VIACOM INTERNATIONAL, INC., a Delaware corporation v. Mga Entertainment, Inc.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
VIACOM INTERNATIONAL, INC., a
Delaware corporation,
Plaintiff-counter-
defendant-Appellee,
v.
MGA ENTERTAINMENT, INC.,
Defendant-counter-claimant-
Appellant,
and
DOES, 1-10, inclusive,
Counter-defendants.
No. 16-56475
D.C. No. 2:15-cv-09621-R-E
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted June 7, 2018
Pasadena, California
Before: TALLMAN and NGUYEN, Circuit Judges, and BENNETT,** District
Judge.
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Mark W. Bennett, United States District Judge for the
Northern District of Iowa, sitting by designation.
FILED
JUN 21 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Appellant MGA Entertainment, Inc., a toy manufacturer, and Appellee
Viacom International, Inc., the owner of cable television channels, entered into
agreements to develop and air a television show, Lalaloopsy, both domestically
and internationally, based on MGA’s Lalaloopsy fashion doll. The parties also had
a contract for MGA’s advertising on Viacom media. After MGA failed to make
contractually obligated payments, Viacom sued MGA for breach of the
agreements, and MGA asserted counterclaims and various defenses. The district
court granted summary judgment in favor of Viacom, and MGA appeals.
We have jurisdiction under 28 U.S.C. § 1291, and we review de novo a
district court’s grant of summary judgment. Sierra Med. Servs. All. v. Kent, 883
F.3d 1216, 1222 (9th Cir. 2018). The parties agree that their claims are governed
by California law.
1. As to the Co-Finance Agreement (CFA) concerning development,
financing, and domestic airing of Lalaloopsy, the district court correctly concluded
that to prove either a breach of contract or a viable excuse for non-performance,
MGA must show that Viacom materially breached the contract, Brown v. Grimes,
120 Cal. Rptr. 3d 893, 903 (Ct. App. 2011), and that the breach caused MGA’s
resulting damages, Troyk v. Farmers Grp., Inc., 90 Cal. Rptr. 3d 589, 628–29 (Ct.
App. 2009). The district court correctly concluded that MGA did not establish a
genuine issue of material fact that any breach by Viacom was material, or
otherwise stated, that Viacom failed to “regularly” air Lalaloopsy. Furthermore,

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nothing but speculation connects Viacom’s alleged breaches of the CFA to any
loss of sales of Lalaloopsy dolls.
2. As for the International Advertising Agreement (IAA), there is no
dispute that MGA did not fulfill its required $5 million “spend” on international
advertising within the time specified. On MGA’s “excuse” defense, no reasonable
jury could find that (1) the alleged unhappiness of MGA’s international
distributors, prevented or delayed MGA’s fulfillment of its commitment;
(2) Viacom materially breached its airing obligations under the companion
International Licensing Agreement (ILA) when it substantially performed; or
(3) Viacom had no excess international advertising inventory during the relevant
period, so that Viacom had no damages. Standard Iron Works v. Globe Jewelry &
Loan, Inc., 330 P.2d 271, 278 (Ct. App. 1958) (“Mere difficulty or unusual or
unexpected expense will not excuse a party for failing to comply with the terms of
his contract.”). Therefore, we affirm summary judgment in favor of Viacom on the
IAA claim.
3. MGA does not dispute on appeal that it breached the so-called Beacon
Agreement, relating to MGA’s advertising on Viacom media. We need not
address the district court’s conclusion that “failure to mitigate” was inapplicable
where MGA’s advertising commitment was “non-cancellable,” because we “may
affirm [summary judgment] on any ground supported by the record.” Perez v. City
of Roseville, 882 F.3d 843, 850 (9th Cir. 2018). Evidence that networks may have

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been short of advertising inventory at the time of MGA’s breach, would allow
jurors to speculate that Viacom could have taken further steps to mitigate its
damages. That evidence would not, however, be enough for a reasonable jury to
conclude that when a suitable offer was made to purchase MGA’s “cancelled”
advertising inventory, Viacom unreasonably rejected that offer. Green v. Smith, 67
Cal. Rptr. 796, 800 (Ct. App. 1968).
Costs are awarded to Plaintiff-Appellee Viacom.
AFFIRMED.

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