933 F. Supp. 2d 1
D.D.C.2013Background
- Xereas, Dawson, and Heiss formed Riot Act DC, LLC, to operate a Riot Act Comedy Club; Xereas contributed capital and intellectual property, including RIOT ACT Trademarks and domain names.
- Xereas registered Riot Act domain names (e.g., riotactcomedy.com) in 2005 and 2009, and the LLC planned to start the club in Washington, D.C. in 2010–2011.
- The Amended Operating Agreement (Nov. 2010) and Business Plan delineated management by the “Managing Members” and the potential for salaries; Xereas served as general manager through 2011.
- In Jan. 2012, Dawson and Heiss directed Squiid to alter domain-name registration data to transfer domain ownership to the LLC, without Xereas’s knowledge.
- Xereas filed suit March 2012 with eleven counts, including conversion and an ACPA claim; Defendants moved to dismiss multiple counts under Rule 12(b)(6).
- Court denied some claims and granted others; focal rulings include allowing breach of the implied duty claim against Dawson/Heiss and unjust enrichment against the LLC, but dismissing several other claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conversion of domain names viability | Xereas asserts domain names are his property and were unlawfully transferred. | Domain names are intangible and not cognizable under DC conversion law or require merger into a document. | Conversion claim fails for lack of cognizable property transfer; domain names not proven as transferable document-based property. |
| Breach of contract and implied duty | Operating Agreement/Business Plan create express/implied duties; termination breached duties after formation. | No express duty identified; management decisions could be taken by majority; implied duty claims premature or duplicative. | Breach of contract not pled for express duty; implied duty claim survives against Dawson/Heiss as to post-contract actions (good faith/ fair dealing). |
| Fraudulent inducement and civil conspiracy | Representations before or during contract induced participation; conspiracy to defraud aided by misrepresentations. | Plaintiff fails to plead specific misrepresentations with particularity. | Fraudulent inducement and civil conspiracy claims fail for lack of particularized misrepresentations. |
| Tortious interference with prospective business relationships | Interference with long-standing relationships and future opportunities in the comedy field. | No specific, reasonably probable future business relationships alleged. | Dismissed for lack of a specifically identified, reasonably likely prospective business relationship. |
| ACPA cyber-squatting against the defendants | Defendants re-registered domain names with bad faith to profit from Riot Act marks; initial registrations by Xereas become actionable via re-registration. | GoPets interpretation of re-registration not applying; need to limit 'registration' to initial act. | ACPA claim sustained against Dawson, Heiss, and the LLC; dismissed as to Squiid. |
Key Cases Cited
- Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2002) (domain name as intangible property under conversion analysis)
- GoPets Ltd. v. Hise, 657 F.3d 1024 (9th Cir. 2011) (re-registration under ACPA extends liability; initial vs. later registrations)
- Ricks v. BMEzine.com, LLC, 727 F. Supp. 2d 936 (D. Nev. 2010) (ACPA scope re-registration context guidance)
- Murray v. Wells Fargo Home Mortg., 953 A.2d 308 (D.C. 2008) (implied duty of good faith and fair dealing framework)
- Ellipso, Inc. v. Mann, 541 F. Supp. 2d 365 (D.D.C. 2006) (implied covenant analysis and timing after contract formation)
- Plesha v. Ferguson, 725 F. Supp. 2d 106 (D.D.C. 2010) (unjust enrichment vs. express contract distinction)
- Jordan Keys & Jessamy, LLP v. St. Paul Fire and Marine Ins. Co., 870 A.2d 58 (D.C. 2005) (unjust enrichment when third-party contract exists)
- Kramer v. Rwanda Working Group, 227 F. Supp. 2d 45 (D.D.C. 2002) (Gov't of Rwanda v. Rwanda Working Group (treating intangible property context))