J. PAUL OETKEN, District Judge:
This is a case about the sale of merchandise relating to the movie Office Space, a 1999 cult classic about the soul-crushing experience of working under incompetent management. The merchandise at issue is the Office Space "Box of Flair," a product that was sold to consumers beginning in 2007. "Flair" refers to buttons that waiters in the film must wear as a mode of corporate-mandated self-expression. The front of the Box of Flair includes an image of a waiter in the film who wholeheartedly embraces these buttons as a means to express himself. The actor who played that character, Plaintiff Todd Duffey, claims that this use of his image is unauthorized and is likely to mislead consumers into believing that Duffey is personally affiliated with the Office Space Box of Flair. Defendants move to dismiss this case for failure to state a claim. For the reasons that follow, Defendants' motion is granted.
Duffey alleges the following background facts in the operative complaint. The court accepts these facts as true for the purposes of this motion. Michael Coppel Promotions Pty. Ltd. v. Michael Bolton, 982 F.Supp. 950, 953 (S.D.N.Y.1997). This summary of the facts also references two contracts and the Box of Flair itself, all of which are integral to the operative complaint.
Cubicle subsequently conveyed its interest in Office Space to Defendant Twentieth Century Fox Film Corporation.
The Box of Flair contains fifteen pieces of flair,
Duffey learned about the Box of Flair in 2010. Three years later, in January 2013, he requested that Running Press provide him with an accounting of Box of Flair sales. After Running Press refused, Duffey filed this action in February 2013. He
Rule 8 of the Federal Rules of Civil Procedure requires a complaint to make a short, plain statement showing that the pleader is entitled to relief. A complaint states a claim for relief if the claim is plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). To review a complaint for plausibility, the court accepts all well-pleaded factual allegations as true and draws all reasonable inferences in the pleader's favor. Iqbal, 556 U.S. at 678-79, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). But the court need not accept "[t]hreadbare recitals of the elements of a cause of action," which are essentially legal conclusions. Id. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). After separating legal conclusions from well-pleaded factual allegations, the court must determine whether those facts make it plausible — not merely possible — that the pleader is entitled to relief. Id.
The potentially dispositive issue common to each of Duffey's claims is whether he has given up his right to pursue them. Two provisions of the Day Player Agreement bear on this question. In the first provision, Cubicle agrees to employ Duffey in accordance with the terms set forth in a schedule attached to the SAG Agreement. In the second provision, Duffey grants Cubicle "all rights throughout the universe" to his performance. The first provision has generated confusion over whether federal or state law controls interpretation of this contract.
Because the first provision references a collective bargaining agreement, Defendants contend that Duffey's breach of contract claims are preempted by § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a). Section 301 grants district courts subject matter jurisdiction over suits for violation of collective bargaining agreements. The Supreme Court has held that Congress passed § 301 with the intent that district courts would create a body of federal common law, resulting in relatively uniform interpretation of labor contracts throughout the country. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). To achieve that goal, § 301 preempts state law claims that are "substantially dependent" on analysis of the terms of a collective bargaining agreement. Allis-Chalmers
"[N]ot every dispute that touches upon a collective bargaining agreement is preempted by § 301." Williams v. Comcast Cablevision of New Haven, Inc., 322 F.Supp.2d 177, 182 (D.Conn.2004) (citing Livadas v. Bradshaw, 512 U.S. 107, 123, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994)). Section 301 applies only if Duffey's claims substantially depend on interpretation of a collective bargaining agreement. They do not.
The Day Player Agreement itself is not a collective bargaining agreement. It is a contract between Duffey and Cubicle, not a contract between a union and an employer.
The SAG Agreement is a collective bargaining agreement, but Duffey's claims do not depend on its interpretation. Duffey is not bound by its terms. Defendants argue that Duffey is bound by the SAG Agreement because it purports to incorporate itself into the individual contract of employment between each performer and Cubicle. This position is unpersuasive for two reasons. First, Cubicle is not a party to the SAG Agreement: the agreement is between SAG and members of the Alliance of Motion Picture & Television Producers, each of which is listed in Exhibit A to the SAG Agreement. Cubicle is not listed as a member. Second, Duffey cannot be bound to a contract to which he did not agree. Duffey agreed to the terms of the Day Player Agreement, but not the terms of the SAG Agreement. The parties do not argue that SAG negotiated the collective bargaining agreement as Duffey's agent, nor that Duffey later bound himself to the terms of the agreement by ratification.
Finally, the schedule arguably could be a collective bargaining agreement for purposes of § 301 — it was negotiated between a union and an employer, but then incorporated by reference into a private contract — but the Court need not resolve this point. None of Duffey's claims depends on provisions in the schedule. The schedule does not contain the arbitration provisions or separate negotiation requirements to which both parties refer in their briefs. Therefore, even if the schedule were a collective bargaining agreement for purposes of § 301, § 301 still would not apply. See Adonna v. Sargent Mfg. Co., 485 Fed. Appx. 445, 447 (2d Cir.2012) (quoting Livadas, 512 U.S. at 123, 114 S.Ct. 2068) ("[W]hen the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished."). Because none of Duffey's claims is substantially dependent on analysis of a collective bargaining agreement, federal law does not apply to interpretation of the contracts at issue.
The Day Player Agreement does not contain a choice of law provision. To interpret the Day Player Agreement, the Court must determine what body of law governs its terms. The first question is whether federal or state choice of law principles apply. It is not dispositive that this action was brought pursuant to federal question jurisdiction. The source of the right asserted — not the basis for subject matter jurisdiction — determines whether state or federal law governs any given issue in federal litigation. Comm'r of Internal Revenue v. Estate of Bosch, 387 U.S. 456, 475-76, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967) (Harlan, J., dissenting) ("[T]he [Rules of Decision] Act gives [state law] force in federal courts, Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); it is not, for that purpose, material whether [] jurisdiction ... is founded upon diversity of citizenship."); Maternally Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 540 n. 1 (2d Cir.1956); Wright & Miller, Fed. Prac. & Proc. Juris.2d § 4520.
If a defendant asserts that the plaintiff agreed to forego the right to bring the claims he has filed, the defendant seeks to enforce contractual rights, which are interpreted in accordance with state law in the absence of a "distinctive national policy" to the contrary. Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 153 (2d Cir.1968) (Friendly, J.) ("The development of a federal common law of contracts is justified only when required by a distinctive national policy....") (quotation marks omitted); see, e.g., Rooney v. Columbia Pictures Inds., Inc., 538 F.Supp. 211, 223 n. 4 (S.D.N.Y.) (applying state choice of law rules to interpret contract where defendant claimed plaintiff had granted defendant his right to bring various federal claims, including Lanham Act claims), aff'd, 714 F.2d 117 (2d Cir.1982). The Day Player Agreement implicates no such distinctive national policy, and therefore, state law governs its interpretation. Cf. Bartsch, 391 F.2d at 153-54 (holding, where defendant asserted that plaintiff had contractually waived copyright claims:
Federal courts faced with state law claims must apply choice-of-law principles of the state in which they sit. Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975) (per curiam) (citing Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)). The New York choice-of-law analysis begins by asking whether there is an actual conflict between the different bodies of law that might apply. Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 672 F.3d 155, 157 (2d Cir.2012) (quoting Wall v. CSX Transp., Inc., 471 F.3d 410, 415 (2d Cir. 2006)).
New York applies a "center of gravity" approach to choosing which law to apply in contract cases. Lazard Freres & Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1539 (2d Cir.1997) (citing Babcock v. Jackson, 12 N.Y.2d 473, 481-82, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963)). To find the center of gravity for a particular contract, courts consider the significance of various contacts with the relevant jurisdictions, including where the contract was drafted, negotiated, executed, and performed; the location of the subject matter; and the domicile or place of business of the contracting parties. Id. (citing In re Allstate Ins. Co. & Stolarz, 81 N.Y.2d 219, 227, 597 N.Y.S.2d 904, 613 N.E.2d 936 (1993)). The jurisdictions relevant to this action are Texas, where the contract was negotiated, executed, and performed; and California, where Duffey may be domiciled.
For the purposes of this case, there is an actual conflict between Texas and California law. Duffey asks the Court to consider evidence extrinsic to the Day Player Agreement. Both Texas and California prohibit courts from relying on extrinsic evidence to supplement the terms of an otherwise unambiguous contract. See F.B.T. Prods., LLC v. Aftermath Records, 621 F.3d 958, 963 (9th Cir.2010) (quoting Winet v. Price, 4 Cal.App.4th 1159, 6 Cal.Rptr.2d 554, 557 (1992)); Addicks Svcs., Inc. v. GGP-Bridgeland, LP, 596 F.3d 286, 294 (5th Cir.2010) (quoting Texas v. Am. Tobacco Co., 463 F.3d 399, 407 (5th Cir.2006)). But California follows a two-step approach to extrinsic evidence: even if a contract is clear on its face, courts provisionally receive extrinsic evidence to determine whether the contract is ambiguous in light of that evidence. F.B.T. Prods., 621 F.3d at 963 (quoting
Texas is clearly the center of gravity in the dispute over the Day Player Agreement. The contract was negotiated, executed, and performed in Texas, and Duffey was residing in Texas when he filmed his scenes for Office Space (it is unclear whether he was domiciled in Texas). The parties have not suggested that Cubicle had a place of business in California or that the agreement was drafted in California. Duffey moved to California after Office Space had been filmed — it is not clear whether he is now domiciled there, but even if he were, Texas would remain the jurisdiction with more significant contacts to this dispute. Texas law therefore governs interpretation of the Day Player Agreement.
Duffey agrees that the Day Player Agreement is a valid contract granting Cubicle broad rights to his performance. He does not contest that Cubicle subsequently sold those rights to Fox, and that Fox in turn sold Running Press a license to use images from Duffey's performance on the Box of Flair. But Duffey does dispute that the rights he granted to Cubicle included the right to use images of his performance in connection with consumer merchandise. He argues that his contract must be interpreted in light of industry custom, which requires a specific merchandising provision in order to grant merchandising rights.
Contract terms are construed with the primary aim of ascertaining the intent of the parties as expressed in the contract, known as their "objective intent." Grohman v. Kahlig, 318 S.W.3d 882, 887 (Tex.2010) (citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex.2005)); Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731 (Tex.1981) (quoting City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex.1968)) ("[I]t is objective, not subjective, intent that controls."). Courts must interpret unambiguous contract language as a matter of law. Grohman, 318 S.W.3d at 887 (citing Univ. Health Servs., Inc. v. Renaissance Women's Grp., P.A., 121 S.W.3d 742, 746 (Tex. 2003)); cf. Intech, Inc. v. Consol. Freightways, Inc., 836 F.2d 672, 674 (1st Cir. 1987). To determine whether a contract is ambiguous, the court must consider the contract as a whole and the circumstances present at the time the parties entered the contract. AEP Energy Svcs. Gas Holding Co. v. Bank of Am., N.A., 626 F.3d 699, 728 (2d Cir.2010) (citing Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983)); Sun Oil Co., 626 S.W.2d at 731; cf. T.G.I. Friday's Inc. v. Nat'l Restaurants Mgmt., Inc., 59 F.3d 368, 373 (2d Cir.1995). But the court may not consider extrinsic evidence. Sun Oil Co., 626 S.W.2d at 731-32.
The difference between circumstances surrounding the contract's execution (which a court must consider to determine ambiguity) and extrinsic evidence (which a court may not consider) is defined in a footnote to Sun Oil Co., the leading Texas Supreme Court case discussing the issue. To determine whether a contract is
It appears that evidence of "surrounding circumstances" is evidence of what the parties knew, which is a permissible consideration. But "extrinsic evidence" is the parties' statements of their intent, which is not a permissible consideration. In other words, the contract is the only statement of intent that a court may consider. This reading of Sun Oil Co. is consistent with other decisions noting that courts may consider industry custom, which is a fact known to the parties, when determining whether a contract is ambiguous. Sw. Bell Tel. Co. v. Pub. Util. Comm'n, 208 F.3d 475, 486 (5th Cir.2000) (dictum) (noting that provision requiring undefined terms to be interpreted in accordance with contemporary usage "tracks well-established rules of contract interpretation"; citing Intratex Gas Co. v. Puckett, 886 S.W.2d 274, 278 (Tex.App.8th 1994); KMI Cont'l Offshore Prod. Co. v. ACF Petroleum Co., 746 S.W.2d 238, 241 (Tex. App. 1st 1987)); Toren v. Braniff, Inc., 893 F.2d 763, 765 (5th Cir.1990) (dictum) (citing Coker, 650 S.W.2d at 393) ("In answering that question [whether the contract is ambiguous], the court should consider the intent of the parties as evidenced by the terms of the contract and industry custom."); cf. GTE Sw., Inc. v. Pub. Util. Comm'n, 102 S.W.3d 282, 297 (Tex.App.3d 2003) ("[E]ven with unambiguous contracts courts may consider the commercial context of the transaction ... [including] the ordinary terms, customs and usages then in effect as these are evidence of the intent of the parties.") (citations and quotation marks omitted). But see David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450-51 (Tex.2008) ("If a contract is unambiguous, the parol evidence rule precludes consideration of evidence of prior or contemporaneous agreements unless an exception to the parol evidence rule applies.") (citing Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30, 31 (1958)); see also GTE Southwest, 102 S.W.3d at 295 (referring to evidence of industry custom as "extrinsic evidence").
The Day Player Agreement unambiguously grants Cubicle the right to use images of Duffey's performance for commercial purposes in connection with Office Space. The agreement grants Cubicle "all rights throughout the universe in and/or to all results and proceeds of [Duffey's] services rendered hereunder." The agreement goes on to specify that this grant is
The plain meaning of these words is that Duffey conveys the right to use images of his performance for commercial purposes in connection with his performance in Office Space. The sale of merchandise involves a commercial purpose connected to Duffey's performance in Office Space — merchandising falls within the plain meaning of "commercial purposes," and nothing in the remainder of the one-page agreement, or the schedule that it incorporates, suggests that "commercial purposes" should be read otherwise. Even if merchandising rights somehow fell outside the scope of "commercial purposes," they would be captured in the clause granting Cubicle "all rights throughout the universe" to the results of Duffey's performance. Duffey has not pleaded any circumstances surrounding the agreement's execution that would impact this analysis. These terms admit of only one reasonable interpretation: that Duffey granted Cubicle the right to use images of his performance on Office Space merchandise.
Duffey's arguments to the contrary fail. He argues that industry custom requires specific merchandising provisions to convey merchandising rights, but he fails to plead facts in support of any such custom. Instead, Duffey cites three cases in his opposition brief. Even if the facts discussed in these cases were alleged in the operative complaint, the facts would not be sufficient to establish the reasonableness of the interpretation that Duffey proposes. The brief cites one case discussing industry custom with regard to merchandising provisions and a performer's employment contract — James Dean's employment contract, employing Dean to star in multiple films, executed more than forty years before Duffey executed his contract in Texas. Warner Bros., Inc. v. Curtis Mgmt. Grp., Inc., No. 94 Civ. 4016, 1995 WL 420043 (C.D.Cal. Mar. 31, 1993). The brief also cites two other cases discussing contracts with specific merchandising provisions.
A custom is evidence of the parties' intent because it has "such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be
Duffey also argues that a passage in the agreement between Fox and Running Press suggests that other Office Space performers had specific merchandising provisions in their agreements with Cubicle. Perhaps Cubicle agreed that Jennifer Anniston could retain merchandising rights — but that has little bearing on whether Cubicle agreed that Duffey could retain merchandising rights. At any rate, even if Duffey had made these allegations in the operative complaint, the Court would not be able to consider them. Under Texas law, the Court cannot rely on extrinsic evidence to create an ambiguity in Duffey's Day Player Agreement.
Duffey argues for an interpretation of the Day Player Agreement that is unreasonable. There is only one reasonable way to read the relevant terms: Duffey granted Cubicle all rights to images of his performance in Office Space, including the right to use his image on Office Space merchandise.
Each of Duffey's claims — false endorsement, breach of contract, and his claim for a declaratory judgment — fails in light of the Day Player Agreement. A plaintiff may assert a false endorsement claim only if the defendant is using his likeness without permission. Bruce Lee Enters., LLC v. A.V.E.L.A., Inc., No. 10 Civ. 2333(KMW), 2013 WL 822173, *19 (S.D.N.Y. Mar. 6, 2013). Duffey granted Cubicle permission to use his likeness on Office Space merchandise; Cubicle sold that right to Fox, and Fox granted a license to Running Press. Duffey's false endorsement claim must be dismissed.
The elements of breach of contract are the existence of a contract, tendered performance by the plaintiff, breach of contract by the defendant, and resulting damages to the plaintiff. Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009). When a contract is unambiguous and the facts of the parties' conduct are undisputed, breach of contract is a question of law. Grohman, 318 S.W.3d at 887 (citing Sullivan v. Barnett, 471 S.W.2d 39, 44 (Tex.1971)). The Day Player Agreement is unambiguous, and the facts regarding sale of the Box of Flair are undisputed. Duffey granted Cubicle the right to use his image for commercial purposes in connection with his performance. Fox bought that right from Cubicle and sold it to Running Press. Running Press then used images of Duffey's performance on Office Space merchandise. Duffey has failed to allege that Fox or Running Press breached their contractual duties to him, and therefore, he has failed to state a claim for breach of contract.
Finally, a claim for declaratory relief requires a substantial controversy between the parties. Kesselman v. The Rawlings Co., LLC, 668 F.Supp.2d 604, 610 (S.D.N.Y.2009) (citing Starter Corp. v.
For the foregoing reasons, Defendants' motion to dismiss is GRANTED in its entirety. This action is dismissed.
SO ORDERED.
Next, Duffey block-quotes a clause permitting Cubicle to employ performers only if they are SAG members in good standing. The quoted provision is a union security clause. Such provisions require new employees to become members of a union shortly after they are hired. Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 37, 119 S.Ct. 292, 142 L.Ed.2d 242 (1998). Compounding the mystery surrounding this lonely block quote: Duffey specifically noted that Texas is a right-to-work state. If this claim has any relevance to Duffey's case, it is to suggest that Texas law governed whether Cubicle was required to fire Duffey if he refused to join SAG — right-to-work states such as Texas do not enforce union security clauses such as the one Duffey quotes here. Oil, Chem. & Atomic Workers Int'l Union v. Mobil Oil Corp., 426 U.S. 407, 409-10 & n. 1, 96 S.Ct. 2140, 48 L.Ed.2d 736 (1976).
Finally, Duffey claims that a different provision, paragraph 2(c), "makes it clear" that only the minimum salary and working conditions provisions in the SAG Agreement apply to nonmembers. (Pl.'s Opp. at 17.) Contrary to counsel's representation, paragraph 2(c) does not specify what provisions of the SAG Agreement apply to performers who are not SAG members. (Newman Decl. Ex. C at 3 (Excerpt of SAG Agreement), Dkt. No. 16-3.)
