Case 2:14-cv-09237-CAS-RZ Document 56 Filed 05/04/15 Page 1 of 13 Page ID #:186
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`CHRISTINA A. SNYDER
`Present: The Honorable
`N/A
`Laura Elias
`Catherine Jeang
`Tape No.
`Court Reporter / Recorder
`Deputy Clerk
`Attorneys Present for Defendants:
`Attorneys Present for Plaintiffs:
`Robert Besser
`Julie Abelev
`DEFENDANT CONCORD MUSIC GROUP, LLC’S MOTION
`TO DISMISS (Dkt. No. 53, filed March 31, 2015)
`
`Proceedings:
`
`I.
`
`INTRODUCTION
`
`On December 2, 2014, plaintiff Donald Hepburn (“plaintiff” or “Hepburn”) filed
`this action against defendants Concord Music Group, L.L.C. (“Concord”); Universal
`Music Group, Inc.; Sony Music Entertainment, Inc.; Third Story Music, Inc. / Six Palms
`Music Corp.; Rykomusic, Inc.; Ryko Corporation; and Does 1 through 5. Dkt. No. 1
`(Compl.). Concord is the only remaining defendant.1 Plaintiff seeks declaratory relief
`and an accounting concerning Concord’s interests in certain copyrights. The complaint
`asserts subject matter jurisdiction on the bases of federal question and diversity
`jurisdiction. Id. ¶¶ 9–10.
`
`On March 31, 2015, Concord filed a motion to dismiss the complaint on the
`grounds that (1) this Court lacks subject matter jurisdiction over the action, and (2) the
`complaint fails to state a claim. Dkt. No. 53. Hepburn opposed the motion on April 13,
`2015. Dkt. No. 54. Concord filed a reply on April 20, 2015. Dkt. No. 55. Concord’s
`
`1On February 25, 2015, Hepburn stipulated to dismiss Third Story Music Inc. / Six
`Palms Music Corp., Ryko Corporation, and Rykomusic, Inc. Dkt. Nos. 45, 46. On
`March 30, 2015, Hepburn stipulated to dismiss Sony Entertainment, Inc., Dkt. No. 51,
`and filed a notice of dismissal as to Universal Music Group, Inc., Dkt. No. 52. Hepburn
`represents that each of these defendants “has voluntarily provided an accounting of
`sorts,” and that as Hepburn “received information about his royalties and ownership
`interests, he dismissed the defendants without prejudice.” Opp’n at 1.
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`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`motion is presently before the Court. After considering the parties’ arguments, the Court
`finds and concludes as follows.
`
`II.
`
`BACKGROUND
`
`A.
`
`Factual Allegations of the Complaint
`
`Hepburn is a keyboardist and songwriter who was a member of a musical band
`called “Pleasure,” which was active from 1972 to 1982. Compl. ¶ 13. In 1974, the
`band’s producer, Wayne Henderson, entered the band into a “Record Company
`Agreement” with a company called Fantasy Records. Id. ¶ 21. Pleasure recorded six
`albums with Fantasy Records, and one album with RCA Records. Id. ¶ 13. Hepburn
`alleges that he “is the author or co-author” of Pleasure songs referenced in the complaint.
`Id. He attaches “[a] selection” of these songs in an exhibit to the complaint, and names in
`the complaint additional songs that have been “sampled by other artists.” See id. ¶ 14 &
`Attach. A.
`
`Hepburn alleges that in the years since Pleasure broke up, he has “received few
`royalty payments for his compositions,” even though the compositions have been used in
`media outlets and sampled by other artists. Id. ¶ 14. Hepburn further alleges that several
`albums containing Pleasure music have recently been released. For example, Hepburn
`asserts that in 2006, Fantasy Records—which he alleges to be “the predecessor of
`Concord”—released an album compilation entitled Dust Yourself Off/Accept No
`Substitutes that includes Pleasure songs. Id. Hepburn also submits that in September
`2013, Concord re-released several Pleasure songs on the album Glide: The Essential
`Selection 1975–1982. Id. ¶ 16. Hepburn alleges that the Glide album was released under
`the Decision Records label, which “may be an affiliate of Fantasy Records.” Id.
`Hepburn contends that all of these “albums and songs were published without
`[Hepburn’s] input,” and that “he has not received any royalties from them.” Id. ¶ 17.
`With regard to royalty statements provided to him by Fantasy Records, as well as checks
`issued by publishing agencies and other documents concerning royalties, plaintiff asserts
`that these documents “do not specify the titles, amounts sold, or the sources for the
`amounts,” making it “difficult for Hepburn to trace the ownership and licensing of his
`individual songs, as well as monitor the songs’ status and commercialization.” Id. ¶ 19.
`
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`Hepburn alleges that some of the companies to have owned rights in Pleasure’s
`music have undergone mergers and acquisitions that complicate the current state of
`ownership of rights to the Pleasure songs. For example, he asserts that Fantasy Records
`completed a merger and transferred its catalogue to Concord. Id. ¶ 24. Hepburn
`contends: “In view of the many entities that have worked with Pleasure, published the
`band’s compositions, or held royalty privileges, Hepburn lacks sufficient information and
`access to secure his rights, requiring the cooperation and participation of” the defendants
`named in his complaint. Id. ¶ 25. Plaintiff alleges that the defendants or their assignees
`“have and are continuing to receive payments from the reproduction, use or other
`exploitation of the compositions performed and/or written by Hepburn as a member of
`Pleasure,” as “evidenced by the extensive sampling of Pleasure songs and the recent
`release of the Glide album without Hepburn’s consent.” Id. ¶ 32.
`
`B.
`
`Hepburn’s Claims for Relief
`
`In his first claim for relief, Hepburn alleges that an actual controversy exists
`between him and defendants “concerning who has an ownership interest in the copyrights
`[and] who must provide Hepburn an accounting of royalties and profits.” Id. ¶ 27. He
`asserts that various “mergers, transfers, and shell companies” have “made tracking the
`Pleasure songs’ chain of title highly difficult,” so that only defendants “are in a position
`to clarify how and why they respectively received ownership, control, or management
`rights.” Id. Hepburn alleges that the “issuance of declaratory relief by this Court of
`which of the [defendants] should provide an accounting under the Copyright Act, due to
`an ownership, licensee, transferee, or management interest, will terminate the existing
`controversy and allow Hepburn to move forward with infringement actions against the
`appropriate parties.” Id. ¶ 28. To this end, Hepburn contends that the Court “must
`declare” the defendants’ “status as assignees, transferees, licensees, and managers.” Id. ¶
`31. Hepburn seeks judicial declarations of (1) “the respective interests of each Defendant
`in the relevant Pleasure copyrights,” and (2) “which Defendants the Plaintiff may pursue
`in a copyright infringement action for the Pleasure compositions sampled and featured in
`the newly released Glide album.” Id. at 9.
`
`In his second claim for relief, Hepburn alleges that he “has a right to demand an
`accounting from the listed [defendants] under the Copyright Act,” but “lacks sufficient
`information to know the nature of” those entities’ respective interests, and that “[g]aining
`such information is the purpose of this accounting action.” Id. ¶ 30. In the alternative,
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`Hepburn seeks an accounting under California common law. Id. ¶ 31. He alleges
`“improper use of Pleasure compositions in the distribution of the Glide album” and other
`acts, but states that “tracking the movement of Hepburn’s compositions and [the parties’]
`various interests [is] difficult,” and that an “accounting is necessary to determine the
`exact amount of all monies, revenues, profits, and property and the proceeds thereof
`received by the [defendants] and owed to Hepburn.” Id. ¶ 33. He seeks an accounting of
`sums and money received by each defendant in connection with the exploitation of
`Pleasure compositions listed in his complaint, as well as an explanation from each
`defendant of “the chain of title” for those compositions. Id. at 9–10.
`
`III. LEGAL STANDARD
`
`A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) raises the
`objection that a federal court lacks subject matter jurisdiction. This defect may exist
`despite the formal sufficiency of the allegations in the complaint. T.B. Harms Co. v.
`Eliscu, 226 F. Supp. 337, 338 (S.D.N.Y. 1964), aff'd 339 F.2d 823 (2d Cir. 1964). Once
`a Rule 12(b)(1) motion has been raised, the burden is on the party asserting jurisdiction.
`Sopcak v. N. Mountain Helicopter Serv., 52 F.3d 817, 818 (9th Cir. 1995); Ass’n of Am.
`Med. Coll. v. United States, 217 F.3d 770, 778-79 (9th Cir. 2000). If jurisdiction is based
`on a federal question, the pleader must show that he has alleged a claim under federal law
`and that the claim is not frivolous. See 5B Charles A. Wright & Arthur R. Miller, Federal
`Practice and Procedure, § 1350, pp. 211, 231 (3d ed. 2004). If jurisdiction is based on
`diversity of citizenship, the pleader must show complete diversity and that the asserted
`claim places more than $75,000 in controversy.
`
`IV. ANALYSIS
`
`Concord argues that the complaint should be dismissed for lack of subject matter
`jurisdiction and for failure to state a claim. Because a federal court “may not hypothesize
`subject-matter jurisdiction for the purpose of deciding the merits,” Ruhrgas AG v.
`Marathon Oil Co., 526 U.S. 574, 577 (1999), the Court first analyzes whether it has
`jurisdiction over this action. Determining that it lacks jurisdiction, the Court does not
`consider whether the complaint states a claim under Rule 12(b)(6).
`
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`A.
`
`The Court Lacks Subject Matter Jurisdiction.
`
`Hepburn alleges that this Court has both federal question and diversity jurisdiction
`over his action. Compl. ¶¶ 8–9. The Court addresses each ground in turn.
`
`1.
`
`This Action Does Not Arise Under Federal Law.
`
`The Declaratory Judgment Act, 28 U.S.C. § 2201, “permits a federal court to
`‘declare the rights and other legal relations' of parties to a case of actual controversy.”
`Societe de Conditionnement en Aluminium v. Hunter Eng'g Co., Inc., 655 F.2d 938, 942
`(9th Cir. 1981). There must be an independent jurisdictional basis to bring an action
`under the Declaratory Judgment Act, which “does not itself confer federal subject matter
`jurisdiction.” Fidelity & Cas. Co. v. Reserve Ins. Co., 596 F.2d 914, 916 (9th Cir. 1979).
`Additionally, there must be an actual Article III case or controversy between the parties.
`Hunter Eng’g Co., 655 at 942.
`
`Hepburn alleges that this action is “based solely on Copyright Act principles, not
`state contract law.” Id. ¶ 8. Federal courts have exclusive jurisdiction over cases “arising
`under” the Copyright Act. 28 U.S.C. § 1338(a). “However, 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. Caldeway, 698 F.2d 991, 993 (9th Cir. 1983); see, e.g.,
`Danks v. Gordon, 272 F. 821, 827 (2d Cir. 1921) (holding suit involving copyright
`royalties owed by contract did not arise under federal law). To determine whether a case
`“arises under” the Copyright Act, the Ninth Circuit has adopted the T.B. Harms test,
`under which a district court has jurisdiction only if: “(1) the complaint asks for a remedy
`expressly granted by the Copyright Act; (2) the complaint requires an interpretation of
`the Copyright Act; or (3) federal principles should control the claims.” Scholastic
`Entm’t, Inc. v. Fox Entm't Group, Inc., 336 F.3d 982, 986 (9th Cir. 2003).
`
`Applying this test, Hepburn’s claims for declaratory relief and accounting do not
`arise under the Copyright Act. First, Hepburn does not seek a remedy “expressly
`granted” by the Copyright Act, as the text of that Act does not provide for declaratory
`relief or an accounting of the type Hepburn requests. See 17 U.S.C. §§ 502–05 (listing
`
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`civil remedies for infringement).2 Second, the complaint does not indicate that it will
`require interpretation of the Copyright Act; rather, the relief Hepburn requests involves
`ascertaining and untangling a complicated “chain of title” and determining “how and why
`[defendants] respectively received ownership, control, or management rights” through a
`series of “mergers, transfers, [] shell companies,” and “royalty privileges.” See Compl.
`¶¶ 25, 27. Finally, no “distinctive policy of the Act requires that federal principles
`control the disposition of the claim.” T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d
`Cir. 1964). “The general interest that copyrights, like all other forms of property, should
`be enjoyed by their true owner is not enough to meet this last test.” Id.
`
`The Court is not persuaded by Hepburn’s argument that his claim arises under the
`Copyright Act because he alleges ownership of copyrights based on co-authorship, and
`not by virtue of contract. Compl. ¶ 8; Opp’n at 8. Hepburn correctly notes that “a
`determination of copyright ownership based on a disputed allegation of co-authorship
`presents a federal question that arises under, and must be determined according to, the
`Copyright Act.” Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik, 510
`F.3d 77, 86 (1st Cir. 2007). However, the complaint does not seek a determination based
`on copyright law of a “disputed allegation of co-authorship.” Id. Rather, Hepburn seeks
`declarations of (1) “the respective interests of each Defendant in the relevant Pleasure
`copyrights,” and (2) “which Defendants the Plaintiff may pursue” in a yet-to-be-filed
`
`2Hepburn cites Taylor v. Merrick, 712 F.2d 1112 (7th Cir. 1983) for the
`proposition that he has a right to an accounting under the Copyright Act, 17 U.S.C.
`§ 504(b). Compl. ¶ 30. But the portion of Taylor that he cites states: “[i]t is too much to
`ask a plaintiff who has proved infringement also to do the defendant’s cost accounting.”
`712 F.2d at 1121–22 (emphasis added). This portion of Taylor, and the statute Heburn
`cites, discuss the duty of a defendant found liable for infringement to “prove his or her
`deductible expenses and the elements of profit attributable to factors other than the
`copyrighted work,” after the infringement plaintiff “present[s] proof [] of the infringer’s
`gross revenue.” 17 U.S.C. § 504(b). These authorities are inapposite because Hepburn
`has not even asserted a claim for copyright infringement, much less presented proof of
`Concord’s gross revenue; indeed, he explicitly states that he wishes to initiate separate,
`future “infringement actions” once this case has concluded. Compl. ¶ 28. That such a
`future proceeding might seek statutory royalties and damages does not change the nature
`of the remedies sought in this case.
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`“copyright infringement action” involving those copyrights. Compl. at 9. Determining
`what, if any, interests Concord has in the Pleasure copyrights will require the
`interpretation of contracts and other chain of title documentation, not the Copyright Act.
`Indeed, Hepburn expressly states in his complaint that “the Court must declare” the
`defendants’ “status as assignees, transferees, licensees, and managers” of the various
`copyrights. Id. ¶ 31.
`
`As the Ninth Circuit has stated:
`
`If [the] claim involves copyright infringement or other matter
`directly related to the interpretation and enforcement of the
`Copyright Act, jurisdiction has been upheld. On the other hand,
`where it has been determined that the claim is essentially for
`some common law or state-created right, most generally for a
`naked declaration of ownership or contractual rights,
`jurisdiction has been declined, even though the claim might
`incidentally involve a copyright or the Copyright Act.
`
`Topolos, 698 F.2d at 993 (quoting Royalty Control Corp. v. Sanco, Inc., 175 U.S.P.Q.
`641, 642 (N.D. Cal. 1972)). In deciding on which side of this line an action falls, courts
`look to “the ‘primary and controlling purpose’ of the suit, the ‘principal issue,’ the
`‘fundamental controversy,’ and the ‘gist’ or ‘essence’ of the plaintiff’s claim.” Id.
`(citations omitted); see also Peay v. Morton, 571 F. Supp. 108, 115 (M.D. Tenn. 1983)
`(finding no federal jurisdiction because “the ‘essence of the plaintiff’s claim’ is a
`declaratory judgment action to establish title to a work in statutory copyright”)
`
`Although Hepburn’s counsel has attempted to cast his claim for declaratory relief
`as relating to Hepburn’s ownership interest in portions of Hepburn’s opposition and at
`oral argument, the complaint itself only seeks declarations relating to the defendants’
`interests in the Pleasure songs, which plaintiff alleges must be determined by looking to
`complex “chain[s] of title” complicated by numerous “mergers and acquisitions” and the
`“many entities that have . . . held royalty privileges” in the songs at issue.3 Compl. ¶¶ 24,
`
`3Because the T.B. Harms test is essentially a restatement of the well-pleaded
`complaint rule, Scholastic Entm’t, 336 F.3d at 986, the claims alleged and the relief
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`25, 27, 31 & p. 9. Such an adjudication will not require interpretation of the Copyright
`Act, and does not arise under federal law. See Muse v. Mellin, 212 F. Supp. 315, 318
`(S.D.N.Y. 1962) (“The primary and controlling purpose of the [declaratory judgment]
`complaint is to secure an interpretation of the various assignments of the one-third
`interest. Of such suits the federal courts lack jurisdiction.”). This is so even if Hepburn’s
`own interest in the compositions arose by virtue of co-authorship rather than contractual
`transfer. See Rotardier v. Entm’t Co. Music Grp., 518 F. Supp. 919, 920–21 (S.D.N.Y.
`1981) (granting motion to dismiss declaratory and injunctive action for lack of federal
`jurisdiction because the principal issue was “who owns title to the copyright” of a
`musical composition, even though the plaintiff composed the musical piece at issue). In
`sum, this action does not “arise under” the Copyright Act so as to confer federal question
`jurisdiction.4
`
`2.
`
`Plaintiff Has Not Established A Sufficient Amount in Controversy to
`Establish Diversity Jurisdiction.
`
`Hepburn also alleges diversity jurisdiction under 28 U.S.C. § 1331(a)(1), which
`confers original jurisdiction in the district courts over civil actions between “citizens of
`different States” where the amount in controversy exceeds $75,000, exclusive of interest
`and costs. For diversity purposes, “a corporation shall be deemed to be a citizen of every
`State . . . by which it has been incorporated and of the State . . . where it has its principal
`place of business.” 28 U.S.C. § 1332(c)(1). Hepburn alleges (and Concord does not
`contest) that he resides in Bothell, Washington, and that Concord and all other named
`defendants are organized in and have principal places of business in states other than
`Washington. Thus, the requirement of complete diversity is met.
`
`sought in the complaint, not in plaintiff’s opposition papers, control. See Keith v.
`Scruggs, 507 F. Supp. 968, 970 (S.D.N.Y. 1981) (“Plaintiff attempts to distinguish [cases
`finding no federal jurisdiction] by listing various issues that may require construction of
`the copyright laws . . . . However, although plaintiff lists these potential issues in his
`brief, he does not allege the facts underlying them in his complaint.”).
`
`4This conclusion is bolstered by the fact that plaintiff has voluntarily dismissed the
`defendants who have provided an “accounting of sorts.” That “accounting” seems
`unlikely to have involved an interpretation of Hepburn’s rights under the Copyright Act.
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`Hepburn also alleges that the “amount in controversy, though yet unstated, is
`reasonably likely to exceed the requisite $75,000 due to Pleasure’s popularity as a source
`of song samples.” Id. ¶ 10. In an action seeking declaratory relief, “the amount in
`controversy is measured by the value of the object of the litigation.” Hunt v. Wash. State
`Apple Advert. Comm’n, 432 U.S. 333, 347 (1977). Ordinarily, the plaintiff’s good faith
`claim in the complaint that the amount in controversy exceeds $75,000 controls;
`however, “bare allegations of jurisdictional facts have been held insufficient to invest a
`federal court with jurisdiction.” St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d
`1250, 1253 (5th Cir. 1998) (internal quotation marks and brackets removed); see
`Morrision v. Allstate Indem. Co., 228 F.3d 1255, 1268 (11th Cir. 2000) (finding the
`amount in controversy not met, despite plaintiff’s allegation that it was, because the
`equitable relief requested had “no reasonably certain monetary value”). In this circuit,
`“[i]t has long been settled that the requirements of statutes predicating federal jurisdiction
`on the presence of a specified amount or value in controversy are not met by claims for
`relief not reducible to monetary statement.” See Whittemore v. Farrington, 234 F.2d 221,
`225 (9th Cir. 1956).
`
`Hepburn argues that “Concord’s actions in depriving him of royalty payments and
`eroding his ownership interest has a monetary value exceeding $75,000.” Opp’n at 6.
`That may be. But in an action seeking equitable relief, the amount in controversy is “the
`value of the particular and limited thing sought to be accomplished by the action.”
`Ridder Bros., Inc. v. Blethen, 142 F.2d 395, 399 (9th Cir. 1944). Here, Hepburn does not
`seek a declaration that Concord has infringed any copyright interest, and a resolution in
`Hepburn’s favor would not force Concord to pay Hepburn any sum, or do anything
`besides produce or summarize business records. Despite Hepburn’s bare allegation that
`the amount in controversy is “reasonably likely to” be met, the action before this Court
`does not place into controversy any amount reducible to a monetary value.
`
`Indeed, Hepburn’s own jurisdictional allegations show that the amount in
`controversy to which he refers is the amount that might be at stake in a separate
`proceeding. Hepburn alleges that the amount in controversy “though yet unstated, is
`reasonably likely to exceed the requisite $75,000 due to Pleasure’s popularity as a source
`of song samples.” Compl. ¶ 9. In context, this indicates that the value of a future suit,
`which plaintiff hopes to assert after the Court declares which defendants plaintiff “may
`pursue in a copyright infringement action,” id. at 9, may exceed $75,000 because of
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`widespread unauthorized use of the copyrighted compositions. This does not establish
`that “the value of the particular and limited thing sought to be accomplished” by this
`action exceeds $75,000. See Rapoport v. Rapoport, 416 F.2d 41, 43 (9th Cir. 1969) (“It
`is well settled that the amount in controversy requirement cannot be met by taking into
`account any collateral effect which may follow adjudication.”); Correspondent Servs.
`Corp. v. First Equities Corp., 442 F.3d 767, 769–70 (2d Cir. 2006) (finding jurisdictional
`amount not met in declaratory action despite argument that the claim was brought to
`avoid liability “in the approximate amount of $10 million,” because the actual “object of
`the litigation” was a certificate of deposit which had no value at the time of filing).
`Accordingly, plaintiff’s claim that his request for declaratory relief places more than
`$75,000 in controversy is too speculative and indefinite to support federal jurisdiction.5
`
`Nor can Hepburn’s accounting claim substantiate his allegation that the amount in
`controversy is “reasonably likely” to exceed $75,000. “Unless it also features a demand
`for damages or restitution, or the amount in question indisputably exceeds $75,000, a suit
`for accounting does not fall within diversity jurisdiction because the ‘amount in
`controversy’ is indeterminable.” A. Wallace Tashima & James M. Wagstafe, Federal
`Civil Procedure Before Trial, Calif. & 9th Cir. Eds. § 2:1841 (citing DiTolla v. Doral
`Dental IPA of New York, LLC, 469 F.3d 271, 277 (2d Cir. 2006)). For example, in
`DiTolla, the proponents of federal jurisdiction argued that although the plaintiff sought
`no damages, because he demanded an accounting of all amounts by which a large
`reimbursement fund had been funded and reduced, he had placed the amount of that fund
`in controversy. 469 F.3d at 272. Assuming that the fund itself exceeded the
`jurisdictional requirement, the Second Circuit found that the accounting claim did not
`place that amount (or any other measurable sum) in controversy. The court reasoned that
`the complaint sought “only an accounting, the results of which are presently unknown,”
`and that “no one [could] say how much money may ultimately be claimed by” the
`plaintiff. Id. at 276–77. The Court also finds instructive Sierp v. DeGreen Partners LP,
`
`5See also Gonzalez v. Fairgale Props. Co., N.V., 241 F. Supp. 2d 512, 517–18 (D.
`Md. 2002) (finding declaratory relief sought to be too speculative and immeasurable to
`satisfy the amount in controversy requirement, because the plaintiff if successful “would
`simply receive the opportunity to vote on the sale of [] land” rather than “receive a
`pecuniary gain,” and it was “speculative to conclude” that defendants might suffer a
`pecuniary loss of more than $75,000 in a subsequent lawsuit).
`CIVIL MINUTES - GENERAL
`CV-90 (06/04)
`
`Page 10 of 13
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`

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`Case 2:14-cv-09237-CAS-RZ Document 56 Filed 05/04/15 Page 11 of 13 Page ID #:196
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`No. CV-14-02353-PHX-DGC, 2015 WL 464338 (D. Ariz. Feb 4, 2015), in which the
`complaint sought a court order directing a partnership to produce certain records—similar
`to the “accounting” Hepburn seeks here. Id. at *1. Rejecting the argument that the
`amount in controversy exceeded $75,000 because of the possibility that, after obtaining
`the records, the plaintiffs would file civil claims against the partnership, the court
`reasoned:
`
`If Plaintiffs find evidence of wrongdoing, the inspection could
`result in civil claims that are worth more than $75,000. But
`deciding whether Plaintiffs will find evidence supporting civil
`claims, and how much those claims might be worth, is a
`speculative exercise. As another court explained, the “liberal
`standard for jurisdictional pleading is not a license for
`conjecture.”
`
`Sierp, 2015 WL 464338, at *2 (quoting Morrison, 228 F.3d at 1268).
`
`Here, Hepburn’s accounting claim cannot support an amount in controversy
`exceeding $75,000 because, regardless of how much Hepburn might seek in a later
`infringement action (if he files one), the relief actually requested—a statement of the
`revenue Concord has received from exploiting Pleasure songs, as well as an explanation
`of the chains of title relating to those songs—is irreducible to a monetary value. Put
`differently, the fact that an accounting might reveal that Hepburn could sue Concord for
`an amount exceeding $75,000 in a future proceeding does not mean that the present claim
`for an accounting places that amount in controversy. For these reasons, the Court
`concludes that it lacks subject matter jurisdiction.
`
`B.
`
`Hepburn’s Request for Declaratory Relief Does Not Present an Actual
`Case or Controversy Because Hepburn Seeks an Advisory Opinion.
`
`Independently of the lack of subject matter jurisdiction discussed above, the Court
`additionally concludes that Hepburn’s request for declaratory relief is improper because it
`seeks an advisory opinion. To determine whether an Article III case or controversy
`exists, “the question in each case is whether the facts alleged, under all the circumstances,
`show that there is a substantial controversy, between parties having adverse legal
`interests, of sufficient immediacy and reality to warrant the issuance of a declaratory
`CIVIL MINUTES - GENERAL
`CV-90 (06/04)
`Page 11 of 13
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`

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`Case 2:14-cv-09237-CAS-RZ Document 56 Filed 05/04/15 Page 12 of 13 Page ID #:197
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CIVIL MINUTES - GENERAL ‘O’ JS-6
`Case No.
`2:14-cv-09237-CAS(RZx)
`Date May 4, 2015
`Title
`DONALD HEPBURN v. CONCORD MUSIC GROUP, LLC, ET AL.
`
`judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). “The
`disagreement [underlying the declaratory action] must not be nebulous or contingent but
`must have taken on a fixed and final shape so that a court can see what legal issues it is
`deciding, what effect its decision will have on the adversaries, and some useful purpose
`to be achieved in deciding them.” Rhoades v. Avon Prods., Inc., 504 F.3d 1151, 1157
`(9th Cir. 2007) (brackets in original) (quoting Pub. Serv. Comm’n v. Wycoff, 344 U.S.
`237, 244 (1952)). This “case or controversy” requirement ensures that the court “does
`not render an impermissible advisory opinion.” Veoh Networks, Inc. v. UMG
`Recordings, Inc., 522 F. Supp. 2d 1265, 1268 (S.D. Cal. Nov. 14, 2007) (citin