Copyright preemption, complete preemption, and federal jurisdiction

A writer sues a movie studio for breach of implied contract for making a movie allegedly based on their script. Athletes sue a licensing company for violating their right of publicity by selling rights to photographs of them. A music promoter sues a singer-songwriter for breaching their contract by performing songs for another label.

Cases like these may seem like copyright cases in disguise. Claims for unjust enrichment, breach of implied contract, conversion, right of publicity, and the like, can be thought to be “copyright-adjacent” when copyrightable works are involved. If a particular copyright-adjacent claim is equivalent to copyright infringement, the Copyright Act’s preemption provision (17 U.S.C. § 301) provides a defense, and the state-law claim must be dismissed. Under the well-pleaded complaint rule (that federal jurisdiction exists only when a federal-law question is presented on the face of the plaintiff’s complaint, regardless of defenses), when a state-law claim is filed in state court, it would seem that the state court judge would decide whether the federal-law copyright preemption defense has merit.

But not so fast—a growing number of courts are wrestling with the doctrine of complete preemption in the context of copyright law. This doctrine applies when the preemptive force of federal law is so “extraordinary” that it converts a state-law complaint into one stating a federal claim. Complete preemption is thus an exception to the well-pleaded complaint rule, creating federal jurisdiction even when no federal claims are pleaded. Accordingly, a completely preempted claim means the complaint can be removed to federal court, where a federal judge will decide the merits of the “ordinary” preemption defense. Defendants often prefer federal court for a variety of reasons, including their greater experience in copyright law and the potential of an award of attorney’s fees to the prevailing party in copyright cases. See Mark Lindsay, Complete Preemption and Copyright: Toward a Successive Analysis, 20 J. Intell. Prop. Law 43, 49-53 (2012). Thus, defendants may seek to remove copyright-adjacent cases to federal court, which requires that the plaintiff’s claim arise under federal law—that is, be completely preempted.

The complete preemption doctrine originated in the 1968 Avco case, in which, although an employer had filed a state-law contract claim against a union, the Supreme Court held that an “action arising under [the Labor Management Relations Act] is controlled by federal substantive law even though it is brought in a state court.” Avco Corp. v. Aero Lodge No. 735, Int’l Ass’n of Machinists, 390 U.S. 557, 559 (1968). Later cases extended the doctrine to apply to ERISA and the National Bank Act. Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66-67 (1987) (holding state-law claims brought against an employer by a group of former employees were proper subjects of federal jurisdiction because ERISA completely preempted them); Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 11 (2003) ([T]here is, in short, no such thing as a state-law claim of usury against a national bank.”).

Is the preemptive force of the Copyright Act so “extraordinary” that complete preemption applies? Its preemption provision provides that “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright . . . are governed exclusively by this title. . . . [N]o person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.” 17 U.S.C. § 301(a). While copyright complete preemption has not yet been addressed by the Supreme Court, the doctrine has caught hold in the circuit courts of appeal.

Perhaps the first appellate court to extend the doctrine to copyright was the Fourth Circuit in Rosciszewski v. Arete Assocs., 1 F.3d 225 (4th Cir. 1994). There, removal was held proper because the “grant of exclusive jurisdiction to the federal district courts over civil actions arising under the Copyright Act, combined with the preemptive force of § 301(a), compels the conclusion that Congress intended that state-law actions preempted by § 301(a) of the Copyright Act arise under federal law.” Id. at 232- 33. The Second, Fifth, and Sixth Circuits have followed suit. See GlobeRanger Corp. v. Software AG, 691 F.3d 702, 706 (5th Cir. 2012); Ritchie v. Williams, 395 F.3d 283, 286-87 (6th Cir. 2005); Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc., 373 F.3d 296, 305 (2nd Cir. 2004).

Although the Ninth Circuit has yet to address copyright complete preemption, many California district courts have held it applies. In Dielsi v. Falk, the plaintiff sued in state court for breach of contract, breach of confidence, conversion, and other torts, related to the alleged wrongful use of his submitted script for the television show “Columbo.” 916 F. Supp. 985, 987-88 (C.D. Cal. 1996). The case was removed to federal court, which, absent Ninth Circuit authority, relied on Rosciszewski to hold that removal was proper because “a common law claim preempted by federal copyright law is clearly completely preempted under these principles.” Id. at 993. Courts have held the same in other movie and television script cases. Metrano v. Fox Broad., Co., No. 00-cv-2279- JWJX, 2000 WL 979664, at *3 (C.D. Cal. Apr. 24, 2000); Worth v. Universal Pictures, Inc., 5 F.Supp.2d 816 (C.D. Cal. 1997).

Not every appellate court has embraced copyright complete preemption. The Seventh Circuit stated it was “not so certain” that the Copyright Act completely preempted state-law claims. Wisc. Interscholastic Athletic Ass’n v. Gannett Co., 658 F.3d 614, 620 (7th Cir. 2011). The Third and Tenth Circuits have rejected arguments for complete preemption in copyright-adjacent cases involving public record requests and wrongful termination. See Bd. of Chosen Freeholders of Burlington v. Tombs, 215 F. App’x 80, 82 (3d Cir. 2006) (“[F]ederal copyright law does not wholly displace state statutory or common law rights to public records,” even if copyrighted); Okla. Nat. Gas Co. v. LaRue, 156 F.3d 1244, (Table) (10th Cir. 1998) (holding employee’s claims that he was wrongfully fired for asserting ownership of photograph copyrights should have been remanded to state court). The carveouts to the Copyright Act’s preemption provision, including for non-equivalent state causes of action, suggest that Congress did not intend the Act to preempt every state-law claim where copyrightable material is at issue. 17 U.S.C. § 301(b)(3). The dissent in Beneficial was critical of the entire complete preemption doctrine. Beneficial, 539 U.S. at 13-17 (Scalia, J., dissenting) (describing Avco as “jurisdictional alchemy”). Badhwa v. Veritect, Inc., 367 F. Supp. 3d 890 (D. Minn. 2018) provided a thorough review of the arguments pro and con, and concluded that the Act does not “exhibit the extraordinary preemptive power that is prerequisite for complete preemption,” and thus state-law claims “simply cannot serve as a basis for removal.” Id. at 905.

The Eleventh Circuit seems poised to decide whether the doctrine applies to the Copyright Act. Poet Theatricals Marine, LLC v. Celebrity Cruises, Inc. concerns a cruise line’s continued promotional use of photographs and video recordings of an entertainment company’s shows after contract termination. 515 F.Supp.3d 1292, 1297 (S.D. Fla. 2021). Plaintiff sued for conversion, unjust enrichment, and vicarious liability in state court, and the defendant removed to federal court. The district court determined that removal was proper under the complete preemption doctrine because all but one claim was preempted, dismissed those claims, and remanded the non-preempted unjust enrichment claim to state court. Id. at 1306. Defendant appealed.

The appeal is interesting. Neither party’s briefing addressed in any detail whether there was federal question jurisdiction under the doctrine of complete preemption. If the doctrine is inapplicable, then the district court had no power to dismiss the claims, and the Eleventh Circuit could not decide the appeal. After briefing, but before oral argument, the Eleventh Circuit directed the parties “to be prepared to discuss at oral argument the ‘complete preemption’ issue,” and a list of copyright complete preemption cases, including Rosciszewski, Ritchie, GlobeRanger, Wisconsin Interscholastic, and Badhwa. No. 21-10410 (11th Cir. Jan. 4, 2022). The Badhwa case noted that the Eleventh Circuit had “entertained the [complete preemption] argument in several cases, but then decided each matter on narrower grounds.” Badhwa, 367 F. Supp. 3d at 901. Because the procedural and substantive history of Poet Theatricals rests on complete preemption, perhaps the Eleventh Circuit is ready to decide whether it will join the Second, Fourth, Fifth, and Sixth Circuits in further establishing the doctrine, or the Third, Seventh, and Tenth Circuits in declining to apply it.

The complete preemption doctrine goes to the heart of the separation between federal and state judicial power. “Ordinary” copyright preemption provides a defense, but complete preemption determines which court is empowered to decide that defense, as an exception to the well-pleaded complaint rule. When drafting or responding to state court complaints that involve facts involving copyrightable subject matter, attorneys should consider the effect of the complete preemption doctrine.

Cyndi J. Claxton is an associate and Marc David Peters is a partner at Turner Boyd.