MEMORANDUM OPINION AND ORDER
One of the more popular and prolific songwriters of the twentieth century, Sammy Cahn, once wrote that love was “lovelier the second time around.” Bing Crosby, The Second Time Around, lyrics by Sammy Cahn, music by Jimmy Van Heusen, in High Time (Bing Crosby Prod. 1960). This case puts the lyric to the test in the context of a contemporary songwriter’s second attempt at federal removal jurisdiction.
Plaintiffs Ryan Andrews, Scott Crawford, and Mark Perry (collectively, “Plaintiffs”) are suing their former bandmate, Defendant Christopher Adam Daughtry (“Daughtry”), to recover profits derived from certain musical works. The action originated in state court, was timely removed to this court, and then remanded for lack of subject matter jurisdiction. (Doc. 24 in case l:12cv441.)
Plaintiffs move to remand the action on the grounds that jurisdiction is lacking under section 1454 and Daughtry’s removal was nevertheless untimely. (Doc. 19.) Daughtry opposes the motion on both grounds (Doc. 23) and moves to dismiss Plaintiffs’ claims for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. 12). The court has stayed all briefing on the dismissal motion pending resolution of Plaintiffs’ motion to remand. (Doc. 22.)
For the reasons set forth below, Plaintiffs’ motion to remand will be granted, rendering the court without jurisdiction to consider Daughtry’s motion to dismiss.
I. BACKGROUND
A. Factual Background
The facts leading to this dispute are set forth in detail in this court’s earlier opinion. Andrews v. Daughtry, No. 1:12-cv00411,
Sometime in 2004, Andrews, Crawford, Perry, and Daughtry formed a band called “Absent Element.” All four bandmates were musicians and began collaborating on songwriting, recording, and performing. Together they also marketed the band and sold band-related merchandise. All four shared equally in the band’s costs and profits and considered themselves a partnership.
In late December 2004, the bandmates had a disagreement over how to split the songwriting authorship and credit for Absent Element’s songs. Before the release of their album “Uprooted” in March 2005, however, they resolved their differences by “agreeing] to equally share in the profits from any songs written by any of the partners as members of and in furtherance
In the summer of 2005, the bandmates agreed that Daughtry should audition for and participate in the nationally-televised singing competition “American Idol” in order to gain the band exposure. Daughtry successfully entered the competition in the fall of 2005, appeared on the show in the winter and spring of 2006, and made it to the final four before being cut in May 2006. During Daughtry’s time on the show, he repeatedly introduced Plaintiffs as his bandmates to other contestants, judges, and producers; the Plaintiffs were shown on camera during one show and were identified as “Chris’ Band.” Plaintiffs believed that Daughtry appeared on the show in order to promote Absent Element.
Meanwhile, members of the band continued to write songs. In the summer of 2005, the song “Sinking” was written. Sometime before June 2006, the song “Home” was written. In Plaintiffs’ view, regardless of who wrote the songs, they were written in furtherance of the Absent Element partnership and were therefore partnership assets. Plaintiffs believed they would share authorship credit for and profits from those songs.
Absent Element last performed in June 2006. Daughtry entered into a solo recording contract in the summer of 2006, although Plaintiffs were unaware of it and Daughtry assured Plaintiffs they would continue to perform as a band. In November 2006, Daughtry released a solo debut album titled “Daughtry,” recorded with studio musicians instead of Plaintiffs. Daughtry released his second album, “Leave This Town,” in July 2009. In their complaint, Plaintiffs allege that music and lyrics from four Absent Element songs were used in songs on “Daughtry” and “Leave This Town”: “Breakdown” and “Conviction” from the band’s “Uprooted” album; “Sinking”; and “Home.” Plaintiffs contend that Daughtry has failed to provide authorship credit and profits from these songs in violation of their partnership agreement.
B. Procedural Background
Plaintiffs filed their complaint in Guilford County (North Carolina) Superior Court on April 5, 2012. The complaint seeks relief on five claims: four arising from the alleged partnership and one for unjust enrichment “to the extent the wrongful conduct of Daughtry ... does not fall within the subject matter of his partnership agreement.” (Doc. 2 ¶ 80.)
Daughtry removed the case to this court on May 3, 2012, premising jurisdiction on the presence of a federal question under the Copyright Act, and shortly thereafter moved to dismiss the complaint. Plaintiffs timely moved to remand the action. After hearing argument on the remand motion, this court determined that Plaintiffs had “carefully pleaded their claims to avoid federal question jurisdiction” and remanded the action to the state court of origin on February 22, 2013. Andrews,
According to Plaintiffs, after this court’s remand decision “[pjroceedings then began in earnest in state court.” (Doc. 20 at 3.)
On May 17, while his motion to dismiss was apparently pending, Daughtry filed an answer in state court, asserting two counterclaims, and, on May 20, filed a second notice of removal to this court. (Id. at 13-37; Doc. 1.) This time, Daughtry premises federal question jurisdiction on 28 U.S.C. § 1454. He counterclaims under the Copyright Act for (1) a declaratory judgment stating, among other things, that while Plaintiffs are equal co-owners of the copyrights in the sound recordings of Absent Element, they do not enjoy authorship or ownership rights in the music and lyrics of all the songs alleged; rather, Daughtry holds sole ownership and authorship rights in the four Absent Element songs at issue (“Home,” “Breakdown,” “Conviction,” and “Sinking”) and co-ownership in others, and (2) an equitable accounting for profits from the “Uprooted” album. (Doc. 1-3 at 31-34.)
Plaintiffs now move again to remand the case to state court on the grounds that federal question jurisdiction is lacking and that Daughtry’s removal is untimely. (Doc. 19.)
II. ANALYSIS
A. Federal Jurisdiction Based on Counterclaims
Traditionally, a plaintiff could not get into federal court simply because an anticipated defense to the plaintiffs state law claim would raise a federal question. See Louisville & Nashville R.R. Co. v. Mottley,
Holmes Group involved not just any counterclaim, however. The defendant had asserted a counterclaim arising under federal patent law. After Holmes Group, Congress became concerned about the decision’s effects on the uniformity of federal patent law, as well as other areas traditionally reserved for exclusive federal jurisdiction, such as copyright. The rule articulated in Holmes Group meant that state courts could end up adjudicating a significant amount of federal patent claims. In response, Congress passed the so-called “Holmes Group fix,” included in the 2011 Leahy-Smith America Invents Act. Joe Matal, A Guide to the Legislative History of the America Invents Act: Part II of II, 21 Fed. Cir. B.J. 539, 539 (2012) (citing H.R. Rep. No. 112-98, at 81 (2011), 2011 U.S.C.C.A.N. 67). Among other things, the “fix” added a new removal statute, which allows “any party [who] asserts a claim for relief arising under any Act of
The new section 1454 does not fix open the federal courthouse doors for all defendants with a copyright counterclaim, however. A defendant must be timely. Section 1454 specifically incorporates the •procedures and deadlines applicable to other removals. See 28 U.S.C. §§ 1446, 1454(b). Under section 1446(b)(1), a notice of removal must be filed “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” If the case stated in the initial pleading is not removable, however, section 1446(b)(3) requires that a notice of removal be filed “within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.” Thus, even under section 1454, a defendant who does not remove timely will be subject to a remand motion pursuant to section 1446. However, where removal is premised solely on section 1454, the deadlines in section 1446(b) “may be extended at any time for cause shown.” 28 U.S.C. § 1454(b)(2).
It is a “near-canonical rule” that the burden of proving federal removal jurisdiction lies with the party seeking removal; this rule applies even to new statutes silent on the issue. Strawn v. AT & T Mobility LLC,
While Daughtry contends that his counterclaims arise under the Copyright Act and therefore confer federal removal jurisdiction under section 1454, the court will need to reach that issue only if Daughtry’s removal is timely. Thus, because timeliness is a significant issue nevertheless, the court’s inquiry will begin there.
B. Timeliness of Daughtry’s Removal
Daughtry contends that the 30-day clock set out in section 1446 started on May 17, 2013, the day he filed his answer and counterclaims, making his removal,
To be sure, this court’s determination that the complaint did not provide “arising under” jurisdiction for a traditional removal, Andrews,
In determining when a defendant knew that a case was one which had become removable, the Fourth Circuit does “not require courts to inquire into the subjective knowledge of the defendant, an inquiry that could degenerate into a mini-trial regarding who knew what and when.” Lovern v. Gen. Motors Corp.,
The documents exchanged in this case and the statements of Daughtry’s counsel at oral argument on Plaintiffs’ first motion to remand demonstrate that Daughtry knew, before the court’s February 22, 2013 Memorandum Opinion and Order, that he claimed ownership of the contested Absent Element songs and sound recordings under the Copyright Act. In his memorandum in support of his motion to dismiss filed May 10, 2012, Daughtry stated that he “(and others) owns the sound recordings and he was entitled to exploit them after [Absent Element’s] dissolution.” (Doc. 11 in case l:12cv441 at 3.)
On February 22, 2013, Daughtry received the court’s Memorandum Opinion and Order. The decision expressly acknowledged that Plaintiffs’ claims presented a federal question under the Copyright Act, but it concluded that remand was required because Plaintiffs had pleaded alternative state-law theories of recovery that could provide an independent basis for recovery. Andrews,
C. Extension of Time
Although Daughtry’s current notice of removal is untimely, section 1454 allows a court to extend the deadline for “cause shown.” 28 U.S.C. § 1454(b)(2). Only a handful of cases has interpreted the statutory language of section 1454, so it is instructive to consider how those courts interpreted this provision, even though them holdings are not binding.
A Louisiana district court concluded that “[wjhile there is no authority on what constitutes ‘cause shown’ under 28 U.S.C. § 1454(b)(2) to extend the 30-day time period to remove, at a minimum the standard imposes some burden on the removing party to justify why its tardiness should be excused.” SnoWizard, Inc. v. Andrews, Civ. A. No. 12-2796,
Other procedural rules governing time limitations under a “cause shown” stan
Like “cause shown,” the Rule 6 “good cause” standard is not a high bar, but it does require some reasonable explanation for the party’s delay. See, e.g., Stanley v. Huntington Nat. Bank,
With this guidance in mind, it is apparent that Daughtry has not shown good cause under section 1454 for his nearly three-month delay in petitioning for removal following this court’s February 22, 2013 Memorandum Opinion and Order. But mere delay is not the only problem. During the intervening time, Daughtry actively engaged the state court in the litigation process. In addition to serving written discovery requests on Plaintiffs, Daughtry unsuccessfully petitioned the state court to transfer the case to the North Carolina Business Court and designate it a complex business case. Further, he filed a motion to dismiss. Daughtry therefore not only participated in, but also sought remedies from, the state court for almost three months, all with full knowledge that he claimed ownership of the contested songs and recordings. Only some six weeks after the state court denied his request for designation to the Business Court did he then elect to remove the case to federal court.
One of the salutary purposes of the timing provisions of sections 1446 and 1454 is to “limit the ability of the Defendant to test the waters in one forum and, finding them inhospitable, move to another forum that might be more sympathetic to its views.” Niadyne,
Daughtry urges the court to find cause for removal on the ground that the federal courts are the exclusive forum for his copyright claims. (Doc. 23 at 16.) But, as noted by the Niadyne court, if Congress shared that view, “it would have simply removed all time limitations” in section
Therefore, Plaintiffs’ motion will be granted and the case remanded to the Guilford County Superior Court. In light of this conclusion, the court lacks jurisdiction to consider Daughtry’s motion to dismiss (Doc. 12), which will be denied without prejudice. See In re Bear River Drainage Dist.,
III. CONCLUSION
For the reasons set forth above, the court finds that, even assuming Daughtry’s counterclaims arise under the Copyright Act and therefore provide a basis for federal removal jurisdiction, his notice of removal was untimely and without a showing of cause to excuse the delay.
IT IS THEREFORE ORDERED that Plaintiffs’ motion to remand (Doc. 19) is GRANTED and the case is REMANDED to the General Court of Justice, Superior Court Division, Guilford County, North Carolina. Daughtry’s motion to dismiss (Doc. 12) is DENIED WITHOUT PREJUDICE for lack of subject matter jurisdiction.
Notes
. All references are to documents filed in the current case, l:13cv408, unless specifically noted otherwise, as here.
. This procedural requirement is subject to waiver. See Barbour v. Int’l Union,
. Daughtry also argued that he is "at minimum, a joint owner of the underlying works,” id. at 9, that he "registered the works in his own name,” id. at 19, and that by January 2, 2007, "Plaintiffs knew or reasonably should have known that Mr. Daughtry had asserted rights both in the underlying musical compositions and in the allegedly derivative works he recorded,” id.
. Section 1454, which became effective as to any action commenced on or after September 16, 2011, was thus effective on the date Plaintiffs filed this action on April 5, 2012.