Rupa Marya v. Warner Chappell Music Inc

Filing 52

NOTICE OF MOTION AND MOTION to Dismiss Second Amended Consolidated Class Action Complaint and/or Motion to Strike Plaintiffs' Proposed Class Definition filed by Defendants Warner Chappell Music Inc. Motion set for hearing on 9/30/2013 at 09:30 AM before Judge George H. King. (Klaus, Kelly)

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1 GLENN D. POMERANTZ (State Bar No. 112503) gl~nn.p9merantz@.mto.com 2 KELLY M. KLAUS (State Bar No. 161091) kelly.klaus@mto.com 3 ADAM I. IV\.PLAN (State Bar No. 268182) adam.k~Qlan@.mto .com 4 MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue 5 Thirty-Fifth Floor Los Angeles, California 90071-1560 6 Telephone: (213) 683-9100 Facstmile: (213) 687-3702 7 Attorneys for Defendants 8 Wamer/ChaJ?pell Music, Inc. and Summy-Bircnard, Inc. 9 10 11 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION 12 RUPA MARYA, eta/. 13 14 15 16 17 18 Plaintiffs, • DEFENDANTS' NOTICE OF MOTION AND MOTION TO v. DISMISS SECOND AMENDED WARNER/CHAPPELL MUSIC, INC., CONSOLIDATED CLASS ACTION , COMPLAINT AND/OR MOTION TO STRIKE PLAINTIFFS' PROPOSED Defendant. CLASS DEFINITION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF KELLY M. KLAUS 19 Date: September 30, 2013 Time: 9:30a.m. Courtroom: 650 (Roybal) Judge: Hon. George H. King, Chief Judge 20 21 22 Lead Case No. CV 13-04460-GHK (MRWx) ------------------------~ MAJAR PRODUCTIONS LLC, On 23 Behalf of Itself and All Others Similarly Situated, 24 Plaintiff, 25 Case No. CV 13-05164-GJK (MRWx) 26 v. WARNER/CHAPPELL MUSIC, INC., 27 and SUMMY-BIRCHARD, INC., 28 Defendants. NOTICE OF MOTION AND MOTION TO DISMISS 1 TO ALL PARTIES AND THEm ATTORNEYS OF RECORD: 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 PLEASE TAKE NOTICE that on September 30, 2013, at 9:30a.m., or as soon thereafter as this matter may be heard before the Honorable George H. King, Chief Judge, in Courtroom 650 of the Edward R. Roybal Federal Building, located at 255 E. Temple Street, Los Angeles, California 90012, Defendants Warner/Chappell Music, Inc. and Summy-Birchard, Inc. ("Summy-Birchard," and jointly with Warner/Chappell Music, Inc., "Warner/Chappell") will and hereby do move this Court, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for an order dismissing the third, fourth, fifth, sixth and seventh claims for relief in Plaintiffs' Second Amended Consolidated Class Action Complaint ("SAC"); dismissing the claims ofPlaintiffMajar Productions, LLC ("Majar") and Plaintiff Robert Siegel ("Siegel"); and dismissing Plaintiffs' proposed class definition to the extent that it exceeds three years prior to the first of the complaints filed in the these cases. With respect to the class period, if the Court determines that this issue should be raised by motion to strike, then Warner/Chappell moves in the alternative, pursuant to Rule 12(t), for an order striking the class period to the extent that it exceeds three years prior to the first of the complaints filed in these cases. 1 18 19 1 20 21 22 23 24 25 26 27 28 The accompanying Memorandum of Points and Authorities references the parties, causes of action, and paragraph numbers of the SAC. Plaintiffs have not yet filed the SAC because the parties' Stipulation and [Proposed] Order consolidating Case No. CV 13-04460-GHK. (MRWx) (Marya eta/. v. Warner/Chappell Music, Inc.) and Case No. CV 13-05164-GHK. (MRWx) (Majar v. Warner/Chappell Music, Inc. and Summy-Birchard, Inc.) remains pending as of the date of this submission. Plaintiffs' counsel has stated that, if this Court determines that the SAC should not be filed in accordance with the pending Stipulation, Plaintiffs do not object to this Motion serving as Warner/Chappell's response under Rule 12 to both the consolidated complaint in Marya eta/. and the complaint in Majar. Klaus Decl.1J3. A copy of the SAC is appended to the Memorandum of Points and Authorities as Exhibit A to the Klaus declaration, for the Court's convenience. If the Court does not approve the filing of the SAC, Warner/Chappell will file a supplemental ~1- NOTICE OF MOTION AND MOTION TO DISMISS 1 This Motion is made on the grounds that: 2 1. The Copyright Act, 17 U.S.C. § 30l(a), preempts Plaintiffs' third, 3 fourth, fifth, sixth and seventh claims for relief under state law; 4 2. Plaintiffs fail to plead their third and seventh claims for relief in a 5 manner sufficient to state a claim under Rules 8(a) and 9(b); 6 3. Plaintiffs' sixth claim for relief states a remedy, not a cause of action; 7 4. The only claims that remain for any Plaintiff or class member should be 8 limited to a three-year limitations period, rather than the four-year period Plaintiffs 9 plead in the SAC; and 10 5. All of the claims of Plaintiff Majar and Plaintiff Siegel fail to state 11 claims for relief and/or are barred by the applicable statutes of limitations. Since 12 these Plaintiffs have no remaining claims, the Court should dismiss them from the 13 case. 14 This Motion is made following the conference of counsel pursuant to Civil 15 L.R. 7-3 that took place on August 21, 2013, and subsequent email correspondence 16 between the parties. This Motion is based upon this Notice of Motion and Motion, 17 the accompanying Memorandum of Points and Authorities, all the pleadings and 18 documents on file herein, such other oral and documentary evidence as may be 19 presented at or before the time of the hearing on this Motion, and all facts of which 20 this Court may take judicial notice. 21 22 23 24 25 26 27 memorandum identifying the paragraphs of the Marya et al. consolidated complaint 28 and the Majar complaint that correspond with the citations in this Motion. -2- NOTICE OF MOTION AND MOTION TO DISMISS 1 DATED: August 30, 2013 MUNGER, TOLLES & OLSON LLP 2 3 4 By: Is/ Kelly M Klaus KELLY M. KLAUS 5 6 Attorneys for Defendants Warner/Chappell Music, Inc. and Summy-Birchard, Inc. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- NOTICE OF MOTION AND MOTION TO DISMISS TABLE OF CONTENTS Page IN'TRODUCTION .............................................................................................. 1 FACTUAL BACKGROUND ............................................................................ 2 ARGU'MENT ......................................................................................................5 A. Standards Governing This Motion .......................................................... 5 B. The Copyright Act Preempts All of Plaintiffs' State-Law Claims ......... 6 I. 2. Section 301(a) Preempts Each of Plaintiffs' State-Law Claims ............................................................................................ 7 3. C. The Copyright Act Broadly PreemQts State-Law Claims Concernmg_ the Sub~ct Matter of Copyright and the Copyright Dwner' s Exclusive Rights ........................................... 6 Plaintiffs Do Not Avoid§ 301(a) Because They Seek a Declaration of Copyright Invalidity ........................................... 12 Even lfNot Preempted, Several ofPlaintiffs' State-Law Claims Fail to Plead Claims for Relief............................................................. 13 1. 2. D. Plaintiffs' UCL and FAL Claims Do Not State Plausible Claims, Let Alone Meet the Requirements of Rule 9(b) ........... 13 Plaintiffs' Claim for Rescission Asserts a Remedy, Not a Cause of Action .......................................................................... 18 All of Plaintiffs' Claims That Are Outside the Three-Year Limitations Period Are Time-Barred ................................................... 18 I. 2. E. Three-Year Limitations Periods Govern Copyright, FAL and Money-Had-and-Received Claims ...................................... 18 Plaintiffs Majar and Siegel Have No Timely Claims, and Their Claims Should Be~Dismissed ........................................... 20 Preempted and Time-Barred Claims and Plaintiffs Should Be Dismissed, or Stricken, with Prejudice ................................................ 21 CONCLUSION ............................................................................................... 21 -1- MEMORANDUM OF POINTS AND AUTHORITIES TABLE OF AUTHORITIES 1 Page 2 3 FEDERAL CASES 4 Ashcroft v. Iqbal, 5 556 u.s. 662 (2009) ............................................................................. 2, 5, 15, 16 6 Barclays Capital Inc. v. TheFlyOnTheWall.Com, Inc., 650 F.3d 876 (2d Cir. 2011) ............................................................................... 12 7 8 Bell At/. Corp. v. Twombly, 550 u.s. 544 (2007) ................................................................................... 2, 5, 15 9 Blue Nile, Inc. v. Ice.com, Inc., 10 478 F. Supp. 2d 1240 (W.D. Wash. 2007) ......................................................... 12 11 Brooks v. Gomez, 12 2013 WL 496339 (N.D. Cal. Feb. 7, 2013) ....................................................... 16 13 Campbell v. PricewaterhouseCoopers, 14 2008 WL 3836972 (E.D. Cal. Aug. 14, 2008) ............................................. 19, 20 15 Del Madera Props. v. Rhodes & Gardner, Inc., 16 820 F .2d 973 (9th Cir. 1987) ............................................................................. 10 17 G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., . 958 F.2d 896 (9th Cir. 1992) ................................................................................ 6 18 19 Gardner v. Martino, 563 F .3d 981 (9th Cir. 2009) ............................................................................. 21 20 21 Hinton v. Pacific Enters., 5 F.3d 391 (9th Cir. 1993) ................................................................................. 21 22 Idem a v. Dreamworks, Inc., 23 162 F. Supp. 2d 1129 (C.D. Cal. 2001) ...................................................... passim 24 Jacobsen v. Katzer, 25 609 F. Supp. 2d 925 (N.D. Cal. 2009) ........................................................... 7, 11 26 Johnson v. Dist. 2 Marine Eng 'rs Beneficial Ass 'n, 27 857 F.2d 514 (9th Cir. 1988) ............................................................................. 21 28 21572203,1 -11- MEMORANDUM OF POINTS AND AUTHORITIES TABLE OF AUTHORITIES 1 Page 2 3 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) ................................................................. 6, 14, 15 4 14 Motown Record Corp. v. George A. Harmel & Co., 657 F. Supp. 1236 (C.D. Cal. 1987) .............................................................. 7, 11 15 16 MRC II Distrib. Co. v. Coelho, 2012 WL 3810257 (C.D. Cal. Sept. 4, 2012) .......................................................9 17 NBA v. Motorola, Inc., 18 105 F.3d 841 (2d Cir. 1997) ............................................................................... 12 19 Perfect 10, Inc. v. Cybernet Ventures, Inc., 20 167 F. Supp. 2d 1114 (C.D. Cal. 2001) ................................................................ 7 21 Pippen v. NBC Universal Media LLC, 2013 WL 4450590 (7th Cir. Aug. 21, 2013) ..................................................... 16 22 23 ProCD, Inc. v. Zeidenberg, 24 86 F.3d 1447 (7th Cir. 1996) ............................................................................. 12 25 Santa-Rosa v. Combo Records, 471 F.3d 224 (1st Cir. 2006) .............................................................................. 11 26 27 Selby v. New Line Cinema Corp., 96 F. Supp. 2d 1053 (C.D. Cal. 2000) ............................................................... 11 28 21572203.1 -111- MEMORANDUM OF POINTS AND AUTHORITIES TABLE OF AUTHORITIES 1 Page 2 3 Shabaz v. Polo Ralph Lauren Corp., 586 F. Supp. 2d 1205 (C.D. Cal. 2008) ....................................................... 19, 20 4 5 Stewart v. U.S. Bancorp, 297 F.3d 953 (9th Cir. 2002) ................................................................................7 6 7 8 9 10 11 Stewart v. Wachowski, 574 F. Supp. 2d 1074 (C.D. Cal. 2005) ............................................................. 18 Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064 (C.D. Cal. 2010) ............................................................. 18 TeraRecon, Inc. v. Favia, Inc., 2006 WL 1867734 (N.D. Cal. July 6, 2006) ............................................ 9, 10, 13 12 United Food & Commercial Workers Cent. Pa. & Reg'/ Health & Welfare 13 Fund v. Amgen, Inc., 400 F. App'x 255 (9th Cir. 2010) ...................................................................... 15 14 United States ex. rei. Berge v. Bd. ofTrs. ofthe Univ. ofAla., 15 104 F.3d 1453 (4th Cir. 1997) ........................................................................... 13 16 Vess v. Ciba-Geigy Corp. USA, 17 317 F.3d 1097 (9th Cir. 2003) ......................................................................... 2, 6 18 Welles v. Turner Entm 't Co., 19 503 F.3d 728 (9th Cir. 2007) ............................................................................. 18 20 Xerox Corp. v. Apple Computer, Inc., 21 734 F. Supp. 1542 (N.D. Cal. 1990) .................................................................. 10 22 Yumul v. Smart Balance, Inc., 2011 WL 1045555 (C.D. Cal. Mar. 14, 2011) ......................................................7 23 24 Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1117 (C.D. Cal. 201 0) ...................................................... passim 25 26 STATE CASES 27 Cel-Tech Commc 'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163 (1999) ....................................................................................... 14 28 21572203.1 -IV- MEMORANDUM OF POINTS AND AUTHORITIES TABLE OF AUTHORITIES 1 Page 2 3 Creditors Collection Serv. v. Castaldi, 38 Cal. App. 4th 1039 (1995) ............................................................................ 4 5 Kabehie v. Zoland, 102 Cal. App. 4th 513 (2002) .................................................................. 7, 11, 6 Kwikset Corp. v. Superior Court, 7 51 Cal. 4th 310 (2011) ....................................................................................... 8 Nakash v. Superior Court, 9 196 Cal. App. 3d 59 (1987) ............................................................................... 19 12 17 18 10 State Farm Fire & Cas. Co. v. Superior Court, 11 45 Cal. App. 4th 1093 (1996) ............................................................................ 14 12 13 14 15 FEDERAL STATUTES 17 u.s.c. § 102 ............................................................................................................8 17 u.s.c. § 103 ...........................................................................................................8 17 U.S.C. § 106 ................................................................................................ passim 16 17 17 U.S.C. § 301(a) ............................................................................................ passim 18 17 u.s.c. § 304(b) ................................................................................................ 3, 4 19 17 U.S.C. § 410(c) ................................................................................................... 17 20 17 u.s.c. § 507(b) .............................................................................................. 2, 18 21 Copyright Act of 1909, ch. 320, § 55, 35 Stat. 1075 .............................................. 17 22 23 STATE STATUTES 24 Cal. Bus. & Prof. Code § 17200 ......................................................................... 4, 13 25 Cal. Bus. & Prof. Code§ 17500 ..................................................................... 4, 5, 14 26 Cal. Civ. Proc. Code§ 338(a), (d) .......................................................................... 19 27 28 21572203.1 -v- MEMORANDUM OF POINTS AND AUTHORITIES TABLE OF AUTHORITIES 1 Page 2 3 FEDERAL RULES 4 Fed. R. Civ. P. 8(a) .............................................................................................. 5, 15 5 6 Fed. R. Civ. P. 9(b) ............................................................................................. passim Fed. R. Civ. P. 12(b)(6) ................................................................................................ 7 7 8 Fed. R. Civ. P. 12(-t) ............................................................................................ 19, 20 9 LEGISLATIVE MATERIALS 10 H.R. Rep. No. 94-1476 (1976), reprinted in 1976 U.S.C.C.A.N. 5659 ..................... 6 11 TREATISES 12 1 Melville B. Nimmer and David Nimmer, Nimmer on Copyright 13 § 1.01[B][2] (Matthew Bender, Rev. Ed.) ......................................................... 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21572203.1 -VI- MEMORANDUM OF POINTS AND AUTHORITIES 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Plaintiffs seek to declare invalid under federal copyright law Warner/Chappell 4 Music, Inc.'s and its subsidiary Summy-Birchard, Inc.'s copyright to the musical 5 work, Happy Birthday to You. Warner/Chappell will demonstrate at summary 6 judgment that Plaintiffs' declaratory relief claims fail under the federal copyright 7 laws. Plaintiffs, however, have gilded this exclusively federal dispute with multiple 8 state-law claims, through which Plaintiffs attempt to extend the purported class 9 period for damages and otherwise expand the scope of relief. Plaintiffs' efforts fail 10 at the pleading stage, and Warner/Chappell respectfully moves for dismissal on 11 several grounds. 12 First, the Copyright Act, 17 U.S.C. § 301(a), preempts all of Plaintiffs' state- 13 law claims. Section 301(a) is clear that where, as here, (i) a work is "fixed in a 14 tangible medium of expression" and "within the subject matter of copyright" and 15 (ii) the rights that a plaintiff asks the court to vindicate "are equivalent to any of the 16 exclusive rights within the general scope of copyright," then "all legal and equitable 17 rights ... are governed exclusively by" Title 17. Id. (emphasis added). Happy 18 Birthday to You has long been fixed and is plainly "within the subject matter of 19 copyright," which includes "musical works, including any accompanying words." 20 !d. § 102(a)(2). The crux of each of the state-law claims is that Plaintiffs have the 21 unfettered right to reproduce, distribute and publicly perform Happy Birthday to You 22 without infringing Warner/Chappell's copyright. The claims rest on rights that are 23 equivalent to those the Copyright Act protects, and therefore are preempted. See, 24 e.g., Kodadek v. MTV Networks, Inc., 152 F.3d 1209, 1213 (9th Cir. 1998) (state25 law claims "based solely on rights equivalent to those protected by the federal 26 copyright laws" are preempted). 27 Second, even if they are not preempted, several of Plaintiffs' claims 28 independently fail on the pleadings. Plaintiffs' claims for alleged fraudulent -1- MEMORANDUM OF POINTS AND AUTHORITIES 1 conduct, which purportedly violates the state Unfair Competition Law ("UCL") and 2 False Advertising Law ("F AL"), do not even plead plausible claims for relief, 3 Ashcroft v. Iqbal, 556 U.S. 662 (2009), Bell At!. Corp. v. Twombly, 550 U.S. 544 4 (2007), much less claims that meet the even more demanding standards that apply 5 under Fed. R. Civ. P. 9(b). While the SAC has numerous paragraphs, the fraud6 based claims boil down to (i) Plaintiffs' assertion that Warner/Chappell's 7 predecessor's registration of the copyright to Happy Birthday to You was invalid in 8 1935 because the song was not copyrightable and/or because of an alleged failure to 9 comply with registration formalities, SAC ~~ 16-11 0; and (ii) Plaintiffs' ipse dixit 10 that it is "deceptive" and "misleading" for Warner/Chappell to license a copyright 11 that Plaintiffs allege is invalid. /d.~~ 179, 200. The SAC is bereft of the "who, 12 what, when, where, and how" of any fraudulent conduct. Vess v. Ciba-Geigy Corp. 13 USA, 317 F.3d 1097, 1106 (9th Cir. 2003). And the SAC does not come close to 14 alleging any scheme of fraudulent conduct or false advertising. Plaintiffs also assert 15 a claim for rescission, SAC~~ 195-97, but rescission is a remedy, not a claim, under 16 California law. 17 Third, Plaintiffs' attempt to extend the class period from the three-year period 18 that applies under the Copyright Act, 17 U.S.C. § 507(b), to the four-year period 19 under Plaintiffs' UCL and contract claims, fails along with those state-law claims. 20 The Court should dismiss, or strike, Plaintiffs' request for a class period going back 21 four years before the filing of the first complaint. See SAC~ 136. And, because all 22 of the claims of Plaintiffs Majar and Siegel admittedly accrued more than three 23 years before each of them filed suit, id. ~~ 130, 134, the Court should dismiss both 24 of those Plaintiffs from this lawsuit. 25 II. FACTUAL BACKGROUND 26 The SAC alleges that Mildred Hill and Patty Hill authored the song Good 27 Morning to All and assigned their rights in it to Clayton F. Summy (''Summy") in 28 1893. SAC~~ 16-18. Summy registered the copyright to Good Morning to All that -2- MEMORANDUM OF POINTS AND AUTHORITIES 1 same year. !d.~~ 20-22. The song Happy Birthday to You is set to the melody of 2 Good Morning to All, but has different lyrics. !d.~~ 24-25. In 1935, Clayton F. 3 Summy Co. 2 filed Applications for Copyright for Republished Musical Composition 4 with new Copyright Matter, in particular, the lyrics to Happy Birthday to You, with 5 Reg. Nos. 51988 and 51990. !d.~~ 91-93, 96-98. Clayton F. Summy Co. renewed 6 Reg. Nos. 51988 and 51990 in 1962. /d. ~~ 107-09. Warner/Chappell obtained the 7 rights to the Happy Birthday to You copyright through a succession of assignments. 8 /d.~ 110. Pursuant to 17 U.S.C. § 304(b), Reg. Nos. 51988 and 51990 remain 9 subject to copyright protection. 10 Plaintiffs allege that they are filmmakers and musicians who have used Happy 11 Birthday to You in their recorded and live commercial productions. SAC~~ 10-13. 12 Plaintiffs allege that they and Warner/Chappell executed license agreements with 13 respect to Happy Birthday to You on various dates between 2009 and 2013. !d. 14 ~~ 122, 129, 133, 134. Plaintiffs purport to represent a class of all persons and 15 entities who have entered into licenses or paid license fees to Warner/Chappell for 16 Happy Birthday to You since June 18, 2009, i.e., four years before the complaints 17 that started these cases. !d. 18 ~ 136. The crux of all of Plaintiffs' claims is that the copyright registrations to 19 Happy Birthday to You, Reg. Nos. 51988 and 51990, were invalid at the time of 20 registration and/or renewal, and that Warner/Chappell has no copyright to Happy 21 Birthday to You. Plaintiffs allege that the work "consisted entirely of information 22 that was common property and contained no original authorship, except as to the 23 sheet music arrangement itself," id. ~~ 94, 99, 163, and that the copyrights and 24 25 2 The SAC alleges that John F. Sengstack incorporated Clayton F. Summy Co. in 26 1931, after buying a separate corporation of this name from Summy in 1930. SAC ~~ 67-68. These and other allegations regarding the provenance of Clayton F. 27 Summy Co., to which Summy allegedly assigned the copyright to Good Morning to 28 All, SAC~~ 27, 61, are not pertinent to this Motion. -3- MEMORANDUM OF POINTS AND AUTHORITIES 1 renewals lacked compliance with registration formalities, id. ~~ 97-98, 108-09, 164. 2 Plaintiffs also assert the legal conclusion that the registrations were invalid "because 3 [Clayton F. Summy Co.] did not have authorization from the author to publish that 4 work." Id. ~~ 95, 100. Plaintiffs do not allege any facts supporting the contention 5 that Clayton F. Summy Co. lacked such authorization from the author. 6 Plaintiffs seek a declaratory judgment declaring invalid Warner/Chappell's 7 federally registered copyright to Happy Birthday to You. !d.~ 167. Plaintiffs seek 8 further declaratory relief in the form of an injunction against Warner/Chappell's 9 assertion of copyright in the song and restitution and an accounting of licensing fees 10 paid for the song's use. !d. 11 ~ 172. The same allegations of the copyright.' s invalidity underlie Plaintiffs' five 12 additional claims for relief under California law. See id. ~~ 173-201. First, 13 Plaintiffs allege that Warner/Chappell has engaged in "deceptive and misleading" 14 conduct under the UCL, Cal. Bus. & Prof. Code § 17200, alleging that 15 Warner/Chappell's "exerting control over exclusive copyright ownership to Happy 16 Birthday to You to extract licensing fees is deceptive and misleading because neither 17 Warner/Chappell nor [Summy-Birchard] own the rights to Happy Birthday to You." 18 SAC~ 179. Second, Plaintiffs allege that Warner/Chappell has breached its 19 agreements with Plaintiffs by making "unlawful and false assertions" of owning the 20 copyright to Happy Birthday to You. !d. ~ 191. Third, Plaintiffs allege that 21 Warner/Chappell is liable "for money had and received." ld. ~ 194. Fourth, 22 Plaintiffs purport to assert a claim for "rescission for failure of consideration," on 23 the ground that the licenses "were worthless and ineffective, and do not constitute a 24 valid consideration." !d. ~ 196. Fifth, Plaintiffs allege that Warner/Chappell 25 circulated "untrue and misleading" statements about their ownership of Happy 26 Birthday to You, thereby violating the FAL, Cal. Bus. & Prof. Code § 17500. SAC 27 ~ 200. 28 -4- MEMORANDUM OF POINTS AND AUTHORITIES 1 Plaintiffs do not allege any facts substantiating the allegation of"deceptive 2 and misleading" conduct beyond the allegations that Warner/Chappell licensed a 3 purportedly invalid copyright. Nor do Plaintiffs plausibly allege facts showing their 4 purported reliance on Warner/Chappell's allegedly "misleading" conduct. In at least 5 one case-that of Plaintiff Rupa Marya- the SAC positively undermines any claim 6 of reliance. "Rupa," as the SAC refers to this Plaintiff, submitted a notice of 7 intention to take a mechanical license on June 17, 2013, id.1f126, and then promptly 8 filed suit three days later. Complaint, No. CV 13-04460-GHK (MRWx) (C.D. Cal. 9 June 20, 2013), ECF No. 1. The incredibly short time between requesting a license 10 and turning around and suing shows that Plaintiff Rupa took a license not in reliance 11 on anything Warner/Chappell said or did, but rather in order to manufacture a claim 12 ofliability. 13 III. ARGUMENT 14 A. 15 A plaintiff must plead each claim with sufficient specificity to "give·the 16 17 18 Standards Governing This Motion defendant fair notice of what the ... claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555 (citation and internal quotation marks omitted). To satisfy the minimum strictures of Rule 8(a), a plaintiff must plead "enough facts to 19 state a claim to relief that is plausible on its face." Jd. at 570. "Where a complaint 20 pleads facts that ~e merely consistent with a defendant's liability, it stops short of 21 22 23 24 25 26 27 the line between possibility and plausibility of entitlement to relief." Iqbal, 556 U.S. at 678 (citation and internal quotation marks omitted). "[C]ourts are not bound to accept as true a legal conclusion couched as a factual allegation." Twombly, 550 U.S. at 555 (citation and internal quotation marks omitted). Where, as here, a plaintiff alleges claims sounding in fraud, Rule 9(b) requires the plaintiff to ~'state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). "Rule 9(b) demands that the circumstances 28 -5- MEMORANDUM OF POINTS AND AUTHORITIES 1 constituting the alleged fraud be specific enough to give defendants notice of the 2 particular misconduct so that they can defend against the charge and not just deny 3 that they have done anything wrong." Kearns v. Ford Motor Co., 567 F.3d 1120, 4 1124 (9th Cir. 2009) (alteration, citation and internal quotation marks omitted). 5 "Averments of fraud must be accompanied by the who, what, when, where, and how 6 of the misconduct charged." Vess, 31 7 F.3d at 1106 (citation and internal quotation 7 marks omitted). 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. The Copyright Act Preempts All of Plaintiffs' State-Law Claims 1. The Copyright Act Broadly Preempts State-Law Claims Concerning the Subject Matter of Copyright and the Copyright Owner's Exclusive Rights "Copyright preemption is both explicit and broad ...." G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F .2d 896, 904 (9th Cir. 1992). Section 301(a) ofthe Copyright Act provides: On and aftet January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive nghts 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, whether created before or after that date and whether published or unpublished are governed exclusively by this title. Thereafter, no person IS entitled to any such right or equtvalent right in any such work under the common law or statutes of any State. 17 U.S.C. § 301(a). The legislative history underlying§ 301(a) states that the section "is intended to be stated in the clearest and most unequivocal way possible, so as to foreclose any conceivable misinterpretation of its unqualified intention that Congress shall act preemptively, and to avoid the development of any vague borderline areas between State and Federal protection." H.R. Rep. No. 94-1476, at 130 (1976), reprinted in 1976 U.S.C.C.A.N. 5659,5746. "The Ninth Circuit employs a two-part test to determine whether the Copyright Act preempts particular state law claims. Preemption occurs when: (1) the work at issue comes within the subject matter of copyright; and (2) the rights -6- MEMORANDUM OF POINTS AND AUTHORITIES 1 granted under state law are equivalent to those protected by the Act." Idema v. 2 Dreamworks, Inc., 162 F. Supp. 2d 1129, 1189 (C.D. Cal. 2001). 3 The labels that Plaintiffs affix to their state-law claims do not save them from 4 preemption. The courts have repeatedly held that the state-law causes of action that 5 Plaintiffs assert in this case-for violation of the UCL and FAL; for breach of 6 contract; and for money-had-and-received-are preempted so long as those claims 7 fall within the subject matter and general scope of federal copyright law. See, e.g., 8 Kodadek, 152 F .3d at 1212 (UCL claim preempted where plaintiff alleged television 9 show used his copyrighted drawings without permission); Perfect 10, Inc. v. 10 Cybernet Ventures, Inc., 167 F. Supp. 2d 1114, 1124-25 (C.D. Cal. 2001) (UCL 11 claims under the "unlawful" and "fraudulent" prongs preempted insofar as they 12 "relate to copyrights"); Motown Record Corp. v. George A. Harmel & Co., 657 F. 13 Supp. 1236, 1238-40 (C.D. Cal. 1987) (UCL and FAL claims preempted where "not 14 qualitatively different from [plaintiffs'] copyright claim"); Jacobsen v. Katzer, 609 15 F. Supp. 2d 925, 933-34 (N.D. Cal. 2009) (breach of contract claim seeking 16 rescission preempted where it alleged "violations of the exact same exclusive 17 federal rights protected by Section 106 of the Copyright Act"); Kabehie v. Zoland, 18 102 Cal. App. 4th 513,530 (2002) (claim for money-had-and-received preempted 19 where "not qualitatively different from a copyright infringement action"). 20 "If a claim is preempted by federal law, it fails to state a claim upon which 21 relief can be granted under Rule 12(b)(6)." Yumul v. Smart Balance, Inc., No. CV 22 10-00927 :Ml\IIM, 2011 WL 1045555, at *5 (C.D. Cal. Mar. 14, 2011) (citing 23 Stewart v. US. Bancorp, 297 F.3d 953, 987 (9th Cir. 2002)). Claims that are 24 preempted are subject to dismissal with prejudice. See Idema, 162 F. Supp. 2d at 25 1190-92 (dismissing with prejudice state-law claims preempted by Copyright Act). 26 27 2. Section 301(a) Preempts Each of Plaintiffs' State-Law Claims Each of Plaintiffs' state-law claims is based on the theory that 28 Warner/Chappell cannot demand payment for the use of Happy Birthday to You -7- MEMORANDUM OF POINTS AND AUTHORJTIES 1 because it allegedly owns no valid copyright in the work. All of these state-law 2 claims are preempted because they involve the subject matter of copyright and the 3 exclusive rights of copyright under 17 U.S.C. § 106. 4 The first prong of the § 301(a) preemption test "is satisfied wherever the 5 works at issue come within the 'subject matter of copyright,' as defined by 17 6 U.S.C. §§ 102 and 103, even where the works at issue (or some parts of those 7 works) may not actually be protected, or even protectable, under the Copyright 8 Act." Jdema, 162 F. Supp. 2d at 1189 (footnote omitted). Under§§ 102 and 103, 9 the "subject matter of copyright" includes "original works of authorship fixed in any 10 tangible medium of expression," such as "musical works, including any 11 accompanying words" and "compilations and derivative works." 17 U.S.C. 12 §§ 102(a), 103(a). The subject matter requirement is plainly satisfied here because 13 Plaintiffs admit that Happy Birthday to You indisputably is a musical composition 14 that has long been in a tangible medium of expression. SAC ~1f4, 93, 98. 15 The second prong of the Copyright preemption test "is satisfied wherever the 16 rights protected by state law are 'equivalent' to those protected by the Copyright 17 Act. In order to avoid preemption, 'the state cause of action must protect rights 18 which are qualitatively different from the copyright rights."' Jdema, 162 F. Supp. 19 2d at 1190 (citation omitted). Plaintiffs' state-law claims are based on the 20 contention that Warner/Chappell does not have the right to license the reproduction, 21 distribution or public performance of Happy Birthday to You, and, conversely, that 22 Plaintiffs do have the right to "use and enjoy[] ... intellectual property which is 23 rightfully in the public domain." SAC 1f157; see id.1f115 (Plaintiff Good Morning 24 To You Productions Corp. wants to synchronize Happy Birthday to You to a motion 25 picture); id. 1fl26 (Plaintiff Siegel wants to synchronize the song to a motion 26 picture); id.1fl33 (PiaintiffRupa wants to create a sound recording of the song); id. 27 1Jl34 (PiaintiffMajar wants to synchronize the song to a motion picture); id. ~ 157 28 ("Plaintiffs seek the Court's determination as to whether Defendants are entitled to -8- MEMORANDUM OF POINTS AND AUTHORITIES I assert ownership of the copyright ...."). All of the rights that Plaintiffs seek to "use 2 and enjoy" free of Warner/Chappell's copyright are squarely within the scope of 3 § 106 of the Copyright Act. See 17 U.S.C. § 106 (enumerating the rights to which 4 "the owner of copyright under this title has the exclusive rights to do and authorize," 5 including rights to reproduce, distribute and publicly perform copyrighted works); 6 Leadsinger, Inc. v. BMG Music Publishing, 512 F.3d 522, 527 (9th Cir. 2008) (right 7 to control synchronization of musical composition in timed relation to audiovisual 8 work within copyright owner's exclusive rights); MRC II Distrib. Co. v. Coelho, No. 9 2:12-CV-03539-0DW, 2012 WL 3810257, at *1 (C.D. Cal. Sept. 4, 2012) (finding 10 Copyright Act jurisdiction over claim that defendants licensed materials allegedly in 11 the public domain and over which defendants allegedly falsely asserted ownership). 12 Plaintiffs cannot avoid preemption by asserting that the state-law rights at 13 issue in their UCL and FAL claims are "qualitatively different from the copyright 14 rights" because those state claims "have an 'extra element' which changes the nature 15 of the action." Jdema, 162 F. Supp. 2d at 1190 (citation and internal quotation 16 marks omitted). Plaintiffs do allege in boilerplate fashion that Warner/Chappell 17 engaged in "deceptive and misleading" conduct, made "misleading statements and 18 omissions," and the like. SAC~~ 173-80, 200. But these sorts of conclusory labels 19 do not determine whether the rights at issue in fact are qualitatively different from 20 the rights under federal copyright. Courts look beyond mere labels "to determine 21 whether the 'gravamen' of the state law claim asserted is the same as the rights 22 protected by the Copyright Act." Idema, 162 F. Supp. 2d at 1190; see also 23 TeraRecon, Inc. v. Fovia, Inc., No. C 05-4407 CW, 2006 WL 1867734, at *3 (N.D. 24 Cal. July 6, 2006) ("Courts do not automatically conclude that, if misrepresentation 25 or deceit is alleged, a claim is not preempted by the Copyright Act."). 26 Here, Plaintiffs' conclusory and unsupported allegations of fraudulent 2 7 conduct under the UCL and FAL do not provide an "extra element" taking the 28 claims outside the scope of copyright rights. The gravamen of all of Plaintiffs' -9- MEMORANDUM OF POINTS AND AUTHORITIES 1 state-law claims is that Warner/Chappell licensed a copyright that Plaintiffs now 2 allege is invalid, as a result of which Plaintiffs insist they should be able to "use and 3 enjoy[] ... intellectual property which is rightfully in the public domain." SAC 4 , 157. Plaintiffs' claims, in short, all seek to determine whether Warner/Chappell 5 has the rights that the Copyright Act says it does. The Copyright Act preempts these 6 claims, notwithstanding the "unfair," "fraudulent" and "false advertising" labels. 7 See Del Madera Props. v. Rhodes & Gardner, Inc., 820 F.2d 973,977 (9th Cir. 8 1987) (UCL claim preempted where "part and parcel of the copyright claim"), 9 overruled on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 ( 1994). 10 In TeraRecon, for example, the court confronted an unfair competition claim 11 "founded on allegations that the TeraR.econ parties misrepresented that TeraRecon's 12 3-D volume rendering software is exclusively its own product and that images in 13 TeraRecon's marketing materials were created by its own product." 2006 WL 14 1867734, at *4. The court rejected the defendants' argument that this claim was not 15 preempted because it alleged the "extra element" of deceit and misrepresentation. 16 !d. at *3-4. The court found that, notwithstanding these labels, the claim "d[id] not 17 address rights which are qualitatively different from copyright rights": "Still at 18 issue is the copyright owner's exclusive rights of reproduction, production of 19 derivative works, distribution, and display." !d. at *4. Likewise, in this case, 20 because Plaintiffs' claims, however styled, are all directed to the claim that 21 Warner/Chappell does not have the exclusive rights under 17 U.S.C. § 106 to Happy 22 Birthday to You, Plaintiffs' UCL and FAL claims are preempted, notwithstanding 23 the labels that Plaintiffs have placed on them. See also ldema, 162 F. Supp. 2d at 24 1191-92 (state-law claims that only "nominally" included an extra element were 25 preempted where plaintiffs did not allege any false promise or misrepresentation 26 "separate" from that of the authorship of the work at issue); Xerox Corp. v. Apple 27 Computer, Inc., 734 F. Supp. 1542, 1550 (N.D. Cal. 1990) (UCL claim that Apple's 28 allegedly wrongful assertion of copyright ownership "has caused such confusion -10- MEMORANDUM OF POINTS AND AUTHORJTIES 1 among others in the industry such as to dissuade them from dealing with Xerox" 2 adds no extra element beyond copyright claim and is preempted); Motown, 657 F. 3 Supp. at 1239-40 (UCL and F AL claim preempted because allegations of 4 deliberately producing advertisement that falsely implied song and image were used 5 with permission did not add an extra element beyond copyright infringement claim). 6 The result is the same for Plaintiffs' claims for breach of contract, rescission 7 and money-had-and-received. While some breach of contract claims may involve 8 extra elements, courts have not hesitated to hold breach claims preempted where 9 they are not qualitatively different from the claim based on copyright rights. See, 10 e.g., Selby v. New Line Cinema Corp., 96 F. Supp. 2d 1053, 1061 (C.D. Cal. 2000); 11 Kabehie, 102 Cal. App. 4th at 527-29. Whether Warner/Chappell breached an 12 alleged warranty that it owns the copyright to Happy Birthday to You and whether 13 Plaintiffs are entitled to rescission both depend on whether Warner/Chappell owns a 14 valid copyright in the song. See Jacobsen, 609 F. Supp. 2d at 933-34 (breach of 15 contract claim preempted because it "does not add an 'extra element' which changes 16 the nature of the action or the rights secured under federal copyright protection" and 17 it "alleges violations of the exact same exclusive federal rights protected by Section 18 106 of the Copyright Act"). The same is true for rescission, which (as discussed 19 below) is not even a cause of action (but a remedy) under California law; and in any 20 event, even in those jurisdictions where rescission is a separate claim for relief, the 21 Copyright Act will preempt the claim where the§ 30l(a) requirements are satisfied. 22 See Santa-Rosa v. Combo Records, 471 F.3d 224, 227 (1st Cir. 2006) ("Because 23 Santa Rosa seeks rescission ofhis contract, if we were to grant him the relief that he 24 sought, we would be required to determine his ownership rights by reference to the 25 Copyright Act.. .. As such, 17 U.S.C. § 30l(a) preempts Santa Rosa's rescission 26 claim."). 27 Plaintiffs' claim for money-had-and-received also is preempted because 28 whether the license fees at issue "in equity and good conscience" belong to -11- MEMORANDUM OF POINTS AND AUTHORITIES 1 Plaintiffs, SAC~ 194, turns exclusively on the validity of Warner/Chappell's Happy 2 Birthday to You copyright. Like Plaintiffs' other state-law claims, this claim is no 3 different from the copyright claim. See Kabehie, 102 Cal. App. 4th at 529 (because 4 "causes of action for money had and received and an accounting attempt to recover 5 proceeds from ... unauthorized reproduction and distribution of [copyrighted] 6 material," they "are not qualitatively different from a copyright infringement action" 7 and are preempted). 3 In sum,§ 301(a) preempts each of Plaintiffs' state-law claims. 8 3. 9 10 11 Plaintiffs Do Not Avoid§ 301(a) Because They Seek a Declaration of Copyright Invalidity During the conference of counsel that preceded this Motion, Plaintiffs 12 asserted that§ 301(a) does not apply in this case because Plaintiffs contend that 13 Warner/Chappell's copyright is invalid. That contention is meritless. 14 Section 301(a)'s preemptive scope does not depend on whether the 15 underlying subject matter is copyrighted. The statute is applicable so long as the 16 work of authorship is "within the subject matter of copyright as specified by 17 sections 102 and 103." 17 U.S.C. § 301(a). The courts have consistently held that 18 the work need only fall "within the ambit of copyright protection" to be subject to 19 § 301(a). NBA v. Motorola, Inc., 105 F.3d 841, 849 (2d Cir. 1997) (citation and 20 internal quotation marks omitted); accord Barclays Capita/Inc. v. 21 TheFlyOnTheWall.Com, Inc., 650 F.3d 876, 892 (2d Cir. 2011) (same); ProCD, Inc. 22 23 24 25 26 27 28 3 Indeed, each of Plaintiffs' state-law claims expressly incorporates and relies upon the federal declaratory judgment claim, SAC~~ 173, 187, 193, 195, 198, which further demonstrates that the state-law claims are not qualitatively different and are therefore preempted. See Kodadek, 152 F.3d at 1212-13 (UCL claim preempted where it expressly incorporated Copyright Act allegations); Blue Nile, Inc. v. Ice.com, Inc., 478 F. Supp. 2d 1240, 1249-51 (W.D. Wash. 2007) (state-law claims preempted where they expressly incorporate copyright claims (citing Kodadek, 152 F.3d at 1213 and Litchfield v. Spielberg, 736 F.2d 1352, 1358 (9th Cir. 1984))). -12- MEMORANDUM OF POINTS AND AUTHORITIES 1 v. Zeidenberg, 86 F.3d 1447, 1453 (7th Cir. 1996); Jdema, 162 F. Supp. 2d at 11892 90 ("The work(s) upon which a state law claim is based need only be within the 3 'subject matter' of copyright; their actual protection thereunder is irrelevant to a 4 preemption analysis. See, e.g., Kodadek, 152 F.3d at 1211-1213 (uncopyrighted 5 drawings)."); 1 Melville B. Nimmer and David Nimmer, Nimmer on Copyright 6 § 1.01 [B][2] (Matthew Bender, Rev. Ed.), at 1-67 ("It is clear that failure to meet the 7 required standards for federal protection will not negate federal pre-emption."). "As 8 has often been observed, 'the shadow actually cast by the [Copyright] Act's 9 preemption is notably broader than the wing of its protection."' 1 Nimmer on 10 Copyright§ 1.01[B)[2], at 1-67 to -68 (footnotes omitted) (quoting United States ex. 11 rei. Berge v. Bd. ofTrs. ofthe Univ. ofAla., 104 F.3d 1453, 1463 (4th Cir. 1997). 12 Nor can Plaintiffs avoid preemption based on the fact that they are on the left- 13 hand side of the "v." in the case caption. If Plaintiffs had used Happy Birthday to 14 You without licensing it and been sued by Warner/Chappell, and had Plaintiffs 15 counterclaimed under state law, those counterclaims clearly would be subject to 16 preemption. See, e.g., TeraRecon, 2006 WL 1867734, at *4 (UCL counterclaim, in 17 response to infringement claim, preempted where it "d(id] not address rights which 18 are qualitatively different from copyright rights"). The preemption analysis cannot 19 ·differ because Plaintiffs have appended their state-law claims to a declaratory 20 judgment complaint. Plaintiffs' state-law claims are preempted. The procedural 21 posture of this case does not change that result. 22 23 24 25 26 27 28 C. Even If Not Preempted, Several of Plaintiffs' State-Law Claims Fail to Plead Claims for Relief 1. Plaintiffs' UCL and FAL Claims Do Not State Plausible Claims, Let Alone Meet the Requirements of Rule 9(b) In their third claim for relief, Plaintiffs allege that Warner/Chappell violated the UCL, Cal. Bus. & Prof. Code§ 17200, which proscribes "unlawful, unfair or fraudulent" business practices. In particular, Plaintiffs allege that Warner/Chappell -13- MEMORANDUM OF POINTS AND AUTHORITIES 1 violated the second and third prongs of the UCL by licensing Happy Birthday to 2 You, even though Warner/Chappell allegedly did not own a copyright in this song. 3 SAC~~ 175-79.4 The second, or "unfair" prong in the UCL, covers "conduct that 4 threatens an incipient violation of an antitrust law, or violates the policy or spirit of 5 one of those laws because its effects are comparable to or the same as a violation of 6 the law, or otherwise significantly threatens or harms competition." Cel-Tech 7 Commc 'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th I63, 187 (1999). The third 8 prong of the UCL covers "fraud," which the California courts have defined for these 9 purposes to mean conduct by which "the public is likely to be deceived." State I 0 Farm Fire & Cas. Co. v. Superior Court, 45 Cal. App. 4th 1093, II 06 (1996), 1I abrogated on other grounds, Cel-Tech, 20 Cal. 4th at 163. I2 In their seventh claim for relief, Plaintiffs allege that Warner/Chappell 13 violated the FAL, Cal. Bus. & Prof. Code § I7500, based upon Warner/Chappell's I4 "publicly disseminated advertising" concerning Happy Birthday to You, which I5 allegedly contained "untrue and misleading" statements that Warner/Chappell 16 "knew, or in the exercise of reasonable care should have known" to be untrue and 17 misleading. I8 SAC~~ 198-201 . Because Plaintiffs allege UCL and FAL liability based on Warner/Chappell's 19 alleged "nondisclosures," "deceptive and misleading" conduct, and the like, SAC 20 ~~ 175-80, 200, these claims are grounded in fraud and subject to the pleading 21 requirements of Rule 9(b). Kearns, 567 F.3d at 1125 (UCL claims that "allege a 22 unified course of fraudulent conduct" subject to Rule 9(b)); Yumul v. Smart Balance, 23 Inc., 733 F. Supp. 2d 1117, 1122-23 (C.D. Cal. 2010) ("District courts in California 24 25 26 27 28 4 Plaintiffs include a cursory reference to unlawful conduct in the SAC, but do not state what conduct was unlawful or how it was unlawful. SAC ~ 182. Plaintiffs' UCL claim does include a citation to Cal. Bus. & Prof. Code § 17500. SAC ~ 178. If Plaintiffs intended for this citation to allege as "unlawful" Warner/Chappell's alleged violation of the FAL, then the effort fails for the reasons that Plaintiffs' standalone FAL claim fails. -14- MEMORANDUM OF POINTS AND AUTHORITIES I have consistently held ... that claims under California's F AL are grounded in 2 fraud."). Rule 9(b) applies not only to Plaintiffs' UCL "fraud" prong theory but also 3 to their "unfair" prong theory (and, to the extent they allege one, their "unlawful" 4 prong theory), since all of Plaintiffs' UCL (and FAL) theories boil down to the same 5 underlying allegation of a fraudulent assertion of copyright. United Food & 6 Commercial Workers Cent. Pa. & Reg'! Health & Welfare Fundv. Amgen, Inc., 400 7 F. App'x 255, 257 (9th Cir. 20IO) ("Because the complaint sounded in fraud, all of 8 its allegations are subject to Rule 9(b)'s pleading requirements. Consequently, the 9 district court properly dismissed the complaint in its entirety, including its UCL I 0 'unlawful' and 'unfair' claims.") (citations omitted). II As noted, Plaintiffs' UCL and FAL claims are based entirely on I2 Warner/Chappell's licensing of a copyright that Warner/Chappell claims to own and I3 that Plaintiffs allege to be invalid. The remainder of the SAC is simply conclusory I4 allegations of wrongful conduct. Plaintiffs fail to state "plausible" violations of the I5 UCL or F AL under the standards of Twombly and Iqbal, let alone meet the I6 requirements of Rule 9(b). See Twombly, 550 U.S. at 555 (Rule 8(a) requires I7 plaintiffs to plead "more than labels and conclusions, and a formulaic recitation of I8 the elements of a cause of action"); Iqbal, 556 U.S. at 678 (same). In particular, I9 Plaintiffs fail to allege the "who, what, when, where, and how" required for their 20 claims of Warner/Chappell's alleged misconduct. See Kearns, 567 F.3d at II25-26 2I (UCL claim dismissed for failing to plead "the particular circumstances 22 surrounding" alleged misrepresentations); Yumul, 733 F. Supp. 2d at II24-25 (UCL 23 and FAL claims dismissed for failing to "allege[] with particularity when, where, 24 and how the alleged misrepresentations were communicated"). Plaintiffs do not 25 plead any specific facts regarding the content of the various unspecified 26 communications and publicly disseminated advertisements, much less how the 27 messages were conveyed, when, to whom, etc. Given that Plaintiffs claim to be 28 -I5- MEMORANDUM OF POINTS AND AUTHORITIES 1 victims of the alleged misrepresentations, Plaintiffs have no excuse for failing to 2 include the required pleading allegations in detail. 3 Moreover, Plaintiffs cannot state their fraud-based claims merely on account 4 of Warner/Chappell's alleged licensing of the Happy Birthday to You copyright and 5 statements about that copyright-even if the copyright were ultimately found to be 6 invalid. Plaintiffs do not allege that Warner/Chappell believed its copyright was 7 invalid or otherwise acted deceptively or in bad faith. SAC~~ 173-86, 198-201. 8 Plaintiffs assert legal conclusions as to why they believe the underlying copyright 9 registrations were invalid. See SAC~~ 158-65 (alleging that Happy Birthday to You 10 and other copyrights expired, were forfeited, were not eligible for copyright 11 protection, or were otherwise invalid); id. ~~ 95, 100 (asserting legal conclusions12 without factual support-that 1935 copyright registrations were invalid because 13 author did not authorize publication of the work). Plaintiffs nowhere allege, 14 however, facts showing that Warner/Chappell knew or should have known that the 15 copyright to Happy Birthday to You copyright was invalid. See Brooks v. Gomez, 16 No. C 10-01873 SBA, 2013 WL 496339, at *6-7 (N.D. Cal. Feb. 7, 2013) (under 17 Iqbal, factually unsupported allegations that defendants "knew or should have 18 known" the alleged falsity of their representations were insufficient). Although 19 Rule 9(b) allows a defendant's state of mind to be "alleged generally," the 20 conclusory allegations in Plaintiffs' complaint are insufficient to meet Plaintiffs' 21 burden. Iqbal, 556 U.S. at 686-87. 22 In fact, Plaintiffs point to no details supporting their bare allegation that 23 Warner/Chappell "knew, or in the exercise of reasonable care should have known" 24 that it did not own a valid copyright to Happy Birthday to You. SAC~ 200. 25 Plaintiffs' claims are not plausible. See Iqbal, 556 U.S. at 686-87; Pippen v. 26 NBC Universal Media LLC, No. 12-3294, 2013 WL 4450590, at *3 (7th Cir. Aug. 27 21, 2013) ("States of mind may be pleaded generally, but a plaintiff still must point 28 to details sufficient to render a claim plausible."). Further, Plaintiffs' factually -16- MEMORANDUM OF POINTS AND AUTHORITIES 1 unsupported allegations of knowingly deceptive and misleading conduct are 2 contrary to the fact that certificates of registration- . like Warner/Chappell's Happy 3 Birthday to You certificates, the existence of which Plaintiffs implicitly 4 acknowledge-"constitute prima facie evidence of the validity of the copyright and 5 of the facts stated in the certificate." 17 U.S.C. § 410(c); see also Copyright Act of 6 1909, ch. 320, §55, 35 Stat. 1075 (under 1909 Act, which governs registration of 7 Happy Birthday to You, a registration certificate "shall be admitted in any court as 8 prima facie evidence of the facts stated therein"). 9 Plaintiffs likewise fail to allege facts showing their reasonable reliance on the 10 claimed fraud. See Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 326-27 & n.9 11 (20 11) (class representatives must plead and prove actual reliance for UCL and FAL 12 standing). Plaintiffs instead just flatly declare they were "deceived as a result of 13 their reasonable reliance" on Warner/Chappell's allegedly "false and misleading 14 statements and omissions." SAC~ 180. This conclusory allegation is not supported 15 by facts demonstrating any of Plaintiffs' alleged reliance on Warner/Chappell's 16 statements and/or omissions. The case of at least one Plaintiff.-Rupa-underscores 17 why the allegations that Plaintiffs omit are critical. As noted in the background, 18 Rupa alleges having requested a mechanical license to Happy Birthday to You just 19 three days before filing the complaint. See SAC~ 133 (Rupa sent notice of 20 intention to obtain mechanical license on June 17, 2013); Complaint, No. CV 1321 04460-GHK (MRWx) (C.D. Cal. June 20, 2013), ECF No. 1. The short time frame 22 from purported reliance to filing a lawsuit-just 72 hours-strongly suggests that 23 Rupa was not relying on a purported fraud, but rather was attempting to create a 24 legal claim. Rule 9(b) requires Rupa and the other Plaintiffs to spell out the 25 particulars of their claimed reliance in order to state a valid claim. 26 In short, Plaintiffs' UCL and FAL claims are premised on fraud and deceit, 27 yet supported only by conclusory and deficient allegations that fall short under the 28 applicable pleading standards. -17- MEMORANDUM OF POINTS AND AUTHORITIES 2. 1 2 3 Plaintiffs' Claim for Rescission Asserts a Remedy, Not a Cause of Action In their sixth claim for relief, Plaintiffs assert a claim for "rescission for 4 failure of consideration," contending that their "purported licenses were worthless." 5 SAC ~~ 195-97. "Rescission is not a cause of action; it is a remedy." Nakash v. 6 Superior Court, 196 Cal. App. 3d 59,70 (1987); see also Taguinodv. World Sav. 7 Bank, FSB, 755 F. Supp. 2d 1064, 1072 (C.D. Cal. 2010) (dismissing rescission 8 claim because it is a remedy, not a cause of action). The claim should be dismissed. 9 D. All of Plaintiffs' Claims That Are Outside the Three-Year Limitations Period Are Time-Barred 10 11 12 13 14 15 16 17 18 19 20 21 22 1. Three-Year Limitations Periods Govern Copyright, FAL and Money-Had-and-Received Claims Declaratory judgment claims based on the Copyright Act, like those alleged in Plaintiffs' first and second claims for relief, SAC ~~ 1, 146-72, are subject to the Copyright Act's three-year statute of limitations. 17 U.S.C. § 507(b) ("No civil action shall be maintained under the 'provisions of this title unless it is commenced within three years after the claim accrued."); Welles v. Turner Entm 't Co., 503 F.3d 728, 734 (9th Cir. 2007) (applying three-year limitations period to declaratory claim for copyright ownership); Stewart v. Wachowski, 574 F. Supp. 2d 1074, 1111 n.l47 (C.D. Cal. 2005) ("The three year statute of limitations governing copyright infringement actions also governs claims for declaratory relief regarding copyright ownership or infringement."). Because all of Plaintiffs' state-law claims should be dismissed as preempted, the purported class period should be limited to three years 23 24 25 26 27 28 prior to the filing of the first complaint, rather than the four-year period that Plaintiffs plead. See SAC ~ 136. Plaintiffs' putative class claims under the Copyright Act should be dismissed to the extent they fall outside the three-year limitations period. See Yumul, 733 F. Supp. 2d at 1133 (dismissing putative class action complaint "to the extent it alleges -18- MEMORANDUM OF POINTS AND AUTHORITIES 1 conduct occurring outside the relevant statutes of limitations"); Keilholtz v. Lennox 2 Hearth Products Inc., No. C 08-00836 CW, 2009 WL 2905960, at *5 (N.D. Cal. 3 Sept. 8, 2009) (dismissing class claims outside the applicable statutes oflimitations). 4 Some cases have held that a motion to strike under Rule 12(t) is an 5 appropriate basis for limiting class period allegations in a class action complaint. 6 See Shabaz v. Polo Ralph Lauren Corp., 586 F. Supp. 2d 1205, 1211 (C.D. Cal. 7 2008) (striking class allegations outside the limitations period); Campbell v. 8 PricewaterhouseCoopers, No. CIV. S-06-2376 LK.K/GGH, 2008 WL 3836972, at 9 *6 (E.D. Cal. Aug. 14, 2008) ("Plaintiffs have also improperly alleged a four-year 10 class period for all of their claims, rather than properly confining this four-year class 11 period to only their UCL claim .... Accordingly, the motion to strike is granted as to 12 all improper four-year references in the complaint"). 5 If the Court determines that a 13 motion to strike is the appropriate procedural mechanism for limiting the class 14 period allegations of the SAC, then the alternative component of Warner/Chappell's 15 Motion respectfully requests that the Court strike Plaintiffs' proposed class 16 definition to the extent it exceeds three years prior to the filing of the first complaint 17 in these cases. 18 To the extent that Plaintiffs' claims under the FAL and for money-had-and- 19 received are not dismissed, these claims are also governed by a three-year 20 limitations period. Cal. Civ. Proc. Code§ 338(a), (d); Yumul, 733 F. Supp. 2d at 21 1130 ("FAL claims are subject to a three-year statute of limitations."); Creditors 22 Collection Serv. v. Castaldi, 38 Cal. App. 4th 1039, 1043-44 (1995) ('"[A] quasi23 contract action, in the form of a common count for money had and received, to 24 25 5 Rule 12(t) provides, "[t]he court may strike from a pleading an insufficient defense 26 or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(t). "This includes striking parts of the prayer for relief when the relief sought is 27 'not recoverable as a matter of law."' Shabaz, 586 F. Supp. 2d at 1208-09 (citation 28 omitted). -19- MEMORANDUM OF POINTS AND AUTHORITIES 1 recover money obtained by fraud ... or mistake is governed by [a three-year statute 2 of limitations]."') (citation omitted). Accordingly, any surviving class claims under 3 the F AL or for money-had-and-received should be dismissed to the extent they fall 4 outside a three-year period. Yumul, 733 F. Supp. 2d at 1133; Keilholtz, 2009 WL 5 2905960, at *5. Alternatively, Plaintiffs' proposed class definition should be 6 stricken under Rule 12(t) to the extent it includes FALor money-had-and-received 7 claims outside a three-year period. Shabaz, 586 F. Supp. 2d at 1211; Campbell, 8 2008 WL 3836972, at *6. 9 10 11 2. Plaintiffs Majar and Siegel Have No Timely Claims, and Their Claims Should Be Dismissed For the reasons shown above, Majar's and Siegel's state-law claims are 12 preempted and in some cases insufficiently pled. These Plaintiffs' FAL and money13 had-and-received claims fail for the additional reason that they are time-barred. 14 Their copyright claims are time-barred as well. Each of these claims accrued when 15 Majar and Siegel were allegedly forced to license a copyright they contend was 16 invalid and worthless. SAC ~ 123-30, 134, 153, 156. Plaintiffs offer no reason to 17 believe their claims accrued at any time other than when they executed their 18 licenses. See Yumul, 733 F. Supp. 2d at 1130 ("In order to invoke [the delayed 19 discovery exception] to the statute of limitations, the plaintiff must specifically 20 plead facts which show (1) the time and manner of discovery and (2) the inability to 21 have made earlier discovery despite reasonable diligence.") (citations and internal 22 quotation marks omitted). Even if Majar' s copyright, F AL and money-had-and23 received claims did not accrue until October 29, 2009, when Majar alleges it paid 24 for the Happy Birthday to You license, SAC~ 134, the claims are time-barred 25 because Majar filed its complaint more than three years later. Complaint, No. CV 26 13-05164-GHK (MR.Wx) (C.D. Cal. July 17, 2013), ECF No.1. Similarly, even if 27 Siegel's copyright, F ALand money-had-and-received claims accrued when Siegel 28 alleges his assignor paid for the license on September 1, 2009, SAC ~~ 11, 130, the -20- MEMORANDUM OF POINTS AND AUTHORITIES 1 claims are barred because Siegel filed his complaint more than three years later. 2 Complaint, No. CV 13-04418-GHK. (MRWx) (C.D. Cal. June 19, 2013), ECF No.1. 3 Because each ofMajar's and Siegel's claims fail, these Plaintiffs should be 4 dismissed from the case. 5 6 E. Preempted and Time-Barred Claims and Plaintiffs Should Be Dismissed, or Stricken, with Prejudice Leave to amend is appropriately denied where amendment would be futile. 7 8 Gardner v. Martino, 563 F .3d 981, 990, 992 (9th Cir. 2009) ("When a proposed 9 amendment would be futile, there is no need to prolong the litigation by permitting 10 further amendment.") (citation and internal quotation marks omitted). Dismissal 11 based on preemption should be with prejudice because amendment would be futile. 12 Johnson v. Dist. 2 Marine Eng 'rs Beneficial Ass 'n, 857 F .2d 514, 517-18 (9th Cir. 13 1988) (affirming dismissal with prejudice of preempted state-law claims); Idema, 14 162 F. Supp. 2d at 1190-92. Likewise, time-barred claims should be dismissed, or 15 stricken, with prejudice. Hinton v. Pacific Enters., 5 F.3d 391, 396-97 (9th Cir. 16 1993) (affirming dismissal with prejudice of time-barred claims); Madani v. Shell 17 Oil Co., No. CV 08-1283-GHK (JWJx), 2008 WL 7856015, at *1 (C.D. Cal. July 18 11, 2008) (dismissing time-barred claims with prejudice), affd, 357 F. App'x 158 19 (9th Cir. 2009). 20 IV. CONCLUSION 21 Warner/Chappell respectfully submits that Plaintiffs' UCL, breach of 22 contract, money-had-and-received, rescission and F AL claims should each be 23 dismissed with prejudice; any declaratory judgment, F AL and/or money-had-and24 received claims that survive dismissal should be dismissed, or stricken, to the extent 25 they are asserted on behalf of a putative class whose members licensed Happy 26 Birthday to You more than three years before the first operative complaint was filed; 27 and Plaintiffs Majar and Siegel should be dismissed from this action with prejudice. 28 -21- MEMORANDUM OF POINTS AND AUTHORITIES 1 DATED: August 30, 20I3 MUNGER, TOLLES & OLSON LLP 2 3 4 By: Is/ Kelly M Klaus KELLY M. KLAUS 5 6 Attorneys for Defendants Warner/Chappell Music. Inc. and Summv-Birchard. Inc. 7 8 9 IO II 12 I3 I4 I5 I6 17 18 19 20 2I 22 23 24 25 26 27 28 -22- MEMORANDUM OF POINTS AND AUTHORITIES

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