Ritchie v. WilliamsRitchie v. Williams
*1 Before: MERRITT and GILMAN, Circuit Judges; HOOD, District Judge. [*] _________________
COUNSEL ARGUED: Stephanie L. Hammonds, LAW OFFICE OF STEPHANIE L. HAMMONDS, Detroit, Michigan, for Appellants. William H. Horton, COX, HODGMAN & GIARMARCO, Troy, Michigan, for Appellees. ON BRIEF: Stephanie L. Hammonds, LAW OFFICE OF STEPHANIE L. HAMMONDS, Detroit, Michigan, Gregory J. Reed, GREGORY J. REED & ASSOCIATES, Detroit, Michigan, Robert S. Nolan, CANTOR COLBURN, Troy, Michigan, for Appellants. William H. Horton, Christopher J. Nelson, COX, HODGMAN & GIARMARCO, Troy, Michigan, for Appellees. _________________
OPINION
_________________ MERRITT, Circuit Judge. This case arises from a dispute between a singer-songwriter known as “Kid Rock” (Robert Ritchie) and a promoter, Alvin Williams, and his group of associates, who entered into a series of music contracts in 1989 before Kid Rock became successful. The primary questions before us are (1) whether the District Court erred in holding that a Michigan state court action, arising from the contracts, by the Williams group against Kid Rock is preempted by the Copyright Act under the developing doctrine of “complete preemption” and hence removable to the federal court as presenting federal copyright issues rather than state claims, and (2) whether the District Court erred in foreclosing the state claims under the three-year statute of limitations found in the Copyright Act. In Section II below, we will incorporate the facts in more detail in our review of the state law claims brought in state court by the Williams group. In the first section, we will discuss the doctrine of federal jurisdiction that allows the recharacterization and removal of such claims.
I. The District Court Correctly Applied the Doctrine of
Complete Preemption to Allow Removal
Section 301 of the Copyright Act broadly preempts state law claims, and federal law vests
exclusive jurisdiction over such preempted copyright claims in the federal courts. Section 301 of
the Copyright Act states that “all legal or equitable rights
that are equivalent
to any of the exclusive
rights
within the general scope
of copyright as specified in § 106 in works of authorship that . . .
come within the subject matter of copyright . . . are governed exclusively by this title. . . . [N]o
person is entitled to any such right or equivalent right in any such work under the common law or
statutes of any State.”
Under
Metropolitan Life Ins. Co. v. Taylor
, 481 U.S. 58, 64-65 (1987), the “complete
preemption” doctrine serves to “recharacterize a state law claim . . . as an action arising under
federal law” and “converts an ordinary state common law complaint into one stating a federal claim
for purposes of the well-pleaded complaint rule.” Or as is stated in
Moran v. Rush Prudential HMO,
Inc.
, 230 F.3d 959, 967 (7th Cir. 2000), the complete preemption doctrine “permits
recharacterization of a plaintiff’s claim as a federal claim so that removal is proper” even though the
complaint may not mention a federal basis of jurisdiction. The doctrine of complete preemption
applies, for example, in the labor management collective bargaining field and to ERISA plans. In
dissent, Justice Scalia criticizes the doctrine as the “federalize-and- remove dance” in
Beneficial
National Bank v. Anderson
,
Since this case involves removal of claims stated only in state law terms, we must determine
whether or not the doctrine of complete preemption applies to the Copyright Act. Although this
Circuit and most other Circuits have not addressed the question directly, the Second and the Fourth
Circuits have held that the doctrine of complete preemption applies in copyright cases. Most
recently, the Second Circuit analyzed the Act in light of the
Anderson
case above and found that the
doctrine of complete preemption clearly applies.
Briar Patch, Ltd. v. Phoenix Pictures, Inc.
, 373
F.3d 296 (2d Cir. 2004). In
Rosciszewski v. Arete Assoc., Inc.
,
The grant of exclusive jurisdiction to the federal courts over civil actions arising
under the Copyright Act, combined with the preemptive force of
We agree with the Second and Fourth Circuits. Congress has indicated that “national uniformity” in the strong sense of “complete preemption” is necessary in this field. The bulk of the Williams group’s state law claims must be recharacterized as copyright infringement and copyright ownership claims. [2] II. The District Court Correctly Concluded that All of the Williams Group’s State Law Claims Are Time Barred
A. The Preempted Claims
Williams claims that he entered into a partnership agreement with Kid Rock in February 1989 to form “Top Dog” Records to promote Kid Rock’s career and for the two to share equally in the ownership of partnership property, income and expense. A few days later, Williams claims that Kid Rock transferred his interest in the partnership to a Michigan “production” company which then entered into an exclusive agreement with Kid Rock that precluded him from writing or performing songs for anyone else for one year (with two one-year options). Williams also alleges that three months later the Michigan production company and Kid Rock entered into contracts concerning Kid Rock’s songs with a record company (“Zomba”) and a music publisher (“Bow-Wow”).
The parties agree, as Judge Edmunds found below, that these various 1989 alleged agreements were designed to control the ownership, performance rights and exploitation of copyrights on songs written by Kid Rock, including the performance, recording and distribution of those songs. The Williams group alleges that Kid Rock performed these songs and transferred to other parties the right to publish, record and distribute them, thereby breaching his contracts with Williams, the Michigan production company, the recording company and the publishing company.
Judge Edmunds held that these contract and tort claims basically assert that Kid Rock
infringed the publication, performance and distribution rights of those claiming under the 1989
contracts and that the claims must, therefore, be recharacterized as copyright claims and governed
by federal copyright law. The claims are that Kid Rock licensed the songs he had written to others
in violation of the copyrights and the performance and distribution rights of the Williams group.
All of these claims are “equivalent” to infringement claims. There is no meaningful “extra element,”
as some of the cases have put it, that removes the reformulated claims from the policy of national
uniformity established by the preemption provisions of
The problem with the Williams group’s claims under federal law is that on December 17, 1990, Kid Rock wrote a letter, forwarded to the defendants, flatly stating that he did not intend to work with the parties to the 1989 contracts with respect to the publishing, production or performance of his songs, “or any other area of [his] entertainment career.” He made it clear that he regarded the songs he had written as his songs. Thereafter, he openly claimed exclusive ownership of the “Top Dog” label and the rights to his songs. The December 1990 letter triggered the running of the federal copyright three-year statute of limitations for copyright infringement claims. [5] Because the defendants waited ten years to file suit on these claims, they are clearly barred by the statute of limitations.
Most of the defendants’ non-contract claims, found in Counts 2 through 8 of their complaint, seek relief arising from the same set of transactions but under alternative theories — unjust enrichment, misrepresentation, conversion, and injunctive relief against further misappropriation of income derived from the songs. The defendants, again as the District Court held, may not escape the statute of limitations for copyright infringement merely by suing in tort and restitution. The District Court did not err in recharacterizing these claims as copyright claims. The policy of national uniformity inherent in copyright preemption is no less applicable to infringement claims that are described as sounding in tort or restitution rather than contract. The injunctive relief sought In all but the simplest cases, the extra elements test cannot be applied with any certainty.” Marshall A. Leaffer, Understanding Copyright Law § 11.7[C] (3d ed. 1999). Another described it this way:
The problem with this test is that it does not provide any real guidance to the courts. There is always some difference between the state law and the Copyright Act, so a court that wants to avoid preemption can always find some difference, however small, that is the “extra element” needed to avoid preemption. The net result is that courts seem to first decide independently whether or not they think preemption should apply, and then label the result accordingly . . . . Thus, the “extra element” test has proved circular in practice, and the cases are ad hoc, inconsistent, or wrong.
Schuyler Moore, Straightening Out Copyright Preemption , 9 UCLA Ent. L. Rev. 201, 204 (2002).
[4] Kid Rock does not now claim ownership of the 13 songs on his first album, “Grits Sandwiches for Breakfast,” stipulating that they are owned by Zomba and EB-Bran pursuant to the contracts between Ritchie, Bow-Wow, EB-Bran and Zomba. Ritchie Br. at 17 n.4. The district court applied the copyright principle that each new infringing act causes a new three year statutory
period to begin. While this principle does apply to causes of action by an owner against an unknown third party, in
closer relationships, such as when the parties are co-authors, the statutory period for any action to establish ownership
begins to run whenever there is a “plain and express repudiation” of ownership by one party as against the other.
See
Aalmuhammed v. Lee
,
is for income derived from various performance, production, and distribution rights related to Kid Rock songs. The plaintiffs have simply waited too long to bring their action.
B. The Non-Preempted Claims
They did not involve either ownership or copyrightable material; even so, both are time-barred Two of the Williams group’s state law claims may not be “equivalent to” copyright claims. under the applicable Michigan statutes of limitations.
First, Williams claims that Kid Rock violated his fiduciary duty to the original Top Dog
Records Partnership when he incorporated his own company, also titled “Top Dog Records,” in
1993 to compete with the original partnership. This claim does not implicate either of the elements
of a copyright claim — ownership or infringement — and therefore should not be preempted by
Second, Williams claims that Kid Rock breached the so-called “Supplemental Agreement”
of March 1989, an agreement in the nature of an employment contract, with Kid Rock working as
an independent contractor to recruit additional talent for Top Dog Records. He was to be paid a
commission of 50% of all profits earned from exploitation of the other artists’ work. Similarly, this
contract does not involve either the ownership or copying of any songs or recordings and is therefore
not preempted by
III. The District Court Accurately Held That the Williams Parties
Abandoned Any Interest in the “Top Dog” Trademark
The District Court accurately concluded that the Williams parties abandoned their interest
in the Top Dog trademark. The only entity that may have continued to use the Top Dog trademark
after Kid Rock’s repudiation (other than Kid Rock) was Zomba Records. Zomba is not a party to
this suit and makes no claim against Kid Rock. As for the Williams group’s argument that the
related company doctrine applies to rescue their interest in the trademark, there is substantial
authority, including the language of
IV. The Williams Parties’ Post-Judgment Motions Were Properly Denied by the District Court After summary judgment was entered in favor of Kid Rock, the Williams group made a motion for reconsideration and a motion to vacate the judgment based on lack of subject matter jurisdiction and newly discovered evidence. Given the bases for our holding here, it is clear that the district court’s denial of these motions should not be disturbed. The District Court reached the correct result because the doctrine of complete preemption applies to require removal and all claims are time barred.
For the reasons discussed above, the District Court’s opinion in favor of Kid Rock is hereby AFFIRMED.
Notes
[*] The Honorable Joseph M. Hood, United States District Judge for the Eastern District of Kentucky, sitting by designation.
[1]
The other provisions of the Copyright Act directly relevant to this case are:
[2] We find that the district court was correct in its earlier ruling that Kid Rock removed the Williams parties’ state claims to federal court in a timely manner under28 U.S.C. § 1446(b) , which allows for removal within thirty days of defendant receiving some “other paper from which it may first be ascertained that the case is one which is or has become removable.” Production of the Songwriter’s Agreement by Williams in April 2002 triggered a 30 day window for timely removal under§ 1446(b) ’s “other paper” provision.
[3]
In determining under § 301 whether or not a particular state law cause of action is “equivalent” to a federal
copyright infringement action, most circuits (including this one) have referred to the “extra element test.”
See Wrench
v. Taco Bell Corp.
,
[6] Nimmer states that a copyright infringement claim requires proof of two elements: “(1) ownership of a valid copyright and (2) copying of constituent elements of the work that are original.” 4 M. Nimmer & D. Nimmer, Nimmer on Copyright § 13.01.