Pottstown Daily News Pub. Co. v. Pottstown Broadcasting Co., Civ. A. No. 33953.

• Decision Date: 22 November 1965
• Docket Number: Civ. A. No. 33953.
• Citation: 247 F. Supp. 578
• Parties: POTTSTOWN DAILY NEWS PUBLISHING COMPANY v. POTTSTOWN BROADCASTING COMPANY.
• Court: U.S. District Court — Eastern District of Pennsylvania

247 F. Supp. 578

POTTSTOWN DAILY NEWS PUBLISHING COMPANY v. POTTSTOWN BROADCASTING COMPANY.

Civ. A. No. 33953.

United States District Court E. D. Pennsylvania.

November 22, 1965.

William A. O'Donnell, Jr., Pottstown, Pa., for plaintiff.

Stanford S. Hunn, Pearlstine, Salkin & Hardiman, Lansdale, Pa., for defendant.

BODY, District Judge.

Pottstown Daily News Publishing Company ("News Company"), the publisher of a newspaper known as the "Pottstown Mercury", instituted this action by a summons in equity in the Court of Common Pleas of Montgomery County, Pennsylvania, on October 14, 1960. The suit was brought to enjoin the Pottstown Broadcasting Company ("Broadcasting Company"), the owner of radio station WPAZ, from any further appropriation of its local news stories without its permission or authorization.

The News Company's complaint, filed on April 26, 1961, alleges that both plaintiff and defendant "disseminate news to the same general area and sell advertising within the same area"; that "plaintiff has invested and expends great sums of money to operate its newspaper and more particularly to develop its sources of local news, train personnel, and to accurately and concisely compose local news items"; that "the principal factor in plaintiff's circulation and the sale of advertising copy is its specialized treatment of local news items and local treatment of all news items"; that "plaintiff has copyrighted such local news items and notice of the copyright appears on the masthead of its newspaper"; that "the defendant has without license, permission, or authority from plaintiff, on numerous occasions in the past and is so continuing in the present, to use the local news stories gathered by the plaintiff's personnel and published in the newspaper for its own daily broadcast of news"; and that "said unauthorized use by the defendant of the said news items as gathered by the plaintiff is in violation of the right that the plaintiff has obtained by copyrighting and also violates the property rights of the plaintiff in the aforesaid news items."

On December 31, 1962 defendant filed its Answer denying most of the allegations of the Complaint and averred under the heading of New Matter that the Court of Common Pleas of Montgomery County lacked jurisdiction to entertain the action since the causes of action averred in the Complaint are based upon a violation of the copyright laws of the United States and an unfair competition claim joined with a substantial and related claim under the copyright laws over which the federal courts have exclusive jurisdiction. The defendant Broadcasting Company further averred that the News Company had no common-law property right in the news upon which a claim of unfair competition could be predicated.

On January 2, 1963 counsel for defendant made a motion in the Court of Common Pleas of Montgomery County to dismiss the action for lack of jurisdiction based upon the Act of June 25, 1948, c. 646, 62 Stat. 931; 28 U.S.C.A. § 1338. Judge Quinlan denied the motion and on January 14, 1963, after argument and submission of briefs, the court en banc confirmed the denial of defendant's Motion to Dismiss.

Defendant then appealed to the Supreme Court of Pennsylvania, No. 155 January Term, 1963, which affirmed the lower court in an opinion by Mr. Justice Benjamin R. Jones on July 2, 1963. Pottstown Daily News Publishing Co. v. Pottstown Broadcasting Co., 411 Pa. 383, 192 A.2d 657 (1963).

Thereafter, on August 5, 1963, the defendant filed the instant petition for removal to the United States District Court for the Eastern District of Pennsylvania. This Court now has before it the motion of the original plaintiff, the News Company, to remand the matter to the Court of Common Pleas of Montgomery County, Pennsylvania, and to assess all costs and disbursements on the defendant Broadcasting Company, including therein counsel fees in such amount as the Court may determine.

From its inception in 1960, this has proved to be a rather involved case from a procedural standpoint; however, for purposes of deciding the present motion to remand, the substantive legal issues can be narrowed down to the following two questions:

(1) Whether the federal court has exclusive jurisdiction over the causes of action alleged by plaintiff, with the effect that it cannot remand to the state court, which would have no jurisdiction whatsoever; and

(2) Whether the defendant Broadcasting Company has complied with the strict requirements of the removal statute found in 28 U.S. C.A. §§ 1441 and 1446.

These issues will now be examined in turn.

WHETHER JURISDICTION OVER PLAINTIFF'S CAUSES OF ACTION IS VESTED EXCLUSIVELY IN THE FEDERAL COURTS

The Broadcasting Company's argument on this issue is that the News Company's complaint alleges two causes of action, that is, one claim which arises under the United States laws relating to copyright and another cause of action which asserts an unfair competition claim joined with a substantial and related claim under the United States copyright laws, and that as to both causes of action, exclusive jurisdiction is vested in the federal courts by virtue of the provisions of § 1338(a), (b) which provides:

"(a) The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, copyrights and trade-marks. Such jurisdiction shall be exclusive of the courts of the states in patent and copyright cases.

(b) The district courts shall have original jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under the copyright, patent or trade-mark laws."

This contention of defendant was rejected by the Supreme Court of Pennsylvania in the very lucid and well written opinion of Mr. Justice Benjamin R. Jones. We agree in all respects with that decision of July 2, 1963, and therefore conclude as did Justice Jones that:

"* * * under Section 1338(b), supra, the federal courts may now exercise pendent or derivative jurisdiction over a claim of unfair competition which is joined with a claim under the copyright laws if the latter claim is `substantial and related'. However, such permissive jurisdiction does not render the jurisdiction of the federal courts exclusive in nature or oust state courts of their jurisdiction over claims of unfair competition."

Pottstown Daily News Publishing Co. v. Pottstown Broadcasting Co., 411 Pa. 383, 389, 192 A.2d 657, 661 (1963).

In its opinion the Supreme Court of Pennsylvania went on to hold that:

"* * * insofar as the News Company pleads that the Broadcasting Company has `pirated' news items gathered through the special services of the News Company, such states a violation of a property right and a claim of unfair competition which the state courts have jurisdiction to determine."

Id. at 394, 192 A.2d at 663.

In its Reply Brief Contra Plaintiff's Motion to Remand, however, defendant contends that the portion of the opinion by the Supreme Court of Pennsylvania holding that the complaint states a common-law cause of action for unfair competition under Pennsylvania law was "completely overruled" by a decision of the United States Supreme Court in the case of Sears Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964). See also the companion case of Compco Corp. v. Daybright Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964), decided the same day. With this contention we cannot agree.

In the Sears Roebuck case, the Court held that a state's unfair competition law cannot, consistently with the federal patent law, impose liability for or prohibit the copying of an article which is not protected by a federal patent or copyright.

First of all, the language in Sears Roebuck to the effect that a state may not prohibit the copying of uncopyrighted material could be construed as obiter dictum since, in that case, it was the patents on the "pole lamps" which were found invalid for lack of invention. Consequently, it cannot be said with absolute certainty that the law of common-law copyright has been limited by the Sears Roebuck decision in exactly the same respects as the state protection of unpatentable articles. However, we need not rest our conclusion upon such a tenuous distinction.

For instance, it is entirely possible, even in light of Sears Roebuck, that congressional failure to protect purely factual news accounts by the Copyright Act could be deemed an expression of a limitation of federal power rather than a congressional policy which allows the copying of such items.

Another distinction can be found in the fact that in Sears Roebuck the court was concerned with the copying of an unpatented and uncopyrighted product. In the case at bar, however, plaintiff alleges an unwarranted appropriation of its news stories by defendant. In the recent case of Flamingo Telefilm Sales, Inc. v. United Artists Corp., 141 U.S.P.Q. 461 (1964), which involved the unauthorized appropriation of artistic performances to the profits of others, the New York Supreme Court drew a similar distinction.

The court in the Flamingo case further stated:

"Whether this cause be denominated as sounding in `unfair competition' or `intentional interference with economic or contractual relations,' this court cannot, in view of the background of jurisprudence and decisional law in this area, hold that these recent decisions which involved distinguishable factual situations, wiped clean the slate of precedent and empowered the unauthorized appropriation of artistic performances to the profits of others." (Cases cited)

Id. at 462 We think the analogy between the cases is an appealing one.

Another reason for supporting our conclusion that the rationale of the Sears Roebuck case does not preclude an action based upon a state unfair competition law for an invasion of a property right in uncopyrighted news, for instance, is that any...