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Disney Lorcana, Motion To Dismiss (The Upper Deck Company vs. Ryan Miller and Ravensburger North America, Inc.)
Disney Lorcana, Motion To Dismiss (The Upper Deck Company vs. Ryan Miller and Ravensburger North America, Inc.)
70 Page 1 of 34
1 TABLE OF CONTENTS
2 Page
3 I. Introduction .................................................................................................. 10
4 II. Background and Procedural History ............................................................ 11
5 A. Factual Background ........................................................................... 11
6 1. The Parties ............................................................................... 12
7 2. Mr. Miller is a prominent and well-established trading
card game designer. ................................................................. 12
8
3. Miller’s Relationship with Upper Deck .................................. 13
9
4. Ravensburger’s Development of Lorcana ............................... 14
10
B. Procedural History ............................................................................. 14
11
III. The Court Lacks Personal Jurisdiction ........................................................ 15
12
A. Legal standard under Rule 12(b)(2). .................................................. 15
13
B. This Court lacks general jurisdiction. ................................................ 16
14
C. The Court lacks specific jurisdiction. ................................................ 17
15
IV. Upper Deck’s claims fail as a matter of law. ............................................... 21
16
A. Legal standard under Rule 12(b)(6). .................................................. 21
17
B. The fiduciary duty claim should be dismissed................................... 22
18
C. The fraud claim should be dismissed. ................................................ 24
19
D. The claim for inducing breach of contract should be dismissed. ...... 27
20
E. The negligent interference with prospective economic relations
21 claim should be dismissed. ................................................................ 29
22 F. The conversion claim should be dismissed........................................ 30
23 G. There is no cause of action for constructive trust in California......... 32
24 H. Upper Deck has failed to allege a specific and/or legally
cognizable claim for relief under California’s unfair competition
25 law. ..................................................................................................... 32
26 V. The Court Should Strike Upper Deck’s Request for Attorneys’ Fees
Under California Civil Code § 3426.4 ......................................................... 34
27
VI. Conclusion .................................................................................................... 34
28
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1 TABLE OF AUTHORITIES
2 Page
CASES
3
Aas v. Superior Ct.,
4 24 Cal. 4th 627 (2000) ............................................................................. 23, 24, 31
5
Arena Rest. & Lounge LLC v. Southern Glazer’s Wine & Spirits, LLC,
6 2018 WL 1805516 (N.D. Cal. Apr. 16, 2018) .................................................... 32
7 Ashcroft v. Iqbal,
8 556 U.S. 662 (2009) ...................................................................................... 21, 28
1 TABLE OF AUTHORITIES
2 Page
Cho v. Hyundai Motor Co.,
3 2022 WL 16966537 (C.D. Cal. Oct. 21, 2022) ................................................... 25
4
City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
5 68 Cal. App. 4th 445 (1998) ................................................................................ 22
6 City of Hope Nat’l Med. Ctr. v. Genentech, Inc.,
7 43 Cal. 4th 375 (2008) ................................................................................... 22, 23
8 CleanFuture, Inc. v. Motive Energy, Inc.,
9 2019 WL 2896132 (C.D. Cal. Apr. 15, 2019) ..................................................... 24
1 TABLE OF AUTHORITIES
(Cont’d)
2
Page
3 Honolulu Joint Apprenticeship & Training Comm. of United Ass’n
Loc. Union No. 675 v. Foster,
4
332 F.3d 1234 (9th Cir. 2003) ............................................................................. 32
5
Immobiliare, LLC v. Westcor Land Title Ins.,
6 424 F. Supp. 3d 882 (E.D. Cal. 2019) ........................................................... 25, 26
7
In re Star & Crescent Boat Co., Inc.,
8 549 F. Supp. 3d 1145 (S.D. Cal. 2021) ......................................................... 15, 16
9 Int’l Shoe Co. v. Washington,
10 326 U.S. 310 (1945) ............................................................................................ 15
11 Ixchel Pharma, LLC v. Biogen, Inc.,
9 Cal. 5th 1130 (2020) ......................................................................................... 29
12
13 Kenneally v. Bank of Nova Scotia,
711 F. Supp. 2d 1174 (S.D. Cal. 2010) ............................................................... 32
14
Khoja v. Orexigen Therapeutics,
15
899 F.3d 988 (9th Cir. 2018) ............................................................................... 13
16
Korea Supply Co. v. Lockheed Martin Corp.,
17 29 Cal. 4th 1134 (2003) ................................................................................. 33, 34
18
Kwikset Corp. v. Superior Ct.,
19 51 Cal. 4th 310 (2011) ......................................................................................... 32
20 Loomis v. Slendertone Distrib., Inc.,
21 420 F. Supp. 3d 1046 (S.D. Cal. 2019) ......................................................... 16, 17
22 Lund v. Albrecht,
23 936 F.2d 459 (9th Cir. 1991) ............................................................................... 32
1 TABLE OF AUTHORITIES
(Cont’d)
2
Page
3 Navarro v. Block,
250 F.3d 729 (9th Cir. 2001) ............................................................................... 21
4
5 Neubronner v. Milken,
6 F.3d 666 (9th Cir. 1993) ................................................................................... 25
6
Nguyen v. Stephens Inst.,
7
529 F. Supp. 3d 1047 (N.D. Cal. 2021)............................................................... 31
8
Nuvo Rsch. Inc. v. McGrath,
9 2012 WL 1965870 (N.D. Cal. May 31, 2012) .................................................... 33
10
O’Byrne v. Santa Monica–UCLA Med. Ctr.,
11 94 Cal. App. 4th 797 (2001) ................................................................................ 22
12 Original Beauty Tech. Co. v. Oh Polly USA, Inc.,
13 2022 WL 17224542 (C.D. Cal. Aug. 16, 2022) .................................................. 29
14 Panavision Intern., L.P. v. Toeppen,
141 F.3d 1316 (9th Cir. 1998) ............................................................................. 16
15
16 Pebble Beach Co. v. Caddy,
453 F.3d 1151 (9th Cir. 2006) ............................................................................. 15
17
Qureshi v. Countrywide Home Loans, Inc.,
18
2010 WL 841669 (N.D. Cal. Mar. 10, 2010) ...................................................... 33
19
Rajapakse v. Escrow.Com,
20 2021 WL 2473933 (S.D. Cal. June 17, 2021) ..................................................... 14
21
Reeves v. Hanlon,
22 33 Cal. 4th 1140 (2004) ....................................................................................... 29
23 Robinson Helicopter Co. v. Dana Corp.,
24 34 Cal. 4th 979 (2004) ................................................................................... 23, 25
25 Roth v. Garcia Marquez,
26 942 F.2d 617 (9th Cir. 1991) ............................................................................... 19
1 TABLE OF AUTHORITIES
(Cont’d)
2
Page
3 Sanjiv Goel MD, Inc. v. Cigna Healthcare of Cal., Inc.,
2016 WL 11507380 (C.D. Cal. June 16, 2016)................................................... 32
4
5 Schwartz E Liquid v. OMW Techs. Inc.,
2019 WL 4459324 (C.D. Cal. June 13, 2019)..................................................... 19
6
Schwarzenegger v. Fred Martin Motor Co.,
7
374 F.3d 797 (9th Cir. 2004) ......................................................................... 15, 18
8
Serafini v. Superior Ct.,
9 68 Cal. App. 4th 70 (1998) .................................................................................. 16
10
Soil Retention Prods., Inc. v. Brentwood Indus., Inc.,
11 521 F. Supp. 3d 929 (S.D. Cal. 2021) ..................................................... 27, 29, 30
12 Sprewell v. Golden State Warriors,
13 266 F.3d 979 (9th Cir. 2001) ......................................................................... 21, 28
14 Stolz v. Wong Commc’ns Ltd. P’ship,
25 Cal. App. 4th 1811 (1994) .............................................................................. 29
15
16 Strasburger v. Blackburne & Sons Realty Cap. Corp.,
2020 WL 6128223 (C.D. Cal. June 25, 2020)..................................................... 32
17
Sweeney v. Carter,
18
2021 WL 4776064 (C.D. Cal. Oct. 12, 2021) ..................................................... 20
19
Tapia v. Davol, Inc.,
20 116 F. Supp. 3d 1149 (S.D. Cal. 2015) ............................................................... 25
21
Thakur v. Betzig,
22 2019 WL 2211323 (N.D. Cal. May 22, 2019) .................................................... 31
23 United States ex rel. Integrated Energy, LLC v. Siemens Gov’t Techs., Inc.,
24 2016 WL 11743176 (C.D. Cal. June 13, 2016)................................................... 33
25 United States v. Ritchie,
26 342 F.3d 903 (9th Cir. 2003) ......................................................................... 13, 14
1 TABLE OF AUTHORITIES
(Cont’d)
2
Page
3 Williams v. Yamaha Motor Co.,
851 F.3d 1015 (9th Cir. 2017) ............................................................................. 18
4
5 Zumbrun v. Univ. of S. Cal.,
25 Cal. App. 3d 1 (1972) ..................................................................................... 23
6
STATUTES
7
8 Cal. Bus. & Prof. Code § 17200 ............................................................................... 32
9 Cal. Civ. Proc. Code § 410.10 .................................................................................. 15
10 RULES
11
Fed. R. Civ. P. 12(b)(2) ................................................................................ 15, 16, 21
12
Fed. R. Civ. P. 12(b)(6) ................................................................................ 21, 32, 33
13
OTHER AUTHORITIES
14
15 A Primer On Collectible And Trading Card Games, REALITY IS A
GAME (Feb. 2, 2014),
16 http://www.realityisagame.com/archives/2513/a-primer-on-
17 collectible-and-trading-card-games/ .................................................................... 11
18 How To Play, DISNEY LORCANA, https://www.disneylorcana.com/en-
US/how-to-play/ (last visited July 10, 2023)....................................................... 14
19
20 Restatement (Second) of Torts § 766 cmt. i (Am. L. Inst. 1979) ............................. 28
21 Trading Card Games for the Rest of Us-Cards, Decks, and Basics of
22 Play, GEEKDAD (Jan. 9, 2014), https://geekdad.com/2014/01/tcgs-
rest-us-cards-decks-basics-play/ .......................................................................... 12
23
24
25
26
27
28
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1 claim, and others, to manufacture a non-compete clause where none exists is the
2 legal equivalent of alchemy.
3 The fraud claim fares no better because Upper Deck cannot possibly meet
4 Rule 9’s heightened pleading standards, and its own allegations confirm that no
5 legal duties were breached. The inducement to breach claim fails because the
6 Complaint does not (and cannot) allege that Ravensburger knew about Upper
7 Deck’s agreements with Mr. Miller. Likewise, the negligence interference claim
8 cannot pass muster under Rule 12 as a matter of law because Ravensburger—a
9 direct competitor to Upper Deck—does not owe Upper Deck a duty of care.
10 The other claims fail because of the economic loss rule (conversion), or
11 because they do not exist (constructive trust), or because Upper Deck did not bother
12 to invoke the right statute (unfair competition and attorneys’ fees).
13 Taken together, the Complaint should be dismissed for lack of jurisdiction,
14 and for failure to state a claim. But the Court may choose instead to rule on
15 Defendants’ forthcoming § 1404 motion and defer this motion to the Western
16 District of Washington.
17 II. BACKGROUND AND PROCEDURAL HISTORY
18 A. Factual Background
19 Trading card games (e.g., Pokémon and Magic: The Gathering) have been
20 popular amongst those who collect and play them for decades. 2 Typically, a trading
21 card game (“TCG”) will feature many commonalities, including without limitation,
22 that players will purchase and build their own decks, using cards sold in random
23 distribution such that each player’s deck is unique. Id. While each player will have
24 their own self-designed decks and strategies for play, the basics of how each
25 game’s cards are designed and their “core tactics” for play can often be universally
26
27
See Adam Clare, A Primer On Collectible And Trading Card Games, REALITY IS
2
1 understood and applied. 3 In other words, strategies vary significantly in TCG play,
2 but the mechanics of play include many basic commonalities across games.
3 1. The Parties
4 Upper Deck is a “sports and entertainment company” that manufactures,
5 “among other products, sports and entertainment trading cards and trading card
6 games.” ECF No. 1, at 16–17 (Compl. ¶¶ 7, 11) (hereinafter, “Compl.”). The
7 “latest” TCG in Upper Deck’s line up is the “still-in-progress” Rush of Ikorr™
8 (“Rush of Ikorr”). Id. ¶ 12.
9 Ravensburger is headquartered in Seattle. Compl. ¶ 9. Ravensburger focuses
10 its business on family-friendly games, puzzles, crafts, and toys. Id. ¶ 14; Decl. of
11 Florian Baldenhofer (“Baldenhofer Decl.”) ¶ 2. Ravensburger’s latest family-
12 friendly project is the TCG at issue in this action, Disney Lorcana™ (“Lorcana”).
13 Baldenhofer Decl. ¶ 2; see also Compl. ¶ 32.
14 2. Mr. Miller is a prominent and well-established trading card
game designer.
15
Except for a few short stints in Virginia, Maryland, and Alabama, Mr. Miller
16
has lived in the greater Seattle area since 1998. Compl. ¶ 8; see also Decl. of Ryan
17
Miller (“Miller Decl.”) ¶ 2. With decades of experience in the industry, Mr. Miller
18
has worked on several popular games, such as Magic: The Gathering, Duel Masters,
19
Kaijudo, and Digimon. Compl. ¶ 13. Mr. Miller has done this work as a full-time
20
employee of a company (e.g., Wizards of the Coast), as a business owner, and as an
21
independent freelance designer/consultant retained for projects on a work-for-hire
22
basis. Miller Decl. ¶ 3.
23
Mr. Miller is employed full-time at Ravensburger as Senior Brand Manager -
24
Lorcana, a role he has held since November 9, 2020. Id. ¶ 4. Prior to joining
25
Ravensburger, Mr. Miller worked for six years as an independent freelance game
26
27 Id.; see also Rory Bristol, Trading Card Games for the Rest of Us—Cards, Decks,
3
and Basics of Play, GEEKDAD (Jan. 9, 2014), https://geekdad.com/2014/01/tcgs-
28 rest-us-cards-decks-basics-play/ (describing how in most TCGs, “each card has a
‘cost,’ ‘type,’ ‘speed,’ ‘color,’ and ‘rarity’” among other similarities).
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27 along with the pleadings. Khoja v. Orexigen Therapeutics, 899 F.3d 988, 998 (9th
Cir. 2018); Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010); see
28 also United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). The Agreements
are the subject of a concurrently filed motion to file under seal.
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1 work on Upper Deck’s TCG project. Compl. ¶ 28. In April 2023, Upper Deck filed
2 a trademark application for the Rush of Ikorr name and a provisional patent
3 application for the game. See Compl. ¶ 30.
4 4. Ravensburger’s Development of Lorcana
5 In early 2020, Ravensburger’s representatives met with Disney to pitch a
6 family-friendly card game featuring Disney characters, meant to capture untapped
7 segments of the tabletop game market. Baldenhofer Decl. ¶ 3. Ravensburger
8 quickly put together a team. Months later, in November 2020, the company hired
9 Mr. Miller. Id. ¶ 4; Miller Decl. ¶ 4; Compl. ¶ 27. The Ravensburger team of
10 designers, developers, and artists worked for years to create a cohesive game (i.e.,
11 characters, strategy, and story), that was simultaneously accessible and complex
12 enough to appeal to Disney fans, families, and to both die-hard and new trading
13 card gamers alike. Baldenhofer Decl. ¶ 5; see also Compl. ¶ 31.
14 An application to trademark the Disney Lorcana name was filed in
15 December 2021. On August 30, 2022, Ravensburger officially announced its years-
16 long development of Lorcana along with its plans to release the first “Chapter” of
17 the game in fall 2023. Baldenhofer Decl. ¶ 6. Ravensburger released the rules for
18 Lorcana, along with helpful videos demonstrating how to play the game, on its
19 website in April 2023. Id. ¶ 7; see also How To Play, DISNEY LORCANA,
20 https://www.disneylorcana.com/en-US/how-to-play/ (last visited July 10, 2023). 5
21 B. Procedural History
22 Upper Deck filed this lawsuit in San Diego Superior Court on June 7, 2023,
23 and served Ravensburger and Mr. Miller with the Summons and Complaint on
24 June 9, 2023 and June 12, 2023, respectively. On July 6, 2023, Defendants removed
25 the lawsuit to this Court.
26
27 The Court may take judicial notice of publicly available documents, including
5
websites and their contents, “without converting the motion to dismiss into a
28 motion for summary judgment.” Ritchie, 342 F.3d at 908; see also Rajapakse v.
Escrow.Com, 2021 WL 2473933, at *1 n.1 (S.D. Cal. June 17, 2021).
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27 arguments for dismissal under Rule 12(b)(2). Defendants respectfully request that
the Court assess the merits of these arguments as to each defendant individually.
28 See Calder v. Jones, 465 U.S. 783, 790 (1984) (personal jurisdiction over each
defendant must be “assessed individually”).
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1 place of business in Seattle (Compl. ¶ 9). Daimler AG, 571 U.S. at 117.
2 Nor do the circumstances present an “exceptional case” warranting the
3 exercise of general jurisdiction in California. Martinez, 764 F.3d at 1070; Loomis,
4 420 F. Supp. 3d at 1065. Mr. Miller’s alleged contacts with California are tenuous
5 and infrequent, at best. As alleged in the Complaint, Mr. Miller signed two (short-
6 term) personal services contracts with Upper Deck and traveled to San Diego once
7 in 2018 to work with Upper Deck and other game designers. Compl. ¶ 4; see also
8 Miller Decl. Exs. 1 (Summit Agreement), 2 (Shell Beach Agreement). This
9 represents a fraction of Mr. Miller’s decades-long career in game design. Miller
10 Decl. ¶ 3. Mr. Miller’s contacts are insufficiently “substantial” or “continuous and
11 systematic” to make him “at home” in California. Branca v. Bai Brands, LLC, 2019
12 WL 1082562, at *16–17 (S.D. Cal. Mar. 7, 2019) (no general jurisdiction over
13 individuals who resided in other states).
14 So too for Ravensburger. Ravensburger’s only alleged ties to California are a
15 single license with a California-based company, and a limited number of “pre-
16 sales” of a product that have yet to be delivered. Compl. ¶ 5. Such allegations do
17 not establish contacts with the “longevity, continuity, volume, and economic
18 impact” necessary to trigger an “exceptional case.” Loomis, 420 F. Supp. 3d at
19 1065; Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986) (collecting
20 cases where defendants with significant forum contacts lacked general jurisdiction).
21 C. The Court lacks specific jurisdiction.
22 “Specific jurisdiction” only exists where the claim for relief arises directly
23 from the defendant’s contacts with the forum state. AT&T Co. v. Compagnie
24 Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir.), supplemented on other grounds, 95
25 F.3d 1156 (9th Cir. 1996). A court “will exercise specific jurisdiction over a non-
26 resident defendant only when three requirements are satisfied: (1) the defendant
27 either purposefully directs its activities or purposefully avails itself of the benefits
28 afforded by the forum’s laws; (2) the claim arises out of or relates to the
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1 “[a]n out-of-state party does not purposefully avail itself of a forum merely by
2 entering into a contract with a forum resident.” HK China Grp., Inc. v. Beijing
3 United Auto. & Motorcycle Mfg. Corp., 417 F. App’x 664, 665 (9th Cir. 2011)
4 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)); see also Roth
5 v. Garcia Marquez, 942 F.2d 617, 621 (9th Cir. 1991) (“[T]he existence of a
6 contract with a resident of the forum state is insufficient by itself to create personal
7 jurisdiction over the nonresident.”). And, those cases analyzed the specific contracts
8 at issue between the parties to the lawsuit. Disney is a third-party licensor and not a
9 party to this suit—one more step removed from the contractual relationships that
10 still did not give rise to personal jurisdiction, without more. See Burger King, 471
11 U.S. at 479.
12 Moreover, Upper Deck’s vague allegations of general pre-sales made, but not
13 yet delivered, to California residents is insufficient. Indeed, limited sales to
14 California residents that are not targeted to or expressly aimed at California
15 residents do not give rise to specific personal jurisdiction. Schwartz E Liquid v.
16 OMW Techs. Inc., 2019 WL 4459324, at *4 (C.D. Cal. June 13, 2019) (finding no
17 specific personal jurisdiction when plaintiff failed to allege sales and marketing
18 specifically to California residents other than “by the general appeal” of defendant’s
19 products). Upper Deck offers no allegations about the sales volume in California,
20 whether Ravensburger specifically targeted California residents, or whether
21 Ravensburger marketed its products specifically to California residents. See
22 generally Compl.
23 Finally, according to even Upper Deck’s own allegations, Ravensburger’s
24 relationship with Mr. Miller occurred entirely in Washington—not California. See
25 Compl. ¶¶ 8 (Miller is a resident of Washington state), 9 (Ravensburger is a
26 Washington corporation), 71 (alleging that Miller lived in Washington state during
27
28 pleads no license with Disney, or even the prospect of having a license with Disney.
At bottom, the Disney license cannot be the hook for jurisdiction in this case.
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26 which is governed by the Shell Beach Agreement. See, e.g., Compl. ¶¶ 1, 60, 65,
70, 74, 79, 86, 102. The Shell Beach Agreement provides that “[a]ny dispute,
27 controversy or claim . . . arising out of or relating in any way to the provisions of
the [Shell Beach] Agreement shall be resolved . . . [in] binding arbitration.” Miller
28 Decl. Ex. 2, at 17 (Shell Beach Agreement § 14). Defendants therefore reserve their
rights to move to compel arbitration of this action.
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1 disclosing the central, proprietary components and expressions within the game to .
2 . . Ravensburger, to develop the Lorcana trading card game.”). And the alleged
3 fiduciary duty at issue—to maintain the confidentiality of Upper Deck’s proprietary
4 information—is an express obligation in the Agreements. Compare Compl. ¶¶ 65–
5 66, with Miller Decl. Ex. 2, at 16 (Shell Beach Agreement § 10). Finally, Upper
6 Deck seeks purely economic relief. Because the fiduciary duty claim “merely
7 restate[s] contractual obligations” it is barred by the economic loss rule. Aas, 24
8 Cal. 4th at 643; see also CleanFuture, Inc. v. Motive Energy, Inc., 2019 WL
9 2896132, at *3–4 (C.D. Cal. Apr. 15, 2019) (fiduciary duty claim barred by
10 economic loss rule).
11 Upper Deck’s fiduciary duty claim should be dismissed with prejudice. See
12 BP W. Coast Prod., LLC v. Crossroad Petroleum, Inc., 2013 WL 12377979, at *10
13 (S.D. Cal. Dec. 3, 2013) (a finding of no fiduciary duty amounts to dismissal of
14 claim with prejudice); CleanFuture, 2019 WL 2896132, at *5 (dismissing fiduciary
15 duty claim with prejudice where “incurably barred” by economic loss rule).
16 C. The fraud claim should be dismissed.
17 In its third cause of action, Upper Deck contends it was defrauded by
18 Mr. Miller’s “intentional[] conceal[ment]” of certain material facts, namely, that
19 Mr. Miller: (1) discussed possible employment opportunities and accepted
20 employment with Ravensburger (“Employment Omission”); (2) would be working
21 to design a competing game for a competitor (“Competing Game Omission”); and
22 (3) intended to seize Upper Deck’s “confidential and proprietary game” and transfer
23 it to Ravensburger (“Transfer Omission”). Compl. ¶¶ 71–73; id. 69–77. Not so.
24 Upper Deck’s meandering and incendiary allegations of fraud fail to state a claim
25 for relief, for at least two reasons.
26 To begin, the fraudulent concealment claim is barred by the economic loss
27 rule. Upper Deck again seeks to recover purely economic losses in tort—lost profits
28 and opportunities resulting from the earlier release of competing TCG that “copies
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1 the essence of Rush of Ikorr” (Compl. ¶ 76)—for harms caused by the alleged
2 breach of contract. Compare Compl. ¶¶ 72 (alleging Mr. Miller concealed his intent
3 to “seize confidential and proprietary [information] and transfer them to
4 Ravensburger without Upper Deck’s knowledge”), with id. ¶ 62 (“Miller breached
5 [the Agreements] by, without authorization, copying Upper Deck’s proprietary and
6 novel TCG game and disclosing . . . the game to . . . Ravensburger . . . .”), and
7 Miller Decl. Exs. 1 at 8 (Summit Agreement § 7), 2 at 16 (Shell Beach Agreement
8 § 9) (“Designer agrees not to reveal Confidential Information to any third party . . .
9 .”). Upper Deck’s failure to “demonstrate harm above and beyond a broken
10 contractual promise” is fatal to its claim. Robinson Helicopter Co., 34 Cal. 4th at
11 988; see also Cho v. Hyundai Motor Co., 2022 WL 16966537, at *5 (C.D. Cal. Oct.
12 21, 2022) (dismissing class action claims for fraudulent concealment with prejudice
13 after finding the claims were barred by the economic loss rule); id. at *4 (collecting
14 cases). The fraudulent concealment claim should be dismissed—with prejudice.
15 The fraud claim also fails because its elements are not pled with the requisite
16 level of particularity—not by a long shot. Under California law, the elements of
17 fraudulent concealment are: (1) concealment or suppression of a material fact;
18 (2) by a defendant who was under a duty to disclose the fact to the plaintiff; (3) the
19 defendant intentionally concealed or suppressed the fact, intending to defraud the
20 plaintiff; (4) the plaintiff was unaware of the fact and would not have acted as it did
21 had it known the concealed or suppressed fact; and (5) resulting damage. Boschma
22 v. Home Loan Ctr., Inc., 198 Cal. App. 4th 230, 248 (2011). Claims for fraudulent
23 concealment are subject to the heightened pleading requirement in Rule 9(b).
24 Immobiliare, LLC v. Westcor Land Title Ins., 424 F. Supp. 3d 882, 890 (E.D. Cal.
25 2019). This particularity requirement necessitates pleading facts which set forth
26 “the times, dates, places, benefits received, and other details of the alleged
27 fraudulent activity.” Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993). See
28 also Tapia v. Davol, Inc., 116 F. Supp. 3d 1149, 1164 (S.D. Cal. 2015) (evaluating
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1 fact. Boschma, 198 Cal. App. 4th at 248. Upper Deck does not specify how it would
2 have behaved differently if it were aware of the alleged Transfer Omission, instead
3 vaguely alleging it would have taken affirmative action to protect its “ideas,
4 concepts, details, and intellectual property[.]” See Compl. ¶ 75; id. ¶¶ 69–77.
5 Relatedly, the facts alleged in the Complaint contradict Upper Deck’s
6 allegations regarding its reliance on the Employment and Competing Game
7 Omissions. Upper Deck claims it would have sought the return of confidential
8 information and/or prevented its employees from communicating with Mr. Miller if
9 it was aware of Mr. Miller’s employment at Ravensburger and the company’s work
10 on a competing TCG. Compl. ¶ 74. But Upper Deck was aware of Mr. Miller’s
11 employment with Ravensburger and work on Lorcana when the game was
12 announced in September 2022. See Compl. ¶¶ 31–32. And despite that awareness,
13 Upper Deck did nothing. Upper Deck cannot now lament that it was damaged by its
14 own inaction.
15 D. The claim for inducing breach of contract should be dismissed.
16 To raise a claim for inducing breach of a written contract, Upper Deck must
17 plead and prove: (1) the existence of a valid contract between the plaintiff and a
18 third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s
19 intentional acts designed to induce a breach; (4) actual breach; and (5) resulting
20 damage. Soil Retention Prods., Inc. v. Brentwood Indus., Inc., 521 F. Supp. 3d 929,
21 961 (S.D. Cal. 2021). Upper Deck failed to plead at least two elements of its
22 inducement claim.
23 First, absent from the Complaint is any allegation regarding Ravensburger’s
24 knowledge of one or more specific contracts between Upper Deck and Mr. Miller.
25 Upper Deck alleges “Ravensburger knew or reasonably should have known Miller
26 was subject to valid confidentiality contracts[.]” Compl. ¶ 80 (emphasis added). But
27 that allegation—the only one in the Complaint about Ravensburger’s
28 “knowledge”—does not identify a specific contract, much less point to the
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1 Agreements purportedly at issue in this action. The Court should not take context
2 cues from the surrounding conclusory allegations, or accept “unwarranted
3 deductions of fact, or unreasonable inferences[.]” Sprewell, 266 F.3d at 988. The
4 plausibility standard “asks for more than sheer possibility that a defendant acted
5 unlawfully.” Iqbal, 556 U.S. at 678. The realm of possible confidentiality contracts
6 that Ravensburger knew or could have known about is endless: Mr. Miller was a
7 freelance game designer for six years before joining Ravensburger in
8 November 2020. Miller Decl. ¶ 5.
9 More to the point: Upper Deck did not allege that Ravensburger knew about
10 the Agreements identified in the Complaint. See Compl. ¶¶ 78–84. That omission is
11 fatal to the inducement claim.
12 Nor is it enough to allege that Ravensburger should have known about these
13 vague confidentiality contracts. Compl. ¶ 80. The tort requires actual knowledge.
14 Evans Hotels, LLC v. Unite Here! Loc. 30, 2021 WL 10310815 (S.D. Cal. Aug. 26,
15 2021) (dismissing claim that failed to allege actual knowledge of development
16 contract); see also Restatement (Second) of Torts § 766 cmt. i (Am. L. Inst. 1979)
17 (“To be subject to liability [for inducing a breach of contract], the actor must have
18 knowledge of the contract with which he is interfering and of the fact he is
19 interfering with the performance of the contract.”).
20 Second, Upper Deck has not pled any acts or conduct by Ravensburger
21 designed to induce any breach. Upper Deck alleges in a conclusory manner that
22 “Ravensburger induced and intended for Miller to breach his obligations[.]” Compl.
23 ¶ 81. That’s it. There are no allegations about what Ravensburger actually did to
24 induce Miller’s supposed breach of contract (probably because Upper Deck can’t
25 even allege Upper Deck knew about the contract).
26 If Upper Deck’s theory of liability is based on Ravensburger’s hiring
27 Mr. Miller away from Upper Deck, see Compl. ¶ 83, that theory cannot stand
28 because Upper Deck has failed to show any independent wrongful conduct by
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1 Ravensburger. Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal. 5th 1130, 1145–46
2 (2020). Even if Ravensburger expressly asked Mr. Miller to terminate his freelance
3 project with Upper Deck, that would not be actionable either. See Reeves v. Hanlon,
4 33 Cal. 4th 1140, 1151 (2004) (“Where no unlawful methods are used, public
5 policy generally supports a competitor’s right to offer more pay or better terms to
6 another’s employee, so long as the employee is free to leave.”).
7 E. The negligent interference with prospective economic relations
claim should be dismissed.
8
A claim for negligent interference with prospective economic relations has
9
five elements: “(1) the existence of a valid economic relationship between the
10
plaintiff and a third party containing the probability of future economic benefit to
11
the plaintiff; (2) the defendant’s knowledge (actual or construed) of (a) the
12
relationship and (b) that the relationship would be disrupted if the defendant failed
13
to act with reasonable care; (3) the defendant’s failure to act with reasonable care;
14
(4) actual disruption of the relationship; and (5) resulting economic harm.” Soil
15
Retention Prods., Inc., 521 F. Supp. 3d at 961. Upper Deck fails to plausibly allege
16
several elements.
17
First, Upper Deck does not and cannot allege that Ravensburger owes it a
18
duty of care. After all, as Upper Deck acknowledges, “Ravensburger . . . is a direct
19
competitor to Upper Deck.” Compl. ¶ 9; id. ¶ 1. California law is clear: “there is no
20
duty of care between competitors[.]” S. Cal. Elec. Firm v. S. Cal. Edison Co., 2023
21
WL 2629893, at *11 (C.D. Cal. Jan. 10, 2023) (applying California law); Stolz v.
22
Wong Commc’ns Ltd. P’ship, 25 Cal. App. 4th 1811, 1825 (1994) (“[C]omplaint
23
did not allege such a duty, nor could it, since it was plain that plaintiff and
24
defendants were competitors.”); Original Beauty Tech. Co. v. Oh Polly USA, Inc.,
25
2022 WL 17224542 (C.D. Cal. Aug. 16, 2022) (same).
26
Even if Ravensburger owed Upper Deck a duty of care—as a direct
27
competitor, it does not—the “duty” proposed in the Complaint would require the
28
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1 very breach of confidentiality that is the basis of this action. According to Upper
2 Deck’s strained view of negligent interference, “Ravensburger was required to vet
3 the specifics of the prior work the game designer had undertaken[.]” Compl. ¶ 87.
4 But the very agreement Mr. Miller signed required him “not to reveal the
5 Confidential Information to any third party[.]” Miller Decl. Ex. 2, at 16 (Shell
6 Beach Agreement § 10). When a liability theory collapses on itself, that’s a good
7 sign the claim should be dismissed with prejudice.
8 Second, Upper Deck fails to show that it was “reasonably probable that the
9 prospective economic advantage would have been realized but for defendant’s
10 interference.” Westside Ctr. Assocs. v. Safeway Stores 23, Inc., 42 Cal. App. 4th
11 507, 522 (1996). “[A] hope of future transactions is insufficient to support a claim
12 of tortious interference.” Soil Retention Prods., 521 F. Supp. 3d at 961–62. Here,
13 Upper Deck concedes Rush of Ikorr game is “still-in-progress,” i.e., the game has
14 not been “publicly announced or launched[.]” Compl. ¶¶ 12, 29. This is insufficient
15 as a matter of law. See Soil Retention Prods., 521 F. Supp. 3d at 961–62.
16 Third, Upper Deck relies exclusively on conclusory allegations about
17 Ravensburger’s knowledge. See, e.g., Compl. ¶ 87 (“Ravensburger knew of, or
18 should have known of [Upper Deck’s contractual relationship with Mr. Miller]
19 through any basic due diligence . . . .”); id. ¶ 88. But “conclusory allegations that
20 Defendant knew of Plaintiff’s economic relations fail to state a plausible claim for
21 relief under the Twombly/Iqbal standard.” Soil Retention Prods., 521 F. Supp. 3d at
22 962 (dismissing negligent interference claim).
23 F. The conversion claim should be dismissed.
24 To raise a claim for conversion, Upper Deck must allege: (1) “ownership or
25 right to possession of a certain piece of property; (2) the defendant’s conversion of
26 the property by a wrongful act or disposition of property rights; and (3) damages.”
27 Counts v. Meriwether, 2015 WL 12656945, at *5 (C.D. Cal. June 12, 2015). Upper
28 Deck’s conversion claim fails for at least three independent reasons.
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1 First, Upper Deck does not specify which prong of the UCL its claim relies
2 upon. Compl. ¶¶ 106–10. This “deprives [Defendants] of fair notice of the claims”
3 alleged against them and warrants dismissal. Nuvo Rsch. Inc. v. McGrath, 2012 WL
4 1965870, at *6 (N.D. Cal. May 31, 2012) (cleaned up); see also United States ex
5 rel. Integrated Energy, LLC v. Siemens Gov’t Techs., Inc., 2016 WL 11743176, at
6 *5 (C.D. Cal. June 13, 2016) (“To survive a Rule 12(b)(6) motion to dismiss, the
7 plaintiff must identify the prong(s) underlying its unfair competition claim.”);
8 Qureshi v. Countrywide Home Loans, Inc., 2010 WL 841669, at *7 (N.D. Cal. Mar.
9 10, 2010) (dismissing UCL claim where plaintiff failed to identify specific prong at
10 issue). The UCL claim must be dismissed on this basis alone.
11 Second, at least as to Ravensburger, Upper Deck has failed to plausibly
12 allege that it has standing to bring a claim under the UCL because it has not
13 suffered a legally cognizable “injury in fact” and “lost money or property as a result
14 of the unfair competition.” Hawkins v. Kroger Co., 906 F.3d 763, 768 (9th Cir.
15 2018). The law is clear: “lost business opportunities, lost anticipated profits, or
16 injury to goodwill” are not recoverable under the UCL. Dyson, Inc. v. Garry
17 Vacuum, LLC, 2010 WL 11595882, at *8 (C.D. Cal. July 19, 2010) (citing cases)
18 (“Courts assessing standing under the UCL . . . have found that it is not sufficient
19 for business competitor plaintiffs to allege lost business opportunities, lost
20 anticipated profits, or injury to goodwill.”); see also Korea Supply Co. v. Lockheed
21 Martin Corp., 29 Cal. 4th 1134, 1152 (2003) (“[N]onrestitutionary disgorgement of
22 profits is not an available remedy in an individual action under the UCL.”).
23 Here, Upper Deck—an admitted “direct competitor” of Ravensburger (see
24 Compl. ¶¶ 1–2, 9, 62, 71)—seeks to recover from Ravensburger for the alleged
25 UCL violation, “disgorgement of revenue and income earned by Ravensburger[.]”
26 Compl. ¶ 110. Upper Deck’s alleged harms include, without limitation, “lost sales,
27 loss of goodwill and popularity of [its] game, thwarting the Rush of Ikorr launch,
28
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1 loss of related revenue streams, [and] loss of capital[.]” Id. ¶ 83; see also id. ¶ 76.13
2 But the California Supreme Court has clearly held that the monetary relief Upper
3 Deck seeks from Ravensburger is not recoverable under the UCL. See Korea
4 Supply Co., 29 Cal. 4th at 1152. The UCL claim against Ravensburger should be
5 dismissed.
6 V. THE COURT SHOULD STRIKE UPPER DECK’S REQUEST FOR
7 ATTORNEYS’ FEES UNDER CALIFORNIA CIVIL CODE § 3426.4
8 Upper Deck seeks attorneys’ fees under Civil Code section 3426.4—the fee
16 For the foregoing reasons, Defendants respectfully request that the Court: (1)
17 dismiss the Complaint for lack of jurisdiction; (2) dismiss claims two through seven
18 for failure to state a claim; (3) strike the demand for damages from the eighth cause
19 of action; and (4) strike Upper Deck’s prayer for attorneys’ fees under CUTSA.
20 Dated: July 12, 2023 PERKINS COIE LLP
21
By: s/ Alisha C. Burgin
22 Alisha C. Burgin
23 David A. Perez (Pro Hac Vice Pending)
Torryn T. Rodgers
24
Attorneys for Defendants RYAN MILLER and
25 RAVENSBURGER NORTH AMERICA, INC.
26
Upper Deck also seeks, presumably only from Mr. Miller, “restitution of sums
13
27 paid to Miller[,]” and “costs and expenses paid to Miller[.]” Compl. ¶¶ 83, 110.
While restitution is available as a remedy under the UCL, it is axiomatic that such
28 an award under the UCL “replace[s] . . . money or property that [a] defendant[]
took directly from plaintiff.” Korea Supply Co., 29 Cal. 4th at 1149.
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