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