Kelly v. Di Angelo Publications, Inc., No. 4:2021cv01666 - Document 10 (S.D. Tex. 2021)
Court Description: MEMORANDUM OPINION AND ORDER - Granting 7 MOTION to Remand and this action is REMANDED to the 270th District Court of Harris County, Texas...*** Case terminated on 7/28/21. (Signed by Judge Sim Lake) Parties notified.(sanderson, 4)
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Kelly v. Di Angelo Publications, Inc. Doc. 10 Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 1 of 12 United States District Court Southern District of Texas ENTERED July 28, 2021 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION JENTRY KELLEY, Nathan Ochsner, Clerk § § Plaintiff, § § v. CIVIL ACTION NO. H-21-1666 § § DI ANGELO PUBLICATIONS, INC., § § Defendant. § MEMORANDUM OPINION AND ORDER Plaintiff Jentry Kelley ("Plaintiff") filed this action on November 7, 2018, against defendant Di Angelo Publications, Inc. ("Defendant") in the 270th District Court of Harris County, Texas, asserting claims for (1) (2) violations Practices Act ("DTPA"), fraud, and (4) fraud by nondisclosure. 1 of Removal on May 20, 2021. 2 of the Deceptive breach of contract, (3) Trade common-law Defendant filed a Notice Pending before the court is Plaintiff Jentry Kelley's Motion to Remand ("Plaintiff's Motion to Remand") (Docket Entry No. Di Angelo 7) , Publications, to which Defendant Inc. 's has Opposition: · to filed Defendant Plaintiff Kelley's Motion to Remand ("Defendant's Response") Jentry (Docket Entry 1 Plaintiff's Original Petition, Exhibit 2H to Notice of Removal, Docket Entry No. 1-10, pp. 5-9 ~~ 16-51. All page numbers for docket entries in the record refer to the pagination inserted at the top of the page by the court's electronic filing system, CM/ECF. 2 Notice of Removal, Docket Entry No. 1. Dockets.Justia.com Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 2 of 12 No. 8). For the reasons stated below, Plaintiff's Motion to Remand will be granted. I. Factual Allegations and Procedural Background Plaintiff is the owner of a makeup line based in Houston, Texas. 3 Defendant is a publishing company incorporated in Texas. 4 This case arises from a contract (the "Contract") between Plaintiff and Defendant under which Defendant entitled "Hooker to Looker: Offended" (the "Book") . 5 agreed to publish a book A Makeup Guide for the Not So Easily Plaintiff states that she wrote the Book, 6 while Defendant states that it ghostwrote the Book. 7 On November 7, 2018, Plaintiff filed suit against Defendant in the 270th District Court of Harris County, Texas, asserting claims for DTPA violations, breach of contract, fraud by non-disclosure. 8 common-law fraud, and Plaintiff claimed that Defendant had Plaintiff's Second Amended Petition, Exhibit 2A to Notice of RE;=moval, Docket Entry No. 1-3, p. 3 ~ 6; Defendant's Answer, Affirmative Defenses and Request for Declaratory Judgment in Response to Plaintiff's Second Amended Petition ("Defendant's Answer") , Docket Entry No. 3, p. 2 ~ 6. 3 4 Plaintiff's Second Amended Petition, Exhibit 2A to Notice of Removal, Docket Entry No. 1-3, p. 2 ~ 2. 5 Plaintiff's Original Petition, Exhibit Removal, Docket Entry No. 1-10, p. 4 ~ 10. 6 7 ~ 1. Notice of Notice of Plaintiff's Motion to Remand, Docket Entry No. 7, p. 1 2H to Notice of Removal, Docket Entry No. 1, p. 2 ~· 4. 8 Plaintiff's Originai Petition, Exhibit 2H Removal, Docket Entry No. 1-10, pp. 5-9 ~~ 16-51. -2- to Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 3 of 12 "concealed or otherwi~e failed to disclose actual costs to [Plaintiff] " 9 and had demanded payments from Plaintiff that were not supported by . any agreement or legal principle. 10 Plaintiff claimed that under the Contract, "actual costs were to be deducted from gross revenue before a split of the net revenues between the parties [,] " concealing but a "Defendant materially breached the contract by markup on the costs, payable to Defendant" and deceptively treated the markup as part of the cost of publication. 11 In other words, Plaintiff claimed that "Defendant was not passing on actual costs but inf lated costs marked up to Defendant's advantage." 12 On January ( "Di Angelo") 11, 2020, Di Angelo Publications, Inc. commenced suit against Jentry Kelley ("Kelley") in the Southern District of Texas, arguing that the court had original jurisdiction under the Copyright Act because Di Angelo was seeking a declaratory judgment as to ownership of copyrights in the Book. Di Angelo Publications, Inc. v. Jentry Kelley; Civil Action No. H-20-115, 2020 WL 5884659, at *1 (S.D. Tex. Aug. 28, 2020) On March 19, On August 9 2020, 28, Id. 2020, at 4 ~ lOid. at 5 ~ 11 Id. at 7 12):d. ~, at 8 ~ Kelley moved the to dismiss the suit. Honorable David Hittner granted Kelley's 12. 15. 27, 29. 43. -3- Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 4 of 12 motion to dismiss, holding that "the disputed ownership and authorship of the Book hinges on the terms of the Contract[,]" that Di Angelo's claim therefore involved a question of state and not federal law, and that the court lacked subject matter jurisdiction. Id. at *2. Di Angelo appealed the dismissal to the Fifth Circuit Court of Appeals, ~nd oral arguments were held on April 26, 2021. A decision is pending. 13 On May 6, Petition, 14 2021, in which Plaintiff served Defendant a Second Amended Plaintiff requested for the first time a declaration that "Plaintiff is the sole author and sole copyright owner of the Book." 15 Removal, arguing On May 20, 2021, Defendant filed a Notice of that the new request implicated the federal Copyright Act . 16 for declaratory relief Plaintiff filed the pending Motion to Remand on June 18, 2021; 17 Defendant filed a Response on June 29, 2021; 18 and Plaintiff filed a Reply on July 6, 2021. 19 13 Plaintiff' s Motion to Remand, Docket Entry No. 7, p. 3 Notice of Removal, Docket Entry No. 1, p. 2 ~ 6. ~ 4; 14 Plaintiff's Second Amended Petition, Exhibit 2A to Notice of Removal, Docket Entry No. 1-3, p. 13. 15 Ig_,_ at.10 ~ 58.C. 16 Notice :Of Removal, Docket Entry No. 1, pp. 2 - 3 ~ 17 Plaintiff's Motion to Remand, Docket Entry.No. 7. 18 Def end.;:i.nt' s Response, Docket Entry No. 8. 19 7. Plaintiff Jentry Kelley's Reply to Defendant's Opposition to Plaintiff's Motion to Remand, Docket Entry No. 9. -4- Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 5 of 12 II. A. Plaintiff's Motion to Remand Standard of Review Except as otherwise expressly provided.by Act of Congress, a defendant or defendants in a civil action brought in a state court may remove the action to federal court if the action is one over which the district jurisdiction. court? of the United States 28 U.S.C. § 1441(a). have original Federal district courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." § 1331. "[A] 28 U.S.C. suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows Constitution." S. Ct. 42, 43 that it Louisville (1908). federal-question is & based upon those laws or that Nashville Railroad Co. v. Mottlev, 29 Generally, jurisdiction is "[t]he presence or absence of governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a plaintiff's federal question is presented on the properly pleaded complaint." Williams, 107 S. Ct. 2425, 2429 (1987). face Caterpillar of the Inc. v. "Since a defendant may remove a case only if the claim could have been brought in federal court, the question for removal jurisdiction must also be determined by reference to the 'well-pleaded complaint.'" Merrell Dow Pharmaceuticals Inc. v. Thompson, 106 S. Ct. 3229, 3232 (1986). "The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." -5- Manguno v. Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 6 of 12 Prudential Property and Casualty Insurance Co., 276 F.3d 720, 723 (5th Cir. 2002). Because removal jurisdiction raises significant federalism concerns, the removal statute is strictly construed, "and any doubt about the propriety of removal must be resolved in favor of remand." Gasch v. Hartford Accident &·Indemnity Co., 491 F.3d 278, 281-82 (5th Cir. 2007). B. No Jurisdiction Under the Copyright Act Federal district courts have original jurisdiction over any civil action arising under the Copyright Act. An action "arises under" complaint: ( 2) 28 U.S.C. § 1338(a). the Copyright Act if and only if the ( 1) "is for a remedy expressly granted by the Act[,] " "asserts a claim requiring constructi [on] of the Act," or (3) "presents a case where a distinctive policy of the Act requires that federal principles control the disposi tiori of the claim." Goodman v. Lee, 815 F.2d 1030, 1031 (5th Cir. 1987) (quoting T.B. Harms 1964), Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir. cert. denied, 85 S. Ct. 1534 (1965)). Plaintiff does not seek a remedy expressly granted by the Copyright Act, and Defendant does not argue that a distinctive policy of the Act requires that federal principles control the disposition of Plaintiff's claim. Instead, Defendant argues that Plaintiff's claims require construction of the Copyright Act. 20 20 Defendant' s Response, Docket Entry No. 8, p. 16 ( "Establishing Kelley's right will require interpreting federal law . ") . · -6- Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 7 of 12 This is the same basis for federal Circuit relied on in Goodman, 815 jurisdiction that the Fifth F. 2d plaintiff alleged that she was an actual disputed song. 103°1-32, in which a joint co-author of a The Fifth Circuit held that "exclusive federal district court jurisdiction exists in an action for a declaratory judgment to establish joint authorship of a copyrighted work," and thus federal jurisdiction over the plaintiff's claim was proper. But the Fifth Circuit distinguished between cases Id. at 1032. where the "'controlling issue involves a dispute over title to a copyright arising from an alleged breach of contract'" and cases that involved "the validity of Copyright Act." Id. the copyright itself under the Because Goodman belonged to category, federal jurisdiction was proper. the latter Id. While "the Fifth Circuit has recognized that claims requiring construction of the Copyright Act create jurisdiction when the actions are based on rights created in the Act [,]" "state law claims over ownership to a copyright as a matter of state law do not 'arise under' jurisdiction Inc., the Copyright Act for the purposes of federal If Ultraflo Corp. 823 F. Supp. 2d 578, 584 v. (S. D. Tex. Pelican Tank Parts, 2011) (citing Kane v. Nace International, 117 F. Supp. 2d 592, 595-96 (S.D. Tex. 2000); see also Ross WL 1889195, copyright v. at *5 involves Dejarnetti, (E.D. Civil Action No. La. April 16, only a state 2.020) 18-11277, ("[O]wnership of a law question if the disputed ownership hinges on the terms of a contractual agreement."). -7- 2020 Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 8 of 12 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. RTG LLC v. Fodera, No. 5:19-CV-87-DAE, 2019 WL 5791459, at *5 (W.D. Tex. May 16, 2019) The (quoting Eliscu, 339 F.2d at 828). Copyright Act provides that " [c] opyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are coowners of 17 U.S.C. copyright in the work. " § 20l(a). [a] The Copyright Act defines a "joint work" as "a work prepared by two or more authors with the intention that their contributions be merged inseparable or interdependent parts of a unitary whole." § into 17 U.S.C. 101. The Contract does not explicitly provide for ownership of copyrights. However, every page of the Contract refers to Plaintiff as "the author[,]" 21 and the Contract refers to the Book as "Jentry Kelley's book[.]" 22 the Contract, "Author. " 23 takes pride Plaintiff's At the bottom of the last page of signature appears next to the word The Contract further states that "Di Angelo Publications in our ability to 21 Contract, No. 3-1. 22 Id. at 3. 23 Id. at 6. Exhibit A to allow the Defendant' s -8- author Answer, full creative Docket Entry Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 9 of 12 control over the outcome - [of] enhanced· royalty - percentage your book, (and option along with a for greatly buyout) . " 24 The Contract never refers to the Book as a "joint work" or to Defendant as a "co-author." The court concludes that determining the Book's ownership will require construction of the Contract and not of the Copyright Act. This case therefore does not arise under the Copyright Act, and Plaintiff's Motion to Remand will be granted. C. Removal Is Untimely The procedure for removal of civil actions is governed by 28 U.S.C. § 1446(b), which provides that [t]he notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such iriitial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. "[W]hen read as a whole, § 1446(b) provides a two-step test for determining Chapman v. whether Powermatic, a Inc., defendant timely 969 F.2d 160, 161 removed a case." (5th Cir. 1992). "[I]f the case stated by the initial pleading is removabl~, then notice of removal must be filed within thirty days from the receipt of the initial pleading by the defendant II Id. "[I] f the case stated by the initial pleading is not removable, then notice 24 '.J:d. at 2. -9- Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 10 of 12 of removal must be filed within thirty days from the receipt of an amended pleading, motion, order, or other paper from which the defendant cari ascertain that the case is removable." Id. Defendant argues that this case only became removable when Plaintiff filed her Second Amended Petition seeking a declaration that she was the Book's sole author and copyright holder. 25 But Plaintiff claimed in her Original Petition, filed November 7, 2018, that she .was intellectual "the sole property author, rights to owner, the and Book claimant and its of the ancillary creations" and "the sole owner of all copyrights" associated with the Book. 26 Plaintiff's First Amended Petition, filed July 8, 2020, made a virtually identical claim. 27 If claiming to be the sole author and copyright owner of a work were enough on its own to establish an action as removable under the Copyright Act, then this action became removable on November 12, deadline to remove was December 12, 2018. 2018, 28 and Defendant's See 28 U.S.C. § 1446(b). See Defendant's Response, Docket Entry No. 8, p. 11 ( "Kelley introduced a federal question into her state court lawsuit when she amended her petition a second time and inserted a new cause of action seeking a declaration of sole authorship and ownership of a book in suit.ff). 25 26 Plaintiff' s Original Petition, Exhibit Removal, Docket Entry No. 1-10, p. 4 , 10. 2H to Notice of 27 Plaintiff's First Amended Petition, Exhibit 2D to Notice of Removal, Docket Entry No. 1-6, p. 4 , 10. 28 See Citation Corporate, Docket Entry No. 1-1, p. 3. Exhibit -10- 1 to Notice of Removal, Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 11 of 12 But Defendant did not file its Notice of Removal until May 20, 2021, approximately three years too late. D. Attorneys' Fees Plaintiff seeks reimbursement of attorneys' fees incurred due to Defendant's improper removal. 29 Motions for remand are governed by 28 U.S.C. § 1447(c), which states in pertinent part that [i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal. "There is no automatic entitlement to an award of.attorney's fees." Cir. Valdes v. Wal-Mart Stores, 2000). attorney's lacked "Absent fees under an ·objectively Conversely, unusual 199 F.3d 290, circumstances, 1447 (c) § Inc., only where reasonable basis may (5th award the· removing party for when an objectively reasonable should be denied." courts 292 seeking basis removal. exists, fees Martin ·v. Franklin Capital Corp., 126 S. Ct. 704, 711 (2005). The court concludes that Defend~nt had an objectively reasonable basis for seeking removal, and thus Plaintiff's request for reimbursement of attorneys' fees is denied. 29 ~ Plaintif f's Motion to Remand,. 5 .d. -11- Docket Entry No. 7, p. 4 Case 4:21-cv-01666 Document 10 Filed on 07/28/21 in TXSD Page 12 of 12 III. Conclusions and Order For the reasons explained above, Defendant· has failed to meet its the court concludes that burden of establishing federal jurisdiction exists and that removal was proper. that The court further holds that even if removal under the Copyright Act had been proper, Defendant's removal was untimely. Accordingly, Plaintiff Jentry Kelley's Motion to Remand (Docket Entry No. 7) is GRANTED, and this action is REMANDED to the 270th District Court of Harris County, Texas. The Clerk will promptly provide a copy of this Memorandum Opinion and Order to the District Clerk of Harris County, Texas. SIGNED at Houston, Texas, on this the 28th day of July, 2021. SIM LAKE SENIOR UNITED STATES DISTRICT JUDGE -12-
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