Benitez v. Williams

Filed 8/30/13
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
DAVID ERIK BENITEZ, B242512
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC456351)
v.
ROSS LEVERNE WILLIAMS et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of Los Angeles County, William F.
Fahey, Judge. Affirmed in part; reversed in part.
Thomas W. Kielty for Plaintiff and Appellant.
Law Offices of Scott M. Richter and Scott M. Richter for Defendants and
Respondents.
_________________________
INTRODUCTION
Plaintiff David Benitez appeals an order of dismissal of his second amended
complaint (SAC) against defendants Ross Williams (Ross) and Devon Williams
(Devon).1 The SAC set forth a copyright infringement cause of action and various state
law claims. The superior court ordered plaintiff to “remove” the suit to federal court and,
when plaintiff did not do so, dismissed the SAC.
The court‟s order of dismissal was based on two erroneous assumptions. The first
was that Benetiz could remove the case to federal court. Only a defendant, however, can
file a notice of removal.
The superior court also assumed that plaintiff could not maintain concurrent state
and federal actions arising out of the same facts and circumstances. Rather, the court
concluded, plaintiff was required to litigate his entire lawsuit, including his state law
claims, in federal court. This was error.
We conclude that the superior court‟s dismissal of plaintiff‟s copyright
infringement cause of action was not a miscarriage of justice because the federal courts
have exclusive jurisdiction over such claims. We further conclude, however, that the
superior court‟s dismissal of plaintiff‟s state law causes of action was reversible error
because the court had subject matter jurisdiction and the plaintiff had the right to pursue
those claims in state court.
FACTUTAL AND PROCEDURAL BACKGROUND
Although the record is unclear, it is undisputed that the trial court adjudicated
defendants‟ demurrer to plaintiff‟s first amended complaint (FAC). The parties agree
that the court sustained the demurrer to some causes of action without leave to amend,
sustained the demurrer to one cause of action with leave to amend, and overruled the
demurrer to other causes of action. Defendants contend that the court‟s order granted
1 Plaintiff filed suit in his individual capacity and on behalf of The Osker
Partnership. Ross was sued as an individual and in his capacity as president of his
professional law corporation.
2
plaintiff leave to file the SAC on or before September 19, 2011. Plaintiff did not meet
that alleged deadline.
On September 20, 2011, plaintiff filed a motion for leave to file the SAC. The
gravamen of the SAC was that in the late 1990‟s plaintiff, Devon and Phil Drazic formed
a musical group known as “Osker,” as well as a business partnership known as “The
Osker Partnership,” which received royalties from third parties. The SAC alleges that
after Drazic departed from the partnership pursuant to a written agreement (Drazic
agreement), plaintiff and Devon agreed to split partnership proceeds evenly. The SAC
further alleges that Devon formed a conspiracy with Ross to wrongfully divert
partnership proceeds to Devon. Ross is allegedly Devon‟s father and an attorney who
represented The Osker Partnership.
Based on these underlying allegations, the SAC set forth causes of action for
(1) conspiracy to defraud by fraudulent concealment, (2) breach of fiduciary duty,
(3) conversion, (4) breach of the implied partnership agreement, (5) breach of the Drazic
agreement, and (6) copyright infringement. The SAC was apparently plaintiff‟s first
complaint to include a copyright infringement cause of action.
The trial court granted plaintiff‟s motion for leave to file the SAC. The court,
however, also ordered plaintiff to remove the case to federal court on the grounds that the
federal court had “exclusive jurisdiction of all copyright actions, and the state courts may
not preside over them, so the pending state court claims would go along with the
copyright claim to the federal court.” At the hearing on the motion, plaintiff‟s counsel
asked whether only defendants could remove a case to federal court. The court replied,
“I don‟t think that‟s necessarily the case.” Immediately after the hearing, the court
entered a minute order requiring plaintiff to remove the case to federal court by
November 14, 2011.
3
Before November 14, 2011, plaintiff filed four sets of papers, all of which
essentially advised the trial court that he could not comply with the court‟s order because
only defendants could remove a case to federal court.2 The trial court denied plaintiff
any relief on various procedural and technical grounds, including plaintiff‟s failure to
provide defendants with proper notice. On November 16, 2011, the trial court entered an
Order to Show Cause Re: Dismissal on January 6, 2011.
On January 6, 2012, the court entered an unsigned minute order stating: “The
Second Amended Complaint was filed alleging copyright violations, so it must be in
Federal Court. The Court previously ordered the plaintiff to remove it, plaintiff declined.
[¶] The case is ordered DISMISSED WITHOUT PREJUDICE and Plaintiff can refile
the case [in] Federal Court.”
Later that day, plaintiff filed a complaint against defendants in the United States
District Court for the Central District of California (federal action). Shortly thereafter,
plaintiff filed an amended complaint, which set forth both state law claims and copyright
infringement claims based on essentially the same facts and circumstances that gave rise
to the SAC in this action. On April 9, 2012, plaintiff voluntarily dismissed the federal
action.3
2 Plaintiff filed (1) a “Request for Clarification of Court Order,” (2) “Application
for Reconsideration of Court Order” pursuant to Code of Civil Procedure section 1008,
(3) an “Ex Parte Application Re Removal Procedure, Jurisdiction Issues, Enforcement of
Prior Court Orders,” and (4) a “Notice of Inability to Comply with Court Order and Good
Faith Efforts to Bring it to the Court‟s Attention.”
3 Defendants contend that plaintiff dismissed the federal action only after they
served plaintiff with a proposed motion for sanctions under rule 11 of the Federal Rules
of Civil Procedure (28 U.S.C.) (Rule 11 motion). Plaintiff contends he dismissed the
federal action in light of his attorney‟s additional research regarding copyright
infringement, and that defendants served the Rule 11 motion after he agreed to the
dismissal.
4
On or about April 11, 2012, plaintiff filed a motion requesting the superior court to
set aside the January 6, 2012, order dismissing the action (set aside motion). The motion
also requested leave to file a third amended complaint, which did not include a copyright
infringement cause of action. The trial court apparently denied this motion, though a
copy of the relevant order is not in the record. On or about May 7, 2012, plaintiff filed a
motion for reconsideration, seeking the same relief in his set aside motion.
On June 15, 2012, the trial court denied plaintiff‟s motion for reconsideration.
The court also entered a signed order dismissing the action without prejudice on the
grounds that the SAC alleged a copyright infringement cause of action and plaintiff did
not comply with the court‟s order to remove the action to federal court. Plaintiff filed a
timely notice of appeal of the June 15, 2012, order.4
DISCUSSION
The federal courts have exclusive jurisdiction over copyright infringement causes
of action. (28 U.S.C. § 1338; Sears, Roebuck & Co. v. Stiffel Co. (1964) 376 U.S. 225,
231, fn. 7.) The trial court thus correctly determined that it did not have subject matter
jurisdiction over plaintiff‟s copyright infringement claim.
The court, however, erroneously assumed that it could order plaintiff to remove
the case to federal court. Only a defendant can remove a case from state court to federal
court. (28 U.S.C. §§ 1441, 1446; Shamrock Oil Corp. v. Sheets (1941) 313 U.S. 100,
104; Westwood Apex v. Contreras (9th Cir. 2011) 644 F.3d 799, 804-805.)
By ordering plaintiff to remove the case and then dismissing plaintiff‟s action for
failing to comply with that order, the superior court erred. We cannot, however, reverse
the court‟s order of dismissal unless the error was prejudicial. (Code Civ. Proc., § 475.)
We hold that the superior court‟s error was harmless to the extent the court dismissed
plaintiff‟s sixth cause of action for copyright infringement. Because the court had the
4 The June 15, 2012, order was entered nunc pro tunc to correct a clerical error in
the January 6, 2012, order. The operative provisions of the order relating to the dismissal
of plaintiff‟s action are exactly the same as the order dated January 6, 2012.
5
inherent power to determine its own jurisdiction (Brown v. Desert Christian Center
(2011) 193 Cal.App.4th 733, 740), it was entitled to sua sponte dismiss plaintiff‟s
copyright infringement cause of action for lack of subject matter jurisdiction.
The superior court did not have the same power with respect to plaintiff‟s state law
claims. As a court of general jurisdiction, the superior court had subject matter
jurisdiction over these claims.5 The court therefore did not have the authority to dismiss
plaintiff‟s state law claims for lack of subject matter jurisdiction.
The sole ground for the court‟s dismissal of plaintiff‟s state law claims was that
they were alleged in the same pleading as his copyright cause of action. The court‟s
unstated assumption was that plaintiff could not concurrently pursue a state court action
on his state law claims and a federal action on his copyright infringement claim. This
was not true. A plaintiff can maintain concurrent state and federal court actions arising
from the same facts and circumstances (Wilton v. Seven Falls Co. (1995) 515 U.S. 277,
284; Fowler v. Ross (1983) 142 Cal.App.3d 472, 476-477), albeit the plaintiff risks
having his or her state court or federal court action barred by res judicata if a judgment is
rendered in the other case. (2 Witkin, Cal. Procedure (5th ed. 2008) Jurisdiction, § 435,
p. 1089.)
Both federal and California state courts have grappled with the issues raised when
concurrent state and federal court cases regarding the same subject matter are pending.
The seminal federal case is Colorado River Water Cons. Dist. v. U. S. (1976)
424 U.S. 800 (Colorado River). There, the United States Supreme Court held that in
limited circumstances a district court may abstain from exercising jurisdiction over a case
while a concurrent state court action is pending. (Id. at pp. 817-818.) Colorado River
5 State law causes of action are preempted to the extent they assert rights equivalent
to the exclusive rights protected by federal copyright law. (Kabehie v. Zoland (2002)
102 Cal.App.4th 513, 517.) Defendants do not contend plaintiff‟s state law claims are
preempted by federal copyright law or that the trial court did not otherwise have subject
matter jurisdiction over these claims. We express no opinion on the merits of plaintiff‟s
state law claims.
6
abstention is based on “considerations of „[w]ise judicial administration, giving regard to
conservation of judicial resources and comprehensive disposition of
litigation.‟ ” (Id. at p. 817; see also Moses H. Cone Hospital v. Mercury Constr. Corp.
(1983) 460 U.S. 1, 14-16.)
Likewise, “[i]t is black letter law that, when a federal action has been filed
covering the same subject matter as is involved in a California action, the California court
has the discretion but not the obligation to stay the state court action.” (Caifa Prof. Law
Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal.App.4th 800, 804.) In exercising its
discretion, the superior court should consider a number of factors, including whether the
plaintiff‟s choice to litigate in two forums was designed solely to harass the adverse party
and the importance of avoiding unseemly conflicts with the federal court. (Farmland
Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208, 215.)
Here, at the time the superior court dismissed plaintiff‟s suit, there was no pending
federal action. Thus the court did not yet face potential problems with concurrent
pending suits. Moreover, there were no other grounds for the superior court to abstain
from adjudicating plaintiff‟s state law claims. The superior court‟s dismissal of
plaintiff‟s state law claims therefore was a miscarriage of justice.
It is worth noting that plaintiff was a California resident who sought to litigate
California state law claims against California residents in California state court. Under
these circumstances, the superior court should have given plaintiff‟s choice of forum
great deference. (See Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 754 [analyzing
plaintiff‟s choice of forum for purposes of forum non conveniens]; Thompson v.
Continental Ins. Co. (1967) 66 Cal.2d 738, 742 [a determination that plaintiff resides in
California ordinarily limits the forum non conveniens doctrine because of “a state policy
that California residents ought to be able to obtain redress for grievances in California
courts, which are maintained by the state for their benefit”].)
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DISPOSITION
The superior court‟s June 15, 2012, order of dismissal is affirmed to the extent it
dismissed plaintiff‟s sixth cause of action for copyright infringement, and reversed to the
extent it dismissed plaintiff‟s first five causes of action. In the interests of justice, both
sides shall bear their own costs on appeal.
CERTIFIED FOR PUBLICATION
KITCHING, J.
We concur:
KLEIN, P. J.
CROSKEY, J.
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