Dent et al v. Meyer
Filing
102
MEMORANDUM Opinion and Order signed by the Honorable Edmond E. Chang. For the reasons stated in the Opinion, the Court relinquishes supplemental jurisdiction, and this case is remanded to the Circuit Court of Cook County. The motion to remand 53 is granted. Civil case terminated. Status hearing of 06/05/2015 is vacated. Emailed notice(slb, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
RICHARD DENT, STEVE FULLER
WILLE GAULT, JIM MCMAHON, MIKE
RICHARDSON, and OTIS WILSON,
Plaintiffs,
v.
RENAISSANCE MARKETING
CORPORATION and JULIA MEYER,
Defendants.
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No. 14 C 02999
Judge Edmond E. Chang
MEMORANDUM OPINION AND ORDER
Six members of the 1985 Chicago Bears football team, Richard Dent, Steve
Fuller, Willie Gault, Jim McMahon, Mike Richardson, and Otis Wilson (collectively
Plaintiffs or the Shufflin’ Crew), filed this suit in state court against Renaissance
Marketing Corporation and Julia Meyer. R. 1-1, State Court Compl. ¶ 1.1 Plaintiffs
allege that Defendants used Plaintiffs’ personas in the “Super Bowl Shuffle”
without authorization. Renaissance and its sole officer, Julia Meyer, removed the
original complaint to federal court, arguing that it was preempted by the Copyright
Act, 17 U.S.C. § 101 et seq. R. 1, Defs.’ Notice of Removal. Plaintiffs moved to
remand. R. 15, Pls.’ First Mot. Remand. This Court concluded that Plaintiffs’ claims
for declaratory judgment, injunctive relief, and conversion were preempted, but that
the claims for unjust enrichment, constructive trust, and an accounting were not.
R. 36, Order on First Mot. Remand. The Court therefore had federal-question
1Citation
to the docket is “R.” followed by the entry number.
jurisdiction over the preempted claims and supplemental jurisdiction over the
remaining state-law claims. Id.
After the denial of the motion to remand, Plaintiffs amended their
complaint, removing the preempted claims and adding a claim under the Illinois
Right of Publicity Act, 765 ILCS 1075/1 et seq. R. 51, Am. Compl. Plaintiffs moved to
remand the amended complaint, R. 53, Pls.’ Second Mot. Remand, and Defendants
again opposed the motion, R. 92, Defs.’ Resp. Br. Red Label Publishing, Inc., a
proposed third-party intervenor2 and owner of the copyrights involved in this suit,
also opposed the motion to remand. R. 94, Red Label Resp. Br. Both the Defendants
and the intervenor (represented by the same counsel) argue that the Publicity Act
claim is preempted by the Copyright Act, Red Label Resp. at 4-8; Defs.’ Resp. Br. at
5-19, and Defendants argue that forum-manipulation concerns counsel against
relinquishing subject-matter jurisdiction over the state-law claims, Defs.’ Resp. Br.
at 1-5. For the reasons discussed below, Plaintiffs’ motion to remand is granted.
I. Background
The Court assumes familiarity with the facts of the dispute between the
Shufflin’ Crew and Defendants as described more fully in the order denying the first
motion to remand. See Dent v. Renaissance Marketing Corp., 2014 WL 5465006, at
*1 (N.D. Ill. Oct. 28, 2014) (R. 36 on the Court’s docket). In short, the Shufflin’
Crew—six former members of the Chicago Bears—agreed to perform in the Super
Bowl Shuffle, a video and song celebrating the Chicago Bears’ 1985 Super Bowl
2Red
Label’s motion to intervene was denied without prejudice in light of the motion
to remand, but it was permitted to file a response to the motion. R. 56, Dec. 3, 2014 Minute
Entry.
2
victory. R. 51, Am. Compl. ¶¶ 10-11. Red Label Records and its president, Richard
Meyer, were to develop and produce the video. Id. ¶¶ 10-12. The parties entered into
a Royalty Agreement to define each party’s rights in the work and to ensure that
the Shuffle’s charitable purpose would be carried out. Id. ¶¶ 12-13; see also R. 51-1,
Pls.’ Exh. A, Royalty Agreement. The agreement expired on March 31, 1989. Am.
Compl. ¶ 15. In 1986, Red Label assigned its rights in the Shuffle to Richard Meyer
individually without the Shufflin’ Crew’s consent. Id. ¶ 19. Richard Meyer’s widow,
Defendant Julia Meyer, now claims survivorship rights in the Shuffle. State Court
Compl. ¶ 11.
In 2014, the Shufflin’ Crew filed this lawsuit in Illinois court against Julia
Meyer and her licensing company, Defendant Renaissance Marketing. Id. at 1.
Defendants removed the state-court case to federal court under 28 U.S.C. § 1441 on
the basis of complete preemption by the Copyright Act, 17 U.S.C. § 101 et seq. Defs.’
Notice of Removal at 2-20. Plaintiffs moved to remand, Pls.’ First Mot. Remand, and
the Court denied the motion, Dent, 2014 WL 5465006 at *1. In that order, the Court
concluded that although some of Plaintiffs’ claims against Renaissance and Meyer
were not preempted by the Copyright Act (the claims for unjust enrichment,
constructive trust, and an accounting), other claims were preempted, so remand
was denied. Id. at *3-6. Plaintiffs then amended their complaint, eliminating the
preempted claims and including a claim under the Illinois Right of Publicity Act,
765 ILCS 1075/1 et seq.3 See Am. Compl. Plaintiffs moved to remand. Pls.’ Second
3The
amended complaint has four remaining counts: (1) unjust enrichment;
(2) constructive trust; (3) accounting; and (4) Illinois Right of Publicity Act. Am. Compl.
3
Mot. Remand. Defendants and the proposed intervenors oppose remand. Defs.’
Resp. Br.; Red Label Resp. Br.
II. Legal Standard
Removal is governed by 28 U.S.C. § 1441, which provides, in pertinent part,
that “any civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district … embracing
the place where such action is pending.” 28 U.S.C. § 1441(a). “Only state-court
actions that originally could have been filed in federal court may be removed to
federal court.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). After a case is
removed, it may be remanded based on lack of subject-matter jurisdiction at any
time before a final judgment is issued. 28 U.S.C. § 1447(c). Jurisdiction is
determined at the time of removal, however, see In re Burlington N. Santa Fe Ry.
Co., 606 F.3d 379, 380-81 (7th Cir. 2010) (per curiam), so post-removal amendments
will not ordinarily strip the court of subject-matter jurisdiction, see Carlsbad Tech.,
Inc. v. HIF Bio, Inc., 556 U.S. 635, 639-41 (2009) (holding that, although the claims
over which the court had original jurisdiction had been dismissed, the court
retained supplemental jurisdiction over the state-law claims; the decision to
relinquish jurisdiction over those claims was therefore discretionary and not based
on a lack of subject-matter jurisdiction). This is true even if the claims giving rise to
original jurisdiction were dismissed voluntarily. Anderson v. Aon Corp., 614 F.3d
361, 364-65 (7th Cir. 2010) (holding that a court retains supplemental jurisdiction
4
over related state-law claims even when the federal claims are voluntarily
dismissed). But even if a district court retains subject-matter jurisdiction over a
removed case on the basis of supplemental jurisdiction, 28 U.S.C. § 1367, the court
may relinquish that jurisdiction if all claims over which the court had original
jurisdiction are dismissed. RWJ Mgmt. Co. v. BP Prods. North America, Inc., 672
F.3d 476, 479-80 (7th Cir. 2012).
In general, federal district courts have “original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C.
§ 1331. The usual test for federal-question jurisdiction under § 1331 is the “well
pleaded complaint rule,” which requires federal courts to look only at the complaint
itself “to determine if the case arises under federal law.” Vorhees v. Naper Aero
Club, Inc., 272 F.3d 398, 402 (7th Cir. 2001). In addition, “[c]omplete preemption
‘confers exclusive federal jurisdiction in certain instances where Congress intended
the scope of a federal law to be so broad as to entirely replace any state-law claim.’”
Nelson v. Welch (In re Repository Techs.), 601 F.3d 710, 722 (7th Cir. 2010) (citing
Franciscan Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare Trust
Fund, 538 F.3d 594, 596 (7th Cir. 2008)). “Under this jurisdictional doctrine, certain
federal statutes have such ‘extraordinary pre-emptive power’ that they ‘convert [ ]
an ordinary state common law complaint into one stating a federal claim.’” Id.
(citing Franciscan Skemp Healthcare, 538 F.3d at 596; Aetna Health Inc. v. Davila,
542 U.S. 200, 209 (2004)). “Complete preemption, therefore, creates an exception to
the rule that courts look only to the plaintiff’s well-pleaded complaint to determine
5
whether federal jurisdiction exists. If the complaint pleads a state-law claim that is
completely preempted by federal law, the claim is removable to federal court.” Id.
(citing Franciscan Skemp Healthcare, 538 F.3d at 596-97).
The federal Copyright Act preempts “all legal and equitable rights that are
equivalent to any of the exclusive rights within the general scope of copyright as
specified by section 106” and are “in a tangible medium of expression and come
within the subject matter of copyright as specified by sections 102 and 103.” 17
U.S.C. § 301(a). “Even though [a] claim is created by state law, a case may ‘arise
under’ a law of the United States if the complaint discloses a need for determining
the meaning or application of … [federal] law.” See T.B. Harms Co. v. Eliscu, 339
F.2d 823, 827 (2d Cir. 1964); accord Int’l Armor & Limousine Co. v. Moloney
Coachbuilders, Inc., 272 F.3d 912, 915-16 (7th Cir. 2001). But not every claim that
involves a copyright will be preempted by the Copyright Act. See T.B. Harms, 339
F.2d at 825-27; Nova Design Build, Inc. v. Grace Hotels, LLC, 652 F.3d 814, 816
(7th Cir. 2011). Preemption applies when “establishing the plaintiff’s right [under
the state-law cause of action] will require interpreting federal law.” Saturday
Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1194 (7th Cir. 1987).
Two conditions must be satisfied for copyright preemption of a state-law
cause of action under § 301. “First, the work in which the right is asserted must be
fixed in tangible form and come within the subject matter of copyright as specified
in § 102. Second, the right asserted must be equivalent to any of the rights specified
in § 106.” Baltimore Orioles, Inc. v. Major League Baseball Players Ass’n, 805 F.2d
6
663, 674 (7th Cir. 1986). Section 106 of the Copyright Act specifies five exclusive
and fundamental rights in a copyrighted work: reproduction, adaptation,
publication, performance, and display. 17 U.S.C. § 106; Toney v. L’Oreal USA, Inc.,
406 F.3d 905, 909 (7th Cir. 2005). To avoid preemption, a state-law claim must
claim a right that is “qualitatively distinguishable” from these five rights. Toney,
406 F.3d at 910. In determining if a claim is qualitatively distinguishable, courts
will look to the right that the plaintiff seeks to protect and the reasons he believes
those rights should be protected. Briarpatch Ltd., L.P. v Phoenix Pictures, Inc., 373
F.3d 296, 306 (2d Cir. 2004).
III. Analysis
Plaintiffs’ motion to remand their amended complaint raises two distinct
questions. The first is whether the newly added right-of-publicity claim is
preempted by the Copyright Act. If it is, the Court has federal-question jurisdiction
over the case, 28 U.S.C. § 1331, and the case stays here. If the right-of-publicity
claim is not preempted, the Court nevertheless has subject-matter jurisdiction
under supplemental jurisdiction, 28 U.S.C. § 1367. Carlsbad Tech, 556 U.S. at 63941 (“Upon dismissal of the federal claim, the District Court retained its statutory
supplemental jurisdiction over the state-law claims.”). The second question, then, is
whether the Court should relinquish its supplemental jurisdiction.4 Id. (“A district
4Plaintiffs
frame this motion as one to remand under 28 U.S.C. § 1447(c), which
permits a court to remand a case for lack of subject-matter jurisdiction at any time. See Pls.’
Second Mot. Remand at 1. But because the Court retains its supplemental jurisdiction even
if the claims over which the Court had original jurisdiction are dismissed, Anderson, 614
F.3d at 364-65, this characterization is inaccurate. The issue is whether the Court should
relinquish jurisdiction, not whether it has jurisdiction at all.
7
court’s decision whether to exercise that jurisdiction after dismissing every claim
over which it had original jurisdiction is purely discretionary.”). The Court will
address each of these questions in turn.
A. Preemption
The Illinois Right of Publicity Act (IRPA) gives individuals “[t]he right to
control and to choose whether and how to use an individual’s identity for
commercial purposes.” 765 ILCS 1075/10. The statute prohibits the unauthorized
use of personal identity for any commercial purpose. 765 ILCS 1075/30. In their
newly pled IRPA claim, Plaintiffs allege that Defendants “held themselves out as if
they had an affiliation with or authorization from the Shufflin’ Crew to use the
Shufflin’ Crew members’ [p]ersonas even though Defendants did not have and do
not have the Shufflin’ Crew members’ permission to do so,” in violation of IRPA.
Am. Compl. ¶ 48. Defendants argue that this claim is preempted by the Copyright
Act. Defs.’ Br. at 5-20. The Court disagrees.
Copyright preemption of right-of-publicity claims is not a simple issue. 1-1
Nimmer on Copyright § 101[B][3][b][i] (“The interplay between copyright preemption and the right of publicity has seen more volatility than just about any other
doctrine canvassed throughout this treatise. Tremendous disarray punctuates the
cases.”). And Defendants are correct that many cases hold that right-of-publicity
claims are preempted by the Copyright Act when the allegedly unauthorized use of
a plaintiff’s identity is coterminous with performance, reproduction, or distribution
of a copyrighted work. See Laws v. Sony Music Entm’t, Inc., 448 F.3d 1134, 1139-45
8
(9th Cir. 2006) (holding a right-of-publicity claim based on use of a copyrighted voice
recording of the plaintiff was preempted); Jules Jordan Video, Inc. v. 144942
Canada Inc., 617 F.3d 1146, 1152-55 (9th Cir. 2010) (holding that a right-ofpublicity claim based on the sale of copyrighted videos featuring plaintiffs was
preempted); Baltimore Orioles, Inc. v. Major League Baseball Players Assoc., 805
F.2d 663, 674-78 (7th Cir. 1986) (holding that an IRPA claim based on copyrighted
broadcasts of games was preempted); Maloney v. T3Media, Inc., 2015 WL 1346991,
at *5-9 (C.D. Cal. Mar. 6, 2015) (holding that a right-of-publicity claim based on sale
of copyrighted photos of the plaintiffs was preempted); Ray v. ESPN, Inc., 2014 WL
2766187, at *2-5 (W.D. Mo. Apr. 8, 2014) (holding that a right-of-publicity claim
based on broadcasts of copyrighted professional wrestling performances by the
plaintiff was preempted); Dryer v. Nat’l Football League, 55 F. Supp. 3d 1181, 120002 (D. Minn. 2014) (holding that a right-of-publicity claim based on broadcasting
recordings of football games played by the plaintiff was preempted); Fleet v. CBS,
Inc., 58 Cal. Rptr. 2d 645, 650-53 (Cal. Dist. Ct. App. 1996) (holding that a right-ofpublicity claim based on distribution of the plaintiff’s performance in a copyrighted
film was preempted). This makes sense. If the alleged use of the plaintiff’s identity
is confined solely to that plaintiff’s performance in a copyrighted work, the entirety
of the “identity”5 in question really is fixed in the recorded performance—a tangible
medium of expression. The conduct violating the plaintiff’s right to publicity would
5IRPA
defines “identity” as “any attribute of an individual that serves to identify
that individual to an ordinary, reasonable viewer or listener, including but not limited to
(i) name, (ii) signature, (iii) photograph, (iv) image, (v) likeness, or (vi) voice.” 765 ILCS
1075/5.
9
merely be an “act of reproducing, performing, distributing, or displaying the work,”
and allowing a right-of-publicity claim to proceed on this basis would contradict “the
obvious conclusion that a party who does not hold the copyright in a performance
captured on film cannot prevent the one who does from exploiting it by resort to
state law.” Fleet, 58 Cal. Rptr. at 652-53; see also 1-1 Nimmer on Copyright
§ 101[B][3][b][ii] (approving of Fleet’s approach). To the extent that Plaintiffs in this
case are attempting to allege a claim under IRPA based on Defendants’ use of the
Shufflin’ Crew’s performances in the Shuffle, that claim would be preempted by
copyright law.
But there is a theory of liability under IRPA that is not preempted, and
Plaintiffs plausibly allege a claim under this theory. Courts have held that right-ofpublicity claims are not preempted by the Copyright Act when the alleged
unauthorized use of the plaintiff’s identity extends beyond the copyrighted work. In
some of these cases, the copyrighted work is used to advertise another product or
service. See Toney v. L’Oreal USA, Inc., 406 F.3d 905, 908-11 (7th Cir. 2005)
(holding that an IRPA claim based on the use of a photograph of the plaintiff to sell
a hair product was not preempted); Downing v. Abercrombie & Fitch, 265 F.3d 994,
1003-05 (9th Cir. 2001) (holding that the use of a photograph of plaintiffs to sell
clothing was not preempted). In others, the plaintiff’s name or likeness (apart from
a copyrighted work) is used to advertise some product, which itself might be a
copyrighted work. See Brown v. Ames, 201 F.3d 654, 657-60 (5th Cir. 2000) (holding
that a right-of-publicity claim was not preempted when the defendants, without
10
authorization, used the plaintiffs’ names and likenesses to advertise an album
containing plaintiffs’ copyrighted vocal performances); Seifer v. PHE, Inc., 196 F.
Supp. 2d 622, 626-28 (S.D. Ohio 2002) (holding that a right-of-publicity claim was
not preempted when the defendants used the plaintiff’s name and likeness to
advertise both videos she appeared in and those she did not); see also Jules Jordan
Video, 617 F.3d at 1154 (suggesting that a non-preempted right-of-publicity claim
would lie were the defendants to use plaintiff’s likeness on the cover of the DVD
containing the copyrighted performance, so long as the likeness was not a still shot
from the performance itself); Baltimore Orioles, 805 F.2d at 676 n.24 (reasoning
that “[a] player’s right of publicity in his name or likeness would not be preempted
if a company, without the consent of the player, used the player’s name to advertise
its product”). In either case, the plaintiff’s performance in some copyrighted work is
not the sole embodiment of the “identity” that the plaintiff seeks to protect. A
copyrighted work might be somehow related to the right-of-publicity claim, but the
work and the embodiment of the plaintiff’s “identity” being used are not
coterminous. The plaintiff’s identity or persona—his voice, likeness, signature, or
image—is not, therefore, fixed in a tangible medium of expression.6 Toney, 406 F.3d
at 910; see also Seifer, 196 F. Supp. 2d at 628 (“[A] person’s name and likeness do
not become copyrightable merely because they have been placed on works which are
subject to copyright law.”). And because the plaintiff is seeking to protect the
6Defendants’
argument that the Court has already decided that the subject-matter
prong of the preemption standard was satisfied is wrong. The IRPA claim was not a part of
the original complaint, and was therefore not considered in deciding the first motion to
remand.
11
“amorphous concept” of his identity, separate from a particular embodiment of that
identity contained solely within a copyrighted work, enforcement of his right of
publicity is not equivalent to any of the rights set forth in § 106. Toney, 406 F.3d at
910.
Plaintiffs’ IRPA claim pleads this theory. Plaintiffs allege that “Defendants
held themselves out as if they had an affiliation with or authorization from the
Shufflin’ Crew to use the Shufflin’ Crew members’ [p]ersonas even though
Defendants did not have and do not have the Shufflin’ Crew members’ permission to
do so.” Am. Compl. ¶ 48. As a result of this unauthorized use of the Shufflin’ Crew’s
personas, Plaintiffs allege that “Defendants received and continue to receive
commercial benefits in the form of revenues and other financial benefits.” Id. ¶ 49.
Plaintiffs request relief in the form of “[a]ctual damages and/or profits from
Defendants’ unauthorized use of the Shufflin’ Crew members’ [p]ersonas.” Id. ¶ 51.
Plaintiffs are not alleging that Defendants misused the Shufflin’ Crew’s
performances in the Shuffle, but instead that Defendants falsely represented that
they had an affiliation with the Shufflin’ Crew—that is, used the Shufflin’ Crew’s
identities apart from their performances in the Shuffle7—to reap a financial benefit.
This claim is not preempted by the Copyright Act.
Defendants argue that Plaintiffs did not plead that their images were used in
connection with advertisements for products or services. Defs.’ Resp. Br. at 16. Not
so. Reading the Plaintiffs’ allegations as a whole, it is clear that they are alleging
7Remember
that a plaintiff’s name is part of his identity under IRPA. 765 ILCS
1075/5.
12
that Defendants used their identities to advertise the Shuffle itself. Am. Compl.
¶¶ 18-23. And, contrary to Defendants’ arguments, advertising the Shuffle does not
necessarily drag the IRPA claim into the territory covered by copyright law.
Plaintiffs allege that Defendants pretended to have an affiliation with the Shufflin’
Crew (again, apart from their performances in the work itself) to sell copies of or
licenses to use the Shuffle. To illustrate, consider the plausible scenario that
Defendants told potential licensors or buyers that Willie Gault and Richard Dent
continue to work with Renaissance Marketing and that they endorse the Shuffle. If,
as Plaintiffs allege, neither Gault nor Dent gave Defendants authorization to use
their names to endorse the Shuffle, Defendants would be trading on Plaintiffs’
identities in order to sell a product. The identities in this case—Plaintiffs’ names—
would be broader than their performances that are embodied in the copyrighted
work. The “amorphous concept” of identity would extend beyond the bounds of the
work protected by copyright and thus avoid preemption. Toney, 406 F.3d at 910; see
also Seifer, 196 F. Supp. 2d at 628.
It is true that pleading the claim in this way significantly limits Plaintiffs’
potential damages. If they prevail on the IRPA claim, the Shufflin’ Crew will not be
entitled to all revenues from the sale of the Shuffle, just those revenues attributable
to falsely holding out that Defendants had an affiliation with or authorization from
the Shufflin’ Crew. This line will likely be challenging to draw. Plaintiffs will have
to devise some way of ascertaining which sales or licenses of the Shuffle—or, more
likely, which portions of sales or licenses of the Shuffle—were due to a perceived
13
affiliation with the Shufflin’ Crew apart from their performances in the work. It is a
narrow ground on which to base a claim, but Plaintiffs are nonetheless free to
pursue it.
Defendants do not believe that Plaintiffs have pled so narrowly because
(1) there is no express disclaimer of copyright damages, and (2) there are no specific
allegations detailing how Defendants have used the Shufflin’ Crew’s personas apart
from the Shuffle itself. Defs.’ Resp. Br. at 16-17. Although these may be close
questions, the IRPA allegations are sufficient to plead a non-preempted IRPA claim.
It is true that there is no express disclaimer of copyright damages, but the
disclaimer is implicit in the prayer for relief. Plaintiffs request “[a]ctual damages
and/or profits from Defendants’ unauthorized use of the Shufflin’ Crew members’
[p]ersonas” and other ancillary relief. Am. Compl. ¶ 51 (emphasis added). They do
not request all revenues or profits from the sale or licensing of the Shuffle, only
those revenues derived from the unauthorized use of their identities. And, though
there are no allegations detailing specific instances of the use of Plaintiffs’ personas
to advertise the Shuffle, obtaining those details is an issue for discovery and there is
enough material in the complaint to “give [Defendants] fair notice of what the claim
is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (internal
alternation omitted). Plaintiffs allege that Defendants represented that they were
affiliated with or authorized by the Shufflin’ Crew in selling the Shuffle. Am.
Compl. ¶¶ 20-24; 47-50. The facts are not specifically alleged at this stage, but they
are factual allegations (not mere legal conclusions) and are sufficient to alert
14
Defendants to the nature and basis of the claim against them. Discovery will yield
information about what specific advertising efforts Defendants undertook (if any)
that might have infringed upon Plaintiffs’ right to publicity. If, in fact, there was no
use of Plaintiffs’ identities apart from their performance in the Shuffle, Defendants
can move for summary judgment.
Defendants and the proposed intervenor also argue that interpretation of the
copyright work-for-hire doctrine is necessary to resolve the issues in this case. Defs.’
Resp. Br. at 17-18; Red Label Resp. Br. at 5-8. It is true that the work-for-hire
doctrine can be basis for complete copyright preemption, see, e.g., JustMed, Inc. v.
Byce, 600 F.3d 1118, 1124 (9th Cir. 2010), but the work-for-hire doctrine is about
determining the author (and thus the owner) of a copyrighted work, see Harris
Custom Builders, Inc. v. Hoffmeyer, 92 F.3d 517, 518-19 (7th Cir. 1996) (noting that
the author and owner of a copyright is generally “the party who actually creates the
work,” but if the copyrighted material is a work made for hire, “the owner [of the
copyright] is the employer or other person for whom the work was prepared”). Here,
there is no dispute about authorship of the copyrighted work. The Shufflin’ Crew
does not allege and has never alleged that it owns the copyrights in question. See
generally State Court Compl.; Am. Compl. They allege instead that they own their
personas and identities, which, as discussed above, can be separated from the
copyrighted works.8 The work-for-hire doctrine does not, therefore, serve as a basis
for preemption.
8Although
the original state-court complaint could be interpreted to request relief
that would ultimately be based in copyright, as discussed in the order denying the first
15
B. Relinquishment
Because the IRPA claim is not preempted, the Court must determine whether
to relinquish jurisdiction over the state-law claims. Plaintiffs frame this question as
one of subject-matter jurisdiction, Pls.’ Br. at 1, but that is incorrect. It is true that
once removed, a case may be remanded based on lack of subject-matter jurisdiction
any time before a final judgment is issued. 28 U.S.C. § 1447(c). But if the case was
properly removed, dismissal of the claim giving rise to the court’s original
jurisdiction will not deprive a court of subject-matter jurisdiction. Anderson, 614
F.3d at 364 (“[I]f there is federal jurisdiction on the date a suit is removed … the
final resolution of the claim that supported the suit’s presence in federal court does
not necessitate remand.”); see also Burlington Northern, 606 F.3d at 380-81 (“The
well-established general rule is that jurisdiction is determined at the time of
removal, and nothing filed after removal affects jurisdiction.”). To sustain removal,
the district court must have original jurisdiction over at least one of the claims. 28
U.S.C. § 1441. If the court has original (in this case, federal-question) jurisdiction
over any claim, it may exercise supplemental jurisdiction over related state-law
claims. 28 U.S.C. § 1367. This supplemental jurisdiction does not disappear when
claim giving rise to original jurisdiction is dismissed, even when the federal claims
are dismissed voluntarily. Carlsbad, 556 U.S. at 639-41; Anderson, 614 F.3d at 365.
A district court may, however, decline to exercise its supplemental jurisdiction once
the federal claim has been dismissed. 28 U.S.C. § 1367(c)(3) (stating that a court
motion to remand, they never alleged or argued that they owned the copyrights at issue or
that the Shuffle was not a work made for hire. See R. 16, Pls.’ First Mot. Remand Br. at 4
(“Plaintiffs’ complaint does not claim copyright ownership.”).
16
may decline to exercise supplemental jurisdiction if it “has dismissed all claims over
which it has original jurisdiction”). The decision to relinquish supplemental
jurisdiction is “purely discretionary.”9 Carlsbad, 556 U.S. at 639.
Ordinarily, “[w]hen the federal claim in a case drops out before trial, the
presumption is that the district judge will relinquish jurisdiction over any
supplemental claim to the state courts.” Leister v. Dovetail, Inc., 546 F.3d 875, 882
(7th Cir. 2008). This presumption is “particularly strong where, as here, the statelaw claims are complex and raise unsettled legal issues.” RWJ Mgmt. Co., 672 F.3d
at 478-79. As discussed above, it might be challenging to ascertain precisely which
components of Plaintiffs’ damages are attributable to Defendants’ alleged use of
Plaintiffs’ personas to market the Shuffle, as separated from the Shufflin’ Crew’s
performance in the copyrighted work (over which Plaintiff does not and cannot state
a claim). The careful drawing of the line between damages for use of the Shufflin’
Crew’s performance in the Shuffle and damages for claiming to have an affiliation
with the Shufflin’ Crew (either implicitly or explicitly) to sell the Shuffle will
require careful consideration of the state-law causes of action (as applied to a novel
context), the Illinois Right to Publicity Act (which has not been interpreted all that
often), and their associated remedies. These complex and novel damages issues are
purely questions of state law, and they are better left to a state-court forum.
9The
Seventh Circuit has pointed out the sometimes-semantic nature of the
distinction between relinquishing supplemental jurisdiction and remanding for lack of
subject-matter jurisdiction in this context, see Townsquare Media, Inc. v. Brill, 652 F.3d
767, 772 (7th Cir. 2011), but the principle is nonetheless binding on this Court.
17
The presumption in favor of relinquishment is, of course, rebuttable, “but it
should not be lightly abandoned, as it is based on a legitimate and substantial
concern with minimizing federal intrusion into areas of purely state law.” Id. at
479-80 (internal quotation marks omitted) (citing Khan v. State Oil Co., 93 .3d 1358,
1366 (7th Cir. 1996)). The Seventh Circuit has identified three circumstances that
might displace the presumption of relinquishing jurisdiction: (1) “the statute of
limitations has run on the [supplemental] claim, precluding the filing of a separate
suit in state court”; (2) “substantial judicial resources have already been committed,
so that sending the case to another court will cause a substantial duplication of
effort”; or (3) “when it is absolutely clear how the [supplemental] claims can be
decided.” Sharp Elecs. Corp. v. Metro. Life Ins. Co., 578 F.3d 505, 514-15 (7th Cir.
2009).
None of these unusual circumstances apply in this case. There might be
issues with the timeliness of Plaintiffs’ complaint,10 but these issues are in the case
whether or not the Court relinquishes supplemental jurisdiction. See 28 U.S.C.
§ 1367(d) (tolling the statute of limitations for 30 days after dismissal of a
supplemental claim); see also Myers v. Cnty. of Lake, 30 F.3d 847, 848-49 (7th Cir.
1994) (holding that § 1367(d) “removes the principal reason for retaining a case in
federal court when the federal claim belatedly disappears”). Nor have significant
judicial resources been expended on this case. This case has not yet reached the
motion to dismiss stage, and the Court has not engaged with the merits of the
claims beyond the motions to remand. See Wright v. Associated Ins. Cos., 29 F.3d
10The
royalty agreement expired in 1989, but Plaintiffs did not bring suit until 2014.
18
1244, 1251 (“[R]arely when a case is dismissed on the pleadings can ‘judicial
economy’ be a good reason to retain jurisdiction.”). Finally, it is not clear how the
state-law claims should be decided. Apart from the myriad factual issues that will
need to be resolved, there are questions surrounding the limitations period, the
proper scope of damages, and interpretation of the IRPA.
Defendants urge the Court to retain jurisdiction over the state-law claims
because of the “forum manipulation rule” articulated by the Supreme Court in
Rockwell International Corporation v. United States, 549 U.S. 457 (2007). Defs.’ Br.
at 2-4. Rockwell was not a case about removal or supplemental jurisdiction,11 but
the Supreme Court did briefly discuss amendments to removed claims. Id. at 474
n.6. The Supreme Court noted that, “when a defendant removes a case to federal
court based on the presence of a federal claim, an amendment eliminating the
original basis for federal jurisdiction generally does not defeat jurisdiction.” Id.
(citing Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 346 (1988); St. Paul Mercury
Indemnity Co. v. Red Cab Co., 303 U.S. 283, 293 (1938)). The Court noted, however,
that “removal cases raise forum-manipulation concerns that simply do not exist
11In
Rockwell, the plaintiff—a qui tam relator in a False Claims Act action—
originally filed his claims in federal court. 549 U.S. at 463. In False Claims Act cases,
jurisdiction is premised in part on the relator being the “original source” of the allegations
of fraud. Id. at 467 (citing 31 U.S.C. § 3730(e)(4)(B)). During the course of the litigation, the
plaintiff amended his complaint to change the allegations of fraud, prompting the Supreme
Court to consider which of the plaintiff’s allegations were relevant for the “original source”
rule. Id. at 473. The Supreme Court concluded that it would consider the amended
allegations because, although subject-matter jurisdiction depends on the state of things at
the time the action was brought, the “state of things and the originally alleged state of
things are not synonymous.” Id. “[D]emonstration that the original allegations were false
will defeat jurisdiction.” Id. Therefore, “when a plaintiff files a complaint in federal court
and then voluntarily amends the complaint, courts look to the amended complaint to
determine jurisdiction.” Id. at 473-74.
19
when it is the plaintiff who chooses a federal forum and then pleads away
jurisdiction through amendment,” as was the case in Rockwell.
From this footnote, the Seventh Circuit extrapolated a “forum manipulation”
exception to the general rule: “if [a] case has been removed to federal court and the
defendant opposes the remand, … dismissal is no longer mandatory.” Townsquare
Media, Inc. v. Brill, 652 F.3d 767, 773 (7th Cir. 2011); accord. Brown v. Calamos,
664 F.3d 123, 131 (7th Cir. 2011) (“Nor can the suit be saved by amending the
complaint to delete the passage that injected fraud into the case … it is contrary to
the ‘forum manipulation’ rule recognized in Rockwell.”); Burlington Northern, 606
F.3d at 380-81 (“And though it is sometimes possible for a plaintiff who sues in
federal court to amend away jurisdiction, removal cases present concerns about
forum manipulation that counsel against allowing a plaintiff’s post-removal
amendments to affect jurisdiction.”). The Seventh Circuit reasons that amending a
removed complaint to eliminate federal claims “is a case not just of the plaintiff’s
abandoning his federal claims but of his seeking to deprive the defendant of the
opportunity to defend the remaining claims in the court that obtained jurisdiction of
the case on the defendant’s initiative.” Townsquare, 652 F.3d at 773. “That is called
pulling the rug out from under your adversary’s feet.” Id. The forum-manipulation
exception is not “a categorical prohibition on the remand of cases involving statelaw claims”; it is simply another factor for the court to consider in determining
whether to relinquish supplemental jurisdiction. See Carnegie Mellon, 484 U.S. at
20
357 (“A district court can consider whether the plaintiff has engaged in any
manipulative tactics when it decides whether to remand the case.”).
Unlike many of the cases in which the Seventh Circuit applied this “forum
manipulation” exception, however, there is no basis here on which to infer that
Plaintiffs are using manipulative tactics. It is clear that, from the outset of this
case, Plaintiffs believed that they were pursuing state-law claims. See State Court
Compl.; Pls.’ First Mot. Remand. Although the relief Plaintiffs initially requested
may have implicated copyright law, see Dent, 2014 WL 5465006, there is no
evidence that the relief sought was anything more than overly expansive pleading,
rather than a desire to sneak copyright claims into a state court. In fact, Plaintiffs
narrowed the relief requested in their amended complaint (for the claims that were
not preempted) to avoid territory governed by copyright law. Compare Am. Compl.
at Prayers for Relief (Counts 1, 5, and 6) with State Court Compl. at Prayers for
Relief (Counts 1, 2, and 3). Plaintiffs’ decision to drop the preempted claims also has
an innocent explanation: Plaintiffs do not allege—and never have alleged—that
they own the copyrights to the Shuffle. The preempted claims were interpreted to be
subject to federal copyright laws, and without any ownership in the copyrights,
Plaintiffs could not expect to prevail on any of those claims. So, not only is there a
logical explanation for dropping the federal claims, this course of action might have
been Plaintiffs’ only legitimate option. See, e.g., Fed. R. Civ. P. 11(b) (requiring
attorneys to certify that pleadings and motions submitted to the court have a
reasonable basis in fact and law). Given the information before the Court at this
21
stage in the litigation, no inference of forum-manipulation can be drawn from
Plaintiffs’ decision to abandon the preempted claims.
Nor can an adverse inference be drawn from Plaintiffs’ motions to remand. It
is true that, absent some specific circumstances, parties should be forum-neutral.
But § 1367(c) and the judicial presumption in favor of relinquishment recognize that
if state law claims are complex or novel and all federal claims have been dismissed,
there is a compelling reason to resolve state-law claims in a state forum. See 28
U.S.C. § 1367(c); Huffman v. Hains, 865 F.2d 920, 923 (7th Cir. 1989) (“[R]espect for
the state’s interest in applying its own law, along with the state court’s greater
expertise
in
applying
state
law,
become
paramount
concerns.”).
It
is
understandable, then, that Plaintiffs would want their Illinois-law claims to be
decided by an Illinois court.
By contrast, the cases in which the Seventh Circuit has applied the forummanipulation exception do raise genuine concerns of gamesmanship. For example,
jurisdiction over the removed claim in In re Burlington Northern Santa Fe Railway
Company was premised on the Class Action Fairness Act (CAFA), 28 U.S.C.
§ 1332(d), which confers federal jurisdiction over putative class actions where there
is minimal diversity and an amount in controversy exceeding $5 million. 606 F.3d at
379. After removal, the plaintiff amended his complaint to remove the class
allegations. Id. The Seventh Circuit concluded that the post-removal amendment
did not destroy CAFA jurisdiction in part due to concerns about forum
manipulation. Id. at 381. Unlike this case, in which there is a substantial and
22
legitimate explanation for dropping the allegations that provide the basis for
jurisdiction (Plaintiffs do not own the copyrights, so they cannot pursue copyright
claims), there appeared to be no legitimate reason in Burlington Northern for
plaintiffs’ counsel to abandon class claims beyond simply trying to avoid federal
jurisdiction. More importantly, Congress’s explicit motivation in enacting CAFA
was to override plaintiffs’ preferences for litigating cases of national importance in
state courts. Hart v. FedEx Ground Package Sys., Inc., 457 F.3d 675, 681-82 (citing
Pub. L. 109-2, § 2). To allow plaintiffs to amend away CAFA jurisdiction would
undermine the very purpose of CAFA. And although the class allegations were
removed from the case in Burlington Northern prior to certification, class actions
raise particularly strong concerns about forum manipulation because the class
representatives (and their attorneys) act as fiduciaries for absent class members.
See Addison Automatics, Inc. v. Hartford Cas. Ins. Co., 731 F.3d 740, 742-43 (7th
Cir. 2013). Abandoning claims or theories of liability in order to secure a particular
forum could prejudice absent class members who will be bound by the
representative’s decisions.
Similar concerns arose in Brown v. Calamos, another class action. 664 F.3d
at 124. The putative class action in Brown was removed under the Securities
Litigation Uniform Standards Act (SLUSA), 15 U.S.C. § 78bb(f)(1), which prohibits
securities class actions when, among other things, the allegations are based on
fraud in connection with purchase or sale of a security. Id. SLUSA was “designed to
prevent plaintiffs from migrating to state court in order to evade rules for federal
23
securities litigation,” and actions removed under SLUSA are often quickly
dismissed. Id. (quoting Kircher v. Putnam Funds Trust, 403 F.3d 478, 482 (7th Cir.
2005)). After concluding that the putative class action was properly removed under
SLUSA, the Seventh Circuit noted that the complaint could not be saved by
“delet[ing] the passage that injected fraud into the case” because the forummanipulation rule would weigh against remand. Id. at 131. As with CAFA, the
unique legal framework of SLUSA counseled against allowing the plaintiff to amend
away federal jurisdiction. Id. at 128 (stating that allowing a complainant to remove
his fraud allegations would thwart “SLUSA’s goal of preventing state-court end
runs around limitations that the Private Securities Litigation Reform Act had
placed on federal suits for securities fraud”). The Seventh Circuit also concluded
that the plaintiff’s deletion of the fraud allegations “would not be credible” because
they were central to his case. Id. at 131. So “[t]he likelihood that [the plaintiff]
would do everything he could to sneak the allegation back into the case, if the
complaint were amended and remand to the state court followed, would be so great
as to make it imprudent to allow the complaint to be amended to delete the
allegation.” Id.
Echoing the Seventh Circuit in Brown, Defendants express concern that the
copyright claims could sneak back into the case over the course of the litigation.
Defs.’ Resp. Br. at 3-4 (“[T]here is an overwhelming likelihood that Plaintiffs will
try to sneak back into the case damages based on use … of their images and voices
in the Shuffle video and song themselves.”). Although Defendants’ fears are not
24
wholly unfounded, they do not justify retaining jurisdiction over purely state-law
claims. The claims that this Court has found to be preempted by copyright law will
not reenter the case; they have been voluntarily dismissed by Plaintiffs.12 The
remaining claims in this case were not the basis of the Court’s original jurisdiction,
and, as discussed in the order denying the motion to remand, the only viable theory
of liability for those claims does not involve performance, reproduction, publication,
or distribution of the copyrighted work. See Dent, 2014 WL 5465006 at *5-6. The
same goes for the IRPA claim discussed above.
The Court is nonetheless sensitive to Defendants’ concerns about copyright
issues making their way back into the case. It will be challenging for the state court
to precisely identify the boundary between the damages arising from Plaintiffs’
state-law claims and damages arising from use of the copyrights. This presents
some risk that copyright damages will be improperly reintroduced into the case. If
that situation does occur, Defendants can re-remove the case. See 28 U.S.C.
§ 1446(b)(3) (allowing for removal 30 days after the filing of a pleading, motion, or
order “from which it may first be ascertained that the case is one which is or has
become removable”). At that time, an inference of forum manipulation potentially
would be established in the record, and if forum manipulation were found, then the
12Unlike
both Brown and Burlington Northern, in which the plaintiffs modified the
claims over which the court had original jurisdiction to eliminate the basis of that
jurisdiction, the remaining claims in this case were never the basis of the Court’s original
jurisdiction. For that reason, neither Brown nor Burlington Northern dealt with
supplemental jurisdiction at all. See Brown, 664 F.3d at 124-26; Burlington Northern, 606
F.3d at 379-81. Townsquare, which does address supplemental jurisdiction (though in the
bankruptcy context), does not actually base its holding on the forum-manipulation
exception; the defendant in Townsquare waived the argument by failing to raise it. 652 F.3d
at 773-74.
25
claims would remain in federal court even if Plaintiffs were to amend away any
preempted claims. But on the record before the Court now, there is simply no basis
on which to infer that Plaintiffs are attempting to pull the rug out from under their
opponents. Because the remaining claims arise purely under state-law, the statelaw issues are complex, and significant resources have not yet been expended on
this case, the Court will relinquish jurisdiction over the state-law claims and
remand the case.
IV. Conclusion
For the reasons discussed above, Plaintiffs’ motion to remand is granted on
different grounds. Plaintiffs’ IRPA claim is not preempted by the Copyright Act, and
the Court relinquishes its supplemental jurisdiction over the state-law claims. The
case is remanded to the Illinois court for further proceedings.
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: June 1, 2015
26
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