Norris v. NBA Properties, Inc.

Background

Paul V. Norris, Sr. alleged that he developed an application or website called “Predict a Pick 3,” which would allow NBA fans to predict players’ points, final game points, and point margins and win prizes for correct predictions. Norris emailed Adam Silver, the NBA’s CEO, about the idea. Silver referred him to Scott Stanchak, then the NBA’s head of Emerging Technology. Norris and Stanchak arranged a telephone call, but the call did not occur because Norris experienced technical problems. Norris had sent Stanchak a one-page description of the idea before the scheduled call. Stanchak later told Norris that, after checking with the gaming group, the NBA was not interested.

Norris later alleged that the NBA used his idea in an app or website called “Pick ‘Em” without compensating him. He initially filed the case without a lawyer and later retained counsel. His First Amended Complaint asserted five claims: breach of contract, infringement of proprietary intellectual property, theft of trade secrets, breach of quasi-contract, and breach of an implied-in-fact contract. In opposition to the motion to dismiss, his counsel asked the court to treat the complaint as asserting only two claims: breach of an implied-in-fact contract and misappropriation.

Legal standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. To survive that motion, a complaint must contain factual allegations making liability plausible, rather than relying on labels, conclusions, or speculation. The court accepted the complaint’s factual allegations as true for purposes of the motion but did not accept legal conclusions as true.

Implied-in-fact contract

The court concluded that Norris did not plausibly allege an implied-in-fact contract. Such a contract is an agreement inferred from the parties’ conduct rather than stated in words. The court explained that the complaint needed facts showing an offer, acceptance, consideration, mutual assent, and an intent to be bound by specific terms.

The complaint and attached emails showed, at most, that Stanchak agreed to listen to Norris’s presentation. They did not show that Stanchak, the NBA, or another defendant agreed to specific contractual terms or intended to enter into a contract. The court also relied on Norris’s allegation that the parties “may or may not have intended to enter into a contract” and made no promises to perform. The court therefore dismissed the implied-in-fact contract claim. It did not need to decide whether New York or California law applied because it found that the claims failed under both laws.

Misappropriation claim

The court also dismissed Norris’s misappropriation claim. Under California law, the court stated, an idea is not recognized as a property right for purposes of a misappropriation claim. Under New York law, a misappropriation claim involving an idea requires a qualifying legal relationship between the parties and an idea that is novel and concrete.

The court found that Norris had not alleged the required legal relationship. He had not alleged an express contract, an implied-in-fact contract, or a fiduciary relationship, and he had withdrawn his quasi-contract theory. Because the court found this deficiency sufficient to resolve the claim, it did not decide whether the idea was novel or concrete, or whether copyright preemption applied.

Disposition

The court treated Norris’s remaining claims as abandoned because his opposition asked the court to consider only the implied-in-fact contract and misappropriation claims. Judge Gregory H. Woods granted the defendants’ motion to dismiss for failure to state a claim under Rule 12(b)(6). The court granted Norris leave to replead and directed the Clerk of Court to terminate the pending motion. The opinion does not state that the dismissal was with or without prejudice.