Penske Media Corporation v. Shutterstock, Inc.

Background

Penske Media Corporation (PMC) sued Shutterstock, Inc. over the breakdown of an agreement between the parties during the COVID-19 pandemic. The complaint originally included multiple federal and state claims. The parties later voluntarily dismissed all federal claims, leaving competing state-law breach-of-contract claims and related claims involving frustration of purpose and restitution after rescission.

The parties then filed cross-motions for summary judgment on the remaining contract-related claims. Summary judgment is a decision without a trial when the governing law and undisputed facts entitle a party to judgment.

Jurisdiction issue

The court independently reviewed whether it had subject-matter jurisdiction, meaning legal authority to hear the case. The court observed that the parties had voluntarily dismissed the claims that had invoked federal jurisdiction. It therefore found an apparent lack of subject-matter jurisdiction over the action as presented.

The court also stated that it was considering whether to decline supplemental jurisdiction over the remaining state-law claims under 28 U.S.C. § 1367(c). Supplemental jurisdiction is the authority to hear certain state-law claims connected to claims within federal jurisdiction.

Ruling

The court stated that the cross-motions for summary judgment were dismissed without prejudice based on the apparent jurisdictional problem. At the end of the order, the court stated that the cross-motions were denied without prejudice and directed the Clerk of Court to close docket entries 167 and 169. The court planned to issue a scheduling order giving the parties an opportunity to address the court’s inclination to dismiss the case without prejudice under Section 1367(c). This opinion did not itself enter that anticipated dismissal of the case.