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Alexander v. Metro-Goldwyn-Mayer Studios

District court dismiss misappropriation of idea, breach of implied contract and unjust enrichment claims against creators of “Creed” motion picture, finding that idea is not recognized property right under California law and unilateral tweet cannot form basis of implied contract and unjust enrichment claims.

Jarrett Alexander sued Sylvester Stallone, Metro-Goldwyn-Mayer Studios, Warner Brothers Entertainment Inc., New Line Cinema Corporation and others, alleging that they stole his idea for a motion picture about the son of Apollo Creed, a character from the “Rocky” movie franchise. Alexander claimed that between April 2012 and July 2013, he and his friends pitched his screenplay, pitch reel and website about the fighting career of Creed’s son to several actors and movie studios, including defendants, on Twitter, and that defendants’ motion picture “Creed,” which they announced their plans to develop in July 2013, is premised exactly on the idea he created and pitched.

Plaintiff initially filed his complaint in New Jersey state court. Defendants removed the action to the U.S. District Court for the District of New Jersey, where they subsequently filed a motion to dismiss plaintiff’s complaint, and a motion to transfer the action to the District Court for the Central District of California. The New Jersey District Court granted the motion to transfer, denying the motion to dismiss as moot. Following the transfer, defendants again filed a motion to dismiss in the California District Court.

Before addressing the merits of the motion to dismiss, the court had to decide whether California or New Jersey state law applied to Alexander’s claims. Applying the choice of law rules of the transferring New Jersey federal court, the court found that California law applied. While Alexander’s injury took place in New Jersey, where he was domiciled, the defendants were domiciled in and had their principal places of business in California, and the conduct allegedly causing the injury took place in California.

Having decided that California law applies, the court dismissed Alexander’s misappropriation of idea claim, noting that this type of claim — in the context of a plaintiff sending the defendant a movie idea or disseminating a movie idea — is typically unworkable under California law, which does not recognize an idea as a property right. The court found that the alleged money and labor Alexander expended on his idea were insufficient to regard the idea as property. Further, the court noted that even if it were to recognize Alexander’s misappropriation of idea claim, the claim lacked the requisite confidentiality, as Alexander disseminated and made his pitch widely available.

On Alexander’s breach of implied contract claim, the court noted that California law recognizes that an implied-in-fact contract arises when a writer submits material to a producer with the understanding that the writer expects to be paid if the producer uses his concept. As such, in granting defendants’ motion to dismiss this claim, the court found that Alexander failed to make the requisite allegation that his idea was offered to defendants for sale, instead alleging that he offered the idea to defendants gratuitously. The court also found that the complaint was devoid of the requisite privity for breach of implied contract, as Alexander failed to allege any exchange or dialogue with defendants whereby defendants accepted Alexander’s offer to enter a contract or understood the conditions under which he sent them his pitch. Ultimately, the court found that the premise of Alexander’s claim — a unilateral tweet that defendants never responded to — was an untenable theory of implied contract that “might turn mere idea submission into a free-for-all.” Above all, the court concluded that Alexander’s claim ran afoul of the oft-cited language from the California Supreme Court’s decision in Desny v. Wilder:

The idea man who blurts out his idea without having first made his bargain has no one but himself to blame for the loss of his bargaining power. The law will not in any event, from demands stated subsequent to the unconditioned disclosure of an abstract idea, imply a promise to pay for the idea, for its use, or for its previous disclosure.

Finally, the court also dismissed Alexander’s unjust enrichment claim, finding that it suffered from the same flaws as the breach of implied contract claim. The court noted that Alexander could not allege that defendants benefitted from his pitch, as it is uncertain whether and how defendants accepted Alexander’s idea and converted it to their own benefit after Alexander sent them a unilateral tweet. Nor was it clear why defendants must compensate Alexander, as he had not demonstrated factual circumstances binding the parties or making it equitable to compensate him for gratuitously disseminating his idea.

The court also denied Alexander’s request to file an amended complaint, as it had strong misgivings that Alexander could overcome the lack of facts indicating that defendants received and misappropriated his idea or overcome the fact that the parties never had any bilateral exchange through which an implied contract could be inferred.

Summary prepared by Jonathan Neil Strauss and Amanda-Jane Thomas