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Toyrrific, LLC v. Edvin Karapetian; Edward Minasyan; Lena Amerkhanian; and Edo Trading

October 25, 2012

TOYRRIFIC, LLC, PLAINTIFFS,
v.
EDVIN KARAPETIAN; EDWARD MINASYAN; LENA AMERKHANIAN; AND EDO TRADING, INC., DEFENDANTS. EDVIN KARAPETIAN; AND EDWARD MINASYAN, COUNTERCLAIMANTS,
v.
TOYRRIFIC, LLC; KEVORK KOUYMJIAN; AND VIKEN KOUYOUMJIAN, COUNTERDEFENDANTS.



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

ORDER GRANTING PLAINTIFF AND COUNTER-DEFENDANT TOYRRIFIC LLC'S SPECIAL MOTION TO STRIKE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE § 425.16 (ANTI-SLAPP) [33]

I.INTRODUCTION

Before the Court is Plaintiff and Counterdefendant Toyrrific LLC's special motion to strike Defendants and Counterclaimants Edvin Karapetian and Edward Minasyan's breach of contract counterclaim. (ECF No. 33.) Having carefully considered the papers filed in support of and in opposition to this motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7--15. For the reasons that follow, the Court GRANTS Toyrrific's anti-SLAPP motion under California Civil Procedure Code section 426.16.

II.FActual Background

Toyrrific is a company known for manufacturing, marketing, and selling various types of toys. (Compl. ¶ 8.) Toyrrific promotes its business via its Hobbytron website. (Id.)

Edvin Karapetian is a former Toyrrific employee who allegedly worked with Edward Minasyan to steal Toyriffic's products, business information, and intellectual property in order to establish a competing online business called Hobbychase. (Id. ¶¶ 11--12.) The Hobbychase website allegedly infringed upon Toyrrific's Hobbytron website by using the same platform, design, content, product descriptions, photography, and graphics. (Id. ¶ 15.)

On August 5, 2010, Toyrrific filed suit against Karapetian and Minasyan for copyright infringement and related claims. Toyriffic*fn1 v. Karapetian ("Toyriffic I"), No. CV 10-5813-ODW(Ex) (C.D. Cal. Aug. 5, 2010.) This Court issued a preliminary injunction in Toyriffic I on November 24, 2010, which enjoined Karapetian and Minasyan from infringing upon Toyrrific's intellectual property. (Compl. ¶ 16.) The parties eventually executed a settlement agreement that resolved Toyriffic I in December 2011. (Id. ¶ 18.) In addition to fully settling all claims related to Toyriffic I, the settlement agreement contained two confidentiality provisions. (Id. Ex. 3.) The first of these provisions was Paragraph 1(aa), which said that Exhibit A to the agreement "will be for attorney's eyes only, and will be kept confidential and used by counsel for purposes of impeachment in the Issagoolian Action." (Id.) The second was Paragraph 6, which required the parties to keep any terms of the settlement agreement confidential. (Id.)

Despite this resolution, Toyrrific filed this action ("Toyrrific II") against Karapetian, Minasyan, Lena Amerkhanian, and EDO Trading, Inc. on May 23, 2012. (ECF No. 1.) In its Complaint, Toyrrific alleges that Karapetian and Minasyan- along with Minasyan's girlfriend, Amerkhanian-breached the terms of the Toyriffic I settlement agreement by creating EDO Trading and operating another infringing website, www.airsoftrc.com. (Compl. ¶ 20.)

Karapetian, Minasyan, Amerkhanian, and EDO Trading filed a motion to dismiss Toyrrific's Complaint on July 9, 2012. (ECF No. 24.) The Court granted this motion in part on October 16, 2012, but let Toyrrific's breach-of-contract claim stand. (ECF No. 30.) Thereafter, Karapetian and Minasyan launched a counterclaim against Toyrrific, arguing that Toyrrific also breached the terms of the Toyriffic I settlement agreement. (ECF No. 31.) Specifically, Karapetian and Minasyan allege that Toyrrific breached the agreement by (1) attaching the agreement to the Toyrrific II complaint in violation of Paragraph 6; (2) failing to keep Exhibit A to the agreement confidential in violation of Paragraph 1(aa); and (3) asserting already settled claims. (Answer ¶¶ 16--18.)

In response, Toyrrific filed a special motion to strike Karapetian and Minasyan's counterclaim on September 24, 2012, which is the focus of the Court's analysis here. (ECF No. 33.)

III.LEGAL STANDARD

In 1992, the California legislature enacted California Code of Civil Procedure section 425.16, commonly dubbed California's "anti-SLAPP"*fn2 statute, in response to a perceived "disturbing increase" in the number of civil actions aimed at private citizens designed to deter or punish those citizens from exercising their political or legal rights. Cal. Civ. Proc. Code § 425.16(a); U.S. ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963, 970 (9th Cir. 1999). "The hallmark of a SLAPP suit is that it lacks merit, and is brought with the goals of obtaining an economic advantage over a citizen party by increasing the cost of litigation to the point that the citizen party's case will be weakened or abandoned, and of deterring future litigation." Newsham, 190 F.3d at 970--71.

The anti-SLAPP statute allows defendants in California state or federal courts to counter SLAPP suits by making a special motion to strike a claim if that claim arises from an act by the defendants to further their right of petition or free speech in connection with a public issue. Id. § 425.16(b)(1); Newsham, 190 F.3d at 973 (concluding that the twin aims of the Erie doctrine "favor application of California's anti-SLAPP statute in federal cases"). An act qualifies for protection under this statute if it falls within one of four categories:

(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law[;] (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law[;] (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest[;] or (4) any conduct in furtherance of the exercise of ...


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