Warner Bros. Records, Inc. v. RA RIDGES DISTRIB, CO., INC.

• Decision Date: 06 March 1973
• Docket Number: No. 72-1883.,72-1883.
• Citation: 475 F.2d 262
• Parties: WARNER BROS. RECORDS, INC., et al., Plaintiffs-Appellants, v. R. A. RIDGES DISTRIBUTING CO., INC., a corporation, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

475 F.2d 262 (1973)

WARNER BROS. RECORDS, INC., et al., Plaintiffs-Appellants, v. R. A. RIDGES DISTRIBUTING CO., INC., a corporation, et al., Defendants-Appellees.

No. 72-1883.

United States Court of Appeals, Tenth Circuit.

March 6, 1973.

L. R. Gardiner, Jr., of Christensen, Gardiner, Jensen & Evans, Salt Lake City, Utah, for plaintiffs-appellants.

Kenneth W. Yeates, of Prince, Yeates, Ward, Miller & Geldzahler, Salt Lake City, Utah, for defendants-appellees.

Before BREITENSTEIN, McWILLIAMS and DOYLE, Circuit Judges.

PER CURIAM.

Plaintiffs-appellants, phonograph record manufacturers, filed suit in the District Court for the County of Salt Lake, Utah seeking equitable relief against defendants who were alleged to have been copying and selling without authority the tapes and records which had been made by the plaintiffs. The state district judge granted a temporary restraining order and subsequently conducted a hearing following which he made extensive findings of fact and conclusions of law and entered a preliminary injunction. Subsequently, the cause was removed by the defendants to the United States District Court for the District of Utah. The judge of that court summarily dissolved the state court injunction, at the same time issuing an order denying the motion to remand the case to state court.

This is a repeat of a case which was presented to us approximately one year ago. We heard that case on an emergency basis also and, as in the present case, we granted relief. See Tape Head Company v. R C A Corporation, 452 F.2d 816 (10th Cir. 1971).

Plaintiffs have appealed the judgment dissolving the injunction and have applied for a stay of proceedings pending the appeal. We accelerated the hearing of the case and following oral arguments we have concluded that there was and is a complete lack of federal jurisdiction and that the action should have been remanded to state court.

Plaintiffs' complaint does not invoke any federal laws. It makes no mention of a federal law nor does it allege that the cause arises under any such law. Instead, it alleges that plaintiffs have made contracts with recording artists; that they have property rights in the resultant recorded compositions; and that the defendants have interfered with their property rights by pirating the compositions and selling the same. The complaint also alleges that apart from the pirating, the plaintiffs' good will was injured because of the poor quality of the recordings or the tapes.

The preliminary injunction issued by the state district court follows the pattern of the complaint and grants relief on the basis of invasion of plaintiffs' common law rights.

The petition for removal seeks to add a federal character. It declares that the action is one in which the federal court has exclusive original jurisdiction under the provisions of 28 U.S.C. § 1338.¹

Defendants also allege in the petition for removal that the action may be removed pursuant to 28 U.S.C. § 1441(b).²

It is obvious that neither of these provisions applies to the case at bar since the action does not directly or indirectly arise under the patent or copyright laws of the United States. Secondly, it does not arise under the Constitution, treaties or laws of the United States in accordance with the requirements of § 1441(b), supra. Accordingly, on the face of the papers, there was no right to remove.

But the terms and conditions of the complaint furnish a clearer basis for holding that the trial court lacked jurisdiction to entertain the case. It is for the plaintiffs to design their case as one arising under federal law or not, and it is not within the power of the defendants to change the character of plaintiffs' case by inserting allegations in the petition for removal. It is fundamental that the action is not one arising under federal law where the federal question is supplied by way of defense. See Louisville & N. R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908); State of Tennessee v. Union & Planters' Bank, 152 U.S. 454, 14 S.Ct. 654, 38 L.Ed. 511 (1894); Metcalf v. City of Watertown, 128 U.S. 586, 9 S.Ct. 173, 32 L.Ed. 543 (1888). See also Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194 (1950). In this latter case the Supreme Court through the late Justice Frankfurter summarized the law as follows:

If Phillips sought damages from petitioners or specific performance of their contracts, it could not bring suit in a United States District Court on the theory that it was asserting a federal right. And for the simple reason that such a suit would "arise" under the State law governing the contracts. Whatever federal claim Phillips may be able to urge would in any event be injected into the case only in anticipation of a defense to be asserted by petitioners. "Not every question of federal law emerging in a suit is proof that a federal law is the basis of the suit." Gully v. First National Bank in Meridian, 299 U.S. 109, 115, 57 S.Ct. 96, 99, 81 L.Ed. 70; compare 28 U.S.C. § 1257, 28 U.S.C.A. § 1257, with 28 U.S.C. § 1331, 28 U.S.C.A. § 1331. Ever since Metcalf v. City of Watertown, 128 U.S. 586, 589, 9 S.Ct. 173, 174, 32 L.Ed. 543, it has been settled doctrine that where a suit is brought in the federal courts "upon the sole ground that the determination of the suit depends upon some question of a federal nature, it must appear, at the outset, from the declaration or the bill of the party suing, that the suit is of that character." But "a suggestion of one party that the other will or may set up a claim under the Constitution or laws of the United States does not make the suit one arising under that Constitution or those laws." State of Tennessee v. Union & Planters\' Bank, 152 U.S. 454, 464, 14 S.Ct. 654, 657, 38 L.Ed. 511. The plaintiff\'s claim itself must present a federal question "unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose." Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218; Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126.

339 U.S. at 672, 70 S.Ct. at 879.

The Court goes on to point out that the cited decisions reflect the current of jurisdictional legislation going back to the Act of 1875, and that these cases plainly show that federal jurisdiction not only must appear on the face of the complaint, but further that some indirect relationship to a federal law will not serve to furnish a basis for federal jurisdiction nor is it sufficient that a federal law may emerge in the suit. See Gully v. First National Bank of Meridian, 299 U.S. 109, 115, 57 S.Ct. 96, 81 L.Ed. 70, supra.

It is undisputed that the recordings which were here copied predated the passage of the federal statute creating a limited copyright in sound recording. 85 Stat....