DiMucci v. Zenimax Media Inc.

REPLY in Support

N.D. Cal.September 21, 2017

DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA DION DiMUCCI, Plaintiff, v. ZENIMAX MEDIA INC., Defendant. CASE NO. 3:17-cv-03789-EMC DEFENDANT ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT Date: October 12, 2017 Time: 1:30 p.m. Courtroom: 5, 17th Floor, San Francisco Courthouse Complaint filed: July 2, 2017 RACHEL E. K. LOWE (SBN 246361) DLA PIPER LLP (US) 2000 Avenue of the Stars Suite 400, North Tower Los Angeles, California 90067-4704 Telephone: 310.595.3000 Facsimile: 310.595.3300 rachel.lowe@dlapiper.com ANN K. FORD (DC Bar No. 341479, admitted pro hac vice) HARRIET LIPKIN (DC Bar No. 434225, admitted pro hac vice) JOHN M. NADING (DC Bar No. 981625, admitted pro hac vice) DLA PIPER LLP (US) 500 Eighth Street, NW Washington, DC 20004 Telephone: 202.799.4000 Facsimile: 202.799.5000 ann.ford@dlapiper.com harriet.lipkin@dlapiper.com john.nading@dlapiper.com Attorneys for Specially Appearing Defendant ZENIMAX MEDIA INC. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 1 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -i- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT TABLE OF CONTENTS Page I. INTRODUCTION .......................................................................................... 1 II. PLAINTIFF’S LMRA ACTION AGAINST ZENIMAX IS DOOMED ...... 3 III. PLAINTIFF DOES NOT PLEAD A BREACH OF CONTRACT CLAIM AGAINST ZENIMAX ..................................................................... 5 IV. LEAVE TO AMEND WOULD BE FUTILE ................................................ 6 A. Amendment Would Be Futile Because Plaintiff Admits that His Contract Claim Requires Interpretation of the CBA, Demonstrating His Claim, if Any, Is Preempted. ................................ 7 B. Leave to Amend Should Be Denied Because AFTRA is an Indispensable Party. ............................................................................. 9 C. Leave to Amend Should Be Denied Because Plaintiff’s Claim is Arbitrable. ............................................................................................ 9 V. THIS COURT DOES NOT HAVE SUBJECT MATTER OR PERSONAL JURISDICTION OVER ZENIMAX ...................................... 10 A. There is No General Jurisdiction, Which Plaintiff Does Not Refute ................................................................................................. 10 B. There is No Specific Jurisdiction Based on the License Agreement .......................................................................................... 11 VI. VENUE IS NOT PROPER IN THE NORTHERN DISTRICT .................. 14 VII. CONCLUSION ............................................................................................ 15 Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 2 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -ii- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT CASES Abdelhamid v. Fire Ins. Exch., 182 Cal. App. 4th 990 (Cal. Ct. App. 2010) ......................................................... 6 Allis Chalmers v. Lueck, 471 U.S. 202 (1985) .............................................................................................. 7 Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224 (9th Cir.1988) .................................................................................. 8 BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 (2017) ........................................................................................ 11 Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cnty., 137 S.Ct. 1773 (2017) ............................................................................... 3, 11, 13 Burnside v. Kiewit Pac. Corp., 491 F.3d 1053 (9th Cir. 2007) ............................................................................... 7 Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242 (9th Cir. 1990) ................................................................................. 7 Daimler AG v. Bauman, 134 S.Ct. 746 (2014) ..................................................................................... 11, 12 Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399 (3d Cir. 1993) .................................................................................... 9 Juarez v. Jani–King of Cal., Inc., No. 09–cv–3495 SC, 2010 WL 3766649 (N.D. Cal. Sept. 24, 2010) ................. 14 Karo v. San Diego Symphony Orchestra Ass’n, 762 F.2d 819 (9th Cir. 1985) ................................................................................. 8 Kuang v. Bel Air Mart, No. 2:15-cv-00160-JAM-EFB, 2015 WL 3407881 (E.D. Cal. May 22, 2015) ................................................................................................................ 4 Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399 (1988) .............................................................................................. 7 Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 3 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -iii- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT Mirza v. Cent. Asia Inst., No. CV1401542MMMPJWX, 2014 WL 12663437 (C.D. Cal., May 27, 2014) ................................................................................... 15 Mulato v. Wells Fargo Bank, N.A., 76 F. Supp. 3d 929 (N.D. Cal. 2014) ..................................................................... 8 Myers v. Bennett Law Offices, 238 F.3d 1068 (9th Cir. 2001) ............................................................................. 12 Pencikowski v. Aerospace Corp., 340 Fed. Appx. 416 (9th Cir. 2009) ...................................................................... 4 Pestmaster Franchise Network, Inc. v. Mata, No. 16-CV-07268-EMC, 2017 WL 1956927 (N.D. Cal., May 11, 2017) ............................................................................. 11, 12 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) ............................................................................... 11 Sofias v. Bank of Am., 172 Cal. App. 3d 583 (Cal. Ct. App. 1985) ........................................................... 6 Sound Check v. AFTRA, 204 F.3d 801 (8th Cir. 2000) ................................................................................. 5 Timmons v. Linvatec Corp., 263 F.R.D. 582 (C.D. Cal. 2010) .......................................................................... 3 Vaca v. Sipes, 386 U.S. 171 (1967) .............................................................................................. 5 Walden v. Fiore, 134 S.Ct. 1115 (2014) ......................................................................................... 12 Williams v. E & K Corp., No. CV-14-02699-PHX-GMS, 2016 WL 393637 (D. Ariz. Feb. 2, 2016) ...................................................................................................................... 4 STATUTES AND OTHER AUTHORITIES 28 U.S.C. § 1391 ................................................................................................... 3, 15 Fed. R. Civ. P. 56(c)(4)............................................................................................. 14 Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 4 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -iv- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT Fed. R. Evid. 402 ...................................................................................................... 14 Fed. R. Evid. 602 ...................................................................................................... 14 Fed. R. Evid. 701 ...................................................................................................... 14 Fed. R. Evid. 1002 .................................................................................................... 14 Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 5 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -1- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT I. INTRODUCTION Specially appearing Defendant ZeniMax Media Inc. (“ZeniMax”) files this Reply in Support of Its Motion to Dismiss Plaintiff’s Complaint (Dkt. No. 13) (“Motion to Dismiss” or “Motion”). To try to salvage the poorly pled Complaint, Plaintiff Dion DiMucci’s (“Plaintiff”) Opposition (Dkt. No. 24) (“Opposition”) seeks to reinvent his lawsuit. Plaintiff now asserts he is bringing a common law breach of contract claim based on a license agreement between ZeniMax and Universal Music Enterprises, a Division of UMG Recordings, Inc. (“UMG” or “UME”) (the “License Agreement”) under diversity jurisdiction. Plaintiff incorrectly accuses Defendant of “misstat[ing] or at least misunderstand[ing] the Complaint” (Opp. at 5:15-17), yet the lawsuit described in Plaintiff’s Opposition bears little to no resemblance to the Complaint which he filed. Plaintiff’s Civil Cover Sheet (Dkt. No. 1-1) asserts a breach of collective bargaining agreement (or “CBA”) (a claim for violation of the Labor Management Relations Act, the “LMRA claim”) under federal question jurisdiction. Plaintiff does not allege breach of the License Agreement in the Complaint. Instead, he references the SAG-AFTRA Commercials Contract, a collective bargaining agreement, throughout the Complaint with only a side reference to the License Agreement. As he admits, Plaintiff’s common law breach of contract claim is preempted by the LMRA. (Opp. at 6:4-11.) Plaintiff now claims that Exhibit 1 to the declaration of his counsel Steven Ames Brown (Dkt. No. 25) (“Brown Decl.”), the License Agreement (id., Exh. 1), is the operative contract that has been breached.1 (Opp. at 2:2-6.) In that License Agreement, ZeniMax allegedly agrees to make 1 Plaintiff conflates two license agreements in his Opposition, though he admits that his purported claim is solely based on the first UMG License Agreement. (See Opp. at 2:2-6.) This is likely because in the second UMG license ZeniMax and UMG consent to jurisdiction and venue in the courts of the Southern District of California. (See Opp. at 3:11-21.) The alleged operative UMG license, however, contains no consent to jurisdiction in California. (Brown Decl., Exh. 1.) In any event, the consent in the second UMG license suggests ZeniMax and UMG never intended to litigate in the Northern District of California, which is not a proper venue for this dispute. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 6 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -2- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT payments, if any, to the union, AFTRA, for the “express benefit of [AFTRA], and its members affected thereby,” and to arbitrate under the terms of the Sound Recordings CBA. (Brown Decl., Exh. 1 (§ 3(a)).) None of this saves Plaintiff’s Complaint. The Complaint cannot proceed under either Plaintiff’s LMRA claim or his newly conceived, preempted common law breach of contract theory. Plaintiff’s Complaint should be dismissed for the following reasons: • Plaintiff’s LMRA claim is time-barred and improper – the claim is barred by a six-month statute of limitations and ZeniMax is not an employer or party to the Commercials Contract. • Plaintiff did not plead breach of the License Agreement under a third-party beneficiary theory. Plaintiff admits his contract claim is preempted. • Even if Plaintiff sought leave to amend the Complaint (which he did not), amendment would be futile: First, the License Agreement states ZeniMax is to make payments if any for the express benefit of “AFTRA and its members affected thereby.” (Id. (emphasis added).) This provision does not entitle Plaintiff to renegotiate license fees and receive damages as if he were the copyright holder (which he is not).2 Second, the License Agreement expressly references the AFTRA CBA and requires an interpretation thereof, rendering Plaintiff’s claim preempted. Third, AFTRA, as the third-party theoretically benefiting from the union payments, would be an indispensable party and Plaintiff’s failure to include the union requires dismissal. Fourth, the License Agreement binds ZeniMax to “comply with the arbitration provisions . . . found in the National Code of Fair Practice for Sound Recordings” CBA. Fifth, the SAG-AFTRA Commercials Contract referenced throughout the Complaint also requires arbitration. 2 The License Agreement also demonstrates that ZeniMax is not obligated to pay any sums beyond the amounts allegedly due to SAG-AFTRA: “UME shall be responsible for all non-union payments to the Artist and the producers of the Recording in respect of this license.” (Brown Decl., Exh. 1 (§ 4).) Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 7 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -3- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT • This Court lacks jurisdiction over ZeniMax. Plaintiff fails to address, and therefore admits, there is no general jurisdiction over this lawsuit. Instead, his assertion in his Opposition to a receivable right due Plaintiff (in Florida) under the License Agreement does not give rise to specific jurisdiction over ZeniMax (in Maryland). See e.g., Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cnty., 137 S.Ct. 1773 (2017). The self-serving allegations in the Brown Declaration do not establish jurisdiction. • This Court is not the proper venue. That Plaintiff’s counsel is located in San Francisco does not establish venue under any prong of 28 U.S.C. § 1391. There is a reason why Plaintiff cannot cite to any other artist who has successfully pled a claim under the LMRA (directly or as a third-party beneficiary). Such a claim is preempted and the union’s necessary involvement will preclude any such claim from moving forward in Court. This Court should grant Defendant’s Motion to Dismiss and deny leave to amend. II. PLAINTIFF’S LMRA ACTION AGAINST ZENIMAX IS DOOMED Plaintiff’s LMRA action should be dismissed as time-barred and failing to satisfy statutory requirements, including the fact that ZeniMax is not a party to a labor contract with Plaintiff. Although Plaintiff puts the onus on the Court to “determine whether this is a common law breach of contract action, or a section 301 action” (Opp. at 5:13-14), it is required to do no such thing. Timmons v. Linvatec Corp., 263 F.R.D. 582, 585 (C.D. Cal. 2010) (“allowing plaintiffs to file first and investigate later . . . would be contrary to Rule 11(b)”). Plaintiff’s Complaint pleads a breach of collective bargaining agreement, despite his current attempt to distance himself from LMRA preemption. Plaintiff’s Civil Cover Sheet indicates that the nature of his suit is “other labor litigation” filed under the LMRA, 29 U.S.C. § 185(a) (“§ 301”) for “[b]reach of collective bargaining agreement.” (Dkt. No. 1-1.) Plaintiff claimed federal question jurisdiction of this dispute, expressly referencing his LMRA claim. (See Dkt. No. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 8 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -4- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT 1-1.) Plaintiff’s Complaint alleged “Defendant failed to separately bargain with Plaintiff and reach an agreement concerning such use with him and obtain his advance consent before the commercials were publicly exploited as required by [SAG-AFTRA] Commercials Contract, Section 28.”3 (Compl., ¶ 13 (emphasis added).) “In addition to money damages for Defendant’s continuing breach of the Commercials Contract Plaintiff seeks an injunction requiring Defendant to serve take down notices. . . .” (Id., ¶ 17 (emphasis added).) Plaintiff repeatedly tells the Court and ZeniMax that he is suing for an LMRA claim. Although now trying to recast his Complaint, he admits that a common law breach of contract claim would be preempted: “resolution of Plaintiff’s claim requires an interpretation of the collective bargaining agreement . . . .” (Opp. at 6:8-9.) For all of the reasons set forth in the Motion, ZeniMax properly moved to dismiss Plaintiff’s LMRA claim on the grounds that it is time-barred and does not state that ZeniMax “violat[ed] [a] contract[] between an employer and a labor organization.” 29 U.S.C. § 185(a). Plaintiff’s Opposition fails to address directly the fact that ZeniMax is not a proper party to his LMRA claim. Plaintiff further admits that his alleged claim began tolling at least as early as October 18, 2015. (Compl., ¶¶ 7, 12.) Thus, Plaintiff failed to file his LMRA claim within the six- month statute of limitations applicable to § 301 claims. Plaintiff attempts to recast his LMRA claim as a “straightforward” breach of contract suit, not requiring an allegation of breach of the duty of fair representation against the union.4 Plaintiff cannot plead around the LMRA in such a fashion. 3 Plaintiff alleges zero facts to support his conclusion that “[t]he collective bargaining agreement applicable in the medium of television and Internet commercials in 2015 was the SAG-AFTRA Commercials Contract.” (Compl., ¶ 9.) ZeniMax disputes the Commercials Contract applies. 4 Each case cited by Plaintiff is distinguishable and inapplicable because it involves a former employee claiming breach of a CBA against his former employer and/or union. ZeniMax is neither. See Pencikowski v. Aerospace Corp., 340 Fed. Appx. 416 (9th Cir. 2009) (former employee alleged breach of CBA and wrongful termination against his employer); Kuang v. Bel Air Mart, No. 2:15-cv-00160-JAM-EFB, 2015 WL 3407881, at * 2 (E.D. Cal. May 22, 2015) (same); Williams v. E & K Corp., No. CV-14-02699-PHX-GMS , 2016 WL 393637, at *3 (D. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 9 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -5- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT Indeed, Plaintiff fails to cite any authority permitting a “straightforward” LMRA action to be brought against a non-employer defendant.5 There is none. Similarly, Plaintiff fails to cite any authority permitting a plaintiff to collect alleged damages pursuant to a CBA with exclusive grievance and arbitration procedures without at least attempting to exhaust those procedures. That which Plaintiff is trying to do – plead around CBAs and the LMRA – is not permitted.6 The payments if any from ZeniMax described in the License Agreement cannot be divorced from the union, the CBAs, and the LMRA. Indeed, even the License Agreement on which Plaintiff now relies demonstrates that Plaintiff cannot seek any payments from ZeniMax; it states that “UME,” and not ZeniMax, “shall be responsible for all non-union payments to the Artist . . . .” (Brown Decl., Exh. 1 (§ 4).) For this reason, ZeniMax’s Motion to Dismiss should be granted. III. PLAINTIFF DOES NOT PLEAD A BREACH OF CONTRACT CLAIM AGAINST ZENIMAX Plaintiff spends the bulk of his Opposition attempting to refashion his LMRA claim as a “common law breach of contract” case. (See, e.g., Opp. at 1:2-3, 5:16- 18.) Indeed, Plaintiff now asserts that “this is a common law breach of contract action” and he is a third-party beneficiary under the License Agreement. (Id.) Remarkably, the phrase “breach of contract” appears nowhere in the Complaint. The standard elements of a claim for breach of contract are (1) the contract, Ariz. Feb. 2, 2016) (employee sued employer and union for violation of Title VII, breach of contract, fraud, misrepresentation, and breach of trust); Vaca v. Sipes, 386 U.S. 171, 173 (1967) (class action by former employee against union for termination in violation of the CBA). 5 Plaintiff’s reliance on Sound Check v. AFTRA, 204 F.3d 801 (8th Cir. 2000), for the proposition that ZeniMax’s consent to a portion of a CBA, pursuant to the License Agreement, deems ZeniMax an “employer” under the LMRA is mistaken. Sound Check involved a dispute between AFTRA and Sound Check over whether Sound Check was a “producer” or a payroll company for purposes of the applicable CBAs and whether the union reserved unilateral right to determine producer status. Id. at 802. Sound Check does not address when non-signatories to a CBA are deemed “employers” under the LMRA. 6 This Court should also reject Plaintiff’s argument that ZeniMax’s declaration that it was not his employer “renders moot all of its LMRA arguments.” (Opp. at 7.) Regardless whether ZeniMax employed him, Plaintiff’s purported claim is preempted as requiring interpretation of a CBA. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 10 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -6- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom. Abdelhamid v. Fire Ins. Exch., 182 Cal. App. 4th 990, 999 (Cal. Ct. App. 2010). “[A] third party beneficiary must show the contract was made expressly for his or her benefit. [Citations] ‘[E]xpressly’ means ‘in an express manner; in direct or unmistakable terms; explicitly; definitely; directly.’ [Citations] ‘[A]n intent to make the obligation inure to the benefit of the third party must have been clearly manifested by the contracting parties.’ [Citations].” Sofias v. Bank of Am., 172 Cal. App. 3d 583, 587 (Cal. Ct. App. 1985) (holding plaintiff was not a third-party beneficiary based on review of contract). Plaintiff does not plead the requisite elements of a third-party beneficiary claim. In his Opposition, Plaintiff cannot cite to allegations in the Complaint where he pleads: (1) a contract between the parties; (2) what provision was breached; (3) the resulting damages; and (4) an express intent to benefit Plaintiff by the provision allegedly breached. Plaintiff cannot point to any promise made to Plaintiff by ZeniMax in the License Agreement. At most, there is an alleged promise to make payments if any “for the express benefit of [SAG-AFTRA] and its members affected thereby.” (Brown Decl., Exh. 1 (§ 3(a)).) Plaintiff does not plead that he was one of the “members affected thereby” of SAG-AFTRA at the time the License Agreement was executed, or that he was an intended beneficiary of Section 3(a) of the License Agreement. Further, the plain terms of the License Agreement reject Plaintiff’s argument. The License Agreement provides “UME shall be responsible for all non-union payments to the Artist and the producers of the Recording in respect of this license.” (Id., § 4.) And that ZeniMax’s “only obligation is to make the payment as required under this agreement.” (Id., § 8.) Even if Plaintiff pled these allegations, Plaintiff’s Complaint would remain fatally flawed for all the reasons set forth below and in the Motion to Dismiss. IV. LEAVE TO AMEND WOULD BE FUTILE As a preliminary matter, Plaintiff does not seek leave to amend his pleading. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 11 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -7- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT Plaintiff’s Opposition offers no facts that he could plead to save his Complaint. Leave should be denied to allow Plaintiff to plead his new third-party beneficiary theory because it would be futile. Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 246-47 (9th Cir. 1990) (leave to amend not required if it would be futile). A. Amendment Would Be Futile Because Plaintiff Admits that His Contract Claim Requires Interpretation of the CBA, Demonstrating His Claim, if Any, Is Preempted. The License Agreement does not give Plaintiff standing and jurisdiction to sue ZeniMax in this Court. Plaintiff cannot plead around the LMRA and any attempt to do so must be denied on preemption grounds. The U.S. Supreme Court has held that the basic test for determining whether a claim is preempted is whether it “requires the interpretation of the collective bargaining agreement.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413 (1988); Allis Chalmers v. Lueck, 471 U.S. 202, 220 (1985). “[T]o determine whether a state [statute claim] is ‘substantially dependent’ on the terms of a CBA,” the Ninth Circuit has instructed courts to “decide whether the claim can be resolved by ‘look[ing] to’ versus interpreting the CBA.” Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1060 (9th Cir. 2007) (citation omitted). In Plaintiff’s Opposition, he states “[i]t’s Defendant’s violation of its UMG License promise to pay Plaintiff which gives rise to his breach of contract claim.” (Opp. at 5:22-23.) Further, Plaintiff admits that the “resolution of Plaintiff’s claim requires an interpretation of the collective bargaining agreement, to determine the economic benefits due Plaintiff . . .” and thus would be preempted by LMRA § 301. (Id. at 6:8-10.) Plaintiff’s Complaint, as filed, claims that ZeniMax had to “bargain with him” under the union CBA. (See, e.g., Compl., ¶ 13.) Plaintiff is bound by these judicial admissions that the CBA applies and that his claim is preempted. “Factual assertions in pleadings and pretrial orders, unless amended, are considered Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 12 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -8- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT judicial admissions conclusively binding on the party who made them.” Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir.1988); Mulato v. Wells Fargo Bank, N.A., 76 F. Supp. 3d 929, 948 (N.D. Cal. 2014). That Plaintiff’s claim, even if amended, would be preempted is supported by the language of the License Agreement itself, which by its terms requires ZeniMax to make payments to SAG-AFTRA, indicates that ZeniMax is bound by the Sound Recordings CBA’s arbitration provision, and states that UME (as opposed to ZeniMax) is responsible for all non-union payments. (Brown Decl., Exh. 1 (§§ 3(a) and 4).) The License Agreement, taken as a whole, clearly evinces an intent that ZeniMax is not obligated to do anything outside the union and any dispute should be arbitrated under the CBA. Thus, Plaintiff’s new common law breach of contract claim would be preempted by LMRA § 301 and would fail for the reasons set forth herein and in ZeniMax’s Motion to Dismiss. Plaintiff incorrectly cites Karo v. San Diego Symphony Orchestra Ass’n, 762 F.2d 819 (9th Cir. 1985), as authority for his proposition that third-party beneficiaries have “standing to enforce promises made for their benefit both in common law breach of contract actions and Section 301 LMRA, 29 U.S.C. § 185 claims.” (Opp. at 5:18-21.) Karo is distinguishable but nonetheless helpful to ZeniMax because the plaintiff in Karo, a former symphony employee and union member, brought a hybrid LMRA action for breach of a CBA and breach of the duty of fair representation against the symphony and the union alleging that he was a third-party beneficiary to the CBA itself. 762 F.2d at 820 (court of appeals dismissed plaintiff’s hybrid suit because plaintiff (1) had no standing to sue the union as he was not a member of the bargaining unit to which a duty of fair representation was owed, and (2) lacked standing to sue as a third-party beneficiary under California law because he had no vested rights at the time the CBA was amended). Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 13 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -9- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT B. Leave to Amend Should Be Denied Because AFTRA is an Indispensable Party. Accepting Plaintiff’s revised theory, SAG-AFTRA is a joint obligee that is an indispensable party to this suit. Plaintiff’s suit is subject to dismissal without it. Pursuant to Federal Rule of Civil Procedure 19, joint obligees, like SAG-AFTRA, are generally regarded as indispensable parties. See Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 408 (3d Cir. 1993) (“Joint obligees, on the other hand, usually have been held indispensable parties and their nonjoinder has led to a dismissal of the action.” (citation omitted)). Plaintiff now claims he is entitled to payments as a result of Section 3(a) of the alleged License Agreement. (Opp. at 5:22-25.) Section 3(a) of the License Agreement, however, states that the obligation to make payments, if any, is for the benefit of SAG-AFTRA: “[ZeniMax] hereby agrees, that in consideration for the use of the Recording, and for the express benefit of [SAG-AFTRA] and its members affected thereby, to make the above payments . . . .” (Compl., ¶ 8; Brown Decl., Exh. 1 (§3(a)).) If Plaintiff could somehow state a viable breach of contract claim, then SAG-AFTRA would be a co-obligee on the purported amounts due. Therefore, the Court could not make a theoretical determination of what payments were due under the License Agreement or resolve this case with any finality without the inclusion of SAG-AFTRA. For this reason, too, amendment to allege a third-party beneficiary claim under the License Agreement would be futile. C. Leave to Amend Should Be Denied Because Plaintiff’s Claim is Arbitrable. If the Court somehow allows Plaintiff’s claim to proceed either as pled or in an amended pleading, either AFTRA or ZeniMax will have the right to compel arbitration against Plaintiff. The License Agreement itself provides the following: “[ZeniMax] hereby agrees . . . to make the above payments . . . and to be bound by and comply with the arbitration provisions (and the procedures contained therein) Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 14 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -10- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT found in the National Code of Fair Practice for Sound Recordings.” (Brown Decl., Exh. 1 (§ 3(a)).) The National Code of Fair Practice for Sound Recordings, in turn, states the parties shall arbitrate any dispute and that arbitration is a complete defense to any suit: “All disputes and controversies of every kind and nature whatsoever between any Company and AFTRA or between any Company and any member of AFTRA . . . shall be submitted to arbitration in accordance with the following procedure.” National Code of Fair Practice for Sound Recordings, § 3, of which the Court can take judicial notice: https://www.sagaftra.org/files/2002- 2006_aftra_national_code_of_fair_practice_for_sound_recordings.pdf. “The parties agree that the provisions of this paragraph shall be a complete defense to any suit, action or proceeding instituted in any Federal, State, or local court before any administrative tribunal with respect to any controversy or dispute which arises during the period of this Agreement and which is therefore arbitrable as set forth above.” Id., § 3(c). The Commercials Contract to which SAG-AFTRA is a signatory contains a similar arbitration provision in Section 58, of which the Court can take judicial notice: https://www.sagaftra.org/files/2013 commercialscontract_e-book_0.pdf. Therefore, if Plaintiff files an amended pleading for breach of the License Agreement, the mandatory arbitration agreements constitute a complete defense and amendment is futile. V. THIS COURT DOES NOT HAVE SUBJECT MATTER OR PERSONAL JURISDICTION OVER ZENIMAX A. There is No General Jurisdiction, Which Plaintiff Does Not Refute Plaintiff does not oppose ZeniMax’s Motion to Dismiss based on lack of general jurisdiction grounds. In doing so, Plaintiff tacitly acknowledges there is no general jurisdiction over ZeniMax, a Delaware corporation with a principal place of business in Maryland that is not at home in California. (See, e.g., Mot. at 2.) Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 15 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -11- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT B. There is No Specific Jurisdiction Based on the License Agreement Plaintiff further fails to offer any authority or competent evidence that would satisfy his burden to establish jurisdiction. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (“Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate.”). In his Opposition, Plaintiff, a Florida resident, ignores controlling U.S. Supreme Court precedent, tries to recast his claim as one of breach of third-party beneficiary, and submits an improper and self-serving declaration from his counsel recounting “facts” that have nothing to do with Plaintiff’s new theory of liability, i.e., whether ZeniMax, a Maryland resident, owes Plaintiff sums as a result of Section 3(a) in an alleged License Agreement between ZeniMax and UMG to which he is not a party. (See Opp. at 7:2-6.) None of these approaches creates jurisdiction over ZeniMax. Plaintiff’s Opposition conspicuously fails to address Daimler AG v. Bauman, 134 S.Ct. 746 (2014), Bristol-Myers Squibb Co., 137 S.Ct. 1773, and BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 (2017) – recent U.S. Supreme Court authority that would reject the expansive jurisdiction Plaintiff advocates. Constitutional due process requires that for a State to exercise specific jurisdiction, the defendant’s suit-related conduct must create a substantial connection with the forum state. Daimler, 134 S.Ct. at 754. Indeed, in-state activities must be “continuous and systematic” and “give rise to the liabilities sued on.” Id. The Supreme Court rejects claims from out-of-state residents trying to create a tenuous link to California. Id. To establish specific personal jurisdiction, this Court has clarified: the claim [must] arise out of the defendant’s forum- related activities. Id. In Walden, the Court emphasized that “it is the defendant, not the plaintiff or third parties, who must create contacts with the forum State.” Walden v. Fiore, 134 S.Ct. 1115, 1126 (2014) (emphasis added). And the effect of the defendant’s conduct must be Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 16 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -12- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT “tethered to” the state, not to the plaintiff. Id. at 1125. In determining whether Plaintiff’s claims arise out of forum related activity, the Ninth Circuit follows the “but for” test. See Myers v. Bennett Law Offices, 238 F.3d 1068, 1075 (9th Cir. 2001). Hence, Plaintiff must show that it would not have suffered an injury “but for” [the defendant’s] forum related conduct. See id. Pestmaster Franchise Network, Inc. v. Mata, No. 16-CV-07268-EMC, 2017 WL 1956927, at *3 (N.D. Cal., May 11, 2017) (Chen, J.) (citations omitted) (granting motion to dismiss for lack of jurisdiction). Plaintiff’s Opposition does not point to a single fact pled in the Complaint that establishes that this Court has specific jurisdiction over ZeniMax. (See Opp. at 14-20.) Moreover, nothing in the Opposition saves the Complaint. Even if the Court considers the alleged License Agreement (Brown Decl., Exh. 1), that Plaintiff could have pled, and chose not to plead in his Complaint or attach thereto, there is not a sufficient nexus between ZeniMax’s alleged activities in California and Plaintiff’s claim to establish specific jurisdiction over this dispute. ZeniMax does not dispute that aspects of the Fallout 4 videogame production were connected to California. But that is not the end of the inquiry. Plaintiff’s “claim must be one which arises out of or relates to the defendant’s forum-related activities.” Plaintiff fails to make that showing. At most, in his Opposition, Plaintiff now claims the right to receive payments as a third-party beneficiary of the License Agreement. The License Agreement was directed to ZeniMax at its address in Rockville, Maryland. Plaintiff asserts that the place of payment is “the place of Defendant’s contractual performance” (Opp. at 16:14-17), but the License Agreement requires ZeniMax’s payment to UME’s bank in Concord, California or to UME in Chicago, Illinois. (Brown Decl., Exh. 1 (§ 10).) Further, the License Agreement nowhere sets forth any mechanism for paying Plaintiff because he was not a contemplated third-party beneficiary. Even if the License Agreement Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 17 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -13- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT somehow contemplated payments to Plaintiff by virtue of Section 3(a), Plaintiff is a resident of Florida, not California. Moreover, according to the California Secretary of State, UMG Recordings, Inc., the contracting party, is a Delaware corporation. While the License Agreement states it will be governed by the “laws of the State of California,” it does not provide for jurisdiction in California. Indeed, the License Agreement is conspicuously silent as to jurisdiction, unlike the later alleged license agreement. (Cf. Brown Decl., Exh. 1 with Exh. 2.) None of these facts support specific jurisdiction in California. In sum, neither Plaintiff, nor Defendant is a California resident. Plaintiff now claims an alleged receivable purportedly payable to a union under Section 3(a) in the License Agreement, an agreement to which he is not a party and to which neither party is a California corporation. He cannot recast his dispute as concerning the entire production of the videogame of Fallout 4 or marketing thereof such that any links from that conduct to California are fair game when all he demands is a contractual payment. Indeed, the Supreme Court rejects such an approach. Bristol- Myers Squibb Co., 137 S.Ct. at 1777 (“The present case illustrates the danger of the California approach. The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims. As noted, the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. . . . As we have explained, ‘a defendant’s relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction.’ Walden, 571 U.S. at ––––, 134 S.Ct. at 1123.”). Finally, Plaintiff submits a lengthy, self-serving, and argumentative declaration from his counsel, the Brown Declaration, that is so lacking in a proper evidentiary basis that it should be stricken. Federal Rule of Civil Procedure 56(c)(4) (previously in subdivision (e)), provides that “[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 18 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -14- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” See also Juarez v. Jani–King of Cal., Inc., No. 09–cv–3495 SC, 2010 WL 3766649, at *2 (N.D. Cal. Sept. 24, 2010) (striking declaration of plaintiffs’ attorney as argumentative, conclusory, and not based on personal knowledge in violation of Rule 7–5(b)). ZeniMax objects to the Brown Declaration as setting forth not facts, but mere conclusions, arguments, and unsupported conjecture, and as not based on personal knowledge.7 ZeniMax requests that the Court disregard the Brown Declaration in its entirety. For all of these reasons, this Court should grant Defendant’s Motion and find the Court lacks jurisdiction over this dispute. VI. VENUE IS NOT PROPER IN THE NORTHERN DISTRICT Plaintiff’s claim that venue is proper in the Northern District is a blatant misstatement of the relevant law and facts. Plaintiff’s Opposition does not establish any of the requirements of 28 U.S.C. § 1391. As set forth in the Motion, 28 U.S.C. § 1391 requires that a civil action be brought where the defendant resides, where a substantial part of the events giving rise to the claim occurred, or any district in which the defendant is subject to personal jurisdiction. The Northern District of California satisfies none of these requirements. Plaintiff asserts that venue is proper here because “[t]he breach occurred where Defendant’s compensation was due. It was due in San Francisco.” (Opp. at 21:4-8.) Relying on his counsel’s declaration, he then convolutedly asserts “the only way Defendant could perform its [contractual] obligation . . . would have been 7 ZeniMax objects to all statements in the Brown Declaration (1) regarding Mr. Brown’s resume as irrelevant because his experience is not the subject of ZeniMax’s Motion (Brown Decl., ¶¶ 1-9, 14, 15); (2) concerning other alleged licenses that ZeniMax has entered into or alleged persons ZeniMax has hired as lacking in personal knowledge (id., ¶¶ 11, 12, 15-30); (3) characterizing CBAs and licenses as violating the Best Evidence Rule because the documents can speak for themselves (id., ¶¶ 7-10, 30); (4) regarding ZeniMax’s alleged breach as impermissible legal conclusion and argumentative (id., ¶ 11); and (5) that lack foundation and call for speculation (id., ¶¶ 5, 7, 9, 10, 13-21, 24, 27, 31). See Fed. R. Evid. 402, 602, 701, 1002. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 19 of 20 DLA PIPER LLP (US) LO S A NG EL ES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EAST\146519346.2 -15- ZENIMAX MEDIA INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT to come to . . . San Francisco.” (Id. at 21:11-14; see also Brown Decl., ¶ 11.) This argument is specious and speculative. Plaintiff does not, because he cannot, cite a single case where venue was proper because the lawyer for a third-party beneficiary is located in a particular district and the payor theoretically should have negotiated with that lawyer in person. See also Mirza v. Cent. Asia Inst., No. CV1401542MMMPJWX, 2014 WL 12663437, at *5 (C.D. Cal., May 27, 2014) (granting motion to transfer to Montana in part because “it appears that his only connection to the district is the fact that his attorney has his office in Newport Beach.”) Moreover, the License Agreement does not require ZeniMax to bargain with Plaintiff and it does not require payment in San Francisco. (Brown Decl., Exh. 1 (§ 3(a)).) There is no such contractual term. As detailed in the Motion, ZeniMax is not a resident of California, is not subject to personal jurisdiction in California, and the alleged breach of the License Agreement (accepting Plaintiff’s new theory for this purpose), did not occur in San Francisco. Plaintiff is a Florida resident. And, there is no provision in the License Agreement requiring anything to be paid to Plaintiff in San Francisco. If not otherwise dismissed, the Court should transfer this case to the District of Maryland. VII. CONCLUSION For all of the reasons set forth herein and in its Motion, Plaintiff’s Complaint is fatally flawed. ZeniMax respectfully requests that this Court dismiss the Complaint in its entirety, with prejudice, and without leave to amend. Dated: September 21, 2017 Respectfully submitted, DLA PIPER LLP (US) By /s/ John M. Nading ANN K. FORD HARRIET LIPKIN JOHN M. NADING RACHEL E. K. LOWE Attorneys for Specially Appearing Defendant ZENIMAX MEDIA INC. Case 3:17-cv-03789-EMC Document 33 Filed 09/21/17 Page 20 of 20