ORDER RE: MOTIONS FOR SUMMARY JUDGMENT
[Dkts. 159, 119, 115, 107]
DEAN D. PREGERSON, District Judge.
Presently before the court are three separate motions for summary judgment: one filed by Defendant Juan Croucier, another filed by Defendants Rob Hoffman and 1 Model Management, LLC (collectively, "Hoffman"), and a third filed by Plaintiff. Having considered the submissions of the parties, the court grants Defendants' motions, denies Plaintiff's motion, and adopts the following Order.
In 1985, the five founding members of the heavy metal band RATT formed a California partnership ("the RATT Partnership" or "Partnership"). (Declaration of Juan Croucier in Support of Motion, Ex. A.) The members of the RATT Partnership were Robbinson Lantz Crosby, Stephen Pearcy, Robert Blotzer, Warren DeMartini, and Defendant Juan Croucier. (
The band went on hiatus in 1992, by which time one of the five members of the RATT Partnership, Crosby, had been expelled in accordance with the Partnership Agreement. (Croucier Decl. ¶ 6.) In 1992, Pearcy hand-wrote a document referring to his "departure from RATT" and stating that he was "leaving the band."
In January 1997, Blotzer and Pearcy purportedly sent Croucier a "letter of expulsion" expelling him from the RATT Partnership. (Supplemental Declaration of Drew Sherman, Ex. G at 18; Ex. X at 16.) Later that year, Pearcy, Blotzer, and DeMartini executed a "Bill of Sale and Agreement" representing that they were the members of the RATT Partnership and conveying all rights in the RATT trademarks to the newly formed WBS, Inc. ("WBS" or "Plaintiff") in exchange for shares in WBS. (Counterclaim ¶ 17; Croucier Decl. ¶ 8; Request for Judicial Notice, Ex. 5.) Croucier was not a party to this transaction, nor did he tour with the RATT band in 1997. (Declaration of Drew Sherman in Support of Plaintiff's Motion, Ex. G at 160.) WBS recorded the assignment of the trademarks with the United States Patent and Trademark Office seven years later, in 2004. (RJN, Ex. 5.) Various iterations of RATT toured, without Croucier, between 1992 and 2012. Croucier rejoined the band from 2012 to 2014.
In 2013, after discussions with Blotzer, Croucier, DeMartini, and Pearcy, Defendant Hoffman began working as RATT's band manager. (Declaration of Rob Hoffman ¶ 3.) Hoffman followed the day-to-day direction of Blotzer and DeMartini who, by that time, were the only two shareholders of WBS. (
In 2014, Pearcy, Croucier, and Blotzer each formed or performed with their own separate bands. (Croucier Decl. ¶ 10.) Blotzer formed a band called "Bobby Blotzer's Ratt Experience," but then changed his band's name to RATT. (
On September 4, 2015, counsel for Blotzer demanded that Hoffman turn over all social media logins and passwords "that are owned by WBS, Inc. or use any of WBS, Inc's intellectual property." (Hoffman Decl. ¶ 12.) That same day, however, DeMartini instructed Hoffman not to take any action. (Hoffman Decl., Ex. B.) Hoffman informed Blotzer's counsel of the dispute between the WBS shareholders and expressed a desire to remain neutral until the dispute was resolved.
On September 15, 2015, WBS filed the instant action against Croucier and Hoffman, alleging causes of action against Croucier for trademark infringement and dilution, unfair competition, and interference with economic relations related to Croucier's advertising and performances with "RATT's Juan Croucier," as well as tortious interference and conversion claims against Hoffman. (Dkt. 1). DeMartini has since filed a shareholder derivative suit against Blotzer on behalf of WBS. (Croucier Decl. ¶ 10.)
WBS and Croucier now move for summary judgment on WBS' trademark-related claims against Croucier. Hoffman also moves for summary judgment with respect to the claims against him.
II. Legal Standard
Summary judgment is appropriate where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact.
Once the moving party meets its burden, the burden shifts to the nonmoving party opposing the motion, who must "set forth specific facts showing that there is a genuine issue for trial."
It is not the court's task "to scour the record in search of a genuine issue of triable fact."
A. Whether WBS Owns the Trademarks
A threshold issue in this matter is whether WBS has an ownership interest in the RATT trademarks. See
WBS argues that because it registered an assignment of the RATT marks from the Partnership to WBS with the Patent and Trademark Office in 2004, its ownership of the marks is incontestable. Registration of a trademark does give rise to a presumption of ownership, subject to rebuttal by a preponderance of the evidence.
Even assuming that Plaintiff has made a prima facie showing of ownership of the RATT marks, there is no triable issue with respect to the question whether the assignment from the Partnership to WBS was invalid. Plaintiff asserts that, at the time of the assignment in 1997, Pearcy, Blotzer, and DeMartini were the only remaining members of the RATT Partnership, and therefore had the authority to convey the rights in the marks to WBS without Croucier's consent. Croucier contends first that there "is an open factual question as to whether Mr. Pearcy and Mr. DeMartini withdrew from the band or the Partnership" prior to 1997. Croucier points to two separate documents supposedly drafted in 1992. The first document, apparently written by Pearcy on the back of a napkin in February 1992, is addressed to "Allen Kouvac," who appears to have been the manager of RATT at the time. Although difficult to discern, the writing appears to refer to Pearcy's "departure from RATT . . . [a]nd that I'm leaving the band." (Croucier Decl., Ex. B.) Croucier posits that because Pearcy stated that he was leaving the band and referred to his "departure from RATT" separately, he must have meant that he was leaving the RATT Partnership. Further, although Pearcy later, in 1995, denied authoring any document addressed to "Allen Kovak," he also took the position that, as of 1995, "there is no RATT a partnership," suggesting that he may, at some point, have withdrawn from the partnership. (Supp. Sherman Decl., Ex. X at 10.)
Although a reasonable trier of fact could not conclude, on this record, that the napkin alone sufficed to signify or inform the other members of the RATT Partnership of Pearcy's voluntary departure from the Partnership, it does, in conjunction with his 1995 disavowal of the continued existence of the Partnership, create a triable issue of fact as to his partnership status at the time of the 1997 assignment to WBS.
The second document to which Croucier cites presents a question as to whether DeMartini withdrew from the RATT Partnership prior to the 1997 assignment to WBS. On June 1, a Linda Rein, whose identity is not entirely clear to the court, addressed a letter to "The RATT Partnership" on behalf of DeMartini. (Croucier Decl., Ex. C.) The letter represented itself as "formal notice that Warren DeMartini is no longer a member of the recording and performing group professionally known as `RATT', effective as of the date" of the letter. (
These lingering questions about Pearcy and DeMartini's continued membership in the Partnership as of 1997 would, on their own, preclude a grant of summary judgment in either Croucier or WBS' favor. The question of Croucier's membership in the Partnership, however, is more fundamental. There is no dispute that Croucier remained a partner through the end of 1996. Plaintiff contends that Croucier was expelled from the Partnership in 1997, and that Blotzer, DeMartini and Pearcy therefore did not need Croucier's consent to assign the RATT marks from the Partnership to WBS later that same year. As proof of its contention, WBS cites to a letter to Croucier dated January 20, 1997 stating, "The undersigned, by their unanimous vote and consent, in accordance with . . . the Partnership Agreement . . ., herewith advise you that you are expelled from the partnership, Ratt." (Declaration of Stephen Pearcy, Ex. 1.) The letter is purportedly signed by Blotzer and Pearcy. (
This "letter of expulsion" is insufficient to establish that Croucier was expelled from the Partnership for several reasons. First, it is undisputed that, under the terms of the Partnership Agreement, a partner could be involuntarily expelled from the Partnership only with the unanimous consent of the remaining partners. The 1997 "Bill of Sale and Agreement" conveying all rights in the RATT trademarks to WBS represented that Pearcy, Blotzer, and DeMartini were the members of the RATT Partnership, and WBS has taken the position in this litigation that DeMartini never withdrew from the Partnership. (WBS Opposition to Croucier Motion at 9). The letter of expulsion, however, refers to the "unanimous vote and consent" of only two partners, Blotzer and Pearcy. If, as WBS maintains, DeMartini never left the Partnership, his consent would have been required to expel Croucier.
Second, Pearcy, one of two supposed signatories to the letter of expulsion, has stated, under penalty of perjury, that he never discussed Croucier's expulsion from the RATT Partnership with Blotzer, never understood Croucier to have been expelled, and has no recollection of seeing the 1997 expulsion letter prior to this litigation. (Pearcy Decl. ¶¶ 102.) Pearcy's declaration states that the letter "is not the product of any agreement I reached with Robert Blotzer or anyone else."
The evidence is undisputed that Croucier was a founding partner of the RATT Partnership. No reasonable factfinder could conclude that Croucier was ever expelled from the Partnership. It is undisputed that no partner in the RATT Partnership could transfer or assign any part of his interest in the RATT Partnership without the unanimous consent of the other partners. Croucier has never consented to the assignment of the RATT marks to WBS or to anyone else. Accordingly, there is no triable issue with respect to the validity of the assignment of the RATT marks to WBS. Because the assignment was invalid, WBS cannot make the threshold showing that it has an ownership interest in the marks, and its trademark claims fail.
B. Claims against Hoffman
Under California law, a conversion claim requires (1) ownership or right to possession of property, (2) wrongful disposition of that property, and (3) damages.
It is undisputed that WBS granted Hoffman sole administrator access to the RATT band's social media accounts. On September 4, 2015, counsel for Blotzer demanded that Hoffman turn over all logins and passwords for "all social media accounts . . . that are owned by WBS, Inc. or use any of WBS, Inc's intellectual property, including, but not limited to, trademarks and copyrights."
Even assuming that WBS owned the social media accounts to which it demanded access, no reasonable trier of fact could conclude that Hoffman's refusal to turn over the logins and passwords was wrongful. WBS' governing "Code of Conduct and Operation" provides that termination of "management, or other affiliates connected with the Band," or any threat of litigation on WBS' behalf, shall require a majority vote of WBS' members. (Hoffman RJN, Ex. 2 at 94 of 100.) There is no dispute that, by September 2015, DeMartini and Blotzer were WBS' only shareholders, and that each held a 50 percent interest. It is also undisputed that Hoffman had previously been granted exclusive authority to manage the social media accounts. DeMartini's correspondence with Hoffman, however, clearly indicates that WBS' threats to sue Hoffman, since carried out, and efforts to terminate Hoffman as manager of the social media accounts were made against DeMartini's wishes and, therefore, without majority shareholder support and contrary to WBS' Code of Conduct and Operation. WBS has not provided any evidence suggesting that Blotzer's counsel's demand to Hoffman complied with WBS' own governing document.
2. Intentional Interference with Prospective Economic Advantage
An intentional interference with prospective economic relations claim requires (1) an economic relationship between plaintiff and a third party with the probability of future economic benefit to the plaintiff, (2) defendant's knowledge of that relationship, (3) defendant's intentional, independently wrongful act to disrupt the relationship, (4) actual disruption, and (5) economic harm to the plaintiff.
Even assuming, as WBS asserts, that there is a triable issue regarding WBS' economic relationship with specific third parties, namely RATT's (unnamed) social media followers, there is no evidence that Hoffman's refusal to turn over social media passwords caused any economic harm to WBS. WBS simply assumes, without any evidentiary support or citation to the record, that had Hoffman turned over the passwords to Blotzer's counsel, WBS would have more actively communicated with followers over social media and successfully translated those outreach efforts into some economic gain.
Even taking that unfounded assumption as true, furthermore, there is no evidence that Hoffman engaged in an "independently wrongful act." An act is independently wrongful "if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard."
For the reasons stated above, Plaintiff's Motion for Summary Judgment is DENIED. Defendants' Motions for Summary Judgment are GRANTED.
IT IS SO ORDERED.