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Players Network, Inc. v. Comcast Corporation

United States District Court, D. Nevada

February 2, 2015

PLAYERS NETWORK, INC., Plaintiff,
v.
COMCAST CORPORATION, et al., Defendants.

ORDER

GLORIA M. NAVARRO, Chief District Judge.

Pending before the Court is the Motion to Dismiss (ECF No. 12) filed by Defendants Comcast Corporation, Comcast Programming Development, Inc., and Comcast Cable Communications, LLC (collectively, "Defendants"). Plaintiff Players Network, Inc. ("Plaintiff") filed a Response (ECF No. 17), and Defendants filed a Reply (ECF No. 18). For the reasons discussed below, Defendants' Motion to Dismiss is GRANTED in part and DENIED in part.

I. BACKGROUND

This case arises out of a dispute over an agreement (hereinafter "the Agreement") executed between Players Network, Inc. ("Plaintiff") and Comcast Programming Development, Inc. (Am. Compl., ECF No. 1-1). Plaintiff is a Nevada corporation that produces and sells movie and television programming related to "any type of content in and around the Las Vegas area." ( Id. ¶¶ 1, 11-12). Plaintiff alleges that it was approached by Peter Heumiller ("Heumiller") of Comcast Corporation ("Comcast") with a proposed business arrangement in 2004. ( Id. ¶ 14). Plaintiff further alleges that Comcast wanted "to develop a channel devoted to gaming and the gaming lifestyle, " and wanted Plaintiff "to build out the gaming channel for Comcast." ( Id. ¶¶ 18-19). Furthermore, Plaintiff alleges that Heumiller and others at Comcast made various representations regarding the development of the new channel, including the use of "dynamic ad assertion" and Comcast's assistance in getting sponsors and advertisers for the new channel. ( Id. ¶¶ 20-28). On October 5, 2005, the parties executed the Agreement, memorializing the parties' intentions to develop the new channel. ( Id. ¶ 35).

Plaintiff initially brought the instant suit in the Eighth Judicial District Court for the State of Nevada. ( See Pet. for Removal, ECF No. 1). On January 20, 2014, Plaintiff filed an Amended Complaint, alleging eight causes of action against Defendants: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) tortious breach of the implied covenant of good faith and fair dealing; (5) fraudulent inducement; (6) tortious interference with prospective economic gain; (7) breach of a consent decree; and (8) declaratory relief. (Am. Compl. ¶¶ 54-87). Defendants properly removed the case to this Court. (Pet. for Removal, ECF No. 1).

II. LEGAL STANDARD

Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as a factual allegation are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.

"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 Twombly, 550 U.S. at 555). "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." Id. This standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

"Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). "However, material which is properly submitted as part of the complaint may be considered." Id. Similarly, "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss" without converting the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). On a motion to dismiss, a court may also take judicial notice of "matters of public record." Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(d).

If the court grants a motion to dismiss for failure to state a claim, leave to amend should be granted unless it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to Rule 15(a), the court should "freely" give leave to amend "when justice so requires, " and in the absence of a reason such as "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962).

III. DISCUSSION[1]

a. Claims Against Comcast Corporation and Comcast Cable Communications

As a preliminary matter, Defendants assert that Plaintiff's claims against Comcast Corporation and Comcast Cable Communications, LLC fail because neither entity is a party to the Agreement. (Mot. to Dismiss 21:24-25, ECF No. 12). Supporting this assertion, Defendants cite two provisions of the Agreement. ( Id. 21:4-10). First, Section 2 of the Agreement defines "Company" as "Comcast Programming Development, Inc., on behalf of its operating affiliates." (Ex. B to Mot. to Dismiss at 2, ECF No. 12-2). Second, Section 13(d) of the Agreement provides as follows: "Any recourse of [Plaintiff] against Company shall extend only to Company and not to any of Company's affiliates." ( Id. at 15). Finally, the Agreement was executed by Matthew Strauss, Vice President of Comcast Programming Development, Inc. ( Id. at 16). On the other hand, Plaintiff asserts that the language, "on behalf of its operating affiliates, " includes the operating affiliates as parties to the Agreement. (Response 27:2-11, ECF No. 17).

"Ambiguity exists when the provisions in controversy are reasonably or fairly susceptible to different interpretations.'" Vanderbilt Income and Growth Assoc., LLC v. Arvida/JMB Managers, Inc., 691 A.2d 609, 613 (Del. 1996) (quoting Kaiser Aluminum Corp. v. Matheson, 681 A.2d 392, 395 (Del. 1996)). "A trial judge must review a contract for ambiguity through the lens of what a reasonable person in the position of the parties would have thought the contract meant.'" Kuhn Const., Inc. v. Diamond State Port Corp., 990 A.2d 393, 396 (Del. 2010) (quoting Rhone-Poulenc Basic Chem. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1197 (Del. 1992)). If the court finds ambiguity, the court will apply the doctrine of contra proferentem and construe ambiguous terms and provisions against the drafting party. Id. at 397.

The Court finds ambiguity regarding the definition of "Company" in the Agreement. Whether "on behalf of its operating affiliates" includes operating affiliates as parties to the Agreement is reasonably susceptible to different interpretations. Therefore, because Defendants drafted the Agreement, the Court construes the provision defining "Company" in favor of the Plaintiff and finds that dismissal of Plaintiff's claims against Comcast Corporation and Comcast Cable Communications, LLC is improper on this basis.

b. Breach of Contract

Plaintiff's First Cause of Action alleges that "Defendants failed to perform their duties and obligations required by the Contract." (Am. Compl. ¶ 56). Specifically, Plaintiff alleges that "Defendants did not increase the distribution and broadcast of programming provided to it by Players Network by twenty percent (20%) per year as required by the Contract." ( Id. ¶ 49).

Under Delaware law, for a plaintiff to prevail on a breach of contract claim he or she must demonstrate (1) the existence of a valid contract, (2) the breach of an obligation imposed by that contract, and (3) the resultant damage to the plaintiff. VLIW Technology, LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003). "It is an elementary canon of contract construction that the intent of the parties must be ascertained from the language of the contract." Citadel Holding Corp. v. Roven, 603 A.2d 818, 822 (Del. 1992). After examining the four corners of the document, if ambiguities exist in the language then the court can look at extrinsic evidence to determine the intent of the parties. Id. Moreover, a plaintiff must identify in its complaint "any express contract provision that was breached." Anderson v. Wachovia Mortg. Corp., 497 F.Supp.2d 572, 581 (D. Del. 2007) (citations omitted).

The parties do not dispute the existence of a valid contract. Rather, Defendants assert that Plaintiff's breach of contract claim fails because "the Agreement was negotiated by two sophisticated entities and the resulting language is clear and unambiguous: the Agreement is a licensing agreement that authorizes, but does not obligate, Comcast Programming to distribute Players Network's programming." (Mot. to Dismiss 10:3-6). Moreover, Defendants assert that, "if Comcast Programming fails to carry ...


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