Biafra has counterclaimed with ten causes of action: (1)
declaratory judgment that he is an author with rights in the
works that have not been assigned or licensed and which he is
free to exercise; (2) breach of fiduciary duty; (3) breach of
contract; (4) conversion; (5) defamation; (6) intentional
inducement of breach of contract; (7) intentional interference
with prospective economic advantage; (8) conspiracy; (9) unfair
competition under California Business and Professions Code §
17200; and (10) injunctive relief under the Copyright Act.
Plaintiffs now move to have the case remanded to state court
for lack of federal subject matter jurisdiction.
B. Legal Standard
"Only state-court actions that originally could have been filed
in federal court may be removed to federal court by the
defendant. Absent diversity of citizenship, federal-question
jurisdiction is required." Caterpillar Inc. v. Williams,
482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); see
28 U.S.C. § 1441 (removal jurisdiction).
To invoke federal-question jurisdiction, this action must
"arise under federal copyright law." Vestron, Inc. v. Home Box
Office, Inc., 839 F.2d 1380, 1381 (9th Cir. 1988). Application
of the well-pleaded complaint rule renders the initial complaint
dispositive on this question. See id. The determination cannot
consider "anything alleged in anticipation or avoidance of
defenses." See id. (quoting Franchise Tax Bd. of Cal. v.
Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct.
2841, 77 L.Ed.2d 420 (1983).) Nor may affirmative defenses
alleged by defendant be considered. See id.
In the Ninth Circuit, federal subject matter jurisdiction
exists in copyright cases if one of three grounds is satisfied:
(1) the claim "is for a remedy expressly granted by the
[Copyright] Act"; (2) the complaint "asserts a claim requiring
construction of the Act"; or (3) the case "presents a case where
a distinctive policy of the Act requires that federal principles
control the disposition of the case." See id. (quoting T.B.
Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir. 1964)).
"Contract questions that depend on common law or equitable
principles belong in state court." Dolch v. United Cal. Bank,
702 F.2d 178, 180 (9th Cir. 1983) (addressing the validity of an
Co-owners of a copyright, and their licensees, cannot be liable
to one another for infringement of that copyright as a matter of
law. See Oddo v. Ries, 743 F.2d 630, 632 (9th Cir. 1984).*fn2
"[E]ach co-owner has an independent right to use or license the
use of the copyrights." See id. at 633. An action for an
accounting or determination of ownership as between alleged
co-owners is founded in state law and does not arise under the
copyright laws. See id. These rules apply whether co-ownership
arises from joint authorship or through co-ownership of rights
through a partnership. See id.
All of the parties to this action are California domicilaries
and so federal subject matter jurisdiction will subsist only if
there is a federal question. Plaintiffs argue that the action
must be remanded because the claims are all based in state law
causes of action and because defenses based in federal law are
insufficient to confer subject matter jurisdiction.
Defendant first argues that the doctrine of complete preemption
makes this a federal case. The fact that certain copyright
provisions, such as 17 U.S.C. § 204, which requires that any
license granting exclusive rights to another must be in writing,
may preempt certain state law provisions, such as those
oral agreements, does not change a state-based cause of action
into a federal one. See, e.g., Valente-Kritzer Video v.
Pinckney, 881 F.2d 772, 775-76 (9th Cir. 1989); PMC, Inc. v.
Saban Entertainment, Inc., 45 Cal.App.4th 579, 584,
52 Cal.Rptr.2d 877 (1996). Biafra's defenses are not to be
considered in determining whether or not the Court has subject
matter jurisdiction. See Vestron, 839 F.2d at 1381.
As for the two state claims most likely to run afoul of
complete preemption, plaintiffs have pled them in terms that
avoid preemption. A state law right is completely preempted only
if the work at issue is copyrightable and the state law grants
right equivalent in scope to the rights granted under copyright.
See Kodadek v. MTV Networks, Inc., 152 F.3d 1209, 1212 (9th
Cir. 1998). The unfair business practices claim focuses on
self-dealing with respect to promotional activities and failure
to pay royalties; the claim does not attempt to mimic an
infringement action by claiming unfair use of the works at issue.
See id. Nor does plaintiffs' conversion action attempt to
circumvent the copyright laws by asserting an equivalent right,
rather it alleges conversion of royalties, not of the works
themselves. See Dielsi v. Falk, 916 F. Supp. 985, 992 (C.D.Cal.
Defendant next contends that in their first and seventh claims,
plaintiffs have pled causes of action arising under federal
copyright law. Plaintiffs counter that they are asserting rights
granted under state law.
The first cause of action does not attempt to raise an
infringement claim, but rather seeks resolution of the parties'
respective rights and duties. Ownership and title rights are
matters of common-law and do not arise under the Copyright Act.
See Oddo, 743 F.2d at 633. In essence, plaintiffs seek an
accounting and determination of ownership rights, which are
matters to be decided under state law. See id.
The seventh cause of action pleads a claim for injunctive
relief on the theory that Biafra will continue to exploit the
materials for which Decay Music allegedly holds exclusive rights
to control the exploitation unless he is enjoined. Biafra is a
co-owner of all the works in dispute, either through his own
authorship efforts or through his participation in the
partnership. Mordam is a licensee of Biafra and thus its rights
are derivative of Biafra's. As a matter of law, in the Ninth
Circuit, co-owners cannot infringe on each others' copyrights;
they can only violate rights allocated by contract. See Oddo,
743 F.2d at 633. Accordingly, the Court construes the seventh
cause of action as a an effort to enjoin Biafra from violating a
written agreement with Decay Music granting them exclusive rights
to works for which he is an author, which therefore would bar him
from exploiting the works independently. Whether Biafra ever
validly assigned his rights in the works exclusively to Decay
Music, thereby depriving himself of his ability as a joint author
to exercise those rights independently, is a matter of contract
law for the state courts to decide.
For the foregoing reasons, the Court GRANTS the motion and
hereby REMANDS the case to the state courts.
IT IS SO ORDERED.