Krechmer v. Tantaros ( 2018 )

17-4061-cv
Krechmer v. Tantaros
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary
order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of
Appellate Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in
a document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 24th day of August, two thousand eighteen.
PRESENT: JOSÉ A. CABRANES,
ROSEMARY S. POOLER,
Circuit Judges
J. PAUL OETKEN,
District Judge. 1
MICHAEL KRECHMER, a/k/a MICHAEL MALICE,
Plaintiff-Appellant,
v. 17-4061-cv
ANDREA K. TANTAROS, ASTERO, LLC,
Defendants-Appellees.
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Judge J. Paul Oetken, of the United States District Court for the Southern District of New York,
sitting by designation.
______________________________________________
FOR PLAINTIFF-APPELLANT: JAY M. WOLMAN, Randazza Legal Group,
PLLC, Hartford, CT.
FOR DEFENDANTS-APPELLEES: LEVI LECHES (Shella Sadovnik, Christian S.
Molnar, on the brief), Arendsen Cane Molnar
LLP, Beverly Hills, CA.
Appeal from a judgment of the United States District Court for the Southern District of New
York (Katherine B. Forrest, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the December 4, 2017 judgment of the District Court is AFFIRMED.
Plaintiff-appellant Michael Krechmer (“plaintiff”) appeals from two District Court orders
granting the successive motions of defendant-appellee Andrea K. Tantaros (“Tantaros”) and Astero,
LLC (Astero) (collectively, “defendants”) to dismiss plaintiff’s Complaint and First Amended
Complaint. Plaintiff first commenced this action against defendants on October 6, 2016, asserting
both copyright and breach of contract claims relating to the authorship of defendant Tantaros’s
book Tied Up in Knots (“the Book”). On September 29, 2017, the District Court dismissed plaintiff’s
federal copyright claims and granted plaintiff leave to file an amended complaint after plaintiff
asserted that he could plead a basis for diversity jurisdiction if the court dismissed plaintiff’s federal
question claims. On December 1, 2017, the District Court dismissed plaintiff’s First Amended
Complaint for failure to plead diversity jurisdiction. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
I.
We first consider the District Court’s September 29, 2017 dismissal in full of plaintiff’s initial
complaint. We review de novo a district court’s dismissal pursuant to Rules 12(b)(1) and 12(b)(6),
taking all facts alleged in the complaint as true and drawing all reasonable inferences in favor of the
plaintiff. See Jaghory v. New York State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997).
In addition to various state law claims for breach of contract, plaintiff purports to allege two
federal claims in his complaint: (1) a claim for relief under the Declaratory Judgment Act, 28 U.S.C. §
2201 (DJA), and (2) a violation of the Digital Millennium Copyright Act, 17 U.S.C. § 1202(a)
(DMCA). In its September 29, 2017 order, the District Court did not specify whether it dismissed
plaintiff’s complaint pursuant to Fed. R. Civ. P 12(b)(1) or 12(b)(6), both of which were raised by
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defendants in their motion to dismiss. However, we may affirm the district court’s judgment on any
basis that finds support in the record. Citrus Marketing Board of Israel v. J. Lauritzen A/S, 943 F.2d 220,
223 (2d Cir. 1991). Thus, although we are unsure of the specific Federal Rule on which the District
Court relied, we conclude that plaintiff’s initial complaint warranted dismissal in full. Plaintiff’s DJA
claim was properly dismissed under Rule 12(b)(1). His DMCA claim was properly dismissed under
Rule 12(b)(6). And the District Court did not abuse its discretion in declining to exercise jurisdiction
over plaintiff’s remaining state law claims.
A. Plaintiff’s DJA Claim
It is well established that “the Declaratory Judgment Act does not extend the jurisdiction of
the federal courts.” Medtronic., Inc. v. Mirowski Family Ventures, LLC, 571 U.S. 191, 196 (2014) (internal
quotation marks omitted). Whether there is federal question jurisdiction over a declaratory judgment
action depends on whether “a coercive action brought by the declaratory judgment defendant …
would necessarily present a federal question.” Id. (internal quotation marks omitted). Thus, whether
we have jurisdiction over plaintiff’s DJA claim depends on whether plaintiff is asking us to resolve a
potential action that could arise under the Copyright Act.
“[A]n action ‘arises under’ the Copyright Act if and only if the complaint is for a remedy
expressly granted by the Act, e.g. a suit for infringement … or a claim requiring construction of the
Act.” T. B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir. 1964). The mere fact that a contract deals
with the disposition of a copyright or there is a dispute as to who owns the copyright does not
implicate the Copyright Act: “[t]he general interest that copyrights, like all other forms of property,
should be enjoyed by their true owner is not enough” to allege a wrong delineated by the Act, or a
remedy provided by it. Id.Plaintiff has not “used or threatened to use copyrighted material.” Id. Nor has he distributed
any copyright management information. Tantaros would have no action of copyright infringement or
any other copyright violation against him. Plaintiff is thus merely asking for a declaration of copyright
ownership, something for which “relevant statutes create no explicit right of action.” Id. at 827; see
also Scholastic Entm’t, Inc. v. Fox Entm’t Grp., Inc., 336 F.3d 982, 987-88 (9th Cir. 2003) (applying T.B.
Harms and denying subject matter jurisdiction when “the ownership issue is the sole question
presented for review.”)
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B. Plaintiff’s DMCA Claim
Although plaintiff correctly argues that the copyright registration requirement imposed by 17
U.S.C. Section 411(a) is not a 12(b)(1) jurisdictional bar to a DMCA action, see Reed Elsevier, Inc. v.
Muchnick, 559 U.S. 154, 168-69 (2010), plaintiff’s DMCA claim does not meet 12(b)(6) plausibility
standards. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[A] complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”) (internal
citation omitted).
Section 1202(a) of the DMCA provides that “no person shall knowingly and with the intent
to induce, enable, facilitate, or conceal infringement— (1) provide copyright management
information that is false, or (2) distribute or import for distribution copyright management
information that is false.” 17 U.S.C. § 1202(a). “Copyright management information” (“CMI”)
includes the name of the copyright owner—including as set forth in the notice of copyright—and the
name of the author. 17 U.S.C. § 1202(c)(2), (c)(3). In order to plead a violation of § 1202(a), plaintiff
thus must plausibly allege that defendant knowingly provided false copyright information and that the
defendant did so with the intent to induce, enable, facilitate, or conceal an infringement.
Plaintiff does not set forth any factual basis for pleading this double scienter requirement.
Plaintiff’s DMCA claim merely alleges that Tantaros is identified on the Book as its author, and that
she is listed in the notice of copyright as its owner, which plaintiff alleges is false. Such facts do not
amount to a plausible allegation that defendants knew that such copyright information was false—or
that it is false, for that matter—and that defendants intended to conceal valid CMI. Tantaros is listed
as the Book’s author because the clear terms of the parties’ Collaboration agreement, as well as the
purported terms of the parties’ subsequent oral agreement, specified that Tantaros would be listed as
the sole author of the book. Even accepting plaintiff’s allegations of non-payment for his services as
true, such allegations do not suggest that defendants had any reason to believe that the terms of their
agreements with plaintiff conferred any copyright ownership on plaintiff.
Thus, upon review of the record, we conclude that plaintiff failed to allege a plausible
violation of the DMCA. The operative allegations in plaintiff’s complaint allege a straightforward
breach of contract claim. Plaintiff cannot “use Section 1338 as a means of obtaining federal
jurisdiction over a purely contractual dispute by inappropriate or bad-faith pleading of a copyright
claim.” Bassett v. Mashantucket Pequot Tribe, 204 F.3d 343, 351 n.4 (2d Cir. 2000).
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C. Plaintiff’s State Law Claims
The District Court acted within its discretion in declining to retain jurisdiction over plaintiff’s
remaining state law breach of contract claims. Where “all federal-law claims are eliminated before
trial, the balance of factors to be considered under the pendent jurisdiction doctrine—judicial
economy, convenience, fairness and comity—will point toward declining to exercise jurisdiction over
the remaining state-law claims.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988).
II.
We next consider the District Court’s dismissal of plaintiff’s First Amended Complaint for
failure to plead diversity jurisdiction. On appeal from an order dismissing an action for lack of subject
matter jurisdiction, we review factual findings for clear error and legal conclusions de novo. Maloney v.
Soc. Sec. Admin., 517 F.3d 70, 74 (2d Cir. 2008). In resolving a motion to dismiss for lack of subject
matter jurisdiction under Rule 12(b)(1), a district court, as it did here, may refer to evidence outside
the pleadings. See Kamen v. American Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir. 1986). A plaintiff
asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence
that it exists. See Malik v. Meissner, 82 F.3d 560, 562 (2d Cir. 1996). We agree with the District Court
that plaintiff failed to meet that burden here.
The District Court concluded in its December 1, 2017 order that Tantaros was a citizen of
New York at the time plaintiff’s First Amended Complaint was filed. The District Court relied on a
variety of evidence presented in defendants’ second motion to dismiss and Tantaros’s declaration
supporting that motion, as well as evidence included in plaintiff’s own complaint. Such evidence
included (1) Tantaros’s assertion that she rents an apartment in New York; (2) Tantaros is registered
to vote in New York; (3) Tantaros filed taxes in New York State and listed New York as her home
state in 2016; (4) Tantaros has a New York driver’s license and owns a car that is registered and
insured in New York; and (5) Tantaros’s bank account is in New York. In light of this evidence, we
conclude that the District Court committed no error in making the factual finding that complete
diversity among the parties did not exist.
Plaintiff relatedly argues that the District Court erred in denying further jurisdictional
discovery on the issue of defendants’ domicile. We disagree. We review the District Court’s decision
to deny further discovery and leave to amend for abuse of discretion. Koehler v. Bank of Bermuda (New
York) Ltd., 209 F.3d 130, 138 (2d Cir. 2000). At the time of the District Court’s December 1, 2017
order, plaintiff had already been given one opportunity to amend his complaint for the specific
purpose of pleading diversity jurisdiction. Plaintiff had ample time leading up to the filing of his First
Amended Complaint to obtain discovery on this key jurisdictional issue. Because the evidence clearly
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established that Tantaros was domiciled in New York, the District Court did not abuse its discretion
in holding that any further discovery or pleading on defendants’ domiciles would be futile.
CONCLUSION
We have considered plaintiff’s remaining arguments and find them to be without merit. For
the foregoing reasons, we AFFIRM the judgment of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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