Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 1 of 8 Page ID#3901
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`UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`__________________________
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`CATHERINE PUETZ, M.D.,
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`Plaintiff,
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`v.
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`SPECTRUM HEALTH HOSPITALS,
`KEVIN SPLAINE, and
`JEANNE ROODE,
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`Defendants.
`______________________________/
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`Case No. 1:14-CV-275
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`HON. GORDON J. QUIST
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`OPINION REGARDING
`SUBJECT MATTER JURISDICTION
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`On April 24, 2015, the Court issued an Order to Show Cause Regarding Jurisdiction, which
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`directed the parties to address two jurisdictional issues, namely, why Plaintiff’s claim for declaratory
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`relief set forth in Count Four of her complaint alleges a case of actual controversy as required for
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`Article III jurisdiction under the Declaratory Judgment Act and why Count Four, which requests a
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`declaration that the “copyright on any and all Observation Unit materials belongs to her and she is
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`the lawful owner [of such materials],” (dkt. # 1 at Page ID# 25, ¶ 112), presents a federal claim that
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`arises under the Copyright Act. Pursuant to the April 24, 2015 Order, Plaintiff and Defendants have
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`filed responses addressing the specified issues. Having considered the parties’ responses, for the
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`following reasons, the Court concludes that it lacks subject matter jurisdiction over this case because
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`Plaintiff’s request for a declaratory judgment of ownership of copyrighted materials does not invoke
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`federal question jurisdiction under the Copyright Act. Therefore, Plaintiff’s complaint will be
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`dismissed without prejudice.
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`I. BACKGROUND
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`Plaintiff is a doctor board certified by the American Board of Internal Medicine and the
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`American Board of Emergency Medicine. (Id. at Page ID #3, ¶ 7.) Between 1999 and 2013,
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 2 of 8 Page ID#3902
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`Plaintiff had admission privileges in emergency services and observation medicine at Defendant
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`Spectrum Health Hospitals (SHH) through her employment with Emergency Care Specialists, an
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`independent contractor that provides emergency services for certain SHH facilities. (Id. at Page
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`ID##3–4, ¶¶ 8–9.) During her years at SHH, Plaintiff held various medical positions, including
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`Associate Medical Director of Observation Medicine, Associate Medical Director of
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`ED/Cardiovascular Services, Clinical Advisor of Emergency Medical Observation, and Clinical
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`Advisor in Pediatrics. (Id. at Page ID#4, ¶ 10.)
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`Plaintiff alleges that, independent of her duties and services that she provided to SHH, she
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`developed various materials in observational medicine for use in evaluating patients for transfer to
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`in-patient, observation, or discharge, and developed treatment protocols and order sets relating to
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`treatment of children in an observational unit. Plaintiff alleges that she developed such materials
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`on her own personal time, without use of SHH’s facilities or resources. (Id. at Page ID##4–5, ¶¶
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`11, 13.) Plaintiff claims that, for financial reasons, SHH officials had historically rejected the
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`concept of observational medicine and did not endorse it, but SHH eventually viewed Plaintiff as
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`a competitor and took a series of steps designed to restrict her ability to compete, including the
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`insertion of an intellectual property clause in her Clinical Advisor contract and attempts to take
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`control of her materials and license them in SHH’s name. (Id. at Page ID##7–8, ¶¶ 23–25.) Plaintiff
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`alleges that once SHH discovered the demand for Plaintiff’s literature and materials on observational
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`medicine by other hospitals, SHH reversed course and sought to distribute Plaintiff’s materials as
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`its own. After obtaining a copy of Plaintiff’s pamphlet, SHH asserted that it had total control over
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`the concept of observation units and associated materials, and insisted that it could prohibit Plaintiff
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`from consulting with other hospitals on the topic of observation units. (Id. at Page ID##8–9, ¶¶
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`30–34.)
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`On August 5, 2013, Plaintiff signed onto Facebook and saw a picture of a female’s backside,
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`posted by a nurse. Plaintiff suspected that the picture was of a woman whom Plaintiff had seen in
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 3 of 8 Page ID#3903
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`public and who had been treated on occasion in SHH’s emergency department. Plaintiff wrote in
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`the comment area, “OMG. Is that TB?” (Id. at Page ID#10, ¶¶ 38–39.) After the nurse’s posting
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`was reported, SHH conducted an investigation. Some of the employees involved were fired, but
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`others were not. Although Plaintiff was initially disciplined, SHH ultimately banned her from all
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`of its facilities. Plaintiff alleges that, although SHH claims it banned her from its hospitals solely
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`because of the Facebook incident, it “exaggerated the effect of Plaintiff’s mistake and inflated the
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`discipline to justify the termination of her appointments and to gain greater control over her
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`Intellectual Property.” (Id. at Page ID#15, ¶ 61.)
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`On March 14, 2014, Plaintiff filed a six-count complaint against Defendants SHH, Kevin
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`Splaine, and Jeanne Roode, alleging claims of defamation, false light invasion of privacy, breach
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`of contract and the covenant of good faith and fair dealing, declaratory judgment-intellectual
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`property ownership, and tortious interference with business expectancy (two counts). For purposes
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`of subject matter jurisdiction, Plaintiff alleged that the Court has jurisdiction over the case because
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`Plaintiff’s claims arise under the Copyright Act, 17 U.S.C. § 101 et seq. (Id. at Page ID#3, ¶ 5.)
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`Although Plaintiff alleged that her claims arise under the Copyright Act, in truth, the only claim that
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`could even arguably arise under the Copyright Act is her claim in Count Four seeking “a declaratory
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`judgment that she is the owner of the copyrighted materials,” because all of Plaintiff’s other claims
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`arise under state law.
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`II. DISCUSSION
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`“[F]ederal courts are courts of limited jurisdiction and have a continuing obligation to
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`examine their subject matter jurisdiction throughout the pendency of every matter before them.”
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`In re Wolverine Radio Co., 930 F.2d 1132, 1137 (6th Cir. 1991); see also Ruhrgas AG v. Marathon
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`Oil Co., 526 U.S. 574, 583, 119 S. Ct. 1563, 1570 (1999) (“[S]ubject-matter [jurisdiction]
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`delineations must be policed by the courts on their own initiative.”). Accordingly, this Court may
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`only adjudicate claims “that (1) are within the judicial power of the United States, as defined in the
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 4 of 8 Page ID#3904
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`Constitution, and (2) that have been entrusted to them by a jurisdictional grant by Congress.” Chase
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`Bank USA, N.A. v. City of Cleveland, 695 F.3d 548, 553 (6th Cir. 2012) (internal quotation marks
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`omitted). The party asserting federal jurisdiction bears the burden of proving that subject-matter
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`jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S. Ct. 1673,
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`1675 (1994). Subject-matter jurisdiction must exist at the time the complaint was filed. Klepper
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`v. First Am. Bank, 916 F.2d 337, 340 (6th Cir. 1990).
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`Pursuant to 28 U.S.C. § 1338(a), “[t]he district courts shall have original jurisdiction of any
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`civil action arising under any Act of Congress relating to . . . copyrights . . . .” “However, it is well-
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`established that not every complaint that refers to the Copyright Act arises under that law for
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`purposes of § 1338(a).” Perry v. Broadcast Music Inc., 23 F. App’x 210, 211 (6th Cir. 2001)
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`(internal quotation marks omitted). To determine whether subject-matter jurisdiction exists under
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`the Copyright Act, federal courts often apply the Second Circuit’s test articulated in T.B. Harms Co.
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`v. Eliscu, 339 F.2d 823 (2d Cir. 1964). Under the T.B. Harms test, an action “arises under” the
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`Copyright Act
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`if and only if the complaint is for a remedy expressly granted by the Act, e.g., a suit
`for infringement or for the statutory royalties for record reproduction, or asserts a
`claim requiring construction of the Act, . . . or, at the very least and perhaps more
`doubtfully, presents a case where a distinctive policy of the Act requires that federal
`principles control the disposition of the claim.
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`Id. at 828 (internal citation omitted). The T.B. Harms court explained that not all things copyright
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`are included within the jurisdiction of federal courts. “Just as with western land titles, the federal
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`grant of . . . a copyright has not been thought to infuse with any national interest a dispute as to
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`ownership or contractual enforcement turning on the facts or on ordinary principles of contract law.”
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` Id. at 826. Based on this observation, the court concluded that the dispute at issue was solely one
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`of ownership of the copyright and did not present any significant questions under the Copyright Act.
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`The plaintiff’s claim for a declaration regarding ownership of copyrights was thus not within the
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`federal court’s jurisdiction. Id. at 826–27.
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 5 of 8 Page ID#3905
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`The Ninth Circuit has described the test set forth in T.B. Harms as “essentially a reiteration
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`of the ‘well-pleaded complaint’ rule.” Scholastic Entm’t, Inc. v. Fox Entm’t Grp., Inc., 336 F.3d
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`982, 986 (9th Cir. 2003). Under that rule, a complaint that alleges solely state law claims is not
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`within a federal court’s original jurisdiction, even if the complaint asserts that federal law deprives
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`the defendant of a defense he may raise or that a federal defense the defendant may raise does not
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`defeat the plaintiff’s claim. Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10,
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`103 S. Ct. 2841, 2846–47 (1983).
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`Because Count Four is framed as a request for declaratory relief under the Declaratory
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`Judgment Act based on federal question jurisdiction, the parties’ positions are reversed, and the
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`Court must consider the issue of jurisdiction from the perspective of the defendant’s hypothetical
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`claim. See Medtronic, Inc. v. Mirowski Family Ventures, LLC, __ U.S. __, 134 S. Ct. 843, 848
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`(2014) (“[F]ederal courts, when determining declaratory judgment jurisdiction, often look to the
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`character of the threatened action.” (internal quotation marks omitted)). Thus, the proper inquiry
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`is “if the declaratory judgment defendant brought a coercive action to enforce its rights, [would] that
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`suit necessarily present a federal question[?]” Franchise Tax Bd. 463 U.S. at 19, 103 S. Ct. at 2851.
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`In other words, this Court must look to the face of Plaintiff’s well-pleaded complaint to determine
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`whether any coercive action that SHH might have brought to enforce its rights would necessarily
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`present a federal question. New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 329 (5th
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`Cir. 2008); see also GNB Battery Techs., Inc. v. Gould, Inc., 65 F.3d 615, 619 (7th Cir. 1995) (“In
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`declaratory judgment cases, the well-pleaded complaint rule dictates that jurisdiction is determined
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`by whether federal question jurisdiction would exist over the presumed suit by the declaratory
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`judgment defendant.”).
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`Because the Declaratory Judgment Act does not provide an independent basis for federal subject matter
`jurisdiction, the court must have an independent basis for jurisdiction, such as diversity of citizenship or a federal
`question. Heydon v. MediaOne of Se. Mich., Inc., 327 F.3d 466, 470 (6th Cir. 2003).
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 6 of 8 Page ID#3906
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`In Severe Records, LLC v. Rich, 658 F.3d 571 (6th Cir. 2011), the plaintiffs filed a complaint
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`that included a claim for copyright infringement and a claim for a declaratory judgment seeking a
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`declaration identifying the authors of certain sound recordings and the underlying composition for
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`the musical works and declaring that one of the defendants was not an author of one of the
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`compositions. The plaintiffs alleged that, prior to the lawsuit, the defendants sent cease and desist
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`letters that accused the plaintiffs of copyright infringement. In response, the plaintiffs asserted that
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`they were entitled to exploit the songs for commercial use as co-owners because one of the plaintiffs
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`was a co-author. The Sixth Circuit held that the plaintiffs failed to state a claim for copyright
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`infringement, but concluded that the district court erred in concluding that it lacked jurisdiction over
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`the plaintiffs’ declaratory judgment claim, which the court characterized as a response “to the
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`numerous cease-and-desist letters that Plaintiffs received from Defendants.” Id. at 580. The court
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`stated the test for determining jurisdiction as follows:
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`[I]n the context of a declaratory judgment action, the normal position of the parties
`is reversed; therefore, we do not look to the face of the declaratory judgment
`complaint in order to determine the presence of a federal question. Instead, this
`court must determine whether or not the cause of action anticipated by the
`declaratory judgment plaintiff arises under federal law. Our inquiry is thus whether,
`absent the availability of declaratory relief, the instant case could nonetheless have
`been brought in federal court. To do this, we must analyze the assumed coercive
`action by the declaratory judgment defendant. Federal question jurisdiction exists
`in a declaratory judgment action if the plaintiff has alleged facts in a well-pleaded
`complaint which demonstrate that the defendant could file a coercive action arising
`under federal law.
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`Id. at 580–81 (internal quotation marks and citations omitted). The court distilled the inquiry into
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`two questions: (1) whether the defendants could have sued the plaintiffs for copyright infringement
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`under the theory that they were not the authors or owners of the works in question; and (2) whether
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`such an action would have arisen under federal law. Id. at 581. The court described the answer to
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`the first question as “easy,” because the defendants had threatened to sue the plaintiffs for copyright
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`infringement on numerous occasions. Id. The court found the answer to the second question more
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`difficult, but nonetheless concluded that such a claim would have arisen under federal law. The
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 7 of 8 Page ID#3907
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`court acknowledged that a claim concerning copyright ownership based on state-law principles, such
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`as contract, does not “arise under” the Copyright Act merely because it involves a copyrighted work.
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`Id. (quoting Cambridge Literary Props., Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co. Kg., 510
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`F.3d 77, 81 (1st Cir. 2007)). However, it noted that “a question of authorship, rather than
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`ownership, does arise under the Copyright Act,” and concluded that the plaintiffs’ request for
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`declaratory relief “undeniably” sought a declaration of authorship of the sound recordings and
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`musical compositions based on the defendants’ numerous cease-and-desist letters attached to the
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`amended complaint, which suggested a dispute over authorship. Id. at 581–82.
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`Turning to the first of the two questions the Sixth Circuit posed in Severe Records,
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`LLC—whether SHH could have asserted a claim against Plaintiff for copyright infringement under
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`the theory that Plaintiff was not an author or owner of the alleged copyrighted material—the answer
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`is no. Unlike the plaintiff in Severe Records, LLC, in the instant case, Plaintiff does not allege that
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`SHH ever sent her a cease-and-desist letter or otherwise threatened to sue her for copyright
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`infringement. Instead, Plaintiff alleges that SHH took a number of steps designed to restrict her
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`ability to compete, including imposing an intellectual property clause in her Clinical Advisor
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`contract, trying to take control of her materials and license them in its own name, opposing her
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`development of a consulting business, and harshly punishing her for the Facebook incident. (Dkt.
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`# 1 at Page ID##7–8, ¶ 25; see also id. at Page ID#27, ¶ 126 (“After learning of third parties [sic]
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`inquiries about Plaintiff’s copyrighted materials, Spectrum took a stronger interest in her
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`Observation Unit and materials. It initiated discussions of distribution and marketing of Observation
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`Medicine protocols and tried to control the materials that Plaintiff had created that were part of her
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`intellectual property.”). None of this relates to copyright infringement. Instead, Plaintiff’s
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`allegations show that, to the extent a dispute existed, it concerned ownership and control of the
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`observation medicine materials that Plaintiff created—whether the materials that Plaintiff created
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`were subject to the intellectual property clause in Plaintiff’s Clinical Advisor agreement. (Id. at
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`Case 1:14-cv-00275-GJQ Doc #78 Filed 06/26/15 Page 8 of 8 Page ID#3908
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`Page ID#27, ¶ 123.) Regardless, Plaintiff has not alleged any facts showing that SHH had any basis
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`for a coercive claim against Plaintiff based on the alleged ownership dispute.2
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`Even assuming that the Court could answer the first question in the affirmative, it would
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`have to answer the second question in the negative—any possible coercive claim that SHH might
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`have would not arise under federal law because the dispute boils down to ownership on the basis of
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`contract. In contrast to Severe Records, LLC, Plaintiff’s allegations do not reveal a dispute
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`concerning authorship. Plaintiff alleges that she, alone, authored the materials at issue. Plaintiff
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`does not allege that SHH authored, or claimed to have authored, the materials. In fact, Plaintiff’s
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`request for declaratory relief does not request a declaration pertaining to authorship, but instead is
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`limited solely to a declaration that “she is the owner of the copyrighted materials.” (Id. at Page
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`ID#29, ¶ 136.)
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`Accordingly, this Court lacks subject matter jurisdiction because Plaintiff’s declaratory
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`judgment claim does not arise under the Copyright Act.3
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`An Order consistent with this Opinion will enter.
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`Dated: June 26, 2015
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` /s/ Gordon J. Quist
`GORDON J. QUIST
`UNITED STATES DISTRICT JUDGE
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`2
`Plaintiff’s response to the Court’s Order to Show Cause Regarding Jurisdiction likewise shows that SHH did
`not have a coercive claim. Plaintiff admits that “Spectrum has not commenced suit or explicitly threatened enforcement
`actions.” (Dkt. # 77 at Page ID#3840.) Plaintiff states that “Spectrum has required its personnel to impose the Spectrum
`copyright on Plaintiff’s Observation Materials . . . [which] demonstrates an affirmative act of seizing the materials and
`publicly making a claim for the copyright,” (id. at Page ID##3840–41), yet, such activity does not provide a claim to
`SHH.
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`Plaintiff’s assertion that a dispute whether a work was made for hire gives rise to a federal question under the
`Copyright Act cannot support the exercise of jurisdiction in this case. While the statement is no doubt an accurate
`statement of the law, see JustMed, Inc. v. Byce, 600 F.3d 1118, 1124 (6th Cir. 9th Cir. 2010), the work-for-hire doctrine
`would be a defense that SHH would raise that would not provide SHH a coercive claim against Plaintiff. Moreover,
`Plaintiff does not allege that SHH ever asserted the work-for-hire doctrine as a basis for its ownership.
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