`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`Margaret Morris,
`Plaintiff,
`
`
`vs.
`
`Kenneth Atchity; Atchity
`Entertainment
`International, John Reid,
`Sonic Age Ltd., The
`
`Writer’s Lifeline Inc., Defendants.
`
`)))))))))))))))
`
`CV 08-5321 RSWL (JCx)
`ORDER RE: DEFENDANTS’
`MOTION FOR SUMMARY
`JUDGMENT OR, IN THE
`ALTERNATIVE, PARTIAL
`SUMMARY JUDGMENT[116]
`
`On October 5, 2010, Defendants’ Motion for Summary
`Judgment or, in the alternative, Partial Summary
`Judgment [116] came on for regular calendar before this
`Court.
`The Court having reviewed all papers submitted
`pertaining to this Motion and having considered all
`arguments presented to the Court, NOW FINDS AND RULES
`AS FOLLOWS:
`///
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`Case 2:08-cv-05321-RSWL-JC Document 134 Filed 10/15/10 Page 2 of 17 Page ID #:2923
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`The Court hereby DENIES IN PART AND GRANTS IN PART
`Defendants’ Motion for Summary Judgment, or in the
`alternative, Partial Summary Judgment.
`Summary judgment is appropriate when the pleadings,
`affidavits, and other supporting papers demonstrate
`that there are no genuine issues of material fact, and
`the moving party is entitled to prevail as a matter of
`law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett,
`477 U.S. 317, 322 (1986). When making this
`determination, the Court must view the record in the
`light most favorable to the non-moving party. Anderson
`v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A
`“genuine” dispute is one that is supported by evidence
`sufficient to permit a reasonable jury to find in favor
`of the nonmoving party. Id. at 247-48.
`Defendants first assert Summary Judgment as to all
`claims against Defendant John Reid on the grounds that
`the Court lacks personal jurisdiction. As to all
`Defendants, seven grounds are asserted for Summary
`Judgment, or in the alternative, Partial Summary
`Judgment: 1) As to Plaintiff’s claim for Copyright
`Infringement, no reasonable juror could find
`substantial similarity between Plaintiff’s Work, “Jesus
`Augustus: From Imperial Cult to Christianity”
`(hereinafter, “Work”), and the novel based on the Work,
`“The Ashes of Christ / The August God” (hereinafter,
`“Derivative Work”), 2) as to Plaintiff’s claim for
`Breach of Implied Contract, the claim is preempted by
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`the Copyright Act, 3) as to Plaintiff’s claim for
`Fraud, no reasonable juror could find that Defendants
`acted with fraudulent intent or that Plaintiff suffered
`any damage as a result of any misrepresentation, 4) as
`to Plaintiff’s claim for Interference with Prospective
`Economic Advantage, Plaintiff cannot establish each
`element of the claim as a matter of law, 5) as to
`Plaintiff’s claim for Accounting, Plaintiff has failed
`to establish any basis for Defendants’ liability that
`entitles her to such a remedy, 6) as to Plaintiff’s
`claim for Declaratory Relief, there is no genuine issue
`of material fact as to Plaintiff’s lack of ownership of
`the copyright in the Derivative Work, and 7) as to
`Defendants’ counterclaims for Fraud on the Copyright
`Office, Declaratory Judgment for Non-Infringement, and
`Defamation against Defendant Dr. Kenneth Atchity, there
`are no genuine issues of material fact precluding
`judgment in favor of Defendants on these counterclaims.
`1.
`Personal Jurisdiction
`The exercise of personal jurisdiction over a
`nonresident Defendant requires the presence of two
`factors: 1) the forum state’s laws must provide a basis
`for exercising personal jurisdiction, and 2) the
`assertion of personal jurisdiction must comport with
`due process. Hirsch v. Blue Cross, Blue Shield, 800
`F.2d 1474, 1477 (9th Cir. 1986). The California long-
`arm statute permits the exercise of jurisdiction “on
`any basis not inconsistent with the Constitution . . .
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`of the United States.” Cal. Civ. Proc. Code § 410.10.
`This statute renders the state and federal limits of
`jurisdiction coextensive. Roth v. Garcia Marquez, 942
`F.2d 617, 620 (9th Cir. 1991). Thus, only a due
`process analysis is required.
`Due process requires that a defendant have “certain
`minimum contacts with [the forum] such that the
`maintenance of the suit does not offend traditional
`notions of fair play and substantial justice.” Int’l
`Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The
`defendant’s contacts must be “such that the [defendant]
`should reasonably anticipate being haled into court
`there.” World-Wide Volkswagen Corp. v. Woodson, 444
`U.S. 286, 297 (1980). Depending upon the nature and
`scope of the defendant’s contacts with the forum,
`jurisdiction may be general or specific to the cause of
`action. Roth, 942 F.2d at 620 (citing Data Disc v.
`Sys. Tech. Assoc., 557 F.2d 1280, 1287 (9th Cir.
`1977)).
`The Court finds there is no genuine issue of
`material fact as to whether this Court has personal
`jurisdiction over Defendant John Reid. First, the
`Court finds no genuine issue of material fact exists as
`to whether Reid possesses sufficient minimum contacts
`with the state of California in order to support a
`finding that this Court has either general or specific
`jurisdiction over Reid. Second, the Court finds that
`Reid is not an alter-ego of Defendant Sonic Age Ltd.
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`(hereinafter, “Sonic Age”), and accordingly personal
`jurisdiction over Reid cannot be supported on this
`alternate basis.
`A.
`Minimum Contacts
`The Court finds that Reid does not possess
`sufficient “minimum contacts” with California to
`support a finding that this Court has personal
`jurisdiction over Reid. Plaintiff’s arguments that
`Reid has minimum contacts with the state stemming from
`his business and personal relationships are
`unpersuasive. Plaintiff fails to put forth sufficient
`evidence to show that Reid, who the Court finds has
`resided in and been domiciled in the United Kingdom his
`entire life, maintained substantial contacts with
`California in his individual capacity such that he
`could reasonably expect to be haled into Court in this
`state. The evidence offered by Plaintiff is
`insufficient to raise a triable issue of fact as to
`whether he possesses the constitutionally required
`minimum contacts with California, and accordingly this
`Court’s personal jurisdiction over Reid cannot be
`supported on this basis.
`B.
`Alter-Ego
`Plaintiff asserts an alternate basis for this
`Court’s personal jurisdiction over Defendant Reid: that
`Reid is an alter-ego of his company, Sonic Age.
`The existence of a relationship between a parent
`and its subsidiaries is not sufficient alone to
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`establish personal jurisdiction over the parent on the
`basis of the subsidiaries’ minimum contacts with the
`forum. See Transure, Inc. v. Marsh & McLennan, Inc.,
`766 F.2d 1297, 1299 (9th Cir. 1985). Nonetheless,
`under the alter-ego exception “if the parent and
`subsidiary are not really separate entities ... the
`local subsidiary’s contacts with the forum may be
`imputed to the foreign parent corporation.” Doe I v.
`Unocal Corp., 27 F.Supp.2d 1174, 1186 (9th Cir. 1998)
`(quotation omitted). “To satisfy [this] alter ego
`exception ... the plaintiff must make out a prima facie
`case 1) that there is such unity of interest and
`ownership that the separate personalities no longer
`exist and 2) that failure to disregard their separate
`identities would result in fraud or injustice.” Harris
`Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd.,
`328 F.3d 1122, 1134 (9th Cir. 2003). The plaintiff
`must show that “the parent exercises such control over
`the subsidiary so as to render the latter the mere
`instrumentality of the former.” Id. (quotation
`omitted).
`The Court finds that the underlying facts support a
`finding that Defendants Reid and Sonic Age are distinct
`and not alter-egos of one another. Plaintiff has
`failed to put forth any evidence or facts to support a
`finding that Reid is using Sonic Age solely to shield
`himself from personal liability or that he has taken
`any actions suggesting that the required unity of
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`interest is present. Therefore, Plaintiff’s arguments
`fail to establish that a genuine issue of material fact
`exists as to whether Defendants Reid and Sonic Age are
`alter-egos of one another.
`Accordingly, Defendants’ Motion for Summary
`Judgment as to all claims against Defendant Reid is
`GRANTED.
`2.
`
`Copyright Infringement of the Original Work
`(First Cause of Action)
`To establish copyright infringement, a plaintiff
`must prove two elements: 1) ownership of a valid
`copyright, and 2) copying of protected elements of the
`plaintiff’s work. See Feist Publ’ns, Inc. v. Rural
`Tel. Serv. Co., 499 U.S. 340, 361 (1991).
`Copying may be established by showing that the
`works in question are "substantially similar in their
`protected elements" and that the infringing party had
`access to the copyrighted work. Metcalf v. Bochco, 294
`F.3d 1069, 1072 (9th Cir. 2002).
`In analyzing whether the two works are
`substantially similar, the court must first distinguish
`between the protectable and unprotectable material
`because a party claiming infringement may place “no
`reliance upon any similarity in expression resulting
`from unprotected elements.” Apple v. Microsoft, 35
`F.3d 1435, 1446 (9th Cir. 1994) (quotation omitted).
`Then, a two-part test is used to determine whether the
`two works are substantial similar: an “intrinsic” and
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`“extrinsic” test. The extrinsic test “objectively
`considers whether there are substantial similarities in
`both ideas and expression, whereas the intrinsic test
`... measure[s] expression subjectively.” Id. at 1442.
`Generally, “only the ‘extrinsic’ test is ...
`employed at summary judgment, as the ‘intrinsic’ test
`should generally be reserved for the ultimate finder of
`fact.” Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129,
`1177 (2001). If a court concludes, after analyzing the
`objective criteria under the extrinsic test, that
`“reasonable minds might differ as to whether there is
`substantial similarity between the protected expression
`of ideas in two literary works, and the record supports
`the district court's conclusion, there is a triable
`issue of fact that precludes summary judgment.” Shaw
`v. Lindheim, 919 F.2d 1353, 1361. (9th Cir. 1990).
`Defendants contend the two works are similar only
`in their use of a historical theory and the underlying
`facts of this theory, both of which fall outside the
`scope of copyright protection. See Benay v. Warner
`Bros. Entm’t Inc., 607 F.3d 620, 624 (9th Cir. 2010)
`(“[H]istorical facts are ... unprotected by copyright
`law”); see also Feist Publ’ns, Inc. v. Rural Tel. Serv.
`Co., 499 U.S. 340, 344-45 (1991) (quoting Harper & Row,
`Publishers, Inc. v. Nation Enters., 471 U.S. 539, 559
`(1985)) (“The most fundamental axiom of copyright law
`is that ‘no author may copyright his ideas or the facts
`he narrates.’”). Defendants argue no reasonable juror
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`could conclude that the Derivative Work is
`substantially similar to any protected expression in
`Plaintiff’s Work.
`The Court finds that genuine issues of material
`fact remain on this cause of action. Plaintiff puts
`forth sufficient evidence to rebut Defendants’ claim
`that the two works share only a historical theory and
`that theory’s underlying facts, and the Court finds
`that based on the facts presented reasonable minds
`might differ as to whether there are substantial
`similarities between the two works with respect to the
`protected expression of ideas contained in Plaintiff’s
`literary work.
`Accordingly, this Court DENIES Defendants’ Motion
`for Summary Judgment as to Plaintiff’s first cause of
`action for Copyright Infringement.
`3.
`Breach of Implied Contract (Seventh Cause of
`Action)
`The Ninth Circuit has incorporated a two prong test
`to determine whether a state law claim is preempted by
`the Copyright Act, 17 U.S.C. § 301. First, the work at
`issue must fall within the subject matter of copyright.
`See Del Madera Props. v. Rhodes & Gardner, Inc., 820
`F.2d 973, 976 (9th Cir. 1987), overruled on other
`grounds recognized by Downing v. Abercrombie & Fitch,
`265 F.3d 994, 1003 (9th Cir. 2001). Second, the state
`law claim must be “equivalent to any of the exclusive
`rights within the general scope of copyright as
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`specified by Section 106 [of the Copyright Act].” Id.
`Defendants contend Plaintiff’s state law claim for
`breach of implied contract meets this two prong test
`and is preempted by the Copyright Act because
`Plaintiff’s claim asserts rights based on her Work,
`which falls within the subject matter of copyright, and
`is only seeking to protect her exclusive rights to use
`and authorize use of the Work.
`Defendants fail to present sufficient evidence to
`support this argument, and the Court finds that genuine
`issues of material fact still remain as to whether
`Plaintiff’s claim meets the two prong test for
`preemption.
`Specifically, Defendants fail to show that no
`genuine issues of material fact remain as to whether
`Plaintiff’s claim is based on the submission of her
`idea to Defendants, which is not protected by
`copyright, or if the claim is instead asserting rights
`based on her copyright protected Work. See Grosso v.
`Miramax Film Corp., 383 F.3d 965, 968 (9th Cir. 2004),
`amended 400 F.3d 965 (9th Cir. 2005), cert denied 126
`S.Ct. 261 (2005).
`Moreover, genuine issues of material fact remain
`regarding whether Plaintiff’s state law claim meets the
`second test for preemption. Plaintiff presents
`sufficient evidence to raise a triable issue of fact
`regarding whether her claim seeks to protect her right
`to use and authorize use of the Work or if it instead
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`involves the submission of her idea to Defendants with
`the expectation of compensation, and therefore alleges
`an “extra element” that aims to protect rights
`qualitatively different from those protected by the
`Copyright Act. See id. (holding that a state cause of
`action is not preempted by the Copyright Act if it
`“alleges an ‘extra element’ that changes the nature of
`the action”).
`Accordingly, as Defendants’ have failed to
`demonstrate that no genuine issues of material fact
`remain regarding whether Plaintiff’s state law breach
`of implied contract claim is preempted by the Copyright
`Act, Defendants’ Motion for Summary Judgment on this
`cause of action is DENIED.
`4.
`Fraud (Eighth Cause of Action)
`To state a claim for fraud, a plaintiff must
`allege: 1) misrepresentation, 2) knowledge of its
`falsity, 3) intent to defraud, 4) justifiable reliance,
`and 5) damages. See Lazar v. Superior Court, 12 Cal.
`4th 631, 638 (1996); see also Vess v. Ciba-Geigy Corp.
`USA, 317 F.3d 1097, 1005 (9th Cir. 2003).
`Plaintiff argues that Defendants made multiple
`misrepresentations by telling Plaintiff they would work
`on her behalf without revealing their true intentions
`of moving ahead on a new deal without her, and points
`to later events as proof that these statements were
`fraudulent.
`The Court finds that Plaintiff fails to present
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`affirmative evidence to support a finding that
`Defendants made these alleged statements with an intent
`to defraud Plaintiff at the time that they were made.
`Plaintiff’s allegations that the end result proves the
`statements were fraudulent is insufficient to raise a
`triable issue of fact regarding Defendants’ intent, as
`mere nonperformance of a promise is insufficient to
`show intent to defraud and “affirmative evidence of
`[this intent] is necessary to avoid summary judgment.”
`Fanucchi & Limi Farms v. United Agri Products, 414 F.3d
`1075, 1088 (9th Cir. 2005); see also Conrad v. Bank of
`America, 53 Cal. Rptr. 2d 336 (“[I]n order to support a
`claim of fraud based upon the alleged failure to
`perform a promise, it must be shown that the promisor
`did not intend to perform at the time the promise was
`made.”).
`Accordingly, Defendants have shown that no genuine
`issue of material fact exists as to the elements of
`Plaintiff’s claim for fraud, specifically as to whether
`Defendants’ possessed the requisite fraudulent intent
`at the time the alleged statements were made.
`Defendants’ Motion for Summary Judgment as to
`Plaintiff’s eighth cause of action for Fraud is hereby
`GRANTED.
`5.
`Intentional Interference with Prospective
`Economic Advantage (Ninth Cause of Action)
`The elements of a cause of action for intentional
`interference with prospective economic advantage are:
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`1) an economic relationship between the plaintiff and
`another, containing a probable future economic benefit
`or advantage to plaintiff, 2) defendant’s knowledge of
`the existence of the relationship, 3) defendant’s
`intentional conduct was designed to interfere with or
`disrupt the relationship, 4) defendant’s intentional
`conduct was wrongful by some legal measure other than
`the fact of interference itself, 5) actual disruption
`of the relationship, and 6) damage to the plaintiff as
`a result of defendant’s acts. See Marin Tug & Barge,
`Inc. v. Westport Petroleum, Inc., 271 F.3d 825, 831
`(9th Cir. 2001) (citing Della Penna v. Toyota Motor
`Sales, U.S.A., Inc., 11 Cal. 4th 376, 392-393).
`Defendants have shown no genuine issue of material
`fact exists as to Defendants’ liability on this cause
`of action. Plaintiff has failed to present facts to
`raise a triable issue of fact regarding whether she had
`a prospective economic relationship that was
`intentionally interfered with by Defendants.
`Plaintiff argues in her Opposition that Defendants
`interfered with two prospective economic relationships:
`1) plans to promote and pitch Plaintiff’s Work to the
`top executive editors at each of the major publishing
`houses with whom Defendant Atchity allegedly had
`professional contacts, and 2) an offer to option
`Plaintiff’s film rights that was allegedly made by
`filmmaker Brian Flemming.
`However, Defendants successfully show that no
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`genuine issue of material fact exists as to whether
`Plaintiff had a potential economic relationship with
`either the top editors or Brian Flemming. Plaintiff
`does not present evidence of existing contracts or any
`type of existing economic relationship, and thus fails
`to raise a triable issue of fact as to whether she had
`a relationship with these third parties that contained
`a probable future economic benefit or advantage. See
`Herman v. United Broth. of Carpenters & Joiners of Am.,
`Local Union No. 971, 60 F.3d 1375, 1386 (9th Cir. 1995)
`(holding that plaintiff “cannot survive summary
`judgment on her [intentional interference with
`prospective] economic advantage claim because she has
`failed to allege any facts tending to show she had a
`prospective contractual relationship with a third
`party”).
`Moreover, the Court finds there is an absence of
`evidence that Defendants intentionally took any action
`that interfered with the alleged relationships.
`Plaintiff’s allegations, that Defendants knew about
`these potential relationships and took action to cut
`her out of any potential business deals, are purely
`speculative and lack supporting evidence sufficient to
`create a genuine issue of fact.
`As such, Plaintiff’s arguments cannot support a
`finding that Defendants intentionally interfered with
`any of Plaintiff’s alleged prospective economic
`relationship. No genuine issue of material fact exists
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`as to this claim, and Defendants’ Motion for Summary
`Judgment on this cause of action is hereby GRANTED.
`6.
`Accounting (Eleventh Cause of Action)
`The right to an accounting is dependent on the
`validity of the underlying claims for relief. See
`Duggal v. G.E. Capital Comm’cns Servs., Inc., 81 Cal.
`App. 4th 81, 95 (2000). Because the Court has DENIED
`Summary Judgment on two of the four preceding causes of
`action, this Court DENIES Defendants’ Motion for
`Summary Judgment on the eleventh cause of action for
`Accounting.
`7.
`Declaratory Relief (Twelfth Cause of Action)
` The Court DENIES Defendants’ Motion for Summary
`Judgment on the twelfth cause of action for Declaratory
`Relief. A genuine issue of material fact remains as to
`the respective rights of the parties in the Derivative
`Work, as the Court has DENIED Defendants’ Motion for
`Summary Judgment on Plaintiff’s first cause of action
`for copyright infringement.
`8.
`Defendants’ Counterclaims
`Defendants finally move for Summary Judgment on the
`three counterclaims: 1) Fraud on the Copyright Office,
`2) Declaratory Judgment for Non-Infringement, and 3)
`Defendant Atchity’s counterclaim for Defamation.
`A.
`Fraud on the Copyright Office
`With regard to Defendants’ Motion for Summary
`Judgment on the counterclaim for Fraud on the Copyright
`Office, the Court DENIES Summary Judgment. The Court
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`finds that Defendants do not satisfy their burden of
`showing there is no genuine issue of material fact as
`to whether Plaintiff had the required intent to defraud
`the Copyright Office at the time she filed her
`copyright pre-registration application that stated she
`was both the author and copyright holder to the
`Derivative Work. Plaintiff raises a triable issue of
`fact as to whether she filed this application in a good
`faith belief that she owned the rights to the
`Derivative Work at the time, and accordingly
`Defendants’ Motion is DENIED.
`B.
`Declaratory Judgment
`As the Court has DENIED Defendants’ Motion for
`Summary Judgment on Plaintiff’s first cause of action
`for Copyright Infringement, the Court also DENIES
`Defendants’ Motion for Summary Judgment on the
`Counterclaim for Declaratory Judgment for Non-
`Infringement.
`C.
`Defamation
`Defamation under California law “involves the
`intentional publication of a statement of fact that is
`false, unprivileged, and has a natural tendency to
`injure or which causes special damage.” Smith v.
`Maldonado, 72 Cal. App. 4th 637, 645 (1999).
`The Court finds that genuine issues of material
`fact still exist as to whether Plaintiff’s statement in
`the application for pre-registration with the Copyright
`Office constitutes defamation per se, as Plaintiff has
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`Case 2:08-cv-05321-RSWL-JC Document 134 Filed 10/15/10 Page 17 of 17 Page ID
` #:2938
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`raised a triable issue of fact regarding the truth of
`the statement. See Raghavan v. Boeing Co., 133 Cal.
`App. 4th 1120, 1132 (2005) (noting that in all cases of
`alleged defamation, “the truth of the offensive
`statements ... is a complete defense against civil
`liability, regardless of bad faith or malicious
`purpose”).
`Therefore, this Court DENIES Defendants’ Motion for
`Summary Judgment on Defendant Atchity’s counterclaim
`for Defamation.
`
`IT IS SO ORDERED.
`Dated: October 15, 2010
`
` HONORABLE RONALD S.W. LEW
` Senior, U.S. District Court Judge
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