Wolfson v. Ernst et al
Filing
21
OPINION AND ORDER. The Court has considered all of the remaining arguments of the parties. To the extent not specifically addressed above, they are either moot or without merit. For the foregoing reasons, this action is remanded to the New York State Supreme Court, New York County. The Clerk is directed to remand the case and to close the case on the docket of this Court. re: 11 MOTION to Dismiss Complaint filed by Todd A. Ernst, Ernst Architect, PLLC. (Signed by Judge John G. Koeltl on 7/7/2015) (rjm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
───────────────────────────────────
STANLEY WOLFSON,
Plaintiff,
14 Cv. 7367 (JGK)
- against -
OPINION AND ORDER
TODD A. ERNST and
ERNST ARCHITECT, PLLC,
Defendants.
───────────────────────────────────
JOHN G. KOELTL, District Judge:
The plaintiff Stanley Wolfson brought this action against
defendants Todd Ernst and Ernst Architect, PLLC in the New York
State Supreme Court, New York County.
Wolfson alleged that the
defendants aided and abetted a fraud on this Court in a case in
which Wolfson was the defendant.
See Sorenson v. Wolfson, No.
10cv4596, --- F. Supp. 3d ---, 2015 WL 1454498 (S.D.N.Y. Mar.
31, 2015).
The defendants removed the case to this Court and then
filed a motion to dismiss pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure.
The Court then ordered
supplemental briefing on whether this Court has subject matter
jurisdiction over the case.
For the reasons explained below,
this case is remanded to the New York State Supreme Court, New
York County.
1
I.
Todd Ernst is an architect and principal of Ernst Architect
PLLC.
Compl. ¶ 22.
Bridge Capital Corporation (“Bridge
Capital”), of which Wolfson is the sole shareholder, hired Ernst
to design architectural plans for condominium units in a
building owned by Bridge Capital (the “Building”).
22.
Compl. ¶¶ 1,
Sigurd Sorenson agreed to purchase three units in the
Building from Bridge Capital.
In 2004, Sorenson also hired
Ernst to create plans for the units that he wished to purchase.
Compl. ¶¶ 34, 39
The deal between Sorenson and Bridge Capital fell through,
igniting a wave of litigation among Sorenson, Wolfson, Bridge
Capital, and others.
This Court heard one of those cases.
In
that action, Sorenson alleged, in part, that Wolfson infringed
Sorenson’s copyright in the architectural plans for Unit 7A of
the Building—one of the units that Sorenson had intended to
purchase.
After a bench trial, this Court dismissed the
copyright claim with prejudice.
*11–18.
Sorenson, 2015 WL 1454498, at
The Court concluded that Ernst, not Sorenson, was the
author of the Unit 7A plans.
Id. at *11–13.
Wolfson asserts two claims here, both of which turn on
affidavits signed by Ernst.
In those affidavits, Ernst swore
that neither he nor any of his employees had an ownership
2
interest in the Unit 7A plans in which Sorenson claimed a
copyright.
He also claimed to be a mere scrivener for Sorenson.
Compl. ¶¶ 2, 9–10.
The first cause of action alleges that Ernst
aided and abetted Sorenson’s filing of a fraudulent copyright
action against Wolfson and other defendants.
128.
Compl. ¶¶ 123–24,
The second cause of action again alleges that Ernst aided
and abetted Sorenson’s “fraud on the court” by submitting the
false affidavits.
Compl. ¶¶ 136, 145, 148.
At bottom, the
plaintiff contends that the Court would have dismissed
Sorenson’s copyright claim at the summary judgement stage, but
for Ernst’s affidavits.
Compl. ¶¶ 142–43.
Wolfson seeks only money damages.
For both claims,
Compl. ¶¶ 134, 149.
Neither cause of action alleges that Ernst violated any
federal law.
II.
The Court has an independent obligation to determine if it
has subject matter jurisdiction.
546 U.S. 500, 506 (2006).
See Arbaugh v. Y & H Corp.,
The general removal statute, 28
U.S.C. § 1441(a), grants district courts jurisdiction over state
court actions that originally could have been brought in federal
court.
The Court must construe § 1441(a) narrowly, resolving
any doubts against removability.
Lupo v. Human Affairs Int'l,
Inc., 28 F.3d 269, 274 (2d Cir. 1994).
3
The parties agree that the Court does not have diversity
jurisdiction under 28 U.S.C. § 1332(a) because the parties are
citizens of New York.
Compl. ¶¶ 21–22.
Both parties, however, assert that this court has
jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338.
Section
1331 provides federal district courts with jurisdiction over
“civil actions arising under the Constitution, laws, or treaties
of the United States.”
And § 1338(a) provides federal courts
with exclusive jurisdiction over “any claim for relief arising
under any Act of Congress relating to patents, plant variety
protection, or copyrights.”
A.
Under the canonical well-pleaded complaint rule, “a suit
‘arises under’ federal law for 28 U.S.C. § 1331 purposes ‘only
when the plaintiff's statement of his own cause of action shows
that it is based upon federal law.’”
Vaden v. Discover Bank,
556 U.S. 49, 60 (2009) (alteration omitted) (quoting Louisville
& Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908)).
The
same is true for § 1338(a): jurisdiction extends to cases in
which the complaint alleges a cause of action created by an “Act
of Congress relating to patents, plant variety protection,
copyrights and trademarks,” § 1338, or in which the “plaintiff's
right to relief necessarily depends on resolution of a
substantial question of federal law in that federal law is a
4
necessary element of one of the well-pleaded claims.”
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 807–
09 (1988) (internal citation and ellipses omitted); Briarpatch
Ltd. v. Phx. Pictures, Inc., 373 F.3d 296, 303–04 (2d Cir.
2004).
There is no federal law that created either cause of action
asserted by the plaintiff, and the parties have not identified
any such law.
But that does not end the matter.
B.
Notwithstanding the well-pleaded complaint rule, in “a
special and small category of cases,” Empire Healthchoice
Assurances, Inc. v. McVeigh, 547 U.S. 677, 699 (2006), a claim
arises under federal law if it “necessarily raise[s] a stated
federal issue, actually disputed and substantial, which a
federal forum may entertain without disturbing any
congressionally approved balance of federal and state judicial
responsibilities.”
Grable & Sons Metal Prods., Inc. v. Darue
Eng'g & Mfg., 545 U.S. 308, 314 (2005).
“That is, federal
jurisdiction over a state law claim will lie if a federal issue
is: (1) necessarily raised, (2) actually disputed, (3)
substantial, and (4) capable of resolution in federal court
without disrupting the federal-state balance approved by
Congress.”
Gunn v. Minton, 133 S. Ct. 1059, 1065 (2013).
5
The
Grable test also determines whether the Court has jurisdiction
under § 1338(a).
Id. at 1064.
There is no disagreement that the plaintiff’s claims
involve a federal issue that is actually disputed.
The
plaintiff alleges that Ernst lied when he swore that he was not
the owner of any copyright in the Unit 7A plans.
The fraud
claims thus turn on whether Ernst authored the Unit 7A plans;
that issue requires an interpretation of the Copyright Act.
See
17 U.S.C. § 201(a).
But the plaintiff’s claims do not involve any “substantial”
federal question.
The Supreme Court’s recent decision in Gunn
is instructive on this point.
There, a plaintiff brought a
malpractice claim against his former attorneys because they had
failed to raise an experimental-use argument in a patent case.
As a result, the plaintiff claimed that his patent was declared
invalid.
133 S. Ct. at 1063.
The question presented was
whether § 1338(a) provided federal courts with exclusive
jurisdiction over the malpractice claim.
The Supreme Court recognized “that resolution of a federal
patent question” was disputed and necessary to resolve the
malpractice claim.
Id. at 1065–66.
But the Court held that the
patent issue was not “substantial” because it was not important
“to the federal system as a whole.”
Id. at 1068.
Because “of
the backward-looking nature of a legal malpractice claim, the
6
question is posed in a merely hypothetical sense: If [the
plaintiff’s] lawyers had raised a timely experimental-use
argument, would the result in the patent infringement proceeding
have been different?
No matter how the state courts resolve
that hypothetical ‘case within a case,’ it will not change the
real-world result of the prior federal patent litigation.
patent will remain invalid.”
Id. at 1066–67.
[The]
And a state court
resolution of the patent issue would not be controlling in other
cases.
Id. at 1067.
So too here.
Section 1338(a) provides federal courts with
exclusive jurisdiction over claims arising under the copyright
laws.
In the case that underlies this dispute, the Court
determined (a) that because Sorenson had committed fraud on the
Copyright Office, he did not have a valid copyright in the Unit
7A plans capable of enforcement and (b) that Sorenson was not
the author of the Unit 7A plans.
*11–14.
Sorenson, 2015 WL 1454498, at
The answer to the hypothetical copyright question
raised in the Complaint here—had Ernst not submitted his
allegedly “fraudulent” affidavits, would the Court have granted
Wolfson’s motion for summary judgment—will have no bearing on
this Court’s ultimate conclusion in the original action:
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Sorenson was not entitled to a copyright in the plans he
submitted to the Copyright Office. 1
Indeed, this is an even clearer case than Gunn.
The
plaintiff in Gunn argued that his patent would have remained
valid were it not for his attorneys’ malpractice.
In this case,
Wolfson agrees with this Court’s conclusion that Sorenson did
not have a valid copyright.
His argument is that this Court
would have reached that decision earlier on a motion for summary
judgment, or that Sorenson would not have brought the prior
lawsuit, had it not been for Ernst’s allegedly fraudulent
affidavits.
That is not a substantial copyright question
because it will not change the result of the prior litigation
with respect to the invalidity of Sorenson’s copyright, and
indeed Wolfson does not argue that it should change the result.
Jasper v. Bovina Music, Inc., 314 F.3d 42 (2d Cir. 2002), a
pre-Gunn opinion upon which both parties rely, is not to the
contrary.
In Jasper, the Second Circuit Court of Appeals was
1
To the extent that the defendant contends that the
complaint arises under federal law because it alleges fraud on a
federal court, the argument is unpersuasive. Whether the
defendant lied to a federal court is not a significant question
of federal law. And a state court resolution of the issue would
not disrupt a uniform body of federal law. See, e.g., YoungSmith v. Holt, 575 F. App'x 680, 681-83 (7th Cir. 2014); Reiffin
v. Hoey, No. C11-04625, 2012 WL 10549, at *1-3 (N.D. Cal. Jan.
3, 2012); Andersen v. Roszkowski, 681 F. Supp. 1284, 1291–92
(N.D. Ill. 1988), aff'd, 894 F.2d 1338 (7th Cir. 1990) (summary
disposition).
8
careful to explain that “the fact that a case concerns a
copyright does not necessarily mean that it is within the
jurisdiction of a federal district court.”
Id. at 46.
The
Court of Appeals found jurisdiction proper in that case because
the dispute was “the rare contract interpretation case that does
present a substantial issue as to whether the contract qualifies
as a section 204(a) writing.”
Id. at 47.
This case is not a
“rare” case that turns on a disputed § 204(a) writing.
Indeed, Jasper relied on T. B. Harms Co. v. Eliscu, 339
F.2d 823 (2d Cir. 1964).
In T. B. Harms, Judge Friendly, citing
Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921),
held that district courts may have jurisdiction over state law
claims that include “major questions of construction of the
Copyright Act.”
T. B. Harms, 339 F.2d at 827.
And Gunn
clarified that claims involving “backward-looking”
interpretations of the patent laws do not raise major questions
of federal law.
133 S. Ct. at 1066–68.
The plaintiff’s claims
only require an interpretation of copyright law in hindsight,
and the Gunn principle applies equally to claims involving the
Copyright Act.
See, e.g., Bear Creek Prods., Inc. v. Saleh, 643
F. Supp. 489, 492 (S.D.N.Y. 1986) (Weinfeld, J.) (“Where the
9
focus of the complaint is on state law principles of breach of
contract and fraud, there is no jurisdiction under § 1338.”). 2
All four of the Grable requirements must be met for
jurisdiction to be proper under § 1331 or § 1338(a).
S. Ct. at 1065.
Gunn, 133
The third requirement is not met here.
Accordingly, the complaint does not raise a substantial issue of
federal law.
III.
Finally, the plaintiff contends that the Court has
ancillary equitable jurisdiction because the Complaint alleges
that Ernst defrauded this Court.
This argument is curious
coming from the plaintiff; he filed the complaint in state
court.
But, in any event, the argument lacks merit: the
plaintiff did not bring a Federal Rule of Civil Procedure 60(b)
motion or an independent action for relief from a final
judgment.
There is no doubt that the Court would have jurisdiction
over a Rule 60(b) motion brought by a party in Sorenson v.
2
DeCarlo v. Archie Comic Publications, Inc., 127 F. Supp. 2d
497, 505 (S.D.N.Y. 2001), and Barnhart v. Federated Department
Stores, Inc., No. 04cv3668, 2005 WL 549712, at *3–4 (S.D.N.Y.
Mar. 8, 2005), are not apposite. In those cases, the plaintiffs
claimed to be the owners of works and requested equitable or
monetary relief. However artfully pleaded, those claims
necessarily arose under the Copyright Act. See Briarpatch, 373
F.3d at 305. Wolfson does not claim to be the owner of any
work, nor is he vindicating any rights that are protected by
copyright law.
10
Wolfson.
The Court also would have ancillary jurisdiction over
an independent equitable action that sought relief from a final
judgment in Sorenson v. Wolfson.
See Martina Theatre Corp. v.
Schine Chain Theatres, Inc., 278 F.2d 798, 800 n.1 (2d Cir.
1960).
But the plaintiff requests no such relief.
The Complaint
plainly is not a Rule 60(b) motion in disguise—the final
judgment in Sorenson v. Wolfson dismissed the claims against
Wolfson (the plaintiff here).
“independent equitable action.”
Nor is the complaint an
Such actions are brought “to
obtain relief from a judgment,” 11 Charles Alan Wright, Arthur
R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2868
(3d ed. 2012), and are equitable in nature.
Campaniello
Imports, Ltd. v. Saporiti Italia S.p.A., 117 F.3d 655, 662 (2d
Cir. 1997).
The plaintiff is not requesting such relief.
He is
quite pleased that the Court dismissed Sorenson’s action against
him, and the Complaint seeks only damages for having had to
litigate the previous action. 3
The Complaint appears to allege common law fraud claims
against the defendants.
As the master of his complaint, the
plaintiff was “free to avoid federal jurisdiction by pleading
3
For this reason, Cresswell v. Sullivan & Cromwell, 922 F.2d
60 (2d Cir. 1990), is not relevant. The plaintiffs there
requested relief from a final judgment. Id. 70.
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only state claims even where a federal claim is also available.”
Marcus v. AT&T Corp., 138 F.3d 46, 52 (2d Cir. 1998).
He did
precisely that, and the Court cannot now transform this suit
into a Rule 60(b) motion or an independent equitable action and
assert jurisdiction.
plaintiff requests.
Indeed, that is not the relief the
He seeks damages for the state law claim of
fraud.
Accordingly, the Court lacks subject matter jurisdiction
over this action.
CONCLUSION
The Court has considered all of the remaining arguments of
the parties.
To the extent not specifically addressed above,
they are either moot or without merit.
For the foregoing
reasons, this action is remanded to the New York State Supreme
Court, New York County.
The Clerk is directed to remand the
case and to close the case on the docket of this Court.
SO ORDERED.
Dated:
New York, New York
July 7, 2015
___________/s/_________________
John G. Koeltl
United States District Judge
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