June 16, 2019

Archives for January 26, 2015

Tenth Circuit: Collateral Estoppel Bars Relitigation of Claims Decided in Other Federal Courts

The Tenth Circuit Court of Appeals issued its opinion in Stan Lee Media Inc. v. Walt Disney Co. on Tuesday, December 23, 2014.

In October 1998, legendary comic book artist Stan Lee entered into an employment agreement (“1998 agreement”) with a Colorado company he formed to create new characters, Stan Lee Entertainment, Inc. (the predecessor to Stan Lee Media). At the time, Lee had worked for Marvel for approximately 60 years, and the agreement expressly recognized he would continue to work for Marvel. In November 1998, Lee entered into a similar agreement with Marvel, transferring to Marvel essentially the same rights he had transferred to Stan Lee Media through the 1998 agreement. In 2001, Stan Lee repudiated the 1998 agreement, contending Stan Lee Media committed material breach and reclaiming ownership of the intellectual property rights. Over five years later, Stan Lee Media recorded the 1998 agreement with the U.S. Copyright Office, asserting in a cover letter that the 1998 agreement transferred to Stan Lee Media ownership rights in many famous characters, including Spider-Man and Iron Man.

Meanwhile, Marvel exploited the comic book universe by selling and licensing the character rights to major production companies in order to create, sell, and distribute motion pictures. These included 2002’s Spider-Man movie, which has grossed over $800 million worldwide. Despite Marvel’s success, Stan Lee Media did not assert ownership interests over the characters until 2007, at which time it filed lawsuits across the country. Many courts have considered Abadin v. Marvel Entm’t, Inc., No. 09 Civ. 0715 (PAC), 2010 WL 1257519 (S.D.N.Y. Mar. 31, 2010) (Abadin I) binding precedent, including the lower court in this action.

Stan Lee Media filed a claim against Disney in the U.S. District Court for the District of Colorado, alleging a single cause of action for federal copyright infringement. The district court granted Disney’s motion to dismiss, relying on Abadin I as precluding the Colorado litigation. Since the district court’s decision, the Ninth Circuit has issued a decision in a related suit. The U.S. District Court for the Central District of California dismissed Stan Lee Media’s claims on res judicata grounds, but the Ninth Circuit affirmed on different grounds, finding that Stan Lee Media failed to state a claim that is plausible on its face.

The Tenth Circuit reviewed the Ninth Circuit decision, the briefing in the Ninth Circuit and the Central District of California, and supplemental briefing submitted in the Tenth Circuit, and found that none of the elements of collateral estoppel can be reasonable debated, because each are present in the Tenth Circuit case.

The Tenth Circuit found that only the fourth element of collateral estoppel was seriously contested — Stan Lee Media alleges it did not have a full and fair opportunity to litigate the ownership issue. However, the Tenth Circuit rejected that argument. Stan Lee Media devoted five full pages in a response explaining how its claims met the Iqbal/Twombly and Rule 8 standards. Further, the Ninth Circuit’s decision was a dismissal with prejudice, so there is no point in allowing Stan Lee Media to amend its complaint. Finally, the Ninth Circuit’s singular and readily discernible rationale for dismissal — that Stan Lee Media’s claims are “simply implausible,” — clears all remaining obstacles to the application of collateral estoppel.

The Tenth Circuit affirmed the district court’s dismissal of Stan Lee Media’s complaint for failure to state a claim.

Tenth Circuit: Congress Did Not Grant Authority to Expunge Records in Federal Youth Corrections Act

The Tenth Circuit Court of Appeals issued its opinion in Tokoph v. United States on Tuesday, December 23, 2014.

David Tokoph was sentenced in 1974 under the then-effective Federal Youth Corrections Act, which provided that for offenders sentenced to probation who met certain criteria, the court could set aside the conviction and provide the offender a certificate to that effect. In 1982, Tokoph was discharged, the sentence was set aside, and the court issued him a certificate to that effect. In 2012, Tokoph petitioned the U.S. District Court for the District of New Mexico to seal and expunge his records. The district court found it lacked authority to do so and denied the motion. Tokoph appealed.

The Tenth Circuit evaluated the case law on which Tokoph relied and found that his proposition was only supported by dicta, not holdings in the cases. To the contrary, the Tenth Circuit found the district court correctly followed binding circuit precedent in refusing to expunge the conviction. Tokoph also argued that Supreme Court precedent indicated authority to seal records, but the Tenth Circuit found that the indications were weak, and the binding Tenth Circuit precedent on point controlled. The Tenth Circuit also noted there is no applicable inherent equitable authority to grant expunction of a valid conviction.

The district court’s denial of Tokoph’s motion to expunge was affirmed. The Tenth Circuit reversed the order sealing the record.

Tenth Circuit: Unpublished Opinions, 1/23/2015

On Friday, January 23, 2015, the Tenth Circuit Court of Appeals issued one published opinion and one unpublished opinion.

United States v. Valencia

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.