Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 1 of 7 Page ID #:230
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`UNICHAPPELL MUSIC, INC., a
`Delaware corporation,
`Plaintiff,
`
`Case No. CV 14-02382 DDP (PLAx)
`ORDER DENYING MOTION TO STAY
`ACTION
`[Dkt. No. 12]
`
`v.
`MODROCK PRODUCTIONS, LLC,
`Defendant.
`___________________________
`Before the court is Defendant Modrock Productions, LLC
`(“Modrock”)’s Motion to Stay Action. (Dkt. No. 12.) The matter is
`fully briefed and suitable for decision without oral argument.
`Having considered the parties’ submissions, the court adopts the
`following order denying the motion.
`I.
`Background
`In this motion, Modrock moves to stay this action during the
`pendency of an action Modrock filed in Los Angeles Superior Court
`on January 22, 2014. See Modrock Productions, LLC v.
`Warner/Chappell Music, Inc., Case No. BC533925 (“State Case,”
`Complaint at Defendants’ Request for Judicial Notice, Ex. A., Dkt.
`No. 13.)
`
`)))))))))))
`
`
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`UNICHAPPELL MUSIC, INC., a
`Delaware corporation,
`Plaintiff,
`
`Case No. CV 14-02382 DDP (PLAx)
`ORDER DENYING MOTION TO STAY
`ACTION
`[Dkt. No. 12]
`
`v.
`MODROCK PRODUCTIONS, LLC,
`Defendant.
`___________________________
`Before the court is Defendant Modrock Productions, LLC
`(“Modrock”)’s Motion to Stay Action. (Dkt. No. 12.) The matter is
`fully briefed and suitable for decision without oral argument.
`Having considered the parties’ submissions, the court adopts the
`following order denying the motion.
`I.
`Background
`In this motion, Modrock moves to stay this action during the
`pendency of an action Modrock filed in Los Angeles Superior Court
`on January 22, 2014. See Modrock Productions, LLC v.
`Warner/Chappell Music, Inc., Case No. BC533925 (“State Case,”
`Complaint at Defendants’ Request for Judicial Notice, Ex. A., Dkt.
`No. 13.)
`
`)))))))))))
`
`
`
`Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 2 of 7 Page ID #:231
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`Modrock is a production company formed to develop and produce
`“ModRock,” a musical set in London in the 1960s. It has alleged in
`the State Case that Warner/Chappell Music, Inc.,
`(“Warner/Chappell”), an affiliate of Plaintiff Unichappell Music,
`Inc. (“Unichappell”), granted Modrock oral or implied non-exclusive
`licenses to use several musical compositions to which Unichappell
`owns copyrights, but then repudiated those licenses shortly before
`the musical was to be performed. (Id. ¶¶ 13-22.) ModRock alleged
`that, because of the late repudiation, it was forced to include the
`compositions in its performances of the musical. (Id. ¶ 2.) Modrock
`asserted claims for breach of contract, breach of the implied
`covenant of good faith and fair dealing, negligent
`misrepresentation, among several other related claims.
`In the instant action before this court, Unichappell alleges
`that Modrock used the copyrighted compositions without
`authorization. (Complaint ¶¶ 9-15.) It alleges that its affiliate
`Warner/Chappell initially informed Modrock’s representative,
`(Winogradsky/Sobel, a music clearance company), that it could not
`process the requests for licenses without additional information
`and subsequently communicated that the requests were denied, but
`that Modrock nevertheless proceeded to use the compositions in its
`performances. (Id.) Unichappell asserts claims for copyright
`infringement. (Id. ¶¶ 16-25.)
`As discussed below, Modrock contends that the action should be
`stayed pursuant to the Colorado River doctrine or, alternatively,
`pursuant to the court’s inherent power to control its docket.
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`Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 3 of 7 Page ID #:232
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`II. Colorado River Doctrine
`A.
`Legal Standard
`Under the Colorado River doctrine, a federal court may stay
`proceedings in favor of parallel state court litigation in the
`interests of “wise judicial administration, giving regard to
`conservation of judicial resources and comprehensive disposition of
`litigation.” Colorado River Water Conservation Dist. v. U.S., 424
`U.S. 800, 817 (1976). A stay is proper only in “extraordinary
`circumstances.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716
`(1996). This “exception to the ‘virtually unflagging obligation of
`the federal courts to exercise the jurisdiction given them’ is a
`narrow one.” Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d
`908, 912 (9th Cir. 1993) (quoting Colorado River, 424 U.S. at 817).
`Of relevance for the instant motion, “the Colorado River
`doctrine only applies to claims under the concurrent jurisdiction
`of the federal and state courts. [T]he district court has no
`discretion to stay proceedings as to claims within exclusive
`federal jurisdiction under the wise judicial administration
`exception.” Minucci v. Agrama, 868 F.2d 1113, 1115 (9th Cir. 1989).
`B.
`Discussion
`Modrock’s request for a stay under the Colorado River doctrine
`is fatally flawed because the instant case involves a claim for
`federal copyright infringement, which is within the exclusive
`jurisdiction of the federal courts. See 28 U.S.C. § 1338(a);
`Minucci 868 F.2d at 1115 (“Since Minucci's copyright claim is
`within the exclusive jurisdiction of the federal courts, the
`Colorado River doctrine is inapplicable.”). Indeed, “Ninth Circuit
`precedent is quite clear on this point: the Ninth Circuit has
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`Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 4 of 7 Page ID #:233
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`repeatedly stated that Colorado River abstention applies only to
`claims under the concurrent jurisdiction of the federal and state
`courts and that district courts lack discretion to stay proceedings
`as to claims within exclusive federal jurisdiction.” Krieger v.
`Atheros Commc'ns, Inc., 776 F. Supp. 2d 1053, 1058 (N.D. Cal.
`2011).
`Modrock’s attempts to convince the court that its motion is
`not barred under Minucci are unsuccessful. Modrock contends that
`this “this is really a breach of contract case at its heart,”
`because Modrock asserts as its defense that it had a license to use
`the compositions. (Motion at 21.) However, as Unichappell points
`out, it is Unichappell’s copyright claims, not Modrock’s defense,
`that gives this court exclusive jurisdiction over the action.
`Effects Associates, Inc. v. Cohen, 817 F.2d 72, 73 (9th Cir. 1987)
`(“a claim ‘arises under’ federal law for purposes of federal
`question jurisdiction on the basis of a well-pleaded complaint, not
`from anticipation of possible affirmative defenses”).
`It is true, as Modrock appears to note, that “a case does not
`arise under the federal copyright laws ... merely because the
`subject matter of the action involves or affects a copyright.”
`Topolos v. Caldewey, 698 F.2d 991, 993 (9th Cir. 1983). An action
`“arises under” the Copyright Act “if and only if” (1) the complaint
`seeks a remedy expressly granted by the Copyright Act; (2) the
`complaint requires interpretation of the Copyright Act; or (3)
`federal principles should control the claims. Scholastic Entm't,
`Inc. v. Fox Entm't Grp., Inc., 336 F.3d 982, 986 (9th Cir. 2003)
`(citing T.B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir. 1964)).
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`Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 5 of 7 Page ID #:234
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`Here, this court plainly has subject matter jurisdiction. The
`case satisfies the first prong of the Harms test because
`Unichappell seeks relief expressly provided for under the Copyright
`Act, including injunctive relief in the form of a permanent
`injunction under 17 U.S.C. § 502, actual or statutory damages under
`17 U.S.C. § 504(b)-(c), and attorneys fees under 17 U.S.C. § 505.
`(See Complaint at 6-8.) The case also satisfies the second prong
`because it will inevitably require, at the least, some examination
`of the extent of the alleged unauthorized use of the compositions
`at issue in considering Unichappell’s claims for copyright
`infringement.
`This case is unlike Scholastic Entm't and Hanna-Barbera
`Prods., Inc. v. Screen Gems-EMI Music Inc., 829 F. Supp. 67
`(D.D.N.Y. 1993), on which Modrock relies, because it involves more
`than merely the question of ownership of a copyright or
`interpretation of a contract. In Scholastic Entm't, the Ninth
`Circuit upheld the district court’s finding that it lacked subject
`matter jurisdiction where, following the dismissal of copyright
`infringement claims, the only remaining issue was the validity of
`the termination of a contract. See Scholastic Entm't, 336 F.3d at
`982, 989. Likewise, in Hanna-Barbera Prods., the district court
`determined that it lacked subject matter jurisdiction where it
`found that the “core claim [was] for breach of contract, and only
`incidentally for copyright infringement.” Hanna-Barbera Prods.,
`Inc., 829 F. Supp. at 71. In the present case, the matter of an
`alleged license appears only as a defense to Plaintiff
`Unichappell’s suit, which solely asserts claims for copyright
`infringement.
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`Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 6 of 7 Page ID #:235
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`III. The Court’s Inherent Power to Manage Its Docket
`As an alternative ground for its motion, ModRock contends that
`the court should stay the instant case using its inherent authority
`to manage its docket under Landis v. North Am. Co., 299 U.S. 248
`(1936) and its progeny.
`“The power to stay proceedings is incidental to the power
`inherent in every court to control the disposition of the causes on
`its docket with economy of time and effort for itself, for counsel,
`and for litigants.” Landis, 299 U.S. at 254. However, the court’s
`inherent power is not without limits. One such limit is the rule
`announced by the Ninth Circuit in Minucci, as discussed above,
`prohibiting district courts from staying actions, such as the
`present one, where the sole causes of action are within its
`exclusive jurisdiction. See Krieger v. Atheros Commc'ns, Inc., 776
`F. Supp. 2d at 1058 (Under Minucci,“district courts lack discretion
`to stay proceedings as to claims within exclusive federal
`jurisdiction.”) Indeed, the authority allowed under Landis cannot
`
`///
`///
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`Case 2:14-cv-02382-DDP-PLA Document 18 Filed 06/10/14 Page 7 of 7 Page ID #:236
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`be read without reference to the limitation imposed by Minucci,
`because doing so would render Minucci meaningless. For the reasons
`stated in the previous subsection, this court lacks authority to
`stay the action under Minucci.1
`
`IT IS SO ORDERED.
`Dated: June 10, 2014
`
`DEAN D. PREGERSON
`United States District Judge
`
`1 Even were the court to have the discretion to stay the
`instant action under Landis, it would not do so because the Landis
`factors militate against granting of a stay. Most important, the
`court finds that “possible damage which may result from the
`granting of a stay,” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th
`Cir. 1962) (citing Landis, 299 U.S. at 254–55), in the form of the
`delay of unknown duration that Unichappell will experience in
`pressing its claims and obtaining relief, weighs strongly against a
`stay.
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