Dolores Dawes v. Publish America LLLP , 563 F. App'x 117 ( 2014 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 13-3269
___________
DOLORES DAWES,
Appellant
v.
PUBLISH AMERICA LLLP, A Limited Liability Limited Partnership;
PUBLISH AMERICA, INC., A Corporation
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 11-cv-06912)
District Judge: Honorable C. Darnell Jones, II
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
March 4, 2014
Before: RENDELL, GREENAWAY, JR. and ALDISERT, Circuit Judges
(Opinion filed: April 10, 2014)
___________
OPINION
___________
PER CURIAM
Dolores Dawes appeals the District Court’s order granting a motion to dismiss
filed by Publish America, LLLP and Publish America, Inc. (“Publish America”). For the
reasons below, we will affirm the District Court’s order.
1
In June 2003, Dawes, a Pennsylvania resident, assigned the right to publish and
sell her book, A Child’s Intuition, to Publish America, a company based in Maryland.
The next year, a dispute arose between the parties concerning whether Publish America
was performing its duties under the contract. In 2005, Dawes filed suit in state court in
Maryland, seeking an accounting of the sales of the book and the royalties due. The
matter was arbitrated, and in May 2007, Dawes was awarded royalties based on the sale
of seven copies of the book. In 2009, Dawes filed a claim for copyright infringement in
the United States District Court for the Eastern District of Pennsylvania. The District
Court dismissed the claim because Dawes had never registered the copyright. Dawes
appealed, and we affirmed, holding that Dawes “submitted no proof that she had
registered her copyright or that Publish America had infringed upon her copyright after
their contract was terminated.” Dawes-Lloyd v. Publish America, LLLP, 441 F. App’x
956, 957 (3d Cir. 2011) (not precedential).
Dawes filed the instant action in November 2011, alleging that Publish America
fraudulently induced her to enter into the contract, breached the contract by failing to
register her copyright, and infringed her copyright by selling the book without her
permission. Publish America filed a motion to dismiss or for summary judgment. The
District Court granted the motion to dismiss, citing Federal Rules of Civil Procedure
12(b)(2) (lack of personal jurisdiction) and 12(b)(6) (failure to state a claim upon which
2
relief can be granted), as well as 28 U.S.C. § 1406(a) (pertaining to “venue in the wrong
division or district”). Dawes appealed.1
The District Court held that dismissal was mandated by a forum selection clause in
the contract, which provided that “Author and Publisher irrevocably submit to the
jurisdiction of any Maryland State or Federal court sitting in the City of Frederick over
any suit related to this agreement.”2 This was error, however, because the forum
selection clause – which did not make jurisdiction in Maryland exclusive – was
permissive, not mandatory.3 See Dunne v. Libbra, 330 F.3d 1062, 1063 (8th Cir. 2003)
1
We note that specific personal jurisdiction has been established through the contractual
relationship between Publish America and Dawes. See Remick v. Manfredy, 238 F.3d
248, 256 (3d Cir. 2001) (stating that “we expressly acknowledged that in many instances,
personal jurisdiction can arise primarily from a nonresident defendant’s contract with a
forum resident.”).
2
The contract also provided that “[a]ll unresolved disputes and controversies of any kind
and nature within the scope of this agreement . . . shall be submitted to an Arbitrator . . . .
The arbitration shall be conducted in the City of Frederick, Maryland . . ., and the
decision of the arbitrator shall be final and binding on the parties to the proceeding,
subject only to the right of judicial relief as prescribed by law. This agreement shall be
governed and construed in accordance with the laws of the State of Maryland.” Publish
America did not file a motion to compel arbitration. See Gray Holdco, Inc. v. Cassady,
654 F.3d 444, 451 (3d Cir. 2011) (discussing waiver of right to compel arbitration).
3
If the forum selection clause was mandatory, it would be entitled to a presumption of
enforceability. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). But
that presumption can be overcome when, as here, “extraordinary circumstances unrelated
to the convenience of the parties” clearly disfavor a transfer. Atlantic Marine Const. Co.,
Inc. v. U.S. Dist. Court for W. Dist. of Tx., 134 S. Ct. 568, 581 (2013); see also Martinez
v. Bloomberg LP, -- F.3d --, 2014 WL 114252, at *5-6 (2d Cir. 2014) (factoring
mandatory-permissive analysis into Atlantic Marine approach). Transfer under the forum
selection clause would be useless because, as described below, Dawes’s claims are
plainly barred.
3
(noting distinction between permissive and mandatory forum selection clauses); see also
Global Satellite Commc’n Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1272 (11th Cir.
2004) (“A permissive clause authorizes jurisdiction in a designated forum but does not
prohibit litigation elsewhere,” whereas “[a] mandatory clause . . . dictates an exclusive
forum for litigation under the contract.” (internal quotation marks omitted)). If the
contract does not contain a mandatory forum selection clause, then a forum non
conveniens analysis applies. See Evolution Online Sys., Inc. v. Koninklijke PTT
Nederland N.V., 145 F.3d 505, 509-10 (2d Cir. 1998).
Although the District Court failed to apply such an analysis here, any error was
harmless. The ends of justice would certainly not be furthered if we forced the District
Court to take more action on a permissive forum selection clause that ultimately will not
affect the outcome of the case. See Lony v. E.I. Du Pont de Nemours & Co., 886 F.2d
628, 632 (3d Cir. 1989) (“In deciding whether to dismiss a case for forum non
conveniens, ‘the ultimate inquiry is where trial will best serve the convenience of the
parties and the ends of justice.’” (quoting Koster v. Lumbermens Mut. Casualty Co., 330
U.S. 518, 527 (1947))). Here, every reasonable adjudicator, regardless of venue, would
dismiss Dawes’s case because, as Publish America correctly alleged, her claims are
clearly barred by the applicable statute of limitations and res judicata. See Ball v.
Famiglio, 726 F.3d 448, 459 n.16 (3d Cir. 2013) (noting that both statute of limitations
and res judicata may be raised in a 12(b)(6) motion to dismiss).
4
Dawes alleged that Publish America fraudulently induced her to enter into the
contract and breached the contract by failing to register her copyright.4 We agree with
Publish America’s contention that these claims are barred by Maryland’s three-year
statute of limitations.5 See Goodman v. Praxair, Inc., 494 F.3d 458, 463-64 (4th Cir.
2007) (recognizing that breach of contract actions in Maryland are governed by a three-
year statute of limitations); Phillips v. G.D. Searle & Co., 884 F.2d 796, 797 (4th Cir.
1989) (stating that [u]nder the Maryland statutes, actions for . . . fraudulent
misrepresentation are barred three years after the cause of action accrues.” (citing Md.
Cts. & Jud. Proc. Code Ann. § 5-101)); see also Gen. Eng’g Corp. v. Martin Marietta
Alumina, Inc., 783 F.2d 352, 358 n.5 (3d Cir. 1986) (discussing enforceability of a forum
selection clause in Maryland). These claims accrued by 2004, when Dawes stated that
she became aware of Publish America’s alleged failure to “honor” the contract. See
Poffenberger v. Risser, 431 A.2d 677 (Md. 1981) (holding that, under the discovery rule,
“the cause of action accrues when the claimant in fact knew or reasonably should have
4
To the extent that Dawes alleged that Publish America infringed her copyright by
selling the book without her permission, we agree with Publish America’s assertion in its
motion to dismiss that res judicata bars that claim, which we rejected in a prior suit.
Dawes-Lloyd, 441 F. App’x at 956; Federated Department Stores, Inc. v. Moitie, 452
U.S. 394, 398 (1981) (noting that res judicata bars claims that were actually litigated or
could have been litigated in the prior action).
5
The contract provided that it would be governed by Maryland law. See footnote 2,
supra. Neither party has alleged that this choice of law provision is invalid or
inapplicable. See Neely v. Club Med Mgmt. Servs., 63 F.3d 166, 180 & n.10 (3d Cir.
1995) (en banc) (concluding that “choice of law issues may be waived”).
5
known of the wrong.”). Accordingly, the fraudulent inducement and breach of contract
claims raised in Dawes’s 2011 complaint are time-barred.6
For the foregoing reasons, we will affirm the judgment of the District Court.
6
We also note that there is no merit to Dawes’s assertion that Publish America breached
the contract by failing to register her copyright. Contrary to Dawes’s belief, the contract
did not obligate Publish America to register a copyright. Instead, it merely stated that
“[c]opyright shall be taken out in the name of Author in the United States, and in foreign
countries as the Publisher may deem advisable.” See In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (recognizing “an exception to the general rule
[that matters extraneous to the pleadings may not be considered on a motion to dismiss]
is that a document integral to or explicitly relied upon in the complaint may be
considered without converting the motion [to dismiss] into one for summary judgment.”
(citation and internal quotation marks omitted)).
6