Opinion ID: 786707
Heading Depth: 3
Heading Rank: 5

Heading: Claims Against Malick

Text: 39 The only claims that we have not yet discussed are those originally asserted against Malick. While the claims against Malick were dismissed based on a settlement between him and plaintiffs and are no longer contested, the question of whether they were preempted could be relevant to our jurisdictional inquiry, since the existence of one preempted claim could provide supplemental jurisdiction for hearing others. That is not so in this case, however, because we have already held that the unjust enrichment and declaratory judgment claims against Phoenix are preempted, and because we further hold in a moment that these claims on their own can support supplemental jurisdiction over the remaining claims. We therefore decline to rule on whether the claims asserted against Malick also could have supported supplemental jurisdiction. III Supplemental Jurisdiction 40 For those claims that were not within the district court's copyright jurisdiction, one further question remains: Does the fact that some claims were within the court's copyright jurisdiction bring the other ones within its supplemental jurisdiction? As we have already suggested, the answer is yes. 41 Under 28 U.S.C. § 1367(a), federal courts have supplemental jurisdiction to hear state law claims that are so related to federal question claims brought in the same action as to form part of the same case or controversy under Article III of the United States Constitution. A state law claim forms part of the same controversy if it and the federal claim derive from a common nucleus of operative fact. Cicio v. Does, 321 F.3d 83, 97 (2d Cir.2003) (quoting City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 165, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997)). This is so even if the state law claim is asserted against a party different from the one named in the federal claim. See 28 U.S.C. § 1367(a) (2000); Kirschner v. Klemons, 225 F.3d 227, 239 (2d Cir.2000). 42 All of plaintiffs' claims against Geisler Roberdeau, Inc., Phoenix, and Medavoy unquestionably derive from a common nucleus of operative fact, because they all deal with the purported sale of The Thin Red Line to Phoenix. The district court therefore has power to hear the claims relating to breach of fiduciary duty even though these claims do not fall within the court's copyright jurisdiction. It also has power to hear the trover and conversion and unjust enrichment claims against Geisler Roberdeau, Inc., even if it determines that these claims do not fall within its copyright jurisdiction. 43 The fact that the district court has the power to hear these supplemental claims does not mean, of course, that it must do so. Instead, it may decline to exercise its power based on the factors laid out in 28 U.S.C. § 1367(c). This decision is left to the exercise of the district court's discretion. See Kirschner, 225 F.3d at 239; cf. Motorola Credit Corp. v. Uzan, 322 F.3d 130, 137 (2d Cir.2003) (remanding for district court to consider § 1367(c) because even though it had already done so once, the landscape of the case had since changed). IV Merits 44 Finally, as we turn to the merits we are tempted to salvage what we can of the district court's work. That court has already reached the merits of many of the claims in this case, and while it erred in basing its jurisdiction on diversity of citizenship, we have held that it did possess the power to hear all of plaintiffs' claims. 45 We are nonetheless unable to fully uphold the trial court's decisions on the merits for two reasons. First, with regard to the unjust enrichment and declaratory judgment claims against Phoenix, the court based its dismissal on the wrong rationale. It correctly determined that these claims were preempted by the Copyright Act, but it then went on to analyze whether plaintiffs had come forward with sufficient evidence to make out copyright claims. This might seem like a logical approach given that we evade the well-pleaded complaint rule for jurisdictional purposes by creating the fiction that complete preemption places a federal claim on the face of a plaintiff's well-pleaded complaint. See Williams, 482 U.S. at 393, 107 S.Ct. 2425. But it is incorrect. Instead, once a district court determines that a state law claim has been completely preempted and thereby assumes jurisdiction over it, the court must then dismiss the claim for failing to state a cause of action. See Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116, 132 (2d Cir.2003) (Newman, J., concurring); Romney v. Lin, 94 F.3d 74, 84 (2d Cir.1996). In other words, the complete preemption doctrine ensures that a federal forum will be available to decide that a plaintiff's claim is preempted; but it does not allow a federal court to decide claims that have not actually been pleaded. 46 Second, with regard to the causes of action dealing with breach of fiduciary duty, our holdings thus far change the landscape to such an extent that we feel it prudent to allow the district court to revisit its decision. In particular, our holding that the claims against Geisler Roberdeau, Inc. were erroneously dismissed at the start of litigation leaves us wondering whether plaintiffs would have been able to gather more evidence to withstand summary judgment had that corporation been kept in the action as a party. The district court is in the best position to assess this question.