Opinion ID: 489574
Heading Depth: 2
Heading Rank: 1

Heading: Summary Dismissal of Claims for Unfair Competition and Unjust Enrichment

Text: 7 The defendants' motion to dismiss the unfair competition and unjust enrichment claims was originally framed as a Rule 12(b)(6) motion to dismiss for failure to state a claim. After three days of trial, the district court denied this motion. Because it appears the district court considered matters outside the pleadings in ruling on the motion, the motion is treated as a motion for summary judgment under Rule 56. A grant of summary judgment is reviewed de novo. Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir.1986). In reviewing a summary judgment, we must view the evidence in the light most favorable to the non-moving party (Del Madera) and draw all possible inferences in its favor. Id. 8 The district court's interpretation of state law is reviewed de novo. In re McLinn, 739 F.2d 1395, 1397 (9th Cir.1984) (en banc).
9 Del Madera argues that its federal copyright claim did not preempt its state law claims for unfair competition and unjust enrichment, and that the district court erred in dismissing these claims on this ground. 10 Section 301 of the Copyright Act 1 establishes a two-part test for preemption. First, the Tentative Map and all work supporting it must come within the 'subject matter of copyright' as defined in Sections 102 and 103 of the Copyright Act. Second, the rights granted under state law must be 'equivalent to any of the exclusive rights within the general scope of copyright as specified by Section 106 [of the Copyright Act].'  Harper & Row, Publishers, Inc. v. Nation Enterprises, 501 F.Supp. 848, 850 (S.D.N.Y.1980), aff'd, 723 F.2d 195 (2d Cir.1983), rev'd on other grounds, 471 U.S. 539, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). 11
12 Del Madera claims that the defendants misappropriated (1) the Tentative Map itself, (2) supporting documents, and (3) time and effort Del Madera spent in creating the map and supporting documents and in seeking approval of the subdivision. The Tentative Map itself falls within the category of pictorial, graphic, and sculptural works. 2 See United States v. Hamilton, 583 F.2d 448 (9th Cir.1978) (maps fall within the subject matter of copyright). Supporting documents such as the vegetation plan and the covenants, conditions and restrictions are copyrightable subject matter under section 102 (maps and literary works). 3 13 Effort expended to create the Tentative Map and supporting documents is effort expended to create tangible works of authorship. As such, this effort is within the scope of copyright protection. See Mayer v. Josiah Wedgwood & Sons, Ltd., 601 F.Supp. 1523, 1535 (S.D.N.Y.1985) (misappropriation of author's talent and effort in creating a work is precisely the type of misconduct the copyright laws are designed to guard against). Effort expended to obtain subdivision approval, however, is not effort expended to create a tangible work of authorship. As such, it is not copyrightable subject matter, and it is not subject to preemption under the Copyright Act. 4 14
15 To satisfy the equivalent rights part of the preemption test, Del Madera's unfair competition and unjust enrichment claims which are predicated upon the defendants' alleged misappropriation of the Tentative Map and supporting documents must be equivalent to rights within the general scope of copyright as specified by section 106 of the Copyright Act. Section 106 provides a copyright owner with the exclusive rights of reproduction, preparation of derivative works, distribution, and display. 17 U.S.C. Sec. 106. To survive preemption, the state cause of action must protect rights which are qualitatively different from the copyright rights. Harper & Row, 501 F.Supp. at 852. The state claim must have an extra element which changes the nature of the action. Mayer, 601 F.Supp. at 1535. 16
17 Del Madera's unfair competition claim, as it pertains to the alleged misappropriation of time and effort in creating the Tentative Map and supporting documents, is based upon an alleged breach of fiduciary duty by Martha McCart. Originally, the Del Madera joint venture consisted of Cahn, Rupp, and McCart Associates (Jim Lombard and Martha McCart). McCart Associates later withdrew from the Del Madera joint venture. Martha McCart was then hired by defendant Bank of the Orient to provide services in the development of the Tiburon property. Del Madera argues that when McCart provided services to the defendants which enabled them to develop the property using documents and information she acquired while a joint venturer in the Del Madera joint venture, she breached her fiduciary duty to Del Madera, a breach which the defendants allegedly induced. 18 This argument, however, does not add any extra element which changes the nature of the action. The argument is constructed upon the premise that the documents and information McCart furnished to the defendants belonged to Del Madera and were misappropriated by the defendants. Del Madera's ownership of this material, and the alleged misappropriation by the defendants, are part and parcel of the copyright claim. Thus, Del Madera's unfair competition claim for misappropriation of its time and effort expended in producing the Tentative map and supporting documents is preempted. 19
20 The foundation of Del Madera's unjust enrichment claim is its contention that the defendants violated an implied promise, based on the parties' relationship, not to use the Tentative Map and supporting documents. But an implied promise not to use or copy materials within the subject matter of copyright is equivalent to the protection provided by section 106 of the Copyright Act. Therefore, this portion of Del Madera's unjust enrichment claim is also preempted.
21 We now consider the district court's dismissal of the portion of Del Madera's state claims for unfair competition and unjust richment pertaining to the alleged misappropriation of time and effort spent in obtaining approval of the subdivision. In its order dismissing these claims, the district court concluded: The misappropriation action will not lie here. Not necessarily because it's preempted but because it's improper on its own terms. (Reporter's Transcript at 5-34.) We agree. 22
23 Del Madera's unfair competition claim alleging misappropriation of time and effort expended to obtain approval of the subdivision is predicated upon an alleged breach of a fiduciary duty. Martha McCart was a member of McCart Associates which was formerly part of the Del Madera joint venture. Del Madera contends that when the defendants obtained from McCart documents and information she acquired while McCart Associates was a joint venturer in the Del Madera joint venture, they breached a fiduciary duty owed to Del Madera. 24 Defendants, however, were never in a fiduciary relationship with Del Madera. McCart may have been, but she is not a party to this action. Since the defendants were not in a fiduciary relationship with Del Madera, they did not breach a fiduciary duty owed to Del Madera. 25
26 Del Madera contends that the defendants received the benefit of Del Madera's services rendered in the pursuit of subdivision approval, and the defendants should pay for these services. 27 Under California law, to entitle a plaintiff to recover for services performed, the circumstances must be such as to warrant the inference that it was the expectation of both parties during the time the services were rendered that the compensation should be made. 1 B. Witkin, Summary of California Law, Contracts Sec. 50, at 60-61 (8th ed. 1973 & Supp.1984) (emphasis in original). There was no relationship between Del Madera and the defendants to justify such an expectation. Del Madera's reliance upon Kossian v. American National Insurance Co., 254 Cal.App.2d 647, 62 Cal.Rptr. 225 (1967) is misplaced. In Kossian, the defendant had received the benefit of the plaintiff's labor in removing debris from fire-damaged property. Although the plaintiff had removed the debris, the defendant recovered part of this cost of removal from an insurance company. The California Court of Appeal directed the trial court to determine how much money the defendant had recovered from the insurance company for work performed by the plaintiff and to remit that portion of the recovery to the plaintiff. There was no preexisting relationship between the plaintiff and the defendant. The court mentioned unjust enrichment as a basis for compensating the plaintiff, but the decision was predicated upon an implied-in-law obligation imposed because good conscience dictates that under the circumstances the person benefited should make reimbursement. 254 Cal.App.2d at 650, 62 Cal.Rptr. at 227. We agree with the trial court that the decision in Kossian is nothing more or less, when you read the case, than the court applying equity under the most unusual circumstances. (Reporter's Transcript 4-35).