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Jones v. Brioche and Mayo, LLC

United States District Court, N.D. Indiana, South Bend Division

May 25, 2018

WILLIAM JONES, Plaintiff,
v.
BRIOCHE AND MAYO, LLC, Defendant.

          OPINION AND ORDER

          PHILIP P. SIMON, JUDGE

         Under the pseudonym “Billy Jay, ” plaintiff William Jones wrote a screenplay entitled “Zone 15, ” which he then sold to defendant Brioche and Mayo, LLC. Jones tells me in his complaint that in exchange for “the rights to produce and exhibit a motion picture based on said screenplay, ” he received $250 and “an express guarantee that he would be properly credited as an associate producer as part of the film credits and in any paid advertisements.” [DE 7 at ¶4.] After the movie was produced and released, Jones came to believe that Brioche and Mayo failed to live up to their end of the bargain. The crux of Jones' complaint is that Brioche and Mayo failed to comply with the promise to credit him has an associate producer. He also takes issue with the veracity of Brioche and Mayo's information campaign suggesting that the movie was written by military veterans (which he is not). Jones also contends that he wasn't paid for the final screenplay rewrite as promised and was not credited as an associate producer on the film.

         If all of these beefs sound like they arise out of state law, it's because they do. And indeed, Jones originally filed the case in the Circuit Court of St. Joseph County, Indiana alleging three counts. The first is a breach of contract claim. [DE 7 at 2.] The second is a claim of intentional infliction of emotional distress. [Id. at 3.] Count III is a claim for unjust enrichment. [Id. at 4.] Brioche and Mayo removed the case to this court. They say that Count III of the amended complaint - the unjust enrichment claim - is really a copyright claim dressed up to look like something else. [DE 1 at ¶7.] Asserting that the Copyright Act completely preempts the unjust enrichment claim, Brioche and Mayo contend that removal of the case to federal court is supported by federal question jurisdiction over Count III, and that the court has supplemental jurisdiction over the two other state law claims. [Id. at ¶¶9, 21.] The case was not removed on diversity grounds and the plaintiff's amended complaint specifically says he is not seeking damages of more than $75, 000 in any event. [DE at ¶9.]

         Federal preemption generally is based on the Supremacy Clause of the United States Constitution declaring that the federal Constitution and laws are “the Supreme Law of the land.” U.S. Const., art. VI, cl. 2. There are three ways that a federal law can preempt state and local law:

Express preemption occurs when a federal statute explicitly states that it overrides state or local law. Conflict preemption exists if it would be impossible for a party to comply with both local and federal requirements or where local law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” ... Field preemption occurs when federal law so thoroughly “occupies a legislative field” as to make it reasonable to infer that Congress left no room for the states to act.

Hoagland v. Town of Clear Lake, Ind., 415 F.3d 693, 696 (7th Cir. 2005) (internal citations omitted).

         The preemptive authority of the federal Copyright Act derives from 17 U.S.C. §301(a):

[A]ll legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether...published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

(Emphasis added.) Section 102 extends federal copyright protection to original works of authorship including literary works, dramatic works, motion pictures and other audiovisual works. Section 103 explains that the scope of Section 102 includes compilations and derivative works. Section 106 of the Copyright Act lists the owner of copyright's exclusive rights, namely to reproduce the copyrighted work, to prepare derivative works, to distribute copies to the public, and in the case of literary works including motion pictures, to perform or display the work publicly.

         The preemption of state causes of action by federal law does not always support removal based on federal question jurisdiction. For example, “conflict preemption does not provide an independent basis for federal jurisdiction/removal.” Franciscan Skemp Healthcare, Inc. v. Central States Joint Bd. Health and Welfare Trust Fund, 538 F.3d 594, 601 (7th Cir. 2008). Likewise, express preemption clauses do not necessarily support removal to federal court. See, e.g., Lehmann v. Brown, 230 F.3d 916, 919 (7th Cir. 2000) (ERISA premption provision 29 U.S.C. §1144(a) does not support removal to federal court). Setting aside field preemption, when federal preemption is raised as a defense to a state law claim it does not itself confer federal question jurisdiction. Wisconsin Interscholastic Athletic Ass'n v. Gannett Co., Inc., 658 F.3d 614, 620 (7th Cir. 2011); Atchley v. Heritage Cable Vision Associates, 101 F.3d 495, 498 (7th Cir. 1996). In other words, if the preemption language in the Copyright Act is deemed to be merely conflict preemption or express preemption, which provides a defense to the state claim but does not convert it into a federal claim under the Copyright Act, then preemption would not support removal from state court on the basis of federal question jurisdiction. This is because the ”federal question must be part of the plaintiff's well-pleaded complaint; jurisdiction may not be ‘predicated on an actual or anticipated defense.'” WIAA, 658 F.3d at 619 (quoting Vaden v. Discover Bank, 556 U.S. 49, 60 (2009)).

         Field preemption, which is often called complete preemption, is a horse of a different color. Where field preemption applies, Congress has so completely displaced state law that a state claim in the area “is characterized from its inception as...arising under the federal law.” Atchley, 101 F.3d at 498 (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987)). Several circuits have held that the Copyright Act's preemption provision in §301(a) completely preempts the substantive field, so that where it applies, “it converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule, ” including for purposes of federal question removal to federal court. Spear Marketing, Inc. v. BancorpSouth Bank, 791 F.3d 586, 593-94 (5th Cir. 2015). Brioche and Mayo rely on such cases here, including Ritchie v. Williams, 395 F.3d 283, 287-89 (6th Cir. 2005), Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 296, 303-06 (2nd Cir. 2004), and Rosciszewski v. Arete Associates, Inc., 1 F.3d 225, 230-33 (4th Cir. 1993). [DE 16 at 3-4.]

         But our Court of Appeals has expressed skepticism. Citing those same decisions by the Sixth, Second and Fourth Circuits finding so-called complete preemption by the Copyright Act, the Seventh Circuit has said “[w]e are not so certain, ” citing contrary authorities. WIAA, 658 F.3d at 620. But further analysis of the issue was not necessary to the decision, and the WIAA case did not explore it further. Since that decision in 2011, I have been unable to locate any other Seventh Circuit opinion that addresses the issue. But I think it is fair to say that if the Seventh Circuit persisted in its skepticism, it would deem it error for this court to uphold Brioche and Mayo's removal of Jones's action based on what was pled as an unjust enrichment claim. In other words, if the copyright preemption is merely a defense to the claim, the federal character of “ordinary” preemption would not convert the state law claim into one under federal law supporting federal question removal. WIAA, 658 F.3d at 620.

         But let's suppose that the Copyright Act preemption is of the “complete” variety that supports federal question removal. I still would have to decide whether it applies to the facts of this case as alleged in Count III of the amended complaint - the unjust enrichment count. A two-pronged test, derived from the language of §301(a), is used to determine whether a state law claim is preempted by the Copyright Act. The first question is whether the claim involves a work that is fixed in tangible form and within the subject matter of copyright as specified by §102 and §103? Seng-Tiong Ho v. Taflove, 648 F.3d 489, 500 (7th Cir. 2011). The parties do not dispute that this prong is satisfied.[1]The second question is whether the claim seeks to protect rights that are “equivalent to” any of the exclusive rights granted by federal copyright law in §106? Id. The Seventh Circuit has summarized these rights as “reproduction, adaptation, publication, performance, and display” of the copyrighted work. Toney, 406 F.3d at 909.

         Not every state law claim touching upon copyrighted material, such as the screenplay at issue here, meets the second prong of this test. For instance, it is widely acknowledged that “[a] contract dispute about who owns a particular copyright does not give rise to jurisdiction, ” because it does not assert a claim of infringement or seek any relief provided by the Copyright Act. WIAA, 658 F.3d at 619; Nova Design Build, Inc. v. Grace Hotels, LLC, 652 F.3d 814, 816 (7th Cir. 2011). See also Utopia Provider Sys., Inc. v. Pro-Med Clinical Sys., L.L.C.,596 F.3d 1313, 1327 & n. 26 (11th Cir. 2010); Bowers v. Baystate Techs., Inc., 320 F.3d 1317, 1324 (Fed.Cir. 2003); Lipscher v. LRP Publ'ns, Inc.,266 F.3d 1305, 1318 (11th Cir. 2001); ProCD, Inc. v. Zeidenberg,86 F.3d 1447, ...


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