Professional Documents
Culture Documents
Marks v. UMG
Marks v. UMG
per record for retail sales in the country of manufacture.” Id. ¶ 22 n.7 (first alteration
in original). Following Plaintiff’s dissociation from The Beach Boys and subsequent
litigation, Plaintiff signed a 1972 Settlement Agreement that states “[a]s to records
manufactured outside the USA . . . [o]nly records for which payment is received by
Capitol in the United States of America shall be deemed sold” and thus generate
royalties. Id. ¶ 23 n.9 (alterations in original). These agreements, mentioning
physical records, did not anticipate the shift in the music industry from consumers
buying records to consumers digitally streaming songs. Id. ¶ 25. Defendants
represented to Plaintiff and class members on written royalty statements that Plaintiff
and class members would receive royalty payments for the digital streaming of their
music. Id. ¶ 26. Defendants allegedly failed to disclose the full extent of foreign
royalties derived from streaming and made arbitrary deductions. Id. ¶¶ 27–28.
Defendants purportedly enacted this “scheme” by having foreign subsidiaries take a
portion of the royalties and only reporting the foreign royalties to Plaintiff and class
members left after the deduction by the subsidiaries. Id. ¶¶ 29–31.
To support that Defendants defrauded Plaintiff and the class members, the
SAC includes the following allegations:
Id. ¶¶ 34–39.
Plaintiff brings seven claims on behalf of himself and the putative classes:
(1) breach of contract; (2) account stated; (3) fraud; (4) violation of California
Business & Professions Code section 17200 et seq. (“UCL”); (5) accounting;
(6) breach of the covenant of good faith and fair dealing; and (7) declaratory relief.
Id. ¶¶ 52–106.
Federal Rule of Civil Procedure 12(b)(6) allows an attack on the pleadings for
“failure to state a claim upon which relief can be granted.” “To survive a motion to
dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678.
III. DISCUSSION
The Court previously dismissed Plaintiff’s claims on two grounds. First, the
Court dismissed the fraud claims because “Plaintiff include[d] no particularized facts
that would allow the Court to determine what fraud occurred, when, and through
what instrument.” Order 5 (citing Cafasso, 637 F.3d at 1055). Second, the Court
dismissed the contract claims because Plaintiff “fail[ed] to identify a bargained-for
provision requiring UMG to pay Plaintiff his claimed royalties.” Id. at 7. Plaintiff’s
SAC faces the same deficiencies and must be dismissed.
A. Fraud
Plaintiff once again “includes no particularized facts that would allow the
Court to determine what fraud occurred, when, and through what instrument.” Id. at
5. Plaintiff attaches no contract or fraudulent royalty statement to the SAC, and once
again Plaintiff makes no effort to narrow his serious fraud accusations to a
reasonably discrete period or individual such that UMG can meaningfully respond.
These vague statements do not “state with particularity the circumstances
constituting fraud.” Fed. R. Civ. P. 9(b). The Court thus GRANTS the motion to
dismiss the fraud claim.
B. Breach of Contract
Plaintiff also argues that Defendants paying him royalties for foreign
streaming reflects an intent to modify the contract. Opp’n 3–4. Modification of a
contract requires consideration. See D.L. Godbey & Sons Constr. Co. v. Deane, 39
Cal. 2d 429, 431 (1952); Fairline Ests., Inc. v. Carrico Constr. Co., 228 Cal. App.
2d 65, 71 (1964). Plaintiff argues that a change in legal relationship constitutes
sufficient consideration. Opp’n 7 (citing Chi. Title Ins. Co. v. AMZ Ins. Servs., Inc.,
188 Cal. App. 4th 401, 423 (2010)). Consideration requires both parties to “have
assumed some legal obligations.” Chi. Title, 188 Cal. App. 4th at 423. Plaintiff’s
SAC points to no new legal obligation he assumed after the 1972 Settlement
Agreement. Thus, the purported modification fails for lack of consideration.
Plaintiff finally claims a right to recission of the original contract in the event
the Court finds no breach of contract. Opp’n 8–10. But Plaintiff seeks to keep past
royalties previously paid to him under his contract with Capitol Records. See SAC
¶¶ 6–7, 53–58. Because this is an affirmation of those contracts, Plaintiff cannot seek
to rescind them. Cf. Broad. Music, Inc. v. Davis, No. CV 10-10089-RGK (FFMx),
2012 WL 13008124, at *6 (C.D. Cal. Mar. 30, 2012) (dismissing claim seeking
rescission where claimants affirmed contracts by seeking to retain their benefits).
The Court GRANTS the motion to dismiss the breach of contract claim.
C. Remaining Claims
IV. CONCLUSION
The Court GRANTS the motion. The Court determines that granting further
leave to amend would be futile. See Rutman Wine Co. v. E. & J. Gallo Winery, 829
F.2d 729, 738 (9th Cir. 1987) (affirming denial of leave to amend where amended
complaint failed to cure defects identified in order dismissing prior complaint). The
Court directs the Clerk to enter judgment and close the case.
IT IS SO ORDERED.