Levy Prod. Grp., LLC v. R&R Partners, Inc.

658 F.Supp.3d 901

LEVY PRODUCTION GROUP, LLC, Plaintiff v. R&R PARTNERS, INC. and Farra Foxdog Productions, LLC, Defendants

Case No. 2:22-cv-01261-JAD-DJA

United States District Court, D. Nevada

Signed February 28, 2023

Bradley L. Booke, Law Office of Bradley L. Book, Las Vegas, NV, for Plaintiff.

David Aronoff, Pro Hac Vice, Fox Rothschild LLP, Los Angeles, CA, Colleen E. McCarty, Fox Rothschild LLP, Las Vegas, NV, for Defendant R&R Partners, Inc.

Marc A. Saggese, Saggese & Associates, Ltd., Las Vegas, NV, David Aronoff, Fox Rothschild LLP, Los Angeles, CA, for Defendant Farra Foxdog Productions, LLC.

Order Denying Motion to Remand

[ECF No. 15]

Jennifer A. Dorsey, United States District Judge

Plaintiff Levy Production Group, LLC sues R&R Partners, Inc. and Farra Foxdog Productions, LLC under various tort and contract theories for the alleged copying of Levy's "What's Up Vegas" video series. Levy filed this case in state court, but the defendants removed it based on federal-question jurisdiction.¹ Pointing out that all of its claims are state-law ones, Levy moves to remand this case for want of subject-matter jurisdiction.² The defendants respond that the Copyright Act of 1976 preempts at least two of Levy's claims, conferring federal jurisdiction under the complete-preemption doctrine.

I join with the majority of circuits that have considered this issue and find that the complete-preemption doctrine applies to the Copyright Act, and I conclude that Levy's conversion claim is completely preempted by the act such that it is deemed to arise under federal law. And with subject-matter jurisdiction over the conversion claim, this court may exercise supplemental jurisdiction over the remaining causes of action. So I deny the motion to remand.

Background

Levy Production Group alleges that it created and began development on "What's Up Vegas," an "entertainment[-]magazine style, weekly video series" that "would recap highlights of what had happened and was happening in Las Vegas" for tourism and promotional purposes.³ It then met with advertising agency R&R Partners to pitch this idea.⁴ As part of its presentations, Levy prepared "tangible, full-color, multi-page, graphic depictions called 'treatments' that contained both images and text" detailing the content of the series.⁵ After a couple years of discussions, R&R Partners announced that it was no longer considering Levy's project.⁶ But, a little over a year later, R&R Partners, in collaboration with production company Farra Foxdog, partnered with the Las Vegas Convention and Visitors Authority to launch "Vegas On," a video series that "showcase[s] all of the amazing events in Las Vegas."⁷

Levy sued R&R Partners and Farra Foxdog in Nevada state court for misappropriation of trade secrets, conversion of intellectual property, unjust enrichment, and breach of contract.⁸ The defendants removed the case here based on federal-question jurisdiction, arguing that Levy's conversion and unjust-enrichment claims are completely preempted by § 301 of the Copyright Act.⁹ Levy moves to remand this case back to state court, contending that this court lacks subject-matter jurisdiction because Levy asserted no copyright claims in its complaint, removal on the basis of copyright preemption is improper, and none of its state-law claims are preempted by the Copyright Act.¹⁰

Discussion

Federal courts are courts of limited jurisdiction.¹¹ "A defendant may remove an action to federal court based on federal[-]question jurisdiction or diversity jurisdiction."¹² But there is a strong presumption against removal jurisdiction, and "federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance."¹³ The defendant always has the burden of establishing that removal is proper.¹⁴

Federal-question jurisdiction generally arises only if the complaint "affirmatively allege[s] a federal claim."¹⁵ This so-called "well-pleaded[-]complaint rule means that 'a case may not be removed to federal court on the basis of a federal defense, including the defense of pre[ ]emption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue.' "¹⁶

The complete-preemption doctrine is an exception to the well-pleaded-complaint rule.¹⁷ It comes into play when "a federal statute's preemptive force is so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim" so that "any claim purportedly based on that pre[ ]empted state law is considered, from its inception, a federal claim, and therefore arises under federal law."¹⁸ And under the "artful pleading" doctrine, a well-pleaded state-law claim presents a federal question when a federal statute has completely preempted that particular area of law.¹⁹ Complete preemption applies when Congress "(1) intended to displace a state-law cause of action, and (2) provided a substitute cause of action."²⁰

I. The Copyright Act has complete preemptive force.

Though the "relationship between complete preemption and defensive preemption is not entirely clear, . . . the complete-preemption doctrine must be distinguished from [defensive] preemption."²¹ Defensive preemption "is ordinarily a federal defense to a plaintiff's suit[,]" which "does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court."²² But complete preemption is a jurisdictional doctrine that allows the court to consider a preempted state-law claim as a federal one arising under federal law.²³ So removal based on complete preemption confers subject-matter jurisdiction on the federal court.

Levy argues that the complete-preemption doctrine doesn't apply to the Copyright Act because "Congress has not legislated in any way that suggests that" state-law "claims are necessarily federalized when creative personal or intellectual property is at issue."²⁴ It cites the Ninth Circuit case of City of Oakland v. BP PLC²⁵ for the proposition that "the Copyright Act has never been found to completely preempt state[-]law claims"²⁶ and argues that the "many cases . . . that discuss preemption by the Copyright Act . . . make it abundantly clear" that the complete-preemption doctrine does not apply to it.²⁷

But the City of Oakland case that Levy relies on makes no mention of the Copyright Act; it notes only that the Supreme Court has applied the complete-preemption doctrine to just three statutes thus far.²⁸ And the cases that Levy refers to analyze whether state-law claims fall under § 301 of the Copyright Act²⁹ don't discuss the separate issue of complete preemption: whether the Copyright Act can confer subject-matter jurisdiction over preempted claims pled solely as state-law claims.

Although neither the Supreme Court nor the Ninth Circuit has addressed the issue, the Second, Fourth, Fifth, and Sixth Circuits have all held that the complete-preemption doctrine applies to the Copyright Act.³⁰ Only the Third Circuit has held otherwise in an unpublished opinion,³¹ and no other circuits have answered this question directly. Numerous district courts in this circuit have also determined that the Copyright Act completely preempts state-law claims that fall into the guidelines established under § 301.³²

Particularly persuasive here is the Fourth Circuit's decision in Rosciszewski v. Arete Associates. In Rosciszewski, the court found removal of the plaintiff's state-law claim proper because that claim was completely preempted by the Copyright Act, conferring subject-matter jurisdiction on the federal court.³³ Following the analysis in the Supreme Court's decision in Metropolitan Life Insurance Co. v. Taylor,³⁴ which held that the complete-preemption doctrine applies to the Employee Retirement Income Security Act (ERISA), the Rosciszewski court focused its inquiry on congressional intent, finding complete preemption applicable to the Copyright Act for two reasons.³⁵ First, the court considered the language of § 301, which states that "all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright . . . in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright . . . are governed exclusively by this title."³⁶ The court then looked to a congressional report accompanying the Copyright Act to elucidate the statutory language: "The declaration . . . in section 301 is intended to be stated in the clearest and most unequivocal language possible, so as to foreclose any conceivable misinterpretation of its unqualified intention that Congress shall act preemptively."³⁷ The Rosciszewski court thus held that Congress "clearly indicated" via § 301's "broad[,] mandatory preemption provision for causes of action equivalent to copyright claims" that such claims "should be litigated only as federal copyright claims."³⁸

The court next turned to 28 U.S.C. § 1338(a), which gives federal district courts "original jurisdiction of any civil action arising under any Act of Congress relating to . . . copyrights," and clarifies that "[s]uch jurisdiction shall be exclusive of the courts of the states in . . . copyright cases."³⁹ The court viewed this "grant of exclusive jurisdiction over copyright claims to the district courts as strong evidence that Congress intended copyright litigation to take place in federal courts."⁴⁰ It bolstered this conclusion by noting that Congress provided only concurrent jurisdiction in state and federal courts over claims arising under ERISA and the Labor Management Relations Act—both of which the Supreme Court found to completely preempt relevant state-law claims.⁴¹

So § 1338's jurisdictional grant, combined with the "preemptive force" of the Copyright Act, compelled the Rosciszewski court to find that "state-law actions preempted by § 301(a) . . . arise under federal law."⁴² Given the weight...