Diagnostic Unit Inmate Council v. Films Inc.

• Decision Date: 08 July 1996
• Docket Number: 94-2917,Nos. 94-2867,s. 94-2867
• Citation: 88 F.3d 651
• Parties: 1996 Copr.L.Dec. P 27,542, 39 U.S.P.Q.2d 1371 DIAGNOSTIC UNIT INMATE COUNCIL; John Merrick; Eugene Issac Pitts; Jerry McFarland; Terry Tolliver; Solomon Eskew; Earl Thompson, Plaintiffs-Appellants, Arkansas Department of Correction, Involuntary Plaintiff, v. FILMS INCORPORATED; Swank Motion Pictures, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 651

88 F.3d 651

1996 Copr.L.Dec. P 27,542, 39 U.S.P.Q.2d 1371

DIAGNOSTIC UNIT INMATE COUNCIL; John Merrick; Eugene Issac

Pitts; Jerry McFarland; Terry Tolliver; Solomon

Eskew; Earl Thompson, Plaintiffs-Appellants, Arkansas Department of Correction, Involuntary Plaintiff, v. FILMS INCORPORATED; Swank Motion Pictures, Inc.,

Defendants-Appellees.

Nos. 94-2867, 94-2917.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 13, 1995.

Decided July 8, 1996.

Raymond R. Abramsom, Clarendon, AR, argued (Harold J. Evans, on the brief), for appellant.

Harvey Shapiro, New York City, argued (Gary Kaplan and Charles L. Schlumberger, on the brief), for appellee.

Before BOWMAN, JOHN R. GIBSON, and LOKEN, Circuit Judges.

LOKEN, Circuit Judge.

The Arkansas Department of Corrections ("ADC") shows videotaped movies to inmates in the common areas of its prisons. In 1985, an attorney representing motion picture copyright owners wrote ADC, warning that it would infringe owner copyrights to use videotapes licensed for home use only at these public performances. ADC has since contracted with appellees Films Inc. ("Films") and Swank Motion Pictures, Inc. ("Swank"), to provide videotaped movies that come with "public performance distribution rights."

Certain Arkansas inmates commenced this class action against Films and Swank seeking a declaratory judgment under the Copyright Act that in-prison showings of "home use only" rented movies do not infringe the owners' copyrights, either because prison showings are not "public performances" within the meaning of 17 U.S.C. §§ 101 and 106(4), or because such showings are "fair use" within the meaning of 17 U.S.C. § 107. The inmates believe that ADC could obtain a more desirable selection of movies at less cost by renting from local video stores. For example, the 1994 contract between ADC and Swank provided that Swank would supply 121 videotapes for a total annual cost of $9,600, whereas the parties have stipulated that ADC could rent a comparable number of "home use only" videotapes for an annual cost of about $2,200.

The district court ¹ initially dismissed the complaint for failure to state a legally cognizable claim, but we remanded with directions to consider whether ADC should be joined. Diagnostic Unit Inmate Council v. Motion Picture Ass'n of America, Inc., 953 F.2d 376, 379 (8th Cir.1992). On remand, ADC was joined as an involuntary plaintiff under Fed.R.Civ.P. 19(a). However, when ADC declined to take a position in the lawsuit, the district court again dismissed on the ground that there is no actual controversy. The inmates appeal. Counsel for ADC has advised this court that ADC "did not join with the Inmate Council in appealing the judgment of the district court and is, therefore, not an appellant in this case." Agreeing with the district court that ADC's refusal to participate means there is no actual controversy, we affirm.

1. The Declaratory Judgment Act authorizes federal courts to declare the rights of interested parties "[i]n a case of actual controversy." 28 U.S.C. § 2201. The requirement of an "actual controversy" is imposed by Article III of the Constitution. See Steffel v. Thompson, 415 U.S. 452, 458, 94 S.Ct. 1209, 1215, 39 L.Ed.2d 505 (1974). In general, an actual controversy is "a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941).

In patent and copyright cases, there is an actual controversy if "defendant in the declaratory judgment lawsuit has either expressly or impliedly charged the plaintiff with infringement." Sherwood Medical Indus., Inc. v. Deknatel, Inc., 512 F.2d 724, 727 (8th Cir.1975). The defendant copyright owner must have evidenced its intent to enforce a copyright, usually by a charge or threatened charge of infringement, such as the 1985 attorney letter to ADC. And the declaratory judgment plaintiff must have engaged in "present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity." BP Chemicals Ltd. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed.Cir.1993). In a copyright case, "plaintiff must show that it has actually published or is preparing to publish the material that is subject to the defendant's copyright [in a manner that] places the parties in a legally adverse position." Texas v. West Pub. Co., 882 F.2d 171, 175 (5th Cir.1989), cert. denied, 493 U.S. 1058, 110 S.Ct. 869, 107 L.Ed.2d 953 (1990); see also Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87, 90 (2d Cir.1963) ("where there is no actual manufacture, use or sale, and no immediate intention and ability to practice the invention, there is no justiciable [patent] controversy").

The inmates as declaratory judgment plaintiffs cannot satisfy this standard. True, the inmates have an indirect financial stake in the issue because ADC pays for movie rentals from an Inmate Welfare Fund generated by profits from commissaries sales to inmates and prison employees. However, while that Fund must be spent "for the general benefit of the inmates," Ark.Code Ann. § 12-29-107, ADC has total authority over all Fund expenditures and, more importantly, ADC has complete control over the renting and showing of videotaped movies at its prisons. Inmates may request certain movies, but they cannot rent movie videotapes for prison showings. The inmates do not, and cannot, engage in the activity that prompted the copyright owners' 1985 charge of infringement. Thus, there is no actual controversy between the inmates and defendants Films and Swank that would support Declaratory Judgment Act jurisdiction.

2. On remand, we directed the district court to "consider, after obtaining the views of the Attorney General of Arkansas, whether [ADC] should be joined." 953 F.2d at 379. ADC received the 1985 infringement letter, and it continues to rent and show videotaped movies in its prisons. If ADC credibly asserted a present intent to use home-use-only movies for these showings, it would have standing to seek a declaratory judgment that such activity would not infringe the owners' copyrights. However, though invited to join and later involuntarily joined in the action, ADC has steadfastly refused to take a position on these copyright issues. There is no other evidence in the record that Films, Swank, or any copyright owner objects to the way in which ADC is now obtaining and showing videotaped movies. Accordingly, there is no party plaintiff whose present activity, or intended present activity, could constitute infringement.

The inmates nonetheless suggest that ADC's joinder as an involuntary plaintiff, without more, created an actual controversy. We disagree. Rule 19(a), which authorizes joinder of unwilling plaintiffs, "makes no provision for a plaintiff to require another person to maintain an action vested solely in such other person, even though its maintenance might result in benefit to the plaintiff." Coast v. Hunt Oil Co., 195 F.2d 870, 872 (5th Cir.), cert. denied, 344 U.S. 836, 73 S.Ct. 46, 97 L.Ed. 651 (1952). See also Rhode Island Comm. on Energy v. General Servs. Admin., 561 F.2d 397, 402-03 (1st Cir.1977); In re Interstate Motor Freight System IMFS, Inc., 71 B.R. 741, 746 (Bankr.W.D.Mich.1987).

A narrow exception to this general rule originated with Independent Wireless Tel. Co. v. Radio Corp. of Amer., 269 U.S. 459, 46 S.Ct. 166, 70 L.Ed. 357 (1926), a case in which the holder of an exclusive patent license sought to sue for infringement of the patent. The exception is that an involuntary plaintiff may be joined to cure the original plaintiff's inability to press a claim if the original plaintiff and the involuntary plaintiff have "such a relationship that the absent party must allow the use of his name as plaintiff." 3A James W. Moore et al., Moore's Federal Practice p 19.06 at 84 (2d ed. 1995). But the inmates and ADC have no such relationship here. ADC has no obligation, contractual or otherwise, to allow the inmates to use its name to secure declaratory judgment relief that only ADC may seek.

3. After concluding that this case presents no actual controversy, the district court went on to consider the merits of the inmates' copyright claims because that would achieve judicial economy in the event this court held, in light of ADC's "somewhat ambiguous position," that there is...