Metropolitan News-Enterprise


Thursday, May 5, 2011


Page 1


Court Revives Suit Over ‘Ghost Hunters’ Television Show


By SHERRI M. OKAMOTO, Staff Writer


The Ninth U.S. Circuit Court of Appeals yesterday revived a lawsuit accusing NBC Universal and the former Sci-Fi Channel of stealing the premise for the television series “Ghost Hunters.”

Sitting en banc, the court ruled that copyright law does not preempt an implied contractual claim to compensation for use of an idea included in a pitch to television producers for a show.

Parapsychologist Larry Montz and publicist Daena Smoller claimed that they had presented the concept for a reality television show about the investigation of paranormal activity to representatives of NBC Universal Inc.

NBC allegedly told them it was not interested, but then partnered with Craig Piligian and Pilgrim Films & Television to produce the “Ghost Hunters” series on the Sci-Fi Channel based on the concept proposed by Montz and Smoller.

Suit Filed

Montz and Smoller filed suit in 2006 against NBC, Pilgrim, and others, claiming that the defendants, by producing and broadcasting “Ghost Hunters,” breached an implied agreement not to use their ideas and concepts without their express permission and to share profits and credit. Montz and Smoller also claimed the defendants breached their confidence by taking their ideas, exploiting them and then profiting to their exclusion.

U.S. District Judge Florence-Marie Cooper of the Central District of California, since deceased, ruled that Montz and Smoller’s state law claims were preempted by 17 U.S.C. § 301(a), and granted the defendants’ motion to dismiss the breach-of-implied-contract and breach-of-confidence claims for failure to state a claim.

Sec. 301(a) preempts state law claims that assert rights in “works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by [17 U.S.C. §§ 102 and 103]” if those rights are “equivalent” to the exclusive rights of copyright owners set forth in Sec. 106. That statute grants copyright holders the exclusive right to use original works or authorize another to do so.

Montz and Smoller voluntarily dismissed their copyright claim with prejudice and appealed Cooper’s ruling on their state law claims, but a three-judge panel of the Ninth Circuit affirmed last June, in an opinion by Judge Diarmuid F. O’Scannlain.

Dissent’s Reasoning

O’Scannlain reasoned that the rights asserted by Montz and Smoller under the implied contract were equivalent to the rights of copyright owners under Sec.106, and rejected their argument that their right to receive a share of profits and credit for the show’s concept was “merely derivative of the rights fundamentally at issue: the plaintiffs’ exclusive rights to use and to authorize use of their work.”

Judge Richard C. Tallman and U.S. District Judge Joan Humphrey Lefkow of the Northern District of Illinois, sitting by designation, joined O’Scannlain in that opinion.

O’Scannlain reasserted this view in his dissent yesterday, in which he was joined by Tallman and by Judges Carlos T. Bea and Ronald Gould. Gould also dissented separately.

Writing for the full court, however, Judge Mary M. Schroeder said a cause of action based on the expectation of payment for an idea is substantively different from a copyright claim.

Schroeder explained the California Supreme Court recognized in Desny v. Wilder (1956) 299 P.2d 257 that a writer and producer form an implied contract under circumstances where both understand that the writer is disclosing his idea on the condition that he will be compensated if it is used.

Rule Reaffirmed

In 2004, the Ninth Circuit held in Grosso v. Miramax Film Corp., 383 F.3d 965, that the implied contract rights created under California law emanating from Desny were qualitatively different from the rights protected by federal copyright law because a Desny claim includes an added element—an agreement to pay for use of the disclosed ideas—and therefore are not preempted by federal law.

“We reaffirm that rule today,” Schroeder said.

She reasoned that the “Desny innovation serves to give some protection for those who wish to find an outlet for creative concepts and ideas but with the understanding that they are not being given away for free.” Without such legal protection, Schroeder suggested “potentially valuable creative sources would be left with very little protection in a dog-eat-dog business.”

Since “Montz, as did plaintiffs in Desny and Grosso, has alleged he revealed his concept to defendants reasonably expecting to be compensated, if his concept was used,” Schroeder concluded his implied-in-fact contract claim also survived Copyright Act preemption.

Schroeder was joined by Chief Judge Alex Kozinski and by Judges Stephen Reinhardt, Sidney R. Thomas, Kim McLane Wardlaw, Richard A. Paez and Milan D. Smith Jr.

In his separate dissent, Gould argued that the “extra element” approach taken by Schroeder was likely to engender “improvident practical results.”

He predicted that yesterday’s decision “will lead to uncertainty by making state law—with its ambiguity, variability, and volatility—available to litigants who bring nebulous state law claims that in substance assert rights in the nature of copyright.”

Montz and Smoller were represented on appeal by Girardi | Keese partner and former State Bar President Howard B. Miller. Katten Muchin Rosenman partner Gail Migdal Title argued for the defendants.

The case is Montz v. Pilgrim Films & Television, Inc., 08-56954.


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