The opinion of the court was delivered by: Otis D. Wright, II United States District Judge
ORDER GRANTING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND ORDERING FURTHER BRIEFING [04-cv-8400, ECF No. 702] [04-cv-8776, ECF No. 222]
Defendants DC Comics; Warner Bros. Entertainment Inc.; Warner Communications, Inc.; Warner Bros. Television Production, Inc.; and Time Warner Inc. (collectively "DC") move for summary judgment in these consolidated Superman and Superboy cases following entry of the Ninth Circuit's February 4 Mandate. The Ninth Circuit has directed this Court to reconsider DC's third and fourth counterclaims in view of its holding that an October 19, 2001 letter from the legal representative of the heirs to Superman co-creator Joe Siegel to Warner Bros. (and by extension DC Comics) created an agreement between the parties. DC has effectively withdrawn its third counterclaim, and the Court GRANTS Defendants' Motion on its fourth counterclaim.
In 2004, Joanne Siegel and Laura Siegel Larson,*fn1 the heirs to Superman co-creator Jerry Siegel, sued DC seeking a judicial declaration that the copyright termination notices the Siegels served on DC in 1997 effectively recaptured their copyright interests in Superman. DC counterclaimed that the parties had entered into a settlement agreement that the Siegels repudiated. Specifically, DC's third counterclaim alleges that the Siegels breached a written October 19, 2001 agreement drafted by the Siegels' then-legal representative, Kevin Marks. (Second Amended Counterclaims (SACC) ¶¶ 97--101.) This agreement memorialized an earlier October 16, 2001 telephone conversation between Marks and Warner Bros.'s then-general counsel, John Schulman, during which the parties negotiated the final points of a deal giving DC the continued rights to Superman in exchange for substantial financial consideration. (See id.)
DC's fourth counterclaim, in turn, sought a declaration that, by the October 19, 2001 agreement, the Siegels had "transferred or [is] contractually obligated to transfer to DC Comics" any and all of their Superman rights. (Id. ¶¶ 102--05.)
On March 26, 2008, now-resigned Judge Steven G. Larson held on partial summary judgment "that the parties' settlement negotiations did not result in an enforceable agreement [on October 19, 2001,] resolving the issues before the Court." (ECF No. 293, at 62.) In so holding, Judge Larson considered the parties' 2001--2002 settlement negotiations and found that "[o]ne need only review the language of the parties' correspondence, their conduct in relation thereto, and the numerous material differences between the terms relayed in the October 19 and 26, 2001, letters and the February 1, 2002 draft to reach the conclusion that the parties failed to come to an agreement on all material terms." (ECF No. 293, at 61.) Judge Larson's holding effectively rejected DC's third and fourth counterclaims.
On November 5, 2012, the Ninth Circuit reversed Judge Larson's March 26, 2008 summary-judgment order, holding that the much-disputed October 19, 2001 letter from Marks to Schulman "constituted an acceptance of terms negotiated between the parties, and thus was sufficient to create a contract" as a matter of law. Larson v. Warner Bros. Entmt., Inc., -- F. App'x --, --, 2012 WL 6822241, at *1 (9th Cir. 2012). The court further explained that it reject[ed the Siegels'] arguments that either state or federal law precludes a finding that such a contract could have been created by the October 19, 2001, letter. California law permits parties to bind themselves to a contract, even when they anticipate that some material aspects of the deal will be papered later. This principle applies notwithstanding the lack of an express reference to an intended future agreement, so long as the terms of any contract that may have been formed are sufficiently definite that a court could enforce them (as is undoubtedly the case here). Larson, 2012 WL 6822241, at *1 (internal quotation marks, alterations, and citations omitted).
The Ninth Circuit then directed this Court "to reconsider DC's third and fourth counterclaims in light of [its] holding that the October 19, 2001, letter created an agreement." Id. at *2.
DC brings the issue back before the Court on remand by way of its February 7, 2013 Motion for Summary Judgment. DC contends quite simply that the "Ninth Circuit's binding ruling compels judgment in DC's favor on its Fourth Counterclaim in both Siegel cases; renders DC's remaining counterclaims in the cases moot . . . ; and requires denial of [the Siegels'] claims in the cases." (Mot. i.) The Siegels, on the other hand, maintain that the Court's job isn't quite so simple, as the Court (or the factfinder, as the case may be) must now determine "[w]hat exactly the October 19, 2001 agreement meant, and whether and to what extent it is still enforceable given DC's subsequent conduct." (Opp'n 2.) While DC perhaps overstates the simplicity of the matter, it is nevertheless correct that the Ninth Circuit's ruling obliges the Court to grant its fourth counterclaim.
On remand, this Court is bound by the Ninth Circuit's mandate. Fed. R. App. P. 41(c); see also Ins. Grp. Comm. v. Denver & R.G.W.R.R., 329 U.S. 607, 612 (1947) ("When matters are decided by an appellate court, [the appellate court's] rulings, unless reversed by it or by a superior court, bind the lower court."). "[A] mandate is controlling as to all matters within its compass, while leaving any issue not expressly or impliedly disposed of on appeal available for consideration by the trial court on remand." Odima v. Westin Tuscon Hotel, 53 F.3d 1484, 1498 (9th Cir. 1995) (emphasis added) (quoting Firth v. United States, 554 F.2d 990, 993 (9th Cir. 1977)).
Summary judgment should be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
While DC insists the Court need only enter judgment in its favor to
resolve this matter once and for all, the Siegels urge on remand that
the Court must instead conduct further proceedings in light of the
Ninth Circuit's holding to determine what the October 19 agreement
means today. (Opp'n 7--8.) DC concedes that its third counterclaim for
breach of the October 19, 2001 agreement "can be dismissed without
prejudice, if DC prevails on its Fourth Counterclaim."*fn2
(Mot. 1.) The Court therefore looks first to DC's fourth
counterclaim to determine the extent to which the Ninth Circuit's
mandate leaves open additional questions for resolution by this Court.
Because the Court finds that resolution of additional issues impacting
the continued enforceability of the agreement remains necessary to
resolve DC's fourth counterclaim, the Court proceeds to address and
resolve those issues. The Court holds that the agreement remains
enforceable and therefore does not reach DC's third
A.The Ninth Circuit's Mandate does not fully resolve DC's fourth counterclaim The Court begins its analysis with the ...