Landmark “Idea Theft” Court Decision Secured by KGSW

Ninth Circuit Denies Rehearing of Decision Holding that an “Idea Theft” Claim is Not Subject to an Anti-SLAPP Motion

For over 50 years, California has protected a writer’s ideas and concepts embodied in scripts under the so called “Desny-claim.” On November 17, 2017, the United States Court of Appeals for the Ninth Circuit took a significant step in ensuring that Desny-claims remain a viable option for artists suing studios for “idea theft” by denying Universal Studios’ Petition For Rehearing in the Jordan-Benel v. Universal City Studios, Inc., 859 F.3d 1184 (9th Cir. 2017).

Jordan-Benel is the first published decision of any court in the United States on the issue, and it represents a major victory for artists in California who were threatened with having to pay the studios’ exorbitant attorney’s fees in connection with an anti-SLAPP motion.

KGSW represents the writer, Douglas Jordan-Benel, who filed suit in 2014, alleging that the horror hit film, “The Purge,” incorporated ideas and concepts embodied in his script entitled “Settler’s Day.” Universal Studios and other defendants responded by filing an anti-SLAPP motion arguing that Jordan-Benel’s idea theft claim challenged their right of free speech of creating and distributing a film. The District Court denied the anti-SLAPP Motion on the grounds that Jordan-Benel was seeking payment for his ideas, not trying to interfere with defendants’ right to create and distribute movies.

On June 20, 2017, the Ninth Circuit affirmed the lower court’s decision. After the studio filed a Petition for Rehearing, the Ninth Circuit ordered attorneys for Jordan-Benel to file a response, signaling the Court’s intention to reconsider its prior ruling.

Today, the Ninth Circuit issued an Order denying the Petition for Rehearing and conclusively established that an artist’s idea theft claim – the so called “Desny-claim” — is not subject to the anti-SLAPP statute because it is based on a studio’s alleged failure to pay the artist for his or her ideas. In sum, the Ninth Circuit squarely held that an artist’s most significant state-law protection for his/her literary or artistic ideas remains an available option under California law, and there is no need to fear the threat of having to pay the studios’ exorbitant attorney’s fees and enduring endless appeals in connection with an anti-SLAPP motion.

KGSW Welcomes Samantha Kim

KGSW is proud to announce that on September 5, 2017, Samantha Kim joined the firm.   Ms. Kim took the California State Bar exam in July, 2017.  Subject to her passing the State Bar and being admitted to practice law in California, Ms. Kim’s practice will focus upon civil litigation matters, including intellectual property, real estate and business disputes.

David Bernardoni named a Partner

Kulik Gottesman Siegel & Ware LLP is pleased to announce that, effective March 1, 2016, David Bernardoni has been named a partner with the firm.  Mr. Bernardoni joined Kulik Gottesman Siegel & Ware LLP in July 2006.  Since that time has built a diverse civil litigation practice, which includes real estate, employment, homeowner association and other business matters.  He also provides general counsel services to many of his clients.  In 2013, Mr. Bernardoni was selected to the California Super Lawyers Rising Stars list.

Raging Bull Supreme Court Decision

Glen Kulik represented the appellant before the United States Supreme Court in Petrella vs. MGM, which resulted in a a reversal in favor of the firm’s client in a copyright infringement case that many experts have heralded as one of the most significant copyright decisions in the past 50 years. Ms. Petrella’s father wrote the original screenplay for the famous motion picture Raging Bull and the copyright reverted to her family at the end of the initial 28 year copyright period. In the lawsuit she was seeking to prove that the continued exploitation of the movie by MGM infringed her copyright. The trial court held that there were disputed issues of fact on the substantive copyright issues but that she waited too long to bring the suit and thus it was barred by the doctrine of laches. The Supreme Court reversed and in so doing resolved a serious conflict between the various federal appellate court circuits and reversed the long-standing rule in the Ninth Circuit which had barred the action. The Court held that a copyright claim brought within the applicable three year statute of limitations cannot be barred by laches.

Court of Appeal Decision

On June 19, 2013, Len Siegel, Tom Ware, and David Bernardoni secured a Court of Appeal decision upholding the trial court’s sustaining of a homeowner association’s demurrer to homeowners’ complaint seeking to hold the Association liable for in excess of $200,000 in damages arising out of engineering errors in the homeowners’ architectural application. The victory on appeal is significant inasmuch as many of the issues raised in the complaint were matters of first impression which if decided in plaintiffs’ favor could have increased exponentially California non-profit homeowners association’s exposure in connection with processing homeowner architectural applications.

This matter presented the issue of whether a non-profit homeowners association owed a duty to indemnify members for damages arising from the members’ own professional engineers’ erroneous grading plans submitted to the association’s lay art jury. Currently, there is no legal authority that would impose such a draconian obligation. Nonetheless, plaintiffs sought to create an unprecedented duty that would make their neighbors, who comprise such associations, voluntarily serve on their boards and committees, and fund their operation, the guarantors of the architectural applicant’s own professional engineering reports. Plaintiffs admitted that their lot was constructed seven feet above the elevation depicted on the plans approved by the Association’s lay architectural art jury as a result of incorrect elevations depicted in the engineering plans. When their neighbors discovered this error, the neighbors successfully filed a lawsuit compelling plaintiffs to remove the home, which infringed upon their views, and recovered over $200,000 in attorney’s fees. Plaintiffs sought to recover the cost to remove the structure and the $200,000 paid to the neighbors from the Association based on plaintiffs’ claim that the lay art jury negligently failed to discover the engineering errors. Unbeknownst to plaintiffs, the art jury reviewed a prior architectural submission by the neighbor which reflected the correct elevation of the neighboring lot. As a result, the Association approved the plans under the belief that there was a 25 foot height differential between the two properties as opposed to the 18 foot differential depicted in plaintiffs’ plans. Plaintiffs claimed that the Association acted unreasonably in doing so, and in failing to disclose to them that the approval was based on a 25 foot differential not the 18 foot height differential proposed in plaintiff’s plans. We argued that there were no such duties. Plaintiffs, however, tried to convince the Court to extend the duties imposed on Associations to protect the rights of the “neighboring” properties when reviewing architectural applications (Cohen v. Kite Hill Cohen v. Kite Hill Community Association (1983) 142 Cal.App.3d 642) and the obligation to adopt and follow “reasonable” architectural review procedures (Civil Code § 1378) to impose an obligation on the Association to verify the accuracy of the applicant’s architectural submissions. The Court of Appeal refused to do so.

Rather, the Court held that neither the CC&Rs, Section 1378, nor common law imposed an expressed duty on the Association to verify the accuracy of plaintiffs’ erroneous architectural submissions. The Court clarified that Section 1378 imposed an obligation to adopt “reasonable” procedures and the Association is required to comply with these procedures. However, Section 1378 does not include a duty of “reasonableness” requiring the Association to engage in conduct not specifically mandated by the CC&Rs. Furthermore, the Court clarified that the fiduciary duty imposed on associations in Cohen to enforce the governing documents in order to protect the neighboring property interests did not extend to the applying owner, particularly where as here the plaintiffs can point to no provision which was expressly violated by the Association. With respect to this latter point, the Court held that the Association could not be characterized as a joint tortfeasor with plaintiffs vis-à-vis plaintiffs’ neighbors because the Association owed no duty to the neighbor to find an engineering error, notwithstanding Cohen, because the CC&Rs did not contain an express duty on the Association to protect the neighboring owners’ view rights.

Although the case was not published, the decision is impactful beyond the parties to the action as the Court refused to create new precedent that would have dramatically increased homeowners association’s potential liability in reviewing architectural plans.