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Fractional Villas, Inc. v. Tahoe Clubhouse

May 8, 2009

FRACTIONAL VILLAS, INC., PLAINTIFF,
v.
TAHOE CLUBHOUSE; GOT IT! REAL ESTATE AND DEVELOPMENT CORP.; DOES 1 THROUGH 25; DEL LAFOUNTAIN; RENE BREJC; LARRY DRAUT, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS COUNT TWO OF SECOND AMENDED COMPLAINT

[Doc. No. 31.]

Defendants Tahoe Clubhouse, Got It! Real Estate, Rene Brejc, and Del LaFountain (collectively "Defendants") filed a Rule 12(b)(6) motion to dismiss Count Two of Plaintiff's Second Amended Complaint (SAC). (Doc. No. 31.) Plaintiff did not file an opposition. Having considered Defendants' arguments, the Court GRANTS Defendants' motion for reasons set forth below.

BACKGROUND

Plaintiff's first amended complaint sought relief from copyright infringement, federal unfair competition violations, and unfair competition under California Civil Code §17200. Plaintiff alleged Defendants copied portions of Plaintiff's copyrighted website ("the Work") and used the Work to compete in the fractional ownership market. On January 22, 2009, the Court dismissed Plaintiff's Lanham Act claim and Section 17200 claim as preempted by the Copyright Act.

Plaintiff filed the SAC, alleging copyright infringement and unfair competition under section 17200. The Section 17200 claim alleges Defendants infringed the copyright to unfairly compete with Plaintiff. Defendants move to dismiss the section 17200 claim pursuant to Rule 12(b)(6).

LEGAL STANDARD

A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations; rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S.544 (2007). The court's review is limited to the contents of the complaint and it must accept all factual allegations pled in the complaint as true, drawing all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). In spite of this deference, it is not proper for the court to assume "the [plaintiff] can prove facts which [he or she] has not alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). Furthermore, a court is not required to credit conclusory legal allegations cast in the form of factual allegations, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

DISCUSSION

i. Parties' Arguments

Defendants argue Plaintiff's section 17200 claim is still preempted by the Copyright Act.

According to Defendants, infringing use of a copyright to compete with a copyright holder is prohibited by the Copyright Act, citing Laws v. Sony Music Entertainment, Inc., 448 F.3d 1134, 1137 (9th Cir. 2006); Goldberg v. Cameron, 482 F. Supp. 2d 1136 (N.D. Cal. 2007); RDF Media Ltd. v. Fox Broadcasting Co., 372 F. Supp. 2d 556 (C.D. Cal. 2005). Therefore, Defendants argue the right asserted is equivalent to rights protected by the Copyright act and should be dismissed with prejudice.

ii. Analysis

The Copyright Act preempts a state law claim if: (1) the work involved falls within the "subject matter" of the Copyright Act described in 17 U.S.C. §§ 102 and 103; and (2) the rights asserted under state law are equivalent to rights protected by the Copyright Act. Laws v. Sony Music Entertainment, Inc., 448 F.3d 1134, 1137 (9th Cir. 2006). Congress intended the Copyright Act to occupy the field; therefore, allowing a plaintiff to simply recast copyright claims as state law claims would defeat congressional intent. Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 1150-51 (9th Cir. 2008). The state law claim ...


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