1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 G&G CLOSED CIRCUIT EVENTS, Case No.: 20-CV-1017-CAB-MDD LLC, 12 ORDER DENYING MOTION TO Plaintiff, 13 DISMISS v. 14 TIMOTHY PARKER and DIEGO & [Doc. No. 4] 15 DANTE, LLC dba Chula Vista Brewery, 16 Defendants. 17 18 This matter is before the Court on the Defendants’ partial motion to dismiss 19 Plaintiff’s claims for conversion and for violation of California’s Unfair Competition Law 20 (“UCL”), California Business and Professions Code § 17200 et seq. The motion has been 21 fully briefed, and the Court deems it suitable for submission without oral argument. The 22 motion is denied. 23 I. Background 24 According to the complaint, pursuant to contract, Plaintiff G & G Closed Circuit 25 Events, LLC (“G&G”) held the exclusive nationwide distribution (closed-circuit) rights to 26 the Gennady Golovkin v. Steve Rolls Fight Program event telecast nationwide on Saturday, 27 June 8, 2019 (the “Program”). [Doc. No. 1 at ¶ 18.] G&G entered into sublicense 28 agreements with various commercial entities throughout the country granting limited 1 sublicensing rights to publicly show the Program at their establishment. [Id. at ¶ 19. ] The 2 complaint alleges that Defendants “intercepted, received and published the Program at 3 Chula Vista Brewery” on June 8, 2019, without authorization from G&G. [Id. at ¶ 23.] 4 Based on these alleged facts, G&G filed this suit against the alleged owner and 5 operator of Chula Vista Brewery, Diego & Dante, LLC [Id. at ¶ 15], and its managing 6 member and the manager on duty the night of the Program, Timothy Parker [Id. at ¶¶ 9- 7 14]. The complaint asserts four claims: (1) violation of 47 U.S.C. § 605; (2) violation of 8 47 U.S.C. § 553; (3) conversion; and (4) violation of California Business and Professions 9 Code § 17200. Defendants move to dismiss only the two state law claims on the ground 10 that they are preempted by the Copyright Act, 17 U.S.C. § 301. 11 II. Legal Standard 12 The familiar standards on a motion to dismiss apply here. To survive a motion to 13 dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted 14 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 15 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, 16 the Court “accept[s] factual allegations in the complaint as true and construe[s] the 17 pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire 18 & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). On the other hand, the Court is 19 “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 20 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Nor is the Court “required to accept as 21 true allegations that contradict exhibits attached to the Complaint or matters properly 22 subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions 23 of fact, or unreasonable inferences.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 24 (9th Cir. 2010). “In sum, for a complaint to survive a motion to dismiss, the non-conclusory 25 factual content, and reasonable inferences from that content, must be plausibly suggestive 26 27 28 1 of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 2 (9th Cir. 2009) (quotation marks omitted). 3 III. Discussion 4 Defendants contend the Copyright Act preempts G&G’s state law causes of action. 5 Defendants also contend that because copyright infringement does not constitute 6 conversion, G&G’s conversion claim should be dismissed for this additional reason. 7 A. Preemption under the Copyright Act 8 “The Ninth Circuit has determined that the Copyright Act does not preempt a state 9 law claim unless the following two conditions are satisfied: 1) ‘the “subject matter” of the 10 state law claim falls within the subject matter of copyright’ and 2) ‘the rights asserted under 11 state law are equivalent to . . . the exclusive rights of copyright holders.’” Echostar 12 Satellite, L.L.C. v. Viewtech, Inc., 543 F. Supp. 2d 1201, 1209 (S.D. Cal. 2008) (quoting 13 Laws v. Sony Music Entm’t, Inc., 448 F.3d 1134, 1137–38 (9th Cir. 2006)). 14 1. Subject Matter of Copyright 15 As to whether the subject matter falls within the subject matter of copyright, 16 Defendants contend G&G cannot reasonably dispute this prong, citing to 17 U.S.C. § 17 102(a)(6), listing “motion pictures and other audiovisual works.” Indeed, G&G cannot 18 reasonably dispute that the Program falls under the label of a motion picture. See Doc. No. 19 4-22 at 4. G&G instead argues that the fact that a motion picture may be subject to 20 copyright protection does not mean that G&G’s rights as alleged fall within the Copyright 21 Act. The Court agrees with Defendants as to the subject matter prong. G&G appears to 22 conflate its argument with the second prong related to the rights asserted which is discussed 23 further below. Here, the Court must simply determine, in this case, whether the Program 24
25 26 2 Defendants request the Court take judicial notice of the United States Copyright Office Public Catalog search record of the Program, and G&G did not oppose. [Doc. No. 4-2.] Accordingly, Defendants’ request 27 for judicial notice is granted. See Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (“A court may take judicial notice of ‘matters of public record’ without converting a motion to dismiss into a motion for 28 1 falls within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103. There 2 is no dispute that the Program is a motion picture, and motion pictures are listed under § 3 102(a)(6) as a subject matter of copyright. Therefore, Defendants have satisfied the first 4 prong. 5 2. The Rights Asserted 6 The next issue is whether the rights asserted under state law are equivalent to the 7 rights contained in Section 106 of the Copyright Act. Section 106 provides a copyright 8 owner with the “exclusive rights” of reproduction, preparation of derivative works, 9 distribution, and display. 17 U.S.C. § 106. “Where Plaintiff does not allege ownership of 10 a copyright, the Copyright Act does not then preempt a state law conversion claim.” Joe 11 Hand Promotions, Inc. v. Rajan, No. 10-40029-TSH, 2011 WL 3295424, at *6 (D. Mass. 12 July 28, 2011). A state law unfair competition claim can be preempted by copyright law 13 if the unfair competition claim is based solely on rights that are protected by federal 14 copyright law. See Kodadek v.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 G&G CLOSED CIRCUIT EVENTS, Case No.: 20-CV-1017-CAB-MDD LLC, 12 ORDER DENYING MOTION TO Plaintiff, 13 DISMISS v. 14 TIMOTHY PARKER and DIEGO & [Doc. No. 4] 15 DANTE, LLC dba Chula Vista Brewery, 16 Defendants. 17 18 This matter is before the Court on the Defendants’ partial motion to dismiss 19 Plaintiff’s claims for conversion and for violation of California’s Unfair Competition Law 20 (“UCL”), California Business and Professions Code § 17200 et seq. The motion has been 21 fully briefed, and the Court deems it suitable for submission without oral argument. The 22 motion is denied. 23 I. Background 24 According to the complaint, pursuant to contract, Plaintiff G & G Closed Circuit 25 Events, LLC (“G&G”) held the exclusive nationwide distribution (closed-circuit) rights to 26 the Gennady Golovkin v. Steve Rolls Fight Program event telecast nationwide on Saturday, 27 June 8, 2019 (the “Program”). [Doc. No. 1 at ¶ 18.] G&G entered into sublicense 28 agreements with various commercial entities throughout the country granting limited 1 sublicensing rights to publicly show the Program at their establishment. [Id. at ¶ 19. ] The 2 complaint alleges that Defendants “intercepted, received and published the Program at 3 Chula Vista Brewery” on June 8, 2019, without authorization from G&G. [Id. at ¶ 23.] 4 Based on these alleged facts, G&G filed this suit against the alleged owner and 5 operator of Chula Vista Brewery, Diego & Dante, LLC [Id. at ¶ 15], and its managing 6 member and the manager on duty the night of the Program, Timothy Parker [Id. at ¶¶ 9- 7 14]. The complaint asserts four claims: (1) violation of 47 U.S.C. § 605; (2) violation of 8 47 U.S.C. § 553; (3) conversion; and (4) violation of California Business and Professions 9 Code § 17200. Defendants move to dismiss only the two state law claims on the ground 10 that they are preempted by the Copyright Act, 17 U.S.C. § 301. 11 II. Legal Standard 12 The familiar standards on a motion to dismiss apply here. To survive a motion to 13 dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted 14 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 15 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, 16 the Court “accept[s] factual allegations in the complaint as true and construe[s] the 17 pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire 18 & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). On the other hand, the Court is 19 “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 20 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Nor is the Court “required to accept as 21 true allegations that contradict exhibits attached to the Complaint or matters properly 22 subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions 23 of fact, or unreasonable inferences.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 24 (9th Cir. 2010). “In sum, for a complaint to survive a motion to dismiss, the non-conclusory 25 factual content, and reasonable inferences from that content, must be plausibly suggestive 26 27 28 1 of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 2 (9th Cir. 2009) (quotation marks omitted). 3 III. Discussion 4 Defendants contend the Copyright Act preempts G&G’s state law causes of action. 5 Defendants also contend that because copyright infringement does not constitute 6 conversion, G&G’s conversion claim should be dismissed for this additional reason. 7 A. Preemption under the Copyright Act 8 “The Ninth Circuit has determined that the Copyright Act does not preempt a state 9 law claim unless the following two conditions are satisfied: 1) ‘the “subject matter” of the 10 state law claim falls within the subject matter of copyright’ and 2) ‘the rights asserted under 11 state law are equivalent to . . . the exclusive rights of copyright holders.’” Echostar 12 Satellite, L.L.C. v. Viewtech, Inc., 543 F. Supp. 2d 1201, 1209 (S.D. Cal. 2008) (quoting 13 Laws v. Sony Music Entm’t, Inc., 448 F.3d 1134, 1137–38 (9th Cir. 2006)). 14 1. Subject Matter of Copyright 15 As to whether the subject matter falls within the subject matter of copyright, 16 Defendants contend G&G cannot reasonably dispute this prong, citing to 17 U.S.C. § 17 102(a)(6), listing “motion pictures and other audiovisual works.” Indeed, G&G cannot 18 reasonably dispute that the Program falls under the label of a motion picture. See Doc. No. 19 4-22 at 4. G&G instead argues that the fact that a motion picture may be subject to 20 copyright protection does not mean that G&G’s rights as alleged fall within the Copyright 21 Act. The Court agrees with Defendants as to the subject matter prong. G&G appears to 22 conflate its argument with the second prong related to the rights asserted which is discussed 23 further below. Here, the Court must simply determine, in this case, whether the Program 24
25 26 2 Defendants request the Court take judicial notice of the United States Copyright Office Public Catalog search record of the Program, and G&G did not oppose. [Doc. No. 4-2.] Accordingly, Defendants’ request 27 for judicial notice is granted. See Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (“A court may take judicial notice of ‘matters of public record’ without converting a motion to dismiss into a motion for 28 1 falls within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103. There 2 is no dispute that the Program is a motion picture, and motion pictures are listed under § 3 102(a)(6) as a subject matter of copyright. Therefore, Defendants have satisfied the first 4 prong. 5 2. The Rights Asserted 6 The next issue is whether the rights asserted under state law are equivalent to the 7 rights contained in Section 106 of the Copyright Act. Section 106 provides a copyright 8 owner with the “exclusive rights” of reproduction, preparation of derivative works, 9 distribution, and display. 17 U.S.C. § 106. “Where Plaintiff does not allege ownership of 10 a copyright, the Copyright Act does not then preempt a state law conversion claim.” Joe 11 Hand Promotions, Inc. v. Rajan, No. 10-40029-TSH, 2011 WL 3295424, at *6 (D. Mass. 12 July 28, 2011). A state law unfair competition claim can be preempted by copyright law 13 if the unfair competition claim is based solely on rights that are protected by federal 14 copyright law. See Kodadek v. MTV Networks, Inc., 152 F.3d 1209, 1212–13 (9th Cir. 15 1998). 16 In this case, G&G does not allege copyright infringement. G&G’s primary causes 17 of action, which are incorporated by reference in its state law claims, arise under 47 U.S.C. 18 § 553 (“Section 553”) and 47 U.S.C. § 605 (“Section 605”) pursuant to the Federal 19 Communications Act (“FCA”). Section 553 prohibits persons from receiving or assisting 20 in intercepting or receiving “any communications service offered over a cable system, 21 unless specifically authorized by law.” 47 U.S.C. § 553(a)(1). Section 605 similarly 22 prohibits the unauthorized interception and publication or use of radio communications, 23 including satellite broadcasts. 47 U.S.C. § 605(a); DirecTV v. Webb, 545 F.3d 837, 843 24 (9th Cir.2008); J & J Sports Prods., Inc. v. Walia, 2011 WL 902245 (N.D. Cal. Mar.14, 25 2011). Moreover, the complaint does not allege that G&G is the exclusive owner of a 26 copyright, but rather asserts its rights pursuant to contract. The Ninth Circuit has held that 27 “because contractual rights are not equivalent to the exclusive rights of copyright, the 28 Copyright Act’s preemption clause usually does not affect private contracts.” MDY Indus., 1 LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 957 (9th Cir. 2010); see also Altera Corp. v. 2 Clear Logic, Inc., 424 F.3d 1079, 1089 (9th Cir. 2005) (“Most courts have held that the 3 Copyright Act does not preempt the enforcement of contractual rights.). In Allarcom Pay 4 Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 386 (9th Cir. 1995), the Ninth 5 Circuit concluded that the FCA did not preempt state law claims for unfair competition, 6 interference with contract, and interference with prospective economic advantage because 7 Section 605’s language “indicate[d] that Congress did not intend to occupy the entire field” 8 and state law did not “impose[ ] . . . obligations inconsistent with the FCA” and did not 9 “frustrate any congressional objective.” 10 Ultimately, G&G’s claims under Sections 553 and 605 arise from the enforcement 11 of its contractual rights to distribute the Program and therefore the rights asserted under 12 G&G’s state law claims are not equivalent to the exclusive rights of copyright holders. 13 Accordingly, G&G’s state law claims are not preempted under the Copyright Act. 14 B. Conversion 15 Defendants also contend that G&G’s conversion claim should be dismissed because 16 copyright infringement does not constitute conversion. To state a claim for the tort of 17 conversion under California law, a plaintiff must allege: “(1) ownership or right to 18 possession of property; (2) wrongful disposition of the property right of another; and (3) 19 damages.” Kingvision Pay–Per–View, Ltd. v. Chavez, 2000 WL 1847644, at *4 (N.D. Cal. 20 Dec.11, 2000) (citing G.S. Rasmussen & Assoc. v. Kalitta Flying Serv., 958 F.2d 896, 906 21 (9th Cir. 1992)). Intangible property rights, such as the right to program distribution, are 22 sufficient to support the ownership or possession element of conversion under California 23 law. See Don King Prods./ Kingvision v. Lovato, 911 F.Supp. 419, 423 (N.D. Cal. 1995). 24 As discussed above, G&G alleges that pursuant to contract, it held the exclusive 25 nationwide distribution rights to the Program, Defendants intercepted, received and 26 published the Program at Chula Vista Brewery without authorization from G&G, and that 27 it is therefore entitled to damages. G&G does not base any of its claims on copyright 28 infringement. Accordingly, G&G has adequately alleged facts to support each of the 1 elements of a conversion claim. 2 IV. Conclusion 3 For the foregoing reasons, it is hereby ORDERED that Defendants’ motion to 4 || dismiss is DENIED. 5 Dated: July 30, 2020 (6 6 Hon. Cathy Ann Bencivengo 7 United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28