Righthaven LLC v. Newman

Filing 25

MOTION to Dismiss for Lack of Jurisdiction Subject Matter and Personal First Amended Complaint by Defendant Garry Newman. Responses due by 8/18/2011. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J)(DiRaimondo, Anthony)

Exhibit G

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Righthaven LLC v. Mostofi, Slip Copy (2011)

2011 WL 2746315
Only the Westlaw citation is currently available.
United States District Court,
D. Nevada.
RIGHTHAVEN LLC, Plaintiff,
v.
Dean MOSTOFI, Defendant.
No. 2:10–CV–1066–KJD–GWF.July 13, 2011.
Attorneys and Law Firms
Joseph C. Chu, John Charles Coons, Righthaven LLC,
Shawn A. Mangano, Shawn A. Mangano, LTD., Las
Vegas, NV, for Plaintiff.
Dean Mostofi, Potomac, MD, pro se.
Opinion

ORDER
KENT J. DAWSON, District Judge.
*1 Presently before the Court is Defendant Dean
Mostofi’s Motion to Dismiss (# 25). Plaintiff filed a
response in opposition (# 29), to which Defendant replied
(# 30).
I. Background
This dispute arises out of Defendant’s alleged copyright
infringing conduct. On April 20, 2010, Defendant
displayed a Las Vegas Review–Journal (“LVRJ”) article
(“Work”),
on
his
website,
<http://www.deanmostofi.com/> (“Website”), regarding a
Las Vegas, Nevada based lawyer who was reprimanded
for false advertising by the Nevada Supreme Court.
Defendant allegedly changed the original title of the
Work: “Court Reprimands Lawyer Over Misleading
Ads,” to a different title: “Las Vegas Lawyer
Reprimanded for False Advertising.” (Complaint, ¶ 21).
Plaintiff claims that this article infringes upon the
copyright.
On June 24, 2010, approximately two months after
Defendant displayed the article on his website, the Work
was allegedly registered with the United States Copyright
Office (“USCO”). (Complaint, ¶ 19).
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On or about January 18, 2010, Plaintiff and Stephens
Media LLC (“Stephens Media”), the original owner of the
Work, entered into a Strategic Alliance Agreement
(“SAA”). Plaintiff filed its Complaint (# 1) on June 30,
2010. Plaintiff alleges that Defendant willfully copied the
Work, without authorization. Defendant raises this
Motion to Dismiss for lack of subject matter jurisdiction,
specifically asserting Plaintiff’s lack of standing to bring
the claim at the time the action was filed.
II. Standard for Motion to Dismiss
In this action, “as in all actions before federal court, the
necessary and constitutional predicate for any decision is
a determination that the court has jurisdiction—that is the
power—to adjudicate the dispute.” Toumajian v. Frailey,
135 F.3d 648, 652 (9th Cir.1998). The purpose of a
complaint is two-fold: to give the defendant fair notice of
the basis for the court’s jurisdiction and of the factual
basis of the claim. See Fed.R.Civ.P. 8; Skaff v. Meridien
North Am. Beverly Hills, LLC, 506 F.3d 832, 843 (9th
Cir.2007). Rule 12(b)(1) of the Federal Rules of Civil
Procedure allows defendants to seek dismissal of a claim
or action for a lack of subject matter jurisdiction.
Dismissal under Rule 12(b)(1) is appropriate if the
complaint, considered in its entirety, fails to allege facts
on its face that are sufficient to establish subject matter
jurisdiction. In re Dynamic Random Access Memory
(DRAM) Antitrust Litigation, 546 F.3d 981, 984–85 (9th
Cir.2008). Although the defendant is the moving party in
a motion to dismiss brought under Rule 12(b)(1), the
plaintiff is the party invoking the court’s jurisdiction. As a
result, the plaintiff bears the burden of proving that the
case is properly in federal court. McCauley v. Ford Motor
Co., 264 F.3d 952, 957 (9th Cir.2001) (citing McNutt v.
General Motors Acceptance Corp., 298 U.S. 178, 189
(1936)).
Attacks on jurisdiction pursuant to Rule 12(b)(1) can be
either facial, confining the inquiry to the allegations in the
complaint, or factual, permitting the court to look beyond
the complaint. See Savage v. Glendale Union High Sch.,
343 F.3d 1036, 1039 n. 2 (9th Cir.2003). In a facial attack
“the challenger asserts that the allegations contained in a
complaint are insufficient on their face to invoke federal
jurisdiction.” Safe Air for Everyone v. Myer, 373 F.3d
1035, 1039 (9th Cir.2004). By contrast, “in a factual
attack, the challenger disputes the truth of the allegations
that, by themselves, would otherwise invoke federal
jurisdiction.” Id. A factual attack made pursuant to Rule
12(b)(1) may be accompanied by extrinsic evidence.
Whitehorn v. F.C.C., 235 F.Supp.2d 1092, 1095–96
(D.Nev.2002) (citing St. Clair v. City of Chico, 880 F.2d

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Exhibit G

Righthaven LLC v. Mostofi, Slip Copy (2011)

199, 201 (9th Cir.1989)). Dismissal for lack of subject
matter jurisdiction is proper if the complaint, considered
in its entirety, fails to allege facts that are sufficient to
establish subject matter jurisdiction. DRAM Antitrust
Litigation, 546 F.3d at 984–85.

the case of sound recordings, to perform the
copyrighted work publicly by means of a digital audio
transmission.” 17 U.S.C. § 106.

A. Contract Interpretation

III. Analysis

The legal or beneficial owner of an exclusive right
under a copyright is entitled, subject to the
requirements of section 411, to institute an action for an
infringement of that particular right committed while
he or she is the owner of it.
17 U.S.C. § 501(b). Therefore, to be entitled to sue for
copyright infringement, the plaintiff must be the “legal or
beneficial owner of an exclusive right under a copyright.”
See Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881,
884 (9th Cir.2005). If the plaintiff “is not a proper owner
of the copyright rights, then it cannot invoke copyright
protection stemming from the exclusive rights belonging
to the owner, including infringement of the copyright.” Id.
(quoting 4 Business and Commercial Litigation in
Federal Courts, at 1062 § 65.3(a)(4) (Robert Haig ed.)).
Section 106 of the Act defines and limits the exclusive
rights under copyright law.1 Id. at 884–85. While these
exclusive rights may be transferred and owned separately,
the assignment of a bare right to sue is ineffectual because
it is not one of the exclusive rights. Id. Since the right to
sue is not one of the exclusive rights, transfer solely of the
right to sue does not confer standing on the assignee. Id.
at 890. Additionally, the “bare assignment of an accrued
cause of action is impermissible under [the Act].” Id. One
can only obtain a right to sue on a copyright if the party
also obtains one of the exclusive rights in the copyright.
See id.

Furthermore, although the Act grants exclusive
jurisdiction for infringement claims to federal courts,
those courts construe copyrights as contracts and turn to
the relevant state law to interpret them. See Automation
By Design v. Raybestos Products Co ., 463 F.3d 749, 753
(7th Cir.2006). The question of the interpretation of the
contract is a question of law. See Shelton v. Shelton, 78
P.3d 507, 510 (Nev.2003). A contract is ambiguous if it is
reasonably susceptible to more than one interpretation. Id.
A contract may be ambiguous if the paragraphs in
question are reasonably susceptible to different
constructions or interpretations. See Agric. Aviation Eng’g
Co. v. Board of Clark County Com’rs, 749 P.2d 710, 712
(Nev.1990).
The SAA defines the relationship between Plaintiff and
Stephens Media and governs all future copyright
assignments between them (including the assignment at
issue here). See (Defendant’s Motion to Dismiss, Doc.
No. 25, p. 4 of 28). Plaintiff alleges that the SAA
“envisions an assignment to Plaintiff of all right, title, and
interest in and to potential copyrighted works.”
(Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Doc. No. 29, p. 8 of 14). This is an inaccurate conclusion.
Here, the SAA is not ambiguous. The SAA expressly
denies Righthaven any right from future assignments
other than the bare right to bring and profit from a
copyright infringement action.

*2 Section 501(b) of the 1976 Copyright Act (“Act”)
establishes who is legally authorized to sue for
infringement of a copyright:

1

“[T]he owner of copyright under this title has the
exclusive rights to do and to authorize any of the
following: (1) to reproduce the copyrighted work in
copies or phonorecords; (2) to prepare derivative
works based upon the copyrighted work; (3) to
distribute copies or phonorecords of the copyrighted
work to the public by sale or other transfer of
ownership, or by rental, lease, or lending; (4) in the
case of literary, musical, dramatic, and choreographic
works, pantomimes, and motion pictures and other
audiovisual works, to perform the copyrighted work
publicly; (5) in the case of literary, musical, dramatic,
and choreographic works, pantomimes, and pictorial,
graphic, or sculptural works, including the individual
images of a motion picture or other audiovisual work,
to display the copyrighted work publicly; and (6) in

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*3 This notion is clearly expressed in Section 7.2 of the
SAA:
7.2 Despite any such Copyright Assignment, Stephens
Media shall retain (and is hereby granted by
Righthaven ) an exclusive license to Exploit the
Stephens Media Assigned Copyrights for any lawful
purpose whatsoever and Righthaven shall have no
right or license to Exploit or participate in the
receipt of royalties from the Exploitation of the
Stephens Media Assigned Copyrights other than the
right to proceeds in association with a Recovery. To
the extent that Right haven’s [sic] maintenance of
rights to pursue infringers of the Stephens Media
Assigned Copyrights in any manner would be deemed
to diminish Stephens Media’s right to Exploit the
Stephens Media Assigned Copyrights, Righthaven
hereby grants an exclusive license to Stephens Media to
the greatest extent permitted by law so that Stephens

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Exhibit G

Righthaven LLC v. Mostofi, Slip Copy (2011)

Media shall have unfettered and exclusive ability to
Exploit the Stephens Media Assigned Copyrights ...
(Defendant’s Motion to Dismiss, Doc. No. 25, Exhibit A,
p. 9 of 22 (bold emphasis added, italicization in original)).
It is clear from this section that Plaintiff is prevented from
obtaining, having, or otherwise exercising any right other
than the bare right to sue, which is expressly forbidden
pursuant to Silvers. As a result, Defendant asserts that
Plaintiff lacks standing to maintain this lawsuit. The
Court agrees with this conclusion because it is clear that
the entirety of the SAA was designed to prevent
Righthaven from becoming “an owner of any exclusive
right in the copyright ...,” Silvers, 402 F.3d at 886
(emphasis in original), regardless of Righthaven and
Stephens Media’s post hoc, explanations of the SAA’s
intent or later amendments.
B. Amendment to the SAA
Notwithstanding the actual transaction that occurred,
Plaintiff argues that the amendment it executed with
Stephens Media on May 9, 2011 fixes any possible errors
in the original SAA that would prevent Plaintiff from
having standing in this matter. Righthaven LLC v. Vote
For The Worst, LLC, et al., Case No. 2:10–cv–1045–
KJD–GWF (Doc. No. 41 and 42). Specifically, Plaintiff
alleges that this amendment further clarifies and
effectuates, “to the extent not already accomplished, what
has at all times been the intent of the parties—to transfer
full ownership in copyright,” to Plaintiff. This
amendment, however, cannot create standing because
“[t]he existence of federal jurisdiction ordinarily depends
on the facts as they exist when the complaint was filed.”
Lujan v. Defenders of Wildlife, 504 U.S. 555, 571 n. 4
(1992) (quoting Newman–Green, Inc. v. AlfonzoLarrain,
490 U.S. 826, 830 (1989)) (emphasis in Lujan ). Although
a court may allow parties to amend defective allegations
of jurisdiction, it may not allow the parties to amend the
facts themselves. Newman–Green, 490 U.S. at 830. As an
example, a party who misstates his domicile may amend
to correctly state it. This is an amendment of the
allegation. However, that party is not permitted to
subsequently move in order to change his domicile and
amend accordingly. This would be an amendment of the
jurisdictional facts, which is not allowed. See id. Here,
Plaintiff and Stephens Media attempt to impermissibly
amend the facts to manufacture standing. Therefore, the
Court shall not consider the amended language of the
SAA, but the actual assignment and language of the SAA
as it existed at the time the complaint was filed.
B. Copyright Assignment

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*4 Even if the Court were to consider the amendments,
these cosmetic adjustments do not alter the fact that
Plaintiff has failed to sufficiently allege whether or not
Stephens Media assigned the copyrighted Work to
Righthaven pursuant to the SAA, as amended or not.
Pursuant to Section 3.1 of the SAA, Stephens Media
retains the right to assign copyrights that it owns and that
it, among other things, considers a “material risk of
infringement.” Once a copyright is designated as such, it
is assigned to Righthaven. See (Defendant’s Motion to
Dismiss, Doc. No. 25, Exhibit A, p. 7 of 22). Section 7 of
the SAA establishes how Stephens Media assigns
copyright content to Righthaven. Here, the SAA states:
Stephens Media shall effect the assignments to
Righthaven of copyrights as required by [the SAA] ...
by executing a particularized assignment with respect
to each copyright and each consistent with (and in form
and substance the same as) the scope of assignment as
set forth in the form of copyright assignment as
embodied in Exhibit 1 (each a “Copyright
Assignment”). Stephens Media shall provide Notice to
Righthaven of each copyright ... that is required to be
the subject of a Copyright Assignment ... by no later
than five (5) Business Days prior to the last day upon
which each respective Copyright Assignment is
required to be executed by Stephens Media as provided
in Section 3.1.
(Defendant’s Motion to Dismiss, Doc. No. 25, Exhibit A,
pp. 8–9 of 22) (Emphasis added).
The SAA clearly does not envision an all-encompassing
assignment of all Stephens Media owned copyrights, as
Plaintiff alleges. The SAA sets forth guidelines for the
assignment of each copyright that Stephens Media
identifies as a potential risk for infringement. Specifically,
as stated above, Exhibit 1 of the SAA is the legal
memorialization of the terms set forth in Section 7.
Through this instrument, Stephens Media “transfers, vests
and assigns,” all copyrights requisite to have Righthaven
“recognized as the copyright owner of the work.”
Accordingly, the work must be depicted as “Exhibit A,”
and must be attached to Exhibit 1. Plaintiff acknowledges
this fact because Plaintiff directs the Court to an entire
section of the Opposition devoted to a “Written
Assignment,” yet fails to provide a copy of the
Assignment to the Work in question, pursuant to the
SAA. Furthermore Plaintiff’s reference to the Vote For
The Worst case works against Plaintiff because it provides
a copy of the assignment pertaining to the work in that
case. Additionally, Plaintiff acknowledges that the
purpose of the SAA is not to “effectuate the assignment of
any work;” rather, Exhibit 1 achieves this purpose. See
(Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Doc. No. 29, p. 7 of 14).

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Exhibit G

Righthaven LLC v. Mostofi, Slip Copy (2011)

C. Prior Rulings within this District
Finally, Plaintiff contends that multiple courts within this
district have already determined that Plaintiff has standing
to bring claims for past infringement under the Silver
standard based on the plain language of the copyright
assignment. Again, this Court is unable to conclude
whether or not the assignment confers standing upon
Plaintiff because Plaintiff does not provide a copy of the
assignment for the Court’s consideration as it did in the
prior cases within this district.

*5 Because the SAA prevents Plaintiff from obtaining any
of the exclusive rights necessary to maintain standing in a
copyright infringement action and because Plaintiff fails
to sufficiently allege an assignment of rights from
Stephens Media to Plaintiff, the Court finds that Plaintiff
lacks standing in this case. Accordingly, the Court
dismisses Plaintiff’s cause of action.
IV. Conclusion
Accordingly, IT IS HEREBY ORDERED that Defendant
Dean Mostofi’s Motion to Dismiss is GRANTED.

D. Plaintiff Lacks Standing to Bring this Action
End of Document

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© 2011 Thomson Reuters. No claim to original U.S. Government Works.

© 2011 Thomson Reuters. No claim to original U.S. Government Works.

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Exhibit G