ANDREWS et al v. DAUGHTRY

Filing 24

MEMORANDUM OPINION AND ORDER signed by JUDGE THOMAS D. SCHROEDER on 2/22/2013; that Plaintiffs' motion to remand (Doc. 15 ) is GRANTED, Defendant's motion to dismiss (Doc. 10 ) is DENIED WITHOUT PREJUDICE AS MOOT for lack of subject matter jurisdiction, and the action is REMANDED to the General Court of Justice, Superior Court Division, Guilford County, North Carolina pursuant to 28 U.S.C. § 1447(c). (Sheets, Jamie)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

RYAN ANDREWS, SCOTT CRAWFORD, )
& MARK PERRY,
)
)
Plaintiffs,
)
)
v.
)
)
CHRISTOPHER ADAM DAUGHTRY,
)
)
Defendant.
)

1:12-cv-00441

MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.
This

is

an

action

by

Plaintiffs

Ryan

Andrews,

Scott

Crawford, and Mark Perry (collectively, “Plaintiffs”) alleging
the failure of their former bandmate, Defendant Christopher Adam
Daughtry

(“Defendant”),

to

account

for

profits

authorship credit for certain musical works.

and

provide

Filed in state

court, the action was removed timely to this court (Doc. 1),
with

jurisdiction

question

under

premised

the

on

Copyright

the

Act,

existence
17

U.S.C.

of
§

a

101

federal
et

seq.

(“Copyright Act”).
Two

motions

are

before

the

court.

Plaintiffs

move

to

remand the action pursuant to 28 U.S.C. § 1447(c) on the ground
that

the

court

lacks

subject

matter

jurisdiction

over

the

complaint’s five causes of action pleaded only under state law.
(Doc.

15.)

Defendant

opposes

the

motion,

contending

that

Plaintiffs’

claims

are

disguised

federal

claims

under

the

Copyright Act and moves to dismiss the complaint on the grounds
it fails to state a claim and should be dismissed pursuant to
Federal Rule of Civil Procedure 12(b)(6).

(Doc. 10.)

The court

heard argument on the motions on January 17, 2013.
For the reasons below, the court finds no basis for federal
jurisdiction over Plaintiffs’ claims, and thus the motion to
remand will be granted.

This disposition renders Defendant’s

motion to dismiss moot.
I.

BACKGROUND
A.

Absent Element Partnership and Songs

The

complaint,

taken

in

the

light

most

favorable

to

Plaintiffs, alleges the following facts:
Plaintiffs and Defendant formed a musical band sometime in
2004 which became known as “Absent Element.”
(“Compl.”)) ¶ 12.)

(Doc. 3 (Complaint

The purpose of the band was to “combine the

time, musical talent, labor, and resources of the four members.”
(Id.

¶

13.)

Defendant

Plaintiff

Perry

Plaintiff

Andrews

played drums.

played
played

(Id.)

sang
lead
bass

lead

vocals

guitar

and

guitar,

and

played

guitar,

sang

backup

vocals,

and

Plaintiff

Crawford

From its inception, the band was allegedly

a partnership, with all four members writing music and lyrics
for its songs, collaborating on the arrangement and recording of
those songs, consulting on matters relating to the business of
2

the band, and making decisions based on a majority vote.
¶¶ 13, 15.)

(Id.

Pursuant to an alleged partnership agreement, the

band members also agreed to share equally in the band’s profits
and losses.

(Id. ¶ 15.)

Around December 2004, and in preparation for the release of
the band’s album, “Uprooted,” the band members held a meeting to
discuss how the songwriting authorship and credits for the songs
on the album would be split among the partners.

(Id. ¶ 19.)

They allegedly agreed to “equally share in the profits from any
songs

written

by

any

of

the

partners

as

members

of

and

in

furtherance of Absent Element, irrespective of the extent of any
one

band

member’s

contribution

to

a

particular

song.”

(Id.

¶ 20.)

The songs would “be owned equally by the four parties.”

(Id.

22.)

¶

As

such,

“the

proceeds

of

all

band

affairs,

including proceeds derived from exploitations of songs written
in furtherance of Absent Element, were a partnership asset, to
be divided equally among the partners.”
agreement
parties.

was

reduced

to

writing

and

(Id. ¶ 21.)

signed

by

each

This
of

the

(Id. ¶ 22.)

Following the release of “Uprooted,” Absent Element filed a
copyright registration for all musical compositions and sound
recordings

embodied

in

the

“Uprooted”

album;

the

copyright

identified all four partners as having an equal interest as coauthors in the seven songs on “Uprooted.”
3

(Id. ¶ 23.)

This

copyright was registered on April 4, 2006, under Registration
Number SR0000386167.

(Id.)

Two of the songs subject to the

copyright were entitled “Breakdown” and “Conviction.”
After

recording

and

releasing

“Uprooted,”

(Id.)

Absent

Element

continued to produce other works and perform together.
¶ 25.)

(Id.

Around the summer of 2005, the band wrote the song

“Sinking.”
“Sinking”

(Id.)
was

Like

covered

the
by

songs

the

contained

Absent

on

Element

“Uprooted,”
partnership

agreement, meaning that the band members would “equally share in
the profits.”
Finally,

(Id.)
at

some

point

prior

to

June

2006,

but

earlier, Defendant wrote a song entitled “Home.”
Plaintiffs

contend

that

the

song

was

still

perhaps

(Id. ¶ 32.)

subject

to

the

partnership agreement in that it was written in furtherance of
the partnership and the partners were accordingly entitled to
share in profits derived from it.

(Id.)

Music and lyrics from

the songs “Breakdown,” “Conviction,” “Sinking,” and “Home” are
now the subject of this lawsuit.
B.

Defendant’s Rise to Fame

In the summer of 2005, the members of Absent Element agreed
that, in order to gain greater exposure for the band, Defendant
(as

lead

television

singer)
singing

should
shows.

audition
(Id.

for
¶¶

one

28-29.)

of

the
In

national

fall

2005,

Defendant passed an audition call for the popular competition
4

show “American Idol.”

(Id. ¶ 29.)

Defendant competed on the

show until May 2006, when he was eliminated in fourth place,
though he toured with the “American Idol” cast the following
summer.

(Id. ¶ 34).

During this time, Defendant gained a

significant fan base, and Absent Element’s popularity increased
as well.

(Id. ¶ 35.)

However, Defendant eventually asked that

the band stop selling the “Uprooted” album and remove his name
and

image

Defendant

from
claimed

all

Absent

that

this

Element-related
was

required

by

rules, and the band acquiesced to this request.

items.

(Id.)

“American

Idol”

(Id.)

Between the summer of 2006 and November of that year, the
Absent

Element

partnership

discontinued

their

association

and

dissolved, though the partnership’s affairs have not been wound
up.

(Id. ¶ 45.)

self-titled

album,

In November of 2006, Defendant released his
“Daughtry.”

(Id.

¶

40.)

The

“Daughtry”

album included three songs at issue – “Breakdown,” “Gone,” and
“Home.”

(Id. ¶ 42.)

Defendant subsequently released his second

album, “Leave This Town,” in July of 2009, which included the
fourth disputed song, “You Don’t Belong.”

(Id. ¶ 43.)

With respect to each of the “Daughtry” songs, Plaintiffs
allege the following:
1.

Defendant’s song “Breakdown” includes lyrics and music
from the Absent Element song “Conviction” and music
and lyrics from the Absent Element song “Breakdown.”
5

2.

Defendant’s song “Gone” includes lyrics and music from
the Absent Element song “Sinking.”

3.

Defendant’s

song

“Home”

is

the

Absent

Element

song

“Home” that Defendant wrote prior to June of 2006.
4.

Defendant’s

song

“You

Don’t

Belong”

includes

music

from the Absent Element song “Breakdown.”
(Id. ¶¶ 42, 43.)
substantial

Plaintiffs claim that Defendant has received

compensation

from

these

songs

and

his

success,

including sales of at least five million copies of the album
“Daughtry”
Town.”
C.

and

one

million

copies

of

the

album

“Leave

This

(Id. ¶ 44.)
Plaintiffs’ Claims

Plaintiffs
“[Defendant]

has

complain
not

of

numerous

shared

with

wrongs:

Plaintiffs

first,
any

that

profits

resulting from the Absent Element Songs embodied in the songs”
“Breakdown,” “Gone,” “Home,” and “You Don’t Belong” (id. ¶ 46);
second, that Defendant has misrepresented himself as the sole
songwriter for at least the songs “Breakdown” and “You Don’t
Belong,” despite the fact that they “include music and lyrics”
from Absent Element songs covered by the partnership agreement
(id.

¶

47);

“Breakdown”

third,
and

“You

that

Defendant

Don’t

Belong”

has
to

failed

to

Plaintiffs

attribute
in

the

copyright registrations filed by Defendant with respect to those

6

songs 1 (id. ¶ 48); fourth, that Defendant has taken advantage of
his position of trust as a partner by failing to disclose to
various record/production companies that the songs in question
“contain music and lyrics that were written in furtherance” of
the partnership and that his partners had the right to share in
the

proceeds

(id.

¶¶

52,

53);

fifth,

that

Defendant

took

advantage of his position of trust as a partner by failing to
disclose to various record/production companies and the general
public that the songs “Breakdown” and “You Don’t Belong” include
music and lyrics that were jointly written with Plaintiffs (id.
¶ 54); sixth, that Defendant continually used his position as a
successful

artist

to

suggest

that

he

would

help

Plaintiffs

advance their careers, but never did so (id. ¶ 56); and seventh,
that

such

representations

were

made

by

Defendant

so

as

to

“induce Plaintiffs not to pursue remedies sought” in the instant
action

by

offering

to

collaborate

on

future

work

on

the

condition that no lawsuit be filed (id. ¶ 57).
In the complaint, Plaintiffs plead five separate causes of
action.

Plaintiffs’ first cause of action alleges constructive

1

Copyrights were registered for the “Daughtry” song “Breakdown” on
January 2, 2007, Registration Number PA0001166373, and the “Leave This
Town” song “You Don’t Belong” on September 9, 2009, Registration
Number PA0001656909.
(Id. ¶ 49.)
Plaintiffs assert that in those
registrations Defendant misrepresented to the Copyright Office that
there were “no prior registrations of earlier versions of those songs”
despite
Defendant’s
knowledge
of
the
earlier
Absent
Element
copyrights. (Id.)

7

fraud and seeks a constructive trust.

The underlying theory

advanced is that Defendant owed a fiduciary duty to his partners
and then breached that duty by failing to account to Plaintiffs
for profits, by retaining profits for himself, by failing to
disclose that the songs in question were created pursuant to the
partnership agreement, and by failing to disclose that at least
“Breakdown” and “You Don’t Belong” were jointly authored under
the partnership agreement.
the

complaint

authorize

states

[Defendant]

partnership

property,

partnership,

(Id. ¶¶ 60, 64.)

that
to

exploit

matters

partnership

“[a]t

no

affairs,

point

for

created
or

More generally,

his
in

the

did

own

Plaintiffs

sole

furtherance
proceeds

or

benefit
of

the

profits

derived therefrom, including, without limitation, songs written
in furtherance of Absent Element.”

(Id. ¶ 62.)

The second cause of action seeks a statutory accounting
under North Carolina’s Uniform Partnership Act, N.C. Gen. Stat.
§ 59-52.

The claim asserts that “Plaintiffs are entitled to an

accounting of all profits and proceeds [Defendant] has derived
and

obtained

limitation,

from

all

disputed songs.

partnership

profits

and

affairs,

proceeds”

including,
associated

without
with

the

(Id. ¶ 70.)

The third cause of action is for an accounting based on
common law and injunctive relief.

It appears that this claim is

identical to the statutory accounting claim, except that it is
8

premised upon Defendant’s breach of his fiduciary duty rather
than upon a statute.
seeks

a

permanent

requires Defendant
proceeds.

(Id. ¶ 73.)

Further, this claim also

injunction

that

orders

to

each

partner

provide

an

accounting

his

share

of

and
the

(Id. ¶ 74.)

The fourth cause of action asserts violations of the North
Carolina
N.C.

Unfair

Gen.

actions

Stat.

are

Plaintiffs

and
§

Deceptive
75-1.1.

alleged

stop

to

Trade

Defendant’s

include

selling

Practices

the

the

Act

unfair

following:

“Uprooted”

album

(“UDTPA”),

and

deceptive

demands

while

that

Defendant

continued to profit, failure to account to Plaintiffs profits
and proceeds, retention of profits by Defendant and failure to
share with his partners, failure to disclose to others that the
songs were subject to the partnership agreement, and failure to
disclose
authored.

to

others

that

at

least

some

songs

were

jointly

(Id. ¶ 77.)

The fifth claim for unjust enrichment is pleaded in the
alternative “to the extent the wrongful conduct of [Defendant],
as alleged herein, does not fall within the subject matter of
his partnership agreement[.]”
claim

is

based

on

the

(Id. ¶ 80.)

argument

that

This common law

Defendant

accepted

the

benefits of the partnership and it would be inequitable to allow
him to reap all the profits from the musical works for himself.
(Id. ¶¶ 81-83.)
9

II.

ANALYSIS
Before

Defendant’s

the

court

motion

to

are

Plaintiffs’

dismiss.

motion

Ordinarily,

to

when

remand
a

court

and
is

faced with simultaneous motions to remand and dismiss, it should
resolve

the

remand

motion

first

so

subject matter jurisdiction exists.

as

to

establish

whether

In re Bear River Drainage

Dist., 267 F.2d 849, 851 (10th Cir. 1959); see also Stafford
EMS, Inc. v. J.B. Hunt Transp., Inc., 270 F. Supp. 2d 773, 774
(S.D.W.

Va.

2003).

Accordingly,

the

court

begins

with

the

motion to remand.
A.
A

Motion to Remand
federal

court

will

have

jurisdiction

over

a

removed

action if the case originally could have been brought in federal
court.

See 28 U.S.C. § 1441(a).

However, “[i]f at any time

before final judgment it appears that the district court lacks
subject matter jurisdiction, the case shall be remanded.”
§ 1447(c).

Id.

Any doubts regarding the propriety of removal are

resolved in favor of remand, as federal courts must construe
removal jurisdiction narrowly.

See Mulcahey v. Columbia Organic

Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).

The burden

rests with the party who has removed an action to federal court
to demonstrate the court’s jurisdiction.

Dixon v. Coburg Dairy,

Inc., 369 F.3d 811, 816 (4th Cir. 2004) (citing Mulcahey, 29
F.3d at 151).
10

A federal court will have subject matter jurisdiction in a
removed

action

if:

(1)

there

is

diversity

jurisdiction

(28

U.S.C. § 1332); (2) the face of the “well-pleaded” complaint
raises a federal question (28 U.S.C. §§ 1331, 2 1338 3); or (3) the
state law claim is completely preempted by federal law.
v. Tharp, 413 F.3d 435, 439 (4th Cir. 2005).
assert

that

diversity

jurisdiction

is

Lontz

The parties do not

at

issue.

Rather,

Defendant argues that all claims raise a federal question and
that, alternatively, the claims for constructive fraud, unfair
and

deceptive

trade

practices,

and

unjust

completely preempted by the Copyright Act.

enrichment

are

Plaintiffs contend

that all five of the complaint’s causes of action are based
purely on state law and raise no federal question.
1.

Federal Question Jurisdiction

For removal to rest on federal question jurisdiction, an
essential element of the claim on the face of a plaintiff’s

2

Section 1331 provides that the federal district courts “shall have
original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.”

3

Section 1338(a) provides: “The district courts shall have original
jurisdiction of any civil action arising under any Act of Congress
relating to patents, plant variety protection, copyrights and
trademarks. No State court shall have jurisdiction over any claim for
relief arising under any Act of Congress relating to patents, plant
variety protection, or copyrights.”
The court will “apply the same
test to determine whether a case arises under § 1338(a) as under
§ 1331.”
Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc.,
535 U.S. 826, 829-30 (2002); see also Gunn v. Minton, --- S. Ct. ----,
2013 WL 610193, at *5 (Feb. 20, 2013).

11

complaint must raise a federal question.

Gully v. First Nat’l

Bank, 299 U.S. 109, 112 (1936); Lontz, 413 F.3d at 439.

Under

the “well-pleaded complaint” rule, a plaintiff is the master of
his complaint, and where he could state claims under both state
and federal law, he can prevent federal jurisdiction by resting
only on the state claims.
U.S. 386, 392 (1987).

Caterpillar, Inc. v. Williams, 482

However, even the presence of a federal

issue in a state cause of action does not automatically confer
jurisdiction on the federal court.

Merrell Dow Pharms., Inc. v.

Thompson, 478 U.S. 804, 813 (1986).

Therefore, the fact that a

state law claim involves copyrighted material does not, in and
of itself, create federal question jurisdiction.

Arthur Young &

Co. v. City of Richmond, 895 F.2d 967, 969 (4th Cir. 1990).
Defendant contends that each cause of action alleged not
only involves copyrighted material, but requires the resolution
of

Plaintiffs’

rights

under

the

Copyright

Act

because

co-

ownership by virtue of co-authorship is one of the bases of
liability

alleged.

Defendant

therefore

relies

on

a

line

of

cases that hold that where co-ownership is implicitly at issue,
federal

jurisdiction

exists.

See,

e.g.,

Cambridge

Literary

Props., Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. Kg.,
510 F.3d 77, 84 (1st Cir. 2007); Carell v. Shubert Org., Inc.,
104 F. Supp. 2d 236, 246 n.6 (S.D.N.Y. 2000).

Plaintiffs argue

that this test does not control where each claim also contains
12

an

alternate

theory

independent

of

the

Copyright

Act.

Plaintiffs are correct.
The

Supreme

Court

has

stated

that

federal

jurisdiction

“demands not only a contested federal issue, but a substantial
one,

indicating

a

serious

federal

interest

in

claiming

advantages thought to be inherent in a federal forum.”

the

Grable &

Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 313
(2005).

Accordingly, “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, --- S. Ct. ----,

2013 WL 610193, at *5 (Feb. 20, 2013). 4
However, “arising under” jurisdiction does not necessarily
exist simply because a plaintiff “alleges a single theory [of a
claim]

under

essential.

which

resolution”

of

a

federal

question

is

Christianson v. Colt Indus. Operating Corp., 486

4

Additionally, courts, including the Fourth Circuit, have evaluated
whether a claim arises under the Copyright Act specifically by
applying the test articulated in T.B. Harms Co. v. Eliscu, 339 F.2d
823 (2d Cir. 1964), which assesses whether the complaint (1) is for a
remedy expressly granted by the Copyright Act, i.e., infringement, (2)
asserts a claim that requires construction of the Copyright Act, or
(3) involves a distinctive policy of the Copyright Act that requires
that federal principles control the case.
Arthur Young & Co., 895
F.2d at 970; but see Cambridge, 510 F.3d at 96 n.20 (noting that the
T.B. Harms test is not a reliable test to establish the presence of
federal question jurisdiction).

13

U.S.

800,

810

(1988). 5

If

“on

the

face

of

a

well-pleaded

complaint there are . . . reasons completely unrelated to the
provisions and purposes” of the federal laws why a plaintiff may
be entitled to the relief he seeks, the claim does not arise
under those federal laws.

Franchise Tax Bd. of Cal. v. Constr.

Laborers Vacation Trust, 463 U.S. 1, 26 (1983); see also Dixon,
369 F.3d at 816 (“A plaintiff's right to relief for a given
claim necessarily depends on a question of federal law only when
every legal theory supporting the claim requires the resolution
of a federal issue.” (emphasis in original)) 6; Mulcahey, 29 F.3d
5

In Christianson, the plaintiff claimed monopolization under the
Sherman Act, 15 U.S.C. § 2, alleging several theories; one theory
contended that the defendant was monopolizing the market by wrongfully
advising customers that the plaintiff was violating the defendant’s
trade secrets when, in fact, there were no trade secrets because
defendant’s underlying patents were invalid; the remaining theories
were unrelated to any patent issue. 486 U.S. at 811. The defendant
argued that the claim arose under federal law because it put the
validity of the patents at issue. Id. at 810-11. The Seventh Circuit
agreed with the defendant, finding that the only theory under which
the plaintiff could prove willful monopolization was one involving the
invalidation of the defendant’s patents, thus raising a substantial
federal question under section 1338(a).
Id.
The Supreme Court
disagreed. Because the plaintiff’s complaint provided an alternative
theory that did not involve a question of patent law, the Court
concluded, the entire monopolization claim did not “arise under”
patent law. Id. at 811.
6

In Dixon, the plaintiff claimed that his termination from his
employment (for displaying a Confederate battle flag) was unlawful
under § 16-17-560 of the South Carolina Code. 369 F.3d at 814. This
section made it unlawful to discharge an employee “because of
political opinions or the exercise of political rights and privileges
guaranteed . . . by the Constitution and laws of the United States or
by the Constitution and laws of [South Carolina].”
Id. at 814-15
(quoting S.C. Code Ann. § 16-17-560). The defendant removed the case
and claimed that the complaint required resolution of a substantial
question of federal law. Id. at 815. The Fourth Circuit found that

14

at 153 (stating that “Christianson teaches us that, if a claim
is supported not only by a theory establishing federal subject
matter
would

jurisdiction
not

matter

establish

jurisdiction

but

also

such
does

by

an

alternative

jurisdiction,
not

then

exist”). 7

theory

federal

Therefore,

which

subject
“a

claim

supported by alternative theories in the complaint may not form
the basis for § 1338(a) [(arising under)] jurisdiction” unless
federal

law

is

“essential

to

each

of

those

theories.”

Christianson, 486 U.S. at 810.
The

court’s

initial

inquiry

then

is

whether,

even

if

a

theory of a claim presents a substantial federal question, there
is an alternate theory for that claim dependent solely on state
law.

This issue, presented as it is here in the context of

contractual
ownership,

and
has

other
been

state

law

characterized

claims
as

based

“among

on

copyright

the

knottiest

the complaint supported three theories of liability: “(1) Dixon was
fired because of his political opinions; (2) Dixon was fired for
exercising
political
rights
guaranteed
by
the
United
States
Constitution; and (3) Dixon was fired for exercising political rights
guaranteed by the South Carolina Constitution.” Id. at 818. Of these
theories, only the second required resolution of a substantial
question of federal law, and federal jurisdiction was therefore
inappropriate.
Id. (stating that “although Dixon's complaint does
reference the First Amendment, none of its causes of action rely
exclusively on a First Amendment violation to establish [defendant’s]
liability”).
7

In Mulcahey, the court found alternative theories for the
plaintiff’s negligence claim because, in addition to claiming
negligence per se for violations of federal environmental laws, the
complaint alleged negligence in violation of state and local laws. 29
F.3d at 153-54.

15

procedural

problems

Mashantucket

Pequot

in

copyright

Tribe,

204

jurisprudence.”

F.3d

343,

347

(quoting MELVILLE B. NIMMER & DAVID NIMMER, NIMMER
COPYRIGHT”) § 12.01[A]).

ON

Bassett

(2d

Cir.

v.

2000)

COPYRIGHT (“NIMMER

ON

In making the assessment, the court must

be cognizant that it “walk[s] a fine line between usurping the
power of the state courts and providing redress for copyright
infringement.”

Image Software, Inc. v. Reynolds & Reynolds Co.,

459 F.3d 1044, 1050 n.7 (10th Cir. 2006) (quoting Scholastic
Entm’t, Inc. v. Fox Entm’t Group, Inc., 336 F.3d 982, 985-86
(9th Cir. 2003)).
Upon

examination,

it

is

apparent

that

Defendant’s

contention that a substantial federal question is raised because
the

complaint

necessarily

ownership lacks merit.

raises

the

issue

of

copyright

The complaint reveals that Plaintiffs

have carefully pleaded their claims to avoid federal question
jurisdiction.

Plaintiffs base their right to an accounting and

attribution 8 credit on several theories: the parties’ written
agreement to share authorship and profits from the musical works
at issue (Doc. 3 (Compl.) ¶ 22); the parties’ agreement to share

8

Defendant does not seek to premise removal on any claim by
Plaintiffs for copyright attribution in connection with Defendant’s
works.
See Doc. 18 at 11 (“Mr. Daughtry did not remove this case
based on their claims for attribution.”) Cf. UMG Recordings, Inc. v.
Disco Azteca Distribs., Inc., 446 F. Supp. 2d 1164, 1178 (E.D. Cal.
2006) (noting it is “well established that the right to attribution is
not a protected right under the Copyright Act”).

16

proceeds from the works at issue, irrespective of authorship
(id. ¶ 20); by operation of the band’s partnership arrangement
generally (id. ¶ 21); and co-authorship of some of the works by
some of the Plaintiffs (id. ¶¶ 54). 9

Significantly, each cause

of action incorporates paragraph 20 of the complaint, which is
the paragraph that alleges that the partners agreed to “equally
share

in

the

profits

from

any

songs

written

by

any

of

the

partners as members of and in furtherance of Absent Element,
irrespective of the extent of any one band member’s contribution
to a particular song.”

(Id. ¶ 20.)

agreement

proceeds

to

share

the

from

This allegation of an
the

songs

at

issue

irrespective of ownership suffices to prevent the first four
causes of action, which clearly rely on it, from being the basis
for removal. 10
The fifth cause of action requires closer examination.
is

more

narrowly

tailored,

seeking

recovery

for

It

unjust

enrichment “to the extent the wrongful conduct of [Defendant],

9

Under copyright law, each co-owner acquires an undivided whole
interest in the copyright, 17 U.S.C. § 201(a); NIMMER ON COPYRIGHT
§ 6.05; see also Pye v. Mitchell, 574 F.2d 476, 480 (9th Cir. 1978),
and thus has the independent right to use or license the copyright,
Oddo v. Ries, 743 F.2d 630, 633 (9th Cir. 1984). However, a co-owner
who uses the copyright must account to other co-owners for any profits
he earns from use of the copyright. Oddo, 743 F.2d at 633; Erickson
v. Trinity Theatre, Inc., 13 F.3d 1061, 1068 (7th Cir. 1994).
10

Defendant’s challenge to the merits of any partnership basis for
Plaintiffs’ claims (see Doc. 21) is not for this court to decide on
motion for remand.

17

as alleged herein, does not fall within the subject matter of
his partnership agreement with Plaintiffs.”

(Id. ¶ 80.)

The

claim is premised on the following principal allegation:
In particular, Plaintiffs jointly participated in
the partnership with Daughtry with the expectation and
understanding that each partner, including Daughtry,
would perform his duties and obligations, and would
not undermine or divert from the other partners
proceeds from partnership affairs.
Each partner,
including Daughtry, consciously accepted the benefits
of their partnership arrangement, including the monies
they received from partnership affairs, including
writing, recording, selling and performing songs as
Absent Element.
These benefits were not provided
gratuitously.
(Id. ¶

81.)

benefits,

Plaintiffs

Defendant

acted

allege

that

despite

wrongfully

by

accepting

“fail[ing]

these

to

share

equally with Plaintiffs all profits and proceeds” from the works
in question so as to “deprive[] them of their fair share of the
benefits of the parties’ common venture.”
Even

though

this

claim

excludes

(Id. ¶ 82.)
any

allegation

of

an

express agreement, it nevertheless rises or falls on the alleged
relationship between the parties and the scope of North Carolina
law applicable to that relationship.
not

require

the

determination

of

11

The claim therefore does

any

copyright

issue 11

and,

Under North Carolina law, the theory of unjust enrichment is that a
person should not be able to enrich himself unjustly at the expense of
another, and the remedy is imposed where no recovery in law exists.
Stauffer v. Owens, 214 S.E.2d 240, 241 (N.C. Ct. App. 1974) (affirming
unjust enrichment recovery in lieu of partnership claim).
Here,
Plaintiffs’ claim for unjust enrichment, while pleaded in the
alternative to an express agreement, nevertheless purports to rely on

18

consequently, does not arise under federal law.

Cambridge, 510

F.3d at 81 n.1 (stating that a claim does not arise under the
Copyright Act when “co-ownership may be determined . . . through
other ownership interests governed by state law”).
Defendant’s

reliance

on

cases

that

hold

that

a

federal

question is raised where co-ownership is at issue is unavailing
because

those

cases

are

distinguishable

and

do

not

involve

separate, non-Copyright Act bases for ownership or proceeds, as
alleged here.
644,

652-53

plaintiff’s

For example, in Gaiman v. McFarlane, 360 F.3d
(7th

Cir.

separate

2004),

claim

for

the

court

found

declaratory

that

judgment

of

the
co-

ownership, which was predicated on plaintiff’s contributions as
co-author,

arose

under

and

was

governed

limitations within the Copyright Act.
separate

claim

predicated

solely

by

Id.
on

the

statute

of

Here, there is no

co-authorship.

In

Cambridge, 510 F.3d at 86, jurisdiction was based on diversity,
and the court was again determining a statute of limitations
issue.

Applying the “parallel reasoning” of the “arising under”

jurisdiction analysis, the court found that plaintiff’s claims
for

an

accounting

and

unjust

enrichment

arose

under

the

Copyright Act because they required a predicate showing of co-

the parties’ alleged partnership arrangement.
Whether this states a
claim for relief under North Carolina law is not for this court to
decide at this stage. What is clear, however, is that the claim does
not rely exclusively on a claim arising under federal law.

19

ownership, which in turn was based on an individual’s alleged
contribution as co-author under the Copyright Act. 12
87.

Id. at 84-

Cf. Dead Kennedys v. Biafra, 37 F. Supp. 2d 1151, 1153

(N.D. Cal. 1999) (noting that “[a]n action for an accounting or
determination

of

ownership

as

between

alleged

co-owners

is

founded in state law and does not arise under the copyright
laws” irrespective of “whether co-ownership arises from joint
authorship

or

partnership”).

through

co-ownership

of

rights

through

a

Notably, in none of Defendant’s cases was the

question of an independent state law basis under Christianson
raised, which is not surprising to the extent those cases were
not examining federal subject matter jurisdiction.
Defendant also argued at the hearing that he alone owns the
copyright in the works and that determination of his exclusive
ownership raises a federal question giving rise to this court’s
subject matter jurisdiction.
the

court

applies

the

This argument fails, too.

well-pleaded

complaint

rule,

Because
federal

question jurisdiction cannot arise in connection with a defense,
even

if

the

defense

is

anticipated

in

the

complaint

or

the

parties agree it is the only true question at issue in the case.
Franchise Tax Bd., 463 U.S. at 14.
Finally,

Defendant

claims

12

that

federal

question

Cambridge has been criticized and suggested by some to be limited
to its “unique” facts. NIMMER ON COPYRIGHT § 12.01[A][1][d][iii].

20

jurisdiction exists because Plaintiffs’ claims will require a
determination whether Defendant’s works are “derivative works”
under the Copyright Act, 13 relying on XCEL Data Sys., Inc. v.
Best,

No.

1:08-CV-00613-OWW-GSA,

(E.D. Cal. 2009).

2009

U.S.

Dist.

LEXIS

34904

Defendant’s argument is unpersuasive.

In

XCEL Data, the plaintiff sought a declaration not only that it
owned the copyright in the plaintiff’s materials the defendant
used, but further that it exclusively owned the copyright in the
complete derivative work.
found

that

this

declaring

each

necessary

to

Id. at *20.

presented
party's

examine

a

federal

respective

ownership

rights,

it

is

Id.

(emphasis

not

contrast,

the

“[i]n

derivative [works] and decide the scope of each copyright.”
in

both

because

and

Here,

interpret

question

original

added).

and

The court accordingly

Plaintiffs

are

pursuing any claim of ownership in the subsequent “Daughtry”
songs.

Plaintiffs’ position is that Defendant’s works are at

best derivative works, which they conceded at the hearing they

13

17 U.S.C. § 101 provides: “A ‘derivative work’ is a work based upon
one or more preexisting works, such as a translation, musical
arrangement, dramatization, fictionalization, motion picture version,
sound recording, art reproduction, abridgment, condensation, or any
other form in which a work may be recast, transformed, or adapted. A
work consisting of editorial revisions, annotations, elaborations, or
other modifications which, as a whole, represent an original work of
authorship, is a ‘derivative work.’”
A co-owner of a copyright may
create a derivative work, Weinstein v. Univ. of Ill., 811 F.2d 1091,
1095 (7th Cir. 1987), but enjoys exclusive ownership only over the new
elements; the underlying copyright is not affected in any way, NIMMER ON
COPYRIGHT § 6.05.

21

do not contest; Plaintiffs simply seek an accounting for those
portions

of

the

Element songs.
there

is

no

derivative

works

that

come

from

the

Absent

Consequently, XCEL Data is distinguishable and
need

for

construction

of

the

Copyright

Act.

Moreover, because the complaint also relies on the alternative
theory

that

Plaintiffs

are

entitled

to

an

accounting

for

proceeds based on the alleged partnership agreement irrespective
of ownership, there is no federal question jurisdiction under
Christianson. 14
Therefore,
ownership

and

because

the

recovery

of

complaint

relies

proceeds

on

arising

theories
from

of

express

agreement and other state law bases – and not exclusively under
the Copyright Act – Plaintiffs’ claims for Defendant’s failure
to account for proceeds and/or share songwriting credits do not
arise

under

federal

law.

Dixon,

369

F.3d

at

818

(finding

removal improper where none of the complaint’s causes of action
relied exclusively on a federal question).

14

Defendant also argues that, because the Copyright Act requires that
any transfer of a copyright be in a signed writing, 17 U.S.C.
§ 204(a), the court will have to construe the Copyright Act in
assessing Plaintiffs’ claim that copyrights in the original works were
transferred to the partners and/or partnership.
Even assuming
(without deciding) that such a contention would raise a federal
question, Defendant overlooks the fact that Plaintiffs have raised
alternate state theories for their claims which, under Christianson,
preclude removal.

22

2.
As

an

Complete Preemption
alternative

ground

for

federal

jurisdiction,

Defendant argues that the complaint’s constructive fraud, unfair
and deceptive trade practices, and unjust enrichment causes of
action are completely preempted by federal law, and thus federal
jurisdiction exists. 15
“Preemption

does

not

necessarily

confer

[federal]

jurisdiction, since it is generally a defense to [a] plaintiff's
suit and, as such, it does not appear on the face of a wellpleaded complaint.”
373

F.3d

296,

Briarpatch Ltd. v. Phoenix Pictures, Inc.,

304

(2d

Cir.

2004).

However,

in

some

circumstances the preemptive force of federal law will be so
“extraordinary” that it will convert a state law complaint into
one that states a federal claim for the purposes of the wellpleaded complaint rule.
Such

“complete

Caterpillar, Inc., 482 U.S. at 393.

preemption”

applies

to

state

law

claims

preempted by the Copyright Act because the Copyright Act “both
preempts state law and substitutes a federal remedy for that
law, thereby creating an exclusive federal cause of action.”
Briarpatch, 373 F.3d at 305.
expressly

preempts

“all

Specifically, the Copyright Act

legal

or

equitable

rights

that

are

equivalent to any of the exclusive rights within the general
15

Defendant does not argue that the accounting claims are completely
preempted. (See Doc. 18 at 14-20.)

23

scope

of

copyright

authorship,”

17

as

specified

U.S.C.

§

by

section

301(a),

with

106
the

in

works

proviso

of

that

“[n]othing in this title annuls or limits any rights or remedies
under

.

.

.

State

[law]

with

respect

to

.

.

.

activities

violating legal or equitable rights that are not equivalent to
any

of

the

exclusive

rights

within

the

general

scope

copyright as specified by section 106,” id. § 301(b)(3).

of
The

exclusive rights protected by section 106 are the right to do
and authorize the following: (1) reproduce the copyrighted work;
(2) prepare derivative works; (3) distribute copies of the work
by sale or otherwise; (4) perform the work publicly; and (5)
display the work publicly.

Id. § 106.

In Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225, 229
(4th Cir. 1993), the Fourth Circuit adopted a two-part test to
determine if a state law claim is completely preempted by the
Copyright Act.

First, the court must inquire whether “the work

is

scope

within

the

of

the

subject

specified in 17 U.S.C. §§ 102, 103.”

matter

of

copyright

as

Id. (quoting Ehat v.

Tanner, 780 F.2d 876, 878 (10th Cir. 1985)) (internal quotations
omitted).

If

the

work

is

within

the

subject

matter

of

copyright, the court must then determine if “the rights granted
under state law are equivalent to any exclusive rights within
the scope of federal copyright as set out in 17 U.S.C. § 106.”
Id.

State law claims that infringe one of the exclusive rights
24

contained in section 106 are preempted by section 301(a) if the
right defined by state law “may be abridged by an act which, in
and of itself, would infringe on one of the exclusive rights.”
Id.

(internal

quotations

omitted).

However,

“if

an

extra

element is required instead of or in addition to the acts of
reproduction, performance, distribution or display, in order to
constitute a state-created cause of action . . . there is no
preemption,” provided that the “extra element changes the nature
of

the

action

so

that

copyright

infringement

quotations

removed).

it

is

qualitatively

claim.”
In

Id.

different

(emphasis

determining

whether

and
a

from

a

internal
claim

is

qualitatively different from a copyright claim, the court looks
at “what [the] plaintiff seeks to protect, the theories in which
the matter is thought to be protected and the rights sought to
be enforced.”

Computer Assocs. Int’l, Inc. v. Altai, Inc., 982

F.2d 693, 716 (2d Cir. 1992).
The parties do not dispute that the first prong of the
Rosciszewski

test

is

satisfied,

as

the

copyrighted

works

at

issue are within the scope of the subject matter of copyright.
See 17 U.S.C. § 102(a) (stating that “[c]opyright protection
subsists . . . in original works of authorship fixed in any
tangible medium of expression . . . Works of authorship include
. . . musical works, including any accompanying words”); Daboub
v. Gibbons, 42 F.3d 285, 289 n.6 (5th Cir. 1995) (a song was
25

within the subject matter of copyright); Butler v. Target Corp.,
323 F. Supp. 2d 1052, 1056 (C.D. Cal. 2004) (song lyrics were
within the subject matter of copyright).

As such, at issue is

the second prong of the Rosciszewski test – whether Plaintiffs’
state

law

causes

of

action

are

rights under the Copyright Act.

equivalent

to

any

exclusive

Each of the three causes of

action that Defendant argues are completely preempted will be
examined to assess whether any contains an “extra element” that
would defeat the Copyright Act’s preemptive scope. 16
a.

Plaintiffs’
notion

that

Claim
Trust

1:

constructive

Defendant

Constructive

fraud

breached

claim

his

Fraud/Constructive

is

premised

fiduciary

duty

on

the

to

the

partnership by exploiting, for his sole benefit, “partnership
property,

matters

created
or

in

furtherance

of

the

proceeds

or

profits

partnership

affairs,

the

therefrom.”

(Doc. 3 (Compl.) ¶ 62.)

partnership,
derived

In North Carolina, a prima

facie case for constructive fraud is a showing of a fiduciary
duty and a breach of that duty.

16

HAJMM Co. v. House of Raeford

Defendant does not argue that the accounting claims (second and
third causes of action) are completely preempted by the Copyright Act.
(Doc. 18 at 14-20.)
See NIMMER ON COPYRIGHT § 12.01[A][1][d][iii] (“An
accounting cause of action . . . cannot be deemed completely preempted”); see also Cambridge, 510 F.3d at 100 (Cyr, J., dissenting)
(noting that the “Copyright Act does not preempt all state-law claims
between copyright co-owners, since the Act itself creates no
alternative federal cause of action, remedy, or procedural mechanisms
to govern such claims”).

26

Farms, Inc., 379 S.E.2d 868, 874 (N.C. Ct. App. 1989).
Plaintiffs

argue

that

the

“extra

element”

As such,

provided

by

the

constructive fraud claim derives from the partnership agreement
and

Defendant’s

breach

of

his

fiduciary

duty.

Defendant

counters that these arguments are mere attempts to assert state
law rights that are the equivalent of exclusive rights under the
Copyright Act, including the right to reproduce a copyrighted
work,

the

right

to

prepare

a

derivative

work,

the

right

to

perform a copyrightable work, and the right to distribute a work
by sale, license, or otherwise.
In applying the Rosciszewski test, the court finds that
there is an extra element in the constructive fraud claim that
makes

the

claim

qualitatively

different

rights available under the Copyright Act.
violation

is

predicated

upon

an

act

from

the

exclusive

“[W]hen a state law

incorporating

elements

beyond mere reproduction or the like, the [federal and state]
rights
occur.”

involved

are

not

equivalent

and

preemption

will

not

Harper & Row Publishers, Inc. v. Nation Enters., 723

F.2d 195, 200 (2d Cir. 1983), rev'd on other grounds, 471 U.S.
539 (1985).

In this case, the underlying right identified by

Plaintiffs in connection with the constructive fraud claim is
the right to redress violations of the duty owed to the alleged
partnership.

As

such,

the

fact

that

the

claim

requires

a

finding that there was a breach of fiduciary duty to begin with
27

adds

an

extra

element

that

makes

the

claim

qualitatively

different from a claim of copyright infringement.

See, e.g.,

Briarpatch, 373 F.3d at 307 (a claim that requires a finding
that there was a breach of a fiduciary duty satisfies the “extra
element” test); Oddo v. Ries, 743 F.2d 630, 635 (9th Cir. 1984)
(a claim that one partner breached a fiduciary duty owed to
another partner is not preempted because “a partner’s duty to
his co-partner is quite different from the interests protected
by copyright”); Daboub, 42 F.3d at 289 (a claim involving breach
of

fiduciary

duty

is

different

in

kind

from

a

copyright

infringement claim).
Further, the constructive fraud claim is not equivalent to
the exclusive rights protected by the Copyright Act because it
seeks remedies as between alleged co-owners.

See, e.g., Custom

Dynamics, L.L.C. v. Radiantz LED Lighting, Inc., 535 F. Supp. 2d
542, 550 (E.D.N.C. 2008) (denying preliminary injunctive relief
on grounds that there is no cause of action under the Copyright
Act

for

relief

against

an

alleged

co-owner

of

a

copyright).

Nothing in Plaintiffs’ complaint seeks recovery for infringement
or

challenges

Defendant’s

right

to

use

the

musical

fraud

claim

works

at

issue.
Thus,

Plaintiffs’

constructive

completely preempted by the Copyright Act.

28

is

not

b.

Claim 4: Violation of N.C. Gen. Stat. § 751.1 (North Carolina’s Unfair and Deceptive
Trade Practices Act)

Plaintiffs’

fourth

cause

of

action

alleges

that

the

Defendant engaged in unfair and deceptive trade practices in
violation of the UDTPA, N.C. Gen. Stat. § 75-1.1.

Plaintiffs

contend

over

that

the

federal

court

lacks

jurisdiction

this

claim because it requires proof of extra elements that preclude
a finding of complete preemption.

In response, Defendant points

to numerous decisions by this court holding that a UDTPA claim
is

preempted

by

the

Copyright

Act,

court jurisdiction appropriate.

therefore

making

federal

See, e.g., Vogel v. Wolters

Kluwer Health, Inc., 630 F. Supp. 2d 585, 593 (M.D.N.C. 2008);
Old S. Home Co. v. Keystone Realty Group, Inc., 233 F. Supp. 2d
734, 736-38 (M.D.N.C. 2002).
A prima facie case under N.C. Gen. Stat. § 75-1.1 requires
a

showing

that

(1)

the

defendant

engaged

in

an

“unfair”

or

“deceptive” act or practice, (2) the act was in or affecting
commerce,

and

plaintiff.

(3)

the

act

proximately

caused

injury

to

the

Dalton v. Camp, 548 S.E.2d 704, 711 (N.C. 2001).

As

these three elements are all that is required to state a claim
under the UDTPA, it may initially appear that a UDTPA claim does
not

require

claim

for

an

element

copyright

beyond

that

infringement.

required
See

to

constitute

Pan-Am.

Prods.

a
&

Holdings, L.L.C. v. R.T.G. Furniture Corp., 825 F. Supp. 2d 664,
29

698 (M.D.N.C. 2011) (recognizing the surface-level equivalency
between

elements

copyright claim).

of

a

UDTPA

violation

and

elements

of

a

In fact, this court has previously recognized

that a UDTPA claim is preempted by the Copyright Act when the
violation alleged under the statute is merely the equivalent of
copyright infringement.

See Vogel, 630 F. Supp. 2d at 593;

Iconbazaar, L.L.C. v. Am. Online, Inc., 308 F. Supp. 2d 630, 637
(M.D.N.C. 2004).
The UDTPA is a far-reaching statute that broadly regulates
“unfair” and “deceptive” conduct and whose scope is dependent on
the conduct alleged to constitute a violation. 17
Supp. 2d at 698.
UDTPA

“to

rest

As such, it is possible for a claim under the
on

conduct

Copyright Act claim.”

Id.

may

claim

save

their

Pan-Am., 825 F.

UDTPA

apart

from

that

comprising

the

Therefore, Plaintiffs’ allegations
from

preemption

if

they

contain

elements that render the claim qualitatively different from a
Copyright Act violation.

Id. (“Put differently, in order to

survive preemption, allegations of what constitutes ‘unfairness’
and ‘deception’ to support a UDTPA claim must rest on sufficient
alleged misconduct separate from, and not controlled by, the

17

In appropriate cases the court may look beyond a mere comparison of
the elements and assess the allegations on which a claim is based in
order to determine if the claim is preempted by the Copyright Act.
Rutledge v. High Point Reg’l Health Sys., 558 F. Supp. 2d 611, 618
(M.D.N.C. 2008) (citing United States ex rel. Berge v. Bd. of Trustees
of the Univ. of Ala., 104 F.3d 1453, 1463 (4th Cir. 1997)).

30

Copyright Act.”).

See Progressive Corp. v. Integon P & C Corp.,

947 F.2d 942, 1991 WL 218010, at *6 (4th Cir. 1991) (unpublished
table

decision)

(finding

misappropriation

are

that

simple

insufficient

allegations

to

defeat

of

federal

jurisdiction.)
In this case, Plaintiffs’ complaint does not make any claim
of improper use or infringement or seek otherwise to vindicate
the exclusive right of ownership of a protected work against
misuse.

Plaintiffs allege that Defendant failed to share the

profits and proceeds associated with “Breakdown,” “Gone,” and
“Home” from the “Daughtry” album and “You Don’t Belong” from the
“Leave

This

allegation

Town”
does

infringement.

album.
not

(Doc.

equate

to

3

(Compl.)
a

claim

¶

77.)

for

This

copyright

Don Johnson Prods., Inc. v. Rysher Entm’t, Inc.,

No. CV 09-1906 MMM, 2009 WL 1615982, at *7 (C.D. Cal. June 8,
2009)
against

(noting
another

that

one

co-owner,

copyright
and

co-owner

accordingly

cannot
finding

plaintiff’s state law claims were not preempted). 18

infringe
that

the

Instead,

this claim is based on the breach of the parties’ fiduciary
18

At the hearing on the present motions, Defendant argued that
federal jurisdiction existed because he will dispute Plaintiffs’
ownership of the original Absent Element songs and will argue that his
works are not derivative works under the Copyright Act.
As noted
earlier, to the extent Defendant may raise these arguments, they would
constitute defenses, which cannot support federal jurisdiction.
K2
Am. Corp. v. Roland Oil & Gas, L.L.C., 653 F.3d 1024, 1029 (9th Cir.
2011)
(“Federal
jurisdiction
cannot
hinge
upon
defenses
or
counterclaims, whether actual or anticipated.”).

31

relationship pursuant to the alleged partnership and partnership
agreement.

See Innovative Med. Prods., Inc. v. Felmet, 472 F.

Supp. 2d 678, 683 (M.D.N.C. 2006); Pan-Am., 825 F. Supp. 2d at
699–700 (finding UDTPA claim was not preempted when the claim
was based on an existing relationship between the parties).

So,

the

are

“infringement-like”

cases

relied

on

by

Defendant

inapposite.
Moreover, where a plaintiff’s allegations under the UDTPA
involve

misrepresentation,

relationship,

or

palming

deception,

off,

the

preempted by the Copyright Act.

a

claim

is

confidential
not

completely

Felmet, 472 F. Supp. 2d at 683.

Here, Plaintiffs allege misrepresentation, deception, and, most
importantly,

breach

Specifically,

they

stop

the

selling

of

contend
album

a

confidential

that

Defendant

“Uprooted,”

yet

relationship.

demanded
Defendant

that

thereafter

exploited certain “Uprooted” songs for his sole benefit.
3 (Compl.) ¶ 77.)
misappropriation,

they

(Doc.

This allegation does not relate to mere

but

instead

is

based

confidential relationship and deception.

on

the

breach

See NIMMER

ON

of

a

COPYRIGHT

§ 1.01[B][1][e] (“the element of . . . deception . . . is no
part

of

Plaintiffs

a

cause
also

of

allege

action
that

for

copyright

Defendant

failed

infringement”).
to

account

to

Plaintiffs the profits and proceeds associated with partnership
affairs.

(Doc.

3

(Compl.)

¶
32

77.)

Again,

this

allegation

relates to the breach of a confidential/fiduciary relationship,
not misappropriation.

See Felmet, 472 F. Supp. 2d at 683.

Simply put, Defendant’s alleged unfair and deceptive acts
in connection with any failure to share profits with Plaintiffs
could

not,

and

do

not,

Plaintiffs’

alleged

Defendant’s

alleged

Consequently,

arise

out

copyright.
breach

Plaintiffs’

of

of

any

infringement

Instead,
a

UDPTA

it

confidential
claim

is

arises

of
out

relationship.

not

completely

preempted by the Copyright Act.
c.
Plaintiffs’

Claim 5: Unjust Enrichment
fifth

claim

is

for

unjust

enrichment.

To

prevail on this claim under North Carolina law, Plaintiffs must
show

they

conferred

consciously
conferred

accepted

a

benefit

that

gratuitously.

on

benefit,

another,

the

and

benefit

Southeastern

the

Shelter

Inc., 572 S.E.2d 200, 206 (N.C. Ct. App. 2002).

other

Corp.

party

was

not

v.

BTU,

This cause of

action sounds neither in contract nor in tort, but instead is
imposed by law to prevent unjust enrichment of one party at the
expense of another.

Id.

It is generally stated that “a state law cause of action
for unjust enrichment . . . should be regarded as an ‘equivalent
right’ and hence, pre-empted insofar as it applies to copyright
subject matter.”
omitted).

NIMMER

ON

COPYRIGHT § 1.01[B][1][g] (footnotes

There will be no complete preemption, however, where
33

a

plaintiff

enriched

can

by

demonstrate
“material

that
beyond

a

defendant
copyright

was

unjustly

protection.”

Microstrategy, Inc. v. Netsolve, Inc., 368 F. Supp. 2d 533, 537
(E.D. Va. 2005) (citation omitted).
Plaintiffs contend that their unjust enrichment claim is
not preempted by the Copyright Act because state principles of
equity related to the claim provide the “extra element” needed
to defeat federal jurisdiction.

Defendant counters that this

claim is no more than Plaintiffs’ attempt to present a copyright
action under the guise of a state law claim.

Specifically,

Defendant argues that because the unjust enrichment claim was
pleaded

in

the

alternative

(i.e.,

Plaintiffs

seek

remedies

pursuant to this claim only “to the extent the wrongful conduct
of Daughtry, as alleged herein, does not fall within the subject
matter of his partnership agreement with Plaintiffs” (Doc. 3
(Compl.) ¶ 89), Plaintiffs cannot rely on the duties that flow
from the partnership agreement as a basis for finding an “extra
element.”

In

support,

Defendant

cites

to

multiple

cases

espousing the general rule that a claim for unjust enrichment is
preempted by the Copyright Act.

See, e.g., Thomas v. Artino,

723 F. Supp. 2d 822, 835 (D. Md. 2010); Microstrategy, Inc., 368
F. Supp. 2d at 535-36; Kakizaki v. Riedel, 811 F. Supp. 129, 133
(S.D.N.Y. 1992).

34

But, as Plaintiffs counter, all of these cases involved an
express copyright infringement claim that accompanied the state
law claim at issue.
remotely

akin

Defendant

enjoys

works,

that

derivative

to

is:

As noted, Plaintiffs here make no claim
infringement.

the
to

works;

right

as

reproduce

and

Plaintiffs

owner
the

perform

or

co-owner

copyrighted

them

concede
to

that

use

the

works;

prepare

The

alleged

publicly.

wrongful conduct is not Defendant’s use, but rather his “failure
to share equally with Plaintiffs all profits and proceeds” so as
to “deprive[] them of their fair share of the benefits of the
parties’ common venture.”

(Doc. 3 (Compl.) ¶ 82.)

Although

this cause of action is pleaded in the alternative to any rights
arising from the parties’ express partnership agreement, it is
nevertheless dependent upon whatever rights and duties, if any,
the parties may enjoy under state law. 19
Thus, while there is no extra element that would expressly
preclude a finding of complete preemption, it is apparent that
the cause of action, in the context of the factual allegations
of

this

case

against

an

alleged

co-owner,

does

not

seek

to

vindicate a right equivalent to that protected by the Copyright
Act.

Instead, the gravamen of Plaintiffs’ claim is Defendant’s

failure to provide an accounting for his authorized use of the

19

See note 11 supra.

35

copyrighted works in his derivative works.
832

F.

Supp.2d

enrichment

176,

claim

not

188

(N.D.N.Y.

preempted

vindicate

[plaintiff’s]

reproduce

the

rights

photographs”

2011)

because
to

but

See Levine v. Landy,

it

(finding

“does

distribute,

“[i]nstead,

unjust

not

seek

publish,

to

and/or

[plaintiff]

takes

issue with defendants’ failure to remit payment to him”); Don
Johnson

Prods.,

2009

WL

1615982,

at

*7

(finding

unjust

enrichment claim not preempted where plaintiff’s suit against
alleged co-owner did not seek “to vindicate the right to prevent
infringement”);
(rejecting

Custom

Dynamics,

preliminary

535

injunction

F.

request

Supp.
because

2d

at

550

“[o]ne

co-

owner of a joint work may not assert a copyright infringement
claim against another co-owner”); McCoy v. Scantlin, No. CV 04371-GHK(RZx), 2004 WL 5502111, at *2 (C.D. Cal. 2004) (finding
that “[i]nasmuch as Plaintiff has no copyright claim against
Defendant

[bandmate]

Compositions,

his

as

claims

the
here

putative
[for

unjust

co-owner

of

enrichment,

the

unfair

competition, and constructive trust] cannot be ‘equivalent’ to
claims within the general scope of copyright,” citing NIMMER

ON

COPYRIGHT § 1.01 n.62); Brown v. Mojo Records, No. CV-00-286-ST,
2000 WL 33244473, at *7 (D. Or. June 6, 2000) (“While protecting
the rights of the owner or co-owners against all others, the
Copyright

Act

should

not

preempt

36

the

traditional

state

law

jurisprudence over matters relating to the ownership rights and
duties that exist between co-owners”).
The

cases

relied

upon

by

Defendant

are

distinguishable

because, upon closer inspection, they all challenged the right
of the defendant (sometimes a co-owner) to use the copyrighted
works.
458,

See, e.g., Weber v. Geffen Records, Inc., 63 F. Supp. 2d

463

against
plaintiff

(S.D.N.Y.
putative
alleged

1999)

(dismissing

copyright
that

co-owner

“defendants’

unjust
as

enrichment

preempted

copyrights

claim

because

should

not

entitle them to the full bundle of privileges that attach to
copyright

ownership”);

Netzer

v.

Continuity

Graphic

Assocs.,

Inc., 963 F. Supp. 1308, 1322 (S.D.N.Y. 1997) (finding unjust
enrichment claim preempted where based on an allegation of an
“unauthorized exploitation” of the work of a co-owner); Strauss
v. Hearst Corp., No. 85 Civ. 10017 (CSH), 1988 WL 18932, at *910 (S.D.N.Y. Feb. 19, 1988) (finding that “[i]f in fact Hearst’s
use of the [work] infringed a copyright owned by Strauss, then
it is possible to say, in a general sense, that Hearst was
unjustly

enriched

at

the

expense

of

Strauss,

the

copyright

holder” (emphasis added)); see also Briarpatch, 373 F.3d at 306
(finding unjust enrichment claim preempted because it challenged
the defendants’ right to prepare a derivative work (movie) based

37

on the copyrighted work (novel)); 20 cf. Levine, 832 F. Supp. 2d
at 188 (finding no preemption of unjust enrichment claim and
distinguishing Netzer and Weber “where the use was unauthorized;
here

there

was

no

unauthorized

use

of

the

Group

B

photographs”). 21
For

these

reasons,

therefore,

the

court

finds

that

Plaintiffs’ unjust enrichment claim is not completely preempted.
3.
Having

Summary
found

neither

“arising

under”

jurisdiction

nor

complete preemption over any of Plaintiffs’ claims, the court
20

The district court’s opinion provides a better articulation of the
basis for the unjust enrichment claim that makes clear that use was
challenged. Briarpatch, Ltd. v. Geisler Roberdeau, Inc., No. 99 Civ.
9623(RWS), 2002 WL 31426207, at *11-13 (S.D.N.Y. Oct. 30, 2002)
(noting Plaintiffs’ allegations that one defendant did not own any
“right, title, assignment or other interest in or with respect to” the
motion picture rights, that such rights were not “lawfully or properly
acquired” by defendants, and that the screenplay rights were “owned
by, vested in, property of, and belong to” plaintiffs).
21

Even if the unjust enrichment cause of action were completely
preempted, it would not, in the end, prevent remand.
“[O]nce a
district court determines that a state law claim has been completely
preempted and thereby assumes jurisdiction over it, the court must
then dismiss the claim for failing to state a cause of action.”
Briarpatch, 373 F.3d at 309.
Although a federal court in this
circumstance may allow the plaintiff to re-plead the claim as the
proper federal claim, see Darcangelo v. Verizon Commc’ns, Inc., 292
F.3d 181, 195 (4th Cir. 2002) (re-characterizing a state law breach of
contract claim as a claim under § 502(a)(1)(B) of ERISA where the
state law claim was preempted), Plaintiffs cannot do so here because
there is no cause of action under the Copyright Act for relief against
an alleged co-owner of a copyright, see (Doc. 3 (Compl.) ¶¶ 22-23
(alleging
that
Plaintiffs
are
co-owners
of
the
copyrighted
compositions at issue with Defendant); Custom Dynamics, 535 F. Supp.
2d at 550; Don Johnson Prods., 2009 WL 1615982, at *7 (“Copyright Act
does not grant a co-owner of copyright any rights against another coowner.”).

38

will grant Plaintiffs’ motion to remand.
4.

Plaintiffs’ Request for Attorney’s Fees

Plaintiffs have requested that the court award their costs
and expenses, including attorney’s fees, pursuant to 28 U.S.C.
§ 1447(c), because of Defendant’s improper removal of this case.
Section 1447(c) provides the basis for a court to award costs
and

attorney’s

fees

when

“the

removing

party

lacked

objectively reasonable basis for seeking removal.”

an

Martin v.

Franklin Capital Corp., 546 U.S. 132, 141 (2005).
The jurisdictional issues involved in cases such as this,
where an accounting for copyright use rests on contractual and
other state law bases, are widely recognized as difficult and
complex.

See, e.g., Bassett, 204 F.3d at 347; NIMMER

ON

COPYRIGHT

§ 12.01[A].

In light of the complexity of the case, the court

cannot

the

say

Defendant’s

objectively reasonable basis.

grounds

for

Abshire,

district

574

court’s

F.3d

267,

denial

of

lacked

an

Plaintiffs’ request for costs and

attorney’s fees will therefore be denied.
v.

removal

280

See Admiral Ins. Co.

(5th

Cir.

2009)

attorney’s

fees

and

(upholding
costs

under

section 1447(c) when case presented complex issues).
B.

Motion to Dismiss

Having

resolved

Plaintiffs’

motion

to

remand

in

their

favor, the court lacks jurisdiction to decide Defendant’s motion
to dismiss (Doc. 10).

The proper course is to deny the motion
39

without prejudice for lack of subject matter jurisdiction.
In

re

Bear

River

Drainage

Dist.,

267

F.2d

at

851

See

(citing

Marchant v. Mead-Morrison Mfg. Co., 11 F.2d 368, 369 (2d Cir.
1926)); McWilliams v. Monarch Rubber Co., 70 F. Supp. 2d 663,
666 (S.D.W. Va. 1999).
III. CONCLUSION
For the reasons set forth above,
IT IS ORDERED that Plaintiffs’ motion to remand (Doc. 15)
is GRANTED, Defendant’s motion to dismiss (Doc. 10) is DENIED
WITHOUT

PREJUDICE

AS

MOOT

for

lack

of

subject

matter

jurisdiction, and the action is REMANDED to the General Court of
Justice,

Superior

Court

Division,

Guilford

County,

North

Carolina pursuant to 28 U.S.C. § 1447(c).

/s/
Thomas D. Schroeder
United States District Judge

February 22, 2013

40