Tracy Anderson Mind and Body, LLC v. Megan Roup

• Court: District Court, C.D. California
• Decided: December 12, 2022
• Docket: 2:22-cv-04735
• Status: Unknown

Opinion

Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 1 of 27 Page ID #:186 'O' 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CV 22-4735-RSWL-E x 12 TRACY ANDERSON MIND AND BODY, LLC, et al., ORDER re: MOTION TO 13 DISMISS AND MOTION TO Plaintiffs, 14 STRIKE [15] v. 15 16 MEGAN ROUP, et al., 17 Defendants. 18 19 Plaintiffs Tracy Anderson Mind and Body, LLC 20 (“Plaintiff TAMB”) and Studio New York LLC (“Plaintiff 21 TANY”) (collectively, “Plaintiffs”) brought the instant 22 Action against Defendants Megan Roup (“Defendant Roup”) 23 and The Sculpt Society (“Defendant TSS”) (collectively, 24 “Defendants”) alleging copyright infringement, violation 25 of the Lanham Act, breach of contract, and violation of 26 unfair competition law. Currently before the Court is 27 Defendants’ Motion to Dismiss [15]. 28 1 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 2 of 27 Page ID #:187

1 Having reviewed all papers submitted pertaining to

2 this Motion, the Court NOW FINDS AND RULES AS FOLLOWS:

3 the Court GRANTS Defendants’ Motion to Dismiss 4 Plaintiffs’ Lanham Act and UCL claims with leave to 5 amend and DENIES Defendant’s Motion to Dismiss 6 Plaintiffs’ copyright and breach of contract claims. 7 I. BACKGROUND 8 A. Factual Background 9 Plaintiffs allege the following in their Complaint: 10 Tracy Anderson (“Anderson”) developed the Tracy 11 Anderson Method (“TA Method”)—routines combining 12 choreography, fitness, and cardiovascular movement—after 13 decades of research, development, testing, and 14 investment. First Am. Compl. (“FAC”) ¶ 1, ECF No. 12. 15 Anderson is the founder and CEO of Plaintiff TAMB, which 16 offers choreography-based fitness and mat movement 17 classes. Id. ¶ 2. In turn, Plaintiff TAMB is the owner 18 of registered copyrights to various media, including 19 DVDs created by and featuring Anderson, that express, 20 relate to, or are based on, the TA Method. Id. 21 In 2011, Plaintiff TANY, a subsidiary under 22 Plaintiff TAMB, which is also owned by Anderson, 23 employed Defendant Roup as a trainer. Id. ¶ 3. 24 Defendant Roup was required to sign a Trainer Agreement 25 upon employment. Id. The Trainer Agreement prohibits 26 trainers from using or disclosing the company’s 27 confidential information, which includes “nonpublic 28 business and operation information, training materials 2 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 3 of 27 Page ID #:188

1 and manuals, and transcribed methods . . . including

2 those comprising the TA Method’s proprietary

3 choreography movements.” Id. 4 During Defendant Roup’s six-year employment with 5 Plaintiff TANY, Defendant Roup learned and had access to 6 significant confidential information, including 7 “(i) training materials, choreography transcriptions, 8 and custom write-ups related to the performance and 9 teaching of the TA Method, and (ii) business 10 information, customer lists, and operating procedures.” 11 Id. ¶ 4. 12 Later, in or around February 2017, Defendant Roup 13 terminated her employment with Plaintiff TANY and 14 founded Defendant TSS the next month. Id. ¶ 5. 15 Defendant TSS also offers “choreography-based fitness 16 and mat movement classes that directly compete with 17 Plaintiffs[’ classes].” Id. In creating and operating 18 Defendant TSS, Defendant Roup neither references her 19 association with Plaintiffs, nor credits Plaintiffs for 20 training, teaching, or developing Defendant Roup. Id. ¶ 21 7. Plaintiffs thus filed the current Action seeking 22 damages and injunctive relief for copyright 23 infringement, breach of contract, violation of the 24 Lanham Act, and unfair competition. Id. ¶ 10. 25 B. Procedural Background 26 Plaintiffs filed their First Amended Complaint [12] 27 on September 13, 2022. Defendants then filed the 28 instant Motion [15] on September 27, 2022. Plaintiffs 3 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 4 of 27 Page ID #:189

1 opposed [17] the Motion on October 11, 2022, and

2 Defendants replied [18] on October 18, 2022. 3 II. DISCUSSION 4 A. Legal Standard 5 1. Motion to Dismiss 6 Rule 12(b)(6) of the Federal Rules of Civil 7 Procedure allows a party to move for dismissal of one or 8 more claims if the pleading fails to state a claim upon 9 which relief can be granted. A complaint must “contain 10 sufficient factual matter, accepted as true, to state a 11 claim to relief that is plausible on its face.” 12 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation 13 omitted). Dismissal is warranted for a “lack of a 14 cognizable legal theory or the absence of sufficient 15 facts alleged under a cognizable legal theory.” 16 Balistreri v. Pacifica Police Dep’t, 902 F.2d 696, 699 17 (9th Cir. 1988) (citation omitted). 18 In ruling on a 12(b)(6) motion, a court may 19 generally consider only allegations contained in the 20 pleadings, exhibits attached to the complaint, and 21 matters properly subject to judicial notice. Swartz v. 22 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court 23 must presume all factual allegations of the complaint to 24 be true and draw all reasonable inferences in favor of 25 the non-moving party. Klarfeld v. United States, 944 26 F.2d 583, 585 (9th Cir. 1991). The question is not 27 whether the plaintiff will ultimately prevail, but 28 whether the plaintiff is entitled to present evidence to 4 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 5 of 27 Page ID #:190

1 support its claims. Jackson v. Birmingham Bd. of Educ.,

2 544 U.S. 167, 184 (2005) (quoting Scheuer v. Rhodes, 416

3 U.S. 232, 236 (1974)). While a complaint need not 4 contain detailed factual allegations, a plaintiff must 5 provide more than “labels and conclusions” or “a 6 formulaic recitation of the elements of a cause of 7 action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 8 (2007). However, “a well-pleaded complaint may proceed 9 even if it strikes a savvy judge that actual proof of 10 those facts is improbable, and ‘that a recovery is very 11 remote and unlikely.’” Id. at 556 (quoting Scheuer v. 12 Rhodes, 416 U.S. 232, 236 (1974)). 13 2. Motion to Strike 14 California’s anti-Strategic Lawsuit Against Public 15 Participation (“anti-SLAPP”) statute provides for a 16 special motion to strike state law claims brought 17 “primarily to chill the valid exercise of the 18 constitutional rights of freedom of speech and petition 19 for the redress of grievances.” Cal. Civ. Proc. Code 20 § 425.16(a). “A court considering a motion to strike 21 under the anti-SLAPP statute must engage in a two-part 22 inquiry.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 23 1110 (9th Cir. 2003). “First, a defendant must make an 24 initial prima facie showing that the plaintiff’s suit 25 arises from an act in furtherance of the defendant’s 26 rights of petition or free speech.” Id. (internal 27 quotation marks and citation omitted). “Second, once 28 the defendant has made a prima facie showing, the burden 5 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 6 of 27 Page ID #:191

1 shifts to the plaintiff to demonstrate the probability

2 of prevailing on the challenged claims.” Id. (internal

3 quotation marks and citation omitted). 4 B. Analysis 5 1. Rule 12(b)(6) Motion 6 a. Copyright Infringement 7 Plaintiffs bring a claim against Defendant for 8 copyright infringement. FAC ¶¶ 50-56. “To establish 9 infringement, two elements must be proven: (1) ownership 10 of a valid copyright, and (2) copying of constituent 11 elements of the work that are original.” Feist 12 Publ’ns., Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 13 340, 361 (1991). A copyright registration is “prima 14 facie evidence of the validity of the copyright and the 15 facts stated in the certificate.” 17 U.S.C. § 410(c). 16 While an “accused infringer can rebut [the] presumption 17 of validity” conferred by a copyright registration, 18 “such a presumption is strong in a motion to dismiss 19 since the court must assume all factual allegations are 20 true.” Datastorm Techs., Inc. v. Excalibur Commc’ns, 21 Inc., 888 F. Supp. 112, 115 (N.D. Cal. 1995). To show 22 copying, a plaintiff can rely on circumstantial evidence 23 that the defendant had access to the copyrighted work 24 and that there is substantial similarity between 25 defendant’s work and copyrighted work. Swirsky v. 26 Carey, 376 F.3d 841, 844 (9th Cir. 2004). 27 Here, Plaintiffs adequately pled a prima facie case 28 of copyright infringement. First, Plaintiffs provided a 6 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 7 of 27 Page ID #:192

1 list of copyright registrations for nineteen “Motion

2 Picture[s]” for which Plaintiff TAMB is the sole

3 copyright claimant. FAC, Attachment A, ECF No. 12-1. 4 Next, Plaintiffs alleged that Defendants have published 5 videos that “infringe on [Plaintiff TAMB’s] copyrights 6 by copying the choreography movements, sequences, and 7 routines depicted in the [copyrighted works]; 8 organizational structure and format of the [copyrighted 9 works]; and aesthetic elements depicted in the 10 [copyrighted works].” FAC ¶ 47. Moreover, Plaintiffs 11 contend that Defendants had access to the copyrighted 12 works through Defendant Roup’s employment with 13 Plaintiffs and specify that at least three of Defendant’ 14 videos are substantially similar to Plaintiff’s 15 copyrighted works.1 Id. ¶¶ 3-4, 48-49. Therefore, 16 1 Under certain circumstances, a court ruling on a motion to 17 dismiss may independently assess whether works are not substantially similar. See Christianson v. West Pub. Co., 149 18 F.2d 202, 203 (9th Cir. 1945) (“There is ample authority for holding that when the copyrighted work and the alleged 19 infringement are both before the court, capable of examination 20 and comparison, non-infringement can be determined on a motion to dismiss.”). Here, however, the Court cannot properly examine and 21 compare the works to determine non-infringement. Plaintiffs have provided three examples broadly describing how Defendants’ 22 “choreography movement, sequences, and routines are substantially similar” to those depicted in Plaintiffs’ copyrighted works. FAC 23 ¶ 48. But Plaintiffs did not submit the referenced videos with 24 their FAC. See generally FAC. Moreover, Plaintiffs state that “[b]ecause Defendants’ videos are published behind a paywall,” 25 Plaintiffs are “unable to review and compare every one of Defendants’ videos” with their own, and therefore, “the full 26 extent of Defendants’ infringement . . . cannot be assessed until Defendants produce the videos to Plaintiffs in discovery.” Id. 27 ¶ 49. Consequently, the Court is unable to determine non- 28 infringement at this stage of litigation. 7 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 8 of 27 Page ID #:193

1 Plaintiffs have pled a prima facie case of copyright

2 infringement. See Wake Up & Ball LLC v. Sony Music Ent.

3 Inc., 119 F. Supp. 3d 944, 952 (D. Ariz. 2015) (finding 4 that plaintiff pled a plausible infringement claim by 5 presenting its copyright registration and alleging that 6 defendants published plaintiff’s copyrighted work 7 online). 8 Defendants, however, argue that Plaintiffs have not 9 pled a prima facie case of copyright infringement 10 because “functional exercise movements are not 11 copyrightable.” Defs.’ Mot. to Dismiss (“Mot.”) 7:12- 12 14., ECF No. 15. Plaintiffs counter that (1) whether a 13 copyrighted work qualifies for copyright protection is a 14 factual inquiry not appropriate for determination on a 15 motion to dismiss, and (2) regardless, Plaintiffs’ 16 choreographic work is copyrightable. Plfs.’ Opp’n 17 (“Opp’n”) 5:21-21, 8:6-8. The Court agrees that an 18 inquiry into the copyrightability of Plaintiffs’ works 19 is not appropriate at this stage of litigation. 20 As explained, when assessing a motion to dismiss, 21 the Court “must assume all factual allegations [in the 22 Complaint] are true.” Datastorm Techs., Inc., 888 F. 23 Supp. at 115. Accordingly, motion to dismiss arguments 24 that copyrighted works do not qualify for copyright 25 protection based on a “detailed factual analysis” of the 26 works are “inappropriate . . . as the Court must accept 27 all material factual allegations as true.” Thomson v. 28 HMC Grp., No. CV1303273DMGVBKX, 2014 WL 12589312 at *3 8 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 9 of 27 Page ID #:194

1 (C.D. Cal. Feb. 18, 2014) (holding that motion to

2 dismiss arguments regarding copyrightability are

3 premature and such arguments should instead be asserted 4 at summary judgment); see also P & P Imports, LLC v. 5 Festival Trading, Inc., No. CV171541DOCJCGX, 2018 WL 6 5099723 at *6 (C.D. Cal. May 15, 2018) (declining to 7 assess copyrightability of a copyrighted work on a 8 motion to dismiss); E. W. Sounds, Inc. v. Phoenix, 9 No. CV 12-6143 CAS AJWX, 2012 WL 4003047 at *3 10 (C.D. Cal. Sept. 10, 2012) (same). 11 In Thomson, the defendant asserted that the 12 copyrighted works did not qualify for copyright 13 protection because they were “functional” designs that 14 amounted to “[mere] ideas and concepts.” Thomson, 15 2014 WL 12589312 at *3. There, the court held that 16 determining whether the copyrighted works fell into the 17 specified categories would require “a detailed factual 18 analysis” inappropriate for a motion to dismiss. Id. 19 Similarly, here, Defendants contend that Plaintiffs’ 20 copyrighted works are not copyrightable because they are 21 “functional exercise movements” that are ultimately 22 “unprotectable ‘ideas’ or ‘processes.’” Mot. 7:12-24. 23 As in Thomson, determining the protectability of 24 Plaintiffs’ copyrighted works would require the Court to 25 conduct a detailed factual analysis unfit for ruling on 26 a motion to dismiss. Thus, Defendants’ argument fails, 27 and Plaintiffs have met their burden of pleading 28 copyright infringement. See Ashcroft, 556 U.S. 662 9 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 10 of 27 Page ID #:195

1 at 678 (holding that a complaint must contain enough

2 factual sufficiency to be plausible on its face to

3 survive a motion to dismiss for failure to plead a 4 claim); see also Lee v. City of Los Angeles, 250 F.3d 5 668, 688 (9th Cir. 2001) (“[F]actual challenges to a 6 plaintiff’s complaint have no bearing on the legal 7 sufficiency of the allegations under Rule 12(b)(6).”). 8 Accordingly, the Court DENIES Defendants’ Motion to 9 Dismiss Plaintiffs’ copyright infringement claim. 10 b. Violation of the Lanham Act – False 11 Advertising 12 To succeed on a Lanham Act claim for false 13 advertising, a plaintiff must establish: (1) a false 14 statement of fact by the defendant in a commercial 15 advertisement about its own or another’s product; 16 (2) the statement actually deceived or has the tendency 17 to deceive a substantial segment of its audience; 18 (3) the deception is material, in that it is likely to 19 influence the purchasing decision; (4) the defendant 20 caused its false statement to enter interstate commerce; 21 and (5) the plaintiff has been or is likely to be 22 injured as a result of the false statement, either by 23 direct diversion of sales from itself to defendant or by 24 a lessening of the goodwill associated with its 25 products. See 15 U.S.C. § 1125. 26 Importantly, district courts in the Ninth Circuit 27 apply a heightened pleading standard for false 28 advertising claims. See, e.g., EcoDisc Tech. AG v. DVD 10 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 11 of 27 Page ID #:196

1 Format/Logo Licensing Corp., 711 F. Supp. 2d 1074, 1085

2 (C.D. Cal. 2010) (“Although the Ninth Circuit has not

3 concluded that Rule 9(b) applies to Lanham Act claims, 4 many district courts have applied this heightened 5 pleading standard to claims that are grounded in fraud, 6 such as misrepresentation claims.”). “To satisfy 7 Rule 9(b), Plaintiff must state the time, place, and 8 specific content of the false representations as well as 9 the identities of the parties to the misrepresentation.” 10 EcoDisc Tech., 711 F. Supp. 2d at 1085 (citing Schreiber 11 Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 12 1401 (9th Cir. 1986)). Plaintiffs must also set forth 13 what is false and misleading about the statement and why 14 it is false. Id. (citing Vess v. Ciba–Geigy Corp. USA, 15 317 F.3d 1097, 1106 (9th Cir.2003)). 16 Plaintiffs alleged all elements of a Lanham Act 17 violation with sufficient particularity, specifically 18 listing the following “false and/or misleading” 19 statements from Defendant Roup’s biography on 20 Defendants’ website: “I knew that there was something 21 missing from the boutique fitness community, so I 22 combined my passion for dance and love for fitness to 23 create The Sculpt Society. I spent years teaching 24 fitness and developing The Sculpt Society method before 25 launching in 2017.” FAC ¶ 58. Plaintiffs assert that 26 these statements “misrepresent the nature, 27 characteristics, and qualities of Defendants’ services” 28 because they “imply” that (1) Defendant Roup developed 11 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 12 of 27 Page ID #:197

1 the “TSS Method” over a period of multiple years, when

2 she did not; (2) the “TSS Method” was created through

3 years of science-based research, development, data 4 collection, analysis, and trial and error, when it was 5 not; and (3) the “TSS Method” is significantly different 6 from Plaintiffs’ “TA Method,” when it is not. Id. ¶ 58, 7 59. 8 Defendants counter that these statements are 9 “facially non-actionable” because, amongst other 10 reasons, (1) they are “classic examples of non- 11 actionable opinions or puffery which are both 12 nonmaterial and unlikely to induce consumer reliance,” 13 and (2) they are non-material because a reasonable 14 consumer would not rely on the statements when making 15 purchasing decisions. Mot. 12:22–17:25. 16 The Court’s analysis therefore centers on whether 17 Plaintiff has plausibly alleged a false statement of 18 fact. 19 i. False Statement of Fact 20 “To demonstrate falsity within the meaning of the 21 Lanham Act, a plaintiff may show that the statement was 22 literally false, either on its face or by necessary 23 implication, or that the statement was literally true 24 but likely to mislead or confuse consumers.” Southland 25 Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 26 (9th Cir. 1997). The allegedly false statement must be 27 examined in the full context of the advertising or 28 promotional materials in which the statement was made. 12 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 13 of 27 Page ID #:198

1 Id.

2 Importantly, an advertising statement may be non-

3 actionable if it constitutes “puffery,” which is defined 4 as “exaggerated advertising, blustering, and boasting 5 upon which no reasonable buyer would rely.” Id. at 6 1145. Puffery includes “statement[s] of fact 7 [in]capable of being proved false,” statements that are 8 not “specific and measurable,” or statements that 9 otherwise cannot be “reasonably interpreted as a 10 statement of objective fact.” Coastal Abstract Serv., 11 Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 731 (9th 12 Cir. 1999); see also Glen Holly Ent., Inc. v. Tektronix 13 Inc., 343 F.3d 1000, 1015 (9th Cir. 2003) (establishing 14 that “generalized, vague, or unspecific assertions” 15 constitute unactionable puffery); Cook, Perkiss & Liehe, 16 Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 17 246 (9th Cir. 1990) (“[Puffery] has been described by 18 most courts as involving outrageous generalized 19 statements, not making specific claims, that are so 20 exaggerated as to preclude reliance by consumers.”). 21 A statement is also considered puffery if the claim 22 is extremely unlikely to induce consumer reliance. 23 Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d 1038, 24 1054 (9th Cir. 2008). Ultimately, the difference 25 between a statement of fact and mere puffery rests in 26 the specificity or generality of the claim. Cook, 27 Perkiss & Liehe, Inc., 911 F.2d at 246. “The common 28 theme that seems to run through cases considering 13 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 14 of 27 Page ID #:199

1 puffery in a variety of contexts is that consumer

2 reliance will be induced by specific rather than general

3 assertions.” Id. Thus, a statement that is 4 quantifiable, that makes a claim as to the “specific or 5 absolute characteristics of a product,” may be an 6 actionable statement of fact while a general, subjective 7 claim about a product is non-actionable puffery. Id. 8 Courts may determine at the motion to dismiss stage 9 whether an alleged misrepresentation is a statement of 10 fact or mere puffery as a matter of law. Newcal Indus., 11 Inc., 513 F.3d at 1053. Since Plaintiffs assert that 12 Defendants’ statements are “false and/or misleading,” 13 the Court assesses whether the claims are literally 14 false or true but misleading. FAC ¶ 58. 15 A. Literally False 16 To be literally false, a statement must “expressly 17 or impliedly assert a fact that is susceptible to being 18 proved false,” and must be able to reasonably be 19 “interpreted as stating actual facts.” Weller v. 20 American Broad. Cos., 283 Cal. Rptr. 644, 650 (1991). 21 Claims that a defendant invented a product to fill a gap 22 in the market, and the resulting implications regarding 23 the innovativeness of a defendant’s product, constitute 24 puffery rather than an assertion of fact. See 25 Soilworks, LLC v. Midwest Indus. Supply, Inc., 575 F. 26 Supp. 2d 1118, 1133 (D. Ariz. 2008) (holding that claims 27 that a company was the “innovator” of a product and that 28 the product was the result of “revolutionary state-of- 14 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 15 of 27 Page ID #:200

1 the-art innovation” constituted puffery because those

2 claims are general, vague, and unmeasurable.); Williams

3 & Lake LLC v. Genesis Systems LLC, No. CV-17-00117-TUC- 4 CKJ, 2017 WL 6418937 at *6-8 (D. Ariz. Sept. 13, 2017) 5 (establishing that “inventorship is not a cause of 6 action” for false advertising under the Lanham Act, and 7 that claims attacking defendant’s statements about 8 inventorship do not challenge the nature of the 9 defendant’s product even if the statements create a 10 perception that the plaintiff’s product is inferior). 11 Here, Defendant Roup’s statements constitute non- 12 actionable puffery. First, her statement that “[she] 13 knew something was missing from the boutique fitness 14 community, so [she] combined [her] passion for dance and 15 love for fitness to create The Sculpt Society” conveys a 16 general, vague, and unmeasurable assertion regarding 17 inventorship and the innovativeness of Defendants’ 18 products. See Soilworks, LLC, 575 F. Supp. 2d at 1133; 19 Williams & Lake LLC, 2017 WL 6418937 at *6-8. Next, 20 Defendant Roup’s statement that she “spent years 21 teaching fitness and developing The Sculpt Society 22 method before launching in 2017” is another general and 23 vague assertion of inventorship. While Plaintiffs 24 appear to primarily take issue with Defendant Roup’s 25 statement about her development of The Sculpt Society 26 method, it is worth noting that Plaintiffs offer 27 evidence proving the truth of Defendant Roup’s claim 28 that she “spent years teaching fitness.” FAC ¶¶ 58-59; 15 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 16 of 27 Page ID #:201

1 Id. ¶ 3 (“[Plaintiff] TANY employed [Defendant] Roup as

2 a trainer from 2011 to 2017.”). Moreover, it is

3 unlikely a reasonable consumer would rely on these 4 statements as an objective, measurable statement of 5 fact. See R & A Synergy LLC v. Spanx, Inc., No. 2:17- 6 CV-09147-SVW-AS, 2019 WL 4390564 at * 11 (C.D. Cal. 7 May 1, 2019) (holding that a CEO’s representations that 8 she invented a product and that it filled a “white 9 space” in the market were puffery that would not induce 10 consumer reliance). 11 B. True But Misleading 12 If an advertising claim is not literally false, a 13 plaintiff may still satisfy the first element of a 14 Lanham Act false advertising claim by establishing that 15 the representations of fact in advertising statements 16 were literally true but otherwise misled, confused, or 17 deceived the public. Southland Sod, 108 F.3d at 1140. 18 A plaintiff generally relies on consumer surveys to 19 assess whether consumers were misled. Id. 20 Plaintiffs argue that Defendant Roup’s statements 21 may mislead the public to wrongly believe that 22 (1) Defendant Roup developed the “TSS Method” over a 23 period of multiple years, when she did not; (2) the “TSS 24 Method” was created through years of science-based 25 research, development, data collection, analysis, and 26 trial and error, when it was not; and (3) the “TSS 27 Method” is significantly different from Plaintiffs’ “TA 28 Method,” when it is not. FAC ¶ 58, 59. As explained 16 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 17 of 27 Page ID #:202

1 above, Defendant Roup’s statements are non-actionable

2 puffery, meaning that reasonable consumers are unlikely

3 to rely on these statements to make purchasing decisions 4 regardless of whether the statements may be misleading. 5 Thus, Defendant Roup’s statements cannot be considered 6 true but misleading as a matter of law. 7 Therefore, Plaintiffs have not adequately pled that 8 Defendants have made a false statement of fact and the 9 Court GRANTS Defendants’ Motion to Dismiss Plaintiff’s 10 Lanham Act claim. 11 Since the Court resolves Defendants’ Motion to 12 Dismiss Plaintiff’s Lanham Act claim on these grounds, 13 it need not address the remaining false advertising 14 factors or parties’ arguments. 15 c. Breach of Contract 16 Plaintiff TANY alleges that Defendant Roup breached 17 her employment contract with Plaintiff TANY. FAC ¶ 65. 18 To plead a cause of action for breach of contract, a 19 plaintiff must show (1) the existence of a contract; 20 (2) plaintiff’s performance or excuse for 21 nonperformance; (3) defendant’s breach; and (4) that 22 plaintiff sustained damages resulting from the breach. 23 See Zamora v. Solar, No. 2:16-CV-01260-ODW-KS, 2016 WL 24 3512439, at *3 (C.D. Cal. June 27, 2016) (citing CDF 25 Firefighters v. Maldonado, 70 Cal. Rptr. 3d 667, 680 26 (2008)). 27 Plaintiff TANY has sufficiently alleged a breach of 28 contract claim. Plaintiff TANY states that it entered 17 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 18 of 27 Page ID #:203

1 into and performed its obligations under a “Trainer

2 Agreement” with Defendant Roup. FAC ¶¶ 3, 29, 65-66.

3 The Trainer Agreement prohibited trainers, including 4 Defendant Roup, from “using or disclosing company 5 ‘Confidential Information,’ which includes its nonpublic 6 business and operational information, training materials 7 and manuals, and the transcribed methods taught to 8 trainers, including those comprising the TA Method’s 9 proprietary choreography movements, sequences, and 10 routines” during and after their employment with 11 Plaintiff TANY. Id. ¶ 3, 29. 12 Next, Plaintiff TANY contends Defendant Roup 13 breached the Trainer Agreement by “using and disclosing 14 to [third parties] the Confidential Information after 15 the termination of her employment [with Plaintiff] 16 TANY.” Id. ¶ 68. Specifically, Plaintiff TANY asserts 17 that Defendant Roup (1) used the Confidential 18 Information “with developing the TSS Method and with 19 planning, recording, and publishing videos on the TSS 20 app and website”; (2) used the Confidential Information 21 “related to customers, operations, program structure, 22 customer intake methods, and employees”; and 23 (3) “disclosed the Confidential Information to third 24 parties, including employees, affiliates, and/or 25 customers of TSS.” Id. Finally, Plaintiff TANY 26 contends that as a result of Defendant Roup’s alleged 27 breach, Plaintiff TANY “has suffered, and will continue 28 to suffer, substantial monetary damages in an amount to 18 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 19 of 27 Page ID #:204

1 be determined at trial.” Id. ¶ 69. Thus, Plaintiff

2 TANY has alleged a plausible breach of contract claim.

3 The Court therefore DENIES Defendants’ Motion to Dismiss 4 Plaintiffs’ breach of contract claim. 5 d. Violations of California Unfair Competition 6 Law 7 Plaintiffs argue that Defendants violated 8 California’s Unfair Competition Law (“UCL” or “section 9 17200”) because they engaged in unfair and/or fraudulent 10 business acts and practices including: (1) taking, 11 using, and continuing to use Plaintiffs’ confidential 12 information to form and operate TSS, which competes with 13 Plaintiffs, and (2) making false and/or misleading 14 descriptions or representations of fact by setting forth 15 the statements addressed in Plaintiffs’ false 16 advertisement claim. FAC ¶ 71. 17 California’s UCL prohibits “any unlawful, unfair or 18 fraudulent business act or practice and unfair, 19 deceptive, untrue or misleading advertising.” Cal. Bus. 20 & Prof. Code § 17200. Each UCL prong—unlawful, unfair, 21 and fraudulent—provides a separate and distinct theory 22 of liability. Lozano v. AT&T Wireless Servs., Inc., 23 504 F.3d 718, 731 (9th Cir. 2007). 24 Since Plaintiffs alleged Defendants participated in 25 “unfair and/or fraudulent business acts,” they are 26 required to plead their claims under the unfair and 27 fraud prongs of the UCL. See Lozano, 504 F.3d at 731. 28 /// 19 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 20 of 27 Page ID #:205

1 ///

2 i. “Unfair” Prong

3 The “unfair” prong of the UCL prohibits a business 4 practice that “violates established public policy 5 or . . . is immoral, unethical, oppressive or 6 unscrupulous and causes injury to consumers which 7 outweighs its benefits.” McKell v. Wash. Mut., Inc., 8 49 Cal. Rptr. 3d 227, 240 (2006). The California 9 Supreme Court has held that “[w]hen a plaintiff who 10 claims to have suffered injury from a direct 11 competitor's ‘unfair’ act or practice invokes 12 section 17200, the word ‘unfair’ in that section means 13 conduct that threatens an incipient violation of an 14 antitrust law, or violates the policy or spirit of one 15 of those laws because its effects are comparable to or 16 the same as a violation of the law, or otherwise 17 significantly threatens or harms competition.” Cel-Tech 18 Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 19 4th 163, 187 (1999). 20 Although Plaintiffs allege that Defendants are 21 competitors, Plaintiffs do not argue that Defendants’ 22 alleged misconduct threatens an incipient violation of 23 an antitrust law or has effects comparable to a 24 violation of an antitrust law. See generally FAC. 25 Accordingly, Plaintiffs have not sufficiently alleged a 26 plausible claim for relief under the UCL’s unfair prong. 27 ii. “Fraud” Prong 28 “To state a claim under the ‘fraud’ prong of 20 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 21 of 27 Page ID #:206

1 [section] 17200, a plaintiff must allege facts showing

2 that members of the public are likely to be deceived by

3 the alleged fraudulent business practice.” Antman v. 4 Uber Techs., Inc., No. 3:15-cv-1175-LB, 2015 WL 6123054, 5 at *6 (N.D. Cal. Oct. 19, 2015). “Claims under the 6 fraud prong of the UCL are subject to the particularity 7 requirements of Federal Rule of Civil Procedure 9(b).” 8 In re Anthem, Inc. Data Breach Litig., No. 15-MD-2617- 9 LHK, 2016 WL 3029783, at *34 (N.D. Cal. May 27, 2016); 10 see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1122, 11 1126-27 (9th Cir. 2009) (“[If] the [UCL] claim is said 12 to be ‘grounded in fraud’ . . . the pleading of that 13 claim as a whole must satisfy the particularity 14 requirement of Rule 9(b).”). A plaintiff, therefore, 15 must plead the time, place, and contents of the false 16 representations, as well as the identity of the person 17 making the misrepresentation and what that person 18 obtained thereby. See Fed. R. Civ. P. 9(b). 19 To have standing under the UCL’s fraud prong, a 20 claim must plead “actual reliance by the [party] seeking 21 relief under [the statute].” Morgan v. AT&T Wireless 22 Servs., Inc., 177 Cal. App. 4th 1235, 1235 (2009). No 23 California state court has addressed whether “competitor 24 plaintiffs must plead their own reliance or whether 25 pleading consumer reliance is sufficient for fraudulent 26 business practice claims brought by competitors.” 27 23andMe, Inc. v. Ancestry.com DNA, LLC, 356 F. Supp. 3d 28 889, 911 (N.D. Cal. 2018). As a result, there is a 21 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 22 of 27 Page ID #:207

1 split of authority in the California district courts

2 with a majority view that a plaintiff must allege its

3 own reliance and not the reliance of third parties. 4 Id.; see also ConsumerDirect, Inc. v. Pentius, LLC, No. 5 821CV01968JVSADSX, 2022 WL 16949657 at *8 (C.D. Cal. 6 Aug. 25, 2022) (adopting the majority approach that a 7 plaintiff must allege its own reliance). But see 8 Jerome’s Furniture Warehouse v. Ashley Furniture Indus., 9 Inc., No. 20CV1765-GPC(BGS), 2021 WL 1541649 at *7-8 10 (S.D. Cal. Apr. 20, 2021) (adopting the minority 11 approach based on some courts’ perception that the 12 “broad, sweeping language” of the UCL indicates 13 California legislative intent that the substantive reach 14 of UCL claims be “expansive”) (internal quotations and 15 citations omitted). 16 Plaintiffs fail to plead with specificity that they 17 actually relied upon Defendant Roup’s alleged 18 misrepresentations. Therefore, Plaintiffs fail to state 19 a UCL claim under the fraud prong. 20 Since Plaintiffs have not sufficiently alleged a 21 UCL claim under either relevant prong, the Court GRANTS 22 Defendants’ Motion to Dismiss Plaintiffs’ UCL claim. 23 e. Leave to Amend 24 “Where a motion to dismiss is granted, a district 25 court must decide whether to grant leave to amend.” 26 Winebarger v. Pennsylvania Higher Educ. Assistance 27 Agency, 411 F. Supp. 3d 1070, 1082 (C.D. Cal. 2019). 28 “The court should give leave [to amend] freely when 22 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 23 of 27 Page ID #:208

1 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the

2 Ninth Circuit, “Rule 15’s policy of favoring amendments

3 to pleadings should be applied with ‘extreme 4 liberality.’” United States v. Webb, 655 F.2d 977, 979 5 (9th Cir. 1981). Against this extremely liberal 6 standard, the Court may consider “the presence of any of 7 four factors: bad faith, undue delay, prejudice to the 8 opposing party, and/or futility.” Owens v. Kaiser 9 Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 10 2001). 11 Here, leave to amend Plaintiffs’ claims should be 12 granted because Plaintiffs can cure their Complaint by 13 pleading additional facts that support their claims. 14 There is no evidence of bad faith or undue delay by 15 Plaintiff, or potential prejudice to Defendant by 16 allowing amendment. The Court therefore GRANTS 17 Defendants’ Motion to Dismiss Plaintiff’s Lanham Act and 18 UCL claims with leave to amend. 19 2. Motion to Strike 20 Defendants move to strike the portion of 21 Plaintiffs’ UCL claim asserting that Defendants engaged 22 in unfair and/or fraudulent business acts and practices 23 by making false or misleading statements in advertising. 24 See Mot. 23:1-24:21; White v. Lieberman, 103 Cal. App. 25 4th 210, 220 (2002) (holding that the trial court erred 26 as a matter of law when it denied the defendant's anti– 27 SLAPP motion to strike as moot because it granted the 28 defendant’s demurrer on the same claim); Thornbrough v. 23 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 24 of 27 Page ID #:209

1 West Placer Unified Sch. Dist., 2010 WL 2179917, at *11

2 (E.D. Cal. May 27, 2010) (“Since a defendant who

3 prevails on an anti–SLAPP motion is entitled to recover 4 mandatory attorney’s fees, the dismissal of Plaintiff’s 5 claims against [defendant] does not moot [defendant’s] 6 anti–SLAPP motion.”). 7 As described, a court considering whether claims 8 are barred by the “anti-SLAPP statute must engage in a 9 two-part inquiry.” Vess v. Ciba-Geigy Corp. USA, 10 317 F.3d 1097, 1110 (9th Cir. 2003). “First, a 11 defendant must make an initial prima facie showing that 12 the plaintiff’s suit arises from an act in furtherance 13 of the defendant’s right of petition or free speech.” 14 Id. (internal quotation marks omitted). Under the anti- 15 SLAPP statute, free speech includes “‘any written or 16 oral statement or writing made in a place open to the 17 public or a public forum in connection with an issue of 18 public interest,’ and ‘any other conduct in furtherance 19 of the exercise of the constitutional right of petition 20 or the constitutional right of free speech in connection 21 with a public issue or an issue of public interest.’” 22 Id. 23 Generally, if a defendant makes an initial prima 24 facie showing, “the burden shifts to the plaintiff to 25 demonstrate a probability of prevailing on the 26 challenged claims.” Id. But “when an anti-SLAPP motion 27 to strike challenges only the legal sufficiency of a 28 claim,” as here, a court considers instead “whether a 24 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 25 of 27 Page ID #:210

1 claim is properly stated.” Planned Parenthood Fed’n of

2 Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828, 834

3 (9th Cir.), amended, 897 F.3d 1224 (9th Cir. 2018); see 4 also Day v. California Lutheran Univ., No. 5 821CV01286JLSDFM, 2022 WL 17037433 at *12 (C.D. Cal. 6 Aug. 30, 2022) (assessing whether defendants made a 7 prima facie showing that the activities at issue in 8 their anti-SLAPP motion were protected conduct). 9 As to the first part of the anti-SLAPP inquiry, the 10 Court finds that the Defendants have sufficiently made a 11 prima facie showing that the activities at issue are 12 protected conduct. Defendants pled that the challenged 13 written statements are publicly available on a website, 14 and that they regard an issue of public interest because 15 of Defendant Roup’s public persona. Mot. 23:1-24:21. 16 The California appellate courts have developed 17 multiple tests to determine whether a defendant’s 18 activity is in connection with a public issue. Hilton 19 v. Hallmark Cards, 599 F.3d 894 906 (9th Cir. 2010). 20 Relevant here is the Rivero test, where the Court of 21 Appeal for the First District of California surveyed the 22 appellate cases and established three categories of 23 public issues: (1) statements “concern[ing] a person or 24 entity in the public eye”; (2) “conduct that could 25 directly affect a large number of people beyond the 26 direct participants”; (3) “or a topic of widespread, 27 public interest.” Rivero v. American Federation of 28 State, County, & Municipal Employees, 130 Cal. Rptr. 2d 25 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 26 of 27 Page ID #:211

1 81, 89-90 (2003). 2 Here, Defendants have adequately pled that

3 Defendant Roup is person or entity in the public eye by 4 stating that she is a “celebrity fitness trainer and 5 influencer” with a substantial number of customers and a 6 significant social media following. Mot. 23:21-24:5. 7 Further, Defendants contend that Defendant Roup’s 8 statements are biographical, and therefore Defendants 9 have shown that the statements concern a person or 10 entity in the public eye. Id. 24:6-10. 11 As to the second part of the analysis, Defendants 12 argue that “Plaintiffs cannot carry their burden to show 13 a likelihood of prevailing on the portion of their UCL 14 claim” based on Defendant Roup’s biographical 15 statements. Id. 24:12-16. And the Court has already 16 established that Plaintiffs have not pled a plausible 17 UCL claim. But “granting a defendant’s anti-SLAPP 18 motion to strike a plaintiff’s [] complaint without 19 granting the plaintiff leave to amend would directly 20 collide with Fed. R. Civ. P. 15(a)’s policy favoring 21 liberal amendment.” Verizon Delaware, Inc. v. Covad 22 Commc’ns Co., 377 F.3d 1081, 1091 (9th Cir. 2004); see 23 also Day, 2022 WL 17037433 at *12 (granting plaintiffs’ 24 leave to amend their first amended complaint despite 25 defendants’ anti-SLAPP motion). 26 The purpose of the anti-SLAPP statute would still 27 be served if Plaintiffs eliminate meritless claims or 28 plead them adequately. See id. If, after amendment, 26 Case 2:22-cv-04735-RSWL-E Document 20 Filed 12/12/22 Page 27 of 27 Page ID #:212

1 the Complaint still contains legally insufficient

2 claims, Defendants continue to have anti-SLAPP remedies

3 available to them. See Day, 2022 WL 17037433 at *12 4 (declining to rule on defendants’ anti-SLAPP motion 5 since the court dismissed plaintiffs’ claims with leave 6 to amend and defendants could reassert the motion once 7 plaintiffs filed an amended complaint). Accordingly, 8 the Court will defer its final ruling on Defendants' 9 anti-SLAPP request until after Plaintiffs have amended 10 their complaint in light of this Order. 11 III. CONCLUSION 12 Based on the foregoing, the Court GRANTS 13 Defendants’ Motion to Dismiss Plaintiffs’ Lanham Act and 14 UCL claims with leave to amend and DENIES Defendant’s 15 Motion to Dismiss Plaintiffs’ copyright and breach of 16 contract claims. 17 18 IT IS SO ORDERED. 19 20 DATED: December 12, 2022 ____ _ _ _ /S_/_ R_O_N_A_L_D_ _S_.W_._ L_E_W________ HONORABLE RONALD S.W. LEW 21 Senior U.S. District Judge 22 23 24 25 26 27 28 27