United States District Court, D. Massachusetts
ORDER ON MOTION TO DISMISS (DOC. NO. 13)
Sorokin United States District Judge
Alan Kaufman filed a pro se complaint in state court against
Defendants American Broadcasting Company, Inc., Mark Burnett
Productions, Inc., Sony Pictures Television, Inc., and
Comcast Corporation alleging one count of negligence and one
count of breach of fiduciary duty and covenant of good faith
and fair dealing. Doc. No. 1-1. Defendants removed to this
Court based on diversity. Doc. No. 1. They subsequently moved
to dismiss Kaufman's Complaint under Fed.R.Civ.P.
12(b)(1), (2) and (6). Defendants' Motion to Dismiss is
ALLOWED. Doc. No. 13.
allegations set forth in the Complaint, Doc. No. 1-1,
surround Kaufman's appearance on the ABC reality
television show Shark Tank. The Court considers “only
facts and documents that are part of or incorporated into the
complaint” and takes all reasonable inferences in the
plaintiff's favor. Trans-Spec Truck Serv., Inc. v.
Caterpillar Inc., 524 F/3d 315, 321 (1st Cir. 2008).
Defendants approached Kaufman with the opportunity to appear
on the pilot season of Shark Tank to attempt to get funding
for his hands-free and wind resistant umbrella, Nubrella.
Doc. No. 1-1 at ¶¶ 2, 7. He then participated in a
number of Skype interviews and a background check.
Id. at ¶ 8. In August 2009 Kaufman flew to Los
Angeles, California to film for the show, though it was not
certain that his segment would actually be aired.
Id. at ¶ 9. In order to participate on the
show, Kaufman signed a contract, the Participant
Agreement. Id. at 5.
Agreement provides the following:
I acknowledge, understand and agree that if any dispute,
controversy or claim arising out of or relating to this
Agreement, the breach of any term hereof, or any effort by
any party to enforce, interpret and/or construe, rescind,
terminate or annul this Agreement, or any provision thereof,
including without limitation the applicability of this
arbitration provision, and any and all disputes or
controversies relating in any manner to my appearance on or
participation in the Series (collectively
“Matters”), cannot be settled through direct
discussions, the parties agree to endeavor first to settle
the matter by mediation conducted in the County of Los
Angeles and administered by JAMS under its Commercial
Mediation Rules. If any matter is not otherwise resolved
through direct discussions or mediation, as set forth above,
then the parties agree that it shall be resolved by binding
arbitration conducted in accordance with the arbitration
rules and procedures of JAMS, though its Los Angeles,
California office. Any such arbitration shall be conducted by
a single, neutral arbitrator, who shall be a retired judge of
a state or federal court, experienced in entertainment
disputes, and selected from JAMS' panel of arbitrators
proffered by its Los Angeles, California office. If the
parties cannot agree upon an arbitrator after good faith
discussion, the arbitrator shall be chosen by JAMS pursuant
to the requirements of this paragraph. The parties agree that
the arbitrator's ruling in the arbitration shall be final
and binding and not subject to appeal or challenge. Judgement
upon the award rendered by the arbitration may be entered in
any court having jurisdiction thereof. As set forth more
fully below, Producer, but not I, shall have the right to
seek injunctive or other equitable relief pursuant to
California Code of Civil Procedure Section 1281.8 and any
successor or similar statute. In any and all other respects,
the Federal Arbitration Act (9 U.S.C. §1, et seq.) or
its successor statute shall apply and govern the enforcement
of this arbitration clause.
Doc. No. 16-1 at 28, ¶ 66.
episode featuring Kaufman originally aired on February 4,
2010 at 9:00 p.m. on ABC. Doc. No. 1-1 at ¶ 9. On the
show, Kaufman accepted a $200, 000 deal with Daymond John and
Kevin Harrington for 51% ownership in his company.
Id. at ¶ 10. Before John and Harrington could
negotiate a distribution deal with perspective national
retailers, Defendants asked Kaufman to reappear on the show
in a “pre-scripted, fabricated” follow-up
episode. Id. at ¶ 11-13. The purpose of this
follow up episode was “to show the audience not only
are [John and Harrington] following through with their
proposed investment but playing an additional role in trying
to help the companies invested in build, grown distribution
by utilizing their clout and contacts.” Id. at
had instructed John “to find a so called distribution
‘partner' for Kaufman for the sole purpose of
making the audience believe [John and Harrington] indeed did
invest but also were playing an
integral role in helping their invested
companies.” Id. at ¶ 14. “Due [to]
Mr. John's lack of ability and connection[s] to align
[Kaufman's company] with a valid prominent national
retailer he was left with pursing a falsified partnership
with the recent bankrupt Sharper Image company” in the
follow-up episode. Id. at ¶ 15. In 2001,
Sharper Image had closed all 450 of their retail locations
after they were forced to file for bankruptcy as a result of
class action lawsuit brought against them by millions of
consumers who had purchased defective air purifiers.
Id. at ¶ 16. The follow-up episode featured a
partnership between Kaufman and a private party who had
bought the rights to the Sharper Image brand name.
Id. at ¶ 17. This new company was not concerned
with the “fabricated deal, ” in fact they were
“delighted with the opportunity to get their name on
national TV helping show the consumer the brand was still in
business.” Id. at ¶ 18.
“[P]laintiff was adamant about not wanting to
participate in not only a ‘fabricated' distribution
deal but also associating its new brand with one of the most
failed and hated retailers in the country.”
Id. at ¶ 19.
to the taping of the follow-up episode featuring Kaufman,
there was some disagreement about the deal reached on air and
it was never carried out. Id. at ¶ 20. The
original deal of $200, 000 was ignored by the John and
Harrington and a settlement for $20, 000 was reached between
the parties. Id. at ¶¶ 20-21. “At
the present time of the settlement agreement, the current
claim(s) could not be litigated as they were not present nor
could be predicated.” Id. at ¶ 22. After
the settlement, Defendants began re-selling re-runs of both
of the episodes featuring Kaufman. Id. at ¶ 23.
Those reruns continue to air on CNBC and other international
broadcasting networks that Kaufman is unaware of over six
years later. Id. at ¶ 24. Due to Shark
Tank's popularity and high ratings Defendants have
received significant financial returns from selling these
re-runs and from commercials. Id. at ¶¶
49-50. “Plaintiff has estimated that just CNBC alone
cycles through all of its Shark Tank episodes at least once
per quarter.” Id. at ¶ 44. “Thus .
. . Plaintiff has estimated approximately 8 re-runs per year
times 5 year[s] ¶ 40 re-runs just with CNBC
alone.” Id. at ¶ 45.
2012, after his appearance on Shark Tank, Kaufman
“returned to the design table” to made
significant changes to his product, Nubrella. Id. at
¶ 26. He overhauled the design to add various enhanced
features, ultimately resulting in a higher production cost
and therefore a higher retail price than $29.99, as he
originally stated on the show. Id. at ¶¶
26-27, 30. When Defendants air re-runs of the show they do
not notify the viewers of the date the episode originally
aired or the fact that Kaufman's product has since
changed. Id. at ¶¶ 30-31. Since ABC is one
of the largest networks in the world, the audience
“100% believes everything they view on the show to be
true and accurate” and up-to-date.
Id. at ¶ 32.
Complaint, removed to this Court on the basis of diversity,
alleges two counts. First, Kaufman alleges that Defendants
are negligent in continuing to air the episodes because they
show an older model of the product which was sold at a lower
price, damaging his “reputation, brand image, and
revenues.” Id. at ¶¶ 25-32. Second,
Kaufman claims that Defendants breached their fiduciary duty
and the covenant of good faith and fair dealing because they
do not reveal that the follow up episode is “fabricated
and pre-scripted.” Id. at ¶ 33. This had
led to many consumers being upset and sending “negative
sometimes threatening emails, ” negative internet
reviews and even threats to contact the media. Id.
at ¶ 31. “[The consumers] claim fraud, bait and
switch and ...