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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`No. C 08-2243 BZ
`ORDER DENYING MOTION
`TO DISMISS
`
`))))))))))
`
`DAVID JAMES DUNCAN,
`Plaintiff(s),
`
`v.
`THOMAS A. COHEN, et al.,
`Defendant(s).
`
`Plaintiff David James Duncan sued defendants Thomas A.
`Cohen d/b/a Hammermark Productions and Kristi Denton Cohen
`d/b/a Peloton Productions (“the Cohens”) and defendant Sierra
`Club, incorrectly sued as Sierra Club Books (“Sierra Club”),
`alleging violations of federal copyright laws and a variety of
`claims based on state law, all arising from the Cohens’
`attempts to make a film of Duncan’s novel, The River Why. The
`Cohens have moved to dismiss the complaint for failure to
`state a claim upon which relief can be granted pursuant to
`Federal Rule of Civil Procedure 12(b)(6); to dismiss his
`first, second, fourth, seventh, and eighth claims against the
`Cohens pursuant to California’s anti-SLAPP statute and for
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`sanctions and costs under the anti-SLAPP statute. For the
`reasons set forth below, the Cohens’ motion is DENIED in its
`entirety.1
`The Anti-SLAPP Motion to Dismiss
`A strategic lawsuit against public participation
`(“SLAPP”) “seeks to chill or punish a party's exercise of
`constitutional rights to free speech and to petition the
`government for redress of grievances.” Rusheen v. Cohen, 37
`Cal.4th 1048, 1055 (2006). The California legislature enacted
`Code of Civil Procedure section 425.16 “to allow early
`dismissal of meritless first amendment cases aimed at chilling
`expression through costly, time-consuming litigation.”
`Metabolife Intern., Inc. v. Wornick, 264 F.3d 832, 839 (9th
`Cir. 2001). The statute also provides for the imposition of
`attorney’s fees and costs if the defendant’s motion to dismiss
`is granted. Cal. Code Civ. Proc. § 425.16(c).
`The Cohens contend that Duncan’s claims for copyright
`infringement, declaratory relief, fraud, conspiracy to
`defraud, false advertising and invasion of the right of
`publicity should be dismissed pursuant to the anti-SLAPP
`statute.
`As an initial matter, California’s anti-SLAPP statute
`does not apply to Duncan’s federal claims for relief and the
`Cohens do not provide any contrary authority. See e.g.,
`Summit Media LLC v. City of Los Angeles, CA, 530 F.Supp.2d
`1084, 1095 (C.D. Cal. 2008); Sonoma Foods, Inc. v. Sonoma
`
`In view of this disposition, all of plaintiff’s
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`Cheese Factory, LLC, 2007 WL 2122638, at *4 (N.D. Cal.). The
`anti-SLAPP motion is therefore DENIED as to the federal claims
`for copyright infringement, declaratory relief and false
`advertising.
`Duncan’s state law claims for relief are not subject to
`an anti-SLAPP motion to dismiss because they do not arise out
`of protected activity - the Cohens rights of free speech.
`Courts follow a two step process in ruling on an anti-SLAPP
`motion to dismiss. “First, the court decides whether the
`defendant has made a threshold showing that the challenged
`cause of action is one ‘arising from’ protected activity. (§
`425.16, subd. (b)(1).) If the court finds such a showing has
`been made, it then must consider whether the plaintiff has
`demonstrated a probability of prevailing on the claim.” City
`of Cotati v. Cashman, 29 Cal.4th 69, 76 (2002). A defendant
`makes the threshold showing “by demonstrating that the act
`underlying the plaintiff's cause fits one of the categories
`spelled out in section 425.16, subdivision (e) ....” Id.
`citing Braun v. Chronicle Publ’g Co., 52 Cal.App.4th 1036,
`1043 (1997). Section 425.16(e) provides that:
`‘act in furtherance of a person’s right of petition or
`free speech under the United States or California
`Constitution in connection with a public issue’
`includes: (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; (4) or any
`other conduct in furtherance of the exercise of the
`constitutional right of petition or the constitutional
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`right of free speech in connection with a public issue
`or an issue of public interest.
`Cal. Civ. Proc. § 425.16(e). “When considering a section
`425.16 motion, a court must consider the actual objective of
`the suit and grant the motion if the true goal is to interfere
`with and burden the defendant's exercise of his free speech
`and petition rights.” Ingels v. Westwood One Broad. Serv.s,
`Inc., 129 Cal.App.4th 1050, 1064 (2005) citing Foothills
`Townhome Assn. v. Christiansen, 65 Cal.App.4th 688, 696 (1998)
`overruled in part on other grounds by Equilon Enter. v.
`Consumer Cause, Inc., 29 Cal.4th 53, 68, fn. 5 (2002).
`As in City of Cotati, “the critical point is whether the
`plaintiff's cause of action itself was based on an act in
`furtherance of the defendant's right of petition or free
`speech. 29 Cal.4th at 78. The Cohens contend that Duncan’s
`suit is an attempt to limit the exercise of their rights of
`free speech on a matter of public interest - the “message of
`environmental activism set in a coming-of-age story” found in
`Duncan’s book The River Why. (Defs.’ Mot. to Dismiss at p.
`9.) However, Duncan’s suit in no way seeks limits the Cohens’
`ability to spread their message of environmental activism
`through film, or any other medium. “Copyright laws are not
`restrictions on freedom of speech as copyright protects only
`form of expression and not the ideas expressed.” Harper & Row
`Publishers, Inc. v. Nation Enter.s, 471 U.S. 539, (1985)
`citing New York Times Co. v. U.S., 403 U.S. 713, 726, n.
`(1971) (BRENNAN, J., concurring). Duncan’s suit does not
`prevent the Cohens from making a coming-of-age film about
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`environmental activism, even if it includes a coming of age
`story, as long as the film does not use the copyrighted story
`or title from The River Why. The Cohens are not claiming
`their rights to use material from The River Why are based on
`free speech. Rather they contend their rights are based on a
`contract purportedly signed by Sierra Club in 1984. This
`action centers on copyright and contract claims, not protected
`activity, and the anti-SLAPP statute does not apply.
`Kronemyer v. Internet Movie Data Base, Inc., 150
`Cal.App.4th 941 (2007), does not require that Duncan’s right
`of publicity claim be subject to an anti-SLAPP motion.
`Duncan alleges that the Cohens used his name to solicit funds
`for the film and lists his name on their website. In
`Kronemyer, the Court of Appeal found that a public website
`www.imdb.com’s act of deciding whom to credit as a producer of
`a film was an act in the furtherance of free speech. 150
`Cal.App.4th at 947. Here, Duncan’s right of publicity claim
`is based on the Cohens’ use of his name to solicit funds for
`production of a film in violation of his claimed copyright; it
`is not based in furtherance of their freedom of speech.
`Similarly, the Cohens improperly suggest that the
`California legislature’s enactment of California Code of Civil
`Procedure section 425.17(d)(2) means that any suit involving
`the creation or dissemination of films are subject to an anti-
`SLAPP suit. If this was true, every suit for copyright
`infringement or breach of contract involving a film or
`television show would be subject to California’s anti-SLAPP
`statute. Yet, section 425.17 was enacted to limit the anti-
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`SLAPP statute’s application to public interest and class
`action suits “brought solely in the public interest or on
`behalf of the general public” in certain circumstances. Cal.
`Code Civ. Proc. § 425.17(b); see also Ingels, 129 Cal.App4th
`at 1066. The section’s inclusion of public interest and class
`action suits “against any person or entity based upon the
`creation, dissemination, exhibition, advertisement, or other
`similar promotion of any dramatic, literary, musical,
`political, or artistic work, including, but not limited to, a
`motion picture or television program . . .” as suits subject
`to the anti-SLAPP statute, did not abrogate the requirement
`that anti-SLAPP motions only be granted if the suit is an
`attempt to limit the defendant’s constitutional right to free
`expression. Cal. Code Civ. Proc. § 425.17(d)(2).
`For these reasons the Cohens’ motion to dismiss and for
`attorneys’ fees and costs, pursuant to California’s anti-SLAPP
`statute, is DENIED.
`12(b)(6) Motion to Dismiss:
`A motion to dismiss pursuant to Federal Rule of Civil
`Procedure 12(b)(6) tests the legal sufficiency of a claim and
`should be granted only if plaintiff’s complaint fails to set
`forth facts sufficient to establish a plausible right of
`recovery. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955,
`1974 (2007). For purposes of such a motion, the complaint is
`construed in a light most favorable to the plaintiff and all
`properly pleaded factual allegations are taken as true.
`Aquino v. Capital One Fin. Corp., 2008 WL 1734752, at *1 (N.D.
`Cal.); Mitan v. Feeney, 497 F.Supp. 2d 1113, 1124 (C.D. Cal.
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`2007) (discussing the post-Twombly standard).
`Copyright Infringement Claim:
`The Cohens move to dismiss the copyright claim on the
`grounds that a state court has entered a “stipulated judgment”
`in a case to which Duncan was not a party stating that Peloton
`Productions, defendant Kristi Cohen’s company, is the owner of
`the motion picture rights to The River Why.2 However, the
`judgment expressly states that “[n]o judgment in this action
`would bind David James Duncan” and that Peloton Productions
`“takes the risk that Mr. Duncan will file a claim, but that is
`the risk that [Peloton Productions] is willing to take.” Nor
`is there any basis for asserting that the stipulated judgment
`collaterally estops Duncan from asserting his copyright in
`this action.
`Collateral estoppel is appropriate when:
`‘(1) there was a full and fair opportunity to
`litigate the issue in the previous action; (2)
`the issue was actually litigated in that action;
`(3) the issue was lost as a result of a final
`judgment in that action; and (4) the person
`against whom collateral estoppel is asserted in
`the present action was a party or in privity
`with a party in the previous action.’
`
`United States v. Real Prop. Located at 22 Santa Barbara Dr.,
`264 F.3d 860, 873 (9th Cir. 2001) quoting In re Palmer, 207
`F.3d 566, 568 (9th Cir. 2000). Although “a stipulation may
`meet the ‘fully litigated’ requirement where ‘it is clear that
`the parties intended the stipulation of settlement and
`judgment entered thereon to adjudicate once and for all the
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`Both sides’ requests that I take judicial notice of
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`the stipulated judgment are granted.
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`issues raised in that action,’” Judge Mahoney expressly found
`that the decision would not bind Duncan. Id. quoting Green v.
`Ancora-Citronelle Corp., 577 F.2d 1380, 1383 (9th Cir. 1978).
`Furthermore, “a person who was not a party to a suit generally
`has not had a ‘full and fair opportunity to litigate’ the
`claims and issues settled in that suit. The application of
`claim and issue preclusion to nonparties thus runs up against
`the ‘deep-rooted historic tradition that everyone should have
`his own day in court.’” Taylor v. Sturgell, 128 S.Ct. 2161,
`2171 (2008) quoting Richards v. Jefferson County, 517 U.S.
`793, 798 (1996)). The Supreme Court has “often repeated the
`general rule that ‘one is not bound by a judgment in personam
`in a litigation in which he is not designated as a party or to
`which he has not been made a party by service of process.’”
`Id. quoting Hansberry v. Lee, 311 U.S. 32, 40 (1940)).
`Moreover, Duncan does not satisfy any of the six exceptions to
`the rule against nonparty preclusion set forth by the Supreme
`Court in Taylor. First, Duncan is not “[a] person who agrees
`to be bound by the determination of issues in an action
`between others.” Id. at 2172. Second, Duncan was not
`“adequately represented by someone with the same interests who
`was a party to the suit.” Id. Third, Duncan did not assume
`“control over the litigation in which that judgment was
`rendered.” Id. (internal quotations omitted). Fourth, Duncan
`is not “the designated representative of a person who was a
`party to the prior adjudication.” Id. at 2173. Fifth, there
`is no “special statutory scheme” that “expressly foreclose[s]
`successive litigation by nonlitigants.” Id. Sixth, a
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`“pre-existing substantive legal relationship between [Duncan]
`and the part[ies] to the judgment” does not exist. Id.
`(internal quotations omitted). “Qualifying relationships
`include, but are not limited to, preceding and succeeding
`owners of property, bailee and bailor, and assignee and
`assignor.” Id. At the time of the state court suit, Sierra
`Club was no longer Duncan's literary agent. (Compl., Ex. 14.)
`Furthermore, in his complaint, Duncan denies any assignment of
`rights to Cohen. Thus, no legal relationship between Duncan
`and the parties existed at the time of the lawsuit. As a
`result, Duncan's claim is not barred by the stipulated
`judgment entered in state court.
`The Cohens also argue that Duncan lacks standing to sue
`because Sierra Club was the owner of the rights to develop the
`film version of Duncan’s novel. In support of their claim,
`the Cohens attach to their moving papers an unsigned copy of a
`Publishing Agreement between Duncan and Sierra Club. The
`Cohens contend that the Publishing Agreement conveyed the
`motion picture rights to Sierra Club. The Cohens assert they
`obtained those rights by way of a letter attached as Exhibit 2
`of Duncan’s complaint referred to by the parties as the Rights
`Agreement.
`When ruling on a motion to dismiss, if the court
`“considers evidence outside the pleadings, it must normally
`convert the 12(b)(6) motion into a Rule 56 motion for summary
`judgment, and it must give the nonmoving party an opportunity
`to respond.” U.S. v. Ritchie, 342 F.3d 903, 907 (9th Cir.
`2003); Fed. R. Civ. P. 12(b). However, “documents whose
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`contents are alleged in a complaint and whose authenticity no
`party questions, but which are not physically attached to the
`pleading, may be considered in ruling on a Rule 12(b)(6)
`motion to dismiss.” Branch v. Tunnell, 14 F.3d 449, 454 (9th
`Cir. 1994) overruled on other grounds in Galbraith v. County
`of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). Duncan objects
`to the authenticity of the Publishing Agreement attached to
`the Cohens’ motion. As such, I cannot consider it when ruling
`on the motion to dismiss. In any event, as the Complaint
`alleges, the Publishing Agreement granted Sierra Club the
`right to act as Duncan’s agent for the film rights (¶ 14). It
`did not transfer ownership of the rights to the Sierra Club as
`the Cohen defendants argue.
`Under 17 U.S.C. § 501(b), the “legal or beneficial owner
`of an exclusive right under a copyright is entitled . . . to
`institute an action for any infringement of that particular
`right committed while he or she is the owner of it.” Silvers
`v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 884 (9th Cir.
`2005). Thus, for the purposes of reviewing Duncan’s complaint
`on a Rule 12(b)(6) motion to dismiss, Duncan’s allegations in
`the complaint that he owns the motion picture rights and did
`not grant Sierra Club authority to transfer those rights is
`sufficient to provide standing for his copyright allegation.
`Next, the Cohens argue that the three year statute of
`limitations has run on Duncan’s copyright infringement claim.
`See 17 U.S.C § 507(b). A copyright infringement claim
`“accrues when one has knowledge of a violation or is
`chargeable with such knowledge.” Kourtis v. Cameron, 419 F.3d
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`989, 999 (9th Cir. 2005) abrogated on other grounds in Taylor,
`128 S.Ct. at 2178.
`The Cohens argue that Duncan’s copyright claims are time
`barred because he does not allege any specific acts of
`infringement that occurred in the past three years. However,
`in the complaint Duncan alleges that Kristi Cohen “is”
`violating Duncan’s copyrights through “her efforts to produce
`a film version of” The River Why. (Compl. at ¶ 44.) Any act
`that is inconsistent with a copyright holder’s exclusive
`rights constitutes infringement. 17 U.S.C. § 501(a). The
`copyright holder has “the exclusive rights” to “reproduce” and
`“prepare derivative works”. 17 U.S.C. § 106(1) - (2).
`Duncan’s allegation that Kristi Cohen is infringing through
`her efforts to prepare a derivative work of the novel is
`sufficient to defeat a motion to dismiss the claim for
`continuing infringement. Kourtis, 419 F.3d 999 - 1000. For
`all these reasons, the Cohens’ motion to dismiss Duncan’s
`claim for copyright infringement is DENIED.
`Claim for Declaratory Relief:
`The Cohens’ motion to dismiss Duncan’s claim for
`declaratory relief is based on their inaccurate contention
`that Duncan is seeking a declaration that he has not violated
`their asserted copyright rights. In fact, Duncan requests a
`declaration that the Letter Agreement between Sierra Club and
`the Cohens, upon which the Cohens rely, is invalid or
`terminated and that he owns the motion picture rights to his
`book. (Compl. at ¶ 58.) This central dispute over the
`validity of the Letter Agreement is sufficiently concrete to
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`satisfy the requirement that there be a case or controversy.
`“When presented with a claim for a declaratory judgment . . .
`federal courts must take care to ensure the presence of an
`actual case or controversy, such that the judgment does not
`become an unconstitutional advisory opinion.” Rhoades v. Avon
`Products, Inc., 504 F.3d 1151, 1157 (9th Cir. 2007). As such,
`the motion to dismiss the declaratory relief claim is DENIED.
`Fraud Claim
`The Cohens argue that Duncan’s fraud claim is fatally
`vague. Claims for “fraud must satisfy a heightened pleading
`standard that requires circumstances constituting fraud be
`pled with particularity.” Oestreicher v. Alienware Corp., 544
`F.Supp.2d 964, 968 (N.D. Cal. 2008) citing Fed. R. Civ. P.
`9(b). “The pleadings must state precisely the time, place,
`and nature of the misleading statements, misrepresentations,
`and specific acts of fraud.” Kaplan v. Rose, 49 F.3d 1363,
`1370 (9th Cir. 1994). “[T]he circumstances constituting the
`alleged fraud [must] be specific enough to give defendants
`notice of the particular misconduct ... so that they can
`defend against the charge and not just deny that they have
`done anything wrong.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d
`1097, 1106 (9th Cir. 2003) internal quotations omitted.
`Duncan’s complaint sets forth sufficient information regarding
`the allegedly fraudulent statements Thomas Cohen made in
`inducing Sierra Club to enter the initial option agreement to
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`make the film, in creating the allegedly sham budget3, and in
`promising to commence production of the film to give the
`Cohen’s sufficient notice to defend against the claim.
`The Cohens’ contention that Duncan’s fraud claim fails
`because he does not claim that he, rather than Sierra Club,
`relied on the misrepresentations fails because a principal can
`sue for fraud committed on his agent. Cal. Civ. Code § 2330.
`The Cohens also contend that the fraud claim must fail
`because Duncan does not allege that he suffers pecuniary
`damages. Actual damages are a requirement of a fraud claim.
`Alliance Mortgage Co. v. Rothwell, 10 Cal.4th 1226, 1239
`(1995). However, I read plaintiff’s fraud claim as seeking
`not damages but a declaration that the fraudulently induced
`agreement is invalid, much like a claim for rescission based
`on fraud. See Cal. Civil Code § 1689 (b)(1). If plaintiff is
`seeking damages for fraud, he must amend his complaint by
`August 1, 2008.
`Finally, the Cohens contend that Duncan’s fraud claim is
`barred by the three-year statute of limitations. Cal. Code
`Civ. Proc. § 338(d). In his complaint filed on April 30,
`2008, Duncan alleges that he only became aware of the alleged
`fraud in late 2005 or early 2006.4 Under the delayed
`
`Because I am reviewing the claim under Rule 12(b)(6),
`3
`I did not consider the budget submitted by the Cohens in
`support of their motion. U.S. v. Ritchie, 342 F.3d at 907;
`Fed. R. Civ. P. 12(b).
`Contrary to the Cohens’ allegations, Duncan does not
`4
`plead that the he was aware of the fraud in 1987. Rather he
`merely alleges that he was aware of the request for the
`extension of the option at that time. (Compl. at ¶ 28.)
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`discovery rule, based on the allegations in the complaint,
`Duncan’s fraud claim is timely. E-Fab, Inc. v. Accountants,
`Inc. Servs., 153 Cal.App.4th 1308, 1318 (2007).
`For all these reasons, the Cohens’ motion to dismiss
`Duncan’s fraud claim is DENIED.
`Conspiracy:
`The Cohens motion to dismiss Duncan’s conspiracy claim is
`also DENIED. Contrary to the Cohens’ argument, Duncan is not
`required to plead his claim of conspiracy with the specificity
`required of a fraud claim. Quelimane Co. v. Stewart Title
`Guaranty Co., 19 Cal.4th 26, 47 -48 (1998).
`False Advertising and Right of Publicity Claims:
`In their moving papers, the Cohens contend that the
`Letter Agreement between Sierra Club and the Cohens permits
`them to use Duncan’s name on their website and to solicit
`funds. However, Duncan’s complaint alleges that the Letter
`Agreement is invalid and for the purposes of ruling on this
`motion, I must accept Duncan’s allegations as true and DENY
`the Cohen’s motion as to these claims. Aquino, 2008 WL
`1734752, at *1.
`The Cohens also raise new arguments for the first time in
`their reply papers that the nominative use of Duncan’s name is
`permitted. I have not considered the nominative use
`arguments. Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir.
`2007)( A “court need not consider arguments raised for the
`first time in a reply brief.”)
`///
`///
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`Case3:08-cv-02243-BZ Document69 Filed07/22/08 Page15 of 15
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`For the reasons set forth above, the Cohens’ motion is
`DENIED. The Cohens shall answer by August 4, 2008.
`Dated: July 22, 2008
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`
`Bernard Zimmerman
` United States Magistrate Judge
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`G:\BZALL\-BZCASES\DUNCAN V. COHEN\MOTION TO DISMISS.FINAL RULING.wpd
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