Bellmer Dolls v. Hungry Eye Records, Asim Shaikh, Daniel Skibra
Feb 17, 2010OUTCOME: Motion to remand to state court granted
Action was commenced in the New York's Supreme Court. Plaintiffs' allege that: - in 2004-2005 plaintiffs wrote six songs, and recorded their performance of them on an extended play compact disc, - ... in January 2006 plaintiffs entered into a “Deal Memo” with Hungry Eye, - in September 2006 Hungry Eye registered copyright in the songs in its own name as the assignee of copyright (identifying plaintiffs as the author), - the plaintiffs in February of 2008 terminated the “Deal Memo,” - defendants have failed properly to account to plaintiffs, - Hungry Eye mechanically reproduced and distributed plaintiffs’ recorded compositions without authorization or payment of royalties, - defendants breached the Deal Memo, oral promises made to them, and the covenant of good faith and fair dealing, - after the commencement of this action, defendants attempted to preregister works that Plaintiffs wrote and recorded in 2009, - defendants registered copyright in plaintiffs’ works in 2006 by the misrepresentation to the Copyright Office that defendants had the right to do so. Defendants removed to federal court on the grounds that five of the alleged causes of action (Unjust Enrichment and Conversion claims) were effectively claims for copyright infringement and preempted by the Federal Copyright Act. Plaintiffs moved to remand to state court and District Judge Lawrence M. McKenna granted Plaintiffs' motion. Judge McKenna noted that “For 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 or that the plaintiff’s right to relief necessarily depends on resolution of a substantial question of law under the act.” Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 296, 303-04 (2d Cir. 2004). In Briarpatch, the Second Circuit, in light of Beneficial National Bank v. Anderson, 539 U.S. 1 (2003), concluded that district courts have jurisdiction over state law claims preempted by the Copyright Act. 373 F.3d at 305. The ninth cause of action sounds in “Unjust Enrichment”. There is no question but that some claims of unjust enrichment under New York law may be found to be preempted by the Copyright Act. In Briarpatch, however, the Court found that an element of the alleged claim of unjust enrichment - the turning of a novel and a screenplay, both protected by copyright, into a motion picture - “would, in and of itself, infringe the adaptation rights protected by 17 USC §106(2),” so that the unjust enrichment claim was preempted. Plaintiffs' Complaint, on the other hand, makes different allegations for unjust enrichment: “mechanical licenses for previously unpublished compositions are not governed by the statutory rates as outlined in the Copyright Act” and that, “at the expense of the Plaintiffs, who have not been paid for such use, the Defendants benefited by not having to pay royalties for the mechanical reproduction of the compositions.” If plaintiffs did not distribute phonorecords of their works to the public and they were, as they claim to be, the copyright owner, defendants would not be entitled to the compulsory license of §115(a); defendants would need to obtain a license from plaintiffs. There is no showing here that that (or any other) provision of the Copyright Act will need to be construed, nor that, if any must be construed at all, the question will be a substantial one. Therefore, the unjust enrichment claims is not preempted by the Copyright Act. The conversion claims are disputes as to the ownership of copyrights, requiring the interpretation of the Deal Memo, its validity or not, and the establishment and interpretation of oral promises, but they present no substantial issue under the Copyright Act; the Amended Complaint does not assert any remedy expressly granted by the Copyright Act, but only remedies commonly available under state law. For the above reasons, the conversion claims are not preempted by the Copyright Act.
