Pastime LLC et al v. Schreiber

Filing 36

OPINION AND ORDER: re: 35 LETTER MOTION to Expedite addressed to Judge J. Paul Oetken from Robert W. Clarida dated November 9, 2017 filed by Pastime LLC, 25 MOTION to Dismiss filed by Lee Schreiber. For the foregoing reasons, Schreiber's motion to dismiss is GRANTED in part and DENIED in part. Pastime's motion to expedite decision is DENIED as moot. Schreiber shall file an answer to the Complaint by December 19, 2017. The Clerk of Court is directed to close the motions at Docket Numbers 25 and 35. SO ORDERED., Lee Schreiber answer due 12/19/2017. (Signed by Judge J. Paul Oetken on 12/05/2017) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PASTIME LLC et al.,

Plaintiffs,

16-CV-8706 (JPO)

-vLEE SCHREIBER,

OPINION AND ORDER
Defendant.

J. PAUL OETKEN, District Judge:
At the center of this case is a play, titled “Once Upon a Pastime,” which its creators hope
to mount as a successful stage production. But before that can happen, the characters in this case
have to resolve their own drama: Who owns the rights to the play? Defendant Lee Schreiber
holds a registration from the U.S. Copyright Office listing him as the play’s sole author, but
Plaintiffs Pastime LLC, Dennis M. Mnogue (personally known as Terry Cashman), PKM Music,
and Metrostar Music (collectively, “Pastime”) claim that Schreiber’s employment contract
divested him of any copyright in the work. Instead, Pastime claims that the play’s owners
transferred their copyrights to Pastime, making Pastime the lawful owner of “Once Upon a
Pastime.”
In this action, Pastime asks this Court to declare it the play’s rightful owner and to nullify
Schreiber’s registration. Schreiber has moved to dismiss Pastime’s Complaint for failure to state
a claim upon which relief can be granted. For the reasons that follow, Schreiber’s motion is
granted in part and denied in part.
I.

Background
The following facts are taken from the Complaint and attached exhibits, and are

presumed true for purposes of deciding Schreiber’s motion to dismiss.

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Over a decade ago, Warren Baker and Sally Jacobs-Baker (“the Bakers”) set out to
produce a musical titled “Passin’ It On.” (Dkt. No. 1 (“Compl.”) ¶ 8; Dkt. No. 1-1.) The Bakers
acquired rights to the play from PKM Music and Terry Cashman, who had written the music, and
commissioned author Larry Atlas to write the book for the project. (Compl. ¶ 8.) After a few
underwhelming first-run performances of “Passin’ It On,” the Bakers hired Schreiber and
Cashman to rewrite Atlas’s book under a new title, “Once Upon a Pastime.” (Compl. ¶¶ 9, 12.)
But the Bakers were dissatisfied with the rewrite and decided to withdraw as producers.
(Compl. ¶¶ 12, 14.) Not wanting to abandon the project, Cashman, PKM Music, and Metrostar
Music entered into a deal with the Bakers, which resulted in the Bakers’ transferring their rights
in the musical to Cashman and PKM Music. (Compl. ¶ 14‒15.) Cashman, PKM Music, and
Metrostar Music subsequently transferred their rights to Pastime LLC. (Compl. ¶ 15.)
Still looking to attract investors and producers, PKM Music and Metrostar Music began
presenting readings of the musical. The first two readings occurred at the York Theater in New
York City. (Compl. ¶ 16.) Schreiber made some revisions between the first and second
readings, but the musical received no offers. (Id.) Although Schreiber requested the opportunity
to make further revisions, Cashman decided instead to contract with a more experienced author,
James Glossman. (Compl. ¶¶ 17‒18.) The second set of readings, now of the GlossmanCashman vintage, were held at Montclair State University. (Compl. ¶ 18.) No offers were made,
and more revisions followed. (Id.) Finally, a third attempt at a New York City rehearsal hall
generated some interest, and producer Armand Paganelli undertook a production of the musical
for five performances at the White Plains Performing Arts Center. (Compl. ¶ 19.)
This is where the Pastime’s budding success story hit a snag: In May 2016, Schreiber
confronted Paganelli at the White Plains Performing Arts Center and orally threatened to sue him

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for infringing Schreiber’s rights in the musical. (Id.) As a result, Paganelli has not made any
further plans to produce the musical, and he plans to defer decision on further productions until
Schreiber’s claims are resolved. (Id.)
Schreiber and Pastime have competing claims to authorship—and ownership—of the
musical. On the one hand, Schreiber holds a registration from the U.S. Copyright Office that
lists him as the sole author of “Once Upon a Pastime.” (Compl. ¶ 20.) On the other hand,
Pastime points to Schreiber’s original employment agreement with the Bakers, which states:
You acknowledge and agree . . . that the Book . . . was specifically
commissioned by [the Bakers] and shall be considered for copyright
. . . purposes a “contribution to a collective work” and a “work for
hire” for [the Bakers] . . . . [The Bakers] are, therefore the owner[s]
of all rights in and to the Book and all copyrights therein . . . .
(Dkt. No. 1-1 ¶ 6; see also Compl. ¶¶ 10‒12.) Pastime argues that, in light of Schreiber’s
employment agreement, “Schreiber intentionally falsified the writing and ownership information
in his copyright registration application.” (Compl. ¶ 21.)
Pastime filed this action for a declaratory judgment to resolve the competing claims to
“Once Upon a Pastime.” 1 In response, Schreiber argues that Pastime has not asked for any relief
that this Court has the capacity to grant. Schreiber moves to dismiss the Complaint for failure to
state a claim upon which can be granted under Federal Rule of Civil Procedure 12(b)(6). (Dkt.
No. 25). Where appropriate, this Court also considers Schreiber’s motion as a motion to dismiss
for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).

1

As a technical matter, the play “Once Upon a Pastime” is protected by a bundle of
copyrights in various creative elements such as the script, music, and choreography. Only the
linguistic elements of the play—that is, the lyrics, screenplay, and script—are at issue in this
case. However, for purposes of resolving the instant motion, the Court will sacrifice precision
for readability and refer to the rights in dispute as rights to “Once Upon a Pastime,” “the play,”
or “the musical.”
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II.

Legal Standard
“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the

claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of
what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007) (first quoting Fed. R. Civ. P. 8(a)(2), then quoting Conley v. Gibson, 355
U.S. 41, 47 (1957)). “To survive a motion to dismiss [under Rule 12(b)(6)], a complaint must
contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). When
considering a motion to dismiss under Rule 12(b)(6), courts “must accept as true all of the
factual allegations contained in the complaint,” Twombly, 550 U.S. at 572 (quoting Swierkiewicz
v. Sorema N. A., 534 U.S. 506, 508 n.1 (2002)), and must draw “all inferences in the light most
favorable to the non-moving party[],” In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir.
2007) (Sotomayor, J.).
Because federal courts are courts of limited subject matter jurisdiction, “[a] case is
properly dismissed for lack of subject matter jurisdiction . . . when the district court lacks the
statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113
(2d Cir. 2000). “[T]he plaintiff bears the burden to prove subject-matter jurisdiction by a
preponderance of the evidence.” Morrow v. Ann Inc., No. 16 Civ. 3340, 2017 WL 363001, at *2
(S.D.N.Y. Jan. 24, 2017). “When considering a motion to dismiss for lack of subject matter
jurisdiction . . . , a court must accept as true all material factual allegations in the complaint . . .
[b]ut . . . jurisdiction must be shown affirmatively, and that showing is not made by drawing
from the pleadings inferences favorable to the party asserting it.” Shipping Fin. Servs. Corp. v.
Drakos, 140 F.3d 129, 131 (2d Cir. 1998).

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III.

Discussion
This case is about who owns the rights to “Once Upon a Pastime,” but Schreiber’s motion

to dismiss presents a play-within-a-play (about a play). Specifically, the parties have thus far
concerned themselves with litigating how to characterize their dispute. Schreiber characterizes
the Complaint as asserting a claim for fraud on the U.S. Copyright Office and then argues that
“there is no affirmative private right of action” for such fraud. (Dkt. No. 27 at 2.) Pastime, in
response, argues that its Complaint states a claim “for a declaration of the parties’ respective
ownership rights in [the musical], and for cancellation of [Schreiber’s] copyright registration.”
(Dkt. No. 30 at 6.)
Pastime’s Complaint raises two distinct issues: (1) the validity of Schreiber’s
registration; and (2) rightful ownership of the copyright. Although “copyright” and
“registration” are sometimes treated as synonyms in common parlance, it is important to
distinguish these two legal concepts. A copyright “exists automatically upon the creation and
fixation of an original work of authorship in a tangible medium of expression.” Chere Amie, Inc.
v. Windstar Apparel, Corp., 191 F. Supp. 2d 343, 350 (S.D.N.Y. 2001); see also 17 U.S.C.
§ 102(a) (“Copyright protection subsists . . . in original works of authorship fixed in any tangible
medium of expression . . . from which they can be perceived, reproduced, or otherwise
communicated . . . .”). A registration, in contrast, is granted by the Copyright Office, and the
Copyright Act conditions certain statutory benefits—most notably, the right to sue for
infringement—on registration. See Chere Amie, 191 F. Supp. 2d at 350. In other words,
copyrights exist by virtue of the author’s creation, while copyright registrations exist by grant of
the Copyright Office.

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Having clarified this distinction, the Court divides Pastime’s potential causes of action
into two categories: registration-related and ownership-related requests for relief. The Court
addresses each in turn.
A.

Registration-Related Requests for Relief

Pastime’s Complaint is not a model of clarity when it comes to articulating its purported
causes of action or requests for relief. But at least one of Pastime’s requests is unambiguously
clear: Pastime asks the Court to grant “Cancellation and Nullification of Copyright Registration
#Pau00373988”—Schreiber’s registration number. (Compl. at 9). This the Court cannot do.
Nothing in the Copyright Act, nor any other federal statute, grants federal courts the
power to cancel or nullify a copyright registration. As the Third Circuit explained in Brownstein
v. Lindsay, “there is evidence that the statute does not give courts any such authority” because
“[s]ection 701, which describes the functions of the Copyright Office, explicitly states that ‘[a]ll
administrative functions and duties under this title, except as otherwise specified, are the
responsibility of the Register of Copyrights.’” 742 F.3d 55, 75 (3d Cir. 2014) (alterations in
original) (quoting 17 U.S.C. § 701(a)). Furthermore, it is significant that a separate section of
the Copyright Act does grant federal courts the authority to cancel registrations for “original
designs.” See id. at 76; 17 U.S.C. § 1324. This Court joins the Brownstein court’s conclusion
that Ҥ 1324 would be superfluous if Congress intended for courts to already have the general
authority to cancel copyright registrations,” and that “[i]n carving out a specific power of
cancellation, this provision only further suggests that courts have no general authority to cancel
copyright registrations.” Brownstein, 742 F.3d at 76. In short, “no private cause of action exists
to cancel a registration.” 2 5 Patry on Copyright § 17:108.
2

Pastime also asks this Court to direct the U.S. Copyright Office to register
Pastime’s competing registration application. (See Compl. ¶ 35(J).) “All actions of the
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Schreiber interprets the Complaint differently, arguing that the Complaint “assert[s] a
claim for fraud on the U.S. Copyright Office.” (Dkt. No. 27 at 4.) Pastime, however,
unambiguously disclaims Schreiber’s interpretation. (See Dkt. No. 30 at 6 (“[T]he Complaint
does not assert a claim for ‘fraud on the U.S. Copyright Office.’”).) As a result, the Court finds
it unnecessary to opine at length on the existence of a cause of action that Pastime has explicitly
waived. 3 The Court notes, however, that the absence of a cause of action for fraud on the
Copyright Office comports with the absence of a cause of action for cancellation of a copyright
registration. See Vaad L’Hafotzas Sichos, Inc. v. Krinsky, 133 F. Supp. 3d 527, 537 (E.D.N.Y.
2015) (rejecting a party’s request for “affirmative relief in the form of cancellation of the
registration . . . [because] ‘there is no precedent supporting the use of a claim for fraud on the
Copyright Office as an affirmative cause of action’” (quoting Kwan v. Schlein, 2008 WL
4755345, *2 (S.D.N.Y. Oct. 30, 2008))).
Consequently, the Court grants Schreiber’s motion to dismiss Pastime’s claims for
nullification and cancellation of Schreiber’s copyright registration. By dismissing Pastime’s
Complaint insofar as it seeks cancellation of Schreiber’s registration, however, the Court does
not imply that the validity of Schreiber’s registration is beyond question. Indeed, future

Copyright Office are subject to the Administrative Procedure Act (‘APA’) and the judicial
review attendant to the APA,” and consequently “aggrieved parties may challenge an
unfavorable decision by the Copyright Office . . . by challenging its decision in court under the
APA.” Brownstein, 742 F.3d at 76. However, Pastime’s current Complaint—even if liberally
construed—does not plead an action under the APA, so the Court dismisses any claim requesting
that that the Court direct the Copyright Office to grant Pastime’s registration application.
3

In any event, the Court concludes that the better reading is Pastime’s: The
Complaint asserts a cause of action “for a declaration of the parties’ respective ownership rights
in the subject literary work, and for cancellation of Defendant’s copyright registration.” (Dkt.
No. 30 at 6.)
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litigation may demonstrate that Schreiber’s registration is invalid. As the Third Circuit observed
in Brownstein:
[C]ourts are authorized to police copyright registrations through
authorship claims and infringement claims. . . . [W]e are in no way
holding that courts are incapable of invalidating underlying
copyrights. . . . Holding that federal courts have the authority to
cancel registrations would essentially be declaring that the judicial
branch has the authority to order a legislative branch agency that is
not a party to the litigation to take an affirmative action. A federal
court’s finding that a copyright is invalid, on the other hand, is a
determination of ownership which does not disturb the registration
of a copyright.
742 F.3d at 76–77.
B.

Ownership-Related Requests for Relief

Although Pastime cannot state a claim upon which relief can be granted with respect to
Schreiber’s registration, the Court concludes that Pastime has stated a cognizable claim for a
declaratory judgment as to ownership rights in “Once Upon a Pastime.”
As a prerequisite, the Court must first satisfy itself that such a claim appears in the
Complaint. The Court concludes that the Complaint, although not as explicit as it could be,
contains sufficient information to state a claim “for a declaration of the parties’ respective
ownership rights.” (Dkt. No. 30 at 6.) The “Cause of Action” section of the Complaint states
that: (1) “Schreiber’s claim to own the copyright in and to the [musical], and to being its sole
writer, is intentionally fraudulent . . . and in violation of the . . . Copyright Act”; (2) “Pastime
LLC is the sole owner of the copyrights in the Musical”; and (3) “[a] Declaratory Judgment . . .
would serve a useful purpose in clarifying and settling the respective rights and obligations of the
parties.” (Compl. ¶¶ 26, 31‒32.) Furthermore, the Complaint’s “Prayer for Relief” section
requests an order declaring that: (1) “Pastime . . . is the rightful and sole owner of the copyright
in and to the [musical]”; (2) “Schreiber has no copyright interest . . . in or to the Musical”; (3)

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“Schreiber’s writing services were rendered as an employee for hire so that . . . the book is a
work for hire and is owned by Pastime LLC”; and (4) “Schreiber is not the sole author of the
[musical].” (Compl. ¶ 35.) Taken together, these statements are more than sufficient to meet
Rule 8(a)(2)’s requirement that the Complaint include a “short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
The Court must next determine if there is federal subject matter jurisdiction over an
action to define ownership rights in “Once Upon a Pastime.” Because Pastime does not allege
diversity jurisdiction under 28 U.S.C. § 1332, this Court has subject matter jurisdiction only if
this action “aris[es] under” federal copyright law. See 28 U.S.C. § 1338. 4 Judge Friendly
announced the Second Circuit’s test for arising-under-copyright jurisdiction in T. B. Harms Co.
v. Eliscu:
[A]n action ‘arises under’ the Copyright Act if and only if the
complaint is for a remedy expressly granted by the Act, e.g., a suit
for infringement . . . , or asserts a claim requiring construction of the
Act, . . . or, at the very least and perhaps more doubtfully, presents
a case where a distinctive policy of the Act requires that federal
principles control the disposition of the claim.
339 F.2d 823, 828 (2d Cir. 1964); see also Bassett v. Mashantucket Pequot Tribe, 204 F.3d 343,
355 (2d Cir. 2000) (reaffirming that “this circuit’s standard for determining jurisdiction under
Section 1338 is furnished by T.B. Harms”). As the Second Circuit articulated more recently in
Briarpatch Ltd., L.P v. Phoenix Pictures, Inc., “[f]or an action to arise under [the Copyright Act],
the plaintiff’s well-pleaded complaint must establish either that the act creates the cause of action

4

Usually, arising-under federal jurisdiction is defined by 28 U.S.C. § 1331;
however, 28 U.S.C. § 1338(a) creates a more specific (and exclusive) grant of original
jurisdiction to federal district courts over “any civil action arising under any Act of Congress
relating to patents, plant variety protection, copyrights and trademarks.”
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or that the plaintiff’s right to relief necessarily depends on resolution of a substantial question of
law under the act.” 373 F.3d 296, 303–04 (2d Cir. 2004).
This case falls within the second T. B. Harms category because the Complaint asserts a
claim that will require construction of the Copyright Act. Specifically, the Copyright Act
dictates that “[i]n the case of a work made for hire, the employer or other person for whom the
work was prepared is considered the author . . . and . . . owns all of the rights comprised in the
copyright.” 17 U.S.C. § 201(b). Section 101 of the Copyright Act then defines a “work made
for hire” as “a work prepared by an employee within the scope of his or her employment” or “a
work specially ordered or commissioned for use as a contribution to a collective work.” 17
U.S.C. § 101.
Pastime alleges that Schreiber cannot claim any ownership rights in the musical
because—per his employment agreement—his contribution was a work for hire. (See Compl.
¶¶ 10‒12.) Whether Schreiber can claim any ownership in “Once Upon a Pastime” turns on this
Court’s interpretation and application of the Copyright Act’s “works made for hire” provision.
Consequently, Pastime has sufficiently alleged federal-question jurisdiction to survive a motion
to dismiss under T.B. Harms. Accord Merchant v. Levy, 92 F.3d 51, 56 (2d Cir. 1996) (holding
that a case required construction of the Copyright Act where “[d]efendants offer[ed] a number of
arguments as to why Plaintiffs’ contribution to [a] song [was] legally insufficient to make them
joint authors . . . , and why [a record-company owner’s] contribution sufficed to make him a joint
author (for example, based on the ‘work for hire’ doctrine)” (citations omitted)); RX Data Corp.
v. Dep’t of Soc. Servs., 684 F.2d 192, 196 n.1 (2d Cir. 1982) (explaining that “[w]hether [the
defendant] has title to the copyrights because they are found to be ‘works made for hire’ under
17 U.S.C. §§ 101, 201(b) (Supp. IV 1980) would be a question of federal law requiring an

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interpretation of the Copyright Act”); see also Cohen v. Versatile Studios, Inc., No. 13 Civ.
08280, 2014 WL 1584055, at *2 (S.D.N.Y. Apr. 21, 2014) (“[A] dispute that turns on whether a
copyrighted work was created independently or as a ‘work made for hire’ is an ownership
dispute that unquestionably arises under the Copyright Act.” (quoting Scandinavian Satellite
Sys., AS v. Prime TV Ltd., 291 F.3d 839, 845 (D.C. Cir. 2002)) (internal quotation marks
omitted)). 5
Finally, the Court concludes that Pastime’s Complaint presents “a case of actual
controversy” for which the Court “may declare the rights and other legal relations” of the parties
pursuant to the Declaratory Judgment Act (“DJA”). 6 28 U.S.C. § 2201. Plaintiff has shown that
“there is a substantial controversy, between parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, Inc. v.
Genentech, Inc., 549 U.S. 118, 127 (2007) (quoting Maryland Casualty Co. v. Pacific Coal &
Oil Co., 312 U.S. 270, 273 (1941)). Schreiber and Pastime have a definite and substantial
dispute over ownership rights in “Once Upon a Pastime,” and Schreiber’s claims to ownership
and threat to sue for infringement give immediacy and concreteness to the controversy between
the parties. See Nike, Inc. v. Already, LLC, 663 F.3d 89, 96 (2d Cir. 2011), aff’d, 568 U.S. 85
(2013) (“[T]he threat of future litigation remains relevant in determining whether an actual

5

Schreiber cites Simon & Flynn, Inc. v. Time Inc. for the proposition that “an
aroma of copyright” does not suffice to establish arising-under jurisdiction. 513 F.2d 832, 833
(2d Cir. 1975). But Schreiber’s reliance on Simon & Flynn is misplaced because that case did
not concern a work for hire. The Court also observes that the Second Circuit decided Simon &
Flynn before the Copyright Act of 1976, which represented a “comprehensive revision” to the
previous Copyright Act of 1909, and, consequently, substantially changed the situations that may
require judicial construction of the Act. 1 Nimmer on Copyright intro.
6

While the DJA makes the remedy of a declaratory judgment available in federal
court, it does not create a stand-alone basis for federal jurisdiction. See Skelly Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 671 (1950).
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controversy exists.”). The Court further concludes that all five of the Second Circuit’s Dow
Jones factors weigh in favor of entertaining this action for declaratory judgment; in particular,
the Court concludes that a declaratory judgment as to the parties’ ownership rights “will serve a
useful purpose in clarifying or settling the legal issues involved” and “would finalize the
controversy and offer relief from uncertainty.” The New York Times Co. v. Gonzales, 459 F.3d
160, 167 (2d Cir. 2006) (quoting Dow Jones & Co., Inc. v. Harrods Ltd., 346 F.3d 357, 359‒60
(2d Cir. 2003)).
Consequently, the Court denies Schreiber’s motion to dismiss Pastime’s claim for a
declaration of the parties’ respective ownership rights in the musical.
C.

Leave to Amend

Pastime requests that “any dismissal or partial dismissal be without prejudice to the
submission of an Amended Complaint” that would add an affirmative claim of infringement.
(Dkt. No. 30 at 9.) Because Pastime’s Complaint survives Schreiber’s motion to dismiss in part,
the Court makes no decision as to the propriety of an amended complaint at this time. If it so
chooses, Pastime is free to move for leave to amend.
IV.

Conclusion
For the foregoing reasons, Schreiber’s motion to dismiss is GRANTED in part and

DENIED in part. Pastime’s motion to expedite decision is DENIED as moot. Schreiber shall
file an answer to the Complaint by December 19, 2017.
The Clerk of Court is directed to close the motions at Docket Numbers 25 and 35.
SO ORDERED.
Dated: December 5, 2017
New York, New York

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