Forest Park Pictures v. USA Network, Inc., No. 11-2011 (2d Cir. 2012)
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In 2005, Forest Park formulated a concept for a television show called "Housecall," in which a doctor, after being expelled from the medical community for treating patients who could not pay, moved to Malibu, California, and became a concierge doctor to the rich and famous. Forest Park created character biographies, themes, and storylines, which it mailed to Sepiol, who worked for USA Network. Initial discussions failed. A little less than four years later, USA Network produced and aired a television show called "Royal Pains," in which a doctor, after being expelled from the medical community for treating patients who could not pay, became a concierge doctor to the rich and famous in the Hamptons. Forest Park sued USA Network for breach of contract. The district court held that the claim was preempted by the Copyright Act, 17 U.S.C.101, and dismissed. The Second Circuit reversed. Forest Park adequately alleged the breach of a contract that included an implied promise to pay; the claim is based on rights that are not the equivalent of those protected by the Copyright Act and is not preempted.
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11-2011-cv Forest Park Pictures v. Universal Television Network, Inc. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 4 August Term 2011 5 (Argued: November 14, 2011 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Decided: June 26, 2012) Docket No. 11-2011-cv -----------------------------------------------------x FOREST PARK PICTURES, TOVE CHRISTENSEN, and HAYDEN CHRISTENSEN, Plaintiffs-Appellants, -- v. -UNIVERSAL TELEVISION NETWORK, INC., Defendant-Appellee. -----------------------------------------------------x B e f o r e : 24 WALKER, RAGGI and LIVINGSTON, Circuit Judges. Plaintiffs-Appellants Forest Park Pictures, Tove 25 Christensen, and Hayden Christensen appeal from an order of the 26 United States District Court for the Southern District of New 27 York (Colleen McMahon, Judge) granting Defendant-Appellee 28 Universal Television Network s motion to dismiss on the grounds 29 that this breach of contract action is preempted by the Copyright 30 Act. 31 adequately alleged a contract that includes an implied promise to 1 We reach a different conclusion. Plaintiffs-Appellants 1 pay. 2 equivalent of those protected by the Copyright Act, it is not 3 preempted. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Because this claim is based on rights that are not the VACATED and REMANDED. DAVID MAREK (John R. Halter, on the brief), Liddle & Robinson, L.L.P., New York, New York, for PlaintiffsAppellants. SUSAN WEINER, NBCUniversal Media, LLC, New York, New York (Robert Penchina and Amanda M. Leith, Levine Sullivan Koch & Schulz, L.L.P., New York, New York, on the brief), for Defendant-Appellee. JOHN M. WALKER, JR., Circuit Judge: This dispute over the concept for a television show presents 18 the question of the extent to which the Copyright Act, 17 U.S.C. 19 § 101 et seq., preempts contract claims involving copyrightable 20 property. 21 Christensen, and Tove Christensen (collectively, Forest Park ) 22 developed an idea for a television series and created a writing 23 that embodied it, known in the industry as a series treatment. 24 Forest Park submitted its idea, first by mail and then in person, 25 to Defendant-Appellee USA Network, a division of Universal 26 Television Network, Inc. ( USA Network ). 27 implied promise by USA Network to pay reasonable compensation if 28 the idea were used. 29 of New York (Colleen McMahon, Judge) held that the Copyright Act 30 preempted a breach of contract claim based on idea submission, Plaintiffs-Appellants Forest Park Pictures, Hayden Forest Park alleges an The District Court for the Southern District 2 1 and granted USA Network s motion to dismiss. We reach a 2 different conclusion. 3 of a contract that included an implied promise to pay. 4 this claim is based on rights that are not the equivalent of 5 those protected by the Copyright Act, it is not preempted. Forest Park adequately alleged the breach Because 6 7 8 9 BACKGROUND Facts Because Forest Park appeals from an order dismissing the 10 complaint on the pleadings, we accept as true the facts alleged 11 in the Third Amended Complaint ( Complaint ). 12 Deutsche Bank Sec. Inc., 647 F.3d 479, 481 (2d Cir. 2011). 13 2005, Forest Park formulated a concept for a television show 14 called Housecall, in which a doctor, after being expelled from 15 the medical community for treating patients who could not pay, 16 moved to Malibu, California, and became a concierge doctor to 17 the rich and famous. 18 treatment for the idea, including character biographies, themes, 19 and storylines. 20 who worked for USA Network. 21 See Hutchison v. In Forest Park created a written series It mailed this written material to Alex Sepiol, After sending the written materials, Forest Park requested a 22 meeting between its representatives and Sepiol. 23 the meeting for the express purpose of hearing Plaintiffs pitch 24 their show. Complaint ¶ 12. Sepiol scheduled At the time, Sepiol and USA Network 3 1 knew that writer-creat[o]rs pitch creative ideas to prospective 2 purchasers with the object of selling those ideas for 3 compensation and that it was standard in the entertainment 4 industry for ideas to be pitched with the expectation of 5 compensation in the event of use. 6 meeting, [i]t was understood that Plaintiffs were pitching those 7 ideas with the object of persuading USA Network to purchase those 8 ideas for commercial development. 9 prior to hearing the idea for Housecall, he had never heard of 10 concierge doctors, or doctors who make house calls for wealthy 11 patients, and thought it was a fascinating concept for a 12 television show. 13 week, Sepiol and Forest Park exchanged further communications; 14 however, discussions soon ceased and no further contact between 15 the parties ensued. 16 Id. ¶ 15. Id. ¶ 9. Id. ¶ 13. And, at the Sepiol said that Over the course of the following A little less than four years later, USA Network produced 17 and aired a television show called Royal Pains, in which a 18 doctor, after being expelled from the medical community for 19 treating patients who could not pay, became a concierge doctor to 20 the rich and famous in the Hamptons. 21 knowledge of Royal Pains, did not consent to its production, 22 and received no compensation from USA Network for the use of its 23 idea for the show. 24 4 Forest Park had no prior 1 2 Prior Proceedings Forest Park Pictures, located in California, and the 3 Christensens, residents of California and Toronto, Canada, 4 brought a diversity action against USA Network and Universal 5 Television Network, a New York corporation, for breach of 6 contract. 7 Procedure 12(b)(6) to dismiss the Complaint on the grounds that 8 the Copyright Act preempted the claim and that the contract was 9 too vague to be enforced. USA Network moved under Federal Rule of Civil The district court held the claim 10 preempted and dismissed the Complaint without addressing the 11 vagueness argument. 12 Network, Inc., No. 10 Civ. 5168(CM), 2011 WL 1792587, at * 3, 13 2011 U.S. Dist. LEXIS 50081, at *9 (S.D.N.Y. May 10, 2011). 14 Forest Park timely appealed the dismissal. Forest Park Pictures v. Universal Television 15 16 17 DISCUSSION This appeal presents two questions: first, whether Forest 18 Park s breach of implied contract claim is preempted by the 19 Copyright Act; and second, if such a claim is not preempted, 20 whether Forest Park adequately pleaded a claim under state law. 21 We hold that Forest Park s claim is not preempted and that the 22 Complaint pleads an enforceable contract under state law that 23 survives a motion to dismiss. 5 1 We review de novo a district court s dismissal of a 2 complaint under Rule 12(b)(6), accepting all of the complaint s 3 factual allegations as true and drawing all reasonable inferences 4 in the plaintiffs favor. 5 Nat l Ass n, 655 F.3d 136, 141 (2d Cir. 2011). 6 must state a claim that is plausible on its face. 7 Corp. v. Twombly, 550 U.S. 544, 570 (2007). 8 plausibility when the plaintiff pleads factual content that 9 allows the court to draw the reasonable inference that the Interpharm, Inc. v. Wells Fargo Bank, The complaint Bell Atl. A claim has facial 10 defendant is liable for the misconduct alleged. 11 Iqbal, 556 U.S. 662, 678 (2009). 12 I. 13 Ashcroft v. Preemption We first turn to USA Network s argument that Forest Park s 14 claim is preempted. Section 301 of the Copyright Act expressly 15 preempts a state law claim only if (i) the work at issue come[s] 16 within the subject matter of copyright and (ii) the right being 17 asserted is equivalent to any of the exclusive rights within the 18 general scope of copyright. 19 Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876, 892 (2d 20 Cir. 2011). 17 U.S.C. § 301(b); see Barclays 21 A. Subject Matter Requirement 22 In order to be preempted, a claim must involve a work 23 within the subject matter of copyright. 24 Copyright protection exists for original works of authorship 6 17 U.S.C. § 301(a). 1 fixed in any tangible medium of expression, but does not extend 2 to an idea, . . . regardless of the form in which it is 3 described, explained, illustrated, or embodied. 4 § 102(a), (b). 5 the subject matter of copyright, and thus be subject to 6 preemption, even if they contain material that is uncopyrightable 7 under section 102. 8 Basketball Ass n v. Motorola, Inc. ( NBA ), 105 F.3d 841, 849 (2d 9 Cir. 1997); Harper & Row, Publishers, Inc. v. Nation Enters., 723 17 U.S.C. We have held, however, that works may fall within See Barclays Capital, 650 F.3d at 892; Nat l 10 F.2d 195, 200 (2d Cir. 1983), rev d on other grounds, 471 U.S. 11 539 (1985). 12 Nimmer on Copyright § 19D.03[A][2][b] (2011). 13 for example, the work at issue, President Ford s memoirs, 14 contained uncopyrightable facts. 15 we held that the factual content of the book did not remove the 16 work as a whole (indisputably a literary work of authorship, see 17 § 102(a)(1)) from the subject matter of copyright. 18 723 F.2d at 200; see also Barclays Capital, 650 F.3d at 892, 902. 19 Similarly, in Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 20 296 (2d Cir. 2004), we held that a novel fell within the broad 21 ambit of the subject matter categories listed in section 102(a) 22 despite containing uncopyrightable ideas. 23 of copyright for preemption purposes, then, extends beyond the 24 scope of available copyright protection. See generally 4 Melville B. Nimmer & David Nimmer, In Harper & Row, 723 F.2d at 200. 7 Nevertheless, Harper & Row, Id. at 306. The scope 1 The reason for our broad interpretation of the scope of 2 copyright preemption is that Congress, in enacting section 301, 3 created a regime in which some types of works are copyrightable 4 and others fall into the public domain. 5 849. 6 deprived the states of the power to vest exclusive rights in 7 material that Congress intended to be in the public domain. 8 Id.; see also Harper & Row, 723 F.2d at 200 (recognizing that it 9 would run directly afoul of one of the Act s central purposes See NBA, 105 F.3d at In preempting certain state causes of action, Congress 10 to allow the states to expand copyright protection to works 11 Congress deemed uncopyrightable). 12 scheme functions properly only if the subject matter of 13 copyright includes all works of a type covered by sections 102 14 and 103, even if federal law does not afford protection to them. 15 NBA, 105 F.3d at 850 (quoting ProCD, Inc. v. Zeidenberg, 86 F.3d 16 1447, 1453 (7th Cir. 1996)). 17 Section 301 s preemption The work at issue in this case is Forest Park s idea for 18 Housecall, manifested in the series treatment (comprising 19 character biographies, themes, and storylines). 20 and associated written materials are works of authorship that 21 are fixed in a tangible medium. 22 Forest Park s Complaint does not allege that USA Network took its 23 actual scripts or biographies, the subject matter requirement is 24 met because the Complaint alleges that USA Network used the ideas This treatment 17 U.S.C. § 301(a). 8 Although 1 embodied in those written works. That the work contains within 2 it some uncopyrightable ideas does not remove it from the subject 3 matter of copyright. 4 because the ideas that are the subject of the claim were fixed in 5 writing whether or not the writing itself is at issue the claim 6 is within the subject matter of copyright. 7 849; see also Montz v. Pilgrim Films & Television, Inc., 649 F.3d 8 975, 979 (9th Cir. 2011) (en banc) (holding that an idea for a 9 television show, once fixed in a tangible medium, fell within the 10 subject matter of copyright); Wrench LLC v. Taco Bell Corp., 256 11 F.3d 446, 455 (6th Cir. 2001) (holding that an idea for a 12 character, conveyed in storyboards, scripts, and drawings, was 13 within the subject matter of copyright). 14 requirement for preemption is met. See Briarpatch, 373 F.3d at 305. Moreover, See NBA, 105 F.3d at Therefore, the first 15 B. Equivalency Requirement 16 In order to establish preemption, USA Network must also 17 demonstrate that the Complaint seeks to vindicate a legal or 18 equitable right[] that [is] equivalent to any of the exclusive 19 rights within the general scope of copyright as specified by 20 section 106. 21 owners the exclusive rights, among other things, to reproduce a 22 copyrighted work, to prepare derivative works, to distribute 23 copies of the work to the public, and to display the work 24 publicly. 17 U.S.C. § 301(a). 17 U.S.C. § 106. Section 106 gives copyright A state law right is equivalent to 9 1 one of the exclusive rights of copyright if it may be abridged 2 by an act which, in and of itself, would infringe one of the 3 exclusive rights. 4 extra element is required instead of or in addition to the acts 5 of reproduction, performance, distribution or display, in order 6 to constitute a state-created cause of action, there is no 7 preemption. 8 F.2d 693, 716 (2d Cir. 1992) (internal quotation marks omitted). 9 Harper & Row, 723 F.2d at 200. But if an Computer Assocs. Int l, Inc. v. Altai, Inc., 982 Applying this extra element test, we have held numerous 10 categories of claims to be not preempted, including trade secret 11 claims, in which the plaintiff must show the defendant breached a 12 duty of trust through improper disclosure of confidential 13 material, id. at 717; certain hot news misappropriation claims, 14 because the plaintiff must show time-sensitive factual 15 information, free-riding by the defendant, and a threat to the 16 very existence of the plaintiff s product, NBA, 105 F.3d at 853; 17 and breach of confidential relationship, in which the plaintiff 18 must show an obligation not to disclose ideas revealed in 19 confidence, Smith v. Weinstein, 578 F. Supp. 1297, 1307 (S.D.N.Y. 20 1984), aff d without opinion, 738 F.2d 419 (2d Cir. 1984). 21 also Harper & Row, 723 F.2d at 201 (in dictum, suggesting that 22 conversion based on physical possession and control of a 23 copyrighted work may not be preempted because such a tort 24 involves acts . . . qualitatively different from those 10 See 1 proscribed by copyright law ). By contrast, we have found a 2 state law claim preempted when the extra element changes the 3 scope but not the fundamental nature of the right. 4 Briarpatch, 373 F.3d at 306-07 (holding an unjust enrichment 5 claim preempted because, although plaintiff must prove 6 enrichment, the essential nature of the claim remained the 7 unauthorized use of a work); Fin. Info., Inc. v. Moody s 8 Investors Serv., Inc., 808 F.2d 204, 208 (2d Cir. 1986) (holding 9 that a misappropriation claim was preempted because the element See, e.g., 10 of commercial immorality did not change qualitative nature of the 11 right); Harper & Row, 723 F.2d at 201 (holding that a claim of 12 conversion based on unauthorized publication of a work was 13 preempted because it is coextensive with an exclusive right 14 already safeguarded by the Act ). 15 In this case, the issue is whether a particular breach of 16 contract claim survives preemption. More specifically, Forest 17 Park alleges that it entered into an implied-in-fact agreement 18 with USA Network that required USA Network to pay Forest Park for 19 the use of its idea. 20 qualitative differences between such a contract claim and a 21 copyright violation claim. 22 provide an express right for the copyright owner to receive 23 payment for the use of a work. 24 owner the right to prevent distribution, copying, or the creation See Complaint ¶¶ 24-26. There are several First, the Copyright Act does not It simply gives the copyright 11 1 of derivative works (though, of course, the copyright owner may 2 cede or all part of these rights for payment). 3 § 106. 4 contract must prove extra elements beyond use or copying, 5 including mutual assent and valid consideration. 6 of contract claim asserts rights only against the contractual 7 counterparty, not the public at large. 8 explained in ProCD, A copyright is a right against the world. 9 Contracts, by contrast, generally affect only their parties; 10 strangers may do as they please, so contracts do not create 11 exclusive rights. See 17 U.S.C. Second, a plaintiff suing for failure to pay under a Third, a breach As the Seventh Circuit 86 F.3d at 1454. 12 A number of our sister circuits have accordingly concluded 13 that at least some contract claims involving the subject matter 14 of copyright do not contest rights that are the equivalent of 15 rights under the Copyright Act, and thus are not preempted. 16 Montz, 649 F.3d at 980-81 (implied-in-fact contract); Utopia 17 Provider Sys., Inc. v. Pro-Med Clinical Sys., L.L.C., 596 F.3d 18 1313, 1326-27 (11th Cir. 2010) (express contract); Bowers v. 19 Baystate Techs., Inc., 320 F.3d 1317, 1324-26 (Fed. Cir. 2003) 20 (applying First Circuit law to an express contract in a software 21 license); Wrench, 256 F.3d at 456 (implied-in-fact contract); 22 ProCD, 86 F.3d at 1454-55 (express contract in a software 23 license); Nat l Car Rental Sys., Inc. v. Computer Assocs. Int l, 24 Inc., 991 F.2d 426, 431 (8th Cir. 1993) (express licensing 12 See 1 agreement); Taquino v. Teledyne Monarch Rubber, 893 F.2d 1488, 2 1490, 1501 (5th Cir. 1990) (express contract); Acorn Structures, 3 Inc. v. Swantz, 846 F.2d 923, 926 (4th Cir. 1988) (per curiam) 4 (express contract); see also 4 Nimmer § 19D.03[C][2] ( As a 5 general rule, contract claims require proof of a significant 6 extra element : the existence of an actual agreement between 7 plaintiff and defendant involving a promise to pay for use of 8 disclosed ideas. 9 whether the particular claim at issue is labeled express contract That conclusion is the same, regardless of 10 [or] implied-in-fact contract . . . . (footnotes omitted)). 11 course, preemption cannot be avoided simply by labeling a claim 12 breach of contract. 13 elements of an enforceable contract (whether express or implied- 14 in-fact), including offer, acceptance, and consideration, in 15 addition to adequately alleging the defendant s breach of the 16 contract. 17 Of A plaintiff must actually allege the As long as the elements of a contract are properly pleaded, 18 there is no difference for preemption purposes between an express 19 contract and an implied-in-fact contract. 20 v. Cornell Univ., 584 F.3d 487, 507 (2d Cir. 2009) (under New 21 York law, proof of an implied-in-fact contract requires proof of 22 the same elements as an express contract); Warner Bros. Int l 23 Television Distribution v. Golden Channels & Co., 522 F.3d 1060, 24 1069 (9th Cir. 2008) (same under California law). 13 See, e.g., Leibowitz There is, 1 however, a significant difference for preemption purposes between 2 contracts implied-in-fact and contracts implied-in-law. 3 of implied-in-law contract, quasi-contract, or unjust enrichment 4 differ significantly from breach of contract because the 5 plaintiff need not allege the existence of an actual agreement 6 between the parties. 7 contract implied in law is a fictitious contract. . . . A 8 contract implied in fact is a true contract that arises from 9 the tacit agreement of the parties. ). Theories See 1-1 Corbin on Contracts § 1.20 ( A Under these quasi- 10 contractual theories, the plaintiff need only prove that the 11 defendant was unjustly enriched through the use of her idea or 12 work. 13 copyright infringement that requires a plaintiff to prove that 14 the defendant used, reproduced, copied, or displayed a 15 copyrighted work. 16 extra element in an unjust enrichment claim); see also Wrench, 17 256 F.3d at 459 (noting that there is a crucial difference 18 between implied-in-fact contracts and implied-in-law contracts 19 because the latter depend[] on nothing more than the 20 unauthorized use of the work ); 4 Nimmer §§ 19D.03[B][6], [7] 21 (unjust enrichment and quasi-contract preempted). 22 Such a claim is not materially different from a claim for See Briarpatch, 373 F.3d at 306 (finding no In this case, we need not address whether preemption is 23 precluded whenever there is a contract claim, or only when the 24 contract claim includes a promise to pay. 14 Compare Montz, 649 1 F.3d at 980-81 (holding that the element of mutual assent in a 2 contract claim can by itself provide the extra element ), with 3 Wrench, 256 F.3d at 457-58 (holding that the promise of payment 4 in a contract claim provides the extra element ). 5 Nimmer § 19D.03[C][2] (suggesting that a contract that does not 6 purport to give [the plaintiff] any protection beyond that 7 provided . . . by copyright law itself would be preempted). 8 Here the Complaint specifically alleges that the contract 9 includes by implication a promise to pay for the use of Forest See also 4 10 Park s idea. See Complaint ¶ 11 (alleging that it was understood 11 when Forest Park met with Sepiol they were pitching . . . ideas 12 with the object of persuading USA Network to purchase those ideas 13 for commercial development) (emphasis added); id. ¶ 25 ( USA 14 Network voluntarily accepted Plaintiffs ideas knowing full well 15 that Plaintiffs had submitted those ideas in confidence and for 16 economic gain, and with the clear expectation of payment in the 17 event those ideas were utilized by USA Network. . . . ) (emphasis 18 added). 19 to honor Forest Park s exclusive rights under the Copyright Act 20 (assuming the material at issue to be copyrightable); it requires 21 USA Network to pay for the use of Forest Park s ideas. 22 for breach of a contract including a promise to pay is The alleged contract does not simply require USA Network 15 A claim 1 qualitatively different from a suit to vindicate a right included 2 in the Copyright Act and is not subject to preemption.1 3 II. 4 Breach of Contract The next question we must consider is whether the Complaint 5 actually pleads an enforceable implied-in-fact contract 6 containing a promise to pay. 7 Complaint falls short because there was no meeting of the minds 8 over the price term. 9 our view) that contract claims based on the submission of works 10 or ideas were preempted, and thus it did not reach this issue. 11 See Forest Park Pictures, 2011 WL 1792587, at *3, 2011 U.S. Dist. 12 LEXIS 50081, at *5. USA Network argues that the The district court decided (erroneously, in 13 A. Choice of Law 14 Determining whether Forest Park pleaded an enforceable 15 implied-in-fact contract requires us to examine state law and, 16 because it matters, we must decide which state s law applies. 17 Forest Park contends that California law governs the contract; 18 USA Network argues for New York law. 19 the choice of law can be determined from the implied contract 20 itself. 1 Neither party suggests that We need not here consider whether even a promise to pay may be insufficient to avoid preemption in circumstances where, through contracts of adhesion or similar instruments, a plaintiff uses such promises to create a de facto monopoly at odds with federal copyright policy. See Arthur R. Miller, Common Law Protection for Products of the Mind: An Idea Whose Time Has Come, 119 Harv. L. Rev. 703, 768-74 (2006). That is not this case. 16 1 A federal court sitting in diversity jurisdiction applies 2 the choice of law rules of the forum state. See Klaxon Co. v. 3 Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941); GlobalNet 4 Financial.com, Inc. v. Frank Crystal & Co., 449 F.3d 377, 382 (2d 5 Cir. 2006). 6 first step in a choice of law analysis is to determine whether an 7 actual conflict exists between the laws of the jurisdictions 8 involved. 9 (1993); see also GlobalNet Financial.com, 449 F.3d at 382. Under the law of New York, the forum state, the In re Allstate Ins. Co. (Stolarz), 81 N.Y.2d 219, 223 If 10 there is such a conflict, New York law looks to the center of 11 gravity of a contract to determine choice of law. 12 N.Y.2d at 226. 13 may consider a number of significant contacts, including the 14 place of contracting, the place of performance, the physical 15 location of property that is the subject matter of the contract, 16 and the domiciles or places of business of the contracting 17 parties. 18 Life Ins. Co., 108 F.3d 1531, 1539 (2d Cir. 1997). 19 contracting and place of performance are given the greatest 20 weight. Stolarz, 81 Under the center of gravity approach, a court Id. at 227; see also Lazard Freres & Co. v. Protective The place of Stolarz, 81 N.Y.2d at 226. 21 While neither New York nor California law is absolutely 22 clear, there does appear to be at least one conflict between the 23 two states that is relevant to Forest Park s claim: the question 24 of whether a contract can be enforced without a definite price 17 1 term. Under California law, an implied-in-fact contract can have 2 an open price term to be filled in by industry standards. 3 e.g., Whitfield v. Lear, 751 F.2d 90, 93 (2d Cir. 1984) 4 (declining to dismiss a claim under California law when the 5 plaintiff alleged that a television studio voluntarily accepted a 6 script and also that industry custom indicated a promise to pay); 7 Montz, 649 F.3d at 979. 8 rule is not clear. 9 Sup. Ct. 2011), a New York court found a lack of mutual assent, See, Whether New York law follows the same In Lapine v. Seinfeld, 918 N.Y.S.2d 313 (N.Y. 10 but also noted that price is an essential element of a 11 contract. 12 Grp., Inc., 644 N.Y.S.2d 875, 877 (N.Y. App. Div. 3d Dep t 1996) 13 (dismissing an implied-in-fact contract claim on the pleadings 14 because there were open-ended terms, and industry standards that 15 plaintiff claimed could fill them were not identified). 16 Nadel v. Play-By-Play Toys & Novelties, Inc., 208 F.3d 368, 376 & 17 n.5 (2d Cir. 2000) (noting that an implied-in-fact contract must 18 have mutual assent, but that it can be inferred from the 19 specific conduct of the parties, industry custom, and course of 20 dealing ) (citing Maas v. Cornell Univ., 94 N.Y.2d 87, 94 21 (1999)). 22 Id. at 318; see also Marraccini v. Bertelsmann Music But see Given the opacity of New York law, we cannot confidently say 23 that there is no divergence between California and New York law. 24 Therefore, we next must determine the center of gravity of the 18 1 contract. Here, almost all of the significant contacts are with 2 California: the sole face-to-face meeting between Forest Park and 3 USA Network was in California; at least part of the performance 4 (Forest Park s disclosure in writing and orally of its idea) took 5 place there; the written series treatment was physically located 6 there; two out of the three plaintiffs are California residents; 7 and, while Universal Television Network s principal place of 8 business is in New York, all of the activity related to this 9 contract took place in USA Network s California offices. See, 10 e.g., Tri-State Emp t Servs., Inc. v. Mountbatten Sur. Co., 295 11 F.3d 256, 261 (2d Cir. 2002) (applying New York law where the 12 parties were either incorporated in New York or had their 13 principal places of business there, where the oral contract was 14 negotiated in New York, and where performance took place in part 15 in New York); Twentieth Century Fox Film Corp. v. Marvel Enters., 16 Inc., 155 F. Supp. 2d 1, 13 (S.D.N.Y. 2001) (applying California 17 law to a contract negotiated entirely in California, and 18 performed in both New York and California). 19 that California law applies. 20 thus becomes whether Forest Park has alleged an enforceable 21 contract under California contract law. We therefore hold The remaining question before us 22 B. Implied-in-Fact Contract 23 California has long recognized that an implied-in-fact 24 contract may be created where the plaintiff submits an idea (the 19 1 offer) that the defendant subsequently uses (the acceptance) 2 without compensating the plaintiff (the breach). 3 Wilder, 46 Cal. 2d 715 (1956) (en banc), the plaintiff, Desny, 4 telephoned Billy Wilder, then a producer and writer for Paramount 5 Pictures, and told Wilder s secretary that he had an idea for a 6 film. 7 to Wilder a brief synopsis of the movie idea and stated that, if 8 the idea were used, he expected to be paid. 9 Faced with the enforceability of such an agreement, the Id. at 726. In Desny v. At the secretary s request, Desny forwarded Id. at 726-27. 10 California Supreme Court held that a contract claim based on the 11 submission of an idea could succeed either if the plaintiff 12 received an express promise to pay or if the circumstances 13 preceding and attending disclosure, together with the conduct of 14 the offeree acting with knowledge of the circumstances, show a 15 promise of the type usually referred to as implied or implied- 16 in-fact. 17 California courts have continued to recognize contract claims 18 under the authority of that case. 19 Id. at 738. For almost six decades following Desny, See Montz, 649 F.3d at 976-77. A plaintiff in a Desny action can prevail by proving that an 20 idea was submitted with an understanding by the plaintiff 21 amounting to a condition that the plaintiff would be paid for use 22 of the idea and that the defendant knew or should have known of 23 the condition. 24 620, 629 (9th Cir. 2010); see also Grosso v. Miramax Film Corp., See Benay v. Warner Bros. Entm t, Inc., 607 F.3d 20 1 383 F.3d 965, 967 (9th Cir. 2004) (a Desny claim requires that 2 the offeree voluntarily accepted the idea knowing that use was 3 conditioned on payment, looking to all the circumstances 4 attending disclosure). 5 payment is not required. 6 Mattel, Inc., 128 Cal. Rptr. 2d 50, 57-59, 63 (Cal. Ct. App. 7 2002). 8 offeree to pay the offeror if the idea is used under the 9 circumstances of a particular transaction. 10 11 An express condition or promise of See Gunther-Wahl Prods., Inc. v. Industry custom may establish an implied promise by the Whitfield, 751 F.2d at 93; Gunther-Wahl, 128 Cal. Rptr. 2d at 53-61. Here, although Forest Park does not allege that it expressly 12 conditioned disclosure on a promise of payment, the Complaint 13 alleges facts that, if proven, would establish that USA Network 14 knew or should have known such a condition was implied. 15 Park alleges that it pitched its ideas to USA Network with the 16 object of persuading USA Network to purchase those ideas for 17 commercial development, and that USA Network and its agent 18 Sepiol at all relevant times knew (a) that writer-creators pitch 19 creative ideas to prospective purchasers with the object of 20 selling those ideas for compensation; and (b) that it was 21 standard in the entertainment industry for ideas to be pitched 22 with the expectation of compensation in the event of use. 23 Complaint ¶¶ 9, 13. 24 Network accepted Forest Park s idea when it knew or should have Forest Moreover, the Complaint alleges that USA 21 1 known of that condition by keeping the series treatment Forest 2 Park submitted, scheduling a meeting with Forest Park, allowing 3 Forest Park to pitch its idea uninterrupted, and communicating 4 with Forest Park after the meeting. 5 93 (noting that, by opening and reviewing a submitted script, a 6 producer might implicitly promise to pay for ideas if he uses 7 them, assuming the existence of an industry custom of returning 8 unwanted submissions unopened); Gunther-Wahl, 128 Cal. Rptr. 2d 9 at 53-54 (describing plaintiff s evidence of industry custom to See Whitfield, 752 F.2d at 10 cut off a pitch if the offeree meant to reject an idea). 11 allegations are sufficient to plead a Desny claim under 12 California law. 13 These USA Network argues that even if Forest Park did allege an 14 implied-in-fact agreement, the agreement would not be enforceable 15 because it lacks a definite price term. 16 however, enforce contracts without exact price terms as long as 17 the parties intentions can be ascertained. 18 Lettuce Growers, Inc. v. Union Sugar Co., 45 Cal. 2d 474, 482 19 (1955) (en banc). 20 other extrinsic evidence) to supply absent terms. 21 F.2d at 93; Cal. Lettuce Growers, 45 Cal. 2d at 482. 22 itself, an enforceable contract was found even though the 23 plaintiff stated he expected to be paid the reasonable value of 24 his idea. California courts, See, e.g., Cal. And California permits custom and usage (among 46 Cal. 2d at 727. 22 Whitfield, 751 In Desny 1 Forest Park alleges that it agreed with USA Network to be 2 paid the industry standard for its idea, which is enough under 3 California law to survive a motion to dismiss. 4 Park will have to prove that such an industry standard price 5 exists and that both parties implicitly agreed to it. 6 Forest Park might fail to prove its claim, however, does not 7 render the contract unenforceable as a matter of law at the 8 pleading stage. 9 implied-in-fact contract including a promise of payment for the At trial, Forest That Because Forest Park has alleged an enforceable 10 disclosure of its idea, its claim is not preempted by the 11 Copyright Act and therefore the district court erred in 12 dismissing the Complaint. 13 14 15 CONCLUSION For the foregoing reasons, we VACATE the district court s 16 judgment dismissing Forest Park s complaint and REMAND for 17 further proceedings. 23
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