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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`BARBARA ALLBUT BROWN, et a1., ) CASE NO. CV 98-5381 DT (RZxf
`QRDER GRANTING DEFENI]ANTS'
`MOTION TO DISMISS PLAINTIFFS'
`FIRST AMENDED COMPI~AINT
`
`~~.~ vs.
`_6 'I ?C~,YrF,.A:~t :cECCc~S, et al . ,
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`I. H~cltground
`A . F~c tual Suuunary
`This case involves claims bzought by Plaintiffs Barbara
`~iibut Brown ',"Brown"), Peggy Santiglia Davison ("Davison"), and
`'I Pryliis Alibu~ Sirico, ("Sirico") (collectively "Plaintiffs")
`~~ aaainsc Folyaram Records t"Polygram"), Mercury Records, Inc.
`":vierc:~ry"'t ar.4 rGG Productions, Inc. ("FGG"} (collectively
`s "Cefendants"` fcr damages and injunctive and declaratory relief
`
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`'~ in connection with the use of the name "'she Arge's," which is the
`professional name under which the P~aznt.ffs per=caned as a
` Si?iging ~Y~~iip. The C3llSE5 ~i 3C~i0.^. ~.or~taine~ ~n '~ ~y.Ilt~.ffs ~
`~ E rst amended ~cmplatint are as follows:
`ili she first cause of action is icy Da~riscr: and Sirico for
`~~ infringement of a registered Trademark against al_ Defendants;
`(2} The second cause of action is by all P~aintiffa for
`false designations ar_d descriptions against all ~e,~endants;
`3) The third cause cf action is by a1i P':~i:tiffs for
`~a::`air competition against ail Defendants;
`!4) The ~ourCh cause of action is by Brow:: and Sirico nor
`breach of contract against FGG;
`i5) ThP fifth cause ~.,~ action is 1 ;~rcwn ~n~ Sirico for
`rescission against FGG;
`;6; The sixth cause e~ action is by al'. P~a~n*-i~ts for
`~orstructive trust against FGG;
`(7) The seventh cause o~ action is by alI ~'_airtif~s for
`accounting against all DeTendants;
`;S? The eighth cause of action is by aid ~'_swn~iffs for
`Lrauci against FGG;
`y) The ninth causE of action is by ~a~.risc^ `ter conversion
`against all Defendants;
`~~~) The tenth cause of action is bar ~aT:-is`~: ~cr trespass
`r~.~ ~.(:di.~Ci against r311 i`~.:2iA':~di~LS~ d;7~
`(21? The elevent~7 CdL'S2 of ~cti~n is cy al_ ~laint~ffs for
`deciar~tory relzef against all Defendar:ts.
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`Pldintiffe allege that on or about March 25, 1963,
`2i Srown and Sirico entered into a contract with Sabina Records
`~~~dLii:~ ~JIl~ract"? order whicr. all musical records and rapes
`Oil recorded 'cy Brcwn and Sirwco would become the property of Sabina
`~~ records. In retuzn, Sabana t2ecords would gay Brown and Sirico
`6~ specified royalties of all records sold by Sabina record's or any
`7) a`filiate or iicersee. Amended Complaint at ¶ i5. The Sabina
`8-~ Cyr.=ract also provided that it was to be interpreted under the
`y~~ =awG o~ the State of New York. ~ at ¶ 14. On or about March
`10~ 25, 1963, after execution of the Sabina Contract, Sabina Records
`11~ assigned its rights in the Sabina Contract to FGG. I.~., at ¶ 18.
`Plaintiffs state that Davison was never a party to the
`~ Sob ra Ccntract, but scmetime ~n 19&3, Davison joined the group
`f_~ ~ "T~"'2 ~nge~s" and cox part in recording songs, including "qty
`5 ~I Bcr~f ri end ` s Back . " I.d_,_ at ( 19 . "My Boyfriend ` s Back" became
`16i Mercury`s largest album hit. Plaintiffs` Opposition at ]..
`plaintiffs allege that on or about 3une 13, 1963, Brown
`_~.'~ ;~r.d S~rice signed a contract with FGG ("FGG Contract") under
`_3~ ~.ai: c FGG would pay Brown and Sirico specified royalt~.es bayed on
`2C~~ sales oL Brown and Sirico's recordings.l ~,. at ¶ 20. The FGG
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`Plaintiffs did not attach the Sabina Contract or the FGG
`23 ~~~n~ract to their rust Amended Complaint. However, Defendants
`submi~ted a copy of the Sabina Contract with their motion to
`'iii dismiss. They represent that they requested a copy of the Sabina
`~ ~~ontract from Plaintiffs and that Plaintiffs gave them a copy of
`~~~' tre Sabina ~ontraci but that page 10 is missing and Plaintiffs
`2E ~ have been unable to locate page 10. Defendants also represent
`that neither part} has been able to locate a copy of the FGG
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`~~i Contract.
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`i3 contract alsc provided that it was to be interpreted ander the
`2± laws of the State of New York. I~ Subsequently, in June 1963,
`3~ FGG gr3rted ~ercur~ and/or Phonogr~m "tre exc~usive and
`i
`4~~ perpetual ~ignts" to ~.he master recordings of, and the use of,
`~I
`-
`~~ *. e compositions and performances recorded by Brown and Sirice,
`6~ inc'_udirg bud not limited to, "My Boyfriend's Sack." Id.. at
`7j~ 21. At some unspecified time, PolyGram became she successor-in-
`a ; interest tc Mercury and Phonogram and assumed ail the rights ar_d
`7 ij ob' ~.gations u::der the agreements with F'GG. Ld_,, at !( 22 .
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`10'
`Plaintiffs allege that they did not receive any royalty
`l~~ payments since receiving an initial payment in she early 1960's.
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`ter. ,'anuar~r 17, iy9~, ~he Ur.~~ed Stags _rademark and
`-- II -_ ~c`:.. '~`~~:2 _SS:c~Q d .,._l''✓_CG ~;dYit _ 4?g=S~=~=_Cii J` ti12 name "I~rE
`15 ~; Ange_s, " to ~i•sirtiffs Sirico and Da~~~=scn. Ex:zibit "A" attached
`why to Amended Complaint.
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`B. Procedural ~Lmma~
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`BSI
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`On July 6, 1998, P1_aintiffs `i1_ed he `cmplaint for
`~9 !~ Uama~~es and nor Injunctive and ~eclaratary Relief
`~G ~
`Cn A:~yust 6, 199, P~ainti~fs fi?ed a ~Fotice of
`~_i 'vaiur.~ary Dismissal Withcut Freudice :~s to Dc~e~~dant Mason &
`22~ ~cmpany, which ~his Ccurt gra?:ted on august. 1G, 1°53.
`iI
`231
`On A~:gust 26, 1990^, FiaintiLis flied ~'~:e rirst Amended
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`~a±i C~~pla_nt ;"Cc~~laint"i.
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`JE_c.':.~,.dP_~S t~_2Cl d i~Ot1Ce Of
`20 Mo~icn and Mot_on tc Dismiss Plaintiffs' {irsc .mended Complaint,
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`j which is before this Court today. nefendants conteiza ~tiat this
`i Court does not have personal jurisdiction over FGG and that
`Plaintiffs fail to state their claims.
`II , personal Jury nd~ ct1 on Ove~F~'+G Tye Tm~.-ofl r
`A. Standard
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`In order to maintain an action in the Central District,
`~~ a plaintiff must meet the requirements of 28 U.S.C. § 1391 (A) and
`1 must establish that this Court has personal jurisdiction over a
`i
`defendant . ~~. rDIC ~ ~gsj~~ ~h-Am _ri .an 7nG o L~~, 828 F. 2d
`~ 1439, 1441 (9~:~ Cir. 1987). In order to establish personal
`jurisdiction ever a nonresident defendant, a plaintiff must show
`that the forum state's jurisdictional statute confers personal
`jurisdiction over the defendant, and that the exercise of
`jurisdiction accords with constitutional principals of due
`process. ~ "akP v ~akP, 817 F.2d 1416, 1420 (9th Cir. 1987).
`because California Civil Procedure Code Section 410.10 extends
`urisdictior: ~~ the maximum extent permitted by due process, the
`state and due process jurisdictional inquiries can be conducted
`as one analysis. ~ Cal. Civ. Proc. Code § 410.10 (West 1973).
`Due process requires that a non-resident defendant have
`sufficient min=mum contacts with the forum state so that
`"main~enance oL a suit does not offend traditional notions of
``air play and substantial justice." Tn~~rnation~l shams t'o. v.
`ria, in~ton, 326 U.S. 310, 316 (1945). Courts may exercise either
`general or specific personal jurisdiction over a nonresident
`d~fendan=. ~e rP~i~, 828 F.2d at 1442.
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`1'I
`Cn a motion to dismiss for lack of personal
`~f
`z.l ur~sd~ct_on, a pla_ntir:: need only make a prima tacie showing
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`j ~'::at perscna? jur~sdic.ion exists. PQ _
`T;ata i sc ~ r..
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`1. General Jurisdiction.
`~~eneral jurisdiction exists when a nonresident
`:j ze`~:~dant !^:as "substan~ia" con~inuous and systeriatic" activities
`9; with the icrum state, even if the cause of ac~icn is unrelated to
`1
`10i these forum activities. ~ Per in v A nQl ~ soli at~d
`11 t M~^~-1.~ ~'o. , 342 U.S. 43? ;1952] .
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`2. Specific Jurisdiction.
`I~ a defendan~' _ ~cr.~acts ~N~th ~he ~..~..~.~ state are not
`~4 ~i Si.tL")Std::~13i OY' CCI1tiI1LiCUS and S`y`stema~ic, ~Y'i1S `J'tiY't may only
`15 'I exercise ;urisdicticn over the defendant if tre alleged
`i5 ~l activities occurred in the fcr~am state. fie. Rr3ns?. v Nf~.n
`_"' ?
`~~, ?~6 _ .2d 1670, ' 07_ '9*h ~~r. 1906')
`__. ...Yder to ccr.fer
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`i~
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`ll; the ncnresi:~ent deendant purposer•.~~' y directed
`activities or consummated transac~ior_s ~.vith the forum
`or residents the~~ecf, or performed seine :cL by which he
`purposefuiiy availed himse=f of ~i:e i r~.~.~iiege of
`conducting activi~_Es in the for~~m, t?-!~reby ~rvoking
`the benefits and pro~ectiens of its yaws;
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`5
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`t2) the claim arises out of or z~elates to the
`defendant's forum related contacts; and
`!3? the exercise of jurisdiction is reasonable, meaning
`chat it comports with fair play and substantial
`justice.
`
`Zata i~r, 557 F.2d at 1287.
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`B. Analvsis
`Defendants seex to dismiss FGG from this suit for lack
`of personal jurisdiction. FGG is a New York corporation, with
`its principle place o~ business in New York. Thus, both
`Plaintiffs and Defendants concede that this Court does not have
`general jurisdiction over FGG. Accordingly, this Court must
`~ determine whether it can exercise specific jurisdiction over FGG
`1. FS,S ham not nuZnosPfy lllr avai7,.~Si~,~,~glf of the
`privilege of c~ndLc~ing businegq i~t this forum
`Plaintiffs claim that FGG should be subject to suit in
`~al~~orr.ia because it has purposefully availed itself of the
`Ur~v~iege of conducting business within California.
`Spec~Fica~ly, Plaintiffs assert that FGG's act of producing and
`'~.ce:~sing the master-recordings, which Mercury distributed and
`sold ~n Californza, and the act of receiving royalties from
`Uercury constitute purposeful availment under the "stream of
`~cm;~,erce" idea discussed in ~11i. Defendants, on the other
`i~a~:a, ccn~.ei~d chat under ,t~~hi, FGG did not even place goods into
`the "stream of commerce" because it simply granted rights in
`recordings to Mercury, which then used those recordings. They
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`1~~ further assert that just placing a product into the stream of
`2~ commerce is not encugh under &s~hi. This Ccurr agrees.
`f
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`According o tre p~uraiity of tre Supreme Court,
`y'~ ac:~o~s s~cn as FGG's - "(t)he placemen~ of a prcdllC~ lnt~ the
`7 ~ J~ ~~am O~ ~Ot^'"2Y'CE', without mere" - do 1'20 COI:SLlti:tc ~~~3UrPOSBitli
`o'`I avai'_ment" creating personal ;urisdict_or~. AG~hi Me,~,al Ind. ~o.
`7;~ ~. S~~~riQ,.S a
`480 J.S. 102, 108 ;1987) ~ Om~1 ~ v.
`r,a-1~,~;~en S1 i~,~~.h~~~.eri A/~ 52 F.3d 267, 271 (9th Cir. 1995)
`iw'rere she Ninth Circuit followed the plurai~ty opinion in
`Cam_?. This Cour* finds that Plaintiffs rave not shown that FGG
`..-' a~~ ~nyching more than place a product into the stream of
`~~
`121 ~~cmmerce. Plaintiffs "evidence" supporting jurisdiction over
`i
`13i PGA: ~s best summed up ~y their own statemer~: "Pursuant to the
`1~ ~ __~er_se from FGG, de~e:~dan~ Polygram '.has mar_Ufactured record~~gs
`_~ ~~ .~i U~~;i:~t~~fs' scrgs ~r_~~r. are sold througi:out the United Stu~es,
`~i
`.6.`! ~: '.:ding ~"~e State cf California." (Pia=miffs' Opposition, p.
`'I
`171~.~.? Without evidence what rGG did more than. simply grant
`~g
`iicersirg rights to, and receive rcyaltwes from, Mercury or
`~ Po?yar.sm, a "stream of commerce" jurisdictional analysis is
`~n„e~?~~ab~e. In an analogous situation, the court in Slh M.~.,_
`moo. ~; . Dover Mfg. C'o. , which followed the direct i~.re of &S~i,
`stayed that "the forum activities of a Licensee cannot support
`she assertion of jurisdic~ion over a ;.onresident patentee, ever
`2~ ~ i ~!: N
`" ~
`e atentee recei•✓es
`rodalt;,,• payments.
`oC4
`Sapp. 1129,
`i!
`~5~~ ~i32-3a (E.D. Mo. 1992). Similarly, Defe:x~ancs cite to Advanced
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`held that a licensee's forum activities are not sufficient to
`support the exercise of in personam jurisdiction over a non-
`resident pa~entee, even *when the patentee receives royalty
`~ payments. 1996 WL x67293, at *7 (N.D. Cal. July 24, 1996). The
`court held .hat without evidence that the defendant actually
`retained score control over distribution or marketing of the
`patent, a "stream of commerce jurisdictional analysis is
`inappropriate." I~. This Court finds this reasoning to be
`~ persuasive and applicable to this situation.
`Plaintiffs assert that the notation "A Feldman-
`Goldstein-Gottehrer Production" on "The Angels" recordings and a
`1964 advertisement by Mercury referring to and thanking FGG
`confirm that PGG was actively involved in the recording and
`production of Plaintiffs' sings, which were sold throughout the
`J.S., including California. These assertions, without more, are
`insufficient. FGG states that it had no control over the
`advertisement developed by Mercury. Gotteherer Decl. ¶¶ 5-6.
`Moreover, local advertising alone is not enough to subject a
`nonresident defendant to the jurisdiction of this Court . E..sz.1~h
`y. ~ver,~Pr, 576 F.2d 779, 783 (9th Cir. 1978). In addition,
`FGG's involvement in production of the master-recordings occurred
`n 'dew York, o~~er thirty years ago. Gotteherer Decl. at ¶ 4. It
`is not enough ~o subject a non-resident defendant to the forum
`state's jurisdiction merely because the plaintiff resides in the
`forum state and may feel effects there. ~.a_,~t a~ t-~t A~~uran~P Rig
`~nG Br~kera~P v. Pi1,1,on, 976 F.2d 596, 600-01 (9th Cir. 1992).
`
`to
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`In sum, this Court finds that the notation "A Feldman-
`2i Jaldstein-Gottehrer Production" does not establish that FGG was
`i
`3i actively involved in the recording and production of Plaintiffs'
`I
`4i song. ~n addition, the advertisement referring to and thanking
`S~, rGG, wh~.ch FGG :gad no ccntroi over, does not establish that FGG
`6± was invo?ved in the marketing, distribution, or sales of "The
`7I Angeis" recordings. As such, t?~is court finds that Plaintiffs
`~i have rot established that FGG purposefully availed itself of they
`9i privilege of conducting business in this forum.
`10~
`2. p ai r.j,ffa~ .1aim~ d~ not arise out of FGG's
`1 ~
`fQr~ym_related acts v~ t~ es
`i
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`This Court finds that Plaintiffs' c~aims do not arise
`i
`.3?~ out o~ FGG's forum-re~ated ac~~.Triti.es. Plainty~fs entered into
`;E
`~ j =l:e contracts ~n Ne~,v York. It is c~ ear Lrom ~_a~ miffs'
`15I~ following assertion "ow at~enuated FGG's activities are with this
`15ji forum: "But `or FGG's prcdu~tion and licensing of plaintiffs'
`'7~ scu~:d recordings ~o its cc-defendants, which, in turn,
`'8,~ manufactured, sold and distributed recordings ~f plaintiffs'
`~9! songs, plaintiffs would not ha ,•e been entitled t~ royalties,
`20j wc:~ld have been deprived o~ royalties due to them, and would not
`2~ have had their trademark infringed." (.Opposition, p.10.)
`tit! ..leanly, there are no act~vi~ies by r^GG in C~~~iornia which give
`23'' rise to Plaintiffs' ciaimG.
`i'
`~4 ~!
`3 . Exerc~ se of uersonal j~?rx~di i 2~dver FGG would
`offend.~air ~~,3. and e71~t~s~t,-;al iustice
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`FILED: NEW YORK COUNTY CLERK 02/14/2017 09:33 PM
`NYSCEF DOC. NO. 90
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`~
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`a
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`E 7 8 9
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`Whcre a defendant has purposefully directed his
`activities at the forum state, the defendant has the burden to
`I present cempellirg ev~de~cA that the forum's exercise of
`+.I
`jurisdiction would not ccmport with fair play and substantial
`t jtistiCe. R,~r~z' K~~,.Ccr~- y. ~i,Z,{j~wi~~, 471 U.S. 462, 477-78
`( (1985) ; Amoco ~~.~o_~i 1 , 1 F.3d 848, 851 (9th Cir. 1993) As set
`~ forth above, this Court finds that FGG has not purposefully
`directed its activities at this state. However, even assuming
`II
`ghat it did, this Court Finds that exercise of jurisdictior,cvould
`rot comport with fair ti~ay and substantial justice.
`The ~'or -V .n court identified seven factors that
`shcuid be used to determine ~,ahether jurisdiction is reasonable:
`;'; the exte^t :;f she defendant's purposeful interjection into
`II the forum sr_ate's affairs; (2) ttie burden on the defendant of
`i5,
`defending in the forum; (3) the extent of conflict with the
`sovereignty of the defendant's state; (4) the forum state's
`_nterest in adjudicating the dispute; (5) the most efficient
`udicial resolution of the controversy; (6) the importance of the
``arum to the plaintiff's interest in convenient and effective
`e'iei; and (7) the existence of an alternative forum. or -
`Vp:~~., 11 r . 3d at 1487.
`
`i0
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`21
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`28 I)
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`First, as set forth above, the extent of Defendants'
`purposeful interjection irate phis state is practically non-
`ex~ster.t_ Second, it wcu'd be a burden on FGG, a New York
`-~orporaticn with its principle place of business in New York, to
`dererd in this forum. Third, California does not have a strong
`
`11
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`l~l interest in this action. The contracts Were executed in New York
`2~I and are guided by New Yoric law; although Brcwn and Sirico are now
`3! California residents, they were residents of Vew Jersey at the'
`~ ~` lm2 =ti"!~ :: @:1t21"~Ci 1:':~O ~}"i@ .~`. db1I13 ~'CiitY'dCL ~ ~dtI~SOP. iS a Maryla:iC~
`II
`5~ reside^t. Finally, an alternative fcru~ ex_Vts - New York. n
`61 tact, it appears to `.his Court that Uew York ~Neuld be a more
`7j appropriate forum.
`
`8I
`
`Accordingly, in light of the foregoing this Court
`9~ grants Defendant's Motion to Dismiss FGG for Lack of Personal
`i
`10' Jurisdiction.
`
`11 j,
`I~
`~2~
`f
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`i
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`III. Iternr York L.aw Covern4 p1a?nt~ ffs' Claims
`Hoth parties concede that New York ia~,~ should apply to
`13I ail cf Plaintiffs' contract claims.` Hcweve~, 7e~endants clai;n
`tai that 'vTesv York law should apply to she remaining non-contract
`i~_S ~ Ala=~r:s ~.~:~i~e Plaintif~s dispute the a~pi~cat=cn o~ Vew York law
`16 ~o its non-contract claims and contend that California law should
`17 be applied.
`I
`13~
`
`In determining what applicable law should be determined
`19' b;r the ~=hoice of law provision, this Court applies the choice of
`I
`~~'~ _a~.v r:~'es of ~alifernia, the forum state for this action.
`~I .~„~-- ~i~nai v M^T~'P~~S~;mmi~.i..~r~.t~or1G
`~~
`--
`r~ 55 F.3d 1500
`22j ~505't9th Cir. 195?. California Taw broadly ~~onstrues the type
`
`23'~
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`24~
``5 ~
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`26r
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`2 8 it
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`Plaintiffs do nc~ ;.,cn~est Defendants' argument that
`Plaintiff Davison should be b~urd to the choice-~f-law clauses of
`she cwo contracts (even though she did not personally execute
`them; because she knowingly took advantage of the contracts and
`because :per claims are thcrough~y enmeshed in Brown and Sirico's
`contrac'~ claims.
`
`12
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`of contractual ~hoi~P-of-law provision a~ issue here. Se,~. ~.
`(court, referencing Nedl odd r,; n~G ~3. ti„_v, y~,lp~r; or CoLrt , 3 Cal .
`4th 459 (1992), held that the choice-of-law provision providing
`what the agreement "shall be interpreted, construed and governed
`by the la~n~s of the State of New Ycrk" was sufficiently broad to
`cover non-contrac~ claims). Th.e choice of law provision in this
`case provides, "This agreement shall be governed by and constzued
`~ under the laws of the State of New York."
`Under California choice-of-law rules, this Court must
`apply the law designated by the contractual provision unless (1)
`the chosen state has no substantial relationship to the parties
`or transac*ion; or (2) such application would run contrary to a
`Calif~~rnia public policy or evade a California statute. Is1.;
`SaY'1 c~ .-iCant~r~~n y. i r~
`e,~ns~l van; a MOrt~~ T~;,~_t., 599 F.ld
`915, 917 (9th Cir. 1979) ; =amen v D ~ onY for o ~,a~ Inc. , 65
`~"al.App.3d 280, 286 (1976). This Court finds that Plaintiffs
`have not shown that (1) New York has ne substantial relationship
`to the part,~es or the transaction; or (2) application of the law
`of New York wcu'd be contrary to a California public policy or
`statute.
`
`3 4 5
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`7 8 9
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`10
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`11
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`12
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`14
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`19 i
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`20
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`
`r^lainciffs contend that California has an interest in
`pr~~cecting ics residents (Brown and Sirico) and an interest in
`offering a forum to obtain redress from torts committed against
`its residents. (Opposition at 19.) However, this Court agrees
`with Defenda:?ts that New York's interest in and connection to
`this dispute far outweighs California's minimal interest.
`
`13
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`rnS.
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`lj Although Brawn and Sirico are now California residents, they were
`2~ residents of New Jersey at the time they entered the Sabina
`i
`3! contract, which was execu~ed in ~'e~N Ycrk. Defendants are New
`4~ York residents. Final~y, as Defendants con~end, applying
`5i California law to Plain~irfs' c~aims, which stem from contracts
`5j entered into in New Ycrk ~Nith New Ycrk corporations, would allow
`7~' and encourage forum shopping. Gee imm_ man v A?1Gra
`8~ ~, 1'9 Cal. App. 3d 34~, 847 (1986) ("[T]he only factor
`9~~ supporting plaintiff's ~~aim of California gc~ernmental interest
`i
`'_0~ in this case is his stat~.:s as a resident of Lhis state until some
`~1! mcr:~hs following the [eve^ts leading ~o the lawsuit). Were we to
`'2 i hc'd that the law of plaitiff's residence applied, we would
`? ~ !I ercvuY'dye forum shopping . " i
`,~
`:4 !;
`Accordingly, t.~~.s ~~ourt finds what ~Te~ti York law applies
`'I
`lS! ~ ire non-contract causes of action.
`~o
`15~(
`IV. standard for a Motion to Dismiss
`In cons~derirg a motion to d~sm~ss pursuant to Rule
`_~ b'•;oi of the Federal Rules ci Civii Procedure, the court must
`_9 assumE that the plaintiff's allegat~cns are tY-ue, and must
`20i ccns.true the complaint in a light most favorable to the
`i
`2i !f pla~r_tiff. Unj..~ed S ~r~G ~• r, t~, o
`dw ,o r~ ~
`640 F.2d 963,
`i~
`~~'~ ~~? i9th Cir. 1981;. Mcr~over, even if the dace ~f the pleadings
`I'
`~3;~ '_^di:ates that recovery s anl'kely, the plaintiff is still
`2~ ~ er.~~tled ~o offer evidence in support of '- he complaint . sr.h~r
`25I~ v. Rho~'es, 416 U.S. 232, 236 0974); ~~w~~cl C~tv, 640 F.2d at
`Gc + ~E7 . Tt?2 CCUY't fiat ~Ot u1SiiliSS comp~alllCS DilY'SUdI7t t0 ~L:~ 2
`27'
`i
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`23j
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`14
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`12(b)(6) "unless it appears beyond doubt that the plaintiff can
`Drove no set of facts in support of his claim which would entitle
`him to relief." Con1~~ v. Gih~~n, 355 U.S. 41, 45-46 (1957};
`3:;g,~,_~? 1 z
`~,ar_d~~~ Pll, 621 F.2d 1037, 1039 (9th Cir. 1980) .
`Generally, cyders granting motions to dismiss are
`without prejudice unless "allegations of other facts consistent
`;with the challenged pleading could not possibly cure the defect."
`Sch~c~ii~ r '~i~ _ v SPry-W 11 ~~~nit~tre, 806 F.2d 1393, 1401 {9th
`~ir. 198E?.
`
`1 2 3 q S 6 7 8 9
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`'GI
`f
`11 I
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`12 ~
`
`V. pismissa of P~a~~t~~~s~ F~Yst, Seco*+d and Third Causes
`of Action £or Trademarir 7»fri n~mcant _ Fa~.Se DesiQnatian
`aid Desc~_r-in~}- i on and ~~n£ai•- C~~Ptition Is Warranted
`Defendants contend that Plaintiffs' trademark related
`causes of action - infringement of a registered trademark under
`~ Section 32 of the Lanham Act, 15 U.S.C. § 1114, false designation
`and description under Section 43 (a) of the Lanham Act, 15 U.S.C.
`~ 1125(a) and unfair competition - fail to set forth claims for
`re~ief. They assert that dismissal is warranted because (1)
`~~=erdan~s haj✓e an express right to use the name "The Angels;"
`;2; Defendants have an implied right to use the name "The
`Angels;" and (3? Defendants have lawfully sold genuine musical
`re`crdings made by Plaintiffs under the name "The Angels." This
`~osrt finds that this la*ter argument is persuasive.
`Defendants ~cntend that they have lawfully sold genuine
`musical recordings made cy Plaintiffs as "The Angels" under the
`name "The Angels." Under these circumstances, Defendants assert
`
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`22
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`23
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`15
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`
`that there is no likelihood of confusion and therefore the
`tra~emark-related claims fail as a matter of law.
`F'aintiffs admit C"at Defendants are selling genuine
`musica~. recordings made by F=aintiffs as recordings of "The
`Arge~s." However, they contend that ~e~en~arts' legal conclusion
`~s faulty. They claim that t'~eir tracemark-related claims are
`based on the fact that Defendants have used Plaintiffs' trademark
`in a manner like~y to cause confusion, to cause mistake, or to
`deceive the genera public as to whether Plaintiffs have
`spor_sored or approved of Def~:dants' products and commercial
`activities.
`
`i
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`2
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`4 5
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`7 8 9
`
`~. 0
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`~.1 ',
`
`This Court finds teat the applicable law bars
`r Plainti~fs' trademark-re~ated claim . "mraaemark 'aw generally
`~, goes rep reach the sale of ge Caine goods ~earin~ a true mark ever<
`it ~noti~h such sale is without tine mark owner's consent." ,~^
`~~ ~1 ec~ronic5 v. al ~i r ~i A ~ 810 :.2d 1506, 1509 (9th Cir.
`~ 1987). 'his principle is known as the "first sale" rule: the
`right of a producer to control distr-_bucion of its trademarked
`~,rodur't does not extend beyond the first sale cf the product.
`~,~~~~ pan r*1~Prn v ~n~~ r~•cr~~nr,~5, 53 r .3d _C73, 1074-75 (9th
`..ir. i9y~? . "Once a trademark owner se~.~s n~.s product, the buyer
`ordinarily may resell the product under the or~g~nal mark without.
`incurring any trademark law ~iabi'ity." N~~~]~c:.~2t1~~, S1C
`r.2d at '~50~. The reason behind this princ~nle is that trademark
`law is designed to prevent se~~ers Frcr, confusing cr deceiving
`consumers about the origin or maize of a product, which confusion
`
`~jG "
`
`22
`
`23
`
`L4
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`26
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`INDEX NO. 604403/2005
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`~
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`f ~
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`8
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`ordinarily does not exist when a genuine article bearing a true
`4 mark is sold. Ld. ; ~e~. t~L~-C~~ v. Mi GuboGhi t,~1 ~r~,, rnr. , 67
`F.3d 917, 923 ;"Liability for unfair competition and trademark
`infringement depends on the likelihood of confusion.").
`Here, Plaintiffs do not dispute that Defendants are
`selling Plaintiffs' genuine recordings bearing a true mark.
` Rather, Plaintiffs assert that Defendants are deceiving the
`public thaC Plaintiffs have sponsored or approved of Defendants'
`activities. Plaintiff cites to cases for its proposition that
`` the public's belief that the mark's owner sponsored or otherwise
`approved the use of the trademark satisfies the confusion
`re~~u~remen~. However, these cases do not deal with genuine
`products and marks. In Dal1a~~whoyq~,~t _ v p ~~~~c-ar c'inema~
`Ltd " 604 F.2d 200 (1979), the court held that a likelihood of
`confusion was sufficiently established to entitle plaintiff's
`creerleading group to a preliminary injunction prohibiting
`defendants from distributing or exhibiting a motion picture film
`featuring a uniform strikingly similar to one worn by plaintiff's
`cheerleading group where it was hard to believe that anyone who
`had seen the film could ever thereafter disassociate it from
`~la~ntirf's cheerleaders, and association resulted in confusion
`which had a tendency to impugn plaintiff's services and injure
`pla~rt~ff's business reputation. The court in Dalla owb
`clear_y was not dealing with the use of genuine products and
`marks. Similarly, in AnheLser-BuG~h,` Tn _ v Bal ~
`?un1 i^a~_t~ny, 28 F.~d 769 (9th Cir. 1994) , cited by Plaintiffs,
`
`10
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`
`A
`
`11 the court held that likelihocd of confusion existed between
`2: de`endant's parody and plaintiff's trademarks "Michelob" and "A &
`i,
`3~I eagle Design." There was no ccntent~cn that r_he defendants used
`~ i, ~en~sine products and ma=;cs .
`i
`S i
`i
`
`The Ninth Circuit ease of S~~a~r; ~ , in r v. i,Q~a
`5! ~.~.S,orA~ addresses P1a~nCiffs' argument directly. In
`?~ ~P„~astian, the plaintiff asserted the same argument - that
`d'~ aeferdant's reselling o~ plaintiff's products confused consumers
`ti
`;( _:etc believing that there was some type of affiliation between
`10! defendant and plaintiff or approval by defendant. The Ninth
`11~ circuit called this premise "false":
`12I~
`i
`13 :;
`i
`_µ~
`
`The 'first sale' rule is not rendered
`irapplica~le :,ere' 1~ because consumers
`erroneously believe the reselier is
`affiliated wish or aut:~orized by the
`producer. It ~s the essence of the 'f=rst
`sale' dce*rive what a purchaser who dces no
`more than stock, display, and resell a
`prcducer~s product under the producer's
`trademark violates no right conferred upon
`the producer by she Lanham Act . rr]r:en a
`purchaser resells a trademarked article under
`the prod;;=er's ~rad~mark, and roth~na more,
`there is no ac~ionab=e misrepresenta~icn
`under the statste.
`
`18
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`FILED: NEW YORK COUNTY CLERK 02/14/2017 09:33 PM
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`INDEX NO. 604403/2005
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`
`9'
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`i0 j
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`11~
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`~I .
`
`it Id. at 1076. As such, since Defendants are selling genuine
`2~ products with true marks, Plaintiffs cannot state claims for
`3i trademark infringement and unfair competition.
`4 ~
`Accardingly,.this Court grants Defendants' motion to
`i,%,+ ~ism~ss Plai:~~iffs' first, second and third causes of action for
`7iI infringement of a registered trademark under 15 U.S.C. § 1114,
`7~ false 3esignation under 25 U.S.C. ~ 1125 (a) and unfair
`8 ! competition with prejudice and without leave to amend.
`VI . Thla Court Dotes Not Need Go Addret~.y DiQm~ 4i3~,]„ Qf
`PlaintiffQ' Causes Q.~ Act^.ion,}or F'rat~j and Rey~ission
`Defendants contend that Plaintiffs' cause of action for
`12) fraud against FGG fai?s under New York law because it merely
`131 restates their claim ~cr breach of contract. They also contend
`1?I what Plaintiffs have failed to plead the causes of action against
`'5i rGG for fraud and rescission with sufficient particularity. In
`i6~ light of this Court's finding, ~.u,gr~, that no personal
`1?I urisdiction exists over rGG, this Court does not need to address
`18' these arguments.
`VII. pismissa~ of Davison'
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