United States District Court, W.D. Washington, Seattle
ORDER GRANTING MOTION TO DISMISS COUNTERCLAIMS;
DENYING MOTION TO STRIKE AFFIRMATIVE DEFENSES
Marsha
J. Pechman United States District Judge
THIS
MATTER comes before the Court on Plaintiff and
Counter-Defendant Cody, Inc.'s Motion to Dismiss
Defendant's Counterclaims and Affirmative Defenses. (Dkt.
No. 19.) Having reviewed the Motion, the Response (Dkt. No.
20), the Reply (Dkt. No. 25) and all related papers, the
Court GRANTS the Motion to Dismiss the counterclaims and
DENIES the Motion to Strike the affirmative defenses. The
Court declines to hear oral argument on this matter.
Background
Plaintiff
Cody, Inc. (“Cody”) brings this action against
Defendant Dana Falsetti for breach of contract and trade
libel. (Dkt. No. 1.) Ms. Falsetti counterclaims for breach of
contract and equitable indemnity. (Dkt. No. 16.)
I.
Agreement Between Cody and Ms. Falsetti
Cody
produces online health and fitness content, including
training videos on yoga and wellness. (Dkt. No. 1 at 1.) Ms.
Falsetti is a well-known yoga teacher who offers videos and
related content on Cody's site. (Dkt. No. 16 at 6.) Ms.
Falsetti describes herself as a “large-bodied
woman” who “advocates for those with similar body
types who want to find the confidence to live life more
fully.” (Id.) Ms. Falsetti has been featured
in numerous media outlets and has hundreds of thousands of
followers on Instagram and Facebook. (Dkt. No. 1 at 3.) Ms.
Falsetti states that she “uses her platform to inspire
critical thinking, self-awareness and confidence” among
her followers, and that “[a]t the heart of [her]
inspirational videos and messaging is her desire to inspire
large-bodied persons, and others who feel dehumanized, to
find self-worth and motivation to accomplish their own goals
in life.” (Dkt. No. 16 at 7.)
On
August 1, 2016, Cody and Ms. Falsetti entered into a
“Talent License and Release Agreement” (the
“TLRA”). (See Dkt. No. 19-1.) The TLRA
granted to Cody and “its agents, subsidiaries,
affiliates, licensees, successors, and assigns, and to other
such entities or persons as [Cody] may designate from time to
time” the rights to produce, promote, and own video and
other content using Ms. Falsetti's “physical
likeness, name, voice, image, performance, persona, and
exercise routine, ” and the rights to “any
marketing collateral associated therewith”
(collectively, the “Falsetti Content”)
(Id. at § 1.a.)
The
TLRA granted Cody an irrevocable license to “use and
exploit” the Falsetti Content “in whole or in
part, either alone or in conjunction or combination with
other works . . . for any advertising, marketing, and
promotional purposes . . .” (Id. at §
1.b.) Notwithstanding the foregoing grant of rights, Cody
agreed not to use the Falsetti Content “in a manner
intended to harm” Ms. Falsetti's reputation.
(Id.)
The
TRLA included a provision by which Ms. Falsetti agreed not to
disclose to any third party the content of any of Cody's
or its affiliates' “business plans, marketing
strategies, advertising campaigns, and the like”
without Cody's prior written consent. (Id. at
§ 5.)
The
TRLA also included a provision by which Ms. Falsetti agreed
to indemnify and hold harmless Cody and its affiliates for
any third-party claims arising out of any use of the Falsetti
Content. (Id. at § 8.)
II.
Cody's Merger with ALO, LLC
Around
September 27, 2017, Cody informed Ms. Falsetti that it had
been acquired by ALO, a yoga apparel company. (Dkt. No. 1 at
3-4; Dkt. No. 16 at 8.) Cody claims it informed Ms. Falsetti
that this information was not public, and that it was
developing a public campaign and strategy to announce the
acquisition. (Dkt. No. 1 at 3-4.) Cody claims Ms. Falsetti
“agreed at that time in that conversation that she
would maintain the confidentiality of this
information.” (Id.)
On
October 31, 2017, Cody sent an email to its
subscription-based customers advertising a “last
chance” sale featuring Ms. Falsetti's yoga videos.
(Dkt. No. 16 at 8.) The email stated that Ms. Falsetti's
videos would be “unavailable for purchase after
November 6th, ” but that Cody hoped the sale would
allow “members of the Cody community to enjoy her
training for years to come, and wish[ed] her success in her
future endeavors.” (Id.) Ms. Falsetti claims
she was not informed of this advertisement before it was
sent, that it “generated considerable concern”
and “raised numerous questions” among her
followers, and that she was “left to fend off questions
from concerned students” who contacted her via social
media. (Dkt. No. 16 at 8-9.)
On
November 22, 2017, ALO sent an email to Cody's
subscription-based customers advertising its apparel.
(Id. at 9.) Ms. Falsetti claims this email led her
students and followers to “reasonably believe[]”
she was affiliated with ALO. (Id.) Thereafter, Ms.
Falsetti “became aware that her students and followers
were expressing concern and disappointment about her new
affiliation with ALO, ” which they viewed ...