Bellagio, LLC v. Fritz, 2:15-cv-01879

Background

Plaintiffs (Bellagio, LLC and MGM Resorts) filed a federal declaratory-judgment action seeking a declaration of non-infringement of the right of publicity.
Defendants (Fritz, Kolb, Na, Renee, Hutchings) had already filed a California action asserting California claims for misappropriation of likeness, violation of Cal. Civ. Code § 3344, and unjust enrichment; that action was removed to federal court in the Central District of California.
The core dispute is whether Plaintiffs used Defendants’ likeness beyond a licensing period; both suits rely on the same operative facts and overlapping evidence.
Plaintiffs filed the Nevada suit amid communications about mediation; Plaintiffs contend they filed only after Defendants’ alleged discovery delays and nonresponsive production.
Defendants moved to dismiss under the Declaratory Judgment Act principles (Brillhart/Dizol framework) and separately moved for Rule 11 sanctions.
The Nevada court dismissed the declaratory action without prejudice under its discretionary authority and denied Defendants’ Rule 11 sanctions motion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court should exercise jurisdiction over Plaintiffs’ declaratory-judgment claim	Plaintiffs sought a federal declaration of non-infringement and did not intend forum-shopping; the case was filed after discovery problems	Defendants argued Brillhart factors favor dismissal because state law controls, overlapping facts create duplicative litigation, and a parallel California action exists	Court declined to exercise jurisdiction and dismissed the Amended Complaint without prejudice (Brillhart factors 1 and 3 weigh for dismissal; factor 2 neutral)
Choice of law for right-of-publicity claims	Plaintiffs assumed forum-appropriate law would govern; sought a federal ruling	Defendants emphasized state law governs and California likely applies because most defendants are California domiciliaries	Court concluded California law would most likely apply under Restatement §§ 152–153 and Nevada choice-of-law rules
Whether the Nevada action is duplicative of the California action	Plaintiffs argued their suit was justified by discovery delays and not an attempt to preempt	Defendants argued the suits are duplicative and Plaintiffs filed to ‘‘beat’’ them to the courthouse	Court found overlapping facts and that parallel litigation would be duplicative; dismissal prevents redundant proceedings
Whether Rule 11 sanctions are warranted	Plaintiffs argued the filing was nonfrivolous and supported by factual basis; filing motivated by discovery issues and mediation communications	Defendants argued the filing was improper forum-shopping and sanctionable	Court denied sanctions, finding the Amended Complaint was not frivolous, not filed for improper purpose, and had evidentiary support given the circumstances

Key Cases Cited

Wilton v. Seven Falls Co., 515 U.S. 277 (U.S. 1995) (Declaratory Judgment Act confers discretionary authority to district courts)
Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (U.S. 1942) (factors guiding whether to abstain from issuing declaratory relief)
Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220 (9th Cir. 1998) (clarifies Brillhart factors and discretionary declination)
Emp’rs Reinsurance Corp. v. Karussos, 65 F.3d 796 (9th Cir. 1995) (federal courts should normally decline declaratory jurisdiction over state-law issues during parallel state proceedings)
Golden Eagle Ins. Co. v. Travelers Cos., 103 F.3d 750 (9th Cir. 1996) (parallel state proceedings not strictly required for discretionary dismissal)
Love v. Associated Newspapers, Ltd., 611 F.3d 601 (9th Cir. 2010) (federal courts apply state substantive law and forum state choice-of-law rules to state-law claims)
Gen. Motors Corp. v. Eighth Judicial Dist. Court of State of Nev., 122 P.3d 1252 (Nev. 2006) (Nevada choice-of-law discussion applying Restatement tests)