Shahani v. Moctezuma

Filing 23

ORDER DISMISSING FOR LACK OF SUBJECT MATTER JURISDICTION. Signed by Magistrate Judge Jacqueline Scott Corleu on 1/20/2017. (ahm, COURT STAFF) (Filed on 1/20/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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RAY KHEM SHAHANI,

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Plaintiff,

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United States District Court
Northern District of California

Case No.16-cv-03862-JSC
ORDER DISMISSING FOR LACK OF
SUBJECT MATTER JURISDICTION

v.

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NIEVES MOCTEZUMA,

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Re: Dkt. No. 21

Defendant.

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Plaintiff Ray K. Shahani filed suit against Defendant Nieves Moctezuma alleging a claim

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for relief under the Declaratory Judgment Act and state law claims for breach of contract and

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violation of California’s consumer protection statute. Plaintiff alleges that Defendant breached a

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contract between the parties when he failed to provide Plaintiff with digital photographs from

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Plaintiff’s wedding and failed to provide raw video footage of Plaintiff’s wedding, and instead,

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provided a video containing at least seven different copyrighted songs. Plaintiff contends this

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video subjects him to potential claims for copyright infringement. Because the Court had

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concerns regarding its subject matter jurisdiction, it issued an Order to Show Cause. Having

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reviewed the response to the Order to Show Cause, the Court concludes that there is no justiciable

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case or controversy between the parties and DISMISSES this action for lack of subject matter

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jurisdiction. 1

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Plaintiff has consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 636(c).
(Dkt. No. 9.)

BACKGROUND

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In the summer of 2014, Plaintiff, a California resident, hired Defendant, a Utah resident, to

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take photographs and video at Plaintiff’s wedding and related festivities. (Complaint ¶ 1.)

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Plaintiff paid Defendant $2,500 for his services. (Id.) Pursuant to the parties’ agreement,

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Defendant was to provide Plaintiff with copies of all the digital photographs and raw video

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footage and prepare a “video presentation” which would include the video footage. (Id. at ¶ 8.)

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Plaintiff was advised that over the course of the two-day wedding festivities, Defendant obtained

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several thousand digital photos. (Id. at ¶¶ 10-11.) Six weeks after the wedding, Defendant sent

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Plaintiff a package containing about 200 individual prints and three copies of a 2-DVD

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multimedia presentation containing live video and still photos from the wedding event

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United States District Court
Northern District of California

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accompanied by music performed at the event as well as pre-recorded music from various famous

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artists. (Id. at ¶ 12.) Plaintiff thereafter requested that Defendant provide him with all the digital

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photos and the raw video footage per the parties’ agreement, but Defendant has refused to

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communicate with Plaintiff. (Id. at ¶ 20.)
Plaintiff thus filed this action on July 8, 2016 alleging claims for (1) declaratory relief for

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non-infringement of copyright and rights in photographic and video images, (2) breach of contract,

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and (3) state law unfair competition. (Dkt. No. 1.) Plaintiff alleges that Defendant breached the

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parties’ contract when he failed to provide Plaintiff with digital photographs and raw video

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footage of Plaintiff’s wedding. (Id. at ¶¶ 32-33.) Plaintiff also alleges that Defendant has

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subjected Plaintiff to potential liability for copyright infringement because the wedding video he

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provided Plaintiff contains at least seven different copyrighted songs. (Id. at ¶¶ 13-15; 21-30.)

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Defendant failed to respond to the complaint and the Clerk entered his default on

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September 2, 2016. (Dkt. No. 14.) Plaintiff thereafter filed a motion for default judgment. (Dkt.

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No. 17.) Upon review of the motion for default judgment, the Court had concerns regarding its

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subject matter jurisdiction and issued the now pending Order to Show Cause. (Dkt. Nos. 20 &

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21.)

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DISCUSSION
“Federal courts are courts of limited jurisdiction. They possess only that power authorized
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by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377

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(1994). “Subject matter jurisdiction can never be forfeited or waived and federal courts have a

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continuing independent obligation to determine whether subject-matter jurisdiction exists.”

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Leeson v. Transamerica Disability Income Plan, 671 F.3d 969, 975 n.12 (9th Cir. 2012) (internal

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quotation marks and citations omitted); Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir.

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2004) (noting that district courts are “obligated to consider sua sponte whether [they] have subject

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matter jurisdiction”). There are two bases for federal subject matter jurisdiction: (1) federal

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question jurisdiction under 28 U.S.C. § 1331 and (2) diversity jurisdiction under 28 U.S.C. § 1332.

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A district court has federal question jurisdiction in “all civil actions arising under the Constitution,
laws, or treaties of the United States.” Id. at §1331. A district court has diversity jurisdiction

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United States District Court
Northern District of California

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“where the matter in controversy exceeds the sum or value of $75,000, ... and is between citizens

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of different states, or citizens of a State and citizens or subjects of a foreign state....” Id. §

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1332(a)(1)-(2).

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In his Complaint, Plaintiff avers that the Court has jurisdiction under: (1) 28 U.S.C.

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Section 1338(a) because this is a suit for declaratory relief for copyright non-infringement under

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the United States Copyright Act of 1976, as amended, 17 U.S.C. Sections 101 et seq; and (2) 28

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U.S.C. § 1332 because the parties are diverse and the amount in controversy exceeds $75,000.00.

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Neither basis for jurisdiction is availing.

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A. No Case or Controversy under the Declaratory Judgment Act

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The Declaratory Judgment Act provides that: “[i]n a case of actual controversy within its

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jurisdiction...any court of the United States...may declare the rights and other legal relations of any

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interested party seeking such declaration, whether or not further relief is or could be sought.” 28

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U.S.C. § 2201(a). “[T]he phrase a case of actual controversy refers to the type of ‘Cases’ and

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‘Controversies’ that are justiciable under Article III.” MedImmune, Inc. v. Genentech, Inc., 549

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U.S. 118, 127 (2007). “The constitutional ripeness of a declaratory judgment action depends upon

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whether the facts alleged, under all the circumstances, show that there is a substantial controversy,

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between parties having adverse legal interests, of sufficient immediacy and reality to warrant the

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issuance of a declaratory judgment.” In re Coleman, 560 F.3d 1000, 1005 (9th Cir. 2009) (internal
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quotation marks omitted).

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To allege a sufficient case or controversy in a copyright declaratory relief action a plaintiff

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must demonstrate a real and reasonable apprehension that he will be subject to liability as a result

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of the defendant’s actions. See Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542,

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1555 (9th Cir. 1989); see also Abrahams v. Hard Drive Prods., Inc., No. C-12-01006 JCS, 2012

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WL 5499853, at *4 (N.D. Cal. Nov. 13, 2012), (holding that a plaintiff must show a “real and

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reasonable apprehension” that they may be subject to liability to establish subject matter

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jurisdiction under the Declaratory Judgment Act).
As the Court noted in its Order to Show Cause, the Complaint does not come close to

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meeting this standard. Plaintiff seeks a declaration of non-infringement, but Plaintiff does not

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United States District Court
Northern District of California

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allege that Defendant owns any of the copyrighted material in question and the true copyright

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owners are not parties to this litigation. Since Defendant does not have standing to sue Plaintiff

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for copyright infringement under the Copyright Act, Plaintiff cannot allege facts sufficient to show

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that there is a “real and reasonable apprehension” that he may be sued for copyright infringement

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by Defendant. See 17 U.S.C. § 501(b); Silvers v. Sony Pictures Entertainment, Inc., 402 F.3d 881,

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890 (9th Cir. 2005) (“a party that has no [copyright] ownership interest has no standing to sue”).

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In his response to the Order to Show Cause, Plaintiff simply asserts that he is “liable for copyright

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infringement to the copyright owners for personal use of the copyright infringing multimedia

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video presentation”—but the copyright owners are not parties to this action and have not

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threatened Plaintiff with suit. (Dkt. No. 21 at 2:22-23. 2) Plaintiff’s suggestion that he could be

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subject to criminal prosecution based on possession of the copyrighted songs is even more

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speculative. The only party to threaten suit is Plaintiff.
Plaintiff’s request that he be allowed leave to join the copyright owners under Federal

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Rules of Civil Procedure 19 or 20 does not change the analysis. Even if the Court were to grant

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Plaintiff leave to join the copyright holders, Plaintiff has not shown how joinder would cure the

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jurisdictional defect because he has not alleged that any of the copyright holders have threatened

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Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the
ECF-generated page numbers at the top of the documents.
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suit. See Hal Roach Studios, 896 F.2d at1556 (noting that “the apprehension must have been

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caused by the defendant’s actions.”) (emphasis added). Here, there is nothing to suggest that the

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copyright holders have done anything to create a reasonable apprehension on Plaintiff’s part. See,

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e.g., Lenz v. Universal Music Corp., No. C 7-3783 JF, 2008 WL 962102 (N.D. Cal. Apr. 8, 2008)

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(dismissing declaratory judgment claim because the defendant—the copyright holder of a song

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included in a YouTube video posted by plaintiff—sent a cease and desist letter to YouTube not

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plaintiff, which “indicated [that defendant] had and presently has no intention of ever asserting an

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infringement action directly against [plaintiff]”).
As Plaintiff’s complaint does not allege facts sufficient to support a case or controversy

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between Plaintiff and Defendant for his declaratory relief non-infringement of copyright claim,

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United States District Court
Northern District of California

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this Court does not have subject matter jurisdiction by virtue of the copyright declaratory relief

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claim.

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B. No Diversity Jurisdiction under Section 1332

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Nor has Plaintiff established jurisdiction based on diversity of citizenship under 28 U.S.C.

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§ 1332. While Plaintiff is a resident of California and Defendant is a resident of Utah, the facts

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alleged in the Complaint do not suggest that the amount in controversy requirement is satisfied.

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To properly allege diversity jurisdiction, a plaintiff must claim damages in excess of $75,000. See

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28 U.S.C. § 1332(a). In Plaintiff’s motion for default judgment, Plaintiff requests $2,575 for

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breach of contract and $10,575 in attorney’s fees for a total prayer of $13,075. (Dkt. No. 17 at

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18.) Plaintiff requests the $10,575 in attorney’s fees as statutory damages under Section 505 of

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the Copyright Act. (Id. at 13-14.) Plaintiff’s prayer of $13,075 does not satisfy the $75,000

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amount in controversy requirement for diversity jurisdiction. Plaintiff appears to attempt to plead

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around this by alleging that the “owners of the Copyrighted material would be entitled to increased

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statutory damages awards of up to One Hundred Fifty Thousand Dollars ($150,000.00).” (Id. at

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14; Complaint at 9.) However, as discussed supra, Plaintiff is not an owner of any of the

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copyrighted material in question and the owners are not parties. Plaintiff’s response to the Order

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to Show Cause fails to show how he can use Copyright Act damages available to some other party

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in a purely hypothetical and speculative action to satisfy the amount in controversy requirement in
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this action. The Court thus concludes that diversity jurisdiction is also lacking.

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C. Plaintiff is not Without a Forum

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Plaintiff’s suggestion that he could not file his action in state court is unpersuasive. In

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essence, Plaintiff’s claim is one for breach of contract—he and Defendant entered into an

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agreement, he performed on his part of the agreement by paying Defendant the agreed upon fee.

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Defendant breached the agreement by failing to provide all the digital files and raw video footage.

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These allegations give rise to a claim for breach of contract. Plaintiff has offered no support—and

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the Court can conceive of none—for his proposition that this claim would be deemed preempted

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by Federal law.
CONCLUSION

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United States District Court
Northern District of California

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For the reasons stated above, the Court concludes that it lacks subject matter jurisdiction

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and dismisses the Declaratory Judgment Act claim. Because the Court finds that it has no subject

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matter jurisdiction over the action, the Court declines to exercise supplemental jurisdiction over

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the state law claims and dismisses those without prejudice to refiling in state court.

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The Clerk shall close the file.

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IT IS SO ORDERED.
Dated: January 20, 2017

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JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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