Ralph T. Reilly, an individual v. Steve Wozniak, an individual;

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RALPH T. REILLY, an individual,
Plaintiff-Appellant,
v.
STEVE WOZNIAK, an individual; et al.,
Defendants-Appellees.
No. 21-16140
21-17047
D.C. No. 2:18-cv-03775-MTL
MEMORANDUM*
Appeal from the United States District Court
for the District of Arizona
Michael T. Liburdi, District Judge, Presiding
Argued and Submitted November 16, 2022
Phoenix, Arizona
Before: BYBEE, OWENS, and COLLINS, Circuit Judges.
In the first of two consolidated cases (“First Appeal”), Ralph Reilly appeals
from the district court’s summary judgment against him on his claim for breach of
an implied-in-fact contract (“Count One”) and judgment on the pleadings against
him on his claim for money had and received (“Count Two”). The two claims,
based in California law, were part of a federal copyright infringement lawsuit
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
FILED
JAN 10 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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against Steve Wozniak, co-founder of Apple, for Wozniak’s alleged use of Reilly’s
idea for and work on a “high tech university” using Wozniak’s name and likeness.1
In the second case (“Second Appeal”), Reilly appeals from the district court’s
award of attorney’s fees to Appellees. As the parties are familiar with the facts, we
do not recount them here. We affirm.
1. In the First Appeal, the district court granted summary judgment on
Count One because Reilly did not allege that he disclosed his idea to Wozniak for
sale. We review a district court’s grant of summary judgment de novo and
construe disputed facts in the light most favorable to the nonmovant. Rollins v.
Cmty. Hosp. of San Bernardino, 839 F.3d 1181, 1185 (9th Cir. 2016). Reilly
implores this court to hold that a party claiming breach of a contract for
conveyance and use of an idea need not show that the claimant offered the idea to
the defendant for sale because California law provides a broad equitable basis to
find implied-in-fact contracts for the use of ideas. We decline to do so. Reilly’s
argument is contrary to the holding in Desny v. Wilder, 299 P.2d 257, 269–70 (Cal.
1956) and its progeny.
When interpreting state law, we are bound to follow the decisions of the
state’s highest court, and when “the state supreme court has not spoken on an issue
1 Reilly’s claim for copyright infringement proceeded to trial. The jury found in
favor of Appellees, and Reilly does not appeal that verdict.

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. . . [we] must determine what result the [state] court would reach based on state
appellate court opinions, statutes and treatises.” Diaz v. Kubler Corp., 785 F.3d
1326, 1329 (9th Cir. 2015) (internal quotations omitted).
Reilly’s argument is foreclosed by Aliotti v. R. Dakin & Co., 831 F.2d 898
(9th Cir. 1987), where we followed Faris v. Enberg, 158 Cal. Rptr. 704 (Ct. App.
1979), to hold that “no contract may be implied where an idea has been disclosed
not to gain compensation for that idea but for the sole purpose of inducing the
defendant to enter a future business relationship.” Aliotti, 831 F.2d at 902–03
(citing Faris, 158 Cal. Rptr. at 709–10) (emphasis added). Reilly, by his own
admission, expected that Wozniak would “jointly market,” and be his “partner[] in
exploiting,” Reilly’s idea. It was in this precise context, contemplating a future
business relationship, that Aliotti and Faris held that an idea must be disclosed for
sale for an implied-in-fact contract to exist. Therefore, the district court did not err
in granting summary judgment because there was no genuine dispute of fact as to
whether Reilly offered his idea to Wozniak for sale.
2. Also in the First Appeal, the district court held that Count Two, Reilly’s
claim for money had and received, was preempted under § 301 of the Copyright
Act (“Act”). “We review the granting of . . . a motion [for judgment on the
pleadings] de novo” and accept as true the nonmovant’s allegations of fact. Unite
Here Loc. 30 v. Sycuan Band of the Kumeyaay Nation, 35 F.4th 695, 700 (9th Cir.

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2022). “We also review de novo questions of preemption and statutory
interpretation.” Ass’n des Éleveurs de Canards et d’Oies du Quebéc v. Becerra,
870 F.3d 1140, 1145 (9th Cir. 2017). We affirm.
To the extent that Reilly’s claim for money had and received is based on the
transmission of his idea apart from its embodiment in any tangible medium, that
claim is merely a repackaging of his Desny claim, and it fails for the same reasons
discussed above. An essential element of a claim for money had and received is
that the defendant received something that, under “principles of justice and
fairness,” it ought to pay for. See Philpott v. Superior Ct., 36 P.2d 635, 640 (Cal.
1934). Here, there is no tenable basis, apart from a Desny-based theory, for saying
that Appellees ought to pay for that receipt of a mere idea. Accordingly, Reilly’s
claim for money had and received can rest only on his contention that Appellees
improperly made use of tangible materials that embodied his ideas. We hold that
that claim is preempted.
A particular cause of action is preempted by the Act if 1) the subject matter
of the state law claim is within the subject matter of copyright as set out in §§ 102
and 103 of the Act, and 2) the rights asserted under state law are equivalent to the
rights under § 106 of the Act. Maloney v. T3Media, Inc., 853 F.3d 1004, 1010 (9th
Cir. 2017). Reilly alleges that Appellees owe him money for the profit they made
from Woz U because that profit was derived from his idea and his related

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copyrighted material without Reilly’s consent or participation. His attempts to
distinguish this count from his copyright claims, which he lost on the merits at
trial, are unavailing.
For the first prong of the preemption test, this court has held that ideas
underpinning copyrighted material fall within the subject matter of copyright if the
“ideas and concepts . . . are fixed in a tangible medium,” even though “fixed ideas
[are excluded] from the scope of actual federal copyright protection.” Montz v.
Pilgrim Films & Television, Inc., 649 F.3d 975, 979 (9th Cir. 2011) (en banc).
Reilly contends that Appellees are indebted to him “for money had and
received by . . . each of them from their use, application and exploitation of
Reilly’s Work in the operation, marketing and promotion of Woz U.” Because
Reilly’s Work includes his ideas and their expressions in tangible media, Count
Two is within the subject matter of copyright, satisfying the first prong of the
preemption test.
For the second prong of the preemption test, “[t]o survive preemption, the
state cause of action must protect rights which are qualitatively different from the
copyright rights. The state claim must have an extra element which changes the
nature of the action.” Del Madera Properties v. Rhodes & Gardner, Inc., 820 F.2d
973, 977 (9th Cir. 1987) (emphasis added) (internal quotation and citations
omitted), overruled on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517

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(1994). Reilly argues that Count Two is not preempted because it is based on a
contractual, or impliedly contractual, personal agreement with Wozniak rather than
on a monopoly against the world, as in copyright.
In Del Madera, under much the same circumstances as Reilly alleges, a
party in a joint venture with the plaintiff conveyed information that allowed a third
party to develop “property” based on copyrightable materials. Id. While there was
an extra element in the unjust enrichment claim that the plaintiff had brought—an
implied promise not to use the materials, based on the existing relationship
between the parties—this element did not transform the nature of the action such
that the claimed right was distinct from those provided for in the Act. Id. For the
same reasons that the analogous unjust enrichment claim was preempted in Del
Madera, Reilly’s Count Two claim for money had and received does not assert
rights qualitatively different from those under copyright and is thus preempted.
3. In the Second Appeal, Reilly challenges the district court’s award of
attorney’s fees and costs on all Reilly’s claims pursuant to the Act. See 17 U.S.C.
§ 505. We review the district court’s fee award for abuse of discretion and do not
reverse unless the district court’s decision “is based on an inaccurate view of the
law or a clearly erroneous finding of fact.” Fantasy, Inc. v. Fogerty, 94 F.3d 553,
556 (9th Cir. 1996) (quotation omitted).
The district court’s decision rests on a proper weighing of the relevant

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factors. See Love v. Associated Newspapers, Ltd., 611 F.3d 601, 614 (9th Cir.
2010) (discussing the five factors a court should consider); Kirtsaeng v. John Wiley
& Sons, Inc., 579 U.S. 197, 199–200 (2016) (noting that courts should give
substantial weight to the objective unreasonableness factor while giving due
consideration to the other factors). In particular, the district court found that
Reilly’s copyright claim was objectively unreasonable because he “[chose] to
focus on his idea and not the protected elements of his copyrighted work” at trial
despite it being “[h]ornbook law that ideas are not copyrightable subject matter.”
The district court did not misstate relevant law or demonstrate a clearly
erroneous understanding of the facts. Accordingly, it did not abuse its discretion in
awarding attorney’s fees on the copyright claim.
Nor did the district court abuse its discretion by awarding fees on Reilly’s
state law claims. “Attorney’s fees are awardable . . . if there is express statutory
authorization, or for work done on claims that involve a common core of facts or
[are] based on . . . legal theories [related to] claims governed by statutory . . .
attorney’s fees provisions, such that the lawsuit cannot be viewed as a series of
discrete claims.” Love, 611 F.3d at 614 (internal quotations and citation omitted).
All of Reilly’s claims stem from a common core of facts—his allegation that
Appellees did not compensate him for their use of his idea. Thus, the district court
did not abuse its discretion in holding that Reilly’s claims were sufficiently related

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to warrant application of the Act’s attorney’s fees and costs provision to all causes
of action.
AFFIRMED.

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