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Digerati Holdings, LLC v. Young Money Entertainment

April 26, 2011

DIGERATI HOLDINGS, LLC, CROSS-COMPLAINANT AND APPELLANT,
v.
YOUNG MONEY ENTERTAINMENT, LLC, ET AL., CROSS-DEFENDANTS AND APPELLANTS.



(Los Angeles County Super. Ct. No. EC049512) APPEALS from an order of the Superior Court of Los Angeles County, Michael S. Mink, Judge.

The opinion of the court was delivered by: Croskey, Acting P. J.

CERTIFIED FOR PUBLICATION

Affirmed.

Young Money Entertainment, LLC (Young Money), and Dwayne Michael Carter, Jr., sued Digerati Holdings, LLC (Digerati), and others for breach of contract and other counts relating to the production of a documentary film. Young Money and Carter allege that the defendants breached the contract by failing to honor Carter's final approval rights. Digerati filed a cross-complaint against Young Money and Carter, alleging that they failed to make Carter available for filming and interviews and wrongfully interfered with the sale and distribution of the film. Young Money and Carter filed a special motion to strike the cross-complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16).*fn1 The trial court denied the motion in part and granted it in part. Young Money and Carter appeal the denial of their special motion to strike as to their count for breach of contract, while Digerati appeals the granting of the motion as to the count for breach of the implied covenant of good faith and fair dealing.

The parties dispute whether the two counts arise from an act in furtherance of Young Money's and Carter's constitutional right of petition or free speech in connection with a public issue within the meaning of the anti-SLAPP statute and whether the litigation privilege applies. We conclude that the gravamen of the breach of contract count is Young Money's and Carter's alleged failure to comply with their express contractual obligations, that the count does not arise from protected activity, and that the trial court properly denied the special motion to strike as to that count. We also conclude that the count for breach of the implied covenant if good faith and fair dealing is based primarily on other conduct constituting protected petitioning activity, that the litigation privilege applies, and that the trial court properly granted the special motion to strike as to that count. We therefore will affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

1. Factual Background

Carter is a well-known entertainer who performs under the stage name Lil' Wayne. Young Money is a corporation founded by Carter. Digerati is an entertainment production company.

Young Money and Digerati entered into a written agreement for the production of a biographical documentary film about Carter. Young Money agreed that it would cause Carter to appear for formal interviews and be available for other filming "when and where required by [Digerati]," and that Digerati would be provided "non-exclusive but first-priority" access to Carter during the film production. Young Money also agreed to provide archival photographs and video footage for use in producing the film, and to make its best efforts to cause certain other individuals to appear for interviews. Young Money also agreed not to authorize the release of or allow Carter to participate in interviews for any feature-length documentary film similar in nature to the subject film.

Digerati agreed in paragraph 2(b) of the agreement that Young Money and Carter would have certain "final approval" rights:

"Subject to Company's [Digerati's] distribution agreement, as between Company, on the one hand, and you [Young Money] and DC [Carter], on the other hand, DC shall have the right to inspect and/or approve the use of the DC Performance and/or the DC Materials, or any other results and proceeds of DC's services hereunder. Said approval shall not be unreasonably withheld and DC shall provide Company with written approval of the Scenes or specific written objections to the Scenes no later than 7 days (for DC's manager) and 3 days (for DC's attorney) following: (i) DC's or such applicable representative's review of the Scenes as they appear in the final cut of the Picture if DC or such applicable representative reviews the Scenes at a location designated by Company, or (ii) DC's or such applicable representative's receipt of a copy of the Scenes if Company agrees to provide DC with a copy of the Scenes for his review. Notwithstanding anything to the contrary set forth herein, DC shall have a sole right of final approval in connection with any scene(s) in the Picture that might depict or describe any of DC's actions or activities as criminal in nature or that might have any adverse affect on DC's pending criminal trials."

Another provision in the agreement stated that in the event of a breach by Digerati, the sole remedy available to Young Money and Carter was an action at law for damages, and that they could not obtain injunctive or other equitable relief.

Digerati produced a documentary film and screened a version of the film for Carter's personal manager, Cortez Bryant, in early 2008. According to Bryant, he objected to several scenes in the film and asked that they be removed, and Digerati agreed to remove the scenes but then failed to do so. According to Digerati, Bryant objected to only two scenes in the film, and Digerati removed those scenes as requested.

Digerati exhibited the film at the Sundance Film Festival in January 2009. Young Money and Carter, through their attorney, protested and demanded that Digerati cease any further exhibition of the film. Digerati refused and stated that it intended to pursue a distribution deal and exhibit the film at the Cannes Film Festival to be held in May 2009. Young Money and Carter, through their attorney, sent a letter to MTV Networks and Viacom International, Inc., in March 2009, stating that they had formally objected to scenes in the film and had not given their final approval of the film pursuant to the agreement. The letter stated that the recipients could be liable for intentional interference with contractual relations if they proceeded to acquire rights to the film and that Young Money and Carter would seek to enjoin any effort to release or display the film.

2. Complaint and Denial of a Preliminary Injunction

Young Money and Carter filed a complaint in March 2009 against Digerati and others. They allege that the defendants breached the agreement by failing to honor Carter's final approval rights. They allege counts for (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) unfair competition (Bus. & Prof. Code, § 17200 et seq.); (4) intentional misrepresentation; (5) constructive fraud; (6) invasion of privacy; and (7) injunctive relief.

Young Money and Carter applied ex parte for a temporary restraining order to prevent the defendants from exhibiting, distributing, licensing, selling, or otherwise exploiting the film, and requested an order to show cause regarding a preliminary injunction. They argued that public exhibition of the disputed film content could prejudice Carter's defense in his pending criminal cases and irreparably harm him. They also argued that the anti-injunction provision was unconscionable and unenforceable. They argued further that, apart from unconscionability, the anti-injunction provision was inapplicable to a breach of Carter's final approval rights. The trial court denied the application in March 2009, and later denied a preliminary injunction. On appeal, we concluded that the anti-injunction provision was not unconscionable, that ...


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