LOS ANGELES – The U.S. District Court for the Central District of California recently dismissed several claims against a film distribution company and its owner in suit alleging breach of contract and copyright infringement.
Michael Rosenblatt, the owner of independent film distribution company Echo Bridge Entertainment (EBE), had filed a motion to dismiss all claims against him in a third amended complaint filed by Brett Lauter, who owns Pan Global Entertainment, an independent company that acquires rights to movies, films and other media, and licenses those rights to other distributors.
Lauter's complaint included several claims, including breach of contract, claiming EBE gave away free copies of a film and failed to pay royalties to Pan Global.
In his Aug. 10 ruling, U.S. District Judge Dean D. Pregerson dismissed five of the claims, including the breach of contract claim, and let stand the claim of copyright infringement. Pregerson also denied leave to amend the the third amended complaint.
According to court documents, in 2011, Lauter sold Rosenblatt digital licensing rights for 10 movies in exchange for royalty payments to Lauter. After a state court entered a default judgment against EBE for unpaid royalties, Lauter claimed that EBE and its associated entities continued to distribute the films. The complaint alleges that EBE “breached the agreement by packaging free digital copies of the films together with DVD copies of the same film and other films that Lauter did not own, and by failing to pay royalties owed to Lauter.”
Lauter claims that after he filed the lawsuit, EBE shut down its offices and transferred its assets to Echo Bridge Acquisition Corporation (EBAC) after alleged insider lender BHCIF foreclosed on EBE’s assets. The complaint states EBAC is still distributing some of Lauter’s films.
After dismissing claims against Rosenblatt in Lauter’s second amended complaint, the court granted Lauter leave to amend the claims against Rosenblatt within a limited scope. In his third amended complaint, Lauter included Rosenblatt as a defendant in all six claims. Lauter claimed that Rosenblatt and EBE are alter egos, that Rosenblatt used EBE as a vehicle for copyright infringement and that Rosenblatt has lied about his ownership of EBE and when he allegedly resigned from EBE.
Pregerson dismissed claims against Rosenblatt in the third amended complaint for breach of contract, equitable accounting, rescission of contract and relief from transfer under the Uniform Voidable Transaction Act, finding that because Lauter did not allege the claims against Rosenblatt in his second amended complaint, “the scope of the court’s grant of leave to amend did not extend so far as to permit the filing of new claims against Rosenblatt.“
Pregerson denied the motion to dismiss Lauter’s claim of copyright infringement, contributory copyright infringement and vicarious copyright infringements against Rosenblatt. The judge noted that Lauter has given rise to alter ego liability theory by plausibly showing a relationship between Rosenblatt and EBE “and the inequitable result that would flow from treating EBE’s acts as the corporation’s alone.”
Pregerson dismissed Lauter’s claim of unfair competition against Rosenblatt, finding that this claim and the copyright claim are duplicative and seeks to vindicate the same rights.
The court order denied leave to amend the third amended complaint.
U.S. District Court for the Central District of California case number CV 15-08481 DDP (KSx)