P Stephen Lamont v. Time Warner Inc et al
Filing
39
MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: The Court GRANTS Defendant's Motion to Dismiss 16 . Given the fact that the statute of limitations has long since expired, it appears that there is no set of facts that plaintiff could allege to state a claim upon which relief could be granted. Accordingly, because the Court finds that leave to amend would be futile, dismissal is WITH PREJUDICE. ( MD JS-6. Case Terminated ) Court Reporter: Not Present. (gk)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-8030-CAS (VBKx)
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
Present: The Honorable
Date
December 11, 2012
CHRISTINA A. SNYDER
Catherine Jeang
Deputy Clerk
Not Present
Court Reporter / Recorder
N/A
Tape No.
Attorneys Present for Plaintiffs:
Attorneys Present for Defendants
Not Present
Not Present
Proceedings:
I.
(In Chambers:) DEFENDANT’S MOTION TO DISMISS (filed
October 15, 2012)
INTRODUCTION & BACKGROUND
The Court finds this motion appropriate for decision without oral argument. Fed.
R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing date of December 17, 2012, is
vacated, and the matter is hereby taken under submission.
On September 18, 2012, plaintiff P. Stephen Lamont, proceeding pro se, filed suit
against defendants Time Warner, Inc. (“Time Warner”) and Warner Brothers
Entertainment, Inc. (“Warner Brothers”), erroneously named as Warner Bros.
Entertainment Group. Dkt. No. 1. Plaintiff principally alleges that defendants
appropriated proprietary video streaming technology, in violation of multiple nondisclosure and confidentiality agreements that defendants entered into with non-party
Iviewit Holdings, Inc (“Iviewit”). Id.
Plaintiff alleges as follows. Plaintiff is the Chief Executive Officer and
“significant shareholder” of Iviewit Holdings, Inc., a Delaware corporation. Compl. ¶ 5.
Plaintiff himself is a resident of New York state. Id. ¶ 3. Late in 1998, three
inventors—none of whom were plaintiff—“designed” novel technologies for video
scaling and image overlay, which are useful for creating and streaming digital video. Id.
¶ 9, 13, 16.
Two years later, Iviewit entered into a series of confidentiality / non-disclosure
agreements (“NDAs”) with Warner Brothers regarding this technology. The first
agreement was entered into on August 14, 2000, signed by David Colter on behalf of
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
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Case No.
CV 12-8030-CAS (VBKx)
December 11, 2012
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
Warner Brothers, and contains a prohibition against the use of Iviewit’s proprietary
information without Iviewit’s written consent. Id. ¶ 10 (“Colter NDA”), Ex. A.
Thereafter, Iviewit shared the details of its technologies with Warner Brothers, and
Warner Brothers began to utilize these technologies in its multimedia lab in Glendale,
California. Id. ¶ 11. However, defendant failed to pay the royalties allegedly owed for
the use of U.S. Patent Nos. 09/630,939, 09/522,721, 09/587,734, 09/587,026, and
09/587,730, pursuant to a royalty schedule that plaintiff has set forth in the complaint. Id.
¶ 14.
On February 27 and August 14, 2001, Iviewit entered into two additional NDAs
with Warner Brothers regarding the use of Ivewit’s proprietary technology. Id. ¶¶ 17–19.
On January 14, 2002, Colter sent an email to other Warner Brothers employees (which
was then forwarded to an Iviewit employee), where he stated his belief that Warner
Brothers used some of Iviewit’s techniques for encoding video for internet streaming,
although he was unsure to what extent the techniques either came from or were available
within the public domain. See id. Ex. D. Thereafter, Warner Brothers and Time Warner
have “continuously” used Iviewit’s technologies in “direct violation” of the NDAs and
“strategic alliance contracts,” which had expired by the summer of 2001. Id. ¶¶ 20–22.1
On February 27, 2002, plaintiff, on behalf of Iviewit, sent an email to an employee
of Warner Brothers, John Calkins, demanding that Warner Brothers cease its purportedly
unauthorized use of Iviewit’s technology without paying the proper royalties. Id. Ex. E.
However, Warner Brothers failed to comply with plaintiff’s demands for royalties, and
Iviewit failed to press its claim further, due to a “power struggle” between plaintiff and
the Iviewit founder. Id. ¶¶ 32–33.
On April 1, 2011, the shareholders of Iviewit resolved that all NDAs and other
agreements entered into by Iviewit would be assigned to the capital shareholders of
Iviewit Holdings, Inc., including plaintiff. Id. ¶ 23. An assignment and assumption
agreement to this effect, pertaining to all the contracts at issue in this litigation, was
executed on April 29, 2011. Id. ¶ 24. These assignments were reaffirmed on August 10,
2012, by the Iviewit shareholders. Id. ¶ 25.
1
Plaintiff does not state in his complaint what the terms of the purported “strategic
alliance contracts” are, nor attach any such contract to his complaint.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
JS-6
Case No.
CV 12-8030-CAS (VBKx)
December 11, 2012
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
On August 10 and 13, 2012, plaintiff sent further cease and desist demands by
email to the General Counsel of Time Warner, advising him of the purported violations
the NDAs. Id. ¶ 34–35; Ex. F. Defendant failed to respond within twenty-one days, and
therefore plaintiff initiated the instant lawsuit. Plaintiff brings a single claim for breach
of contract. He seeks more than eleven years of unpaid royalties resulting from
defendants’ allegedly unauthorized use of Iviewit’s technologies. Id. ¶¶ 38–40.
This is not plaintiff’s first suit regarding the alleged theft of Iviewit technologies.
Plaintiff first filed suit against hundreds of defendants in the United States District Court
for the Southern District of New York—including various law firms, the Florida and New
York state bars, and a host of state court judges—alleging numerous claims for relief
under state and federal law related to a vast conspiracy to steal Iviewit’s proprietary
technologies “valued at over several trillion dollars.” Bernstein v. State of New York,
591 F. Supp. 2d 448, 469 (S.D.N.Y. 2008); Defs.’ Request for Judicial Notice (“RJN”)
Ex. 1 (“SDNY Compl.” ¶ 3). Judge Scheindlin dismissed every federal claim asserted in
that complaint without leave to amend, finding “no reason to believe [plaintiffs] will ever
be able” to state a “legally cognizable federal claim.” Bernstein, 591 F. Supp. 2d at 470.
She declined to exercise supplemental jurisdiction over plaintiff’s state law claims, and
the Second Circuit affirmed the dismissal of the federal claims on appeal, finding that
plaintiffs’ appeal lacked “any basis in law or fact.” Berstein v. App. Div. 1st Dep’t
Disciplinary Comm. No. 08-cv-4873, slip op. at 1 (2d Cir. Jan. 5, 2010). Neither Time
Warner nor Warner Brothers was a party to the Bernstein litigation, although Warner
Brothers was named as one of many recipients of Iviewit technology as part of plaintiff’s
RICO claim. SDNY Compl. ¶ 732C.
Plaintiff then filed a second suit in the United States District Court for the District
of Columbia. Defs.’ RJN Ex. 2 (“DDC Compl.”). This complaint contained many of the
same factual allegations as the SDNY complaint, asserted various claims under state and
federal law, and named Time Warner as an additional defendant. In 2012, Judge
Rothstein found plaintiff’s § 1983 claims barred by the res judicata effect of the previous
litigation, both on claim and issue preclusion grounds. Judge Rothstein declined to
exercise supplemental jurisdiction over plaintiff’s state law claims pursuant to 28 U.S.C.
§ 1367(c)(3). See Defs.’ RJN Ex. 4 (Lamont v. Proskauer Rose, LLP, et al., CV No. 110949 (D.D.C. Oct. 8, 2012)).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
JS-6
Case No.
CV 12-8030-CAS (VBKx)
December 11, 2012
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
On October 19, 2012, this Court denied plaintiff’s motion for an order enjoining
defendants from continuing to use plaintiff’s video and imaging technologies without
permission. Dkt. No. 24. The Court found that plaintiff had not demonstrated a
likelihood of success on the merits nor that irreparable injury was likely to result in the
absence of injunctive relief.
On October 15, 2012, defendants filed a motion to dismiss pursuant to Federal
Rule of Civil Procedure 12(b)(1) and 12(b)(6). Dkt. No. 16. Plaintiff opposed the
motion on October 29, 2012. Dkt. No. 30. Defendants filed a reply on November 5,
2012. Dkt. No. 25. On November 29, 2012, having considered the parties’ stipulation,
this Court ordered defendant Time Warner, Inc. dismissed from this action with
prejudice. Dkt. No. 34. After considering the parties’ arguments, the Court finds and
concludes as follows.
II.
LEGAL STANDARD
A.
Federal Rule of Civil Procedure 12(b)(6)
A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a
complaint. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not
need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his
‘entitlement to relief’ requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). “[F]actual allegations must be enough to raise a
right to relief above the speculative level.” Id. Although a court must liberally construe
the complaint of a pro se plaintiff, a complaint must still allege sufficient facts to state the
elements of a claim upon which relief can be granted. See Davis v. Silva, 511 F.3d 1005,
1009 (9th Cir. 2008).
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Parks Sch. of Bus., Inc. v. Symington, 51
F.3d 1480, 1484 (9th Cir. 1995). However, “[i]n keeping with these principles a court
considering a motion to dismiss can choose to begin by identifying pleadings that,
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
JS-6
Case No.
CV 12-8030-CAS (VBKx)
December 11, 2012
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
because they are no more than conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009); Moss v.
United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a complaint to
survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable
inferences from that content, must be plausibly suggestive of a claim entitling the
plaintiff to relief.”) (citing Twombly and Iqbal); Sprewell, 266 F.3d at 988; W. Mining
Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Ultimately, “[d]etermining whether a
complaint states a plausible claim for relief will . . . be a context-specific task that
requires the reviewing court to draw on its judicial experience and common sense.”
Iqbal, 556 U.S. at 663–64.
For all of these reasons, it is only under extraordinary circumstances that dismissal
is proper under Rule 12(b)(6). United States v. City of Redwood City, 640 F.2d 963, 966
(9th Cir. 1981).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th
Cir. 2000).
III.
ANALYSIS
A.
Subject Matter Jurisdiction
In denying plaintiff’s motion for a preliminary injunction, the Court found that it
likely lacked subject matter jurisdiction over the instant case. Plaintiff is a citizen of New
York, like Time Warner, for that is where Time Warner’s officers direct and control the
corporation’s activities. See Def.’s Request for Judicial Notice (“RJN”), Ex. D (Annual
Report Form 10-K for Time Warner, Inc.); Hertz Corp. v. Friend, 130 S. Ct. 1181, 1192
(2010) (holding that the “nerve center” test determines a corporation’s citizenship).
However, because Time Warner is no longer a party to this litigation, the Court finds that
it now has subject matter jurisdiction over this action on the basis of complete diversity
of citizenship, 28 U.S.C. § 1332; the only remaining defendant is a citizen of California.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 12-8030-CAS (VBKx)
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
B.
Date
JS-6
December 11, 2012
Statute of Limitations
Defendant argues that plaintiff’s single breach of contract claim is barred by the
statute of limitations. The Court agrees. Both parties acknowledge that actions for
breach of a written contract are subject to a four-year statute of limitations under
California law. Cal. Civ. P. Code § 337(1). This limitations period begins to accrue
“upon the occurrence of the last element essential to the cause of action.” Neel v.
Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal. 3d 176, 187 (Cal. 1971); see Reichert
v. General Ins. Co., 68 Cal. 2d 822, 831 (1968) (“a cause of action for breach of contract
accrues at the time of the breach”). A claim for breach of contract requires: (1) the
existence of a valid contract; (2) plaintiff’s performance thereunder; (3) defendant’s
breach; and (4) resulting damages to the plaintiff. Oasis W. Realty, LLC v. Goldman, 51
Cal. 4th 811, 821 (2011). Plaintiff here complains that defendant first breached the
NDAs in the summer of 2001, when defendant began “to conduct the unauthorized use of
Technologies in direct violation of strategic alliance contracts and NDAs.” Compl. ¶ 20;
see also Compl. ¶ 37 (“Plaintiff has been caused to suffer more than eleven years of
unpaid royalties. . . ”). As such, the statute of limitations on plaintiff’s claim for breach
of contract began to run in 2001 and expired in 2005, far before plaintiff initiated the
instant suit. Even if plaintiff (or Iviewit) did not initially have knowledge of this alleged
breach, at the very latest plaintiff’s claim for breach of contract accrued in February
2002, when plaintiff first threatened suit for breach of contract against Warner Brothers.
See Compl. Ex. E, Letter from Plaintiff to Warner Brothers. Plaintiff’s claim is thus
time-barred.
Plaintiff’s arguments in opposition are without merit. First, plaintiff’s assertion
that he had no authority to bring this action until 2010, Compl. ¶ 32, is irrelevant—if
plaintiff’s breach of contract claim belonged to Iviewit until recently and Iviewit failed to
bring such a claim, the assignment of the claim to plaintiff in no way reinvigorates what
is otherwise a time-barred claim. Second, plaintiff’s argument that a “continuing
violation” theory saves his claim from a statute of limitations bar is unavailing. See
Opp’n at 17–22. Only when there is a continuing wrong with “periodic new injury to the
plaintiff” may a “continuing accrual” theory apply, such that more than one breach of the
contract may be at issue. See Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co.,
116 Cal. App. 4th 1375, 1388 (2004); see also id. at 1389 (the “context of
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
JS-6
Case No.
CV 12-8030-CAS (VBKx)
December 11, 2012
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
continuing—that is, periodic— accrual for periodic breach is to be distinguished from
that of a single breach or other wrong which has continuing impact. . . ”). A continuing
accrual theory is appropriate in a limited category of cases, including installment
contracts, leases with periodic rental payments, and other types of periodic contracts that
involve no fixed or total payment amount. Id. at 1388. According to plaintiff, damages
from defendants’ alleged breach began accruing over eleven years ago and have
continued accruing up to and including the present. Plaintiff’s theory of breach is
precisely the type of “single breach. . . which has continuing impact” that gives rise to but
a single claim for breach of contract. Id. at 1389. The only contracts that plaintiff has
placed at issue here are non-disclosure agreements, and therefore any breach of contract
claim accrued from the time defendants allegedly misappropriated Iviewit’s technologies.
Accordingly, plaintiff’s claim is clearly barred by the statute of limitations.2
C.
Issue Preclusion
The Court finds that plaintiff’s claim is also barred by the preclusive effect of the
New York federal judgment.3 A federal court sitting in diversity applies the res judicata
law of the state in which it sits, “even where the prior action was in federal court and
involved federal questions.” Costantini v. Trans World Airlines, 681 F.2d 1199, 1201
(9th Cir. 1982). “California follows the rule that the preclusive effect of a prior judgment
of a federal court is determined by federal law.” Butcher v. Truck Ins. Exch., 77 Cal.
App. 4th 1442, 1452 (2000). Issue preclusion under federal common law bars
“successive litigation of an issue of fact or law actually litigated and resolved in a valid
court determination essential to the prior judgment, even if the issue recurs in the context
2
Plaintiff’s other argument—that his claims that “accrued” starting in September
2008 are still timely—is also without merit. See Opp’n at 21. Once a claim has accrued
or begins to accrue, it cannot be parsed into claims that are and are not time–barred.
Plaintiff alleges a single claim for breach of contract that began accruing in 2001, when
defendant allegedly breached the NDAs at issue. That plaintiff continues to allegedly
suffer damages up to and including the present time is irrelevant.
3
This Court noted previously in denying plaintiff’s motion for a preliminary
injunction that claim preclusion likely did not bar plaintiff’s claim; the Court did not
consider the effect of issue preclusion in that order.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
JS-6
Case No.
CV 12-8030-CAS (VBKx)
December 11, 2012
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 892 (2008) (quotation omitted).
To apply issue preclusion, the following elements are required: (1) a full and fair
opportunity to litigate the issue in the prior action; (2) the issue was actually litigated; (3)
a final judgment resulted; and (4) the person against who preclusion is asserted was a
party to the prior action. In re Palmer, 207 F.3d 566, 568 (9th Cir. 2000). Relevant here
is the doctrine of defensive nonmutual issue preclusion, which “involves a defendant
attempting to preclude a plaintiff from relitigating an issue that the plaintiff previously
litigated unsuccessfully against a different party.” State of Idaho Potato Comm’n v. G &
T Terminal Packaging, Inc., 425 F.3d 708, 713 n. 3 (9th Cir. 2005).
In deciding the merits of plaintiff’s RICO claim in the New York action, Judge
Scheindlin found that “the injury underlying [plaintiffs’] RICO claims is ‘the theft of IP
by the enterprise and its agents,” which “happened well before 2003.” Bernstein, 591 F.
Supp. 2d at 468. The “theft” that Judge Scheindlin refers to is the theft allegedly
committed by Warner Brothers, among others, in violation of various NDA agreements
entered into with Iviewit. This is the same “theft” that plaintiff complains about here,
now stylized as a breach of contract claim. Compare S.D.N.Y. Compl. ¶¶ 456 (“WB
[has] already begun to use the Iviewit Companies processes under NDA. . .”), 732C with
Compl. ¶ 11, 15, 20, 22. Applying the four-year statute of limitations for RICO claims,
Judge Scheindlin concluded that the plaintiffs’ RICO claim was time-barred. Because the
same alleged conduct involving Warner Brothers gives rise to both the RICO claim in the
New York action and plaintiff’s breach of contract claim in this action, Judge
Scheindlin’s conclusion precludes plaintiff from relitigating the issue of the timeliness of
his breach of contract claim in this action. Bernstein, 591 F. Supp. 2d at 468. Stated
otherwise, Judge Scheindlin’s finding that the “theft of IP” by Warner Brothers occurred
“well before 2003,” is not subject to relitigation here, given the previous final judgment
on the merits against plaintiff.4
4
In addition, the Court notes that there are serious questions as to plaintiff’s
standing to assert the rights of Iviewit under the various NDAs based on a purported
“assignment” of all such rights under the NDAs to plaintiff. Plaintiff himself was not a
signatory to the NDAs, and his sole claim of right is based on an unverified corporate
resolution. See Opp’n Ex. A. The Court declines to reach this issue, however, given the
Court’s findings herein.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 12-8030-CAS (VBKx)
Title
P. STEPHEN LAMONT V. TIME WARNER, INC., ET AL.
IV.
Date
JS-6
December 11, 2012
CONCLUSION
In accordance with the foregoing, the Court GRANTS defendant’s motion to
dismiss. Given the fact that the statute of limitations has long since expired, it appears
that there is no set of facts that plaintiff could allege to state a claim upon which relief
could be granted. Accordingly, because the Court finds that leave to amend would be
futile, dismissal is WITH PREJUDICE. See Schreiber Distrib. Co., 806 F.2d at 1401.
IT IS SO ORDERED.
00
Initials of Preparer
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:
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CMJ
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