6 Chicago, Illinois 60603 KELLER GROVER, LLP 55 West Monroe … · 2019-01-16 · Case 3:16-cv-00935-RS Document 44 Filed 07/15/16 Page 1 of 48 1 JEFFREY F. KELLER (SBN 148005) [email protected]

Case 3:16-cv-00935-RS Document 44 Filed 07/15/16 Page 1 of 48

1 JEFFREY F. KELLER (SBN 148005) [email protected]

2 CAREY G. BEEN (SBN 240996)

3 [email protected] SARAH R. HOLLOWAY (SBN 254134)

4 sholloway{Cl{kellergrover.com KELLER GROVER, LLP

5 1965 Market Street San Francisco, California 94103

6 Tel: (41°5) 543-1305 /Fax: (415) 543-7861

7 DAVID SCHACHMAN (PRO HAC VICE)

JOHN G. JACOBS (PRO HAC VICE) j gj aco bs(a),j aco bskolton.com BRYAN G. KOLTON (PRO HAC VICE) [email protected] JACOBS KOLTON, CHTD. 55 West Monroe Street, Suite 2970 Chicago, Illinois 60603 Tel: (312) 427-4000 /Fax: (312) 268-2425

8 [email protected] LAW OFFICES OF DAVID SCHACHMAN, P.C.

9 55 West Monroe Street, Suite 2970 Chicago, Illinois 60603

10 Tel: (312) 427-9500 /Fax: (312) 268-2425

11 Attorneys for Plaintiff and the Putative Clas.~·~ _

12 IN THE UNITED STATES DISTRICT COURT

13 NORTHERN DISTRICT OF CALIFORNIA

14 TIMOTHY FORSYTH, individually and on behalf of a class of similarly situated individuals,

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Plaintiff,

vs.

MOTION PICTURE ASSOCIATION OF AMERICA, INC., et al., . ~ -

Defendants.

Plaintiffs Opposition To Defendants' Special i Motion To Strike

Case No. 3:16-cv-00935-RS

PLAINTIFF'S OPPOSITION TO [1] DEFENDANTS' SPECIAL MOTION TO STRIKE PURSUANT TO CALIFORNIA ANTI-SLAPP STATUTE, CAL. CIV. PROC. CODE § 425.16 ET SEQ., OR, IN THE ALTERNATIVE, [2] MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(B)(6); MEMORANDUM OF POINTS AND AUTHORITIES

Date: Time: Place: Courtroom 3, 17th Floor Judge: Hon. Richard Seeborg

16-CV-00935-RS


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I.

IL

III.

IV.

TABLE OF CONTENTS

INTRODUCTION ............................................................................................................ 1

THE FRAMEWORK FOR ANTI-SLAP MOTIONS IN FEDERAL COURT ................................................................................... · ....................... 3

A.. The Two-Step Analysis When The Anti-SLAPP Statute Is Applied ................ 3

B. The California Anti-SLAPP Statute Should Not Be Applied in Federal Court .................................................................................................... 4

DEFENDANTS CANNOT ESTABLISH THAT THE CONDUCT TARGETED IN THE COMPLAINT IS "BASED ON" DEFENDANTS' PROTECTED SPEECH ON AN ISSUE OF "PUBLIC INTEREST." ................................................... .4

A.

B.

C.

The speech at issue is pure commercial speech: Defendants' registered PG-13 certification trademark rating of films with tobacco imagery ............................................................................................ 4

Defendants Incorrectly Describe the Speech that The Complaint is "based on" ................................................................... 7

Plaintiffs claims are not "based on" protected speech on a "public issue" .................................................................................... 9

PLAINTIFF HAS DEMONSTRATED A PROBABILITY OF PREVAILING ON THE MERITS .......................................................................... 15

A. The First Amendment Does Not Provide Immunity For Defendants' Commercial Speech ........................................................................ 15

B. Plaintiff's Negligent Misrepresentation Claim (Count VII) · Properly States A Claim ................................................. ,. .................................... 19

1. The false and misleading representations of fact or actionable opinions and omissions that are alleged ................................ 19

2. The representations in question are actionable representations of fact ........................................................................................................... 19

3. Even if regarded as opinions, false and misleading opinios are sufficient to state a claim for negligent misrepresentation ..................... 22

4. Defendants mischaracterize Plaintiffs allegations of false and misleading representations ..................................................................... 23

5. Defendants fail to establish the absence ofreasonable reliance ............ 24

6. The Complaint establishes proximate causation ..................................... 27

C. Plaintiffs negligence and voluntary undertaking claims (Counts I and II) properly state claims ........................................................................................... 28

Plaintiffs Opposition to Defendants' Special Motion to Strike 11 l 6-CV-00935-R


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II.

TABLE OF CONTENTS ( continued)

1. Defendants did not disclaim their liability for negligence ...................... 30

2. Defendants' argument that they voluntarily assumed a narrower duty than the duty·alleged in the Complaint ........................................... 31

D. Plaintiffs fraudulent misrepresentation Claim (Count IV) properly states a claim ......... ................. ...................... .................................. ................................. 34

E. Plaintiffs breach of fiduciary duty claim (Count III) properly states a claim .... 35

F. Plaintiffs nuisance claim ( Count VIII) properly states a claim ............. ............ 3 7

G. Plaintiffs false advertising claim (Count VI) properly states a claim ........ ........ 37

H. Plaintiffs unfair competition law Claim (Count V) properly states a claim ...... 38

I. Defendants' Motion to Dismiss under Rule 12(b )( 6) should be denied ............. 3 8

CONCLUSION ............. ............... ................................................... ................................ 39

Plaintiffs Opposition to Defendants' Special Motion to Strike 111 l 6-CV-0093 5-R


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TABLE OF AUTHORITIES

Cases

Abbas v. Foreign Policy Grp., LLC, 783 F.3d 1328 (D.C. Cir. 2015) ........................................................................................ 4

All One God Faith, Inc. v. Organic & Sustainable Indus. Standards, Inc., . 83 Cal. App. 4th 1186 (2010) ................................................................ 3, 6, 9, 10, 11, 14 ·

Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133 (C.D. Cal. 2005) ..................................... .................................... 21

Apodaca v. Whirlpool Corp., 2013 WL 6477821 (C.D. Cal. Nov. 8, 2013) ................................................................. 21

Bohac v. Gen. Mills, Inc., 2014 WL 1266848 (N.D. Cal. Mar. 26, 2014) ...... ......................................................... 21

Bolger v. Youngs Drug Products Corp. 463 U.S. 60 (1983) ....... ............................................................................................ 12, 17

Brown v. Entm 't Mere. Ass 'n, 564 U.S. 786 (2011) .................... ..... ................................... ...................................... 1, n.1

California Pub. Employees' Ret. Sys. v. Moody's Inv'rs Serv., Inc., 226 Cal. App. 4th 643 (2014) ............................................................................ 14, 15, 24

Equilon2i~e:{4~h~ r (iooJ)~~~. ~~~~.~:.~~.~:~ ..................... ·· ········· ······· ········· ·· ·· ········· · ············ · ··· 3

Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163 (1999) ........................................................... ........................................ 39

Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York, 447 U.S. 557 (198 ........................................................................................................... 17

Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111 (N.D. Cal. 2010) .................................................................... 21, 28

City of Cotati v. Cashman, 29 Cal. 4th 69 (2002) ................................................................... ........... ......................... 3

Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F. 3d 725 (9th Cir. 1999) ........................................................... ............................... 21

Comm. On Children's Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197 (1983) ............................................................................................... 37, 38

Consolidated Metal Products, Inc. v. American Petroleum Institute, 846 F. 2d 284 (5th Cir. 1988) ...................................................................................... 6, 10

Consumer Justice Ctr. v. Trimedica Int'!, Inc., 107 Cal. App. 4th 595 (2003) ............................................................ ................. . 3, 11, 12

Cook, Perkiss & Liehe, Inc. v. N California Collection Serv. Inc., 911 F. 2d 242 (9th Cir. 1990) ......................................................................................... 21

Plaintiffs Opposition to Defendants' Special Motion to Strike lV 16-CV-00935-R


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Cases

Cortina v. Goya Foods, Inc.,

TABLE OF AUTHORITIES ( continued)

Page(s)

94 F. Supp. 3d 1174 (S.D. Cal. 2015) ............................................. ................................ 21

Davis v. HSBC Bank Nevada, NA., 691 F.3d 1152 (9th Cir. 2012) ....................................... ................................... ......... 27, 28

Delacruz v. Cytosport, Inc., 2012 WL 1215243 (N.D. Cal. Apr. 11, 2012) .............. .................................................. 21

Doran v. Milland Dev. Co., 159 Cal. App. 2d 322 (1958) .............................................. ............................................. 24

Dyer v. Childress, 147 Cal. App. 4th 1273 (2007) ....................................................................................... 16

Ericsson GE Mobile Communications, Inc. v. CS.I Telecommunications Engineers, 49 Cal. App. 4th 1591 (1996) ........................................... ....................................... ...... 12

Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088 (N.D. Cal. 2007) ........ ........................ ........................ .................. 25

Goldsmith v. Allergan, Inc., 2011 WL 2909313 (C.D. Cal. May 25, 2011) ...................... .......................................... 21

Hauter v. Zogarts, 14 Cal. 3d 104 (1975) ....................................................... .................... ......................... 21

Hensley-Maclean v. Safewa1,,_ Inc., 2014 WL 1364906 (N.D. Cal. Apr. 7, 2014) ................................ ................ 29, 30, 31, 39

Herbert v. Lankershim, 9 Cal. 2d 409 (1937) ............. ...................................................................... .................... 37

In re Tobacco II Cases, 46 Cal. 4th 298 (2009) ........ ........................... .............................................. .................. 28

In re Tobacco Cases II, 240 Cal. App. 4th 779 (20 l 5) .............. ....................... ......................... ........................... 27

Jackson v. AEG Live, LLC, 233 Cal. App. 4th 1156 (2015) ........................................ ...................... ................... 31, 34

Jewett v. Capital One Bank, 113 Cal. App. 4th 805 (2003) ............. ............ .............................. ................................. 13

Jolley v. Chase Home Fin., LLC, 213 Cal. App. 4th 872 (2013) ....................................... .................................................. 24

Plaintiff's Opposition to Defendants' Special Motion to Strike V l 6-CV-0093 5-R


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Cases

Kasky v. Nike, Inc.,

TABLE OF AUTHORITIES ( continued)

Page(s)

27 Cal. 4th 939 (2002) .................................................................................. .................. 17

Keegan v. Am. Honda Motor Co., 838 F. Supp. 2d 929 (C.D. Cal. 2012) ................... ....................................... .................. 27

Kwikse~ Icii. 4tguf{oic20Iff~~' ........................................................................ ............... 6, 26, 28

L.A. Taxi Coop., Inc. v. Indep . Taxi Owners Ass'n of Los Angeles, 239 Cal. App. 4th 918 (2015) ................................................................................... 13, 16

Lyons v. Bank of Am., NA, 2011 WL 3607608 (N.D. Cal. Aug. 15, 2011) ............................................................... 39

Makaeff v. Trump Univ., LLC, 736 F.3d 1180 (9th Cir. 2013) ................................ ................................ ..... ........... ........... 4

Mann v.1¥0~!7. z~~.~ilie9ie(2064{~ .................... .......... ..... ...................................................... l3

Martinez v. Metabolife Int'!, Inc., 113 Cal. App. 4th 181 (2003) ......................................................................................... 14

Melton v. Boustred, 183 Cal. App. 4th 521 (2010) ............................. ........................................... ............ ..... 31

Motion tJ6trs~;~'~ 21 ~~n.ff Y.vi !sJ)~.~ .. ~:.~.~~.~~~ .. ~~~·.~······················································ 23

Motion Picture Ass'n of Am., Inc. v. Respect Sportswear, Inc., . 83 U.S.P.Q. 2d 1555 (P.T.O. Apr. 13, 2007) ............................................................ 18, 23

Mullins v. Premier Nutrition Corp., 2016 WL 1534784 (N.D. Cal. Apr. 15, 2016) ................................................................ 28

Nagel v. Twin Labs ., Inc., . 109 Cal. App. 4th 39 (2003) ............................................................... .......... ..... 12, 13, 14

Nat'! Ahnrtinn Fed'n v. Ctr. for Med. Prnf!ress. 2015 WL 5071977 (N.D. Cal. Aug. 27, 2015) ....... .......................................................... .4

nSight, Inc. v. PeopleSoft, Inc., 2005 WL 1287553 (N.D. Cal. June 1, 2005) ......................................................... 22, n.14

Persson v. Smart Inventions, Inc., 125 Cal. App. 4th 1141 (2005) ....................................................................................... 37

Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012) .................................................................. .......... ........ 26

Rezec v. Sony Pictures Entm't, Inc., 116 Cal. App. 4th 135 (2004) ........................................................................................ 16

Plaintiffs Opposition to Defendants' Special Motion to Strike Vl 16-CV-0093 5-R


1

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(continued)

3 Cases Page(s)

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Rowland v. Christian, 69 Cal. 2d 108 (1968) ............................................................ .-........................................ 31

Scott v. Metabolife Int'!, Inc., 115 Cal. App. 4th 404 (2004) ......................................................................................... 14

Siegal v Gamble, 2016 WL 1085758 (N.D. Cal. March 21, 2016) .............................................................. .4

Team Enterprises, LLC v. W Inv. Real Estate Trust, 647 F. 3d 901 (9th Cir. 2011) .......................................................................................... 38

ThermoLife Int'l, LLC v. Gaspari Nutrition Inc., 2016 WL 1460171 (9th Cir. Apr. 14, 2016) .......................................................... 21, n.14

Thesier-Hendricks v. T JL Enterprises, Inc., 2015 WL 10791893 (C.D. Cal. Aug. 3, 2015) ...................................................... 26, n.20

Turcios v. Carma Labs., Inc., 296 F.R.D. 638 (C.D. Cal. 2014) .......................................... ........ .................................. 27

Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976) ....................... .................................................................. ............... 17

Vitt v. Apple Computer, Inc., 469 F. App'x 605 (9th Cir. 2012) ........... ....... ..... ...... ............................................. 21, n. 14

Walter v. Hughes Commc'ns, Inc., 682 F. Supp . 2d 1031 (N.D. Cal. 2010) ............. .................... ................................ 21, n.14

Williams v. Gerber Products Co., 552 F. 3d 934 (9th Cir. 2008) .......................................... ~ ...................................... 21, n.14

Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) ................. ................................ ......... ...................... 25, n.18

World Fin. Grp., Inc. v. HBW Ins . & Fin. Servs., Inc., · 172 Cal. App. 4th 1561 (2009) ....................................................... ....... .................. ... .... 13

Young v. Facebook, Inc., 2010 WL 4269304 (N.D. Cal. Oct. 25, 2010) ........................................................... 32, 33

OTHER AUTHORITIES

1306.0l(b) of the United States Department of Commerce, Patent and Trademark Office, Trademark Manual of Examining Procedures (6111 ed., Oct. 2009) (TMEP) ..................................... .................................................................... 6

15 u.s.c. §1051 ................... ...... ...... ...... ............................................................. ............ ........ 6, 17

Cal. Civ. Proc. Code §425.16(e) ........................ .. ......................................................................... 3

Plaintiff s Oppos ition to Defendants' Special Motion to Strike vu 16-CV -00935-R


1 I. INTRODUCTION

2 Defendants are a trade association and its rating board members, sued for false and

3 misleading commercial speech - for the false and misleading certification labels placed on

4 movies for the purpose of promoting the sale of those movies. The complaint raises no question

5 of artistic freedom or of defendants' right to participate in public debate; instead this lawsuit deals

6 with quotidian issues of false labeling and advertising. The complaint asserts that defendants

7 cannot affix a PG-13 or lower certification on movies with tobacco imagery, because they know

8 that it has been scientifically established that subjecting children to such imagery will result in the

9 premature death of more than a million ofthem. 1 Defendants can give no rating to films with

10 tobacco, they can give a very restrictive rating, but what they cannot give is a false certification

11 that such movies are appropriate for unaccompanied children under 17, when they know that the

12 scientific community has overwhelmingly said that it is not.

13 In the Motion, however, straightforward claims for negligence, consumer fraud and false

14 advertising against a trade association promoting the sale of its members' products have been

15 improperly analyzed as if they were defamation claims against newspapers, book publishers and

16 news agencies for speech published to inform the public about issues of public interest.

17 Defendants assert that their speech is being targeted. Yet, every negligent

18 misrepresentation, consumer fraud and false advertising case challenges speech. But the

19 "speech" that is being targeted is false commercial speech; it is the false and misleading ratings

20 that defendants assign and then affix to each film they rate with the individual, numbered

21 certification trademark or seal of the MP AA. Assume Coke, Pepsi and Dr. Pepper form a trade

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1 This fact makes the attempted reliance by defendant NATO in its supplemental brief on Brown v. Entm 't Mere. Ass 'n, 564 U.S. 786, 794-96 (2011), impossible. In Brown, the Supreme Court refused to allow a ban on the sale of violent videos to persons under 18, in particularly relevant regards to this case, because there was no established scientific causal relationship between viewing such videos and untoward effects on the youngsters. (Id. at 800.) Here, the exact opposite is true. Here, the Complaint specifically alleges the findings of the Surgeon General and the Center For Disease Control that exposure of youngsters to movies with tobacco imagery will result in their addiction and disease and pre_mature deaths from tobacco-related diseases. Complaint,, 45-50.

Plaintiffs Opposition to Defendants' Special Motion to Strike 1 l 6-CV-00935-R


1 association, and the association inspects its members' products and puts labels on each bottle

2 certifying that the contents are suitable for children under seventeen to drink, when the

3 association and its members know that children, because of their still-developing metabolisms,

4 have a unique sensitivity to one of the ingredients that causes children to develop debilitating

5 diseases and that it will kill one million children. This case is no different.

6 The false and misleading labeling of movies in this case does not involve the type of

7 noncommercial speech that commands the First Amendment protections defendants rely upon.

8 Defendants are free to express their opinions in newspapers and books and press releases about

9 the appropriate way to rate films with tobacco imagery, and the expression of their opinions in

1 O that form is protected by core First Amendment principles. However, when defendants make

11 false and misleading representations on product labels or advertisements for the purpose of selling

12 products, they are engaged in quintessential commercial speech, and such commercial speech is

13 not protected by the First Amendment. To the contrary, this is precisely the kind of speech that is

14 subject to the traditional tort, consumer protection and false advertising laws asserted here.

15 The claims in this case are not based on anything defendants said in press releases,

16 newspapers or other publications. The claims are based upon the labels defendants affixed on

17 their members' and others' products for the purpose of promoting and selling theirproducts-

18 films. Defendants have known that exposure of children to tobacco imagery in films causes

19 children to become addicted to nicotine, develop tobacco related diseases and die. Despite that

20 knowledge, defendants have rated and continue to rate films with tobacco imagery as suitable for

21 children under seventeen unaccompanied by a parent or guardian. These PG-13 certifications and

22 labels on films are false and misleading and omit critical health and safety warnings. Defendants

23 cannot wrap themselves in the First Amendment and avoid accountability.

24 Defendants' attempted invocation of the anti-SLAPP statute is inappropriate and seeks to

25 threaten Plaintiff for challenging their calculatedly cynical conduct. It should not be allowed.

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28 Plaintiffs Opposition to Defendants' Special Motion to Strike 2 l 6-CV-00935-R


1 II. The Framework for Anti-SLAPP motions in Federal Court

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a. The two-step analysis when the Anti-SLAPP statute is applied

The California Anti-SLAPP law requires a two-step analysis.

First, defendants bear. the burden to establish that plaintiff's claims are "based on," that is ,

"arise from" defendants' protected rights of petition or free speech. Equilon Enterprises v.

Consumer Cause, Inc., 29 Cal.·4th 53, 66, 52 P.3d 685 (2002) ("1be "arising from" requirement

is not easily met."); City of Cotati v. Cashman, 29 Cal. 4th 69, 78, 52 P.3d 695 (2002) ("In the

anti-SLAPP context , the critical point is whether the plaintiff's cause of action itself was based on

an act in furtherance of the defendants' right of petition or free speech.").

In addition_ under the first sten of the amilvsis. rlefeml:mts mm:t e.sfahli sh th!it their


1 complaint under Rule 12(b)(6) standards or, alternatively, whether defendants contend that

2 plaintiff is unable to produce evidence to support the allegations or defendants dispute the

3 accuracy of the facts alleged in the complaint under Rule 56 standards. Nat'l Abortion Fed'n v.

4 Ctr.for Med. Progress, No. 15-CV-03522-WHO , 2015 WL 5071977, at *4 (N.D. Cal. Aug. 27,

5 2015).

6 Defendants ' Motion challenges only the legal sufficiency of the Complaint under Rule

7 12(b )( 6) standards.4 Thus, if the Court determines the Complaint states claims for relief under

8 well-established 12(b)(6) standards, plaintiff has satisfied his burden to demon strate a probability

9 of prevailing on the claims and the anti-SLAPP motion must be denied.

1 O Defendants cannot meet their burden to demonstrate that the claims are "based on" any

11 speech by defendants on an issue of "public interest." But even if they could, plaintiff has

12 demonstrated a probability of prevailing on the claims. Defendants' Motion should be denied.

13 b. The California anti-SLAPP statute should not be applied in Federal Court

14 Plaintiff acknowledges that bindin g Ninth Circuit precedent requires consideration of the

15 California anti-SLAPP until the Supreme Court or the Ninth Circuit changes the current law.

16 Siegal v Gamble, 2016 WL 1085758, at *9 footnote 2 (N.D. Cal. March 21, 2016) (J.Seeborg).

17 For purposes of preserving his right to appeal, however, plaintiff objects to application of

18 California's anti-SLAPP statute for all the reasons described in Makaeff v. Trump Univ., LLC,

19 715 F.3d 254, 272-276 (9th Cir. 2013) (Concurring opinions of Chief Judge Kozinski and Judge

20 Paez) . See also, Makaeff v. Trump Univ., LLC, 736 F.3d 1180 (9th Cir. 2013). 5

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Defendants cannot establish that the conduct targeted in the Complaint is "based on" defendants' protected speech on an issue of "public interest."

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a. The speech at issue is pure commercial speech: defendants' registered PG-13 certification trademark rating of films with tobacco imagery

4 See, Stipulation Dkt #40, Par.3. , 5 The Motion explicit ly points to at least one aspect of the anti-SLAPP law that conflicts with the Federal Rules of Civil Procedure. Defendants assert the right to attorneys' fees and costs if they prevail on the anti-SLAPP motion under standards that directly conflict with Rule 11. Motion at 3, fu. 2. Notably, since the denial of the motion for rehearing en bane in Maka e.ff, a split in the Circuits has developed . Abbas v. Foreign Policy Grp., LLC, 783 F.3d 1328 (D.C. Cir. 2015).

Plaintiff's Opposition to Defendants' Special Motion to Strike 4 16-CV-00935-R


1 Plaintiff summarizes the speech that the Complaint is actually "based on" below because

2 the speech that the claims are actually "based on" is not described or discussed anywhere in

3 defendants' Motion.

4 The speech the claims are "based on" consists of the certification trademarked ratings that

5 defendants assigned and then affixed to the ten films listed in the Complaint that contain tobacco

6 imagery (and the numerous additional other films that also contain tobacco imagery).

7 Defendants' rating system was created in 1968. Since 1984, defendants' rating system has

8 consisted of five registered certification trademarks registered with the United States Department

9 of Commerce, Patent and Trademark Office, including the following three:

1 o PG - Parental Guidance Suggested. Some Material May Not Be Suitable For

11 Children.

12 PG-13 - Parents Strongly Cautioned. Some Material May Be Inappropriate For

13 Children Under 13.

14 R - Restricted. Children Under 17 Require Accompanying Parent or Adult

15 Guardian.

16 Defendants inspect each film, certify the film with one of the five certification trademarked

17 ratings and then assign each film a unique, sequentially numbered seal or certificate and the

18 rating is then physically affixed to the film and is used on all trailers and advertisements for that

19 film. Complaint~~ 55-60, and 107 (a)-(j); and Complaint, Ex 1.

20 Certification trademarks are a special type of speech - speech that is a creation of federal

21 trademark law - speech that is used for distinct, important and, for purposes of resolving the

22 issues raised by defendants' anti-SLAPP motion, legally significant, commercial purposes.

23 Certification trademarks provide crucial information to consumers about the product that is

24 certified. The certification is a commercial message and representation to the consumer that the

25 goods or services have been inspected, examined, or tested. The certification is a representation

26 to the consumer that the goods or services possess certain characteristics or qualities or meet

27 certain standards established by the owner of the certification trademark. In addition, the owner

28 Plaintiff' s Opposition to Defendants' Special Motion to Strike 5 l 6-CV-009 35-R


1 of the certification trademark is prohibited from applying the certification trademark to his or her

2 own goods or services. Therefore, the use of a certification trademark is a representation that an

3 independent party has inspected, examined and tested the product or service and certifies to the

4 consumer that the product or service has been determined to have the prescribed qualities or

5 characteristics and meets certain standards. Consumers rely upon certification trademarks

6 because the certification representation saves consumers the trouble of investigating the product

7 themselves and the risk of trying untested products. All One God Faith, Inc. v. Organic &

8 Sustainable Indus. Standards, Inc., 183 Cal. App. 4th 1186, 1204 n.16 and 1221-22; Consol.

9 Metal Products, Inc. v. Am. Petroleum Inst., 846 F.2d 284,296 (5th Cir. 1988); and 1306.0l(b) of

1 o the United States Department of Commerce, Patent and Trademark Office, Trademark Manual of

11 Examining Procedures (6th ed., Oct. 2009) (TMEP).

12 The claims in this case are "based on" defendants' certification of each movie featuring

13 tobacco imagery with defendants' registered PG-13 certification trademarked rating ("PG-13 -

14 Parents Strongly Cautioned. Some Material May Be Inappropriate For Children Under 13") and

15 the descriptor portion of the rating for each film. Complaint ,r 107 ( a) - G).

16 As a matter of federal trademark law, defendants' certification trademarks are designed,

17 intended and used by defendants for commercial purposes: to make a representation to Mr.

18 Forsyth and all other parents that the MP AA inspected the product - the film - and that each film

19 it rates qualifies for the rating that the MP AA assigns to the film for the purpose of promoting the

20 sale of the film. 6

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6 See also, Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 328-329, 246 P.3d 877, 889-890 (2011): "Simply stated: labels matter. The marketing industry is based on the premise that labels matter, that consumers will choose one product over another similar product based on its label and various tangible and intangible qualities they may come to associate with a particular source. (E.g., FTC. v. Procter & Gamble Co. (1967) 386 U.S. 568,572, 87 S.Ct. 1224, 18 L.Ed.2d 303 [ noting the central role of advertising and sales promotion in generating market share, where the competing products are functionally identical].) An entire body oflaw, trademark law (see, e.g., 15 U.S.C. § 1051 et seq. [Lanham Act]) , exists to protect commercial and consumer interests in accurate label representations as to source, because consumers rely on the accuracy of those representations in making their buying decisions." (Bracketing in original.)

Plaintiffs Opposition to Defendants ' Special Motion to Strike 6 16-CV-009 35-R


1 b. Defendants incorrectly describe the speech that the Complaint is "based on"

2 Defendants erroneously claim the Complaint is "based on" defendants' speech about the

3 ratings - not the actual ratings assigned to specific films. Defendants incorrectly assert that the

4 speech that the Complaint is "based on" consists of defendants' public statements, or statements . .

5 in defendants' internal written rating rules, about the rating system. MTD at 2, 4-5, 12 and 15-16.

6 However, defendants' speech in any press release or in defendants' internal written rules

7 about the rating system is not the conduct or speech that is targeted by the Complaint and not the

8 speech that the claims are "based on." The Complaint does not assert defendants are liable for

9 their public discussion, press releases, or statements about the rating system, or any statements by

10. defendants made as part of any public debate about the general subject of whether films with

11 tobacco imagery should or shouldn't be rated any particular way. The Complaint is not "based

12 on" defendants' expressions of opinions about anything relating to the rating system.

13 But the Motion repeatedly quotes from a May 2007 press release in which defendants

14 made one public statement about their rating system and their response to public health concerns

15 about tobacco imagery in youth-rated films. But that is no part of plaintiff's claim. At the risk of

16 repetition, the speech that the claims are "based on" is the certification trademarked ratings

17 assigned to the individual films with tobacco imagery starting in 2012 (Compl. ,r 4), not

18 defendants' statements in a press release years earlier about their refusal to change their ratings in

19 response to the experts' recommendations they had solicited (see Compl. ,J63). The claims here

20 are like scores of other consumer protection cases that are based on claims that the labels attached

21 to a product, or advertisements for a product, are false and misleading.

22 Nor can defendants plausibly suggest that anything having to do with their rating system -

23 - either the formulation of the ratings, or the actual rating of particular films -- is in furtherance of

24 any ''public discussion" about ratings. To the contrary, defendants' written rules preclude any

25 public debate about either the fo rmulation of the rating rules or the rating of any particular film.

26 And defendants' rules require that even the discussion of the formulation or revision of the rating

27 criteria, and the decision-making regarding the rating of individual films, will be conducted by

28 Plaintiff's Opposition to Defendants' Special Motion to Strik e 7 16-CV-00935-R


1 defendants in total secrecy. 7

2 Defendants also incorrectly assert , repea tedly, that the claims target, or are "based on,"

3 defendants' opinions and beliefs - that they do not believe that a mandatory R rating for films

4 with tobacco imagery is appropriate. MTD at 2-3, 5-6, 12, 14-16, 18-19, 21, and 23-24.

5 However, the claims are not based on defendants' opinions or beliefs about what the appropriate

6 rating should be for films with tobacco imagery. The claims are that the PG-13 certification

7 ratings assigned to films featuring tobacco imagery are false and misleading, and are negligent ly

8 assigned, because exposure of children to tobacco imagery in films has been scientifical ly proven

9 to cause children to become addicted to nicotine , develop tobac co related diseases and kill them -

10 at current rates, it will kill one million children. Complaint i!12-6, 50- 54, 86-88, 92, 93, and

11 107-110.

12 The fact that the soft drink trade association in our hypothetical may entertain delusional

13 and deadly beliefs and opinions that it would be appropriate to affix labels to the soft drink

14 bottl es that its mem bers sell representing that the contents are suitable for children to drink when

15 they know one of the ingredients will kill one million children , does not mean the consumer's

16 claim against the trade association is based on the trade associations' opinions and beliefs

1 7 regarding whether the label is appropr iate or not. It is based on whether or not the label is false.

18 The speech that is the target of the Complaint, the speech the Comp laint's claims are

19 actually "based on" - for purposes of the first step of the anti-SLAPP analysis - is the false and

20 misleading PG-13 certification trademarked rating assigned to the ten films listed in the

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7 See, Complaint, Ex. 1: the Rater s' identities are secret (Art. I, E.); consultations by the Chairperson with the film producer or distributor regarding the potential rating must be kept confidential (Art. II, Sec. 2., B.); all communication between the MPAA and the representative of the film submitted for rating must be treated as confidential at all times (Art. II, Sec. 2., D.); the raters' bal lots are treated at all times as confidential and not disclosed outside of the MPAA (Art. II, Sec.2, E.); members of the Appeals Board including up to three unidentified designated outside, non-voting memb ers, must treat all appea l proceedin gs as confidential and may not discuss appeal proceedings except with designated members of the :MPAA (Art. IV, Sec. 2, E.); representatives of the unidentified, designated observer organizations may observe the appea l but may not participate and may not speak or vote in the appeal proceeding (Art. IV, Sec. 4., D.); no part of the appeal may be recorded or transmitted (Art. IV, Sec. 4., E.); the Appeals Board votes by secret ballot (Art. IV, Sec. 4., R).

Plaintiff s Oppo sition to Defendants' Special Motion to Strike 8 16-CV-00935-R


1 Complaint, and the many other films with tobacco imagery that are also rated PG-13. Complaint

2 ,~ 2--6, 50-54, 86-88, 92, 93, and 107-110.

3 c. Plaintiff's claims are not "based on" protected speech on a "public issue"

4 Defendants cannot satisfy their burden to show that the claims are based on speech on a

5 "public issue" under the first step of the anti-SLAPP analysis. As described below, the PG-13

6 rating certificate or seal number 49732 (or any of the other nine certification trademarked seals or

7 certificates) is not speech on a public issue. The PG-13 certification assigned to a particular film

8 is not an expression of any opinion about the general subject of whether films with the F*** word

9 should or shouldn't be certified as appropriate for children under seventeen, nor is it an

10 expression of any opinion on the general subject of whether films with tobacco imagery should or

11 shouldn't be certified as appropriate for children under seventeen. While public statements or

12 press releases expressing opinions about the general subject of what film content should or

13 shouldn't be certified as appropriate for children under seventeen may be speech about a "public

14 issue," the certification trademarked rating seal or certificate assigned to specific films is not

15 speech on a "public issue" as defined by the anti-SLAPP law.

16 To plaintiffs knowledge there is only one reported case involving an anti-SLAPP motion

17 filed in response to claims that are "based on" defendant's use of a certification trademark. All

18 One God Faith, Inc . v. Organic & Sustainable Indus. Standards, Inc., 183 Cal. App. 4th 1186,

19 107 Cal. Rptr. 3d 861, (2010). The case is uncited in defendants' papers. In All One God Faith,

20 plaintiff sued defendant OASIS (a commercial trade association) for certifying certain products

21 with its "Made with Organic Oils" or "Organic" certification trademark and authorizing its

22 members to use the mark to sell products, even though the products contained cleansing agents

23 made from nonorganic material that has been hydrogenated and/or sulfated, and preserved with

24 synthetic petrochemicals. Id. at 1192-93. OASIS moved to stiike the complaint pursuant to

25 § 425.16, arguing that it had been sued for its "opinion" as to what makes a personal care product

26 "organic" or "the articulation and dissemination of the ['OASIS Organic' ] standard." Id. at 1202.

27 OASIS argued that the plaintiffs claims challenged speech in connection with a public issue

28 Plaintiffs Opposition to Defendants' Special Motion to Strike 9 l 6-CV-00935-R


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because "the speech was made during the course of an active public debate on the issue, a debate

joined by governmental, commercial and consumer interests; the resolution of the issue will

affect large numbers of people beyond the direct participants; the speech was deve loped with

public input." (Id.)

The court in All One God Faith disagreed, denying the anti -SLAPP motion and holding

that a claim based on speech consisting of the use of a certification trademark, in contrast to

public discussion about the certification trademark or public discussion regarding the process of

formulating ( or revising, or refusing to revise) the certification standards or criteria, is not "based

on" protected speech under the first step ofthe anti-SLAPP analysis. Id. at 1200. The court

explained that the "public interest " component of§§ 425.16 (e)(3) and (4) is met only when ·'the

statement or acti~ity precipitating the claim involved a topic of widespread public interest" and

··the statement ... in some manner itself contribute[s] to the public debate." Id. at 1202.

The court then found that the certification did not contribute to any publi c debate:

Here, unlike the conduct at issue in Lieberman, the articulation of the OASIS standard will nec essarily be complete before OASIS certifies any memb er product. OASIS, and our dissenting colleagu e, fail to show how the applicatio n of an "OASIS Organic" seal on a particular product helps to advance or foster a debate that will have already occurred on the meaning of "organic" as used in the ·'OA SIS Organic" seal, or that it will in some fashion contribute to a broader debate on the meaning of the term "organic." The "OAS IS Organic" seal, when viewed by a consumer on a particular product, is mer ely a representation regarding the produ ct's ingredients and quality .... While the existe nce of some standard may be a sine qua non to creation of a cert ification mark, the "OAS IS Organic" seal itsel f does not include any discussion of what the standa rd is, so as to encourage or contribute to public debat e on the issue ... The purpose of the " 'OASIS Organic' seal" is to promote the sale of the product to which it is affixed , not the standard or its elements. 8 Thus , we reject OASIS's claim that by

8 "As the dissent notes , certification marks, such as the Good Hou sekeep ing and Underwriters Laboratori es seals of approval provide product information to consumer s which 'saves buyers the trouble of inve stigatin g product s themselv es and the risk of trying untested produ cts.' (Dis. opn. post, p. 890, fn. 8; see Consolid ated Metal Prod. v. Amer. Petro. Ins titute (5th Cir. 1988) 846 F.2d 284, 296.) It is the marks them selves, as representations of quality, upon which consumers rely in purchasing decisions, and the well-established reputations of the entities which authori ze them , not the standards upon which the produ ct certifications are based. We are not per suaded that many, if any, consumers th emse lves investigate the basis for an Underwriter1s Laboratory label

Plaintiff's Oppo sition to Defendants' Special Motion to Strike 10 16-CV-00935-R


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certifying a member product to use its seal, it speaks with an educational purpose or contributes to an ongoing public debate about organic standards. [Note: Footnote 16 from the quoted material appears in this brief as Footnote 8 to this brief.]

Here, like in All One God Faith, the certification trademark, the PG-13 rating, "does not

include any discussion regarding what the standard is, so as to encourage or contribute to public

debate on the issue." Id, at 1204, 875. Nor does it speak with an educational purpose or

contribute to an ongoing public debate about rating standards. Defendants certainly do not show

how the application of a registered PG-13 certification trademark rating on a particular film helps

to advance or foster a debate that will have already occurred on the meaning of the "PG-13" mark

or that it will in some fashion contribute to a broader debate on the meaning of the term "PG-13."

The PG-13 certification trademark rating is merely a representation regarding the film's content ,

material , quality, appropriateness and suitability and is intended to induce the purcha se of tickets

to the film, i.e, the purpose of the PG-13 certification trademark rating is to promote the sale of

the film to which it is assigned and affixed, not the standard or its elements.

In addition, even if the rating were simply a product label, rather than a registered

certification trademark, it would make no difference for anti- SLAPP analysis : The courts have

consistently concluded that false and misl eading speech consisting of product labels or

advertisements containing statements regarding the particular qualities, content or safety of a

particular product, designed to sell or promot e a specific product, is commercial speech that does _

not satisfy the requirement tha! the challenged speech be in furtherance of a "public issue or

public interest."

In Trimedica, supra., the Court considered an anti-SLAPP motion in which defendant

argued that the allegedly false statements about the specific properties and efficacy of its product

qualified as speech about a "public issue or public interest." The Court rejected defendants'

argument that the challenged speech was about dietary supplements that are the subject of public

interest and held that the claims were bas ed upon misr epresentatio ns regarding the specific

upon a produ ct, or offer comments on the testing protocols used to achieve it." All One God Faith at 1204, n. 16.

Plaintiffs Opposition to Defendants' Special Motion to Strike 11 l 6-CV-0093 5-


1 properties and benefits of the particular product which was not a matter of general public interest

2 within the meaning of the anti-SLAPP statute. Trimedica, 107 Cal. App. 4th at 601. ("As

3 support, Trimedica cites regulations of herbal supplements by the Federal Trade Commission and

4 the Food and Drug Administration pursuant to acts of Congress. Yet Trimedica's speech is not

5 about herbal supplements in general. It is commercial speech about the specific properties and

6 efficacy of a particular product, Grobust. Ifwe were to accept Trimedica's argument that we

7 should examine the nature of the speech in terms of generalities instead of specifics, then nearly

8 any claim could be sufficiently abstracted to fall within the anti-SLAPP statute.") Id., at 601.9

9 In Nagel v. Twin Labs., Inc!., 109 Cal. App. 4th 39, 134 Cal. Rptr . 2d 420 (2003), the Court

1 o held that product labels and similar online statements regarding the qualities of a dietary I

11 supplement that were alleged to be false and misleading, constituted commercial speech and not

12 speech protected under the anti-SLAPP "public issue" or "public interest" requirement.10

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9 The Court in Trimedica gave an apt illustration (Id at 601):

"CJC suggests a hypothetical regarding false statements made in the course of a real property sale. Blackacre sells a house to Whiteacre, and Whiteacre sues, claiming defendant misrepresented the square footage . Blackacre brings a special motion to strike, claiming his speech involves a matter of public intere st , because millions of Americans live in houses and buy and sell houses . CJC correctly suggests that applying the anti-SLAPP statute in such a case would be absurd.

"This case is no more about the general topic of herbal supplements than the hypothetical above is about the general topic of buying and selling houses. tiie lawsuit in the hypothetical is about the specific topic of whether Blackacre misrepresented the house's square footage to Whiteacre. The topic of this lawsuit is whether Trimedica misrepresented the specific properties and benefits of Grobust. Neither is a matter of general public interest within the meaning of the statute ."

10 In Nagel, the Court made the distinction clear: "Second, while matters of health and weight management are undeniably of interest to the public, it does not necessarily follow that all lists of ingredients on labels of food products or on the manufacturers' Web sites are fully protected from legal challenges by virtue of section 425.16. 'Advertisers should not be permitted to immunize false or misleading product information from government regulation simply by including references to public issues.' (Bolger v. Youngs Drug Products Corp., supra, 463 U.S. at p. 68, 103 S.Ct. 2875.) Here, the list of Ripped Fuel's ingredients on the bottle labels and on Twin Labs' Web site was not participation in the public dialogue on weight management issues; the labeling on its face was designed to further Twin Labs' privat e interest of increasing sales for its products. (Ericsson GE Mobile Communications , Inc. v. CS.I Telecommuni cations Engineers (1996) 49

Plaintiffs Opposition to Defendant s' Special Motion to Strike 12 16-CV-00935-


1 Numerous cases are to the same effect: Jewett v. Capital One Bank, 113 Cal. App. 4th

2 805, 6 Cal. Rptr. 3d 675 (2003), as modified on denial ofreh'g (Dec. 22, 2003), (rejecting

3 defendants' argument that credit card solicitations should be provided the protections of section

4 425.16 merely because credit card debt was a matter of general public interest); Mann v. Quality

5 Old Time Serv., Inc,., 120 Cal. App . 4th 90, 111, 15 Cal. Rptr. 3d 215,227 (2004) ('"Ifwe were to

6 accept [defendants'] argument that we should examine the na~e of the speech in terms of

7 generalities instead of specifics, then nearly any claim could be sufficiently abstracted to fall

8 within the anti-SLAPP statute"); World Fin. Grp., Inc. v. HEW Ins . & Fin. Servs., Inc., 172 Cal.

9 App. 4th 1561, 92 Cal. Rptr. 3d 227 (2009) , as modified (May 7, 2009); and L.A. Taxi Coop., Inc.

IO v. lndep . Taxi Owners Ass'n of Los Angeles, 239 Cal. App. 4th 918,929, 191 Cal. Rptr. 3d 579,

11 587 (2015), review denied (Nov. 10, 2015).

12 These cases demonstrate that even in the absence of the use of a registered certification

13 trademark , the type of speech that is target of the 'Complaint here, the rating assigned to each

14 film, is precisely the type of speech that has repeatedly been held to be commercial speech, and

15 not speech in furtherance of a publ ic issue or public interest within the meaning of the anti-

16 SLAPP law.

17 The fact that the speech targeted here involves defendant s' use of registered certifi cation

18 trademarks only serves to unders core that defendants cannot satisfy their burden to demonstrate

19 that the purely commercial speech in this case is speech on a matter of public interest or a public

20 issue under the first step of the anti-SLAPP analysis. Registered certification trademarks, that is,

21 the ratings that the claims in this case are "based on," are quint essentially commercial speech, not

22 speech on a publi c issue to which the anti-SLAPP law was meant to apply.

23 The cases cited by defendants discussing the "conduct in fortheran ce" requirement (MTD

24 at 8-10) are all distinguishab le for multiple reasons.

25 DuPont Merck Pharm. Co. v. Superior Court, 78 Cal. App. 4th 562, 92 Cal. Rptr. 2d 755

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Cal.App.4th 1591, 1602-1603, 57 Cal.Rptr.2d 491.) Twin Labs ' commer cial speech was not made 'in connection with a public issue ' as that phrase is used in section 425.16. The anti-SLAPP statute does not require dismissal ofNage l's lawsuit ." Id. at 47-48 .

Plaintiff s Opposition to Defendant s' Special Motion to Strike 13 16-CV-009 35-R


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(2000), as modified (Jan. 25, 2000), is in.apposite because it involved claim s based on both

lobbying and political activities before regulatory and legislative bodies that are treated separately

under§ 425.16(e)(l) and (2), and also commercial speech that was inextricably intertwined with

the petitioning and lobbying speech. The petitioning and lobbying sections of the anti-SLAPP

law at stake in DuPont d~ not include the separate public interest or public issue requirement that

applies to the speech in this case because speech involving petitioning the government, lobbying

and other similar political expression is entitled to greater protection than commercial speech.

Defendants make no argument that the claims here are "based on" any such petiti oning or

lobbying conduct. DuPont was distinguished for this reason in the cases discussed above

denying an anti-SLAPP motion where, as here, the complaint was based solely on pure

commercial speech. Jewet, at 814, Nagel, at 428, and All One God Faith , at 1209. Defendants

also cite DuPont for the proposition that the public interest requirement is satisfied here because

the ratings in this case affect a large number of parents. The statement in DuPont that the publi c

interest requirement turns on the magnitude of the consumer fraud, that is, whether the false

commercial speech affects a large number of consumers and invo lves life-threatening statements ,

rather than a small number of consumers on matters that are not life-threatenin g, has been

di scredited by virtually every court that has since considered the issue. As the Court stated in

Scott v. Metabolife Int'!, Inc., 115 Cal. App. 4th 404,423, 9 Cal. Rptr. 3d 242,256 (2004) ("Ifwe

were to conclude that was all that was necessary, our conclusion wo uld pro duce the anomalous

result of giving more protection to advertisers who threat en a larger segment of the public with a

more deadly problem. This cannot be the purpose of a statute that was designed "to encourage

continued participation in matters of public significance, and [ensure] that this participation

should not be chilled through abuse of the judi cial proce ss."). 11

Defendants also rely upon California Pub. Employees' Ret. Sys. v. Moody's Inv'rs Serv.,

Inc., 226 Cal. App. 4th 643, 172 Cal. Rptr. 3d 238 (2014), review denied (Sept. 10, 2014)

("Ca/PERS''). However, Ca/PERS is distinguishable for several reasons. First, Ca/PERS

ll See also, Martin ez v. Metabolife Int'!, Inc., 113 Cal. App. 4th 181, 193, 6 Cal. Rptr. 3d 494, 503 (2003); and All One God Faith, at 1209, 879.

Plaintiffs Opposit ion to Defendants' Special Motion to Strike 14 16-CV -0093 5-R


1 involved a claim based on a combination of protected - noncomme rcial - public speech about an

2 issue of public interest and unprotected commercial speech. The defendant in Ca/PERS,

3 McGraw- Hill, was a publisher - engaged in typical noncommercial speech. In addition, the

4 plaintiff alleged the claim was based on speech published in third party publications by other

5 publishers - Bloomberg and Reuters - that is, noncommercial speech. Thus, the Court described

6 the speech that was the target of the claims in CalPERS as consisting of both protected

7 noncommercial speech and non-protected commercial speech: "where, as here, the cause of

8 action alleges both protected and non-protected activities." Id at, 250, 659. In cases where the

9 complaint is based upon both protected "public issue" speech and non-protected commercial

1 o speech, the "public issue" prong of an anti-SLAPP motion will be satisfied only where the

11 protected public issue speech is more than merely incidental or collateral to the ooprotected

12 commercial conduct. In Ca/PERS, the Court rejected plainti ff's assertion that the protected

13 public issue speech was merely incidental to the unprotected commercia l speech and thus held

14 that the defendant had satisfied the first step in the anti-SLAPP analysis. Id. at 250, 659.

15 Here, however, the Complaint is based solely on defendants' commercia l speech-the

16 certification trademark ratings assigned to those films with tobacco imagery. Complaint ,r,r 107-

17 110. In addition, in contrast to Ca/PERS, defendants here are not newspapers, booksellers, or any

18 manner of publishers engaged in the type of noncommercial speech that is deserving of the core

19 protections of the First Amendment, nor are the claims here based on speech publi shed by news

20 agencies such as Bloomberg or Reuters. Defendants here are a trade association and its members

21 attempting to persuade the movie going consumer, in particular , parents, to buy its members'

22 products by using certification trademarks in connection with the promotion and sale of its

23 members' products. Complaint ,r,r 56, 67-68.

24 Defendants also claim that their certification trademarked movie ratings have a greater

25 claim to being conduct in furtherance of protected noncommercial speech than ratings of diet

26 supplements, credit cards or other products because the subject matter of movie ratings - movies

27 - is itself protected noncommercial speech. (MTD at 10.) Defendants' argument that speech

28 Plaintiffs Opposition to Defendants' Special Motion to Strike 15 16-CV -0093 5-R


1 about movies is entitled to special or greater protection than speech about other products and,

2 therefore, that false commercial speech about movies is immunized from the consumer protection

3 and other state tort laws by the anti-SLAPP law, was previously proposed by one of the

4 defendants here, and specifically rejected. Rezec v. Sony Pictures Entm't, Inc., 116 Cal. App. 4th

5 135, 141-42, 10 Cal. Rptr. 3d 333, 338-39 (2004), as modified (Feb. 26, 2004) ("Sony argues

6 that, because the films themselves are noncommercial speech, so are the advertisements. Under

7 Sony's absolutist approach, every film advertisement, no matter how false, would be outside the

8 scope of consumer protection laws. We reject that position.") (citations and footnote omitted).

9 The argument was raised again, also by another one of the defendants here, and was similarly

10 rejected in Dyer v. Childress, 147 Cal. App. 4th 1273, 1283-84, 55 Cal. Rptr. 3d 544, 550-51

11 (2007). See, also, L.A. Taxi Coop., Inc. v. Indep. Taxi Owners Ass'n of Los Angeles, 239 Cal.

12 App. 4th 918,930, 191 Cal. Rptr. 3d 579,588 (2015), review denied (Nov. 10, 2015).

13 Since the speech that the Complaint is "based on" here is solely commercial speech,

14 defendants have failed to establish that the speech is in furtherance of a public issue and, on that

15 basis alone, the anti-SLAPP motion should be denied, without further consideration of the

16 adequacy of the pleadings to state a claim. We nonetheless address that adequacy not only in

17 response to the Rule 12(b)(6) portion of the motion, but, concurrently, to provide a second,

18 independent basis upon which the anti-SLAPP motion should be denied.

19 IV. Plaintiff has demonstrated a probability of prevailing on the merits

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A. The First Amendment does not provide immunity for defendants' commercial speech

Defendants argue that the speech the claims are based on is pure noncommercial speech --

expressions of defendants' opinions, entitled to the full protections of the First Amendment.

Therefore, defendants assert that plaintiff cannot demonstrate a probability of prevailing on his

claims under the second step of the anti-SLAPP law. MTD at 11-13. But, defendants' First

Amendment arguments are without merit.

The speech that the claims are based upon are the certification trademarked ratings

assigned to specific films with tobacco imagery. Complaint ,r 107. Those certification

Plaintiffs Opposition to Defendants' Special Motion to Strike 16 l 6-CV-0093 5-R


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trademarked ratings are pure commercial speech. Defendants admit, for purposes of the Motion,

all of the allegations of the Complaint including that the PG-13 certification trademarked ratings

of films with tobacco imagery are false and misleading and fail to disclose life threatening health

and safety warnings. False and misleading commercial speech is not entitled to First Amendment

protection or immunity. Kasky v. Nike, Inc,., 27 Cal. 4th 939, 45 P.3d 243 (2002), as modified

(May 22, 2002). All One God Faith, at 876-878, 1205-1208; Virginia State Bd. of Pharmacy v.

Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 771, 96 S. Ct. 1817, 1830, 48 L. Ed. 2d

346 (1976) ("Untruthful speech, commercial or otherwise, has never been protected for its own

sake."); Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York, 447 U.S. 557,563,

100 S. Ct. 2343, 2350, 65 L. Ed. 2d 341 (1980) ("Consequently, there can be no constitutional

objection to the suppression of commercial messages that do not accurately inform the public

about lawful activity. The government may ban forms of communication more likely to deceive

the public than to inform it."); Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 103 S. Ct.

2875, 77 L. Ed. 2d 469 (1983).

Defendant MPAA's applications seeking to register its ratings as federal certification

trademarks state, under oath, that the certification trademarked ratings may lawfully be regulated

by Congress because they are used in the ordinary course of trade. See 15 U.S.C.

§§I051(a)(3)(C) and1054; Ex. 1.12 In addition, the MPAA has sought to protect its commercial

rights under the Trademark Act for its certification trademarked ratings many times over the last

twenty-five years including three recent cases before the United States Patent and Trademark

Office ("USPTO") one of which was filed on February 19, 2016, six days before the Complaint

was filed in this case. All of those pleadings describe defendants' use of the certification

trademarked ratings as commercial speech - certifying the content of motion pictures in

connection with thousands of films, certification trademarked ratings seen by millions of people

every day in theaters in connection with the sale of more than a billion movie tickets sold every

year. See, Exs. 2-4 .

12 All "Ex. " references are to Exhibits attached to the Declaration of David Schachman in Support of Plaintiffs Opposition to Defendants' Special Motion to Strike.

Plaintiff' s Opposition to Defendants' Special Motion to Strike 17 I 6-CV-00935-R


1 In yet another case, Motion Picture Ass'n of Am., Inc. v. Respect Sportswear, Inc., 83

2 U.S.P.Q.2d 1555 (P.T.O. Apr. 13, 2007), the MPAA sought to cancel a sportswear

3 manufacturer's registration and use of a similar trademark: "Rated R Sportswear." The MP AA

4 claimed that allowing the manufacturer to register and use its trademark would damage the

5 MP AA and its members because it would likely cause consumer confusion and would dilute the

6 value of the MPAA's certification trademarks. The MPAA presented evidence to prove that the

7 MP AA and its members had expended enormous resources to create consumer recognition of its

8 certification trademarked ratings and, as a result, the MPAA's certification trademarks were so

9 well known and recognized by consumers that the certification trademarked ratings should be

10 recognized as "famous" trademarks as defined by the Trademark Act. Based upon the MPAA's

11 evidence describing the magnitude of the defendants' commercial use of the trademarks and

12 consumers' recognition of the defendants' certification trademarks, the Trademark Trial and

13 Appeal Board held that the certification trademark was "famous," found that consumers would

14 likely be confused, and granted the MPAA's request to cancel the registration of the offending

15 trademark.

16 Defendants' registration of its certification trademarked ratings, use of its certification

1 7 trademarked ratings, and repeated court filings to enforce and protect its certification trademarked

18 ratings against consumer confusion and dilution claiming that these defendants will be damaged

19 by such consumer confusion or dilution, are utterly inconsistent with their attempt in the Motion

20 to claim that the certification trademarked ratings are pure noncommercial speech entitled to full

21 First Amendment protection.

22 In addition, defendants' internal rules makes pellucid that the certification trademarked

23 ratings are commercial speech: "CARA rates motion pictures intended to be exhibited and

24 distributed commercially to the public in the United States to provide parents information

25 concerning the content of those motion pictures to help them determine each motion picture's

26 suitability for viewing by their children." Complaint, Ex. 1, Art. I, A.

27 Defendants' entire discussion of whether the certification trademarked ratings in this case

28 Plaintiff's Opposition to Defendants' Special Motion to Strike 18 l 6-CV-00935 -R


1 are protected opinion ·simply ignores the well-established test for differentiating actionable

2 representations of fact and non-actionable puffery or opinion/or commercial speech. The test

3 has been applied in scores of reported cases analyzing whether product labels and advertising are

4 actionable commercial speech, on the one hand , or, non-actionable opinion , on the other, but

5 those cases are not discussed or mentioned in the Motion .

6 Instead of recognizing the applicability of the commercial speech cases , and attempting to

7 analyze whether the speech in this case constitutes actionable representations under the

8 appropriate standard for commercial speech, defendants, without explicitly saying so, attempt to

9 apply a different test (a test, not surprisingly, more favorable to defendants), taken from a line of

10 cases that has absolutely nothing to do with the claims asserted in this case. The only cases

11 defendants rely upon for their argument that the certification trademarke d ratin gs assigned to

12 films with tobacco imagery are expre ssion of opinions, not actionab le representations, are

13 defamation and noncommercial speech cases brou ght agains t newspapers or publishers . MID at

14 11-13. In defamation and noncommer cial speech cases against pub lisher s, the test for

15 determining if a statement is defamatory or merely non-d efamatory opinion is more

16 accommodating to defendant s than claims, as here , involving commercial speech . None of the

17 cases cited by defendant s is relevant to plaintiff' s claims. Plaintiff has not asserted any

18 defamation or noncommercial speec h claim.

19 As discussed below, under the applicable standard s governing commercial speech, the

20 certifi cation trademark ratings that are the subj ect of the Complaint here are actionable

21 represent ations, rather than non-acti onable opinions. 13

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13 Ind eed, as is discussed at pp. 22-23 below, even if the certification trademarked ratings were considere d opinions, the certific ation trademarked ratings here are still act ionable false and misleadin g opinion s under well-established California law governing commercial speech.

Plaintiff s Oppos ition to Defendants' Special Motion to Strike 19 16-CV-009 35-R


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B.

1.

Plaintifrs negligent misrepresentation Claim (Count VII) pro.perly states a claim.

The false and misleading representations of fact or actionable opinions and omissions that are alleged

The Complaint is based on the false and misleading representations and the failure to

disclose life threatening health and safety facts .in the labels or certification trademarked ratings

defendants assign to films with tobacco imagery. Complaint ,r,r 2-6, 107-110.

The PG-13 certification rating is a false and misleading representation , as applied to films

with tobacco imagery, that the film is suitable for children under seventeen unaccompanied by a

parent or guardian. This representation is false and misleading because it is a scientific fact, as

defendants are fully aware, that exposure of children and adolescents to tobacco imagery in films

causes children to become addicted to nicotine, develop tobacco related diseases , and kills them,

by the tens of thousands. In addition , the PG-13 rating falsely and mis lead ingly represents, 12 >

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"Some Material May Be Inappropriate For Children Under 13" when, in fact, as defendants

know, exposure of children and adolescents to tobacco imagery in films has been scientifically

proven to cause nicotine addiction, tobacco related diseases and premature death. Therefore,

films with tobacco imagery contain materia l that is, not may be, inappropri ate for children.

Complaint, Par. 2-5, 45-54 , 60-66, 92-93, 98- 100.

In addition, the Complaint is also based upon two types of omissions. The ratings never

disclose life threatening health and safety-warnings that exposure of youth to toba cco imagery in

films has been scientifically proven to cause nicotine addiction, toba cco related diseases and

premature death . In addition, defendants fail to di sclose the presence of tobacco imagery in the

descriptor portion of the film rating for approximate ly 88% of the films that contain tobacco

imagery. Complaint ,r,r 97, 98 and 109.

2. The representations in question are actionable representations of fact

Scores of cases in federal and state courts have clearly estab lished and applied the test to

differentiate actionable statements of fact from non- actionabl e opinion for common law claims of

negligent misrepresentation and fraud , and claims under the California UCL and F AL statutes. If

the statement is capab le of bein g proven false or reasonably interpreted as a statement of

Plaintiff's Oppositio n to Defendant s' Special Motion to Strike 20 l 6-CV -0093 5-R


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objective fact it is an actionable statement of fact. Descriptions of specific or absolute

characteristics of a product are actionable statements of fact. If, however the statement is a

general, vague and unspecified assertion that does not say anything about the specific

characteristics or components of the product, it is a non-actionable opinion. If the stateme nt is . '

sufficiently specific such that it is capable of inducing consumer reliance it is an actionable

statement of fact. Bohac v. Gen. Mills, Inc., No. 12-CV-05280-WHO, 2014 WL 1266848, at *5-

6 (N.D. Cal. Mar. 26, 2014). Cortina v. Goya Foods, Inc., 94 F. Supp. 3d 1174, 1193 (S .D . Cal.

2015). ~ Cases applying the test for actionable representations and non-a ctio nab le opinions are

collected below. 14

14 Examples of actionable representations of fact or opinion: Cortina v. Goya Foods, Inc., 94 F. Supp. 3d 1174, 1193 (S.D. Cal. 2015) (beverage was "safe for consumption"); Bohac v. Gen. Mills, Inc., No. 12-CV-05280-WHO, 2014 WL 1266848, at *6 (N.D. Cal. Mar. 26, 2014) (nature valley granola bars were "100% NATURAL" and "All Natural") ; Goldsmith v. Allergan, Inc., No. CV 09-7088 PSG EX, 2011 WL 2909313, at *5 (C.D. Cal. May 25, 2011) ("suitable" is actionable stat eme nt of fact);ThermoLife Int'/, LLC v. Gaspari Nutrition Inc., No. 14-15180, 2016 WL 1460171, at *4 (9th Cir. Apr . 14, 2016) ("safe" actiona ble state ment of fact); Apodaca v. Whirlpool Corp., No. SAC V 13-00725 NS, 2013 WL 647 7821, at *1 (C.D. Cal. Nov. 8, 2013) (a product used "c ommer cial grade components"); Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133 (C.D. Cal. 2005) (a product uses "brand-name comp onents" and are subjec t to the "mo st stringent quality control test s"); Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111 (N.D. Cal. 2010) (granola bar was "whol esome " when it had dangerous additives); Williams v. Gerber Products Co., 552 F.3d 934 (9th Cir. 200 8) ("nutritious " food); Delacruz v. Cytosport, Inc., No. C 11-3532 CW, 2012 WL 1215243, at *l (N.D. Cal. Apr. 11, 2012) ("healthy fat" because the term

- was -susceptible to proof); Walter v. Hughes Commc'ns, Inc:., 682 F:Supp. 2d 1031 (N.D. Cal. 2010) (the service provide ''ty pical " although seemin gly-vague, was actionable in the context of measuring quantifiabl e intern et speeds); and Hauter v. Zogarts, 14 Cal. 3d l 04, 112, 534 P.2d 377 (1975) ("completely safe ball will not hit player ") ("The assertion that the Gizmo is completely safe, that the ball will not hit the player, does not indicate the seller's subjective opinion about the merits of his product but rather factually describes an important charac teristic of the product. Court s hav e consiste ntly held similar promises of safety to be represent ations of fact.").

Examples of non-actionable opinions: Vitt v. Apple Computer, Inc., 469 F. App'x 605, 607 (9th Cir. 2012 ("durable ," "rugged," "built to withstand reasonable shock," "rel iable," and "high perfonnance ") Vitt v. Apple Computer, Inc., 469 F. App'x 605, 607 (9th Cir. 2012) ("The distric t court held that these statement s are general ized, non-ac tion ab le puffery because they are " inherently vague and generalized terms " and ''not factual representations that a given standard has been met."); Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725 (9th Cir. 1999) ("too small " to handle customer's business needs) ; Cook, Perkiss & Liehe, Inc. v. N California Collection Serv. Inc., 911 F.2d 242 (9th Cir. 1990) ("bes t techno logy" "better

Plaintiff' s Opposition to Defendants' Special Motion to Strike 2 1 I 6-CV -00935-R


1 Defendants' certification trademarked ratings, under the applicable law, are actionable

2 representations of fact capable of being proven false and upon which consumers readily can and,

3 in fact, do rely.

4 Whether the representations are false can be easily established: if there is persuasive . .

5 evidence that exposure to tobacco imagery causes children to become addicted to nicotine,

6 develop tobacco related diseases and die prematurely, by the tens of thousands, the repre sentation

7 that the film is appropriate for children under seventeen without a parent or guardian is false. In

8 addition, the certification trademark rating states "Some Material May Be Inappropriate For

9 Children Under 13." The same scientific evidence (and the recommendations of virtually every

1 O public health and medical association in America and the chief law enforcement officers of thirty-

11 one states) will demonstrate that some material in these films - tobacco imagery - is completel y

12 inappropriate for impressionable children and adolescents because, at current rates, it will kill one

13 million of them . Representing that some material may be inappropriate, when defendants know

14 that the tobacco imagery is inappropriate (meaning that it will kill them), renders this

15 representation easily capable of being proven false.

16 Moreover , by legal definition , and as a result of defendants' registration and subsequent

17 continual use of their certification trademarks , and defendants' repeated attempt to enforce the

18 certification trademarks in the USPTO, defendants cannot be permitted to now claim that their

19 certification trademarked ratings are simply free floating non-actionable opinions.

20 In addition, defendants cannot plausibly claim that their certification trad emarked ratings

21 are not actionable representations of fact upon which a consumer could reasonably rely. The very

22 purpose of a certification trademark is to represent to purchasers that the goods or services

23 possess certain characteristics or meet certain qualifications or standards for the purpose of

24

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28

(Footnote 14 continued from prior page)

customer service"); nSight, Inc. v. PeopleSoft, Inc., No. C-04-3836 MMC, 2005 WL 1287553, at *1 (N.D. Cal. June 1, 2005) ("inferiorto defendants' services," "not professional inimplementing [defendant's] software") .

Plaintiffs Opposition to Defendant s' Special Motion to Strike 22 16-CV -00935-R


1 inducing consumers to rely upon the certification to purchase the product. 15

2 Moreover, there can be no doubt that the certification trademarks worked precisely as

3 intended - to induce parents to rely on them. Every year since 1969 defendants have

4 commissioned a survey to find out whether parents rely on the certification trademarked ratings.

5 Those surveys have consistently shown that an overwhelming majority of parents in fact do rely

6 on defendants' certification trademarked ratings. For, example, in Motion Picture Ass'n of Am.,

7 Inc. v. Rated R Clothing, Inc., 646 F. Supp. 22, 23-24 (S.D.N.Y. 1986), the MPAA submitted its

8 annual survey to establish its remarkable success in obtaining parental reliance upon the MPAA's

9 certification trademarked ratings, and the MP AA argued that "its rating system is considered

IO reliable because of public trust in its accuracy." Id. at 26. In defendants' press release

11 announcing the results of a 2015 survey, Joan Graves, defendants' Senior Vice President and

12 Chairperson of CARA, stated: "We are proud of the system that we have created, a system that

13 families everywhere have come to rely upon." Ex. 5. See also, Motion Picture Ass'n of Am., Inc.

14 v. Respect Sportsw ear, Inc., 83 U.S.P.Q .2d 1555 (P.T.O. Apr. 13, 2007) (finding defendants'

15 certification trademarks "famous.") 16 Reliance cannot be credibly challenged.

16 Defendants' certification trademarked ratings are actionable statements of fact.

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3. Even if regarded as opinions, false and misleading opinions are sufficient to state a claim for negligent misrepresentation

Under well-established law, even if defendants' certification trademark ratings were

regarded as "opinions," they are, nevertheless, a legally sufficient basis upon which to state

claims for negligent misrepresentation ( as well as for fraud and claims under the UCL and F AL).

15 The MPAA's internal rules state the purpose of the ratings is "to be used by parents to assist them in determining whether the motion picture is appropriate for their children to see and whether their children should be accompanied while seeing the motion picture." Complaint,~ 59. 16 Thus, Dan Glickman, the Chief Executive Officer of the MPAA, stated in his press release in 2007: "The MPAA film rating system has exist_ed for nearly 40 years as an educational tool for parents to assist them in making decisions about what movies are appropriate for their children. It is a system that is designed to evolve alongside modern parental concerns. I am pleased that this system continues to receive overwhelming approval from parents, and is consistently described as a valuable tool they rely upon in making movie-going decisions for their families." Complaint , Exhibit 5 at ECF page 5.

Plaintiff' s Opposition to Defendants' Special Motion to Strike 23 l 6-CV-0093 5-R


1 A false or misleading opinion is actionable if made by a person claiming to have superior

2 knowledge or special information concerning the subject matter or where it is expressed in a

3 manner implying a factual basis that does not exist. Doran v. Milland Dev. Co., 159 Cal. App. 2d

4 322,325, 323 P.2d 792, 794 (1958); Jolley v. Chase Home Fin., LLC, 213 Cal. App. 4th 872, . .

5 893, 153 Cal. Rptr. 3d 546, 563 (2013), as modified on denial of reh'g (Mar. 7, 2013). See also,

6 CalPERS where the Court held that the ratings involved in that case were actionable opinions.

7 CalP ERS, at 661-665 and cases in footnote 14, above.

8 By obtaining and utilizing certification trademarks, defendants , by legal definition , claim

9 to have special information concerning the subject matte r, that they have a factual basis for

1 o certifying that they inspected the film, and that the film is appropriate for viewing by

11 unaccompanied children under seve nteen.

12 The Complaint is based on actionable opinions, even if it were assumed that the

13 cert ification trademarked ratings are not regarded as representations of fact.

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4. Defendants mischarac terize Plaintiff's allegation s of false and misleading representation s.

Defendants incorrectly assert "Plaintiff's contention that a rating belo w R implies that a

movie will not contain tobacco image s likewise fails" because ne gligent mi srepresentations

claims based solely on impl ied representations or nondisclo sures are legally insufficient. MID at

15; emphasis in origina l. However, the claim that the PG-13 rating is false and misleading is not

based upon any implied representation about the content of the film - whether about tobacco

imagery or the use of the F*** word more than once or anything else. 17 The PG-13 rating

certifies that the film does not have any content that is inappropriate for unaccompanied chi ldren

under seventeen. Under defendants' rating system, if the film has any content that is unsuitabl e

17 The claim is not that the PG-13 rating is impliedly false and misleading because the film has tobacco imagery - that there is an implied false and misleading repre sentation that PG-13 films

will not have any tobacco imagery; the claim is that if the film has tobacco imagery the PG-13 rating - that the film has no content that is inappropriate for unaccompanied children under seventeen - is false and misleading becau se exposure of children to tobacco imagery has been scientifica lly proven to cause nicotine addiction, tobacco related diseases and premature death.

Plaintiffs Opposition to Defendants' Special Motion to Strike 24 16-CV -0093 5-R


1 for children under seventeen, the film may not be certified PG-13. The ten films listed in the

2 Complaint and the many other films with tobacco imagery are films that defendants certified

3 contained no content inappropriate for unaccompanied children under seventeen. 18 Thus, the

4 claims in the Complaint are not based on any implied representations or solely on defendants'

5 nondisclosure of the fact that exposing children to tobacco imagery in youth rated films has been

6 scientifically proven to cause nicotine addiction , tobacco related diseases, and premature death.

7 Defendants also assert that "CARA has done precisely what it said it would do with films

8 with smoking imagery, and Plaintiff can point to nothin g false about CARA's public

9 statements. "19 "And CARA has never said that it will give an R rating to every movie containing

1 O a single image of smoking. In fact , the opposite is true. CARA has made clear it is not adopting

1 l a 'mandatory R' rating on all films that contain any smokin g. Thus, the Complaint does not

12 plead and Plaintiff cannot establish any misrepresentation ." MTD at 14-15 (citations omitt ed,

13 emphasis in original) .

14 Contrary to defendant s' claims , howeve r, the Complaint does not assert that defendants

15 falsely repre sented (or promis ed) that they would rate tobacco imagery with the R rating even

16 though they never intended to do so and, in fact, did not do so. The Complaint claims the PG- 13

17 ratings are false and misl eading , not that defendants falsely represented that they were going to

18 change the rating s.

19 5. Defendants fail to establish the absence of reasonable reliance

20 Defendant s erroneously claim that plaintiff fails to plead reasona b_le relian ce on

2 1 defendant s' misrepresentations and omissions. MID at 18-1 9.

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18 The ne gligence, fraud and UCL claim s here could be bas ed solely upon defe ndants ' nondi sclosure of material critical health and safety warnin gs. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1141 (9th Cir. 2012). In addition, the claim s here are based on false and mi sleading misr epre sentations , and partial representati ons, but suppression of the material facts that expo sure of childr en and adole scents to tobacco imagery in films causes nicotine addiction, tobacco related di seases and premature death . Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088, 1094-109 5 (N.D. Cal. 2007) . 19 As describe d above, the Compl aint does not target defendants' publi c stat ements about the film rating system; it targe ts the false and mi sleading rati ngs assigned to films with tobacco imagery .

Plaintiffs Opposition to Defendants ' Special Motion to Strike 25 l 6-CV -00935 -R


1 Plaintiff relied upon the defendants' certification trademarked PG-13 rating that the films

2 were appropriate for unaccompanied children under seventeen when he purchased tickets to the

3 ten listed films. If defendants had disclosed that exposure to films with tobacco imagery causes

4 children and adolescents to become addicted to nicotine, suffer tobacco-related diseases and die

5 prematurely and had disclosed ·that the ten films contained tobacco imagery, he would not have

6 purchased tickets to the films. Complaint ,r,r 108 -109. Under the applicable law these facts are

7 sufficient to plead reliance under Rule 12(b)(6) standards. Kwikset Corp. v. Superior Court, 51

8 Cal. 4th 310, 326, 246 P.3d 877, 887 (2011); In re Tobacco JI Cases, 46 Cal. 4th 298, 326, 207

9 P.3d 20, 39 (2009); Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523, 530-531 (N.D. Cal.

10 2012) (J. Seeborg).

11 Defendants argue that plaintiff bought tickets to ten movies over four years that contained

12 tobacco imagery and so, at some point, he must have realized that the films contained tobacco

13 imagery despite being rated PG-13. So, the argument goes, his continued purchase of tickets to

14 PG-13 films containing tobacco imagery demonstrates, as a matter oflaw, that he could not be

15 relying on the PG-13 rating as an indication that the film would contain no tobacco imagery.

16 MTD at 18-19.

1 7 However, once again, defendants misapprehend the actual claims asserted, this time to

18 make a reliance argument that does not apply to the claims asserted. The claims are not based

19 upon an implied or express statement that PG-13 rated films will contain no tobacco imagery.20

20 The claims are that the PG-13 certification of films with tobacco imagery falsely represents that ·

21 the film contains no contel}t that is inappropriate for unaccompanied children under seventeen.

22 Plaintiff did not know that exposure of children and adolescents to films with tobacco

23 imagery had been scientifically proven to cause nicotine addiction, tobacco-related diseases and

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20 Even as to defendants' misstatement of the claims, they have not established as a matter ofla w that plaintiff did not reasonably rely. Thesier-Hendricks v. TJL Enterprises, Inc., No. LACV1500477JAKSSX, 2015 WL 10791893, at *4 (C.D. Cal. Aug. 3, 2015) (denying motion to dismiss based upon the argument that no reasonable consumer could reasonably rely upon defendants' representation after the consumer purchased the product five times).

Plaintiff's Opposition to Defend ants' Special Motion to Strike 26

, 16-CV-00935-R


I death. Complaint ,r,rI08-09. He was unaware of those material facts when he purchased tickets

2 to the ten listed films.21 Without that critical information, known to defendants but not to him,

3 and even assuming he knew that a PG-13 rated film might contain tobacco imagery, plaintiffs

4 reliance upon defendants' certification that the film was suitable for children under seventeen was

5 reasonable (and it was certainly not unreasonable as a matter oflaw). Defendants have failed to

6 demonstrate that no reasonable person could conclude that plaintiff relied upon defendants' false

7 representations and omissions when he purchased tickets to the ten listed films. Keegan v. Am.

8 Honda Motor Co., 838 F. Supp. 2d 929, 960-961 (C.D. Cal. 2012).

9 The cases cited by defendants are distinguishable. Defendants cite In re Tobacco Cases II,

IO 240 Cal. App. 4th 779, 789, 192 Cal. Rptr. 3d 881,891 (2015), review denied (Dec. 9, 2015), and

I I Turcios v. Carma Labs ., Inc., 296 F.R.D. 638 (C.D. Cal. 2014), as examples of courts' finding a

12 lack of reliance. But those decisions came on a fully-developed record- not on a Rule 12(b)(6)

13 motion -- when it turned out that the plaintiff in fact knew the truth about that which he or she

14 claimed had been misrepresented. Here, plaintiff may have realized that the films contained

15 smoking imagery, but was never informed of the deadly effects of exposure of children to that

16 imagery. 22

17 Defendants' reliance upon Davis v. HSBC Bank Nevada, NA ., 691 F.3d 1152, 1163-1164

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21 In her 2015 press release, the Chairperson of the MPAA's rating system stated to parents that the ratings were intended to answer the question: "What would I want to know before letting my child watch this film?" Ex. 5. At a minimum, one would think, a parent would want to know that the movie contained tobacco imagery and that the Surgeon General of the United States had concluded that exposure to such imagery would lead children to addiction, disease and premature death. Yet that was not disclosed. Defendants clearly intended to conceal this material information from parents while simultaneously spending billions of dollars promoting their ratings and soliciting parents' reliance on those ratings by telling parents that the purpose of the rating system is to give parents advance information regarding the content of films that is suitable or not for children under seventeen. 22 The plaintiff in In Re Tobacco Cases II admitted during cross examination that she continued to purchase Marlboro Light cigarettes for six years after learning the truth - that they were no less haimful than full-flavored cigarettes. Id. at 787. In Turcios the court decided, based upon the plaintiffs extensive testimony, that he purchased the product after knowing the truth - that the jar of Carmex was not filled. The court found based upon his extensive testimony, that contrary to his allegation, that he would have paid the same price for the jar even ifhe had he known the entire Carmexjar was not filled. Id. at 643.

Plaintiffs Opposition to Defendants ' Special Motion to Strike 27 16-CV-00935-R


1 (9th Cir. 2012), highlights the lack of merit in their reliance arguments. In Davis, the plaintiff

2 alleged he was misled and that he would not have signed up for a credit card if he had known the

3 credit card required an annual fee. In Davis, the plaintiff electronically signed and accepted the

4 written application for the credit card, and the written application clearly and explicitly disclosed

5 the card required the paymen t of an annual fee. The court ruled, on a l 2(b )( 6) motion, after

6 recognizing that reasonable reliance is usually a question of fact for the jury , that no reasonable

7 person could conclude that plainti ff relied upon the nondisclosure of the annual credit card fee

8 because the plaintiff signed and accepted the written agreement without reading the disclosure

9 statement that stated there was an annual charge. Id. 1163-1164. Here, there was no disclosure;

1 o that is the point.

11 The Complaint sufficiently alleges reasonable reliance .

12 6. The Complaint establishe s proximate causation.

13 Defendants' assertion that as a matter of law the Complaint fails to estab lish proximate

14 causation is based upon a misstat ement of the claims asserted in the Complaint. The Complaint

15 states that the false and misleading representat ions and omissions in defendants' certification

16 trademarked ratings proximately caused plaintiff to purchase tickets to ten films. Complaint,~ ~

17 108-109. These facts are sufficient to establish proximate causation. Kwikset Corp. v. Superior

18 Court, 51 _Cal.1th 3~0, 328-329, 246 P.3d 877,_ 889-890 (201 1); Mullins v. Premier !'luf:ition_ _

19 Corp., No. 13-CV-01271-RS, 2016 WL 1534784;at *20 (N.D. Cal. Apr. 15, 2016) (J. Seeborg);

20 Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111, 1125 (N.D. Cal. 2010) (J. Seeborg).

21 The Complaint also alleges during the period 2012 through the present, defendants' false

22 and mis leading film ratings caused 1.1 million children to becom e addicted to nicotine and will

23 result in the eventual premature death of 360,000 of such children from tobacco-re lated diseases

24 · including lung cancer, heart disease, stroke and emphysema. As a result , plaintiff's children have

25 been exposed to an increased risk of nicotine addiction , tobacco-related disease , and premature

26 death. Complaint 1~ 2-5 and 45-54. Plaintiff acknowledges that California law does not

27 currently permit recovery for the increased risk of addiction , tobacco related diseases and

28 Plaintiff' s Opposition to Defendants' Special Motion to Strike 28 16-CV -0093 5-R


1 premature death. However, the Complaint states a claim for declaratory relief, injunctive relief,

2 the cost of the ticket purchases made by plaintiff and class members, restitution, punitive

3 damages, unjust enrichment or any other relief that the Court deems proper under California law.

4 Count VII properly states a claim for negligent misrepresentation .

5

6

C. Plaintiff's negligence and voluntary undertaking claims (Counts I and II) properly state claims

7 At the outset, a proper understanding of the Complaint's allegations will frame the

8 discussion of the sufficiency of its claims. Defendants inaccurately describe the Complaint ' s

9 allegations regarding the nature and scope of the duty defendants' voluntary assumed.

10 Defend.ants state: "Plaintiff's allegation that [defendants'] rule restricting youth under the age of

11 17 from seeing R-rated movies without a parent or guardian creates a duty to restrict

12 unaccompanied youth from seeing smoking imagery," and "the fact that [defendant] undertakes

13 to rate movies R when it believes that most American parents would not want their children to see

14 the movie unaccompanied does not obligate [defendants] to restrict youth from seeing tobacco

15 images on the grounds that it would be good public policy," and "The rule would require CARA

16 to give an R rating to movies that depict any conduct that advocacy groups think unhealthy" or .

17 "The law .... does not allow any advocacy group to define the contours of CARA's system

18 according to the group's particular social policy goals." -~TD at 16-17.

19 But that mis-states the Complaint. The Complaint describes the factual basis for the claim

20 that defendants volunt¥i ly undertook a duty of using reasonable care in rating films as suitable or

21 not for children under seventeen. Defendants designed their rating system so that films are either

22 certified as suitable for children under seventeen (and children under seventeen are allowed

23 unrestricted access) or, alternatively, defendants certify films as containing content that is not

24 suitable for children under seventeen (and for those R-rated films, defendants' rating system

25 prohibits children unaccompanied by a parent from admission to films). The Complaint asserts

26 that based upon how defendants designed and operate their rating system, defendants voluntarily

27 assumed the duty to exercise due care in certifying films as suitable, or not, for children under

28 Plaintiffs Opposition to Defendants' Special Motion to Strike 29 16-CV -0093 5-R


1 seventeen unaccompanied by a parent or guardian. Complaint ,r,r. 68, 72, and 73. The Complaint

2 alleges that defendants are free to change their rating system, rules and procedures or to cease

3 operations entirely. Complaint ,r 77.

4 The Complaint does not assert that defendants voluntarily assumed a duty to certify films

5 with tobacco imagery as R-rated and restrict children's access to such films because it would be

6 "good public policy" or according to any particular advocacy "group's social policy goals," or

7 based upon "any conduct that advocacy groups think unhealthy." MTD at 17. The Complain t

8 says nothing about "good public policy" or any "group's social policy goals," or "any conduct

9 that advocacy groups think unhealthy." The Complaint instead alleges that defendants breached

10 their duty to use reasonable care in assigning the PG-13 rating to films with tobacco imagery

11 because defendants know that exposure of children and adolescents to films with tobacco

12 imagery has been scientifically proven to cause nicotine addiction, tobacco-related diseases and

13 death-defendants know that at current rates, if defendants continue to rate such films with the

14 PG-13 rating, they will kill one million children.

15 Defendants will have their chance to persuade the fact finder that they acted with due care

16 by treating the evidence from the United States Surgeon General, the Centers for Disease Control

17 and Prevention, the National Institute of Health, the American Medical Association, the

18 Am~rican Association for Pediatric s, and_ the ~ t?ri_can Public Health Associa!ion (among others)

19 as merely the unsupported, erroneous opinions of what some '·advocacy groups thinks is

20 unhealthy." However , defendants' assertion that the Complaint is based upon some vague public

21 policy opinions , or what some advocacy groups think may be unhealthy, seriously misapprehends

22 the claims asserted in the Complaint. It is based on traditional tort theories , as we now discuss.

23 Defendant s have a general duty to exercise due care in assigning ratings to films so as not

24 to cause damage to plaintiff or, in the alternative, defendants voluntary assumed the duty to

25 exercise due care in connection with rating films for the benefit of parents and their children

26 under seventeen. Every person is under a duty to exercise reasonab le care not to injure another

27 person. Hensley-Maclean v. Safeway , Inc., No. CV 11-01230 RS, 2014 WL 1364906, at *3

28 Plaintiffs Opposition to Defend ants' Special Motion to Strike 30 16-CV-00935-R


1 (N.D. Cal. Apr. 7, 2014) (J. Seeborg); Rowlandv. Christian, 69 Cal. 2d 108,113, 443 P.2d 561,

2 564 (1968); and Jackson v. AEG Live, LLC, 233 Cal. App. 4th 1156, 1173, 183 Cal. Rptr. 3d 394,

3 408 (2015), review denied (May 13, 2015).

4 By their silence, defendants tacitly concede that defendants have a duty to exercise due . . .

5 care in the rating of films under the standard tests for determining that there is a general duty to

6 exercise due care, or under the voluntary assumption of a duty line of authority. Rowland, at 113;

7 Melton v. Boustred, 183 Cal. App. 4th 521,530, 107 Cal. Rptr. 3d 481,489 (2010). See

8 Complaint ,r,r 72-84.23

9 Defendants make only two arguments that the negligence claims fail to state claims for

10 relief. Defendants assert that statements in defendants' internal written rules are legally binding

11 disclaimers of their legal duty to exercise due care. (MTD at 16-17.) In addition, defendants

12 assert, based upon statements in their internal written rules and a letter and press release written

13 in 2007, that defendants, as a factual matter, did not undertake the duty to exercise due care in the

14 rating of films, but rather voluntanly undertook a different, narrower duty in connection with

15 their certification trademarked ratings of film s. (MTD 1 7. )24

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1. Defendants did not disclaim their liability for negligence

There is no disclaimer of liability for negli gence on the certification trademarked rating

23 Once again, defendants mischaracterize the claim s asserted in the Complaint. The duty alleged for the neglig ence claim, and the voluntary-assumed duty of care _ claim, is the duty to exercise reasonable care in rating films . It is not a duty "to give mo vies with tob acco imagery an R ratin g." MTD 15-16. The Complaint claims, based upon the scientific evidence and recommendations from the leadin g experts in the medical and publi c health fields, that defendants ' rating of films with tobacco imagery as suitable for unacc ompanied children under seventeen is negligent - that any reasonabl e person, exercising reasonable care, when informed of the same scientific evidence and recomme ndations of the leading medical and public health profes sional s as defendants have been, would not rate films with tobacco imagery with the PG-13 rating. 24 Defendants also rep eat their First Amendment arguments which for reasons explaine d above are without merit. Defendants also assert that there is no logical stopping point if defendants are liable for false and misleadin g ratings, that they could next be liable for not rating alcohol use, gambling, fatty foods or anything else. To plaintiff's knowledg e, however, there is no evidence that exposure of children to film imagery featurin g these other items actually causes addic tion, disease and death , unlike with smoking where it has been established.

Plaintiff s Opposition to Defendants' Special Motion to Strike 31 16-CV -0093 5-R


1 affixed to the films. There is no disclaimer in the 2007 press release, nor is there one in

2 defendants' internal written rules. There simply is no statement anywhere to the effect of:

3 "defendants hereby disclaim liability for negligence in the rating of :films." There is no statement

4 that says explicitly or even vaguely that: "Defendants are not liable for negligent or intentional

5 inaccuracies in the ratings assigned to any film" or "Defendants are not responsible for the

6 accuracy of the ratings and parents should not rely upon the rating of any film as a basis to

7 conclude that the content of any film is actually appropriate for children under seventeen

g unaccompanied by a parent of legal guardian."

9 In Young v. Facebook, Inc., No. 5:10-CV-03579-JF/PVT, 2010 WL 4269304, (N.D. Cal.

10 Oct. 25, 2010), the case relied upon by defendants, there was a clear, explicit disclaimer of

11 liability. Moreover, in Young, the plaintiff had signed the written terms of service agreement that

12 included the explicit disclaimer. Here, plaintiff and other parents signed no service agreement,

13 there is no disclaimer of liability for negligence in the 2007 letter and press release, in

14 defendants' internal, written rules, nor anywhere else.25

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2. Defendants' argument that they voluntarily assumed a narrower duty than the duty alleged in the Complaint

17 Defendants also claim that the duty of due care that they voluntarily assumed is different

18 than the duty described in the Complaint. The Complaint alleges defendant s voluntarily assumed

19 the duty to use due care in assigning ratings to films and to give parents advance cautionary

20 warning that a ~Im contains content that is, or is not, suitable for unaccompanied children_under

21 seventeen. The Complaint states that defendants certify certain films as either (i) suitable for

22 unrestricted viewing by children under seventeen (G, PG, or PG-13) or (ii) they prohibit children

23 under seventeen from viewing films that defendants certify as containin g conten t that is not

24 suitable for unaccompanied children under seventeen. Compl. 111, 55, 56, 67, 68, 72, 73 and 84.

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25 Defendants are among the largest , most sophisticated corporations in the United States. Defendants clearly know how to write an explicit disclaimer ofliability. There are no disclaimers for the movie ratings because the entire point of the certification trademark ratings is to solicit, encourage and obtain parents ' relian ce on the ratings.

Plaintifrs Opposition to Defendants' Special Motion to Strike 32 l 6-CV -00935-R


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Defendants assert, however, that the only duty they voluntarily assumed was "merely" the

duty to use reasonable care to assign a rating to each film that a majority of American parents

would assign to that film. MTD at 16-17. There are three things wrong with defendants'

argument regarding the voluntarily assumed duty claim.

First, defendants claim that their internal written rules actually describe a different and

narrower duty that defendants voluntarily assumed than the nature and scope of the voluntarily

assumed duty that is alleged in the Complaint. Defendants claim that the internal written rules

limit the duties defendants voluntarily assumed to a duty "merely" to accurately assign ratings to

films that a majority of American parents would assign and rely again upon Young. MTD at

pages 15-17. As stated above, there is no evidence that plaintiff or any parent was aware of

defendants' internal written rules, and any attempt to limit, qualify, or narrow the scope of the

duties defendants voluntarily assumed by statements in defendants' internal written rules is not

binding upon plaintiff or other parents because, in contrast to Young, plaintiff and other parents

did not sign a user agreement or anything by which they agreed to be bound by the terms of

defendants' internal written rules. 26

Defendants also rely on a 2007 letter and press release to claim that they disclaimed the

duties described in the Complaint. Complaint, Exhibit 5. However, a comparison of the internal,

written rules with the press release highlights the discrepancy between defendants' internal,

written rules and defendants' public statements describing the nature and purpose of the rating

system, and encouraging and soliciting parents' trust and reliance upon the rating system. There

is no statement whatsoever in the press release that the ratings are merely supposed to be an

assessment, or opinion, of how the average parent would rate the content of a film.

The 2007 press release states the nature and purpose of the rating system is "an educational

tool for parents to assist them in making decisions about what movies are appropriate for their

children." Complaint, Ex. 5. In addition, in another press release, from 2015, the Chairperson of

CARA publicly described the nature and purpose of the rating system, and the scope of the duties

26 In addition, the internal, written rules are themselves inconsistent in describing the nature or purpose, or undertaking, of the rating system.

Plaintiffs Opposition to Defendants' Special Motion to Strike 33 16-CV-00935-R


1 voluntarily assumed, as follows: "It is a responsibility we take very seriously, asking ourselves

2 before every screening: 'What would I want to know before letting my child watch this film?"'

3 Ex. 5.

4 Defendants' argument that the duty they voluntarily assumed was merely to issue opinions

5 regarding how the average parent would rate fil:r;n content is also inconsistent with the MP AA' s

6 Chief Executive Officer's letter to the state attorneys' general in which Mr. Glickman states that

7 defendants were soliciting expert medical and public health advice for the purpose of properly

8 rating films with tobacco imagery (which advise defendants subsequently ignored). Complaint 11

9 Par. 62, 63 and 96; Complaint , Exhibit 2. 27

10 Defendants' arguments that the nature and scope of the duties they voluntari ly assumed are

11 exclusively, or even partially, correctly described in those rules, or that the internal rules are

12 binding upon consumers, are without merit.

13 Second, defendants' arguments create, at most , disputed factual issues regarding the nature

14 and scope of the duty defendants' voluntarily assumed. Defendants attempt in the Motion to

15 dispute the accuracy of the facts regarding the nature and scope of the dutie s defendants

16 voluntarily assumed as alleged in the Complaint is not a basis to dismiss the claim under Rule

17 12(b)(6) . Jackson v. AEG Live, LLC, 233 Cal. App. 4th 1156, 183 Cal. Rptr. 3d 394 (2015),

18 review denied (May 13, 2015), the case relied upon by defendant s for this point, was decided on a

19 full factual record on a motion for summary judgment.

20 Third, even assuming the only duty of care defendants voluntarily undertook was the duty

21 to assign a rating to each film that a majority of Ameri can parents would assign, defendants

22 simply ignore the fact that the Complaint alleges defendants breached this duty as well. The

23 Complaint states that all reasonable parents (that is, 100%), or at the very least, a majorit y of

24 American parents, if provided the same scientific evidence and recommendations provided to and

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27 Until plaintiff obtains discovery of how the ratings are actually assigned, no one will know how defendants' rating system actually works; nor will anyone know to what extent the actual process is accurately described in the internal , written rules or in defendants' public statements describing the ratings system. As described in note 7, above, the entire process is conducted in secret.

Plaintiff's Oppo sition to Defendants' Special Motion to Strike 34 16-CV -00935-R


I known to defendants, would never assign a "PG-13" rating to films featuring tobacco imagery.

2 Complaint ,r 88. Thus, even under defendants' theory of a narrower definition of the duty they

3 voluntarily assumed, the voluntary undertaking claim nonetheless states a valid claim.

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D. Plaintiff's fraudulent misrepresentation Claim (Count IV) properly states a claim.

6 Defendants assert that the fraudulent misrepresentation claim fails for the same reasons as

7 the negligent misrepresentation claim supposedly fails (MTD at 20) and for the further reason

8 that plaintiff supposedly cannot allege scienter. For the reasons stated in Section IV.B above,

9 defendants' arguments against the negligent misrepresentation claim fail. They are incorporated

10 herein.

11 Defendants assert that plaintiff "cannot plead scienter." (MTD at 20.) Defendants say this

12 is so because the Complaint supposedly alleges that CARA has known "of the correlation

13 between tobacco imagery in youth-rated movies and adolescent nicotine addiction." MTD at 20-

14 21; emphasis added. But the Complaint alleges something very different - that science has now

15 established that smoking imagery causes addiction, diseases and premature deaths, and that

16 defendants have known about this throughout the period they have continued to assign PG-13

17 ratings to such films. Complaint ,r,r 2-5, 45-54, and 92-96.

18 The Complaint alleges, and the evidence will establish, exposure to tobacco imagery

19 causes nicotine addiction, tobacco-related diseases and death. Defendants cannot argue with that

20 allegation on a 12(b )( 6) motion and then argue that sci enter has not be shown. Indeed, implicit in

21 defendants ' attempted restatement of plaintiffs actual allegation is the admission that anyone

22 who gave PG-13 rating to films knowing what all leading health authorities had said necessarily

23 acted culpably. Defendants falsely certified that films with tobacco imagery were suitable for

24 children under seventeen with full knowledge of the scientific fact that exposure to films with

25 tobacco imagery causes children and adolescents to become addicted, develop tobacco-related

26 diseases and die. The complaint alleges that, at current rates, defendants ' PG-13 rating would

27 cause 3.2 million children to become smokers and would kill one million children. Complaint ,r,r

28 Plaintiffs Opposition to Defendants' Special Motion to Strike 35 l 6-CV-009 35-R


1 2-5, 45-54 and 92-96. The leading scientists in the United States, including the senior scientific

2 editor of three of the Surgeon General's reports on tobacco, major professional medical

3 association and public health association in America, and the chief law enforcement officers of

4 thirty-one states, reco_mmended to defendants that they stop assigning the PG-13 rating to films

5 with tobacco imagery. Complaint ,r,r 2-5, 45-54, and 96. Each of the Hollyw~od Studio

6 defendants knew that tobacco imagery in films was not suitable for children under seventeen,

7 because they separately adopted corporate policies to discourage tobacco imag ery in youth-rated

8 films. Complaint ,r,r 94-95. Defendants continue to falsely rate films with tobacco imag ery as

9 PG-13 because they make significantly more money from selling tickets to the larger under-

10 seventeen market than they do from adult R-rated films . Complaint ,r,r 102-104.

11 Defendants' claims regarding scienter are, at a minimum , without merit.

12 E. Plaintifrs breach of fiduciary duty Claim (Count III) properly states a claim

13 Defendants knowingly solicited and obtained the trust of the film-going public and, in

14 particular , parents of children under seventeen, to rely upon defendants' film rating service.

15 Defendants have knowingly accepted parent s' trust and ·reliance upon their film rating system as

16 the source of critical information regarding the content of films, the health and safety of their

17 children, and what films they will allow their children to see. Complaint , Par. 134, 56, 67, 68, 72

18 and 84.28

19 Most significantly for purpo ses of the fiduciar y duty claim, defendants ' rating system was

20 created and is operated by both the Hollywood Studio Defendants and NATO to demonstrate to

21 parents that defendants give priority to parents' interests in the health and welfare of their

22 childr en over defendants ' financial interests, because defendants voluntaril y adopted a system of

23 self-regulation or self-cen sorship. Defendant s chose to design and operate a system that does not

24 merely advise parents and children regarding film content that is not appropria te for children

25 under seventeen. Defendants prohibit children under seventeen from admissio n to theatres if

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28 See Section B.2, above de scribing defendant s' knowledge that parents rely upon defendants ' certifi ed trademarked ratin gs .

Plaintif f's Oppo sitio n to Defendants' Special Motion to Str ike 36 16-CV-0093 5-R


I defendants determine the film content is not appropriate for them. Defendants' system, by design

2 and in operation, tells parents and children that we (the film studios and theatre owners) are

3 putting your interests ahead of our own financial interests by voluntarily refusing to sell our

4 product to unaccompanied children under seventeen if we determine it is not appropriate for

5 them. Complaint ,r,r 1, 55, 68, 72, 73, and 134.

6 The existence of a confidential relationship arises where confidence and trust is reposed

7 by one party in the integrity of another and where the person solicits and or accepts the

8 confidence and trust. A fiduciary duty arises where a party voluntarily undertakes to act on

9 behalf of another - to give priority to the bests interests of the other person. Comm. On

IO Children's Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197, 221-222, 673 P.2d 660 (1983)

11 ("Children's Television"); Herbert v. Lankershim, 9 Cal. 2d 409,483, 71 P.2d 220,257 (1937;

12 Persson v. Smart Inventions, Inc., 125 Cal. App. 4th 1141, 1161, 23 Cal. Rptr. 3d 335,351

13 (2005). In addition, the existence of a confidential relationship and whether defendants accepted

14 the relationship are questions of fact that should not be decided on a 12(b)(6) motion. Persson, at

15 1161, 350.

16 Defendants argue that in a typical conunercial relationship between buyers and sellers

17 there is no fiduciary relationship because "sellers routinely make representations concerning their

18 product, often on the basis of a claimed expert knowledge about its utility and value." Children's

19 Television, at 221-222. Defendants claim, using the language from Children's Television, that

20 they have not voluntarily undertaken to "act on behalf of parents and give priority to their best

21 interests." MTD at 21-22.

22 However, that is precisely what defendants have done with their rating system and what is

23 alleged in the Complaint. Defendants purport to have undertaken to act on behalf of parents and

24 children, to give priority to their interests above their own conunercial interests. Defendants

25 assure parents they can and should rely upon the rating system because defendants voluntarily

26 refuse to sell their products to children under seventeen if they determine the product is not

27 appropriate for them. Defendants have benefited enormously by soliciting and obtaining parents'

28 Plaintiff's Opposition to Defendants' Special Motion to Strike 37 l 6-CV-00935-R


1 trust in the belief that the rating system was operated to put parents' interest s above defendants'

2 commercial interests.

3 Defendants' rating system is unlike other commercial relationship s between buyer s and

4 sellers. Defendants refuse to sell their products to children if defendan~ determine that the

5 product is not suitable for them -- for the purpose, and wit h the effect, of obtainin g par ent s'

6 confidence and trust. Defendants should not be permitted to claim that they are giving priority to

7 parents' interests above their own financial interests , and now claim that they should only be held

8 to the standards or mores of the marketplace. Children's Television, at 222.

9 The fiduciary duty claim properly states a claim. 29

10 F. Plaintiff's nuisance Claim (Count VIII) properly states a claim

11 The Complaint clearly alleges that defendants' improper ratin gs assisted in creating the

12 nuisanc e. Complaint, Par, 162-164. Defendant s are also wrong in claiming that the nuisan ce

13 claim should be dismis sed at the pleading stage becaus e the evidence ma y show that it is pure ly

14 duplicative of the negligenc e claim. While in some situation s a general neg ligence and nuisance

15 claim may be identical , the re lief available may vary, and the liability of the various defendant s

16 may differ under a negligenc e or nuisan ce claim and, therefore, at the ple ading stage, it canno t be

17 said that they are identicaJ. Team Enterprises, LLC v. W Inv. Real Estate Trust, 647 F.3d 901,

18 911-912 (9th Cir. 2011). The Complaint properly pleads a claim for nuisance.

19 G. Plaintiff's false advertising Claim (Count VI) properl y states a claim

20 Defe ndant s rely solely upon their prior erroneou s argum ents regarding First Amendment

21 protec tions, non-act ion able opinion s, false representations and reasonable r eliance as reasons to

22 dismiss the false adverti sing claim under Section 17500. Plaintiff has responded to each of those

23 argumen ts previously and incorporates his prior arguments.

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29 Defe ndants misstate the damage caused by defendants ' breach of fiduc iary duty as plaintiff's children's alleged injuries . MTD at 22. The Comp laint alleges the damag es to be the amo unt plainti ff paid for tickets to the films and for the unjust enrichment to defendants resulting from their breach of fiduciary duty, and punitive damages. Comp laint ff 108-110 .

Plaint iff's Oppo sition to Defendant s' Special Motion to Strike 38 16-CV-00935 -R


1 H. Plaintiff's unfair competition law Claim (Count V) properly states a claim

2 Except for the two additional arguments discussed below, defendants rely upon their prior

3 erroneous arguments regarding First Amendment protections and F AL deficiencies as reasons to

4 dismiss the UCL claim. (MTD at 24.) Plaintiff has previously responded to those arguments.

5 Defendants assert that plaintiffs claim under the "unlawful" prong of the UCL relies on

6 inapplicable predicate violations. (Id.) But the violation of the FAL and of the nuisance law,

7 discussed above, plainly satisfies the "unlawful" prong of the UCL.

8 Defendants also assert that the Complaint fails to state a claim under the "unfairness"

9 prong of the UCL because the unfairness prong is limited to showing that the ratings threaten an

10 incipient violation of the anti-trust laws. Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel.

11 Ca., 20 Cal. 4th 163, 180, 973 P.2d 527 (1999). But that is not the law. In consumer cases the

12 courts apply the following test for the "unfairness" prong of the UCL: (1) the injury must be

13 substantial; (2) the injury must not be outweighed by any countervailing benefits to consumers or

14 competition; and (3) the injury must be one that the consumer could not reasonably have avoided.

15 Hensley-Maclean v. Safeway, Inc., No. CV 11-01230 RS, 2014 WL 1364906, at *8 (N.D. Cal.

16 Apr. 7, 2014) (J. Seeborg); Lyons v. Bank of Am., NA, No. 11-01232 CW, 2011 WL 3607608, at

17 *10 (N.D. Cal. Aug. 15, 2011). Defendants have not attempted to show, and could not show, that

18 as a matter of law their conduct passes this test. And it doesn't. .

19 Defendants make no attempt to argue that the fraudulent portion of the UCL claim fails to

20 state a claim other than the arguments made with respect to the F AL claim. Defendants'

21 arguments with regard to the F AL claim are without merit for the reasons stated above.

22 The Complaint properly states claims under all three prongs of the UCL.

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I. Defendants' Motion to dismiss under Rule 12(b)(6) should be denied

For all the reasons stated above, none of the claims should be dismissed under Rule 12(b)(6).

Plaintiffs Opposition to Defendants' Special Motion to Strike 39 16-CV-00935-R


1 V. CONCLUSION

2 For the foregoing reasons , Defendants' Special Motion To Strike Pursuant To California

3 Anti-SLAPP Statute and Motion To Dismiss Pursuant To Fed. Civ. P. 12(b)(6) should be denied.

4

5 Dated: July 15, 2016

6 Respectfully submitted,

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28 Plainti ff's Opposition to Defendants ' Special Motion to Strike

By: Isl David Schachman David Schachman John G. Jacobs Bryan G. Kolton Jeffrey F. Keller Carey G. Been Sarah R. Holloway

Attorneys For Plaintiff Timothy Forsyth And the Putative Class

40 16-CV-00935-R


1 CERTIFICATE OF SERVICE

2 I, David Schachman, an attorney in this matter, certify that on July 15, 2016, I served the

3 foregoing Plaintiff's Opposition To Defendants' Special Motion To Strike by causing true and

4 accurate copies of such paper to be filed and transmitted to the persons registered to receive such

5 notice via the Court's CM/ECF electronic filing system .

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28 Plainti ffs Opposition to Defendants' Special Motion to Strike

/s/ David Schachman

41 16-CV-00935 -R

Documents

6 Chicago, Illinois 60603 KELLER GROVER, LLP 55 West Monroe … · 2019-01-16 · Case 3:16-cv-00935-RS Document 44 Filed 07/15/16 Page 1 of 48 1 JEFFREY F. KELLER (SBN 148005) [email protected]