Case 8:13-cv-00174-JST-JPR Document 25 Filed 05/13/13 Page 1 of 8 Page ID #:162

____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

Present: Honorable JOSEPHINE STATON TUCKER, UNITED STATES DISTRICT JUDGE Terry Guerrero Deputy Clerk ATTORNEYS PRESENT FOR PLAINTIFF: Not Present PROCEEDINGS: N/A Court Reporter ATTORNEYS PRESENT FOR DEFENDANT: Not Present (IN CHAMBERS) ORDER DENYING PLAINTIFFS MOTION TO DISMISS FIRST AMENDED COUNTER-CLAIM (Doc. 16)

Before the Court is a Motion to Dismiss First Amended Counter-Claim filed by Plaintiffs Creighton D. Rothenberger and Thousand Words Entertainment, Inc. (Mot., Doc. 16.) Defendant John S. Green opposed, and Plaintiffs replied. (Oppn, Doc. 19; Reply, Doc. 20.) The Court finds this matter appropriate for disposition without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. R. 7-15. Accordingly, the hearing set for May 17, 2013, at 2:30 p.m. is VACATED. For the following reasons, the Court DENIES Plaintiffs Motion. I. Background

When ruling on a motion to dismiss, the Court accepts as true the factual allegations in the complaint. Hemi Grp., LLC v. City of New York, 559 U.S. ---, 130 S. Ct. 983, 986-87 (2010). This lawsuit concerns ownership over the screenplay Olympus Has Fallen. Green and Rothenberger were long-time friends who collaborated on numerous writing projects throughout the years. (First Am. Counter-Claim (FACC) 10, Doc. 13.) They jointly developed and wrote several screenplays that they intended to sell to third parties. (Id.) Green alleges that the two agreed that in the event they sold any of their screenplays, they would both receive writing credit and profits. (Id.)

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____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

In or about May 2002, the two discussed the idea of writing a screenplay for a feature-length motion picture about terrorists taking over the White House, and shortly thereafter, the pair traveled to Washington, D.C. to walk the perimeter of the White House to help develop their story. (Id. 11.) Green and Rothenberger then began writing their treatment, which they revised numerous times throughout July and August of 2002. (Id. 12.) During this time, Green came up with the name Olympus Has Fallen for the screenplay. (Id.) A forty-one-page treatment titled Olympus Has Fallen a Treatment for a Feature Film Screenplay by Creighton Rothenberger and John S. Green was registered with the Writers Guild of America (WGA) in or about July 2002. (Id. 13.) The pair subsequently completed the then-54-page treatment on or about August 18, 2002. (Id. 14.) The two then began writing the screenplay, with both Green and Rothenberger allegedly exercis[ing] control over the content of the screenplay, and they both made independent copyrightable contributions to the screenplay. (Id. 17.) The screenplay was finished in March 2003, but it did not sell. (Id. 18-19.) The screenplay apparently languished until April 2009 when Rothenbergers friend read the screenplay and liked it. (Id. 20.) The pair then again revised the screenplay. This 2009 revision was allegedly based on and a realization of the treatments the pair had written nearly a decade earlier. (Id. 21.) After the 2009 screenplay was finished, it was set aside again. (Id. 22.) In approximately 2011, Rothenberger contacted Green to inform him that he (Rothenberger) had found a new manager and that The Gersh Agency had agreed to be his talent agency. (Id.) Soon thereafter, Rothenberger sent Green the latest version of the screenplay for Greens review and comment. (Id. 23.) Green then made comments, and the process of revision and comment-solicitation was repeated once more. (Id.) The screenplay was completed in 2012, and, again, it was allegedly substantially based upon the earlier treatments the two wrote. (Id. 24.) Rothenberger then sold the screenplay to a production company and allegedly failed to disclose that Green was a coauthor of Olympus Has Fallen. (Id. 25.) Green also alleges that Rothenberger previously registered one of the versions of the screenplay with the U.S. Copyright Office that erroneously lists Rothenberger as the sole author. (Id.)
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____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

Rothenberger subsequently filed suit in this Court. (Compl., Doc. 1.) Green eventually filed his FACC, asserting four claims: declaration of copyright co-ownership; accounting between copyright co-owners; breach of partnership agreement; and breach of fiduciary duty. (FACC.) The instant Motion followed. II. Legal Standard

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009). Rule 12(b)(6) is read in conjunction with Federal Rule of Civil Procedure Rule 8(a), which requires only a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). When evaluating a Rule 12(b)(6) motion, the district court must accept all material allegations in the complaint as true and construe them in the light most favorable to the non-moving party. Moyo v. Gomez, 32 F.3d 1382, 1384 (9th Cir. 1994). To survive a motion to dismiss, a plaintiff must allege enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 556). The issue on a motion to dismiss for failure to state a claim is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims asserted. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). In considering the motion, the Court is limited to the allegations on the face of the complaint (including documents attached thereto), matters which are properly judicially noticeable and documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading. Branch v. Tunnell, 14 F.3d 449, 453-54 (9th Cir. 1994), overruled on other grounds in Galbraith v. Cnty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002).

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____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

III.

Discussion First Counter-Claim: Declaration of Copyright Co-Ownership

In his first counter-claim, Green seeks a declaratory judgment that: (1) Green is a 50% co-owner and 50% co-author of the screenplay and (2) Rothenbergers registrations for the screenplay shall be amended to add Green as a co-owner and co-author of the screenplay. (FACC 29.) Rothenberger moves to dismiss this counter-claim on the basis that it is timebarred. A claim under the Copyright Act is subject to a three-year statute of limitations. 17 U.S.C. 507(b). Moreover, as the parties both recognize, claims for copyright coownership accrue when plain and express repudiation of co-ownership is communicated to the claimant, and are barred three years from the time of repudiation. Zuill v. Shanahan, 80 F.3d 1366, 1369 (9th Cir. 1996). Rothenberger relies primarily on a First Circuit case and a handful of cases from the Southern District of New York that hold that registration of a copyright gives constructive notice of claims of ownership and is sufficient to commence the statute of limitations. See Saenger Org., Inc. v. Nationwide Ins. Licensing Assocs., 119 F.3d 55 (1st Cir. 1997); Ackoff-Ortega v. Windswept Pac. Entmt Co., 120 F. Supp. 2d 273 (S.D.N.Y. 2000). Green alleges that Rothenberger registered the screenplay, and Rothenberger has indeed provided a printout from the U.S. Copyright Offices website showing that Rothenberger is the copyright claimant for the Olympus Has Fallen screenplay. (See Pls. Request for Judicial Notice Ex. A, Doc. 17-1.)1 Thus, Rothenberger argues that he expressly repudiated co-ownership in 2002, when he registered his copyright. If true, Greens counter-claim would indeed be time-barred. The Seventh Circuit, in Gaiman v. McFarlane, rejected the Saenger courts holding on this point. 360 F.3d 644, 655 (2004). Todd McFarlane, creator of the popular comic book Spawn, had enlisted the help of Neil Gaiman in creating comic book characters, assuring Gaiman that he would treat him better than the big guys. Id. at 649 (internal quotation marks omitted). Ultimately, the two were never able to reach an
1

The Court takes judicial notice of the U.S. Copyright Offices website. See Fed. R. Evid. 201. ______________________________________________________________________________ CIVIL MINUTES GENERAL 4

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____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

agreement, and McFarlane made Gaiman a final offer pursuant to which McFarlane would own the copyrights to all characters the two jointly created. Id. at 652. The Seventh Circuit concluded that statement triggered the three-year limitations period. In doing so, it rejected the argument that the claim had accrued earlier, when he registered the works in his own name: But to suppose that by doing so [registering the copyrights] he provided notice to Gaiman of his exclusive claim to the characters is again untenable. Authors dont consult the records of the Copyright Office to see whether someone has asserted copyright in their works . . . . Id. at 654. The court continued: The significance of registration is that it is a prerequisite to a suit to enforce a copyright. . . . All that is important in this case is that it is no more the purpose of registration to start statutes of limitations running than it is the purpose of the copyright notice itself to do so. Id. at 654-55.2 Green has alleged some facts supporting his argument Rothenberger lulled him into believing that Rothenberger was treating Green as a co-author. (Oppn at 12; see FACC 18-23.) The pleadings stage is not the time to resolve the inherently factual inquiry of when Rothenberger communicated to Green his express repudiation. The Court is not convinced that the mere filing of the copyright registration[] . . . rise[s] to the level of plain and express repudiation. Scorpio Music (Black Scorpio) S.A. v. Willis, No. 11cv1557 BTM(RBB), 2013 WL 790940, at * 6 (S.D. Cal. Mar. 4, 2013). At the very least, Plaintiffs should have to show that [Green] had actual notice of the content of the registrations . . . . What [Green] knew and when he knew it are factual issues that cannot be determined at this time. Id. Accordingly, the Motion is denied as to this claim. Second Counter-Claim: Accounting Between Copyright Co-Owners Greens second counter-claim is for accounting between copyright co-owners. Plaintiffs move to dismiss Greens second claim on the identical ground that it is time2

Contrary to Rothenbergers characterization of Gaiman, the Seventh Circuits rejection of Saengers holding was not limited to the reason that at issue in Gaiman was a compilation of works. See id. ______________________________________________________________________________ CIVIL MINUTES GENERAL 5

Case 8:13-cv-00174-JST-JPR Document 25 Filed 05/13/13 Page 6 of 8 Page ID #:167

____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

barred. (See Mot. at 4-7.) For the reasons set forth above, the Motion is denied as to this claim. Third Counter-Claim: Breach of Partnership Agreement Green next alleges breach of partnership agreement. Specifically, he alleges that he and Rothenberger formed an oral partnership agreement concerning the writing projects upon which they worked together in approximately 2002. (FACC 37.) Green alleges that pursuant to the partnership agreement, both Green and Rothenberger agreed that they would work together to create, develop, and write treatments and screenplays, and that they would share in the credits and profits in the event that they sold any of their screenplays. (Id. 38.) Plaintiffs make two arguments as to why this claim must be dismissed. First, they argue that Green fails to allege sufficient material terms to constitute an enforceable contract. (See Mot. at 7-12.) Plaintiffs argue Green has failed to allege how profits would be calculated and shared, who would be responsible for partnership costs, the duration of the partnership agreement, and which treatments and screenplays were subject to the partnership agreement. None of these terms is required to state a claim for breach of oral contract. In Holmes v. Lerner, 74 Cal. App. 4th 442 (1999), a panel of the California court of appeal explained that Californias Uniform Partnership Act defined a partnership as an association of two or more persons to carry on as coowners a business for profit, and expressly rejected the defendants argument that without an agreement to share profits, there can be no partnership. Id. at 453 (quoting UPA (internal quotation marks omitted)). The court explained that the Legislature intends profit sharing to be evidence of a partnership, rather than a required element of the definition of a partnership. Id. at 453-54. In short, the intent to carry on a business for profit is the essential requirement for a partnership. Id. at 454. Green has alleged this. The purported deficiencies Plaintiffs identify will be explored in discovery, and whether a contract existed will be determined as a factual matter. Second, Plaintiffs argue that the alleged partnership agreement is unenforceable under the statue of frauds. Californias statute of frauds provides in pertinent part that
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____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

[a]n agreement that by its terms is not to be performed within a year from the making thereof is invalid. Cal. Civ. Code 1624(a)(1). The contract is unenforceable only where by its terms it is impossible of performance in the period. If it is merely unlikely that it will be so performed, or the period of performance is indefinite, the statute does not apply. 1 Witkin, Summary of Cal. Law (10th), Contracts 365. Green does not allege a durational term, but, as Plaintiffs note, the law will imply the continuance of the agreement for a reasonable period. See San Francisco Brewing Corp. v. Bowman, 52 Cal. 2d 607, 619 (1959). In Bowman, the California Supreme Court held that the fact-finder was to determine the reasonable period of continuance. If it exceeded one year, then the contract was invalid. See id. at 619. Thus, in this case, it will be for the fact-finder to determine (1) whether an oral partnership contract existed, and, if so, (2) what was the reasonable period implied for the partnerships continuance. If the fact-finder determines that the reasonable period for its continuance, in light of all the evidence, was more than a year, then the alleged partnership agreement will be held invalid. Accordingly, the Motion is denied as to this claim. Fourth Counter-Claim: Breach of Fiduciary Duty Lastly, Green asserts a claim for breach of fiduciary duty. The elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach. Stanley v. Richmond, 35 Cal. App. 4th 1070, 1086 (1995). Green alleges Rothenberger owed him a fiduciary duty by virtue of the partnership that existed between Green and Rothenberger. (FACC 43.) As explained above, Green has alleged the existence of a partnership, and partners owe fiduciary duties to their fellow partners. See Enea v. Super. Ct., 132 Cal. App. 4th 1559, 1564 (2005). The conduct Green has alleged, if true, would constitute such a breach. See id. (In all proceedings connected with the conduct of the partnership every partner is bound to act in the highest good faith to his copartner and may not obtain any advantage over him in the partnership affairs by the slightest

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____________________________________________________________________________ UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES GENERAL Case No. SACV 13-174-JST (JPRx) Title: Creighton D. Rothenberger, et al. v. John S. Green, et al. Date: May 13, 2013

misrepresentation, concealment, threat or adverse pressure of any kind.) (internal quotation marks, alterations, and citations omitted). Accordingly, the Motion is denied as to this claim. IV. Conclusion For the foregoing reasons, the Court DENIES Plaintiffs Motion.

Initials of Preparer: tg

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