Judge Skeptical of Entertainment Firm's Claims
LOS ANGELES (CN) - A Pittsburgh company that charges people hundreds of dollars to present their TV and movie ideas to the entertainment industry needs to do more to persuade a judge that a dissatisfied customer and employee stole its trade secrets.
New Show Studios sued former employee Jimm Needle of West Mifflin, Pa. and New Show client Greg Howe, of Canada, in Federal Court in February.
Plaintiffs, including New Show Studios president Anthony Valkanas, and Davison Design and Development, accused the defendants of misappropriating trade secrets, defamation, computer fraud, conversion, privacy invasion and other counts.
Aiming a defamation claim at Howe, the studio alleged that its former customer made the "patently false" allegation to New Show customers that Valkanas was guilty of a double murder.
The lawsuit also claims that Needle and Howe were part of an "ongoing scheme" to steal New Show's clients and send them to New Show's competitor, nonparty Television Writer's Vault.
After Howe paid New Show to pitch one of his ideas, the company says, it asked him to make a pitch reel or pay the company to make one for him.
New Show states on its website that it typically charges $8,000 to $12,000 for the reel, which includes a DVD, brochure and packaging.
According to New Show, Howe adopted an "inexplicably aggressive and vindictive posture" after refusing to make a reel. He allegedly wrote "hostile" emails to the studio, the company claims, and posted defamatory comments on the websites scambook.com, complaintsboard.com and YouTube, accusing New Show of defrauding clients and running a Ponzi scheme.
Needle, a former creative producer for New Show's sister company George Davison Studios, met Howe online after posting unflattering comments on YouTube about the company, the company claims.
New Show claims that Howe asked Needle to help him "sabotage" the company by stealing its client list and trade secrets, so as to divert customers to another company, Television Writer's Vault.
But in a June 30 order, U.S. District Judge Christina Snyder dismissed all but one of New Show's allegations, finding that New Show Studios' first amended complaint failed to state a claim for relief under the Computer Fraud and Abuse Act, California Comprehensive Computer Data Access and Fraud Act, and the Stored Communications Act.
The lawsuit is "devoid of any allegation that the defendants accessed any computer," the judge wrote in her 25-page order.
New Show alleged only that Needle had got his hands on the company's confidential information, Snyder found.
Snyder was not persuaded by New Show's Studio's claims for receiving stolen property, invasion of privacy and conversion, finding those claims preempted by California's Uniform Trade Secrets Act.
For all but one of New Show's claims, Snyder concluded that the Pittsburgh company's amended complaint was lacking in details that would allow it to prevail.
While Snyder wrote that the studio's defamation against Howe "provides more factual detail" than other claims in the lawsuit, she found it insufficient to support the studio's claims of intentional interference with contractual relations, intentional interference with prospective economic advantage and trade libel.
"Because the allegation focuses on the personal conduct of Valkanas, it does not plausibly assert 'intentional acts on the part of the defendant designed to disrupt [a contractual] relationship,' as required to assert a claim for intentional interference with contractual relations," Snyder wrote. "For the same reasons, the allegation does not support a claim for intentional interference with prospective economic advantage. Finally, the allegation that defendants falsely accused Valkanas of being investigated for a double homicide does not support a claim for trade libel."
Howe and Needle have asked the judge to dismiss the lawsuit under California's Anti- Strategic Lawsuit Against Public Participation (Anti-SLAPP) law. But Snyder declined, finding it "premature." Instead, she found that the claims are "better evaluated" under Federal Rules of Civil Procedure.
"The court reaches this conclusion because consideration of the Anti-SLAPP motion would undermine the orderly resolution of this dispute," Snyder wrote, noting that to take the alternative route could delay the case unnecessarily.
"(T)he court does not reach the merits of defendants' Anti-SLAPP motion, and thus declines to strike plaintiffs' claim for defamation at this time," Snyder wrote.
Only the studio's trade secret misappropriation claim survived the order.
Snyder gave New Show Studios until July 14 to file a second amended complaint.
This not the first time the company has gone to court over a defamation claim.
In 2012, New Show Studios accused Television Writer's Vault owner Scott Manville of defamation in San Diego Superior Court, claiming that a commentator on the site had falsely accused New Show of being run by "'scam artists.'"
On its website, New Show Studios claims to target "top networks" ABC, CBS, Fox, HBO and MTV and touts an "exclusive licensing partnership with SFM Entertainment" of New York.
Though the website includes testimonials from satisfied customers, the company does not elucidate what deals it has secured for its clients.
New Show Studios charges $495 for its service, plus a 10 percent commission on any sale, according to the website.
The Better Business Bureau Western Pennsylvania website gives New Show Studios its lowest rating, an F. Explaining its rating, the BBB says that 17 complaints have been filed against the business in the past three years; one complaint was filed but never resolved, and four serious complaints were filed against the company, according to the BBB.