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Abadin v. Marvel Entertainment

March 31, 2010


The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge


This matter has been pending in a variety of federal and state fora for several years. In Stan Lee Media, Inc. v. Marvel Entertainment, Inc., et al., 07 Civ. 2238 (PAC), Plaintiff sought to compel Marvel to account for profits on the theory that Stan Lee Media, Inc. ("SLMI") possessed certain ownership rights which Marvel and Stan Lee were using. The corporate plaintiff, however, had been dissolved pursuant to Colorado law; and its shareholders had failed in their attempts to revitalize the Colorado corporation. On September 9, 2008, after granting several adjournments to accommodate the Colorado proceedings, this Court dismissed the action:

At the conference on August 27, 2008, the Court noted that it had granted a number of adjournments to accommodate counsel's request to demonstrate that he was authorized to appear on behalf of plaintiff Stan Lee Media Inc. The current affirmation does not establish that counsel has been authorized by the corporate plaintiff to appear on its behalf.

Accordingly the matter is dismissed without prejudice to its renewal should a properly constituted corporate entity decide to retain counsel and presume whatever requests it may have. The Clerk is directed to enter judgment [dismissing the action] and close this case without prejudice to its renewal.

Five months later, on January 26, 2009, Plaintiffs commenced this derivative action on behalf of Stan Lee Media, Inc. The case was referred to the Court as a related case. The core of the complaint remained essentially the same as the 2007 action: Stan Lee contracted with Stan Lee Enterprises ("SLE") (which later became SLMI) in 1998, and then sold the same rights to the Marvel Defendants. On March 20, 2009, counsel for Defendants indicated their intent to move to dismiss the 13 claims for relief on a variety of grounds: including failure to satisfy the pleading requirements for a derivative action pursuant to Fed. R. Civ. P. 23.1; statute of limitations; failure to plead fraud with the particularity required by Fed. R. Civ. P. 9(b); and failure to state a claim on which relief may be granted on the balance of the claims for relief.

In light of Defendants' position, Plaintiffs' counsel announced his intention to amend the complaint, adding the hope that the amendment would moot several of the grounds for the motions to dismiss. (See Semaya letter of April 8, 2009). The April 9, 2009 stipulation set a schedule for filing a new complaint by April 28, 2009. The stipulation "So Ordered" by the Court acknowledged that "Plaintiffs have advised the defendants and the Court that they intend to file an Amended Complaint, which will supercede the existing complaint"; and that "Defendants have no obligation to further respond to the" January, 2009 complaint-because that complaint was being amended.

The Plaintiffs in the Amended Complaint of April 29, 2009 were Jose Abadin and Christopher Belland, derivatively on behalf of Stan Lee Media, Inc. ("SLMI"), a Colorado corporation. They named as defendants Marvel Entertainment, Inc., a Delaware corporation, Marvel Enterprises, Inc., and two individuals: Stan Lee and Arthur Lieberman.*fn1 Plaintiffs alleged, on behalf of SLMI, that defendants Marvel and Lee have been developing, producing, marketing and selling characters initially created by Lee, Lee's interest in which has been assigned and belongs to SLMI, including all of his interest in the name "Marvel." Marvel's financial success derives from characters initially created by Lee. (Verified Amended Complaint, ¶ 25).

Lee assigned his interests to SLMI in October, 1998, but defendants have continuously ignored that assignment (Id. at 27, 43 et seq.); and instead chose to exploit Lee's creation for themselves. On or about November 17, 1998, Lee, in exchange for present and future consideration, and Marvel executed an agreement that conveyed to Marvel the very "property" and "right" that Stan Lee-SLMI agreement had previously transferred to SLMI's predecessors, Stan Lee Entertainment. (Id. at 65).

Based on these allegations, Plaintiffs assert the following 8 counts:

Count I. Copyright Infringement, Unfair Competition, and Declaratory Judgment relief. (As Against Lee)

Count II. Violation of the Lanham Act. (As Against Lee and Marvel)

Count III. Breach of Contract. (As Against Lee)

Count IV. Tortious Interference with Contract. (As Against Marvel and Lieberman)

Count V. Breach of Fiduciary Duty of Case and Loyalty. (As Against Lee)

Count VI. Aiding and Abetting and/or Conspiracy to Breach Fiduciary Duty of Case and Loyalty. (As Against ...

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