foregoing, the Court GRANTS Macy's Request for Judicial Notice and GRANTS IN PART AND DENIES IN PART Macy's Motion to Dismiss.
The Court GRANTS Macy's Motion to Dismiss WITHOUT PREJUDICE as to claims 1 (CCT), 5, 9, 13, 14, and 16. The Court GRANTS Macy's Motion to Dismiss WITH PREJUDICE as to claims 12 and 15, as amendment of these claims would be futile. See DeSoto, 957 F.2d at 658. The Court DENIES Macy's Motion to Dismiss as to claims 1 (Promark), 4, 6, 7, 8, 10, and 11.
If Plaintiffs wish, they SHALL FILE an amended complaint within fourteen (14) days of the date on which this Order is electronically docketed. Failure to file an amended complaint by this date may result in dismissal of Plaintiffs' claims against Macy's with prejudice.