Focal Point Films, LLC v. Sandhu

          ORDER GRANTING MOTION TO DISMISS RE: DKT. NO. 31

          JOSEPH C. SPERO CHIEF MAGISTRATE JUDGE

         I. INTRODUCTION

         Plaintiff Focal Point Films, LLC (“Focal Point”) and its sole member Bryan Gibel (referred to collectively herein as “Gibel”) bring a copyright action seeking a declaratory judgment that Gibel is the sole author of a documentary film called Sign My Name to Freedom (the “Film”) that Defendant Arjot Sandhu also worked on. Sandhu, in turn, has asserted a counterclaim seeking a declaratory judgment that she is a co-author of the Film and owns an undivided interest in the copyright of the Film, as well as other related counterclaims. Presently before the Court is Gibel's Motion to Dismiss Defendant/Counter-Plaintiff's Counterclaims in Part (“Motion”). A hearing on the Motion was held on December 6, 2019. For the reasons stated below, the Motion is GRANTED.^[1]

         II. BACKGROUND

         A. Complaint

         Gibel alleges in the Complaint that he is a “director, producer, editor and cinematographer” with a masters degree from the UC Berkeley Graduate School of Journalism documentary film program. Complaint ¶ 10. He founded Focal Point in 2015. Id. According to Gibel, in 2016 he met Betty Reid Soskin, “a 94-year old African American woman who entered the public spotlight when she became the oldest National Park Ranger serving in the United States.” Id. ¶ 11. Gibel alleges he set out to create a documentary film about Soskin with Soskin's cooperation. Id. ¶ 12. Gibel alleges that “in March 2017, “[m]ore than a year into the project, ” he met Sandhu at a documentary filmmaker workshop. Id. ¶ 15. When Gibel told Sandhu about the Film, she asked if she could assist on set; Gibel agreed and between April 2017 and October 2017 Sandhu worked “as an extra camera operator during a handful of shoots, always under Gibel's supervision and with the understanding that Sandhu would be compensated on partially deferred basis.” Id. ¶ 17. According to Gibel, beginning in November 2017 Sandhu began to help with fundraising for the Film. Id. Gibel alleges that he offered Sandhu an “Associate Producer” credit for this work. Id. However, Gibel and Sandhu were unable to reach agreement on a written contract setting forth their arrangement, with Gibel rejecting draft agreements proposed by Sandhu in November 2017 and August 2018 and Sandhu rejecting a draft agreement proposed by Gibel in January 2018. Id. ¶¶ 18-23.

         Gibel alleges that in November 2018 Sandhu snuck unauthorized co-director and co-editor credits for herself into a “pitch deck” for the film and that even after he told Sandhu he was terminating her services she continued to hold herself out as an authorized representative of the Film. Id. ¶¶ 26-31. The Film has not been completed and Gibel alleges that Sandhu's conduct is “casting a cloud” over the Film and preventing him from obtaining the financing needed to complete it. Id. ¶ 2. In his Complaint, Gibel seeks a declaratory judgment that “Focal Point is the sole author of the Film, ” and that “the Film is not a ‘joint work' within the meaning of the Copyright Act and Sandhu is not a joint author of the Film.” Id. ¶¶ 42-43. Alternatively, Gibel asks that the Court rule “ Sandhu's individual contributions to the Film do not constitute a ‘work of authorship' within the meaning of the Copyright Act to which Sandhu holds any copyright interest.” Id. . at ¶ 44.

         B. First Amended Answer and Countercomplaint

         In her First Amended Answer and Countercomplaint (the “FACC”), Sandhu disputes Gibel's characterization of her role in the Film's production and asserts that she:

personally engaged in various forms of creative authorship, including (among other things): conception, creative direction, content selection, directing scenes, overseeing the Film's production, supervising the work of editors, filming scenes, editing footage, pitching the Film at film festivals, and collaborating on all other aspects of the Film's creation and promotion, including the overall arc and direction of the Film.

FACC ¶ 12. She alleges that “Gibel publicly represented that Ms. Sandhu was a coequal partner in the creation of the Film in correspondence with third parties and promotional materials for the Film, ” until the fall of 2018, when “Gibel began to dispute Ms. Sandhu's credits on the Film and acted to exclude Ms. Sandhu from further involvement with the Film.” Id. at ¶¶ 13-14. She alleges that Gibel wrongfully “blocked Ms. Sandhu's access to the Film's promotional material and social media, and removed Ms. Sandhu's name from those materials, ” id. at ¶ 38, “removed Ms. Sandhu's access to the Google Drive location where they stored key documents for the Film, ” id. at ¶ 39, and “blocked Ms. Sandhu's access to grant funds jointly raised and awarded to the project, ” id. at ¶ 40. According to Sandhu, Gibel brought this action after she refused to withdraw the Film from consideration at Hot Docs Dealmaker Forum, a documentary event where Sandhu and Gibel had been offered the opportunity to pitch the Film. Id. at ¶¶ 43-47.

         In the FACC, Sandhu asserts the following counterclaims: 1) a claim for declaratory judgment under the Copyright Act, 28 U.S.C. § 2201; 2) unjust enrichment; 3) intentional interference with prospective economic advantage; 4) false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) (“the Lanham Act counterclaim”); and 4) false advertising and unfair competition under California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 (“the UCL counterclaim”).

         C. The Motion

         In the Motion, Gibel asks the Court to dismiss Sandhu's Lanham Act and UCL counterclaims, as well as her counterclaim for intentional interference with prospective economic advantage, arguing that these counterclaims fail to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). Motion at 1-2. Gibel argues that Sandhu's Lanham Act counterclaim is barred by the Supreme Court's ruling in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003). He also contends this claim fails because Sandhu has not alleged a required element of the claim, namely, that she engaged in “commercial advertising.” Id. Nor can Sandhu remedy this defect by amendment, he contends, because the Film is still in development and no commercial advertising has yet occurred. Id. at 1. Gibel further asserts that because the UCL claim is based on and coextensive with Sandhu's Lanham Act counterclaim, the UCL counterclaim must be dismissed for the same reasons. Id. at 2. Gibel asserts that the counterclaim for intentional interference with prospective economic advantage should be dismissed because Sandhu has not alleged any conduct that is independently wrongful, as is required under California law. Id. Finally, Gibel contends the request for punitive damages must be dismissed because Sandhu has not alleged that Gibel acted with “oppression, fraud, or malice.” Id. at 11-12.

         III. ANALYSIS

         A. Legal Standard Under Rule 12(b)(6)

         A complaint may be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on which relief can be granted. “The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint.” N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). Generally, a plaintiff's burden at the pleading stage is relatively light. Rule 8(a) of the Federal Rules of Civil Procedure states that a “pleading which sets forth a claim for relief . . . shall contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a).

         In ruling on a motion to dismiss under Rule 12(b)(6), the court analyzes the complaint and takes “all allegations of material fact as true and construe[s] them in the light most favorable to the non-moving party.” Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal may be based on a lack of a cognizable legal theory or on the absence of facts that would support a valid theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A complaint must “contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007) (citing Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). “[C]ourts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557) (alteration in original). Rather, the claim must be “‘plausible on its face, '” meaning that the plaintiff must plead sufficient factual allegations to “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. at 570).

         B. The Lanham Act, Dastar and Sybersound

         The purpose of the trademark protections set forth in the Lanham Act is to “avoid confusion in the marketplace by allowing a trademark owner to prevent[ ] others from duping consumers into buying a product they mistakenly believe is sponsored by the trademark owner.” Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 806 (9th Cir. 2003) (internal quotations and citation omitted). The Lanham Act achieves this objective by prohibiting false designation of a good's origin under § 43(a)(1)(A) and false or misleading commercial advertising about a good under § 43(a)(1)(B). Specifically, § 43(a)(1) provides as follows:

1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to ...