May 24, 2022
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The Defendants brought a motion to dismiss or permanently stay proceedings brought in the Federal Court (the “Court”) by the Plaintiff, Wiseau Studio, LLC (“Wiseau Studio”), on the grounds of cause of action estoppel and abuse of process due to similar litigation brought by Wiseau Studio against the Defendants in the Ontario Superior Court of Justice.
In Wiseau Studio, LLC v. Harper, 2022 FC 568, the Court granted the Defendants’ motion without leave to amend, on the basis of cause of action estoppel.
I. BACKGROUND
Tommy Wiseau wrote, directed and starred in the film The Room, and the rights to the film are owned by Wiseau Studio. The Defendants created a documentary about the film and allegedly promised Mr. Wiseau that he would be portrayed in a positive light. After the release of the documentary, Mr. Wiseau claimed it mocked The Room and made unsubstantiated allegations about his private life. This led to a lengthy litigation history between the two parties.
First Ontario Superior Court of Justice Action
Wiseau Studio and Mr. Wiseau brought an action in the Ontario Superior Court of Justice in June 2017 against the Defendants for copyright infringement, infringement of moral rights, misappropriation of personality, and more. The trial judge dismissed Mr. Wiseau’s claims in their entirety, and allowed a counterclaim against Mr. Wiseau for having improperly obtained an ex parte injunction to prevent the release of the documentary.
After unsuccessfully attempting to vary the trial judge’s decision, Mr. Wiseau appealed the decision to the Ontario Court of Appeal. Before the appeal was heard, the Ontario Court of Appeal ordered Mr. Wiseau to post security both for the costs of the trial, the appeal and for the trial judgment itself due to the “frivolous” notice of appeal which did not articulate the errors supposedly made in the trial decision. The Supreme Court of Canada considered Mr. Wiseau’s application for leave to appeal that order, but Mr. Wiseau failed to post security for costs by the required deadline and as a result, the appeal was dismissed by the Ontario Court of Appeal.
Second Ontario Superior Court of Justice Action
Mr. Wiseau then commenced another action against the Defendants in August 2021, again in the Ontario Superior Court of Justice. In this action, Mr. Wiseau alleged that the Defendants committed fraudulent misrepresentation and intentional infliction of mental suffering. The Ontario Superior Court of Justice stayed that action for being “quite clearly” an abuse of process.
Federal Court Action
In July 2021, shortly before Mr. Wiseau brought the second Ontario action, Wiseau Studio brought the within action in the Federal Court against the Defendants. In this action, Wiseau Studio alleged copyright infringement under s. 41.1(1) of the Copyright Act, which prohibits a person from circumventing technological protection measures. In response, the Defendants brought a motion to strike the action for cause of action estoppel and abuse of process.
II. THE COURT’S DECISION
The Court granted the defendants' motion and struck the action on the basis of cause of action estoppel, without leave to amend. In making its decision, the Court applied the four part test for cause of action estoppel from the Supreme Court’s decision in Grandview v. Doering, [1976] 2 SCR 621.
1. There must be a final decision of a court of competent jurisdiction in the prior action
The Court found that there had been a final court decision in the original Ontario action and that all rights of appeal in respect of the proceedings had been exhausted as a result of the leave application to the SCC being dismissed on April 14, 2022.
2. The parties to the subsequent litigation must have been the parties to or in privy with the parties to the prior action
It was an uncontested fact that the parties to this litigation were the same as those in the original Ontario action and thus, the Court determined the second requirement had been met.
3. The cause of action in the prior action is not separate and distinct
Although Wiseau was technically relying on a different provision of the Copyright Act, the Court noted that both claims were ultimately for copyright infringement of the same original works, the alleged infringement arose from the same documentary, and the relief sought in both claims was identical. Thus, the Court concluded that the cause of action in the within action was not separate and distinct from the original Ontario action.
4. The basis of the cause of action in the subsequent action was argued or could have been argued in the prior action if the party bringing the subsequent action had exercised reasonable diligence
The Court held that Wiseau could have argued the basis of the within action in the original Ontario action had he exercised reasonable diligence.
Wiseau claimed that he did not plead circumvention of technological protection measures in the Ontario action because he was not aware of Harper’s wrongful circumvention acts at the time. However, that directly contradicted his own affidavit, in which he stated that he was closely involved in the production of the Blu-ray discs of The Room. Based on this, the Court concluded that Wiseau was fully aware of the technological protection measures applied to the works in issue before the Ontario action was brought.
The Court also noted that issues related to circumvention of technological protection measures had arisen during the discovery phase of the original Ontario action, and therefore Wiseau could have amended his statement of claim in that action to include those new allegations. Regardless of whether Wiseau Studio made the choice to exclude the claim for breach of technological protection measures from the original Ontario action for strategic reasons or inadvertence, the Court would not permit Wiseau Studio to advance that claim now, long after it could have been included in the original Ontario action.
Authors: Samara Friszman and Mark Leonard