Tatiana Plakhova v. James Hood et al

NOTICE OF MOTION AND MOTION to Dismiss Case Pursuant to F.R.C.P. 12

C.D. Cal.December 30, 2016

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 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 Robert J. Romero (SBN CA 136539) rromero@hinshawlaw.com HINSHAW & CULBERTSON LLP One California Street, 18th Floor San Francisco, CA 94111 Telephone: 415-362-6000 Facsimile: 415-834-9070 Wendy Wen Yun Chang (SBN CA 180114) wchang@hinshawlaw.com HINSHAW & CULBERTSON LLP 11601 Wilshire Blvd. Suite 800 Los Angeles, CA 90025 Telephone: 310-909-8000 Facsimile: 310-909-8001 Attorneys for Defendant BENJAMIN LASKI UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION TATIANA PLAKHOVA, Plaintiff, vs. JAMES HOOD, an individual; MOODSWINGS, LLC, a California Limited Liability Company; BENJAMIN LASKI, an individual; and DOES 1 through 10, Defendants. Case No. 2:16-cv-08245-TJH-FFM (Honorable Terry J. Hatter, Jr.) NOTICE OF MOTION AND MOTION TO DISMISS PURSUANT TO F.R.C.P. 12(B)(6), MOTION TO STRIKE PURSUANT TO F.R.C.P. 12(F), OR, IN THE ALTERNATIVE, MOTION FOR A MORE DEFINITE STATEMENT PURSUANT TO F.R.C.P. 12(E); MEMORANDUM OF POINTS AND AUTHORITIES Date: January 30, 2017 Time: UNDER SUBMISSION Courtroom: 9B Complaint Filed: November 4, 2016 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 1 of 24 Page ID #:125 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 1 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN: PLEASE TAKE NOTICE THAT on January 30, 2017 at in Courtroom 9B of the above-entitled court, located at 350 W. 1st Street, Los Angeles, California 90012, Defendant BENJAMIN LASKI (“Defendant”) will and hereby does move for an order dismissing the Complaint (“Complaint”) portions of the complaint, with prejudice, pursuant to Federal Rule of Civil Procedure 12(b)(6), because: 1. The Second Cause of Action for Vicarious and/or Contributory Copyright Infringement fails to state a claim upon which relief can be granted and are not pled with particularity; 2. The Eighth Cause of Action for Fraud fails to state a claim upon which relief can be granted and are not pled with particularity; and 3. The Ninth Cause of Action for Negligent Misrepresentation fails to state a claim upon which relief can be granted and are not pled with particularity. PLEASE TAKE FURTHER NOTICE that Defendant will and hereby does move for a further order striking Portions of the Complaint, with prejudice, pursuant to Federal Rules of Civil Procedure Rule 12(f), because: 4. Plaintiff has failed to set forth the requisite facts establishing an entitlement to punitive damages in the 6th, 7th, 8th, and 9th Causes of Action; 5. Plaintiff's apparent request for money damages in the 6th Cause of Action is not recoverable as a matter of law; 6. Plaintiff’s claim for recovery of statutory damages and attorneys' fees under the Copyright Act is not recoverable because Plaintiff has no registered US Copyright and she has failed to plead a valid registration. (Complaint ¶27, ¶36, ¶42, prayer b, and prayer d). PLEASE TAKE FURTHER NOTICE, AND ALTERNATIVELY, that by virtue of the inherently vague and ambiguous allegations of the Complaint under the Second Cause of Action for Vicarious and/or Contributory Copyright Infringement and Sixth Causes of Action for Violation of California Business and Professions Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 2 of 24 Page ID #:126 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 2 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 Code section 17200 et seq., Defendant moves this Court for a more definite statement pursuant to Fed. Rules of Civ. Proc., Rule 12(e). This Motion is based upon this Notice, the Memorandum of Points and Authorities in support thereof, all other pleadings and records on file in this action, as well as such oral argument or other evidence that this Court may consider at the hearing these motions. This Motion is made following meet and confers with Plaintiff's counsel pursuant to L.R. 7-3, which occurred on December 19, 2016, December 22, 2016, December 23, 2016, December 28, 2016, and December 29, 2016. Respectfully submitted, DATED: December 30, 2016 By: HINSHAW & CULBERTSON LLP /s/Wendy Wen Yun Chang Robert J. Romero Wendy Wen Yun Chang Attorneys for Defendant BENJAMIN LASKI Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 3 of 24 Page ID #:127 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 i TABLE OF CONTENTS/AUTHORITIES 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 TABLE OF CONTENTS Page I. INTRODUCTION AND SUMMARY ............................................................. 1 II. LEGAL ANALYSIS ......................................................................................... 2 III. THE 2ND CAUSE OF ACTION FOR VICARIOUS AND/OR CONTRIBUTORY COPYRIGHT INFRINGEMENT FAILS TO STATE A VALID CAUSE OF ACTION AND ARE NOT PLED WITH PARTICULARITY ................................................................................ 2 A. The 2nd Cause of Action is Not Pled With Particularity and Fails to State a Claim ....................................................................................... 3 B. The Complaint Fails to State a Viable Claim Against Mr. Laski for Vicarious or Contributory Copyright Infringement on the Merits ...................................................................................................... 5 IV. THE 8TH CAUSE OF ACTION FOR FRAUD AND THE 9TH CAUSE OF ACTION FOR NEGLIGENT MISREPRESENTATION SHOULD BE DISMISSED BECAUSE THEY FAIL TO STATE VALID CLAIMS AND ARE NOT PLED WITH PARTICULARITY ........................ 6 V. PLAINTIFF'S CLAIMS FOR PUNITIVE DAMAGES IN THE 6TH THROUGH 9TH CAUSES OF ACTION, AND THE APPARENT REQUEST FOR MONEY DAMAGES IN THE 6TH CAUSE OF ACTION, MUST BE STRICKEN AS THEY ARE NOT RECOVERABLE AS A MATTER OF LAW ................................................ 10 VI. PLAINTIFF’S CLAIM FOR RECOVERY OF STATUTORY DAMAGES AND ATTORNEYS FEES UNDER THE COPYRIGHT ACT FAILS BECAUSE ONLY OWNERS OF US REGISTERED WORKS MAY COLLECT STATUTORY DAMAGES AND ATTORNEYS' FEES ...................................................................................... 13 VII. PLAINTIFF'S 2ND CAUSE OF ACTION AND 6TH CAUSE OF ACTION ARE FATALLY UNCERTAIN. .................................................... 13 A. The Second Cause of Action for Vicarious/Contributory Copyright Is Vague and Fatally Uncertain ........................................... 14 B. The Sixth Cause of Action for Violation of CA Business & Professions Code §17200 is Fatally Uncertain. .................................... 14 VIII. CONCLUSION ............................................................................................... 14 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 4 of 24 Page ID #:128 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 ii TABLE OF CONTENTS/AUTHORITIES 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 TABLE OF AUTHORITIES Page(s) Cases Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226 ......................................................................................... 12 Aulson v. Blanchard (1st Cir. 1996) 83 F.3d 1 ........................................................................................ 3 B.L.M. v. Sabo & Deitsch (1997) 55 Cal.App.4th 823 ..................................................................................... 6 Berg & Berg Enterprises LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802 ................................................................................... 5 Clark v. Allstate, 106 F.Supp.2d 1016 (S.D. Cal. 2000) .................................................................. 11 College Hospital, Inc. v. Superior Court (1994) 8 Cal. 4th 704 ............................................................................................ 10 Diediker v. Peelle Financial Corp. (1997) 60 Cal.App.4th 288 ..................................................................................... 6 Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) ................................................................................ 5 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951 ............................................................................................. 6 Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) .................................................. 2 Fox v. Pollack (1986) 181 Cal.App.3d 954 .................................................................................... 6 Gee v. CBS, Inc., 471 F.Supp. 600 (E.D.Pa.1979) .............................................................................. 3 Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086 (C.D.Cal.1999) ...................................................................... 7 Estate of Graham v. Sotheby’s, Inc., 178 F. Supp. 3d 974, 996 (C.D. Cal. 2016) .......................................................... 11 Hartman v. Hallmark Cards, Inc., 639 F.Supp. 816 (W.D.Mo. 1986), affd. 833 F.2d 117 (8th Cir. 1987) ....................................................................................................................... 3 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 5 of 24 Page ID #:129 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 iii TABLE OF CONTENTS/AUTHORITIES 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 Jackson v. East Bay Hosp. 980 F.Supp. 1341 (N.D. Cal. 1997) ................................................................ 10, 11 Kernal Records Oy v. Mosley, 694 F.3d 1294 (11th Cir. 2012) ............................................................................ 13 Marvullo v. Gruner & Jahr, 105 F.Supp.2d 225 (S.D.N.Y. 2000) ...................................................................... 3 Media.net Advertising FZ-LLC v. NetSeer, Inc., 156 F.Supp.3d 1052, 1068 (N.D. Ca. 2016) ........................................................... 3 Mock v. Michigan Millers (1992) 4 Cal. App. 4th 306 ................................................................................... 11 Pareto v. F.D.I.C. (9th Cir. 1998) 139 F.3d 696 .................................................................................. 2 Perfect 10, Inc. v. Visa Int'l Serv. Ass'n, 494 F.3d 788 (9th Cir. 2007) .................................................................................. 5 Petersen v. Allstate Indem. Co., 281 F.R.D. 413 (C.D.Cal.2012) .............................................................................. 7 Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal. App. 3d 104 .................................................................................... 6 Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671 .............................................................................................. 9 Smith v. Sup. Crt. (1992) 10 Cal. App. 4th 1033 ............................................................................... 12 United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) ............................................ 2 Cafasso, ex rel. United States v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir.2011) ........................................................................... 8, 10 Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993 (9th Cir.2010) ................................................................................... 7 Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097 (9th Cir.2003) ............................................................................. 6, 7 In re Wal-Mart Stores, Inc. Wage and Hour Litigation, 505 F.Supp.2d 609 (N.D. Cal. 2007) .................................................................... 12 Walling v. Beverly Enters., 476 F.2d 393 (9th Cir.1973) ................................................................................... 7 Wildlife Internationale, Inc. v. Clements, 591 F.Supp. 1542 (S.D.Ohio 1984) ........................................................................ 3 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 6 of 24 Page ID #:130 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 iv TABLE OF CONTENTS/AUTHORITIES 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 Zhang v. Sup. Crt. (2013) 57 Cal.4th 364 ..................................................................................... 11, 14 Statutes 17 U.S.C. §412 ........................................................................................................... 13 17 U.S.C. §504, §505 ................................................................................................. 13 28 U.S.C. §1367(a) ...................................................................................................... 2 CA Business & Professions Code §17200 ................................................ 1, 11, 12, 14 CA Civil Code §1714.10 ............................................................................................. 5 Cal. Bus. & Prof. Code § 17203 ................................................................................ 11 California Civil Code §3294 ................................................................................ 10, 11 California Civil Code §3294(c)(1) ............................................................................ 10 California Civil Code §3294(c)(2) ............................................................................ 10 California Civil Code §3294(c)(3) ............................................................................ 11 Other Authorities FRCP Rule 8 ................................................................................................................ 3 FRCP 8, 9(b) .............................................................................................................. 11 FRCP Rule 9(b) ..................................................................................................... 6, 11 FRCP 12(b)(6) ............................................................................................................. 2 FRCP Rule 12(e) ........................................................................................................ 13 FRCP Rule 12(f) ........................................................................................................ 10 L.R. 7-3 ........................................................................................................................ 2 Rule 8 ........................................................................................................................... 3 Rule 8(a) ...................................................................................................................... 8 Rule 9(b) ............................................................................................................ 6, 7, 11 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 7 of 24 Page ID #:131 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 1 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 I. INTRODUCTION AND SUMMARY This is a single lawsuit filed by Plaintiff against both her former LLC business partner, James Hood (a music artist), and against the attorney for that LLC, Benjamin Laski. Plaintiff and James Hood had formed Vertical Time, LLC, to pursue joint business interests, with Mr. Hood providing capital, and Ms. Plakhova providing digital artwork. They came to Mr. Laski initially to form the LLC, and thereafter from time to time with joint instructions for Mr. Laski to execute their business decisions. Mr. Hood and Plakhova decided to end their working relationship and Mr. Laski contends the parties mutually agreed to dissolve it.1 Thereafter, the parties were unable to reach agreement about distribution of the LLC's assets in the LLC's post-dissolution windup, and this lawsuit followed. Only one cause of action against Mr. Laski sounds in federal law, the 2nd Cause of Action for Vicarious and/or Contributory Copyright Infringement. The vast majority of and remaining claims stated against Mr. Laski sound in state law claims, namely, the 6th Cause of Action (Violation of California Business & Professions Code §17200 et seq), 7th Cause of Action (Breach of Fiduciary Duty), 8th Cause of Action (Fraud), and 9th Cause of Action (Negligent Misrepresentation). This motion to dismiss should be granted as to the 2nd Cause of Action for Vicarious and/or Contributory Copyright Infringement, 8th Cause of Action for Fraud and the 9th Cause of Action for Negligent Misrepresentation because Plaintiff fails to state valid claims for which relief can be granted and they are not pled with particularity. Further, the Motion to Strike the punitive damage claims in the 6th-9th causes of action should be granted because Plaintiff's punitive damages claims are not 1 Plaintiff disputes her consent to the dissolution. Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 8 of 24 Page ID #:132 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 2 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 recoverable as a matter of law. Also, Plaintiff's apparent request for non-recoverable money damages in the 6th Cause of Action should be stricken in ¶64. Further, the Motion to Strike Plaintiff's claims for statutory damages and attorney's fees under the Copyright Act fail because she does not have, and has failed to plead, a valid US registration. Alternatively, if this court does not grant the motion to dismiss and/or the motion to strike, the motion for a more definite statement should be granted as to the 2nd Cause of Action and the 6th Cause of Action in that they are fatally uncertain. This Motion is made following meet and confers with Plaintiff's counsel pursuant to L.R. 7-3, which occurred on December 19, 2016, December 22, 2016, December 23, 2016, December 28, 2016, and December 29, 2016. II. LEGAL ANALYSIS This court has original jurisdiction over the copyright claims. This court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. §1367(a). When a federal court has supplemental jurisdiction over a plaintiff's state claims, state substantive law governs the merits of that claim, and federal procedural law governs procedure. See Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938);United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). III. THE 2ND CAUSE OF ACTION FOR VICARIOUS AND/OR CONTRIBUTORY COPYRIGHT INFRINGEMENT FAILS TO STATE A VALID CAUSE OF ACTION AND ARE NOT PLED WITH PARTICULARITY A FRCP 12(b)(6) motion challenges the legal sufficiency of the Complaint. While the Court must accept as true all material allegations in the complaint and reasonable inferences drawn therefrom, the Court need not “swallow the plaintiff’s invective hook, line, and sinker; bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like need not be credited.” See Pareto v. Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 9 of 24 Page ID #:133 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 3 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 F.D.I.C. (9th Cir. 1998) 139 F.3d 696, 699; Aulson v. Blanchard (1st Cir. 1996) 83 F.3d 1, 3. A. The 2nd Cause of Action is Not Pled With Particularity and Fails to State a Claim FRCP Rule 8 requires a pleading to set forth a short and plain statement of the claim showing that the pleader is entitled to relief. “To be sufficient under Rule 8 a claim of infringement must state, inter alia, which specific original work is the subject of the copyright claim.” Gee v. CBS, Inc., 471 F.Supp. 600, 643-644 (E.D.Pa.1979). In Hartman v. Hallmark Cards, Inc., 639 F.Supp. 816, 820 (W.D.Mo. 1986), affd. 833 F.2d 117 (8th Cir. 1987), the court held that FRCP 8 required a copyright infringement complaint to allege the “specific original work” which is the subject of the copyright claim, as well as include “specific mention of those acts which infringe . . .” In so ruling, the court rejected an attempted pleading which alleged not only a particular infringing act, “but also all other animated productions, paper products, dolls, toys, and any other merchandising and licensing products which have been granted by Hallmark Cards, Incorporated.” See also Wildlife Internationale, Inc. v. Clements, 591 F.Supp. 1542, 1547 (S.D.Ohio 1984) (“In applying rule 8 to copyright infringement actions, courts have required that particular infringing acts be alleged with some specificity.”); Marvullo v. Gruner & Jahr, 105 F.Supp.2d 225, 230 (S.D.N.Y. 2000) (“A ‘properly plead [sic] copyright infringement claim must allege . . . by what acts during what time the defendant infringed the copyright.’ [Citation]. It must set out the ‘particular infringing acts . . . with some specificity. Broad, sweeping allegations of infringement do not comply with Rule 8.’ [Citation].”) See also Media.net Advertising FZ-LLC v. NetSeer, Inc., 156 F.Supp.3d 1052, 1068 (N.D. Ca. 2016) (granting motion to dismiss with leave to amend to allege specifics). Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 10 of 24 Page ID #:134 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 4 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 The Complaint is vague in allegations of infringement. It vaguely alleges Mood/Moodswings "unilaterally and unlawfully used the Folk Collection and several other proprietary works created and owned by PLAKHOVA…in the Pitch Film and other works, which were exploited and disseminated without PLAKHOVA's authorization." (Complaint ¶24) (emphasis added). The Complaint then alleges "the above referenced Defendants" (including Laski) "knowingly induced, participated in, aided and abetted in and profited from the illegal reproduction or subsequent sales of works featuring the Subject Artwork as alleged herein." (Complaint ¶39). The Complaint does not allege exactly who infringed, or who "induced, participated in, aided and abetted, and profited", and does not allege how or when those alleged acts occurred. The Complaint is unclear about what the claimed “Subject Artwork” is. Only Folk Collection is attached to the complaint as Exhibit 1. The Complaint does not identify what “other proprietary works” that Plaintiff claims were improperly used. Further, in Complaint ¶11, Plaintiff alleges “seventeen independent . . . lamps and ornaments” in Folk Collection. Exhibit 1, which she states is "Folk Collection", however, consists of 14 lamps and 15 ornaments - in short, 28 images. What 17 images are alleged to have been improperly used? Similarly, in Complaint ¶33, plaintiff alleges that the Subject Artwork was used in “shows, videos, album covers, and on the internet.” The complaint does not identify what shows, videos, album covers or internet sites for which the alleged infringing work appeared, or when. The complaint fails to plead the alleged copyright infringement, and thus the contributory and vicarious infringement, with particularity, and therefore fails to state a claim. Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 11 of 24 Page ID #:135 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 5 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 B. The Complaint Fails to State a Viable Claim Against Mr. Laski for Vicarious or Contributory Copyright Infringement on the Merits To state a claim for vicarious copyright infringement, a plaintiff must allege that the defendant has (1) the right and ability to supervise the infringing conduct and (2) a direct financial interest in the infringing activity. Perfect 10, Inc. v. Visa Int'l Serv. Ass'n, 494 F.3d 788, 803-806 (9th Cir. 2007)(finding credit card company that processed payment of purchases infringing material not vicariously liable because it did not have the right to supervise); Ellison v. Robertson, 357 F.3d 1072, 1076 and 1079 (9th Cir. 2004) (finding ISP not vicariously liable). A defendant is a contributory infringer if it (1) has knowledge of a third party's infringing activity, and (2) “induces, causes, or materially contributes to the infringing conduct.” Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir.2004) (citing Gershwin Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.1971)). Assuming arguendo only that a valid copyright infringement, and thus, a vicarious or contributory claim is stated in the complaint (and it is not, as established in the prior section), the complaint further fails to allege the substantive elements of a viable vicarious or contributory infringement claim against a lawyer whose acts in question were only those taken in the course of that lawyer's performance of legal services. Mr. Laski, the LLC's attorney and thus its agent, had no legal ability or right to supervise its client. The complaint further fails to establish any facts establishing that Mr. Laski had any direct financial interest in any alleged infringing activity. The simple fact that Mr. Laski may have been paid for his legal services is insufficient to constitute acts taken by Mr. Laski beyond his professional role, and is therefore not such an independent financial interest as a matter of law. (See, e.g., Berg & Berg Enterprises LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 834 (interpreting CA Civil Code §1714.10 “financial Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 12 of 24 Page ID #:136 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 6 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 advantage” exception to mean a personal advantage or gain that is over and above ordinary professional fees earned as compensation for performance of the agency.) IV. THE 8TH CAUSE OF ACTION FOR FRAUD AND THE 9TH CAUSE OF ACTION FOR NEGLIGENT MISREPRESENTATION SHOULD BE DISMISSED BECAUSE THEY FAIL TO STATE VALID CLAIMS AND ARE NOT PLED WITH PARTICULARITY The elements of a fraud claim are: 1) a false representation 2) made with knowledge of falsity 3) made with an intent to defraud, i.e., to induce reliance, 4) justifiable reliance, and 5) resulting damage. Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974; see also Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal. App. 3d 104, 109. Negligent misrepresentation is a form of deceit, the elements of which consist of (1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed, and (5) damages. Fox v. Pollack (1986) 181 Cal.App.3d 954, 962; B.L.M. v. Sabo & Deitsch (1997) 55 Cal.App.4th 823, 834. The tort requires a positive assertion - an implied assertion or representation is not enough. Diediker v. Peelle Financial Corp. (1997) 60 Cal.App.4th 288, 297-98. If defendant’s belief is both honest and reasonable, the misrepresentation is innocent and there is no tort liability. Id. The circumstances constituting a state law fraud claim must be pled with particularity. FRCP Rule 9(b), Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097, 1103-04 (9th Cir.2003). Rule 9(b) also applies to claims “grounded in fraud” or "sounding in fraud," but not those sounding in negligence. Vess, id. “'Rule 9(b) serves to ... protect professionals from the harm that comes from being subject to fraud charges.'” Id. (quoting In re Stac, 89 F.3d 1399, 1405 (9th Cir. 1996). Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 13 of 24 Page ID #:137 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 7 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 Thus, there is authority that both claims for fraud and negligent misrepresentation must meet the heightened pleading requirements of Rule 9(b). Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1093-94 (C.D.Cal.1999); but see Petersen v. Allstate Indem. Co., 281 F.R.D. 413, 418 (C.D.Cal.2012) (reaching opposite conclusion). The opposite conclusions reached in Glen Holly and Petersen can be explained by an analysis of whether or not the negligent misrepresentation claim at issue in each case is grounded in fraud or in negligence. If the claim sounds in fraud even though it its entitled "negligence", then 9(b) applies. By contrast, if the claim sounds in negligence, then 9(b) does not apply. This is the only explanation for Petersen to be consistent with Vess. Here, Plaintiff's complaint is unclear whether Plaintiff's negligent misrepresentation claim is grounded in fraud or negligence. It states that Laski "made at least negligent misrepresentations" (emphasis added). It then improperly seeks punitive damages (see discussion at pgs. 12-14 below). To the extent that Plaintiff's negligent misrepresentation claim is grounded in fraud, it should be subject to the same particularity in pleading requirements of Rule 9(b). Glen Holly, supra., 100 F.Supp.2d at 1093-94. A pleading is sufficient under Rule 9(b) if it “[identifies] the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations.” Walling v. Beverly Enters., 476 F.2d 393, 397 (9th Cir.1973). Rule 9(b) requires a plaintiff to identify “the who, what, when, where, and how of the misconduct charged,” as well as “what is false or misleading about [the purportedly fraudulent] statement, and why it is false.” Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993, 998 (9th Cir.2010) (internal quotation marks and citations omitted) (cited in Cafasso, ex rel. United States v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir.2011). Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 14 of 24 Page ID #:138 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 8 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 Because Rule 8(a) requires the pleading of a plausible claim, claims of fraud or mistake must, in addition to pleading with particularity, also plead plausible allegations. Cafasso, supra., 637 F.3d 1047, 1055 (9th Cir. 2011). The pleading must state “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the misconduct alleged].” Id., citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In the Fraud Cause of Action, Plaintiff identifies two categories of alleged false statements, neither of which are actionable fraud or misrepresentation. The first category, (Complaint ¶74, 75), allege false statements to third parties (government agencies), fail because it is impossible for plaintiff to reasonably rely on statements that were never even made to her in the first place. The allegations further do not specify what specific statements were made, when, or how, what their content was, and how they were false. The second category, (Complaint ¶73), allege unspecified statements by Mr. Laski to her, are set forth with as vague and conclusory types of alleged statements with no specific statements identified. These types, also repeated in the 9th Cause of Action (Complaint ¶80), amount at best to nothing more than alleged statements made by Mr. Laski in the performance of legal services to the LLC that plaintiff now asserts were incorrect in hindsight. These allegations set forth an alleged professional negligence claim, not fraud or misrepresentation. As to both categories of claims, Plaintiff makes no allegation, let alone facts, that Mr. Laski intended to make a false representation, and/or that he made false representations without reasonable basis for believing them to be true, that any such statement(s) were in fact false, and/or that Mr. Laski intended to induce detrimental reliance by Plaintiff when he allegedly made them. She proffers no specifics as to what she allegedly did in reliance on the alleged false statements or why her reliance was justified. (Indeed, as set forth above, she doesn't even clarify what specific art Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 15 of 24 Page ID #:139 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 9 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 work is alleged to have been infringed, when that alleged infringement occurred, by whom, or how). In short, the who, what, when, where, how, why, and content of the purported fraud and misrepresentation are not alleged. No fraud or negligent misrepresentation claims are stated and these causes of action fail. See e.g. Sun ‘n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 703. In Sun ‘n Sand, plaintiff’s employee embezzled funds by preparing checks made payable to United California Bank for small amounts. Plaintiff believed those small amounts to be owed to the bank. Once the employee obtained an authorized signature on the check, she altered the check to increase the amount payable, and then deposited them in her personal account at the bank. The bank permitted the check to be deposited in the employee’s personal account even though the bank, and not the employee, was the named payee. The plaintiff alleged as its fraudulent misrepresentation that UCB “had full knowledge that it was payee on (each) check” and “knowingly failed to advise” Sun ‘n Sand that neither the bank nor Sun ‘n Sand’s employee had any right to, or interest in, the money represented by the checks. Id. at 702. The Supreme Court held these statements to be conclusory allegations that “clearly do not state sufficiently that UCB knew that neither it nor the employee presenting the checks had any right to negotiate them, or that UCB acted in any manner with an intent to deceive.” Id. at 704. “Because Sun 'n Sand does not adequately allege either of these essential elements, its fourth count fails to state a cause of action.” Id. Plaintiff’s allegations are similarly fatally deficient: This type of allegation, which identifies a general sort of fraudulent conduct but specifies no particular circumstances of any discrete fraudulent statement, is precisely what Rule 9(b) aims to preclude. See Bly-Magee, 236 F.3d at 1018 ('Rule 9(b) serves not only to give notice to defendants of the specific fraudulent conduct against which they must defend, but also to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to protect defendants from the harm that comes from being subject to fraud charges, and to prohibit plaintiffs from unilaterally imposing upon the court, the parties and Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 16 of 24 Page ID #:140 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 10 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 society enormous social and economic costs absent some factual basis.' (internal quotation and alterations omitted)). Cafasso, supra., 637 F.3d at 1057. This motion should be granted. V. PLAINTIFF'S CLAIMS FOR PUNITIVE DAMAGES IN THE 6TH THROUGH 9TH CAUSES OF ACTION, AND THE APPARENT REQUEST FOR MONEY DAMAGES IN THE 6TH CAUSE OF ACTION, MUST BE STRICKEN AS THEY ARE NOT RECOVERABLE AS A MATTER OF LAW FRCP Rule 12(f) provides that a federal court may strike from the pleadings any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. California Civil Code §3294, governs punitive damages, and is a matter of substantive law, as it establishes a right to recover punitive damages, listing the essential elements, rather than laying out a procedural requirement. Jackson v. East Bay Hosp. 980 F.Supp. 1341, 1351-55 (N.D. Cal. 1997). Civil Code §3294 reflects California public policy in response to calls for tort reform. In addition to elevating the quantum of proof at trial to "clear and convincing evidence," the California Legislature also required that a plaintiff prove facts establishing that the defendant's conduct was "despicable" to establish the requisite malice or oppression necessary for the imposition of punitive damages. (See, e.g. College Hospital, Inc. v. Superior Court (1994) 8 Cal. 4th 704, 712-13.) Thus, California Civil Code, §3294 provides in pertinent part: (a) In any action for breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant. "Malice" as defined by California Civil Code §3294(c)(1) means "conduct intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. "Oppression" as defined by California Civil Code Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 17 of 24 Page ID #:141 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 11 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 §3294(c)(2) means "despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights." "Fraud" as defined by California Civil Code §3294(c)(3) means "intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury." To obtain punitive damages under this standard, a defendant must be guilty of conduct that "has the character of outrage frequently associated with crime." Mock v. Michigan Millers (1992) 4 Cal. App. 4th 306, 328. In federal pleading, although the court will apply the California substantive law embodied in Civil Code §3294, determinations regarding the adequacy of pleadings are a matter of procedure governed by the Federal Rules of Civil Procedure. Clark v. Allstate, 106 F.Supp.2d 1016, 1018-1019 (S.D. Cal. 2000). FRCP Rule 9(b) states that malice, intent, knowledge, and other conditions of a person's mind may be alleged generally. Reconciling FRCP Rule 9(b) with Cal. Civil Code §3294 means that despite section 3294's specific requirement that a pleading allege oppression, fraud or malice, these may be averred generally. FRCP 9(b); Id. This does not, however, absolve a plaintiff from the predicate requirement that malice, fraud or oppression under §3294 still must be averred, albeit generally. FRCP 8, 9(b). The absence of such averment may still render a complaint objectionable. Jackson supra., 980 F.Supp. at 1351-55 (N.D. Cal. 1997). Here, Plaintiff's punitive damages claims, set forth in four causes of action (6th-9th), and in Prayer J, fail: 1) Complaint ¶64 is Plaintiff's claim for punitive damage in the 6th Cause of Action for Violation of California Business & Professions Code §17200 et seq. However, §17200 only authorizes restitution and injunctive relief. Zhang v. Sup. Crt. (2013) 57 Cal.4th 364, 371. Cal. Bus. & Prof. Code § 17203; Estate of Graham v. Sotheby’s, Inc., 178 F. Supp. 3d 974, 996 (C.D. Cal. 2016) (“As to the UCL, it is well established that the remedies under the statute are limited ‘to injunctive relief Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 18 of 24 Page ID #:142 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 12 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 and restitution.’”) "Indeed, it is settled law" that punitive damages are not recoverable in a §17200 claim. In re Wal-Mart Stores, Inc. Wage and Hour Litigation, 505 F.Supp.2d 609, 620 (N.D. Cal. 2007). Plaintiff's paragraph 64 seeks punitive damages, and appears to seek money damages, neither of which are recoverable under a §17200 claim as a matter of law. Paragraph 64 should be stricken all together. 2) Complaint ¶71 is Plaintiff's claim for punitive damages in the 7th Cause of Action for breach of fiduciary duty. Plaintiff alleges that Mr. Laski took various acts and failed to communicate that were in breach of fiduciary duty to her, one of the two members of the Vertical Time, LLC. She then concludes she is entitled to punitive damages. No allegations of malice, fraud or oppression are stated. In California, general malpractice based claims with a statement of mere willfulness in the act do not justify punitive damages. Smith v. Sup. Crt. (1992) 10 Cal. App. 4th 1033, 1041. 3) Complaint ¶78 is Plaintiff's claim for punitive damages in the 8th Cause of Action for fraud. As stated above, plaintiff fails to particularly plead fraud, and because the fraud claim fails, this punitive damage claims fails as well. 4) Complaint ¶83 is Plaintiff's claim for punitive damages in the 9th Cause of Action for negligent misrepresentation. As stated above, plaintiff fails to particularly plead negligent misrepresentation, and because the negligent misrepresentation claim fails, this punitive damage claim fails as well. It is also well settled that punitive damages are not available for a negligent misrepresentation claim. Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241. 5) Prayer for Relief J merely encompasses the above claims, and fail for the same reasons. Each of punitive damage requests, and Prayer J, should be stricken. Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 19 of 24 Page ID #:143 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 13 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 VI. PLAINTIFF’S CLAIM FOR RECOVERY OF STATUTORY DAMAGES AND ATTORNEYS FEES UNDER THE COPYRIGHT ACT FAILS BECAUSE ONLY OWNERS OF US REGISTERED WORKS MAY COLLECT STATUTORY DAMAGES AND ATTORNEYS' FEES 17 U.S.C. §412, entitled "Registration as prerequisite to certain remedies for infringement," provides that neither statutory damages nor attorney’s fees may be recovered unless there is timely registration. Thus, a timely filed and valid U.S. Copyright is a prerequisite to recover statutory damages and attorneys' fees under U.S. Copyright law. Id.; 17 U.S.C. §504, §505. See also Kernal Records Oy v. Mosley, 694 F.3d 1294, 1302-03 (11th Cir. 2012) (only owners of registered works may collect statutory damages and attorney's fees). Plaintiff has no timely filed and valid U.S. Copyright to the works she seeks to sue under, and the Complaint does not contend otherwise. In fact, the Complaint is premised upon Plaintiff's assertion that the only timely valid registered U.S. copyright that is identified in the Complaint is held by Vertical Time LLC (Complaint ¶23). These claims, (Complaint ¶27, ¶36, ¶42, prayer b, prayer d), must be stricken. VII. PLAINTIFF'S 2ND CAUSE OF ACTION AND 6TH CAUSE OF ACTION ARE FATALLY UNCERTAIN. Under FRCP Rule 12(e), a party faced with responding to an especially vague and ambiguous Complaint may move for a more definite statement. In the unlikely event that this Court declines to grant the foregoing Motion to Dismiss and/or Motion to Strike, Defendant alternatively requests that this Court require Plaintiff to provide a more definite statement pursuant to Fed. Rules of Civ. Proc., Rule 12(e) as follows: Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 20 of 24 Page ID #:144 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 14 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 A. The Second Cause of Action for Vicarious/Contributory Copyright Is Vague and Fatally Uncertain As set forth above in pages 4-6 above, and the authorities cited therein, the Complaint fails to identify which specific works are alleged to be infringed, specifically how they are alleged to have been infringed, specifically by whom, and specifically when. If this Court does not grant the motion to dismiss, a more definite statement is warranted. B. The Sixth Cause of Action for Violation of CA Business & Professions Code §17200 is Fatally Uncertain. As noted above, Business & Professions Code §17200 only authorizes restitution and injunctive relief. Zhang v. Sup. Crt. (2013) 57 Cal.4th 364, 371. However, Plaintiff's §17200 claim in the Sixth Cause of Action is unclear in what damages she seeks, beyond the punitive damages which are not recoverable. (Complaint ¶64 ("As a direct and proximate result of LAsKI and HOD's unfair business practices, PLAKHOVA has been damaged in an amount to be determined at trial, is entitled to punitive damages, and sustained and will continue to sustain damages for which she has no adequate remedy at law"). Given that Plaintiff is not entitled to recover anything other than restitution and injunctive relief in this cause of action, in the event this Court does not strike Paragraph 64 all together, this cause of action will be fatally uncertain and Defendant would seek a more definite statement. VIII. CONCLUSION Plaintiff’s Complaint is replete with both substantive and procedural deficiencies which cannot withstand this Motion to Dismiss and/or Motion to Strike, and Defendant accordingly requests that this Court dismiss Plaintiff’s Complaint, and/or Strike portions of Plaintiff's Complaint, as requested above. In the event that this Court declines to grant the requested relief, Defendant alternatively requests that this Court order Plaintiff to provide a more definite Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 21 of 24 Page ID #:145 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 15 MOTION TO DISMISS/STRIKE/DEFINITE STATEMENT 31691399v1 0993114 HINSHAW & CULBERTSON One California Street, 18th Floor San Francisco, CA 94111 415-362-6000 statement so as to resolve issues regarding the vague and ambiguous allegations contained in the Complaint. Respectfully submitted, DATED: December 30, 2016 By: HINSHAW & CULBERTSON LLP /s/Wendy Wen Yun Chang Robert J. Romero Wendy Wen Yun Chang Attorneys for Defendant BENJAMIN LASKI Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 22 of 24 Page ID #:146 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 23 of 24 Page ID #:147 Case 2:16-cv-08245-TJH-FFM Document 16 Filed 12/30/16 Page 24 of 24 Page ID #:148