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Kaufman v. Sony Pictures Television Inc.

United States District Court, D. Massachusetts

July 19, 2017

ALAN KAUFMAN, Plaintiff,
v.
SONY PICTURES TELEVISION, INC., AMERICAN BROADCASTING COMPANIES, INC., FINNMAX LLC, and COMCAST CORP., Defendants.

          ORDER ON MOTION TO DISMISS (DOC. NO. 13)

          Leo T. Sorokin United States District Judge

         I. INTRODUCTION

         Plaintiff 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.

         II. FACTS

         The 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).

         In 2009 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.[1] Id. at 5.

         The 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.

         The 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 ¶ 11.

         Defendants 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.

         Subsequent 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.

         In 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.

         Kaufman's 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 ...


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