Brown Memo re Motion to Dismiss

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA

FLORENCE DIVISION

HOWARD K. STERN, as Executor of the ) C.A. No. 4:08-CV-2753-TLW Estate of Vickie Lynn Marshall, a/k/a Vickie ) Lynn Smith, a/k/a Vickie Lynn Hogan, a/k/a ) Anna Nicole Smith, ) ) Plaintiff, ) ) vs. ) MEMORANDUM IN SUPPORT OF ) MOTION TO DISMISS BY STANCIL SHELLEY, a/k/a Ford Shelley, ) DEFENDANTS SUSAN M. BROWN AND G. BEN THOMPSON, GAITHER ) THE LAW OFFICES OF SUSAN M. THOMPSON, II, MELANIE THOMPSON, ) BROWN, P.C. GINA THOMPSON SHELLEY, SUSAN ) M. BROWN, and THE LAW OFFICES OF ) SUSAN M. BROWN, P.C., ) ) Defendants. ) ) This matter is before the Court on the motion of Defendants Susan M. Brown and The Law

Office of Susan M. Brown (“Brown Defendants”) to dismiss Plaintiff Howard K. Stern’s Amended

Complaint. The Brown Defendants hereby assert that the Amended Complaint should be dismissed

as to them for failure to state a claim upon which relief can be granted, Rule 12(b)(6) of the Federal

Rules of Civil Procedure, res judicata, and collateral estoppel.

FACTS

Defendant Ben Thompson was a social acquaintance of Deceased Plaintiff, Anna Nicole

Smith. Defendant Thompson met Smith in July of 2005. Smith developed a relationship with

Defendant Thompson and Defendant Thompson’s family, including Defendant Ford Shelley

(Thompson’s son-in-law), Gina Shelley (Thompson’s daughter), Riley Shelley (Thompson’s

granddaughter), Gaither Thompson (Thompson’s son), and Melanie Thompson (Thompson’s

daughter-in-law). For the following two years, Defendant Thompson and his family not only

4:08-cv-02753-TLW -TER Date Filed 08/05/10 Entry Number 136-1 Page 1 of 8

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welcomed Smith as a member of their family but also allowed Smith and Plaintiff Howard Stern to

stay at several houses owned by Defendant Thompson in Myrtle Beach, South Carolina, the Florida

Keys, and the Bahamas for months at a time.

Defendant Thompson’s house in the Bahamas was known as “Horizons.” Deceased Smith

was residing at this house at the time of her death. Although Thompson paid for Horizons and

holds the deed to Horizons, Plaintiff contests the ownership of the house.

Smith passed away on February 8, 2007. According the Amended Complaint, immediately

following Smith’s death, Defendants Ford Shelley, Gina Shelley, and Gaither Thompson traveled to

Horizons and removed material from the house, namely two computers, a hard drive, some

paintings and drawings by Smith, tapes, and documents. The originals of all of these materials have

been turned over to the Plaintiff or to police. Plaintiff contends this material belonged to Smith and

was improperly removed and distributed by Defendants.

After all of this occurred, Defendant Susan Brown entered a representation agreement with

Defendant G. Ben Thompson in October of 2006 wherein she agreed to represent him and several

entities he owned with regards to his dispute with Smith regarding Horizons. Brown was asked to

act as a liaison between Thompson and his Bahamian attorneys.

Based on the Amended Complaint, Brown’s involvement with materials possibly removed

from Horizons and belonging to the Plaintiff Estate is extremely limited. Plaintiff’s claims against

Brown are based on two purported actions. First, Plaintiff alleges that Brown provided some

materials to Neil McCabe, an attorney representing Smith’s mother. Amended Complaint,

Paragraphs 92-127. All of these materials have been returned.

Plaintiff has also alleged that Brown failed to timely turn over two hard drives to Plaintiff in

the course of discovery in this case. Brown’s alleged failure to timely turn over those hard drives in


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compliance with a prior Consent Order is the subject of a motion for sanctions pending before the

Court.

LEGAL ARGUMENT

I. THE LEGAL STANDARD. Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for the dismissal of a

complaint if a party fails to state a claim upon which relief can be granted. Fed. R. Civ. P.

12(b)(6). When reviewing the legal sufficiency of a complaint, the Court must construe the

factual allegations “in the light most favorable to plaintiff.” Schatz v. Rosenberg, 943 F.2d 485,

489 (4th Cir. 1991). However, the Court need not accept legal conclusions drawn by the pleader

from the facts alleged. Id.

To avoid dismissal under Rule 12(b)(6), a complaint must include “sufficient factual

matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,

___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 570 (2007)). This mandate is set forth in Rule 8(a)(2) of the Federal Rules of Civil

Procedure, which requires that pleadings contain “a short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Although the standard set

out in Rule 8(a)(2) does not require detailed factual allegations, “it does demand more than an

unadorned the-defendant-unlawfully-harmed-me accusation.” Iqbal, 129 S.Ct. at 1949 (2009)

(citing Twombly, 550 U.S. at 555); Papasain v. Allain, 478 U.S. 265, 286 (1986). Accordingly,

a complaint that only offers “labels and conclusions” or a “formulaic recitation of the elements

of a cause of action” is deficient. Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555,

557). Nor will a complaint that merely tenders “naked assertions devoid of further factual

enhancement” suffice. Iqbal, 129 S.Ct. at 1949. A complaint must have “enough facts to state a


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claim to relief that is plausible on its face.” Id, (quoting Twombly, 550 U.S. at 570).

Determining whether a plausible claim has been stated is “a context-specific task that

requires the reviewing court to draw on its judicial experience and common sense.” Id. at 1950.

A claim is plausible “when the plaintiff pleads factual content that allows the court to draw a

reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 1949.

Plausibility requires less than probability but more than the sheer possibility that a defendant has

acted unlawfully. Id. Where a complaint only pleads facts consistent with a theory of liability,

the complaint falls short of plausibility and an entitlement to relief under Rule 8(a)(2). Id.

Additionally, “where the well-pleaded facts do not permit the court to infer more than the mere

possibility of misconduct, the complaint has alleged - but not ‘shown’ - that the pleader is

entitled to relief.’” Id. (quoting Fed. R. Civ. P. 8(a)(2)).

I. PLAINTIFF CANNOT BRING CAUSES OF ACTION BASED ON CALIFORNIA PROCEDURAL LAW IN SOUTH CAROLINA DISTRICT COURT.

Because this matter is in federal court on diversity grounds, the choice of law rules of the

forum state, South Carolina, apply. Klaxon v. Stentor, 313 U.S. 487, 496-97, 61 S.Ct. 1020, 85

L.Ed. 1477 (1941). Under South Carolina choice of law principles, the substantive law is

determined by the law of the state in which the injury occurred (lex loci delicti) and procedural

matters by the law of the forum (lex fori). Thornton v. Cessna Aircraft Co., 886 F.2d 85, 87 (4th

Cir. 1989).

At least two of Plaintiff’s causes of action are based on California procedural law that has

no application to an action pending in the U.S. District Court in South Carolina. Plaintiff’s

Second Cause of Action is based on California Probate Code § 850, et seq., which simply sets up

a procedure for making a specific performance type claim in the California Probate Court. In re

Bailey's Estate 42 Cal.App.2d 509, 109 P.2d 356, 357 (1941). A review of the annotated statute


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demonstrates no reported opinions on the statute in any court other than the California State

Court, further supporting the fact that it is a procedural law with no application outside of

California. Since this matter is governed by the procedural rules of South Carolina and the

Federal Court, California Probate Code procedures have no applicability to this action. As such,

Plaintiff’s Second Cause of Action should be dismissed.

Similarly, Plaintiff’s Third Cause of Action for appropriation of a right of publicity is

based on California Civil Code § 3344.1, which is a damage statute that is part of the “Relief”

provisions of California’s Civil Code. The entire section of the Code in which the law is located

is deemed remedial in nature. California Civil Code § 3274. See also Downing v. Abercrombie

& Fitch, 265 F.3d 994, 1001 (9th Cir. 2001) (“In addition to the common law cause of action,

California has provided a statutory remedy for commercial misappropriation under California

Civil Code § 3344. The remedies provided for under California Civil Code § 3344 complement

the common law cause of action; they do not replace or codify the common law.”). Further, a

review of the annotated statute reveals no courts outside of South Carolina interpreting or relying

upon the statute, further indicating that it is procedural with no force outside of California courts.

Since California Civil Code § 3344.1 is procedural in nature, it cannot be relied upon in this

action, and Plaintiff’s Third Cause of Action should be dismissed.

II. CALIFORNIA CIVIL CODE § 3344.1 DOES NOT APPLY TO ACTIONS ARISING OUT ACTS THAT OCCURRED OUTSIDE OF CALIFORNIA. A related problem with Plaintiff’s reliance on California Civil Code § 3344.1 is that the

statute’s scope is explicitly limited to acts that occurred in California:

(n) This section shall apply to the adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state.

California Civil Code § 3344.1(n). This is not a choice of law provision, but rather a specific


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limitation on the reach of the Section 3344.1. Cairns v. Franklin Mint Co., 120 F.Supp.2d 880,

883 (C.D.Cal. 2000) (“The only reasonable interpretation of this provision from its plain

language is that it applies only to claims that arise out of acts occurring in California.”).

Plaintiff’s allegations regarding the Brown Defendants are limited to actions that

occurred in Georgia and South Carolina. As part of her representation of Defendant Shelley,

Brown has never been to California nor does the First Amended Complaint allege that any of

Brown’s acts occurred in California. As such, California Civil Code § 3344.1 is not applicable

to the actions of Brown, and Plaintiff’s Third Cause of Action against Brown should be

dismissed.

III. CALIFORNIA CIVIL CODE § 3344.1 ONLY APPLIES TO THE USE OF DECEDENT’S IMAGE FOR THE PURPOSES OF SELLING PRODUCTS. Plaintiff’s Third Cause of Action under California Civil Code § 3344.1, even if it could

be brought in South Carolina, is not applicable to any actions allegedly undertaken by the Brown

Defendants. The statute bars the use of “a deceased personality's name, voice, signature,

photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for

purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods,

or services . . .” California Civil Code § 3344.1(a)(1) (emphasis added). Later the statute

repeats:

For purposes of this section, acts giving rise to liability shall be limited to the use, on or in products, merchandise, goods, or services, or the advertising or selling, or soliciting purchases of, products, merchandise, goods, or services prohibited by this section.

California Civil Code § 3344.1(e). Plaintiff has neither alleged nor provided any evidence that

Brown used Smith’s likeness for the purpose of advertising or selling goods or services.


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III. THE PRINCIPALS OF RES JUDICATA AND COLLATERAL ESTOPPEL BAR PLAINTIFF FROM SUING BROWN ON GROUNDS THAT HAVE ALREADY BEEN ADJUDICATED BY ANOTHER COURT.

As noted, the accusations against Brown concerning her handling of two hard drives arise

out of a discovery dispute that is the subject of a pending motion for sanctions. Brown’s alleged

actions concerning the handling of the two hard drives is not an appropriate basis for a lawsuit

for two reasons.

First, Plaintiff has already chosen to pursue relief for these alleged actions by way of a

motion for sanctions pending before the Court. In other words, Plaintiff seeks two bites of the

apple – both a motion for sanctions and a legal claim – for the same action. Assuming the

motion for sanctions is denied, it will have a collateral estoppel effect on the claims in the

lawsuit. Collateral estoppel denies a plaintiff the right to re-litigate in a second action issues

which were adequately and necessarily litigated and determined in an earlier proceeding. Pye v.

Aycock, 325 S.C. 426, 480 S.E.2d 455, 459 (Ct. App. 1997).

Second, a lawsuit is not an appropriate vehicle to seek sanctions for the alleged violation

of a Court order. There is no cause of action for “civil contempt.” Sanctions for violations of

Rule 11 of the Federal Rules of Civil Procedure include “nonmonetary directives; an order to pay

a penalty into court; or . . . an order directing payment to the movant of part or all of the

reasonable attorney’s fees and other expenses directly resulting from the violation.” Rule

11(c)(4), FRCP. There is nothing in the Rules creating a cause of action for the alleged violation

of a Court order.

CONCLUSION

Based on the foregoing, Susan M. Brown and The Offices of Susan M. Brown, PC, would

hereby request that the Court dismiss the Second and Third Causes of Action against these


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Defendants in that said actions are based on inapplicable California procedural law. In addition,

Defendants would ask that the Court dismiss all claims by Plaintiff based on these Defendants’

alleged violation of any discovery orders issued by this Court or other Courts because Plaintiff is

already pursuing relief for these actions in a motion for sanction, and because there is no civil cause

of action for violation of a discovery order.

RESPECTFULLY SUBMITTED,

/S/ JOSEPH C. WILSON, IV Carl E. Pierce, II (Fed. ID#3062) Joseph C. Wilson, IV (Fed. ID#5886) Pierce, Herns, Sloan, & McLeod, LLC P.O. Box 22437 Charleston, SC 29413 (843) 722-7733 (843) 722-7732 [email protected] ATTORNEYS FOR SUSAN M. BROWN AND THE LAW OFFICES OF SUSAN M. BROWN, PC

August 5, 2010 Charleston, South Carolina


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Brown Memo re Motion to Dismiss