Student Lifeline, Inc. v. State of New York, 2007 NY Slip Op 51663(U) (N.Y. Ct. Cl. 8/10/2007)

• Decision Date: 10 August 2007
• Docket Number: 110129.
• Citation: 2007 NY Slip Op 51663
• Parties: STUDENT LIFELINE, INC. Claimant, v. STATE OF NEW YORK, Defendant
• Court: New York Court of Claims

Page 1

2007 NY Slip Op 51663(U)

STUDENT LIFELINE, INC. Claimant, v. STATE OF NEW YORK, Defendant

110129.

Court Claims.

Decided August 10, 2007.

John A. Dalley, Esq., Claimant's attorney.

Hon. Andrew M. Cuomo, Attorney General of the State of New York, Defendant's attorney.

By: Glenn C. King, Assistant Attorney General, Third-party defendant's attorney.

JAMES H. FERREIRA, J.

During January 2005, defendants moved to dismiss the state claim. The motion was resolved by agreement of the parties and the court ordered a stipulation of conditional dismissal (Hard, J.) dated October 7, 2005. The parties agreed to dismiss the claim, but provided for its reactivation conditioned upon the status of the federal court action. During November 2005, the United States District Court for the Eastern District of New York (Seybert, J.) granted partial summary judgment to defendants therein and dismissed the action as against the Senate based on Eleventh Amendment immunity, but denied summary relief with respect to the senators in their individual capacities (see Student Lifeline, Inc. v. The Senate of the State of New York, et al., No. 04-CV-5484).¹

Thereafter, the claim was reactivated in this Court, pursuant to the parties' stipulation. Following a telephone conference with the Court, claimant served an amended claim.² The Senate (hereinafter "defendant") is the sole defendant named in the amended claim which alleges, in relevant part, as follows:

"In or about May 2004, a New York State senator, ... contacted Claimant for the purpose of purchasing via ad sponsors plaintiff's National Child I.D. Kits.TM After Claimant furnished its products to defendants, a State Senate representative stated they no longer required [Claimant's] services' and then willfully reproduced and distributed unauthorized copies of Claimant's products in violation of Claimant's copyright, trademark and other State and common law property rights. Some of Defendant's members have further falsely represented to the public that he/she designed, developed and authored the infringing kits in violation of the Lanham Act, Title 15 USC § 1125 et seq., causing a likelihood of confusion and actual confusion in commerce.

As well, defendant infringed upon Claimant's federally protected and common law trade dress contained within its products, causing a likelihood of confusion and actual confusion in commerce. Defendant's copying and distribution of its copies violated Claimant's Due Process rights, under the United States and New York Constitutions, by reason of defendant's intentional taking and usurpation of Claimant's property without due process of law or just compensation.

Further, defendant owed Claimant a duty not to have its members, agents and/or its employees produce unauthorized copies of Claimant's products and in failing to honor and heed conspicuous federal copyright and trademark notices placed on Claimant's products."

Defendant now seeks to dismiss the claim pursuant to CPLR 3211 (a) (2) and (8) on the grounds that the Court lacks subject matter jurisdiction and personal jurisdiction. The Court is mindful that "[o]n a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction (see, CPLR 3026)" (Leon v. Martinez, 84 NY2d 83, 87 [1994]). The Court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (id. at 87-88).

With these principles in mind, the Court concludes that, insofar as claimant has alleged (1) a violation of the Copyright Act, (2) the breach of a duty to refrain from producing unauthorized copies of claimant's i.d. kit and a duty to honor federal copyright and trademark notices on claimant's i.d. kits, and (3) the commission of a federal constitutional tort, it does not possess subject matter jurisdiction of such claims. However, to the extent that claimant alleges (1) violation of the Lanham Act, (2) trade dress infringement and (3) the commission of a state constitutional tort, the Court concludes that it does possess subject matter jurisdiction of such claims. The Court further concludes that defendant is not immune from suit.

As a general rule, copyright law is governed by 17 USC § 101 et seq., also referred to as the Copyright Act. 28 USC § 1338 (a) provides for exclusive federal jurisdiction over actions involving alleged violations of the Copyright Act which states, in relevant part, that

"[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks. Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases."

In fact, absent certain discrete statutory exceptions, the Copyright Act preempts state copyright protections. More specifically, section 301 of the Act provides, in pertinent part, that

"(a) On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

(b) Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to

(1) subject matter that does not come within the subject matter of copyright as specified by sections 102 and 103, including works of authorship not fixed in any tangible medium of expression; or

(2) any cause of action arising from undertakings commenced before January 1, 1978; or

(3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106; or

(4) State and local landmarks, historic preservation, zoning, or building codes, relating to architectural works protected under section 102(a)(8)" (17 USC § 301 [a] [b]).

"The intention of section 301 . . . is to preempt and abolish any rights under the common law or statutes of a State that are equivalent to copyright and that extend to works coming within the scope of the Federal copyright law" (Judiciary Comm Notes, reprinted following USC Ann., Book 17, § 301, at 608). Indeed, section 301 of the Act is "intended to be stated in the clearest and most unequivocal language possible so as to foreclose any conceivable misinterpretation of its unqualified intention that Congress shall act preemptively, and to avoid the development of any vague borderline areas between State and Federal protection" (Judiciary Comm Notes, supra; see also Katz Dochrermann & Epstein, Inc. v. Home Box Office, 1999 WL 179603, *2 [SDNY]). Thus, New York courts have held that State courts are divested of jurisdiction over claims seeking redress for the alleged violation of rights equivalent to those provided for by the Copyright Act including common law copyright claims (see Editorial Photocolor Archives v. Granger Collection, 61 NY2d 517, 522 [1984]; Walker v. Time Life Films, 1983 WL 37482 [Sup Ct, Bronx County 1983]; compare Grecco v. Sygma, 284 AD2d 234, 235 [2001]; Jordan v. Aarismaa, 245 AD2d 616, 617 [1997]).

Here, while the amended claim does not contain a direct reference to the Copyright Act, claimant does aver that defendant "willfully reproduced and distributed unauthorized copies of [the i.d. kits] in violation of Claimant's copyright, trademark and other State and common law property rights." Additionally, in opposition to the instant motion, claimant's attorney characterizes the allegations contained within the original claim as including copyright infringement pursuant to 17 USC §§ 101, 501 et seq. Moreover, the gravamen of the claim is that defendant engaged in the unauthorized reproduction and distribution of claimant's products — rights equivalent to those under the Federal copyright law (see 17 USC §§ 102 [a], 106 [1], [3]). Based upon the language employed in the amended claim, counsel's characterization of the original allegations and the essence of the claim, the Court finds that it is divested of jurisdiction over this aspect of the claim (see 28 USC § 1338 [a]; 17 USC § 301). Nor can claimant salvage the Court's jurisdiction by characterizing defendant's alleged conduct as violations of "other State and common law property rights" or by characterizing the claim as one sounding in negligence (see Editorial Photocolor Archives v. Granger Collection, supra at 523).

As for the alleged Lanham Act violation, the Court finds that it does possess subject matter jurisdiction over claimant's allegations that defendant violated the federal statute (see 15 USC § 1051 et seq.), that defendant engaged in trade dress infringement, and that defendant engaged in conduct constituting an intentional taking and usurpation of claimant's property in violation of the due process clause of the Constitution of the State of New York.

There can be little dispute that claimant has alleged violation of the Lanham Act. The amended claim states, in relevant part, that "[s]ome of Defendant's members have . . . falsely represented to the public that he/she designed, developed and authored the infringing kits in violation of the Lanham Act, Title 15 USC § 1125 et seq., causing a likelihood of confusion and actual confusion in commerce." That section provides, in relevant part, that

"[a]ny person who, on or in connection with any goods or services . . . uses in commerce any word, term, name, symbol, or device,...