Case 3:23-cv-03223-AMO Document 162 Filed 07/30/24 Page 1 of 5

4 UNITED STATES DISTRICT COURT

5 NORTHERN DISTRICT OF CALIFORNIA

7 PAUL TREMBLAY, et al., Case No. 23-cv-03223-AMO

12
Northern District of California
United States District Court

13 Before this Court is OpenAI’s motion to dismiss Count II of Plaintiffs’ First Consolidated

14 Amended Complaint (“FCAC”). The matter is fully briefed and suitable for decision without oral

15 argument. Accordingly, the hearing set for August 1, 2024 is VACATED. See Civil L.R. 7-6.

16 This Order assumes familiarity with the facts of the case, the parties’ arguments, and the relevant

17 law. Having read the parties’ papers and carefully considered their arguments and the relevant

18 legal authority, the Court hereby GRANTS the motion for the following reasons.

19 I. BACKGROUND

20 On February 12, 2024, the Court granted Defendants’ motion to dismiss with leave to

21 amend the claims for vicarious copyright infringement, violation of the Digital Millenium

22 Copyright Act, negligence, and unjust enrichment. ECF 104. The Court denied the motion to

23 dismiss the Unfair Competition Law (UCL) claim under the “unfair” theory. Id. Plaintiffs filed

24 the FCAC, alleging only a direct copyright infringement claim and a UCL claim. ECF 120.1

25 Defendants move to dismiss the UCL claim for failure to state a claim. ECF 122 (“Mot.”).

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27 1
Defendants did not move to dismiss the claim for direct copyright infringement in their initial
28 motion to dismiss, ECF 33, and do not move to dismiss that claim in the instant motion.
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1 II. DISCUSSION

2 OpenAI argues that Plaintiffs fail to state a UCL claim under either the unlawful or

3 fraudulent prongs and that the unfair prong is preempted by the Copyright Act. Mot. at 10-13.

4 Plaintiffs do not respond to Defendants’ arguments about the “unlawful” or “fraudulent” prongs,

5 thus conceding those theories. See ECF 126 (“Opp.”) at 4-8; Namisnak v. Uber Techs., Inc., 444

6 F. Supp. 3d 1136, 1146 (N.D. Cal. 2020) (citing Ardente, Inc. v. Shanley, No. C 07-4479 MHP,

7 2010 WL 546485, at *6 (N.D. Cal. Feb. 10, 2010) (“Plaintiff fails to respond to this argument and

8 therefore concedes it through silence.”). They argue that OpenAI’s motion is procedurally

9 improper under Federal Rule of Civil Procedure 12(g) and that, even if it were not, the Copyright

10 Act does not preempt their UCL claim. Opp. at 4-8. The Court addresses the procedural question

11 before addressing preemption.

12 A. Rule 12(g) Does Not Preclude Defendants’ Motion

13 Federal Rule of Civil Procedure 12(g) prohibits a party from making another motion under

14 Rule 12 that “rais[es] a defense or objection that was available to the party but omitted from its

15 earlier motion.” Fed. R. Civ. P. 12(g)(2). Plaintiffs argue that the Court should disallow

16 Defendants’ motion to dismiss their UCL claim on preemption grounds because Defendants could

17 have raised that issue in their first motion to dismiss and failed to do so. Opp. at 4-6. The law is

18 clear, however, that an “amended complaint supersedes the original, the latter being treated

19 thereafter as nonexistent.” Lacey v. Maricopa Cty., 693 F.3d 896, 928 (9th Cir. 2012) (citation

20 omitted).

21 In ruling on OpenAI’s motion to dismiss the first Complaint, the Court found that Plaintiffs

22 sufficiently pleaded the UCL claim. ECF 104 at 9-10. Plaintiffs nonetheless amended the UCL

23 claim.2 See ECF 120-3 at 18-20. Accordingly, Defendants are permitted to move to dismiss it

24 from the FCAC, and Rule 12(g) does not preclude the Court’s consideration of the motion. See,

25 e.g., Biddle v. Walt Disney Co., No. 22-CV-07317-EJD, 2024 WL 3171860, at *8 (N.D. Cal. June

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The Court notes that the pretrial order required filing a consolidated complaint after the Court’s
ruling on the motion to dismiss. ECF 74. However, Plaintiffs voluntarily elected to amend the
28 UCL claim.

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1 25, 2024) (“an amended complaint supersedes any prior complaint and is fairly subject to renewed

2 challenge on a motion to dismiss”); In re WellPoint, Inc. Out-of-Network UCR Rates Litig., 903 F.

3 Supp. 2d 880, 893-94 (C.D. Cal. 2012) (“Having chosen to amend their complaint in lieu of

4 proceeding with their remaining claims, the [amended complaint] supersedes the original and

5 Defendants are not held to the reconsideration standards”) (citing cases).3 Therefore, the Court

6 concludes that Rule 12(g) does not bar consideration of OpenAI’s preemption argument.4

7 B. The Copyright Act Preempts Plaintiffs’ UCL Claim

8 The Copyright Act of 1976 expressly preempts state law claims where the plaintiff’s work

9 “come[s] within the subject matter of copyright” and the state law grants “legal or equitable rights

10 that are equivalent to any of the exclusive rights within the general scope of copyright[.]”

11 17 U.S.C. § 301(a). The rights protected under the Copyright Act include the rights of

12 reproduction, preparation of derivative works, distribution, performance, and display. Id. § 106.
Northern District of California
United States District Court

13 The Ninth Circuit has established a two-part test to determine whether state law claims are

14 preempted by the copyright law: First, the court decides “whether the ‘subject matter’ of the state

15 law claim falls within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103.”

16 Laws v. Sony Music Ent., Inc., 448 F.3d 1134, 1137 (9th Cir. 2006). If it does, the court must then

17 “determine whether the rights asserted under state law are equivalent to the rights contained in 17

18 U.S.C. § 106[.]” Id. at 1137-38. On the other hand, “[i]f a state law claim includes an ‘extra

19 element’ that makes the right asserted qualitatively different from those protected under the

20 Copyright Act, the state law is not preempted by the Copyright Act.” Altera Corp. v. Clear Logic,

21 Inc., 424 F.3d 1079, 1089 (9th Cir. 2005) (quoting Summit Mach. Tool Mfg. v. Victor CNC Sys., 7

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23 See also Doe #35 v. Labrador, 679 F. Supp. 3d 1019, 1038 (D. Idaho 2023) (citing cases
allowing defendants to file a successive motion to dismiss an amended complaint).
24 4
Even if OpenAI should or could have raised preemption in its first motion to dismiss, Ninth
25 Circuit precedent permits the Court to consider a successive motion to dismiss in its discretion.
See In re Apple iPhone Antitrust Litig., 846 F.3d 313, 317-18 (9th Cir. 2017), aff’d sub nom. Apple
26 Inc. v. Pepper, 587 U.S. 273 (2019) (the Ninth Circuit is “forgiving” when a district court rules
“on the merits of a late-filed Rule 12(b)(6) motion” because strict adherence to Rule 12(g)(2) “can
27 produce unnecessary and costly delays”); see also Columbia Exp. Terminal, LLC v. ILWU-PMA
Pension Fund, No. 20-CV-08202-JSW, 2023 WL 3510377, at *3 (N.D. Cal. May 16, 2023)
28 (concluding that “resolving the [late-filed Rule 12(b)(6)] motion would facilitate judicial economy
and efficiency”).
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1 F.3d 1434, 1439-40 (9th Cir. 1993)).

2 Here, the subject matter of the UCL claim falls within the subject matter of copyright.

3 Plaintiffs allege that Defendants’ unfair business practice was “using Plaintiffs’ Infringed Works

4 to train ChatGPT without permission . . . .” FCAC ¶ 71. The “Infringed Works” are copyrighted

5 books and a play. FCAC ¶¶ 10-22, 66, Ex. A (ECF 120-1) at 1-13. Books and “works, other than

6 audiovisual works, expressed in words, regardless of the nature of the material objects” are

7 considered “literary works,” 17 U.S.C. § 101, which fall within the subject matter of copyright, id.

8 § 102 (literary works, musical works, and dramatic works are the subject matter of copyright).

9 Thus, the UCL claim based on the copying of Plaintiffs’ Infringed Works falls squarely within the

10 ambit of the Copyright Act. See 17 U.S.C. § 301(a). In Opposition, Plaintiffs argue that the UCL

11 claim is “also based on the claim that Defendants have unfairly created a commercial product,

12 making available a source of content generation that distorts the legal marketplace in which
Northern District of California
United States District Court

13 Plaintiffs and Class members compete.” ECF 126 at 8. Plaintiffs do not allege these harms in the

14 FCAC, so they are not part of the UCL claim. Nevertheless, even if Plaintiffs had pleaded these

15 allegations, they only describe the harms that resulted from Plaintiff’s unauthorized use and

16 copyright of Plaintiffs’ copyrighted books. FCAC ¶¶ 34, 71, 73-74; see Laws, 448 F.3d at 1141

17 (concluding that misappropriation claim related to unauthorized duplication of a copyrighted song

18 fell within the subject matter of the Copyright Act). Because the subject matter of the UCL claim

19 involves OpenAI’s unauthorized use and copying of Plaintiffs’ copyrighted books, the claim falls

20 within the “subject matter” of the Copyright Act. See Maloney v. T3Media, Inc., 853 F.3d 1004,

21 1011 (9th Cir. 2017).

22 The UCL claim is also qualitatively the same as the direct copyright infringement claim.

23 The basis of both claims is the unauthorized copying and use of the Infringed Works to train

24 ChatGPT. FCAC ¶¶ 65-66, 73-74. Even though the elements of the UCL claim are not identical

25 to the copyright claim, “the underlying nature” of Plaintiffs’ UCL claim is “part and parcel of [the]

26 copyright claim.” See Laws, 448 F.3d at 1144; see also Sybersound Recs., Inc. v. UAV Corp., 517

27 F.3d 1137, 1152 (9th Cir. 2008) (finding that dismissal of UCL claim as preempted by the

28 Copyright Act was proper where the “improper business act complained of is based on copyright
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1 infringement”). Accordingly, the Court finds that the UCL claim is preempted by the Copyright

2 Act.

3 The final consideration is whether Plaintiffs should be granted leave to amend. Plaintiffs

4 invoke Ninth Circuit caselaw that leave to amend should be freely granted. Opp. at 8 (citing Doe

5 v. United States, 58 F.3d 494, 497 (9th Cir. 1995)). However, the UCL claim does not lack factual

6 allegations; it lacks a tenable legal theory. See Brown v. Van’s Int’l Foods, Inc., No. 22-CV-

7 00001-WHO, 2022 WL 1471454, at *6 (N.D. Cal. May 10, 2022) (“As the defect lies in the legal

8 theory, not the factual allegations, the dismissal is without leave to amend.”). The Court dismisses

9 the UCL claim without leave to amend as amendment would be futile. See, e.g., Young Money

10 Ent., LLC v. Digerati Holdings, LLC, No. 2:12-CV-07663-ODW, 2012 WL 5571209, at *9 (C.D.

11 Cal. Nov. 15, 2012) (dismissing UCL claim without leave to amend where the claim was not

12 qualitatively different from the copyright claim and “any attempt to amend the claim to avoid
Northern District of California
United States District Court

13 preemption would be futile”).

14 III. CONCLUSION

15 For the foregoing reasons, the Court DISMISSES the UCL claim without leave to amend.

16

17 IT IS SO ORDERED.

18 Dated: July 30, 2024

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ARACELI MARTÍNEZ-OLGUÍN
21 United States District Judge
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