Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-02963/USCOURTS-azd-2_05-cv-02963-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Lori Jo Giddings, 

Plaintiff, 

vs.

Vision House Production, Inc., d/b/a

Designer Art Direct; Cindy Rarig,

individually and d/b/a Designer Art Direct;

Jonathan Rarig, individually and d/b/a

Designer Art Direct; John/Jane Does I

through V,

Defendants. 

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No.CV-05-2963-PCT-MHM

ORDER

Plaintiff Lori Jo Giddings has sued Defendant Vision House Production, Inc., a retail art

business, and its two principals, Defendants Cindy and Jonathan Rarig (collectively

“Defendants”), asserting a federal claim under the Copyright Act of 1976 (Count 1) and state

law claims for breach of contract (Count 2), intentional infliction of emotional distress

(Count 3), and fraud (Count 4). Defendants have moved to dismiss the emotional distress and

fraud claims for failure to state a claim for relief pursuant to Fed. R. Civ. P. 12(b)(6) (Dkt.

no. 11). Plaintiff has filed a response (Dkt. no. 13) and Defendants have filed a reply (Dkt.

no. 14). 

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I.

Standard of Review.

 When reviewing a motion to dismiss, the Court accepts the allegations in the complaint

as true and construes them in the light most favorable to the plaintiff. Sosa v. Hiraoka, 920

F.2d 1451, 1455 (9th Cir. 1990). The Court must draw all reasonable inferences in favor of

the non-moving party. Salim v. Lee, 202 F.Supp.2d 1122, 1125 (C.D. Cal. 2002). Dismissal

is proper “only if it appears beyond doubt that the plaintiff can prove no set of facts in

support of his claim which would entitle him to relief.” Gibson v. United States, 781 F.2d

1334, 1337 (9th Cir. 1986). “Dismissal can be based on the lack of a cognizable legal theory

or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v.

Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). The Ninth Circuit has stated that

“[t]he issue is not whether a plaintiff’s success on the merits is likely but rather whether the

claimant is entitled to proceed beyond the threshold in attempting to establish his claims.”

De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). The Court must determine whether

or not it appears to a certainty under existing law that no relief can be granted under any set

of facts that might be proved in support of plaintiff’s claims. Id.

II.

Plaintiff’s Allegations in the Complaint.

The Complaint alleges that prior to June 2001, Plaintiff created a number of original

pieces of artwork, many of which were copyrighted. (Compl., ¶¶ 8-9). Plaintiff retained

exclusive and sole authority to reproduce the copyrighted artwork. (Id. at ¶¶ 8, 18).

Sometime in or around June 2001, Plaintiff and Defendants entered into a contract to

distribute Plaintiff’s art, including the copyrighted artwork. (Id. at ¶¶ 10, 23). Plaintiff claims

that Defendants materially breached the contract by reproducing and placing an excessive

number of prints into the stream of commerce. (Id. at ¶¶ 11, 24). Plaintiff contends that

Defendants were only authorized to produce and distribute a limited number of prints of her

artwork. (Id. at ¶ 32). Plaintiff allegedly authorized reproduction and distribution of an even

fewer number of prints that were to bear her signature. (Id.). Plaintiff further alleges that

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Defendants reproduced, sold, displayed, and otherwise marketed Plaintiff’s artwork, without

permission. (Id. at ¶ 20). Additionally, Defendants allegedly forged Plaintiff’s signature,

altered limited edition numbering on reproductions, and distributed these reproductions as

artist-signed reproductions. (Id. at ¶¶ 32-35). 

Plaintiff alleges that Defendants’ conduct was outrageous. (Id. at ¶ 28). Plaintiff further

asserts that, as a result of the Defendants allegedly unauthorized and malicious use of

Plaintiff’s artwork, Plaintiff has suffered and will continue to suffer emotional and monetary

damages. (Id. at ¶¶ 25, 29-30).

III.

Defendants' Motion to Dismiss Plaintiff's Claim for

Intentional Infliction of Emotional Distress (Count 3).

Plaintiff alleges that Defendants’ conduct, acts, and omissions with respect to her artwork

were outrageous and caused Plaintiff to suffer severe emotional distress. Defendants contend

that Plaintiff's allegations are insufficient to state a claim for intentional infliction of

emotional distress. 

To establish a claim for intention infliction of emotional distress under Arizona law, a

plaintiff must prove: (1) the conduct by the defendant was ‘extreme’ and ‘outrageous,’ (2)

the defendant intended to cause emotional distress or showed reckless disregard with near

certainty that such distress would result from his conduct, and (3) severe emotional distress

resulted from defendant’s conduct. Johnson v. McDonald, 3 P.3d 1075, 1080 (Ariz.Ct.App.

2000). The threshold inquiry is whether a defendant's conduct is sufficiently outrageous to

let the case proceed. Id. As explained in Johnson, 

The trial court determines whether the acts at issue are sufficiently

outrageous to state a claim for relief; however, if reasonable minds

could differ about whether the conduct is sufficiently outrageous, the

issue should be decided by a jury. See Mintz v. Bell Atlanta SYS.

Leasing Int'l, Inc., 183 Ariz. 550, 554, 905 P.2d 559, 563 (App.

1995). To recover for this tort, the plaintiff must show that

defendant's conduct was 'so outrageous in character, and so extreme

in degree, as to go beyond all possible bounds of decency, and to be

regarded as atrocious and utterly intolerable in a civilized

community.' Cliff v. Farmers Ins. Exchange, 10 Ariz.App. 560, 562,

460 P.2d 666, 668 (1969) (quoting Restatement (Second) of Torts §

46 cmt. d).

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Id., at 1080.

Plaintiff’s allegations of unauthorized reproduction, sales, distribution, forgery, and

marketing of Plaintiff’s artwork (Compl. at ¶¶ 7-36), viewed in a light most favorable to the

Plaintiff, rise to the requisite level of offensiveness required under Johnson. Because

reasonable minds could differ about whether the conduct alleged was sufficiently outrageous,

Defendants' motion for partial dismissal with respect to Plaintiff's emotional distress claim

is denied.

Defendants in their reply have argued for the first time that Plaintiff's claim for intentional

infliction of emotional distress is preempted by the Copyright Act, 17 U.S.C. § 106.

Arguments raised for the first time in a reply are generally not considered because to do so

may unfairly deprive the opposing party of the opportunity to make a meaningful response.

See, e.g., Pacific Coast Federation of Fisherman's Ass'n. v. U.S. Bureau of Reclamation, 138

F.Supp.2d 1228, 1248, n.17 (N.D. Cal. 2001). The Court therefore has not considered

Defendants' preemption argument. 

IV.

Defendants' Motion to Dismiss Plaintiff's Fraud Claim (Count 4).

Defendants contend that Plaintiff has failed to state her fraud claim with the requisite

particularity demanded by Fed. R. Civ. P. 9. Rule 9 requires that “[in] all averments of

fraud...the circumstances constituting the fraud....shall be stated with particularity.” Fed. R.

Civ. P. 9(b) (emphasis added). While the Court is mindful of the “simple, concise, and

direct” statement of a claim required under Rule 8(e), the heightened pleading standard is

justified in fraud and mistake claims because it “serves to give defendants adequate notice

to allow them to defend against the charge.” In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405

(9th Cir. 1996) (as amended). In Arizona, the elements of fraud include falsity,

representation, materiality, knowledge, and injury resulting from reliance on the false

representation. See Arnold & Assoc., Inc. v. Misys Healthcare Systems, 275 F. Supp. 2d

1013 (D.Ariz. 2003). See also, Taeger v. Catholic Family and Community Services, 196

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Ariz. 285, 294, 995 P.2d 721, 730 (Ariz. Ct. App. 1999) (citing Burkons v. Ticor Title Ins.

Co. of Cal., 798 P.2d 1308, 1317 (Ariz. Ct. App. 1989)). In order for a plaintiff to sufficiently

plead a fraud claim, she must “set forth more than the neutral facts necessary to identify the

transaction.” Arnold & Associates, Inc., 275 F.Supp.2d at 1028 (citing In re GlenFed, Inc.,

Secur. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994)). Plaintiff must set forth "the who, what,

when, where, and how" of the misconduct charged. Vess v. Ceiba-Geigy Corp. USA, 317

F.3d 1097, 1106 (9th Cir. 2003). 

In the case at bar, the Defendants emphasize that the purpose behind the Rule 9(b)

particularity requirement is "to deter the filing of complaints as a pretext for the discovery

of unknown wrongs....” Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001) (citing

In re Stac Elec. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996)). Defendants further argue that

the Plaintiff's “allegations contain no specifics” and the allegations in support of Plaintiff's

fraud claim “do not even minimally comply with Rule 9.” (Defendants Amended Motion for

Partial Dismissal, pg. 5, lines 17-18).

In her complaint, Plaintiff alleges that Defendants engaged in unauthorized and excessive

reproductions of Plaintiff's artwork, improperly numbered limited edition reproductions,

forged Plaintiff's signature on reproductions, and subsequently distributed these

reproductions as artist-signed reproductions. (Compl. ¶¶ 33 - 36). Viewing such allegations

in a light most favorable to the Plaintiff, Count 4 has colorably set forth more than “neutral

facts” indicating the circumstances of fraud. However, while Plaintiff has alleged the "what",

she has not alleged with particularity "the who, ... when, where, and how". 

Plaintiff has invoked the exception to the heightened pleading requirement of Rule 9(b),

contending that Defendants have knowledge of the forgeries and other, artwork-related

falsifications. See Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993)(recognizing that

"the general rule that allegations of fraud based on information and belief do not satisfy Rule

9(b) may be relaxed with respect to matters within the opposing party's knowledge").

However, "the exception does not nullify Rule 9(b); a plaintiff must state the factual basis

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for the belief." Id. Plaintiff's allegations are not sufficient in this regard. Defendants' motion

to dismiss Plaintiff's fraud claim is granted.

Plaintiff has requested leave to file an amended complaint in the event her fraud claim is

found to be deficient. When granting a motion to dismiss, a court is generally required to

grant a plaintiff leave to amend unless the amendment would be futile. Cook, Perkiss &

Liehe, Inc. v. N.Cal.Collection Serv. Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). The Court

cannot determine that any amended complaint would be futile. Plaintiff shall be granted

leave to file an amended complaint.

 Accordingly,

IT IS ORDERED that Defendants' amended motion to dismiss certain claims (Counts 3

and 4) asserted in Plaintiff's complaint (Dkt no. 11) is granted in part and denied in part.

IT IS FURTHER ORDERED that Defendants' amended motion to dismiss Plaintiff's

claim for intentional infliction of emotional distress (Count 3) is denied.

IT IS FURTHER ORDERED that Defendants' amended motion to dismiss Plaintiff's

claim for fraud (Count 4) is granted. 

IT IS FURTHER ORDERED that Plaintiff's claim for fraud is dismissed without

prejudice with leave to amend. 

IT IS FURTHER ORDERED that Plaintiff may file an amended complaint within

twenty (20) days after the filing date of this Order. Defendant shall have twenty (20) days

after service of any amended complaint within which to file an answer or response. 

DATED this 21st day of September, 2006.

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