REINHARDT, Circuit Judge:
This case involves the worldwide television rights to a number of Laurel and Hardy silent films ("the silent subjects"). Appellee's predecessor in interest, Hal Roach, Inc., and appellant Richard Feiner and Company, Inc. ("Feiner & Co.") entered into a written agreement to license the television rights to certain of the films to Feiner & Co. for a ten year period with an option to renew the license agreement for a second ten year term. Feiner & Co. subsequently exercised the option.
In 1984 appellee Hal Roach Studios, Inc. ("Hal Roach Studios") filed a complaint
On May 24, 1985, Judge Stotler dismissed the reformation counterclaim with leave to amend and the copyright counterclaims without leave to amend.
Hal Roach Studios moved to dismiss the counterclaim and to strike the affirmative defenses. Judge Letts
The court overruled Feiner & Co.'s objections and granted Hal Roach's motions for summary judgment and judgment on the pleadings against Feiner & Co. and Richard Feiner, individually. The court granted the motions on the basis of Hal Roach Studios' Statement of Uncontroverted Facts and Conclusions of Law, which the court incorporated by reference. The court subsequently entered a declaratory judgment against Richard Feiner and Feiner & Co., stating that the license to the silent subjects was to expire in accordance with its terms on September 27, 1986.
I. Richard Feiner
The initial complaint in this action named both Richard Feiner, individually, and Feiner & Co. as defendants. Hal Roach Studios' first amended complaint named only Feiner & Co. However, Hal Roach Studios' memorandum of points and authorities in support of its motions for summary judgment and judgment on the pleadings, as well as its proposed judgment, did include Richard Feiner, individually, as a named defendant. In its opposition to Hal Roach Studios' motions, Feiner and Co. informed the district court that Richard Feiner was no longer a proper defendant in this action. Nevertheless, the district judge signed Hal Roach Studios' proposed judgment without change.
It is well established that an individual is not bound by a judgment in personam resulting from litigation in which he is not named as a party. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110, 89 S.Ct. 1562, 1569, 23 L.Ed.2d 129 (1969). The fact that a party was named in the original complaint is irrelevant; an amended pleading supersedes the original. Loux v. Rhay, 375 F.2d 55, 57 (9th Cir.1967); Bullen v. De Bretteville, 239 F.2d 824, 833 (9th Cir.1956), cert. denied, 353 U.S. 947, 77 S.Ct. 825, 1 L.Ed.2d 856 (1957); accord, King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.1987). Because Richard Feiner was not named as a party in Hal Roach Studios's first amended complaint, the district court erred in entering judgment against him.
Hal Roach Studios contends that, because Richard Feiner was not a proper party in this action, he lacks standing to appeal the judgment against him. Specifically, Hal Roach Studios argues that Richard Feiner lacks standing because he failed to raise the jurisdictional issue in the district court, intervene pursuant to Federal Rule of Civil Procedure 24, or move for relief from judgment pursuant to Federal Rule of Civil Procedure 60. These contentions are without merit.
The jurisdictional issue regarding whether Richard Feiner is a proper party was raised before the district court in Feiner & Co.'s opposition to Hal Roach Studios' motions for summary judgment and judgment on the pleadings. Furthermore, a non-party against whom judgment is entered has standing without having intervened in the district court action to appeal the district court's exercise of jurisdiction over him. Thompson v. Freeman, 648 F.2d 1144, 1147 n. 5 (8th Cir.1981); Commercial Security Bank v. Walker Bank & Trust Co., 456 F.2d 1352, 1354 (10th Cir.1972); see
Finally, since a Rule 60 motion does not toll the time to appeal, Mir v. Fosburg, 646 F.2d 342, 344 (9th Cir.1980), nor does an appeal from a denial of Rule 60 relief bring up the underlying judgment for review, see Browder v. Director, Dept. of Corrections, 434 U.S. 257, 263 n. 7, 98 S.Ct. 556, 560 n. 7, 54 L.Ed.2d 521 (1978), such a motion could not be a procedural prerequisite for Richard Feiner to file this appeal. Thus, Richard Feiner is not procedurally barred from appealing the district court's judgment.
II. The Reformation Counterclaim
Feiner and Co. argues that the district court erred in dismissing the reformation count of its amended counterclaim for failure to state a claim. The district court held that Feiner & Co. had "allege[d] only unilateral mistake, [with] ... no demonstration that Hal Roach Studios was aware of the mistake and permitted it to go forward...." Feiner and Co. contends that the reformation count specifically alleged that the parties made a mutual mistake about a future event and that the contract failed adequately to express the mutual intent of the parties. However, we need not decide this issue, because we conclude that Feiner and Co.'s reformation claim was barred by the statute of limitations.
California Code of Civil Procedure § 338(d) provides for a three year statute of limitations for a cause of action premised upon mistake, including a reformation action based on mutual mistake.
Hal Roach Studios asserts that Feiner & Co.'s cause of action for reformation based on mutual mistake accrued upon Congress's enactment of the Copyright Act of 1976, which extended the duration of the copyrights to the silent subjects, because "[a]ll persons in the United States are chargeable with knowledge of the Statutes-at Large." Bollow v. Federal Reserve Bank of San Francisco, 650 F.2d 1093, 1100 (9th Cir.1981) (en banc), cert. denied, 455 U.S. 948, 102 S.Ct. 1449, 71 L.Ed.2d 662 (1982); see also Texaco, Inc. v. Short, 454 U.S. 516, 531-532 & n. 25, 102 S.Ct. 781, 793 & n. 25, 70 L.Ed.2d 738 (1982). Once the Copyright Act of 1976 was passed, there was, for the first time, a conflict between the expiration date of the license agreement and the expiration dates of the copyrights to the silent subjects. Hal Roach Studios contends that because Feiner & Co. was or should have been aware of the change in the copyright law as of the date of its enactment (or at least as of its effective date), and was or should have been aware on that date that the contract provisions failed to conform to its understanding of the parties' intent, the cause of action for reformation accrued. Under this theory, Feiner & Co.'s cause of action is time-barred because of its failure to file the action on or before January 1, 1981.
With this in mind, we note that under California law, parties to a contract are "presumed to know and to have had in mind" all laws in effect at the time they enter into that contract. Alpha Beta Food Markets, Inc. v. Retail Clerks Union Local 770, 45 Cal.2d 764, 771, 291 P.2d 433, 437 (1955), cert. denied, 350 U.S. 996, 76 S.Ct. 547, 100 L.Ed. 861 (1956); Grubb v. Ranger Insurance Co., 77 Cal.App.3d 526, 143 Cal.Rptr. 558, 559 (1st Dist.1978); Endo Laboratories, Inc. v. Hartford Insurance Group, 747 F.2d 1264, 1267 (9th Cir.1984) (applying California law). Other courts have presumed even more specialized knowledge of the parties, depending on their experience. See, e.g., Kansas Power & Light v. Burlington Northern Railroad Co., 544 F.Supp. 1336, 1347 (D.Kansas 1982) (presuming knowledge of statutory and case law regarding interstate commerce because both parties did "substantial business" which was subject to federal and state regulation, including regulation under the Interstate Commerce Act), rev'd on different grounds, 740 F.2d 780 (10th Cir.1984), cert. dismissed, 469 U.S. 1200, 105 S.Ct. 1155, 84 L.Ed.2d 308 (1985); Texaco, Inc. v. Short, 454 U.S. 516, 532, 102 S.Ct. 781, 793, 70 L.Ed.2d 738 (1982) (property owners are presumed to have knowledge of relevant statutory provisions which affect the control or disposition of that property). Feiner & Co. is a corporation that does substantial business with copyrighted works and has been involved with much copyright litigation.
The question still remains as to whether Feiner & Co.'s presumed knowledge of the change in the copyright laws
Feiner & Co. asserts that its presumed knowledge should not trigger the running of the statute of limitations because until Hal Roach Studios filed its initial complaint in this action, Hal Roach Studios conducted itself in complete accordance with the parties' mutual intent, namely that Feiner & Co. would have a license to use the silent subjects until Hal Roach Studios' copyrights in those works expired. However, Hal Roach Studios' behavior prior to the effective date of the Copyright Act of 1976, while perhaps not inconsistent with Feiner & Co.'s interpretation of the contract, was entirely consistent with the plain language of the license agreement. Nothing Hal Roach Studios said or did was inconsistent with the written provision stating that the license would expire at the end of the fixed term set forth on the face of the contract.
Accordingly, we hold that the statute of limitations on Feiner & Co.'s reformation action began to run when the Copyright Act of 1976 became effective and a conflict first arose between the written terms of the contract and Feiner & Co.'s alleged understanding of the parties' mutual intent.
III. Judgment on the Pleadings
The district court granted Hal Roach Studios' Rule 12(c) motion for judgment on the pleadings on its claim for a declaration that the film licenses would expire on or about September 27, 1986.
Here, the district went beyond the pleadings in reaching its decision. The district court relied on the Baerwitz declaration and Hal Roach Studios's S-1 Registration Statement to establish that Hal Roach Studios was the successor in interest to Hal Roach, Inc., an original party to the agreement at issue. Feiner & Co. expressly denied that factual allegation in its answer to Hal Roach Studios' first amended complaint. Thus, looking solely to the pleadings, Hal Roach Studios must be considered to be a stranger to the license agreement with no legal interest in this action and thus has no substantive rights at issue here. See U-Haul International, Inc. v. Jartran, Inc., 793 F.2d 1034, 1038 (9th Cir.1986); Klamath-Lake Pharm. Ass'n v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1282 (9th Cir.), cert. denied, 464 U.S. 822, 104 S.Ct. 88, 78 L.Ed.2d 96 (1983). Accordingly, the district court erred in granting its motion for judgment on the pleadings.
IV. Summary Judgment
A. Evidentiary Issues
As mentioned above, the district court granted Hal Roach Studios' motion for summary judgment, declaring that the license agreement would expire in accordance with its terms on September 27, 1986. In granting the motion, the district court relied on a Hal Roach Studios S-1 Registration Statement to establish that Hal Roach Studios was the successor to Hal Roach, Inc., the original party to the license agreement. Feiner & Co. contends that the district court erred in relying on the Registration Statement, because the statement did not have a proper foundation as required by Federal Rule of Civil Procedure 56(e).
It is well established that unauthenticated documents cannot be considered on a motion for summary judgment. Canada v. Blain's Helicopters, Inc., 831 F.2d 920, 925 (9th Cir.1987). To be considered by the court, "documents must be authenticated by and attached to an affidavit that meets the requirements of [Rule] 56(e) and the
As previously noted, Feiner & Co. denied that Hal Roach Studios had an ownership interest in the film rights at issue. In order to establish these rights Hal Roach Studios submitted a copy of an S-1 Registration Statement purportedly filed with the Securities and Exchange Commission.
Feiner & Co. is correct that the district court erred in relying on the Registration Statement, because the document lacked a proper foundation. Mr. Baerwitz lacked the necessary personal knowledge to authenticate the Registration Statement. He did not prepare or file the Registration Statement, nor did he explain in his affidavit where the attached copy of the Registration Statement originated. Thus, Hal Roach Studios failed to lay a proper foundation to admit the Registration Statement.
However, the district court's error was harmless. The Registration Statement is not per se inadmissible. A competent witness with personal knowledge could authenticate the document. Fed.R.Evid. 901(b)(1). A certified copy of the document and an affidavit from the SEC custodian of records would also serve as sufficient authentication. Fed.R.Evid. 901(b)(7).
In opposition to Feiner & Co.'s motion for reconsideration, Hal Roach Studios submitted the declaration of Earl A. Glick, Chairman of the Board of Hal Roach Studios. This declaration fulfills the requirements of Federal Rule of Evidence 901(b)(1). Mr. Glick declared that he had been an officer, director, and shareholder of Hal Roach Studios or its predecessors since 1971, and that he had personal knowledge regarding the contents of the Registration Statement, specifically, the corporate history of Hal Roach. Furthermore, he declared that he was the owner of the company that settled its lawsuit with Hal Roach, Inc. in exchange for transfer of the Hal Roach film library to Hal Roach Studios. Feiner & Co. objected to Mr. Glick's affidavit because the Registration Statement was not attached to Mr. Glick's declaration, as required by Fed.R.Civ.P. 56(e). However, considering that both parties provided copies of the Registration Statement to the district court, any such error was harmless.
Feiner & Co. also contends that the S-1 Registration Statement was inadmissible hearsay and that the district court erred in admitting it into evidence under Federal Rule of Evidence 803(24), the "catch-all" exception to the hearsay rule. That rule provides in pertinent part that:
Pursuant to Rule 803(24), the district court must make specific findings regarding the requisite elements of the exception. Fong v. American Airlines, 626 F.2d 759, 763 (9th Cir.1980). The district court's determination of the admissibility of evidence under Rule 803(24) will not be overturned on appeal except for an abuse of discretion. United States v. Brown, 770 F.2d 768, 771 (9th Cir.1985), cert. denied, 474 U.S. 1036, 106 S.Ct. 603, 88 L.Ed.2d 581 (1985); United States v. Friedman, 593 F.2d 109, 118 (9th Cir.1979); Weinstein's Evidence, ¶ 803(24) at 803-374.
In this case, the district court made the following findings: (1) the Registration Statement was offered as evidence of material facts; (2) the Registration Statement was more probative than any other evidence Hal Roach Studios could procure through reasonable efforts; (3) the general purposes of the rules of evidence and the interest of justice would best be served by admission of the statement; and (4) the Registration Statement had a high degree of reliability because of the high standard of due diligence applied by securities lawyers in preparing those types of statements.
Feiner & Co. contends that the district court abused its discretion because (1) the Registration Statement lacked sufficient circumstantial guarantees of trustworthiness; (2) Hal Roach Studios failed to demonstrate that the Registration Statement was more probative than any other evidence that could have been procured through reasonable efforts; (3) the admission of the statement did not further the purposes of the evidence rules or the interests of justice; and (4) Hal Roach Studios failed to give sufficient notice of its intent to use the Registration Statement.
Considering the deference we must give to the trial court's ruling on this matter, we do not find these contentions persuasive. Although it is true that securities lawyers have been found on occasion to publish false information in Registration Statements, there is no reason to believe that the Registration Statement at issue in this case contains false statements as to the corporate history of Hal Roach. The standard of due diligence applied by securities lawyers with regard to Registration Statements is sufficient to guarantee the requisite circumstantial trustworthiness of the facts contained in the Registration Statement to allow the district court to admit the evidence pursuant to Rule 803(24).
We turn next to Feiner & Co.'s contention that Hal Roach Studios failed to demonstrate that it could not have obtained other more probative evidence through reasonable efforts. The determination of what efforts would have been reasonable depends upon the importance of the evidence, the means at the command of the proponent, and the amount in controversy. "[T]he good sense of the trial judge must be relied upon." Weinstein's Evidence, ¶ 803(24) at 803-379. We cannot say that the district court's finding that more probative evidence could not have been obtained through reasonable efforts was clearly erroneous.
Notwithstanding appellant's argument to the contrary, the admission of the Registration Statement also furthers the purposes of the rules and the interest of justice. Feiner & Co. contends that the Registration Statement was "irrebuttable evidence" of the corporate history of Hal Roach Studios, and hence of the ownership of the
Finally, Hal Roach Studios provided sufficient notice to Feiner & Co. of its intent to use the Registration Statement as evidence. The purpose of the notice requirement is to give the adverse party an opportunity to attack the trustworthiness of the evidence. Piva v. Xerox Corp., 654 F.2d 591, 595 (9th Cir.1981). Hal Roach Studios introduced the Registration Statement in response to Feiner & Co.'s contention, made in its motion in opposition to Hal Roach Studio's summary judgment motion, that Hal Roach Studios was not the successor in interest to Hal Roach, Inc. Feiner & Co. had ample opportunity to move to strike the exhibit or rebut it with additional evidence. See Piva, 654 F.2d at 596. Indeed, Feiner & Co. did specifically object to the Baerwitz affidavit. The Registration Statement was made "known to [Feiner & Co.] sufficiently in advance of the [summary judgment] hearing to provide [Feiner & Co.] with a fair opportunity to prepare to meet it...." Fed.R.Evid. 803(24); see also Friedman, 593 F.2d at 119.
B. The Second Affirmative Defense
Feiner & Co. contends that the district court erred in striking as an affirmative defense to Hal Roach Studios' declaratory judgment action its contention that Hal Roach Studios does not own valid copyrights to the silent subjects. It argues that if the copyrights are invalid, there would be no "actual controversy" between these parties as required for a declaratory judgment. See 28 U.S.C. § 2201(a) (Supp.1989). We agree.
It is clear that an assertion that Hal Roach Studios' copyrights to the silent subjects were invalid would be a proper defense to a claim that Feiner & Co. was infringing the copyrights or owed royalties under the license agreement. See, e.g., Mayer v. Josiah Wedgwood & Sons, Ltd., 601 F.Supp. 1523, 1536 (S.D.N.Y.1985); C. Van Der Lely N.V. v. F.lli Maschio S.n.c., 561 F.Supp. 16, 21-25 (S.D.Ohio 1982), aff'd, 748 F.2d 1568 (Fed.Cir.1984); cf. Topolos v. Caldewey, 698 F.2d 991, 994 (9th Cir.1983) ("In an action for infringement plaintiff necessarily must establish ownership of a valid copyright"). The reason for this rule is simple. If the copyrights are invalid, then Hal Roach Studios has "los[t its] property interest in the [silent subjects]. The material becomes public property." Mayer, 601 F.Supp. at 1536. Under such circumstances, any claim for royalties or infringement would necessarily fail.
We see no reason why that same rule should not apply here, although for a slightly different reason. In the cases described above, the plaintiff had no copyright interest to be infringed; thus, there was no basis for a claim for damages. Here, the validity of the copyrights does not affect the basis of the claim that the license agreement expires on a particular date. Nevertheless, the validity of the copyrights is material to the outcome of the declaratory relief action before us. The reason is as follows: if the copyrights are invalid, the expiration date of the license agreement is of no practical consequence; if Hal Roach Studios has no property interest to protect, no substantive
We note, however, that our answer to this question might have been different if Hal Roach Studios had contended that the license agreement granted rights and imposed obligations on the parties that would exist regardless of the validity of the copyrights. For example, because Hal Roach Studios furnished Feiner & Co. with access to certain negatives and other materials, the agreement might possibly be viewed as including non-competition or exclusive use provisions. In that case, the contract could still have had legal consequences, regardless of the validity or invalidity of the copyrights. However, as Hal Roach Studios has made no such claim, we need not consider the argument.
V. Count Four of Feiner & Co.'s Counterclaim
Count four of Feiner & Co.'s counterclaim alleged that a 1972 assignment by Hal Roach Studios effectively transferred all of its television rights in the silent subjects to Feiner & Co. in perpetuity. The district court dismissed this count for failure to state a claim because appellant failed to allege a justiciable controversy beyond the terms of the September 27, 1966 agreement. We review the dismissal de novo. United Energy Owners v. United States Energy Management Systems, Inc., 837 F.2d 356, 360 (9th Cir.1988).
The district court's decision with respect to this count was correct. The 1972 "assignment" merely confirmed the September 27, 1986 license agreement for purposes of recording the agreement with the copyright office. Rather than granting any new rights, the agreement simply recited the breadth of the rights granted under the September 27, 1966 agreement. Moreover, the 1972 "assignment" did not itself provide for any term; rather, it was made "pursuant and subject to" the September 27, 1966 agreement. Thus, the September 27, 1966 agreement determined the term of the 1972 "assignment". Accordingly, the district court properly dismissed count four
VI. Counts One and Two of Feiner & Co.'s Counterclaim
In Counts One and Two of its amended counterclaim, Feiner & Co. sought a declaration that Hal Roach Studios lacked valid and subsisting copyrights to the films that were the subject of the licensing agreement, as well as to over 120 other films in the Hal Roach library.
Feiner & Co. originally sought in Count One of its counterclaim a declaration that Hal Roach Studios did not own valid copyrights to approximately 150 films in the Hal Roach library, only 27 of which were covered by the licensing agreement; in Count Two it sought a declaration that Hal Roach Studios owned no copyrights which would preclude Feiner & Co. from exploiting the Laughtoon Series and that Feiner & Co. had the exclusive right to exploit the Laughtoon Series during the term of the copyrights it obtained in the Series. On appeal, however, Feiner & Co. has not raised the question of its exclusive right to use the Laughtoon Series. Moreover, as to both Count One and Count Two, it has challenged the district court's dismissal only insofar as it relates to the silent subjects. We hold that Count One and Count Two of Feiner & Co.'s counterclaim, as limited on appeal, state valid claims for relief.
The purpose of the Declaratory Judgment Act is "to relieve potential defendants from the Damoclean threat of impending litigation which a harassing adversary might brandish, while initiating suit at his leisure — or never." Societe de Conditionnement v. Hunter Engineering Co., 655 F.2d 938, 943 (9th Cir.1981). Nevertheless, the party seeking relief must still satisfy the "case or controversy" requirement of 28 U.S.C. § 2201(a). To establish that a particular declaratory action presents an actual case or controversy, a party is required to show that, under all the circumstances of the case, there is a substantial controversy between parties having adverse legal interests, and the controversy is of sufficient immediacy and reality to warrant declaratory relief. Id. at 942.
In Societe de Conditionnement, we held that "[a]n action for a declaratory judgment that a patent is invalid, or that the plaintiff is not infringing, ... [presents] a case or controversy if the plaintiff has a real and reasonable apprehension that he will be subject to liability if he continues to
Applying the Societe de Conditionnement principles to the facts of our case, we hold that Counts One and Two of Feiner & Co.'s counterclaim present a justiciable controversy suitable for determination in a suit for declaratory relief. Feiner & Co. is currently engaged in, and has alleged that it will continue to engage in, the use and exploitation of the silent subjects and the Laughtoon Series which it derived from them. In a letter dated March 28, 1984, Hal Roach Studios informed Feiner & Co. that Feiner & Co.'s license to the silent subjects would expire in 1986, and that after the expiration, Feiner & Co. "would have no rights of any kind or character whatsoever in and to the [silent subjects.]"
In sum, we affirm the district court's dismissal of Counts Two, Four, and Five of Feiner & Co.'s counterclaim. We reverse its entry of judgment against Richard Feiner, individually, its grant of summary judgment and judgment on the pleadings in favor of Hal Roach Studios, and its dismissal of Count One of Feiner & Co.'s counterclaim.
Jefferson stands for a far narrower proposition than Feiner & Co. asserts. Jefferson merely holds that where the parties, by their actions, consistently construe a contract in a manner that conflicts with its plain meaning, the time to seek reformation does not begin to run until one of the parties repudiates the past construction and elects to rely on the plain meaning of the contract terms. Here, Hal Roach Studios never acted in a manner that conflicted in any way with the plain meaning of the disputed contract provision. Accordingly, Jefferson is inapplicable.
However, as our holding indicates, the district court should not have dismissed Counts One and Two as to the silent subjects. At the least, it should have given Feiner & Co. leave to amend.
We note that the Federal Circuit in C.R. Bard also held that a plaintiff seeking a declaratory judgment with regard to a patent's invalidity without first terminating the license agreement would be able to establish federal question jurisdiction under 28 U.S.C. § 1338(a). It followed the approach of the Second Circuit in Warner-Jenkinson C. v. Allied Chemical Corp., 567 F.2d 184, 187-88 (2d Cir.1977), and rejected the the approach taken by the Third Circuit in Thiokol Chemical Corp. v. Burlington Industries, Inc., 448 F.2d 1328 (3rd Cir.1971), cert. denied, 404 U.S. 1019, 92 S.Ct. 684, 30 L.Ed.2d 668 (1972). Although we believe that the Federal Circuit's rule rests on sounder ground, see C.R. Bard, 716 F.2d at 880, we need not decide that issue here, because jurisdiction can be grounded here on diversity. See 28 U.S.C. § 1332(a)(1).