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Laura Archer Dick Coelho, As Trustee of the Philip K. Dick v. Mrc Ii Distribution Company

February 8, 2012

LAURA ARCHER DICK COELHO, AS TRUSTEE OF THE PHILIP K. DICK TESTAMENTARY TRUST, PLAINTIFF,
v.
MRC II DISTRIBUTION COMPANY, L.P.; MRC II HOLDINGS L.P., OAKTREE ENTERTAINMENT, INC.; GEORGE NOLFI; AND MICHAEL HACKETT, DEFENDANTS.



The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge

ORDER RE DEFENDANTS' MOTIONS TO DISMISS [13],[14]

Before the Court are Defendants' two motions to dismiss-a first combined motion under Fed. Civ. P. 12(b)(1) and 12(b)(3), and a second motion under 12(b)(6). After careful consideration of the parties' papers, the Court deems the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15.

I. BACKGROUND

Plaintiff, the Philip K. Dick Testamentary Trust, was formed to maintain, promote, and develop the creative works of the late science fiction author Philip K. Dick. Mr. Dick's works numbered over 200, which include works that have been the basis for nearly a dozen feature films, including Blade Runner, Total Recall, and Minority Report.

Defendants approached the Trust and negotiated a contract for exclusive movie rights to Adjustment Team. In 2011, after years of work and further contract renegotiations, the story Adjustment Team became the movie The Adjustment Bureau. The feature film was an instant hit, taking in over $128M at the U.S. and international box offices, and over $10M in DVDs in the United States alone.

The sudden success of The Adjustment Bureau ushered in newfound wealth, and disputes about how that wealth is to be distributed. The parties now dispute the amount owed to the Trust under the alleged agreements relating to Mr. Dick's work.

Based on the foregoing, Plaintiff asserts the following claims: (1) declaratory relief to determine whether Adjustment Team was in the public domain for purposes of Copyright; (2) declaratory relief regarding rights under contract; (3) breach of contract; (4) money had and received; (5) quantum meruit; (6) unjust enrichment; and, (7) accounting.

II. DEFENDANTS' RULE 12(B)(1) MOTION

The Court first considers Defendants' Rule 12(b)(1) motion for lack of subject matter jurisdiction. Defendants ask the Court to retain the narrow copyright question, but to dismiss the remaining, and overarching, contract claims.

Federal courts are courts of limited jurisdiction and "have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto." Couch v. Telescope, Inc., 611 F.3d 629, 632 (9th Cir. 2010) (quoting Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986)). A case arises under federal law if the complaint "establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 690 (2006).

So long as the complaint sets forth a claim arising under federal law, a court may exercise supplemental jurisdiction over the remaining state law claims if they form part of the same case or controversy-that is, if they derive from a common nucleus of operative fact such that a plaintiff would ordinarily be expected to try them all in a single judicial proceeding. United Mine Workers v. Gibbs, 383 U.S. 725 (1966); See 28 U.S.C. § 1367. Even so, a court has discretion to decline supplemental jurisdiction where:

(1) the claim raises a novel or complex issue of State law; (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction; (3) the district court has dismissed all claims over which it has original jurisdiction; or, (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c); Gibbs, 383 U.S. at 726-27. Further, a court must consider the values of judicial economy, convenience, fairness, and comity in order to decide whether to exercise jurisdiction over a case brought in that court involving pendent state law claims. Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1174-75 (9th Cir. 2002).

A Rule 12(b)(1) motion may be brought as either a facial or factual attack. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004).In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. Id. But, in a factual attack, the challenger disputes the truth ...


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