Jackson v. Kavanaugh

In continuing litigation involving Curtis Jackson (professionally known as “50 Cent”) and the horror film Skill House, district court denies combined motion to dismiss and anti-SLAPP motion brought by Jackson and other plaintiffs, holding counterclaims alleging breach of contract and implied covenant of good faith and fair dealing and interference with distribution agreements were well pled, and that plaintiffs failed to meet their anti-SLAPP burden by attempting to strike counterclaims in full because claims covered both protected and unprotected conduct.

Plaintiff Curtis Jackson, the rapper, actor and producer more popularly known as 50 Cent, along with NYC Vibe LLC, through which he holds various trademarks, brought suit against Ryan Kavanaugh, Skill House Movie LLC and GenTV, alleging the misappropriation of Jackson’s intellectual property and likeness in connection with Skill House, an influencer-driven horror film featuring Jackson. Jackson’s suit claimed that despite there being no final agreement for him to appear in the film, the defendants used his likeness and trademarks to promote, market and sell Skill House.

After the district court denied Jackson’s motion for a preliminary injunction stopping the film’s release, finding that the record suggested the existence of an agreement for Jackson to appear in the film (read our summary of the court’s decision here), Skill House Movie and GenTV brought counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, and intentional interference with contractual relations. The counterclaims alleged that Jackson’s agreement to appear in the film provided that Jackson “shall provide a customary amount of marketing and publicity services.” But the counterclaims alleged that rather than provide customary publicity, Jackson instead took to social media to disparage the film, criticizing the producers and contending he was going to “kill” or “trash” the movie. The counterclaims alleged that Jackson did this knowing of the film’s distribution deals and with intent to disrupt the film’s release.

Jackson and the other plaintiffs moved to dismiss and also to strike under California’s anti-SLAPP statute. On the motion to dismiss, Jackson argued that the breach of contract claim was insufficient where, in Jackson’s view, Skill House failed to allege its own performance in light of Jackson’s contentions he had not been paid; that the promised “customary amount” of publicity was subject to Jackson’s “professional availability” and therefore “inherently flexible and undefined”; and that Skill House’s damages theory was “fatally speculative.” As it related to the implied covenant claim, Jackson argued that the cause of action was duplicative of the breach of contract claim where they were based on the same facts and that the implied covenant could not create a non-disparagement obligation where there was no express non-disparagement clause in the agreement. Jackson also argued that the intentional interference claim was insufficient because the counterclaims failed to allege that Jackson committed an intentional act designed to induce a breach or disrupt the distribution contracts at issue. In the anti-SLAPP motion, Jackson argued that Skill House’s counterclaims attempted to chill his constitutionally protected conduct, and that his statements on social media platforms constituted protected speech.

In a thorough order, the district court denied both of Jackson’s motions and rejected each of Jackson’s arguments. In relation to breach of contract, the court noted that Skill House had alleged that it disputed Jackson’s claim of nonpayment and explained that the allegations that Jackson performed under the contract despite the alleged nonpayment raised issues that could not be determined on the pleadings. Further, the court explained that Jackson’s proffered interpretation of the contract offering him carte blanche authority to decline to promote the film was not compelled on a motion to dismiss and that the allegations that Jackson disparaged the film in violation of his agreement to promote it were sufficient, in any event. Finally, the court rejected Jackson’s argument that damages were not adequately alleged where the counterclaims alleged that the film’s revenues would have been greater had Jackson fulfilled his obligations. That a teaser for the film still went viral did not, in the court’s view, “negate” Skill House’s damages theory.

In relation to the implied covenant cause of action, the court found that this claim was sufficiently distinguished from the breach of contract claim where the counterclaims alleged that Jackson’s actions were taken in bad faith and frustrated the actual benefits of the contract. Even if Jackson had technically complied with the contract, the alleged deliberate frustration of the contract’s objectives stated an implied covenant claim. The court also rejected Jackson’s argument about the absence of a non-disparagement agreement, as “inherent in an agreement to promote the Film is its corollary, namely, an obligation not to disparage the very thing one has assented to endorse. … Even if the Agreement granted Jackson the discretion not to engage in certain publicity and marketing engagements, it did not grant him carte blanche to post negative, disparaging, and ultimately damaging material about the Film and its producers.” Such an interpretation, the court noted, “is the epitome of bad faith.”

Concerning the interference claim, the court found that Skill House alleged that Jackson acted intentionally to induce a breach and that, under California law, Jackson’s primary intent did not need to be disruption of the contract. Accordingly, the intentional interference claim was sufficiently pled.

Finally, the court turned to Jackson’s anti-SLAPP motion. To begin with, the court found that Jackson failed to meet his burden that the counterclaims arose from protected speech. While Jackson’s internet statements about the film may have qualified, the counterclaims were also targeted at Jackson’s failure to promote the film as promised. Despite the “mixed” causes of action, Jackson sought to strike them in full without distinguishing between protected and non-protected activity. Further, because the claims were adequately pled, the counterclaims would also survive the second prong of the anti-SLAPP analysis, which only requires showing a probability of success.

Summary prepared by Todd Densen and Tyler Downing