UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
August 5, 2008
GENERAL CHARLES "CHUCK" YEAGER, (RET.) AND GENERAL CHUCK YEAGER FOUNDATION, PLAINTIFFS,
CONNIE BOWLIN, ED BOWLIN, DAVID MCFARLAND, AVIATION AUTOGRAPHS, A NON-INCORPORATED GEORGIA BUSINESS ENTITY, BOWLIN & ASSOCIATES, INC., A GEORGIA CORPORATION, SPALDING SERVICES, INC., A GEORGIA CORPORATION, INTERNATIONAL ASSOCIATION OF EAGLES, INC., AN ALABAMA CORPORATION, AND DOES 1 TO 100, INCLUSIVE, DEFENDANTS.
ORDER RE: MOTION TO DISMISS
Plaintiffs General Charles "Chuck" Yeager, (Ret.) and the General Chuck Yeager Foundation ("Foundation") filed this lawsuit alleging various claims against defendants Connie Bowlin, Ed Bowlin, David McFarland, Aviation Autographs, Bowlin and Associates, Inc., Spalding Services, Inc., and International Association of Eagles, Inc. Connie Bowlin, Ed Bowlin, Aviation Autographs, and Bowlin and Associates, Inc.*fn1 now move to dismiss plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted and Rule 9(b) for failure to plead fraud with specificity. Defendants also move for a more definite statement pursuant to Rule 12(e).
I. Factual and Legal Background
General Yeager is a well-known figure from American aviation history and has a "valuable identity and property interest arising out of his accomplishments . . . ." (Compl. ¶¶ 2, 6-8.) Because of his fame, he "charges, and receives, a fee for the commercial use of his name, image, and/or identity, and additionally charges for any endorsement of products or companies. [He] also charges a fee for providing his autograph in commercial or business settings." (Id. at ¶ 9.) The Foundation is an organization dedicated to teaching and illustrating the ideals of Yeager. (Id. at ¶ 10.) It receives funding through Yeager's appearances and marketing efforts. (Id.)
Defendant Aviation Autographs is a Georgia business that obtains and sells autographed materials. (Id. at ¶ 11.) Aviation Autographs sells these materials through phone orders and on the internet. (Id.) Defendant Bowlin and Associates, Inc. is in the business of aviation sales and consulting. (Id. at ¶ 15.) Defendants Connie and Ed Bowlin, residents of the State of Georgia, are the owners of Aviation Autographs and Bowlin and Associates, Inc. (Id. at ¶¶ 12-13, 15.)
Aviation Autograph's website allegedly features prints, models, books, and other merchandise bearing or utilizing plaintiff's name, likeness, and identity "in an attempt to capitalize and utilize [p]laintiff's fame and reputation to bolster, aid and increase [d]efendants' sales of aviation memorabilia." (Id. at ¶¶ 53, 57.) Plaintiffs insist they have not consented to the use of Yeager's name in connection with the sale of these products and that Yeager has not been compensated for this use. (Id. at ¶ 55.) Furthermore, statements on the website are allegedly false and misleading because they suggest that Yeager and the Bowlins maintain a current friendship. (Id. at ¶ 64.) Yeager further asserts that he has "withdrawn permission for the [d]efendants to sell any prints, lithographs or memorabilia described in [the] Complaint." (Id. at ¶¶ 26, 43, 45, 50.)
Yeager purportedly attended various events in or before 2003 without charging his usual appearance fees because the Bowlins or unspecified defendants fraudulently represented to him that the proceeds from such events would go toward charitable purposes. (Id. at ¶ 111; see also id. at ¶¶ 24, 30, 32, 36, 38, 112(b)-(c), 121(a)-(b)) (regarding the "Leiston Legends" and "Tribute to Aces" Symposium).) Yeager also purportedly signed hundreds of lithographs without charging his usual autographing fees because the Bowlins or unspecified defendants fraudulently represented to him that the proceeds from the sales of such prints would go toward charitable purposes. (Id. at ¶¶ 19-20, 22, 112(a) (regarding the "Gathering of Eagles" events); id. at ¶¶ 25, 30, 32, 34, 36, 38, 112(b)-(c), 121(a)-(b) (regarding the "Leiston Legends" and "Tribute to Aces" Symposium).) Allegedly, none of the proceeds from the sales of the lithographs or generated by the events have gone toward the charitable purposes as represented. (Id. at ¶¶ 112(a)-(c).)
Furthermore, Yeager also allegedly entered into various oral agreements with the Bowlins in 2000 and 2003.*fn2 The agreements relate to different sets of lithographs, but all contain substantially similar promises. (See id. at ¶ 24 (alleging terms of an August 2003 agreement); id. at ¶ 26 (alleging terms of a 2000 agreement); id. at ¶ 32 (alleging terms of an August 2003 agreement regarding the "Tribute to Aces" Symposium); id. at ¶ 41 (alleging terms of a 2000 agreement regarding the "Hey Pard" prints); id. at ¶¶ 45, 112(d) (alleging terms of a 2000 agreement regarding the "F-15" prints); id. at ¶¶ 50, 112(e) (alleging terms of a 2000 agreement regarding the "First Day" covers); id. at ¶¶ 112(c), 121(a) (alleging terms of agreement regarding the "Leiston Legends" lithographs).)
In these agreements, Yeager allegedly authorized the Bowlins to sell signed prints in exchange for a percentage of the proceeds, and unsigned prints in exchange for a royalty payment. (Id. at ¶¶ 26, 45, 50, 112(d)-(e).) These agreements also provided that Yeager would retain one-third of the prints for his own use. (Id. at ¶¶ 24, 32, 47, 112(c), 121(a).) Furthermore, as to each agreement, Yeager "retained full and sole discretion to set or alter the terms upon which any of the lithographs, signed or unsigned, might be offered for sale." (Id. at ¶¶ 24, 32, 41, 45, 50.) Finally, if an agreement required Yeager to travel, it also provided that he would be reimbursed for his first class travel and hotel expenses. (Id. at ¶¶ 26, 121(a).)
Notwithstanding these agreements, defendants allegedly did not consult with Yeager in setting the sales prices for the prints nor did they provide him with his promised one-third of the prints. (Id. at ¶¶ 27, 47, 112(a).) Furthermore, the Bowlins have not paid Yeager his share of the sale proceeds or royalties and have not fully reimbursed him for his travel and lodging expenses. (Id. at ¶¶ 29, 39, 43, 112(c)-(e), 121(a), 121(c)-(d).)
Plaintiffs commenced this lawsuit on January 14, 2008 asserting nine claims against defendants, including: 1) breach of the California common law right to privacy/right to control publicity and likeness; 2) violation of California Civil Code section 3344 (statutory right of publicity); 3) violation of the Lanham Act, 15 U.S.C. § 1125(a), for false endorsement; 4) violation of the California Business and Professions Code section 17200 (unfair business practices); 5) violation of the California False Advertising Act, California Business and Professions Code section 17500; 6) fraud; 7) breach of oral contract; 8) unjust enrichment; and 9) conspiracy.
On a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984). To survive a motion to dismiss, a plaintiff needs to plead "only enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007). Dismissal is appropriate, however, where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988); see also Conley v. Gibson, 355 U.S. 41, 47 (1957) (complaint must "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests"), abrogated on other grounds by Twombly, 127 S.Ct. at 1968. "However, the court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994).
When ruling on a motion to dismiss, the court generally may not consider materials other than the facts alleged in the complaint and documents that are made a part of the complaint. Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir. 1996); Branch v. Tunne11, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). A court may, however, take judicial notice of undisputed facts that are contained in extrinsic materials. Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Lee v. City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001).
Defendants request this court to take judicial notice of various documents filed in the cases of Susan F. Yeager v. Victoria D'Angelo, Nevada County Superior Court Case No. 68834, (Defs.' Req. for Judicial Notice in Supp. of Mot. to Dismiss Exs. A-D), and General Charles E. "Chuck" Yeager v. Susan Yeager, United States District Court, Eastern District of California, Case No. 2:06-CV-01196-JAM-EFB. (Id. Exs. E-F.) Defendants do not "request judicial notice of the truth of the substantive content of these pleadings or of the findings made by the courts in those proceedings." (Id. at 3:8-9.) Instead, they request judicial notice "of the fact and content of the pleadings as [they] relate to the notice that [p]laintiffs had of their potential claims," because Yeager was a party to both of the actions. (Id. at 3:10-11.) Plaintiffs do not oppose defendants' request, and rely on some of the documents in making arguments in their opposition brief.
The court will accordingly take judicial notice of these materials. Fed. R. Evid. 201(b); see also United States ex rel. Robinson Rancheria Citizens Council v. Borneo Inc., 971 F.2d 244, 248 (9th Cir. 1992) ("[W]e 'may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue.'") (citations omitted). The judicially noticed documents "directly relate" to whether and when Yeager had notice of his potential claims such that they would now be barred by the applicable statutes of limitations. See Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1319-20 (9th Cir. 1998) (court may play "the strobe of judicial notice" upon the pleadings when it appears that the action is barred by the statute of limitations).
A. Breach of Oral Contract
The statute of limitations for breach of oral contract under California law is two years. Cal. Civ. Proc. Code § 339. A cause of action on an oral contract accrues, and the statute of limitations begins to run, at the time the contract is breached. Cochran v. Cochran, 56 Cal. App. 4th 1115, 1124 (1997).
In their opposition brief, plaintiffs do not argue that the breach of oral agreement claim accrued within the two year statutory period. Instead, plaintiffs argue that the judicially noticed documents "serve to change the contract from [an oral] agreement into a written agreement--bearing a longer [four year] statute of limitations." (Pls.' Mem. in Opp'n to Defs.' Mot. to Dismiss 2:17-19.) The cases cited by plaintiffs concern whether certain writings were sufficient to constitute contracts; they do not state, as plaintiffs contend, that an oral agreement can be changed into a written agreement. (See id. at 6:4-17 (citing Ashley v. Vischner, 24 Cal. 322 (1864), Osment v. McElrath, 68 Cal. 466 (1866), Melone v. Ruffino, 129 Cal. 514 (1900), and Simmons v. Burge Co., 52 F. Supp. 629, 634 (1943)).)
Plaintiffs have alleged a claim for breach of oral agreement and the applicable statute of limitations is two years. (See Compl. ¶ 120 ("At various times, [d]efendants entered into Oral Agreements with [p]laintiff."); id. at ¶ 121 ("Defendants have breached their oral agreements with [p]laintiff.").) Plaintiffs' allegations suggest that the statute of limitations began to run as early as 2003 or even 2000, since Yeager would have known then whether he was reimbursed for his travel and lodging expenses, whether he retained the promised number of prints, and whether he was compensated for the prints sold. Although plaintiffs allege that defendants "continue" not to compensate plaintiffs, plaintiffs do not allege that the agreements were breached within the two year statutory period. (Id. at ¶¶ 121(c)-(d).)
Further, in arguing that a four year statute of limitations applies, plaintiffs concede that they were on notice of their breach of contract claim by July 2004, well outside the applicable two year statute of limitations period. (See Pls.' Mem. in Opp'n to Defs.' Mot. to Dismiss at 7:4-8 ("The documents attached and incorporated by  [d]efendants show that  [p]laintiffs were not provided with a detailed inventory and report on commissions paid by [d]efendants until July 6, 2004" and plaintiffs "would not have been aware of the improper accounting and financial underpayments until this point in time."); id. at 2:19-20 ("[T]he [judicially noticed] documents clearly demonstrate [d]efendants did not provide the information serving to put [p]laintiffs on notice of their [breach] claim until July, 2004 . . . .").
Given plaintiffs' allegations and admitted notice, the court will grant defendants' motion to dismiss plaintiffs' seventh claim for breach of oral contract.*fn3 Counsel for defendants appears to acknowledge, however, that if subsequent breaches continued to occur within the statute of limitations period, plaintiffs would have a claim for those breaches.
Plaintiffs will therefore be free to amend their claim to allege breaches within the statutory period.
B. Privacy Claims
Defendants contend that plaintiffs' first, second, and third claims--breach of the California common law right to privacy/right to control publicity and likeness; violation of California Civil Code section 3344 (statutory right of publicity); and violation of the Lanham Act, 15 U.S.C. § 1125(a), for false endorsement--are time-barred because of the single publication rule.
The single publication rule provides that "[n]o person shall have more than one cause of action for damages for . . . invasion of privacy or any other tort founded upon any single publication or exhibition or utterance, such as any one issue of a newspaper or book or magazine or any one presentation to an audience or any one broadcast over radio or television or any one exhibition of a motion picture." Cal. Civ. Code § 3425.3. "Under the single-publication rule, with respect to the statute of limitations, publication generally is said to occur on the 'first general distribution of the publication to the public.'" Shively v. Bozanich, 31 Cal. 4th 1230, 1245 (2003) (citations omitted). The single publication rule has been held to apply to statements published on the internet. Traditional Cat Ass'n, Inc. v. Gilbreath, 118 Cal. App. 4th 392, 394 (2004).
The applicable statute of limitations for plaintiffs' first and second claims is two years. Cal. Civ. Proc. Code § 339; Long v. Walt Disney Co., 116 Cal. App. 4th 868, 873 (2004); Cusano v. Klein, 264 F.3d 936, 949-50 (9th Cir. 2001). The applicable statute of limitations for plaintiffs' third claim is less certain since the Lanham Act does not contain its own statute of limitations provision. The general rule in the absence of such a provision is to borrow the most analogous statute of limitations from state law. See Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 720 n. 17 (9th Cir. 2004); Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 836-37 (9th Cir. 2002). Given the nature of plaintiffs' allegations, the most analogous statute of limitations from state law would be either the two year statute applicable to right to privacy claims, or the three year statute applicable to fraud claims.
Defendants argue plaintiffs' first three claims are now time-barred given the applicable statutes of limitations "because the allegedly affronting materials were posted on the internet years ago," and under the single publication rule, the claims accrued when the allegedly unauthorized material was first published on the internet. (Defs.' Mem. in Supp. of Mot. to Dismiss 21:15-16, 23:14-17.)
Although plaintiffs allege ongoing use of Yeager's name and image in connection with sales on the Aviation Autograph's website as early as 2000 and 2003, they also allege that there was a republication of the statements on the Aviation Autograph's website. (Compl. ¶¶ 77, 85, 96, 101, 109); see also Kanarek v. Bugliosi, 108 Cal. App. 3d 327, 332 (1980) (stating that the single publication rule may not be available when a defendant republishes information); (Compl. ¶¶ 37, 46, 48, 53-54, 56-65, 67 (referencing unauthorized publications on the Aviation Autograph's website without stating when the alleged publications or republications were made).) It is unclear at this stage of the proceeding whether the website was changed or modified in any material way such as to constitute a republication sufficient to extend the statute of limitations. Accordingly, defendants' motion to dismiss plaintiffs' first, second, and third claims must be denied.
C. Unjust Enrichment
Like plaintiffs' privacy claims, their unjust enrichment claim relies on defendants' purported unauthorized use of Yeager's name, likeness, and identity to advertize and endorse their products. Since plaintiffs also allege republication as to this claim on an unspecified date, the court cannot determine at this stage of the proceeding when the statute of limitations accrued, and will deny defendants' motion to dismiss plaintiffs' eighth claim for unjust enrichment. (Compl. ¶ 127.)
Plaintiffs' sixth claim alleges fraud, which must be alleged with particularity, "with a high degree of meticulousness." Desaigoudar v. Meyercord, 223 F.3d 1020, 1022 (9th Cir. 2000); Fed. R. Civ. Proc. 9(b). Specifically, the allegations must "identify the time, place, and content of the alleged misrepresentation so that the defendant can identify the statement." Smith v. Allstate Ins. Co., 160 F. Supp. 2d 1150, 1152 (S.D. Cal. 2001). The plaintiff must also "plead facts explaining why the statement was false when it was made." Id. Rule 9(b) not only gives notice to defendants of the specific fraudulent conduct against which they must defend, but also deters the filing of complaints as a pretext for the discovery of unknown wrongs, protects defendants from the harm that comes from being subject to fraud charges, and prohibits plaintiffs "'from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.'" Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). Dismissal is the appropriate remedy for failure to comply with Rule 9(b). E.g., Jenkins v. Commonwealth Land Title Ins. Co., 95 F.3d 791, 796 (9th Cir. 1996).
Plaintiffs allege fraud as to the Gathering of Eagles event, the Tribute to Aces weekend, the Leiston Legends, the F-15 prints, and the First Day Covers. As to each of these alleged instances of fraud, plaintiffs fail to meet the heightened pleading requirements of Rule 9(b). With the Gathering of Eagles event, for example, plaintiffs do not allege who made the fraudulent representations or when the representations were made. (See Compl. ¶ 112(a) (alleging unspecified "defendants" "repeatedly" made false and fraudulent representations to Yeager).) As to the Tribute to Aces and Leiston Legends events, plaintiffs do not allege when the Bowlins allegedly made any false representations to Yeager. (See id. at ¶¶ 24-39, 112(b)-(c).) With respect to the F-15 prints and the First Day Covers, plaintiffs not only fail to allege the maker and the recipient of any misrepresentations, but they also fail to allege the time, place, and content of the alleged misrepresentations, and why they were false when made. (See id. at ¶¶ 45-52, 112(d)-(e).) Accordingly, the court will grant defendants' motion to dismiss plaintiffs' sixth claim for fraud.
Defendants move to dismiss plaintiffs' ninth claim because it purportedly alleges "conspiracy" without an underlying tort. Plaintiffs did not challenge this argument in their opposition brief and at oral argument plaintiffs' counsel conceded this claim should be dismissed. Accordingly, the court will grant defendants' motion to dismiss plaintiffs' ninth claim for conspiracy.
F. Motion to Dismiss Complaint and/or for a More Definite Statement
Defendants also move to dismiss the Complaint, or in the alternative, for a more definite statement on the grounds that the Complaint "fails to allege which [p]laintiff is asserting each claim, and against which [d]efendant the claim is being made."*fn4 (Defs.' Mem. in Supp. of Mot. to Dismiss 24:12- 14.) The Federal Rules of Civil Procedure, however, only require "'a short and plain statement of the claim showing that the pleader is entitled to relief' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007) (omission in original) (quoting Federal Rule of Civil Procedure Rule 8(e)(2).)
The Complaint alleges facts specific to defendants Ed Bowlin, Connie Bowlin, and Aviation Autographs and thus, gives them fair notice of the claims made against them. The Complaint does not, however, allege any facts pertaining to defendant Bowlin and Associates, Inc.s' involvement in this lawsuit. As such, the Complaint does not give "fair notice" of what claim or claims plaintiffs are alleging against it. Accordingly, the court will grant defendants' motion to dismiss Bowlin and Associates, Inc.
"A party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response." Fed. R. Civ. Pro. 12(e). With respect to those claims which the court has not dismissed by this order, the allegations in the Complaint are sufficient to allow defendants Ed Bowlin, Connie Bowlin, and Aviation Autographs to ascertain the nature of the claims against them, the court will deny their motion for a more definite statement. See Advanced Microtherm, Inc. v. Norman Wright Mech. Equip. Corp., No. 04-02266, 2004 WL 2075445, at *12 (N.D. Cal. Sept. 15, 2004) ("Motions for more definite statement are proper only where a complaint is so indefinite that the defendant cannot ascertain the nature of the claim being asserted.").
IT IS THEREFORE ORDERED that defendants' motion to dismiss plaintiffs' Complaint be, and the same hereby is, GRANTED as to all claims against defendant Bowlin and Associates, Inc. only, and as to the sixth, seventh and ninth claims against all remaining defendants; and
IT IS FURTHER ORDERED that defendants' motion for a more definite statement be, and the same hereby is, DENIED.
Plaintiffs are given thirty days from the date of this Order to file an amended complaint consistent with this Order.