Opinion ID: 1427054
Heading Depth: 1
Heading Rank: 9

Heading: Federal Copyright Infringement Claims

Text: The effect of the forum selection clause on Phillips' copyright claims presents a more difficult question. The language of that clause frames our question: Do Phillips' copyright claims arise out of the recording contract? Plaintiff implicitly offers a straightforward argument of mutual exclusivity: Because his copyright infringement claims arise under the Copyright Act, they cannot arise out of the contract. In T.B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir.1964) (Friendly, J.), we held a claim arises under the Copyright Act and accordingly falls within the jurisdiction of the federal courts if the complaint is for a remedy expressly granted by the Act, e.g., a suit for infringement or for the statutory royalties for record reproduction. Id. at 828; see Bassett v. Mashantucket Pequot Tribe, 204 F.3d 343, 349, 355 (2d Cir.2000) (reaffirming Harms test in federal jurisdiction context). Counts Two and Three of Phillips' complaint allege direct and indirect copyright infringement and request remedies under § 504 of the Copyright Act, 17 U.S.C. § 504. We agree these claims arise under the Copyright Act. Thus, federal jurisdiction is properly invoked. See Kamakazi Music Corp. v. Robbins Music Corp., 684 F.2d 228, 229 (2d Cir.1982) (holding defendant's interposition of a contract as defense to copyright claims did not transform copyright suit into breach of contract action). The relevance of Harms to the present inquiry is where we part from appellant. Despite its surface appeal, we are not persuaded by Phillips' suggestion that a claim arising under the Copyright Act for jurisdictional purposes cannot also arise out of a contract for purposes of interpreting a forum selection clause. 1. Federal Courts Have Repeatedly Found Statutory Claims to Arise out of Contract in Interpreting Scope of Contractual Provisions Insofar as Harms relies on the law invoked by the plaintiff to state his claims, it is anchored in doctrines that have long governed our exercise of arising under jurisdiction under 28 U.S.C. § 1331, whereby [a] suit arises under the law that creates the cause of action, Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916) (Holmes, J.), and federal jurisdiction is proper where the complaint is so drawn as to seek recovery directly under the Constitution or laws of the United States, Bell v. Hood, 327 U.S. 678, 681, 66 S.Ct. 773, 90 L.Ed. 939 (1946). Looking to cases involving similar contractual provisions and claims under other laws of the United States, we see that federal courts have routinely rejected Phillips' suggestion that a claim arising under a law of the United States is exempt from provisions governing disputes between contracting parties. See, e.g., Scherk, 417 U.S. at 508-09, 520-21, 94 S.Ct. 2449 (holding that claim under Securities Exchange Act was covered by arbitration clause in international contract governing any controversy or claim [arising] out of this agreement or the breach thereof); Bense, 683 F.2d at 720 (finding complaint brought under federal antitrust law arose from distribution agreement between parties); Abbott Labs., 476 F.3d at 424 (rejecting plaintiff's argument that breach of fiduciary duty claim arising under Delaware tort law did not arise from the contract). Moreover, it is inappropriate in the present context to depend solely on the legal labels used by plaintiff to decide if his case arises out of the contract. When the question is one of federal jurisdiction, we recognize the plaintiff is in charge of deciding what law he will rely upon in bringing suit, Bell, 327 U.S. at 681, 66 S.Ct. 773; see Bassett, 204 F.3d at 355. It follows that legal causes of action stated by plaintiff afford all the information we need to decide whether arising under jurisdiction lies. It does not follow that plaintiff is the master to decide the meaning of a disputed contractual provision, which is, in effect, what appellant suggests in asking us to hold that his claims do not arise out of the recording contract based solely on the laws he cites in his complaint. Phillips' proposed approach is inconsistent with our refusal in Roby to allow a party's solemn promise to be defeated by artful pleading. 996 F.2d at 1360. Instead, when ascertaining the applicability of a contractual provision to particular claims, we examine the substance of those claims, shorn of their labels. Id. at 1361. This approach is consistent with the focus on factual allegations rather than on the causes of action asserted when deciding whether an arbitration clause applies to particular claims. See JLM Indus., Inc. v. Stolt-Nielsen SA, 387 F.3d 163, 173 (2d Cir.2004); Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 846 (2d Cir.1987). Because we cannot presume that the parties intended to exclude all statutory claims, or even all copyright claims, from the forum selection clause, we examine the substance of Phillips' claims as they relate to the precise language of the clause. See New Moon, 121 F.3d at 33 (The scope of the forum selection clause is a contractual question that requires the courts to interpret the clause and, where ambiguous, to consider the intent of the parties.); Wyeth, 119 F.3d at 1075 ([W]hether or not a forum selection clause applies depends on what the specific clause at issue says.).