Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-08-56954/USCOURTS-ca9-08-56954-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LARRY MONTZ; DAENA SMOLLER, 

Plaintiffs-Appellants, No. 08-56954

v. D.C. No.

PILGRIM FILMS & TELEVISION, INC.;  2:06-cv-07174-

NBC UNIVERSAL, INC.; CRAIG FMC-MAN

PILIGIAN; JASON CONRAD HAWES;

OPINION UNIVERSAL TELEVISION NETWORKS,

Defendants-Appellees. 

Appeal from the United States District Court

for the Central District of California

Florence-Marie Cooper, District Judge, Presiding

Argued and Submitted

May 4, 2010—Pasadena, California

Filed June 3, 2010

Before: Diarmuid F. O’Scannlain and Richard C. Tallman,

Circuit Judges, and Joan Humphrey Lefkow,

District Judge.*

Opinion by Judge O’Scannlain

*The Honorable Joan Humphrey Lefkow, United States District Judge

for the Northern District of Illinois, sitting by designation. 

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COUNSEL

Howard B. Miller, of Girardi Keese, Los Angeles, California,

argued the cause for the plaintiffs-appellants. Joseph C.

Gjonola, of Girardi Keese, Los Angeles, California, filed the

briefs. Graham B. LippSmith, of Girardi Keese, Los Angeles,

California, was also on the briefs.

Gail Migdal Title, of Katten Muchin Rosenman LLP, Los

Angeles, California, argued the cause for the defendantsappellees. Joel R. Weiner, of Katten Muchin Rosenman LLP,

Los Angeles, California, filed a brief. Gail Migdal Title and

Gloria C. Franke, of Katten Muchin Rosenman LLP, Los

Angeles, California, were also on the brief.

OPINION

O’SCANNLAIN, Circuit Judge:

We consider whether federal copyright law preempts statelaw claims alleging the unauthorized use of screenplays, videos, and other materials in the production of a cable television

series.

I

A

In November 2006, plaintiffs Larry Montz, a parapsychologist, and Daena Smoller, a publicist, filed a complaint in

federal district court. They claimed that in 1981, Montz conceived of the concept for a new reality television program fea7940 MONTZ v. PILGRIM FILMS & TELEVISION

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turing a team of “paranormal investigators.” As allegedly

envisioned by Montz, each hour-long episode would follow

the team’s members to a different real-world location, where

they would use magnetometers, infrared cameras, and other

devices to investigate (and occasionally debunk) reports of

paranormal activity.

The complaint alleges that between 1996 and 2003, the

plaintiffs presented screenplays, videos, and other materials

relating to their proposed show to representatives of NBC

Universal, Inc., and the Sci-Fi Channel (now the Syfy Channel), “for the express purpose of offering to partner . . . in the

production, broadcast and distribution of the Concept.” The

representatives were allegedly not interested in the concept

for the show. According to the complaint, however, NBC

Universal subsequently partnered with Craig Piligian and Pilgrim Films & Television, Inc., to produce a series on the SciFi Channel based on the plaintiffs’ materials. The show, called Ghost Hunters, stars Jason Hawes as the leader of a team

of investigators who travel across the country to study paranormal activity.

The plaintiffs brought various causes of action against NBC

Universal, Pilgrim Films, Piligian, Hawes, and ten unknown

other defendants. The complaint alleges that the defendants

engaged in unauthorized use of the plaintiffs’ materials, in

violation of their exclusive rights under federal copyright law.

In addition, it alleges several state-law claims, two of which

are relevant here: (1) that “by producing and broadcasting”

Ghost Hunters, the defendants breached an “implied agreement not to disclose, divulge or exploit the Plaintiffs’ ideas

and concepts without the express consent of the Plaintiffs, and

to share with the Plaintiffs . . . the profits and credit for their

idea and concepts”; and (2) that the defendants breached the

plaintiffs’ confidence “[b]y taking the Plaintiffs’ novel ideas

and concepts, exploiting those ideas and concepts, and profiting therefrom to the Plaintiffs’ exclusion.”

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B

In April 2007, the defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. The

district court granted in part and denied in part the defendants’

motion in July 2007. The court concluded that the complaint

alleged facts sufficient to state a federal copyright claim, but

that federal copyright law preempted the plaintiffs’ state-law

breach-of-implied-contract and breach-of-confidence claims.

The court dismissed the state-law claims with prejudice and

without leave to amend.

In August 2008, the plaintiffs amended their copyright

claim and added Universal Television Networks as a defendant. The parties, however, subsequently stipulated to voluntary dismissal of the amended copyright claim with prejudice,

and the district court dismissed the claim accordingly. With

no remaining claims to be adjudicated, the district court

entered final judgment in favor of the defendants.

II

[1] The plaintiffs timely appeal the dismissal of their statelaw breach-of-implied-contract and breach-of-confidence

claims. In their view, the district court erred in ruling their

claims preempted by 17 U.S.C. § 301(a), which provides:

[A]ll legal or equitable rights that are equivalent to

any of the exclusive rights within the general scope

of copyright as specified by section 106 in works of

authorship that are fixed in a tangible medium of

expression and come within the subject matter of

copyright as specified by sections 102 and 103 . . .

are governed exclusively by this title. . . . [N]o person is entitled to any such right or equivalent right

in any such work under the common law or statutes

of any State.

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By its terms, § 301(a) sets forth two conditions for preemption. First, the state-law claim must assert rights in “works of

authorship that are fixed in a tangible medium of expression

and come within the subject matter of copyright as specified

by [17 U.S.C. §§ 102 and 103].” Second, the rights asserted

under state law must be “equivalent” to the exclusive rights

of copyright owners specified by 17 U.S.C. § 106. A state-law

claim is preempted under § 301(a) only if both conditions are

satisfied. See Laws v. Sony Music Entm’t, Inc., 448 F.3d 1134,

1137-38 (9th Cir. 2006).

A

We begin with the plaintiffs’ breach-of-implied-contract

claim. The district court ruled that the claim—which asserts

rights in screenplays, videos, and other tangible media—

comes within the “subject matter of copyright” and thus satisfies the first condition for preemption. The plaintiffs do not

challenge this ruling on appeal. Our inquiry is therefore limited to whether the claim satisfies the second condition—that

is, whether the rights asserted under the claim are “equivalent” to the exclusive rights of copyright owners under § 106.

[2] Section 106 confers upon copyright owners the exclusive rights to reproduce, to distribute, and to display original

works of authorship, and to prepare works derived from the

originals. 17 U.S.C. § 106. Section 106 also gives copyright

owners the exclusive right to authorize such reproduction, distribution, display, and preparation. Id. “To survive preemption, the state cause of action must protect rights which are

qualitatively different from the copyright rights. The state

claim must have an extra element which changes the nature

of the action.” Laws, 448 F.3d at 1143 (internal quotation

marks omitted).

[3] The plaintiffs’ breach-of-implied-contract claim consists of the following allegations: that “[t]he Plaintiffs presented their ideas for the ‘Ghost Hunter’ Concept to the

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Defendants[ ] in confidence . . . for the express purpose of

offering to partner with the Defendants in the production,

broadcast and distribution of the Concept”; that “by accepting

the Plaintiffs’ disclosure of its concept,” the defendants

agreed that they “would not disclose, divulge or exploit the

Plaintiffs’ ideas and concepts without compensation and without obtaining the Plaintiffs’ consent”; and that “by producing

and broadcasting the Concept,” “[t]he Defendants breached

their implied agreement not to disclose, divulge or exploit the

Plaintiffs’ ideas and concepts without the express consent of

the Plaintiffs, and to share with the Plaintiffs . . . the profits

and credit for their idea and concepts.” The gravamen of the

claim is that the defendants used the plaintiffs’ work, without

authorization, to create (and then profit from) a new television

program. The rights asserted by the plaintiffs under the

implied contract are thus equivalent to the rights of copyright

owners under § 106—namely, the exclusive rights to use and

to authorize use of their work.

The plaintiffs counter that Grosso v. Miramax Film Corp.,

383 F.3d 965 (9th Cir. 2004), compels a different conclusion.

Grosso involved a particular type of breach-of-impliedcontract claim, the elements of which the California Supreme

Court elucidated in Desny v. Wilder, 299 P.2d 257 (Cal.

1956). To state a Desny claim, the plaintiff must plead that he

“prepared the work [at issue], disclosed the work to the

offeree for sale, and did so under circumstances from which

it could be concluded that the offeree voluntarily accepted the

disclosure knowing the conditions on which it was tendered

and the reasonable value of the work.” Grosso, 383 F.3d at

967 (citing Faris v. Enberg, 158 Cal. Rptr. 704, 709 (Ct. App.

1979)). “[M]irror[ing] the requirements of Desny,” the complaint in Grosso alleged that the plaintiff had given the defendants an idea for a movie “with the understanding and

expectation . . . that [he] would be reasonably compensated

for its use by Defendants.” Id. (internal quotation marks omitted). We concluded that the defendants’ “implied promise to

pay” for use of the plaintiff’s idea constituted “an ‘extra ele7944 MONTZ v. PILGRIM FILMS & TELEVISION

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ment’ for preemption purposes.” Id. at 968. Accordingly, we

held that the plaintiff’s Desny claim survived preemption

under § 301. Id.

Contrary to the plaintiffs’ assertion, however, the present

case is distinguishable from Grosso. There, the plaintiff allegedly disclosed his idea to the defendants for the express purpose of offering it for sale; the defendants allegedly accepted

the offer and, in return, made an implied promise to pay for

use of the idea. Here, by contrast, the plaintiffs allegedly disclosed their work to the defendants “for the express purpose

of offering to partner . . . in the production, broadcast and distribution of the Concept”; the defendants allegedly rejected

the offer but, in return, made an implied promise “not to disclose, divulge or exploit the Plaintiffs’ ideas and concepts

without the express consent of the Plaintiffs.” (Emphases

added.) The nature of the implied contracts in the two cases

is thus fundamentally different. Whereas the breach of the

alleged agreement in Grosso violated the plaintiff’s right to

payment on a sale, the breach of the alleged agreement in this

case violated the plaintiffs’ exclusive rights to use and to

authorize use of their work—rights equivalent to those of

copyright owners under § 106.

The plaintiffs nevertheless insist that their breach-ofimplied-contract claim contains an “extra element” that distinguishes it from a copyright claim. They contend that “by producing and broadcasting” Ghost Hunters, the defendants

violated not only their exclusive rights to use and to authorize

use of their work, but also their right to receive a share of “the

profits and credit for their idea and concepts.” According to

them, the right to receive a share of the profits and credit is

one beyond the scope of § 106.

[4] The mere mention of such a right, however, is not

enough to “qualitatively distinguish” the plaintiffs’ breach-ofimplied-contract claim from a copyright claim. Laws, 448

F.3d at 1144. The plaintiffs expected to receive a share of the

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profits and credit for use of their work, but only because they

expected, as any copyright owner would, that their work

would not be used without their permission. The text of the

complaint confirms as much:

The Plaintiffs presented their ideas for the “Ghost

Hunter” Concept to the Defendants[ ] in confidence,

pursuant to the custom and practice of the entertainment industry, for the express purpose of offering to

partner with the Defendants in the production, broadcast and distribution of the Concept. Accordingly,

the Plaintiffs justifiably expected to receive a share

of any profits and credit that might be derived from

the exploitation of [their] ideas and concepts for the

Concept.

(Emphasis added.) As this paragraph of the complaint makes

clear, the plaintiffs’ expectation of profits and credit was

premised on the fact that they would retain control over their

work, whether in partnership with the defendants or not. The

plaintiffs’ right to receive a share of the profits and credit is

thus merely derivative of the rights fundamentally at issue:

the plaintiffs’ exclusive rights to use and to authorize use of

their work. The plaintiffs’ claim is “part and parcel of a copyright claim,” and the presence of a right to receive a share of

the profits and credit does not “transform the nature of the

action.” Laws, 448 F.3d at 1144. We therefore hold that the

plaintiffs’ breach-of-implied-contract claim is preempted by

federal copyright law, and that the district court properly dismissed the claim.

B

[5] As to the breach-of-confidence claim, the plaintiffs do

not challenge the district court’s conclusion that it satisfies the

first condition for preemption. The only question before us is

whether the rights asserted under the claim are “equivalent”

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to the exclusive rights of copyright owners under § 106. We

are satisfied that they are. 

[6] The complaint contends that “the Plaintiffs’ disclosure

of their ideas and concepts [was] strictly confidential,” and

that “[b]y taking the Plaintiffs’ novel ideas and concepts,

exploiting those ideas and concepts, and profiting therefrom

to the Plaintiffs’ exclusion, the Defendants breached their

confidential relationship with the Plaintiffs.” Such claim simply echoes the allegations of the breach-of-implied-contract

claim, which we have already deemed preempted. Indeed, the

alleged breach of confidence stems from an alleged violation

of the very rights contained in § 106—the exclusive rights of

copyright owners to use and to authorize use of their work.

Given that the plaintiffs’ breach-of-confidence claim is not

qualitatively different from a copyright claim, we conclude

that it was also properly dismissed.

III

Finally, the plaintiffs argue that even if the district court

properly dismissed their state-law claims, it should not have

denied leave to amend them. “We review strictly a district

court’s exercise of discretion denying leave to amend.”

Albrecht v. Lund, 845 F.2d 193, 195 (9th Cir. 1988).

[7] The proceedings in the district court were governed by

former Federal Rule of Civil Procedure 15(a), which provided

that “[a] party may amend the party’s pleading once as a matter of course at any time before a responsive pleading is

served.” We have previously said that “[a] motion to dismiss

is not a ‘responsive pleading’ within the meaning of the

Rule.” Breier v. N. Cal. Bowling Proprietors’ Ass’n, 316 F.2d

787, 789 (9th Cir. 1963). Nevertheless, we have held that in

granting a motion to dismiss before a responsive pleading is

served, a district court may cut off a party’s right to amend

as a matter of course if “the allegation of other facts consistent with the challenged pleading could not possibly cure the

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deficiency.” Albrecht, 845 F.2d at 195 (internal quotation

marks omitted).1

[8] In this case, the district court dismissed the plaintiffs’

state-law claims without leave to amend before a responsive

pleading was served. Although the district court did not make

written findings in support of its denial of leave to amend, no

such findings were necessary because the court’s decision

makes clear that no allegation of other facts consistent with

the complaint could possibly cure the deficiency. See Miller

v. Yokohama Tire Corp., 358 F.3d 616, 622-23 (9th Cir.

2004). As the district court correctly recognized, the complaint is deficient because it alleges state-law claims that are

preempted by federal copyright law. This deficiency can plausibly be cured only by adding an “extra element” to each

claim that “transform[s] the nature of the action.” Laws, 448

F.3d at 1144. The plaintiffs cannot effect such a transformation, however, without alleging facts inconsistent with the

challenged complaint. To state a viable Desny claim, for

example, the plaintiffs would have to allege that they offered

their work for sale. See Grosso, 383 F.3d at 967. But such an

allegation would be contrary to the challenged complaint,

which states that they made an offer only of partnership in the

“production, broadcast and distribution of the Concept.” We

are therefore satisfied that the district court did not abuse its

discretion by denying the plaintiffs leave to amend.

1Amendments to Rule 15(a) took effect on December 1, 2009, and

apply to pending proceedings “insofar as just and practicable.” Order,

2009 U.S. Order 17 (Mar. 26, 2009). Rule 15(a), as amended, provides

that a party’s right to amend as a matter of course terminates “21 days

after service of a responsive pleading or 21 days after service of a motion

under Rule 12(b), (e), or (f), whichever is earlier.” Fed. R. Civ. P.

15(a)(1)(B) (2010). Thus, under the amended rule, the plaintiffs’ right to

amend as a matter of course terminated in May 2007, before the district

court’s ruling on the defendants’ Rule 12(b)(6) motion. It matters not

which version of the rule we apply here, however, because the question

under both versions is ultimately the same: whether the district court

abused its discretion by denying leave to amend. 

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IV

For the foregoing reasons, the judgment of the district court

is

AFFIRMED.

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