Raucci v. Candy & Toy Factory

145 F. Supp. 3d 440, 2015 U.S. Dist. LEXIS 148348, 2015 WL 6664160
CourtDistrict Court, E.D. Pennsylvania
DecidedNovember 2, 2015
DocketCIVIL ACTION NO. 15-3385
StatusPublished
Cited by12 cases

This text of 145 F. Supp. 3d 440 (Raucci v. Candy & Toy Factory) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Raucci v. Candy & Toy Factory, 145 F. Supp. 3d 440, 2015 U.S. Dist. LEXIS 148348, 2015 WL 6664160 (E.D. Pa. 2015).

Opinion

MEMORANDUM OPINION

Savage, District Judge

William Raucci (“Raucci”) has sued The Candy and Toy Factory (“TCTF”) and Pablo Fernandez Atela (“Atela”), who manufactured and sold interactive candy products designed by him. Raucci’s claims arise from an alleged oral agreement to pay Raucci royalties from the sales of those products. In his complaint, he alleges causes of action for breach of contract, violations of the Copyright Act and the Lanham Act, unjust enrichment, accounting, and conversion. He seeks damages and injunctive relief.

After removing the case from state court, the defendants have moved to dismiss the complaint. First, they argue that all causes of action are time-barred by the statutes of limitations. Second, they invoke Pennsylvania’s gist of the action doctrine to bar the conversion claim. Third, they contend an unjust enrichment claim cannot coexist with a contract claim. Fourth, they argue that injunctive relief under the Copyright Act is not available because Raucci did not attach copyright registrar tions to his complaint. Fifth, they assert that Raucci has failed to state a cause of action under the Lanham Act because he was not a producer of the goods. Sixth, they maintain that Raucci’s state law claims for conversion and unjust enrichment are preempted by the Copyright Act. Finally, they contend Raucci has failed to plead specifically the history of the assignment of rights under the royalty agreement from CRE8 Design and Development, Inc. (“CRE8”), the company through with Raucci operates.

We shall grant the motion as to Raucci’s Lanham Act claims because he is not the producer of the products TCTF manufactured. In addition, the Copyright Act preempts his unjust enrichment claim and his conversion claim, to the extent it seeks relief for conversion of royalty payments.

We shall deny the motion in all other respects. Because there is a factual dispute about when the causes of action accrued, we are unable to determine whether the statutes of limitations were tolled. As the defendants have conceded, the gist of the action doctrine does not apply at this stage because they deny the existence of a contract. Raucci adequately pleaded the assignment of rights from CRE8 to him, and he was not required to attach copyright registrations to his complaint.

Factual and Procedural Background1

Raucci is an industrial engineer and creator of various “interactive candy products.”2 TCTF, a Spanish company, manufactures and distributes such products worldwide.3 Sometime in 2003, Pablo Fernandez Atela, the owner and CEO of TCTF, solicited Raucci to design a stream of products for TCTF.4 Atela and Raucci orally agreed that TCTF would pay a three percent royalty on sales of products Raucci created.5

As agreed, Raucci designed numerous products for TCTF.6 When Raucci delivered a new design to TCTF, he advised [447]*447that he was asserting a copyright on it, and TCTF agreed to honor the royalty agreement.7 Over time, Raucci designed twenty-three products under the royalty agreement and filed copyrights for each.8

TCTF made the agreed-upon royalty payments to Raucci until 2007.9 Once the payments stopped in 2007, Raucci believed that TCTF had ceased selling his products.10 Then, in 2014, while attending a trade show in Germany, Raucci learned that TCTF was still marketing products Raucci had designed.11 TCTF continues to’ market, distribute and sell more than sixteen of the products designed by Raucci— including one known as “Chick N’ Chat,” of which TCTF has sold over ten million units.12

Raucci, individually and as assignee of CRE8, filed his complaint in the Philadelphia Court of Common Pleas on May 13, 2015. The defendants timely removed the action.

Standard of Review

When considering a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all well-pleaded allegations in the complaint are accepted as true and viewed in the light most favorable to the plaintiff. Holk v. Snapple Beverage Corp., 575 F.3d 329, 334 (3d Cir.2009) (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir.2008)). A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), giving the defendant “fair notice of what the... claim is. and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct 1955, 167 L.Ed.2d 929 (2007)). Although this standard “does not require ‘detailed factual allegations’... it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation,” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).

A complaint is subject to dismissal if the plaintiff fails to plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct .alleged.” Id, (citing Twombly, 550 U.S. at 556, 127 S.Ct.1955). The plaintiff must allege facts that indicate “more than a sheer possibility that a defendant has acted unlawfully.” Id. Pleading only “facts that are ‘merely consistent with’ a defendant’s liability” is insufficient and cannot survive a motion to dismiss. Id. (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955). With these standards in mind, we shall .accept as true the facts as they appear in Raucci’s complaint and draw all possible inferences from those facts in his favor.

Statutes of Limitations

The statute of limitations for a state law cause of action is governed by the applicable state limitations period. Mest v. Cabot Corp., 449 F.3d 502, 510 (3d Cir.2006). For federal causes of action, the federal statute provides the statute of limitations. See, e.g., Kingvision Pay-Per-View, Corp. v. 898 Belmont, Inc., 366 F.3d 217, 220 (3d Cir.2004). When the federal statute is silent on the limitation period, the analogous state statute generally supplies it. Id.

[448]*448Typically, the statute of limitations , starts running on the date of the injury or the conduct causing the injury, Morgan v. Petroleum Prods. Equip. Co., 92 A.3d 823, 828 (Pa.Super.2014) (citing Pocono Int’l Raceway, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 468 A.2d 468, 471 (1983)). When applying a state limitations period, we use state tolling principles.

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Cite This Page — Counsel Stack

Bluebook (online)
145 F. Supp. 3d 440, 2015 U.S. Dist. LEXIS 148348, 2015 WL 6664160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/raucci-v-candy-toy-factory-paed-2015.