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Adorian Deck; Marylou Deck, As Legal Guardian of Adorian Deck, A Minor v. Marylou Deck Spartz

September 27, 2011

ADORIAN DECK; MARYLOU DECK, AS LEGAL GUARDIAN OF ADORIAN DECK, A MINOR
PLAINTIFFS,
v.
MARYLOU DECK SPARTZ, INC., A DELAWARE CORPORATION AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.



ORDER DENYING DEFENDANT‟S MOTION TO DISMISS AS TO ADORIAN DECK AND GRANTING DEFENDANT‟S MOTION AS TO

This matter comes before the Court on Defendant Spartz, Inc.‟s ("Defendant") Motion to Dismiss (Doc. #7) Adorian Deck‟s and Marylou Deck‟s Complaint (collectively "Plaintiffs") (Doc. #1) for lack of personal jurisdiction, improper venue, and failure to state a claim pursuant to several subsections of Federal Rules of Civil Procedure 12(b). Plaintiff Mary Lou Deck signed the Complaint in the capacity of Adorian Deck‟s Legal Guardian. Plaintiffs oppose, in part, the motion to dismiss (Doc. #13).*fn1 For the reasons set forth below, Defendant‟s motion is GRANTED in part and DENIED in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

In September 2009, Adorian Deck ("Deck") created a Twitter 5 feed titled "@OMGFacts." The feed collected and republished 6 interesting and trivial facts from other sources on the Internet.

@OMGFacts was eventually subscribed to by over 300,000 Twitter 8 users, including some celebrities. 9

Adorian Deck was approached via email and Internet chat by Emerson Spartz of Defendant Spartz, Inc. with a proposal for a joint venture to expand the @OMGFacts Twitter feed into a suite of Internet products including a website and Youtube.com video channel. Defendant would construct am OMG Facts website and populate the Youtube.com channel with content. The @OMGFacts Twitter feed would remain under Adorian Deck‟s control, but access would be shared with Defendant. The concept of republishing or highlighting various factual tidbits collected from other sources would remain largely the same across the different products, and all products would be branded with the OMG Facts brand. All disputes related to the agreement were to be governed by Indiana law, and the venue for any legal action related to the agreement was to be the federal or state courts located in Indiana.

The terms of the joint venture as described were memorialized in a contract titled "Contractor Agreement" signed by both Plaintiffs and Defendant. The negotiations related to the agreement occurred via email and Internet Chat. Defendant agreed to create and maintain the website and Youtube.com channel. The agreement assigned 30% of gross revenues from the Youtube.com channel to Plaintiffs. Defendant also agreed to promote the sale 2 of certain OMG Facts products such as t-shirts on the OMG Facts 3 website. Plaintiffs retained 100% of the revenues from t-shirt 4 sales. Finally, Defendant agreed to advertise Adorian Deck‟s 5 personal Youtube.com channel on the OMG Facts website. In 6 exchange, Plaintiffs agreed to assign to Defendant all existing and 7 future interests in title and copyright of work related to the 8 subject matter of the parties‟ agreement. Adorian Deck further 9 agreed to render services to Defendant via the Internet from time to time.

Adorian Deck resides in Nevada County, California. He was born on May 22, 1993 and was a minor when this action was filed. In an "OMG-moment" prior to his 18th birthday, Adorian Deck notified Defendant that he wished to disaffirm the parties‟ agreement and later filed the instant action to that effect. Plaintiffs seek a return of the OMG Facts related intellectual property. Plaintiffs‟ Complaint includes the following causes of action: 1) Rescission of Contract under California Family Code § 6710; 2) False Designation of Origin, 15 U.S.C. § 1125(a)(1)(A); 3) False Advertising, 15 U.S.C. § 1125(a)(1)(B); and 4) Unfair Competition and False Advertising, California Bus. & Prof. Code §§ 17200-17210.

The Court has jurisdiction under 28 U.S.C. §§ 1331, 1338(a), and 1367. Additionally, the Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).

II. OPINION

A. Legal Standard 3

Federal Rules of Civil Procedure 12(b) sets forth defenses 4 that may be raised in response to claims for relief including lack 5 of subject matter jurisdiction, lack of personal jurisdiction, 6 improper venue, insufficient process, insufficient service of 7 process, failure to state a claim, and failure to join a party 8 under Rule 19. Fed. R. Civ. P. 12(b). 9

In considering 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); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990).

B. Personal Jurisdiction

Defendant, an Indiana corporation, argues that this Court does not have personal jurisdiction over it because it lacks sufficient contacts with California to satisfy a "minimum contacts" analysis. Plaintiffs contend that sufficient minimum contacts arose when Defendant executed a contract with Plaintiff Deck, a California resident and minor at the time, which required continuing 2 performance on Plaintiff Deck‟s part for the life of the contract. 3

When a defendant challenges personal jurisdiction, the 4 plaintiff bears the burden of establishing the court‟s personal 5 jurisdiction over the defendant. Cubbage v. Merchant, 744 F.2d 6 665, 667 (9th Cir. 1984). If the district court does not conduct 7 an evidentiary hearing on the jurisdictional challenge, a plaintiff 8 need only make a prima facie showing of personal jurisdiction. 9

Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 1174, 1177 (9th Cir. 2004). In determining if a prima facie showing has been made, the court must take the uncontroverted allegations of the Complaint as true, and conflicts between the parties‟ affidavits must be resolved in plaintiff‟s favor. Id.

Where, as here, there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits. Because California's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004) (internal citations omitted). Federal due process is satisfied when the nonresident defendant has "minimum contacts" with the forum state, "such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice." Id. at 801 (quoting Int‟l Shoe v. Washington, 326 U.S. 310, 316 (1945)). Minimum contacts give rise to either general jurisdiction or specific jurisdiction. Id. at 801-02.

To demonstrate general jurisdiction, a plaintiff must show that a defendant‟s contacts were continuous and systematic. Id. at 801. Plaintiffs do not argue in their opposition brief that the Court has general jurisdiction over Defendant, but focus only on 2 specific jurisdiction. Accordingly, the Court finds that 3

Plaintiffs do not meet their burden to show general jurisdiction. 4

To evaluate the nature and quality of a defendant‟s contacts 5 for purposes of specific jurisdiction, the Ninth Circuit uses a 6 three part test: 1) some action must be taken whereby the defendant 7 purposefully avails himself of the privilege of conducting 8 activities in the forum, thereby invoking the benefits and 9 protections of the forum‟s laws; 2) the claim must arise out of the defendant‟s activities in the ...


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