Frank Reginald Brown IV v. Snapchat Inc
2:13-cv-08569
C.D. Cal.Feb 3, 2014Background
- Plaintiff Frank R. Brown IV alleges he co-developed a self-deleting photo messaging app at Stanford with Spiegel and Murphy, forming a partnership/joint venture and expecting equal profits.
- Plaintiff alleges he was later excluded and deprived of his partnership interest when Spiegel and Murphy formed Toyopa (later Snapchat, Inc.) and obtained VC investment.
- Plaintiff filed state-law claims (breach of joint venture/partnership, breach of fiduciary duty, conversion, unjust enrichment, accounting, declaratory relief); the FAC added implied joint venture/partnership claims and a conversion claim against multiple venture-capital defendants.
- Defendants removed to federal court asserting federal-question jurisdiction based on complete preemption by the Copyright Act (arguing the disputes are really joint-authorship copyright claims).
- The district court evaluated whether the Copyright Act completely preempts the state-law claims and whether remand, and attorney’s fees, were appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint raises a federal question on its face | FAC asserts only state-law claims; no copyright/federal claims mentioned | Removal proper because Copyright Act completely preempts the state-law claims (artful pleading) | FAC does not plead a federal question on its face; remand required |
| Whether Copyright Act completely preempts breach of implied partnership/joint venture claims | Brown contends state partnership/joint venture rights differ from copyright rights | Defendants say claims are disguised joint-authorship copyright claims and thus preempted | Not preempted: partnership/joint-venture rights are broader and include extra elements absent from copyright law |
| Whether Copyright Act completely preempts conversion claim against VCs | Conversion depends on non-preempted partnership claims, so remains a state claim | VCs argue conversion is derivative of a preempted ownership dispute and thus preempted | Not preempted: conversion claim rests on state-law partnership rights, so removal fails |
| Whether plaintiff is entitled to attorney’s fees for improper removal under 28 U.S.C. § 1447(c) | Brown seeks fees because removal was improper | Defendants argue removal was objectively reasonable given colorable preemption argument | Fees denied: although removal lacked merit, it was objectively reasonable to raise preemption defense |
Key Cases Cited
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (removal statute construed narrowly; defendant bears burden to show removal proper)
- Sullivan v. First Affiliated Sec., 813 F.2d 1368 (9th Cir. 1987) (well-pleaded complaint rule; plaintiff may avoid federal question by pleading only state claims)
- Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (U.S. 1987) (complete preemption doctrine converts certain state claims into federal ones for removal)
- Hall v. N. Am. Van Lines, Inc., 476 F.3d 683 (9th Cir. 2007) (discussing complete preemption as basis for removal)
- Del Madera Prop. v. Rhodes & Gardner, Inc., 820 F.2d 973 (9th Cir. 1987) (two-prong test for Copyright Act complete preemption)
- Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062 (9th Cir. 2008) (attorney’s fees under §1447(c) only when removal lacked objectively reasonable basis)