Rios v. Micmac Records, Inc.

Background

Awilda Rios, Mildred Rios, and Rios Sisters, an unincorporated partnership, sued Micmac Records, Inc., Mickey Garcia, Phase One Network, Inc., Frank Babar, Al Jankowsky doing business as Onna Roll Records and Management, and unidentified defendants. The plaintiffs originally filed the action in New York state court, asserting claims for breach of contract, unjust enrichment, unpaid royalties, fraud, enforcement of contract terms, injunctive relief, and an accounting.

The Phase One defendants removed the case to federal court, arguing that the claims arose under the federal Copyright Act. The plaintiffs moved to remand the action to state court and requested attorneys’ fees and costs for what they characterized as improper removal.

Procedural objections to removal

The plaintiffs argued for the first time in their reply papers that the removal was procedurally defective because Garcia and Onna Roll had not timely consented to removal. The court declined to consider that argument because it was raised for the first time in reply and was made after the thirty-day deadline for objecting to removal defects other than lack of subject-matter jurisdiction.

The court also found that all defendants had consented to removal. It relied on the removal notice stating that Garcia and Onna Roll had not been properly served when the case was removed, as well as declarations in which Garcia and Onna Roll consented to removal.

Federal copyright jurisdiction

The court held that it had federal-question jurisdiction and exclusive federal jurisdiction over claims arising under the Copyright Act. A claim can arise under that Act even when a complaint does not expressly allege copyright infringement if it seeks remedies provided by the Act or requires interpretation of the Act.

The court determined that the plaintiffs sought remedies expressly provided by the Copyright Act, including injunctive relief, statutory damages, attorneys’ fees and costs, and an accounting. The court also noted that, before removal, the plaintiffs had described their requested preliminary relief as an injunction for copyright infringement.

The court found that the complaint alleged that the plaintiffs authored and owned musical works and artwork that the defendants used without authorization. The alleged uses included playing, releasing, selling, sampling, and offering the songs for sale. In the court’s view, deciding the plaintiffs’ claims required interpreting the Copyright Act’s provisions concerning ownership and the exclusive rights of copyright owners.

The court treated several claims labeled as state-law claims as copyright claims in substance. It concluded that the breach-of-contract claims were based on alleged infringement through use of copyrighted material beyond the agreement’s scope. It likewise concluded that the claim seeking enforcement of contract terms concerned exploitation of the plaintiffs’ works outside the license period. The fraud claim required determining the plaintiffs’ rights as authors, and the unjust-enrichment claim was preempted by the Copyright Act because it concerned alleged unauthorized use of intellectual property.

The court stated that six of the plaintiffs’ claims arose under the Copyright Act. It exercised supplemental jurisdiction—authority to hear related state-law claims—over the unpaid-royalties claims because they arose from the same underlying facts.

Disposition

The court held that removal was proper. It denied the plaintiffs’ motion to remand and denied their request for attorneys’ fees and costs. The Clerk of Court was directed to terminate the motion at ECF No. 16.