By Jeff Birren, Senior Writer
Paul Norris had an idea. He approached the NBA hoping to sell his idea. Norris met with a representative of the NBA and shared his idea, but he had not used a lawyer to protect his interest. The NBA “politely told (Norris) that the NBA was not interested” but, according to Norris, it “stole his idea and implemented it without compensating him.” So, Norris sued the NBA (Norris v. NBA Props., Adam Silver, Scott Stanchak, Anil V. George; Benjamin Aronson, Mark Tatum & Melissa Rosenthal,U.S.D.C. S.D.N.Y. 1:19-cv-06020-GH, 2020 U.S. Dist. LEXIS 66018 (“Norris”), (4-14-20) at 3). Norris drafted his lawsuit (Id.).
Norris alleged that he emailed NBA CEO Adam Silver “to pitch a new app/social media site that allows fans to predict their favorite team player[‘] individual points, final game points and point margins” (Id.) (punctuation in the original). Silver referred Norris to Scott Stanchak, the NBA’s then head of emerging technologies. They spoke on the phone and Norris emailed Stanchak a one-page description of his idea. Stanchak told Norris that the NBA was not interested in pursuing it (Id.). Norris later concluded that the NBA “stole the concept” and “implemented it without compensating him” (Id.). Norris emailed this to Silver. He received an email from NBA Assistant General Counsel Anil George that stated he did not “’have a protectable right’ because the concept … is loosely used in gaming in general” (Id.).
Norris filed his pro se complaint on June 24, 2019. In October the defendants filed a motion to dismiss. Norris responded by filing a pro se First Amended Complaint (“FAC”). The FAC alleged causes of action for breach of contract, infringement of proprietary intellectual property, stealing of trade secrets, breach of quasi contract and breach of an implied-in-fact contract. Norris claimed that he “sustained damages in an amount in excess of $50,000,000” (Norris at 3/4). The defendants responded with another motion to dismiss. Norris finally retained counsel who filed an Opposition to the motion (“Opposition”) (Id. at 4).
The Ruling
The Court began with the usual applicable “legal standard” but added that a plaintiff must state “a plausible claim” and that “task requires the reviewing court to draw on its judicial experience and common sense” (Id.). Mere “labels” or “naked assertions” that lack “further factual enhancement will not survive a motion to dismiss” (Id.).
The Court stated that because “the FAC was filed pro se, the Court will extend Plaintiff the ‘special solicitude’ generally afforded pro se litigants” and therefore, “the Court will construe the FAC liberally” (Id.). However, this did not apply to counsel’s Opposition. Finally, the “special solicitude afforded pro se litigants has its limits” such that the Court will not “read into pro se submissions claims that are inconsistent with the pro se litigant’s allegations,” nor does that status “exempt a party from compliance with relevant rules of procedural and substantive law” (Id.).
The Court then began its “Discussion.” Although the FAC had five separate causes of action, in the Opposition, “counsel asks the Court to construe the FAC as raising only two claims: a claim for breach of an implied-in-fact contract and a ‘misappropriation’ claim. Thus, the Court will review only these two claims and treat the remaining claims as abandoned” (Id. at 5).
The parties disagreed as to which state law governed the claims. Norris argued for California law, but the defendants claimed New York law applied. The Court found that it did not “need to decide which state law applies because Plaintiff’s claims fail under both New York and California law” (Id.).
Breach of An Implied-In-Fact Contract Claim
Norris “acknowledges that he did not form an express contract with the Defendants” but insisted that he had “an implied-in-fact contract” (Id.). That arises when “the agreement and promise have simply not been expressed in words” but a court “may justifiably infer that the promise would have been explicitly made, had attention been drawn to it” (Id.). However, such a contract still requires a showing of “consideration, mutual assent, legal capacity and legal subject matter” (Id.). Furthermore, it did not matter which state law applied. The Court stated that as to the implied-in-fact contract claim there were not material differences as to the elements for the claim under California and New York law “at least as applied to the facts of this case” (Id. FN 2).
The problem here was mutual assent. That “must be inferred from the facts and circumstances of each case” and that includes looking at the “specific conduct of the parties” (Id.). The Court found the “FAC falls woefully short of plausibly alleging an implied-in-fact contract. Plaintiff has failed to plausibly allege that the parties mutually understood and intended to be bound by any specific contract terms” (Id. at 6). Neither the FAC nor the email exhibits “support the contention that any Defendant, or anyone associated with the NBA, intended or agreed to be bound by any specific contractual terms” (Id.).
At “most, Plaintiff’s allegations support the contention that Stanchak agreed to listen to his pitch” but that “is not enough for the Court to conclude that Stanchak manifested his assent to enter into a contract with Plaintiff, or to divine any of the material terms necessary” for a contract. In fact, “Plaintiff admits in the FAC that ‘[t]he Parties may not have intended to enter in a contract, and made no promises to perform.’ FAC ¶ 33. That admission lends further support” to the conclusion that “Plaintiff has not adequately alleged that the parties entered into an implied-in-fact contract” (Id.).
Misappropriation Claim
The Court also made short work of the misappropriation claim. California “does not recognize claims for misappropriation of ideas” but only for legally protected property rights. An “idea is not recognized as a property right” (Id.). The Court also determined that Norris had failed to plead such a claim under New York law.
New York law requires that for an idea to be legally protected, there must be “the requisite legal relationship” between the parties and “the idea must be novel and concrete” (Id.). That “legal relationship” must either exist due to a fiduciary relationship or be based on a contract claim. Norris “failed to allege a legal relationship between the parties.” He had not pled that there was a fiduciary relationship “and there are no allegations in the FAC that would support” such a conclusion” (Id.). In addition, the FAC “does not allege facts that would support the existence of a fiduciary relationship” under either New York or California law (Id. at 6/7 FN 4).
He had also not alleged the existence of an express contract nor had “he adequately alleged the existence of an implied-in-fact contract” (Id.). Furthermore, “although Plaintiff initially alleged a quasi-contract theory, he has expressly withdrawn that claim in his opposition” (Id. at 7).
Conclusion
The Court dismissed both claims but granted leave to replead. Norris remains far from getting past a future motion should he refile. For example, the Court stated that it was “skeptical that the idea alleged in the complaint was novel, but it did “not take a position on this question” because the claim “fails for the reasons outlined above.” The Court also did not need to determine if Norris had alleged that “his idea was sufficiently ‘concrete’ to state a misappropriation claim, or whether Plaintiff’s misappropriation claim is preempted by copyright” (Id. FN 5). Thus, should Norris file a Second Amended Complaint, he will face judicial skepticism, and it may be difficult to plead new allegations that are not inconsistent with his prior complaints or the Opposition.
It is common in our society to criticize lawyers, but Norris may be an example of what happens when people pursue legal relationships and claims without the assistance of counsel. So far, he has failed, badly.
