Court Opinion

ID: 2975303
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:32:09.08843+00
Date Added: 2024-06-11T11:43:55.645804
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                              File Name: 07a0378n.06
                                 Filed: June 6, 2007

                                         No. 06-5358

                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT

LORETTA LYNN,

       Plaintiff-Appellee,

v.                                                      On Appeal from the United
                                                        States District Court for the Middle
SURE-FIRE MUSIC COMPANY, INC.,                          District of Tennessee

       Defendant-Appellant.
                                              /

BEFORE:       RYAN and GRIFFIN, Circuit Judges; and HOOD, Chief District Judge.*

       RYAN, Circuit Judge.          The plaintiff, Loretta Lynn, the famed country music

artist, brought suit in a Tennessee state court against the defendant, Sure-Fire Music

Company, Inc., asserting multiple state law claims arising from a contract governing

copyrights to music Lynn has composed. The state court dismissed Lynn’s complaint on

the grounds that the federal Copyright Act preempted Lynn’s state law claims. She then

filed suit in federal district court alleging the same state law causes of action the state trial

court found were preempted. However, the district court held that Lynn’s state law claims

are not preempted by the Copyright Act, and therefore, must be dismissed because,

without preemption, the court did not have subject matter jurisdiction. Although it “won” in

the district court, in the sense that the lawsuit against it was dismissed, Sure-Fire

       *
         The Honorable Joseph M. Hood, Chief United States District Judge for the Eastern
District of Kentucky, sitting by designation.
(No. 06-5358)                                -2-

appealed, arguing that the district court erred in holding that Lynn’s claims were not

preempted by the Copyright Act and, therefore, the court was without subject matter

jurisdiction. We now affirm.

                                               I.

       Lynn entered into an agreement with Sure-Fire in 1961 whereby Sure-Fire would

receive worldwide copyright interests in music composed by Lynn in exchange for paying

Lynn royalties. In 1966, Lynn and Sure-Fire executed a new agreement with the same

basic terms plus one notable additional provision. The new agreement provided that it

“shall be null and void in the event there is a change of ownership in Sure-Fire Music

Company, Inc., it being . . . [Lynn’s] demand[] that she be associated only with current

management.” At the time of this 1966 Agreement, brothers Doyle, Teddy, Leslie, and

Lester Wilburn owned Sure-Fire. By 2003, only two of these four brothers controlled Sure-

Fire, and thereafter, other family members took over the business.

       Lynn believed that the new ownership triggered the “null and void” provision of the

1966 Agreement. She sued Sure-Fire in a Tennessee state court, raising six claims: (1)

a request for a declaratory judgment that under the 1966 Agreement she now owns the

copyrights to her compositions; (2) an action to recover certain master and demonstration

recordings in Sure-Fire’s possession; (3) conversion; (4) willful and malicious breach of

contract by Sure-Fire for failing to renew certain copyrights and failing to collect and

distribute foreign royalties; (5) breach of implied duty of good faith and fair dealing; and (6)

a request for an accounting of all foreign royalties.

       The state court dismissed the complaint for lack of subject matter jurisdiction,

holding that the Copyright Act preempted Lynn’s claims. The court found that the claims
(No. 06-5358)                                -3-

were “based upon a determination of copyright ownership and exploitation of copyrighted

material” and concluded that Lynn could bring her claims only in federal court.

       Lynn then filed this action in federal district court, raising the exact same six claims

she pleaded in state court. She also filed a motion asking the court to determine whether

it had subject matter jurisdiction. Sure-Fire responded with a motion to dismiss on the sole

and specific ground that the Copyright Act preempted Lynn’s state law claims. In an

opinion from the bench, the district court found Lynn’s state law claims were not preempted

and dismissed the complaint against Sure-Fire, without prejudice, for lack of subject matter

jurisdiction. Sure-Fire, although it “prevailed” below, appeals, arguing that the district court

indeed had jurisdiction of the case because the Copyright Act completely preempts Lynn’s

state law claims.

                                              II.

       Lynn challenges Sure-Fire’s standing to bring its appeal, arguing that since Sure-

Fire successfully obtained a dismissal of the action against it in the district court, it has

prevailed and is not aggrieved by the district court’s judgment. Lynn argues correctly that

one has standing to appeal only if “aggrieved by the judicial action from which” the appeal

is taken. Vanguards of Cleveland v. City of Cleveland, 753 F.2d 479, 484 (6th Cir. 1985).

However, a “prevailing” party may nevertheless be aggrieved if the judgment entered in its

favor was not on the ground for which it sought dispositive relief, but instead, was

erroneously grounded in a ruling that misstates the law and leaves the appealing party

open to further liability. Stated differently, there are circumstances in which a defendant,

although “winning” the lawsuit in the trial court—in the sense that the case against it was

dismissed—has standing to appeal the trial court’s decision because, for example, the
(No. 06-5358)                                 -4-

appellant is erroneously denied the legal ruling it requested in its motion for summary

judgment or for dismissal. In such an instance, the winning/appealing party continues to

stand exposed to liability it should not, and would not, have faced, but for the trial court’s

erroneous application of the law. Sure-Fire is just such a party.

       Having been sued in federal court on state law theories of contract and tort, Sure-

Fire defended on the ground that Lynn’s state law claims do not lie, because they are

preempted by the Copyright Act. The district court held just the opposite and, as a result,

Sure-Fire argues, it is aggrieved.        It now faces liability under multiple theories of

Tennessee law and is denied the defenses available to it under the Copyright Act, including

the right to litigate the issues in federal court.

       We are satisfied that Sure-Fire has made a colorable showing that it is aggrieved

by the district court’s determination that it has no subject matter jurisdiction over this

lawsuit and therefore has established the necessary standing to invoke our appellate

jurisdiction.   We have not overlooked Lynn’s additional arguments, challenging our

jurisdiction to hear this appeal, however, we conclude that they are without merit.

                                               III.

       We turn now to the substantive question whether the district court erred in holding

that Lynn’s claims were not preempted by the Copyright Act and that, as a result, the court

was without subject matter jurisdiction. We review a district court order dismissing a case

for lack of subject matter jurisdiction de novo. Sutton v. St. Jude Med. S.C., Inc., 419 F.3d
568, 570 (6th Cir. 2005) (citing Joelson v. United States, 86 F.3d 1413, 1416 (6th Cir.

1996)). We think the district court did not err and we will, therefore, affirm.
(No. 06-5358)                                -5-

         As a general rule, a federal court has subject matter jurisdiction if the plaintiff’s

complaint invokes federal law as the basis for the relief requested. Caterpillar, Inc. v.

Williams, 482 U.S. 386, 392 (1987).                Lynn’s complaint invokes no federal

law—constitutional, statutory, or otherwise—and alleges only state law claims, strongly

suggesting that this case belongs in the state court where Lynn filed it in the first place.

But the rule proscribing federal court jurisdiction over purely state law claims has some

exceptions, one of which is the instance in which “a federal statute wholly displaces the

state-law cause of action through complete pre-emption.”           Beneficial Nat’l Bank v.

Anderson, 539 U.S. 1, 8 (2003). Sure-Fire argues that Lynn’s ostensible state law claims

are completely preempted by the federal Copyright Act, particularly § 301 of the Act. We

agree that if Lynn’s claims are preempted by the Copyright Act, Lynn’s complaint is

transposed to one seeking Copyright law relief, thereby conferring subject matter

jurisdiction on the district court. See Ritchie v. Williams, 395 F.3d 283, 286-87 (6th Cir.

2005).

         The question, then, is whether Lynn’s allegations, although cast in the language of

state law causes of action, actually seek relief that is available exclusively under the

Copyright Act, via preemption.

         Under § 301(a) of the Copyright Act, a state law claim is preempted if: “(1) the work

is within the scope of the ‘subject matter of copyright,’ as specified in 17 U.S.C. §§ 102,

103; and (2) the rights granted under state law are equivalent to any exclusive rights within

the scope of federal copyright as set out in 17 U.S.C. § 106.” Wrench LLC v. Taco Bell

Corp., 256 F.3d 446, 453 (6th Cir. 2001) (emphasis added) (citation omitted).
(No. 06-5358)                                 -6-

       The parties agree that Lynn’s musical compositions (“the work”) are within the

“subject matter of copyright,” but they disagree whether the specific claims Lynn makes

are“equivalent” to the exclusive rights conferred by the Copyright Act and within its scope

as set out in 17 U.S.C. § 106, the so-called “equivalency requirement.”

       The equivalency requirement is met when “the state common law or statutory [rights

a plaintiff wants vindicated] . . . are the same as those protected under § 106 of the

Copyright Act.” Wrench, 256 F.3d at 455. Section 106 gives exclusive rights:

       (1) to reproduce the copyrighted work in copies or phonorecords;
       (2) to prepare derivative works based upon the copyrighted work;
       (3) to distribute copies or phonorecords of the copyrighted work to the public
       by sale or other transfer of ownership, or by rental, lease, or lending;
       (4) in the case of . . . musical . . . works, to perform the copyrighted work
       publicly;
       (5) in the case of . . . musical . . . works, . . . to display the copyrighted work
       publicly; and
       (6) in the case of sound recordings, to perform the copyrighted work publicly
       by means of a digital audio transmission.

17 U.S.C. § 106. A right defined by state law is seen as equivalent to one of these federal

rights if it “may be abridged by an act which in and of itself would infringe one of the

exclusive rights.” Wrench, 256 F.3d at 456.

       Lynn brought six claims under Tennessee law: (1) a request for a declaratory

judgment; (2) an action to recover personal property; (3) conversion; (4) willful and

malicious breach of contract; (5) breach of implied duty of good faith and fair dealing; and

(6) a request for an accounting. In our judgment, none of these claims satisfies the

equivalency requirement, as defined in Wrench, and so none is preempted by the

Copyright Act.
(No. 06-5358)                               -7-

       Lynn carefully pleaded her first cause of action to allege only ownership claims

based exclusively on the interpretation of the 1966 written amended agreement entered

by the parties. She has not asserted an infringement claim or any other theory equivalent

to a right exclusive to the Copyright Act. We agree with the district court that Sure-Fire’s

obligation under the 1966 contract to surrender and return all copyright entitlements to

Lynn if there is a change of ownership in Sure-Fire, involves more than “a promise to

refrain from reproducing, performing, distributing or displaying the work.” See id. at 457.

A claim solely to determine ownership of copyrights is not among the exclusive rights

conferred by § 106 of the Copyright Act and, ordinarily, is a matter of state law.

       Lynn’s second and third claims are concerned with dominion over tangible personal

property, see Tenn. Code Ann. § 29-30-101; Ralph v. Pipkin, 183 S.W.3d 362, 368 (Tenn.

Ct. App. 2005), and they fall outside the scope of the Copyright Act. See 17 U.S.C. §§

102(a), 202. Therefore, they are not preempted by the Act. See Stromback v. New Line

Cinema, 384 F.3d 283, 305 (6th Cir. 2004) (citing Carson v. Dynegy, Inc., 344 F.3d 446,

456-57 (5th Cir. 2003)).

       Lynn’s fourth and fifth claims seek the recovery of money for mixed tort and breach

of contract claims and not for damages related to the loss of any rights conferred by the

Copyright Act. Stated differently, to prevail on her fourth and fifth causes of action, Lynn

must prove the formation and breach of an enforceable written contract which she would

not be obligated to prove if these claims were merely for copyright infringement under §

106. They are not “equivalent” to the exclusive rights conferred by § 106. Therefore, we

hold that these claims are not preempted.
(No. 06-5358)                               -8-

       Lynn’s sixth claim requesting an accounting likewise does not assert any of the

exclusive rights protected by the Copyright Act, but asks only for the familiar common law

equitable relief of a court-ordered accounting; in this instance, of earned foreign royalties.

A request for an accounting of amounts at issue in a common law breach of contract case

is uniquely a state law claim and it is neither a right nor a remedy conferred by the

Copyright Act. Therefore, Lynn’s sixth claim is not preempted by the Act.

                                             IV.

       Since each of Lynn’s claims asserts a state law cause of action and none is

preempted by the Copyright Act, there is no federal question to support a district court’s

exercise of subject matter jurisdiction for this case. The district court did not err and we

AFFIRM its judgment dismissing Lynn’s complaint.