Righthaven LLC v. Chris Brown Web Network et al

Filing 18

ORDER DISMISSING CASE for lack of subject matter jurisdiction. Signed by Judge Larry R. Hicks on 3/1/2012. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***
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RIGHTHAVEN LLC, a Nevada limited)
liability company,
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Plaintiff,
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v.
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CHRIS BROWN WEB NETWORK, an entity )
of unknown origin and nature; and
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DOMINIQUE HOUSTON, an individual,
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Defendants.
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2:10-CV-01399-LRH-PAL
ORDER

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Before the court is Plaintiff Righthaven LLC’s (“Righthaven”) Omnibus Response (#13) to

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this court’s June 28, 2011 Order to Show Cause (#12) why this case should not be dismissed for

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lack of standing.

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I.

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Facts and Procedural History
This is one of several copyright infringement actions on the court’s docket brought by

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Righthaven. In each case, Righthaven alleges that it is the owner of the copyright in and to works

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originally published in the Las Vegas Review-Journal, and that the defendants’ activities infringed

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on Righthaven’s exclusive rights in the works—specifically, the rights of reproduction, preparation

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of derivatives, distribution, and public display, pursuant to 17 U.S.C. § 106(1)-(3) and (5). Also in

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each case, Righthaven has attached to its complaint either a copyright registration or application

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for copyright registration as evidence of its ownership in the work. In all cases, Stephens Media

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LLC (“Stephens Media”) is identified as the author, and the assignment to Righthaven was

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originally made pursuant to a January 18, 2010 Strategic Alliance Agreement (“SAA”), which

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generally governed the relationship between the two parties with regard to the assignment of rights

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originally owned by Stephens Media.

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Since the assignment was made and Righthaven filed its complaint, Righthaven and

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Stephens Media have executed two amendments to the SAA: first, a May 9, 2011 Clarification and

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Amendment to Strategic Alliance Agreement (the “Clarification”); and second, a July 7, 2011

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Amended and Restated Strategic Alliance Agreement (“Restated Amendment”). The Clarification

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was executed after each of Righthaven’s complaints were filed. And the Restated Amendment

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followed decisions by other courts in this district finding that Righthaven lacked standing to pursue

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copyright infringement claims based on assignments made under the original SAA because “the

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SAA prevents Righthaven from obtaining any of the exclusive rights necessary to maintain

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standing in a copyright infringement action.” Righthaven LLC v. Democratic Underground, LLC,

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791 F. Supp. 2d 968, 976 (D. Nev. June 14, 2011) (Hunt, C.J.); accord Righthaven, LLC v. Hoehn,

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792 F. Supp. 2d 1138, 1146-47 (D. Nev. June 20, 2011) (Pro, J.). Additionally, in Hoehn, the court

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held that even if the May 9, 2011 Clarification were considered, it “does not correct the deficiencies

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with respect to lack of standing” and “does not provide Righthaven with any exclusive rights

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necessary to bring suit.” Hoehn, 792 F. Supp. 2d at 1147.

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Based on these decisions, on June 28, 2011, this court entered a Order to Show Cause (#12)

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why this court should not dismiss for lack of standing this and nine other materially identical

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Righthaven actions that, when filed, were based on assignments under the original SAA. On July

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8, 2011, Righthaven filed its Omnibus Response (#13), along with an Amended Complaint (#17) to

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allege standing under the Clarification and the Restated Amendment.

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II.

Legal Standard
Standing to sue is an indispensable part of a federal court’s Article III jurisdiction and must

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be addressed by the court even if the parties fail to raise it. Lujan v. Defenders of Wildlife, 504 U.S.

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555, 560 (1992); FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990). “The federal courts are

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under an independent obligation to examine their own jurisdiction, and standing ‘is perhaps the

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most important of [the jurisdictional] doctrines.’” FW/PBS, 493 U.S. at 231 (quoting Allen v.

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Wright, 468 U.S. 737, 750 (1984)) (brackets in original). “It is to be presumed that a cause lies

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outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party

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asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

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Questions of subject matter jurisdiction may be considered on either a facial or factual

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basis. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a facial attack,

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the challenger asserts that the allegations contained in a complaint are insufficient on their face to

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invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the

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allegations that, by themselves, would otherwise invoke federal jurisdiction.” Id. In resolving a

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factual attack, the district court need not presume the truthfulness of the plaintiff’s allegations and

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may consider evidence beyond the pleadings. Id.

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III.

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Discussion
Section 501(b) of the 1976 Copyright Act establishes that only the owner or beneficial

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owner of an exclusive right under a copyright law is entitled, or has standing, to sue for

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infringement. Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 884 (9th Cir. 2005); 17 U.S.C. §

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501(b). Although exclusive rights may be transferred and owned separately, Section 106 of the Act

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defines and limits those exclusive rights under copyright law. Silvers, 402 F.3d at 884-85; 17

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U.S.C. § 106. Accordingly, the assignment of a bare right to sue is ineffectual because it is not one

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of the exclusive rights. Silvers, 402 F.3d at 884-85. Moreover, transfer solely of the right to sue

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does not confer standing on the assignee because the right to sue is not one of the exclusive rights.

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Id. at 890. One can only obtain a right to sue on a copyright if the party also obtains one of the

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exclusive rights in the copyright. See id.

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As noted above, courts in this district have found that the SAA does not confer Righthaven

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standing to sue for copyright infringement because the SAA deprives Righthaven of any of the

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rights normally associated with ownership of an exclusive right and grants Righthaven only the

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bare right to sue. Hoehn, 792 F. Supp. 2d at 1146-47; Democratic Underground, 791 F. Supp. 2d

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at 976; accord Righthaven LLC v. Newman, 2011 WL 4762322, *2-3 (D. Nev. 2011) (Mahan, J.).

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This court concurs with these well-reasoned decisions and concludes that Righthaven lacks

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standing to sue based on assignments of copyrights made pursuant to the SAA.

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The court further rejects Righthaven’s argument that the Clarification and the Restated

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Amendment, both executed after the initiation of this lawsuit, confer standing to sue. Neither of

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these two amendments can create standing because “[t]he existence of federal jurisdiction

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ordinarily depends on the facts as they exist when the complaint is filed.” Lujan, 504 U.S. at 570

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n.4 (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830 (1989)) (emphasis in

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Lujan). Although a court may allow parties to amend defective allegations of jurisdiction, the

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parties are not permitted to amend the facts themselves. Newman-Green, 490 U.S. at 830-31.

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Thus, the court will not consider the amendments to the SAA, and will consider only the actual

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assignment and language of the SAA as it existed at the time the complaint was filed.

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Because the SAA does not confer standing to sue, as analyzed by the courts in this district,

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this action shall be dismissed for lack of subject-matter jurisdiction. Additionally, Righthaven’s

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amended complaint, filed as a matter of right, shall be disregarded because Righthaven seeks to add

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facts that did not exist at the time this action was initiated—namely to allege standing under the

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Clarification and the Restated Amendment.

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IT IS THEREFORE ORDERED that this action is hereby DISMISSED for lack of subject
matter jurisdiction.
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The Clerk of the Court shall enter judgment accordingly.

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IT IS SO ORDERED.

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DATED this 1st day of March, 2012.

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__________________________________
LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

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