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DEAD KENNEDYS v. BIAFRA

April 5, 1999

DEAD KENNEDYS D/B/A DECAY MUSIC, A CALIFORNIA GENERAL PARTNERSHIP; EAST BAY RAY A/K/A RAY PEPPERELL; KLAUS FLOURIDE A/K/A GEOFFREY LYALL; D.H. PELIGRO A/K/A DARREN HENLEY, PLAINTIFFS,
v.
JELLO BIAFRA A/K/A ERIC REED BOUCHER, INDIVIDUALLY AND D/B/A ALTERNATIVE TENTACLES RECORDS; MORDAM RECORDS, A CALIFORNIA BUSINESS ENTITY; AND DOES 1 THROUGH 30, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Jensen, District Judge.

ORDER

On March 31, 1999, the Court heard argument on plaintiffs' motion for costs and attorney fees after remand. David M. Given and Paul Karl Lukacs appeared on behalf of plaintiffs; Paul Raynor Keating appeared for defendant Jello Biafra. Having considered the arguments of counsel, the papers submitted, the applicable law, and the record in this case, the Court hereby GRANTS the motion.

I. BACKGROUND

A. Factual Background and Procedural History

Plaintiffs are Decay Music, a general partnership, and three of its four partners. The four partners in Decay Music once comprised the rock music band called the Dead Kennedys. The three individual plaintiffs are East Bay Ray, Klaus Flouride, and D.H. Peligro. Defendant is the fourth partner, Jello Biafra. All of the parties are California domicilaries. In 1986, the band ended its recording and touring activities because of differences among the band members.

In 1979, the Dead Kennedys formed Alternative Tentacles to act as their record label. Two years later, in 1981, the band members formed Decay Music, a California general partnership, in which the four band members are equal partners. An oral agreement in 1986 among the band members transferred ownership of Alternative Tentacles from Decay Music to Biafra individually. On September 30, 1998, plaintiffs met during a Decay Music partnership meeting and on a 3-0 vote terminated Alternative Tentacles' right to administer and exploit the Dead Kennedys' musical compositions and sound recordings (the Catalog), effective October 1, 1998. Biafra claims that he offered to send a proxy to the meeting, which he was unable to attend, but that his offer was refused. Around October 23, 1998, Biafra paid a sum of royalties into a trust account. He conditioned release of that money to the partnership and the individual partners on his approval or the existence of a court order requiring him to release the funds.

On October 29, 1998, plaintiffs brought an action in San Francisco Superior Court against Mordam Records and against Jello Biafra, both in his status as an individual and as the owner of the sole proprietorship Alternative Tentacles Records. The complaint alleged seven state law causes of action: (1) a declaratory judgment that Decay Music validly terminated Alternative Tentacles' right to exploit the Catalog; (2) breach of Biafra's fiduciary duties to his partners through self-dealing; (3) conversion by Biafra of income that rightfully belongs to the partnership; (4) breach of the oral agreement that transferred ownership of Alternative Tentacles to Biafra from Decay Music; (5) unjust enrichment of Biafra at the expense of his partners; (6) engagement in unfair business practices by Biafra and Mordam Records; and (7) injunctive relief to preserve Decay Music's exclusive rights to exploit the Catalog against Biafra and Mordam.

Defendant Mordam counter-claimed in interpleader for resolution of to whom it should pay royalties: Decay Music or Alternative Tentacles. Mordam distributes records at wholesale for Alternative Tentacles pursuant to an oral agreement with Biafra.

Defendant Biafra removed the case to federal court on the basis that the complaint, in particular counts one and seven, pled a claim arising under the Copyright Act. As one of his affirmative defenses, Biafra contended that plaintiffs' claims are barred in whole or in part by Biafra's rights as an author in the sound and video recordings and in the underlying musical compositions. According to Biafra, he retained individual title to his rights in the works and licensed his rights to Alternative Tentacles. Biafra claimed that Decay Music merely acts as an administrator for the purposes of distributing royalties and that the partnership has no rights in the underlying works.

Biafra 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 moved to have the case remanded to state court for lack of federal subject matter jurisdiction. The Court agreed and remanded the case to state court on grounds that co-authors cannot pursue claims of infringement against one another or each other's licensees as a matter of law and thus the only claims present were matters of state law. Plaintiffs now move for costs and attorney's fees incurred with respect to removal and remand.

B. Legal Standard

At its discretion, the court may order "payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c); see Moore v. Permanente Medical Group, Inc., 981 F.2d 443, 446 (9th Cir. 1992). In deciding whether or not to award costs and attorney's fees, the Court should consider whether removal was improper, looking both at the nature of the removal and of the remand. See id. The purpose of an award is not to punish the removing party but instead to reimburse the party who sought remand for litigation costs incurred as a result of unnecessary removal. See id. at 447. The availability of costs and attorney fees replaces the former requirement of posting of a bond; however, it serves the same purpose — to discourage improper removal. See 28 U.S.C. § 1447, commentary.

An award of costs and fees pursuant to section 1447(c) is a "collateral matter over which a court normally retains jurisdiction even after being divested of ...


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