Court Opinion

ID: 3030874
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:45:01.648596+00
Date Added: 2024-06-11T09:33:50.608304
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

JEFF GROSSO,                            
                 Plaintiff-Appellant,         No. 01-57255
                 v.                             D.C. No.
MIRAMAX FILM CORP., a New York              CV-99-10939-ABC
Corporation; MIRAMAX BOOKS;                     ORDER
SPANKY PICTURES, a New York                  AMENDING
Corporation; DAVID LEVIEN, an                OPINION AND
individual; BRIAN KOPPELMAN, an                DENYING
individual; TED DEMME, an                   REHEARING AND
individual; JOEL STILLERMAN, an                AMENDED
individual,                                     OPINION
              Defendants-Appellees.
                                        
        Appeal from the United States District Court
           for the Central District of California
        Audrey B. Collins, District Judge, Presiding

                   Argued and Submitted
            April 7, 2003—Pasadena, California

                  Filed September 8, 2004
                  Amended March 15, 2005

        Before: Mary M. Schroeder, Chief Judge,
 David R. Thompson, and Susan P. Graber, Circuit Judges.

               Opinion by Chief Judge Schroeder

                             3245
               GROSSO v. MIRAMAX FILM CORP.           3247

                       COUNSEL

John A. Marder, Steven J. Renick, and Sylvia Havens, Man-
ning & Marder, Kass, Ellrod, Ramirez, Los Angeles, Califor-
nia, for the plaintiff-appellant.

Richard L. Charnley, Nelson, Thompson, Pegue & Thornton,
Santa Monica, California, for the defendants-appellees.
3248            GROSSO v. MIRAMAX FILM CORP.
                          ORDER

  The opinion is amended to add a new penultimate para-
graph as follows:

    We express no opinion on the question whether the
    facts adduced during the summary judgment pro-
    ceedings on Grosso’s copyright claim can support
    the Desny claim set forth in Grosso’s complaint. Our
    decision is compelled by the procedural posture of
    the Desny claim. Because the district court granted
    Miramax’ motion to dismiss under Rule 12(b)(6),
    our inquiry begins and ends with Grosso’s First
    Amended Complaint. See Schneider v. Cal. Dep’t of
    Corr., 151 F.3d 1194, 1197 n.1 (9th Cir. 1998) (stat-
    ing that “[t]he focus of any Rule 12(b)(6) dismissal
    — both in the trial court and on appeal — is the
    complaint”). Further, we must take all factual allega-
    tions as true and must construe them in the light
    most favorable to the non-moving party. Allied Sig-
    nal, Inc. v. City of Phoenix, 182 F.3d 692, 695 (9th
    Cir. 1999). With those limitations on our review in
    mind, we hold only that the First Amended Com-
    plaint states a Desny claim. We need not and do not
    decide whether the summary judgment record or any
    future record, yet to be developed, supports that
    claim.

  The panel has voted to deny the petition for panel rehearing
and petition for rehearing en banc.

   The full court was advised of the petition for rehearing en
banc, and no judge has requested a vote on whether to rehear
the matter en banc. Fed. R. App. P.

  The petition for panel rehearing and the petition for rehear-
ing en banc are DENIED.
                GROSSO v. MIRAMAX FILM CORP.               3249
  No future petitions for panel or en banc rehearing will be
entertained.

                          OPINION

SCHROEDER, Chief Judge:

   Jeff Grosso appeals the district court’s judgment in favor of
the defendants, Miramax Film Corp. and others (“Miramax”),
in his action alleging breach of contract under California law
and violation of his copyright in his screenplay The Shell
Game. Grosso claims that Miramax stole the ideas and themes
of his work when they made the movie Rounders. In this
appeal we consider two separate district court orders: one
granting summary judgment on Grosso’s copyright claim and
one dismissing his state law claim as preempted by the Copy-
right Act. We affirm the district court’s grant of summary
judgment in favor of Miramax on the copyright claim, but we
reverse its dismissal of the state law claim.

   [1] Summary judgment on Grosso’s copyright claim was
proper. As the district court carefully and correctly explained,
the two works are not substantially similar. The works do not
have substantially similar genre, mood, and pace; their
themes, settings, and characters are different; their plots and
sequences of events are not parallel. Both works have poker
settings but the only similarities in dialogue between the two
works come from the use of common, unprotectable poker
jargon.

   Grosso’s state law claim is for breach of implied contract.
It seeks compensation not for the actual written script, but for
the idea allegedly embodied in the script and shared with
Miramax. See Desny v. Wilder, 299 P.2d at 257 (Cal. 1956).
We conclude that the district court erred in holding the claim
preempted by the Copyright Act and in granting Miramax’s
3250             GROSSO v. MIRAMAX FILM CORP.
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6).

   [2] In Desny, 299 P.2d at 257, the California Supreme
Court explained that where an idea is furnished by one party
to another, a contract sometimes may be implied even in the
absence of an express promise to pay. The Court held that a
contract exists where “the circumstances preceding and
attending disclosure, together with the conduct of the offeree
acting with knowledge of the circumstances, show a promise
[to pay] of the type usually referred to as ‘implied’ or
‘implied in fact.’ ” Id. at 270. The Desny rule is justified on
the theory that the bargain is not for the idea itself, but for the
services of conveying that idea. See Donahue v. Ziv Televi-
sion Programs, Inc., 54 Cal. Rptr. 130, 140, (Ct. App. 1966).

   [3] To establish a Desny claim for breach of implied-in-fact
contract, the plaintiff must show that the plaintiff prepared the
work, 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. See Faris v. Enberg, 158 Cal. Rptr. 704, 709 (Ct.
App. 1979). Grosso’s complaint mirrors the requirements of
Desny and states that “the idea was submitted by Plaintiff to
Defendants with the understanding and expectation, fully and
clearly understood by Defendants that Plaintiffs would be rea-
sonably compensated for its use by Defendants.” We con-
clude that the complaint stated a Desny claim.

   With respect to preemption, the Copyright Act, 17 U.S.C.
§ 301, establishes a two-part test. Claims under state law are
preempted where: (1) the work at issue comes within the sub-
ject matter of copyright, and (2) the state law rights are
“equivalent to any of the exclusive rights within the general
scope of copyright.” Del Madera Props. v. Rhodes & Gard-
ner, Inc., 820 F.2d 973, 976 (9th Cir. 1987) (internal quota-
                GROSSO v. MIRAMAX FILM CORP.                3251
tion marks omitted) overruled on other grounds by Fogerty v.
Fantasy, Inc., 510 U.S. 517 (1994); see also 17 U.S.C. § 301.

   [4] The dispositive preemption issue in this case is whether
the rights protected by a Desny claim are equivalent to the
rights protected by copyright. To survive preemption, the state
cause of action must protect rights that are qualitatively dif-
ferent from the rights protected by copyright: the complaint
must allege an “extra element” that changes the nature of the
action. Del Madera, 820 F.2d at 977. Our prior decision in
Landsberg v. Scrabble Crossword Game Players, Inc., 802
F.2d 1193, 1196-97 (9th Cir. 1986), supports treating the
implied promise to pay required by Desny as an “extra ele-
ment” for preemption purposes. In Landsberg, the defendants
used the plaintiff’s idea for a Scrabble strategy book without
paying the expected compensation, and we applied California
law to affirm a judgment of liability on a Desny claim. We
explained that:

    The contract claim turns not upon the existence of a
    [copyright] . . . but upon the implied promise to pay
    the reasonable value of the material disclosed.

Id. at 1196.

   [5] In Del Madera we held that a claim for unjust enrich-
ment was equivalent to a claim for copyright infringement,
and thus preempted, because the claim lacked an extra
element—the bilateral expectation of compensation. Here,
Grosso has alleged that the extra element is present. There-
fore, his claim for breach of an implied-in-fact contract is not
preempted by the Copyright Act, because it alleges an extra
element that transforms the action from one arising under the
ambit of the federal statute to one sounding in contract. See
Del Madera, 820 F.2d at 977. Grosso’s complaint alleged cir-
cumstances that, if true, would sustain an action under Desny
that is not preempted.
3252            GROSSO v. MIRAMAX FILM CORP.
   We express no opinion on the question whether the facts
adduced during the summary judgment proceedings on Gros-
so’s copyright claim can support the Desny claim set forth in
Grosso’s complaint. Our decision is compelled by the proce-
dural posture of the Desny claim. Because the district court
granted Miramax’ motion to dismiss under Rule 12(b)(6), our
inquiry begins and ends with Grosso’s First Amended Com-
plaint. See Schneider v. Cal. Dep’t of Corr., 151 F.3d 1194,
1197 n.1 (9th Cir. 1998) (stating that “[t]he focus of any Rule
12(b)(6) dismissal — both in the trial court and on appeal —
is the complaint”). Further, we must take all factual allega-
tions as true and must construe them in the light most favor-
able to the non-moving party. Allied Signal, Inc. v. City of
Phoenix, 182 F.3d 692, 695 (9th Cir. 1999). With those limi-
tations on our review in mind, we hold only that the First
Amended Complaint states a Desny claim. We need not and
do not decide whether the summary judgment record or any
future record, yet to be developed, supports that claim.

   [6] The summary judgment of the district court on the
copyright claim is affirmed. The judgment of the district court
dismissing the state law claim is reversed and remanded for
further proceedings.

  AFFIRMED IN PART AND REVERSED AND
REMANDED IN PART. Each party will bear its own costs.