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BALLAS v. TEDESCO

March 5, 1999

CORKY BALLAS, PLAINTIFF,
v.
GENNARO TEDESCO AND BALLROOM BLITZ MUSIC, INC., DEFENDANTS.



The opinion of the court was delivered by: Greenaway, District Judge.

  OPINION

This matter comes before the Court on Plaintiff Corky Ballas' ("Plaintiff") motion to remand this matter to the Superior Court of New Jersey or alternatively to dismiss pursuant to Fed.R.Civ.P. 12(b)(1).*fn1 Also before the Court is Defendants Gennaro Tedesco's and Ballroom Blitz Music's (collectively "Defendants") motion seeking (1) a temporary restraining order, (2) a preliminary injunction and (3) to vacate the December 11, 1998, order of the Superior Court of New Jersey.*fn2 This Court heard oral argument on those motions on January 29, 1999.*fn3 For the reasons stated below, Plaintiff's motion to remand is denied. Defendants' motion for a temporary restraining order is granted. Also, Defendants' motion to vacate the order of the Superior Court of New Jersey is granted.

FACTS

Plaintiff and his wife are competitors in DanceSport, commonly known as ballroom dancing. Defendant Gennaro Tedesco is a music producer, and Defendant Ballroom Blitz Music is his production company. In early 1998, Plaintiff was introduced to Defendant. Plaintiff was interested in having Defendant produce his latest project, a compact disc ("CD") for the competitive dance music audience focusing on the music from the movie "Titantic". The CD was to be titled "Titantic Passion".*fn4 Although the parties did not meet face to face, over the next several months, they corresponded through computer e-mails.*fn5

The e-mails reflected that the parties discussed a deal whereby Plaintiff would pay Defendant a fee of $15,000 for all the musical arrangements, production, mixing and mastering of the CD. In return, Plaintiff would have the exclusive right to manufacture 5,000 copies of the CD for sale.*fn6 Plaintiff forwarded to Defendant several checks totaling $7,500 as a down payment for Defendant to start work on the project. On March 8, 1998, Plaintiff traveled to, and spent the day at, Defendant's studio to participate in the production of the CD. In anticipation of the production of the CD, on June 30, 1998, Plaintiff placed an advertisement touting the release of the CD in the program book of the 46th International Modern and Latin-American Championship. The Championship had been scheduled for October 6th, 7th and 8th of 1998. Plaintiff and his wife were scheduled to dance in the competition. Plaintiff also paid for the artwork design cover in anticipation of the production of the CD.

In July 1998, the parties exchanged drafts of a proposed agreement through e-mails. Due to disagreements with various terms of the proposed agreements, the parties' relationship ceased and negotiations ended.

Thereafter, Defendants obtained a certificate of registration from the United States Copyright Office for sound recordings embodied on a CD entitled "Fire Vol. 1".*fn7 On or about November 16, 1998, at the Ohio Star Ball, DanceSport Competition, Defendants began marketing that CD under the name "Fire Volume 1," which embodied the sound recordings that had been intended for the "Titantic Passion" CD.*fn8

On December 11, 1998, Plaintiff moved for a temporary restraining order ("TRO") and preliminary injunction in the Superior Court of New Jersey, Hudson County. Plaintiff argued that Defendants breached the parties' contract and that he would be irreparably harmed by Defendants' production and sale of the sound recordings originally intended for the Titantic Passion CD.

The court, analyzing the matter as a contract case, found that Plaintiff established a likelihood of success in showing that the parties had agreed to a contract and that Plaintiff would be irreparably harmed by Defendants' reproduction and sale of those sound recordings.*fn9 Thus, the court granted Plaintiff emergent relief requiring Defendants to turn over the master copy of the sound recordings to Plaintiff and enjoining Defendants from further marketing or selling any CDs embodying those sound recordings. The court required Plaintiff to forward Defendants the remaining $9,100 due and owing under the parties' contract.*fn10 Although a formal written order was not signed until January 12, 1999, the court noted on the record that its decision was effective as of the date of the hearing, December 11, 1998.

On December 17, 1998, Defendants filed a notice of removal with this Court. Plaintiff does not contest the validity of the filing of the notice of removal. Thereafter on January 14, 1999, Defendants filed the instant motion to (1) vacate the order of the Superior Court of New Jersey, (2) enter a temporary restraining order and (3) enter a preliminary injunction. On January 19, 1999, Plaintiff filed a motion to remand this matter back to the Superior Court of New Jersey.

DISCUSSION

First, this Court must consider Plaintiff's motion to remand this matter to the Superior Court of New Jersey. Next, this Court will consider Defendants' motion seeking preliminary restraints and an order to vacate the Superior Court of New Jersey's prior order.

Motion to Remand

Plaintiff seeks to have this Court remand this matter to the Superior Court of New Jersey, arguing that it is purely a matter of state contract law. On the other hand, Defendants argue that this matter is so intertwined with the underlying copyright issue that it belongs in federal court, the forum with exclusive jurisdiction over copyright cases.

An action removed to federal court may be remanded to state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction . . ." 28 U.S.C. § 1447(c). When confronted with a motion to remand, the removing party "bears the burden of proving that jurisdiction exists." Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991). "The removal statutes `are to be strictly construed against removal and all doubts should be resolved in favor of remand.'" Id. (quoting Steel Valley Auth. v. Union Switch and Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987), cert. dismissed sub nom., American Standard v. Steel Valley Auth., 484 U.S. 1021, 108 S.Ct. 739, 98 L.Ed.2d 756 (1988)).

Jurisdiction in this case is based on the presentation of a federal question. 28 U.S.C. § 1331. Defendants contend that pursuant to the Copyright Act, 17 U.S.C. § 101 et seq., cases involving copyrights come under the exclusive jurisdiction of the federal courts. Defendants further argue that Plaintiff's state law contract cause of action is preempted by 17 U.S.C. § 301.*fn11

Pursuant to § 301 of the Copyright Act, state law causes of action are preempted when they involve the equivalent of the protections afforded copyrightable subject matter by § 106 of the Act. See 17 U.S.C. § 106, 301(a).*fn12 First, there is no dispute in this case that the music at issue is copyrightable material.*fn13 Second, this Court notes that the question whether breach of contract actions are preempted by § 301 is unsettled.*fn14 However, this Court need not, and shall not, decide whether all breach of contract claims are preempted by 17 U.S.C. § 301. Although Plaintiff has attempted to characterize its claim as one solely for breach of contract, Plaintiff's pleadings and representations to the Court on the record at oral argument expressly contradict that position.

Defendants have satisfied their burden of establishing that this Court has jurisdiction over this matter. Plaintiff's complaint evidences a dispute over the ownership of the copyright to the disputed sound recordings.*fn15 In Count One of Plaintiff's complaint (¶ 7 of Wherefore Clause), he requests that the Court declare "plaintiff the true and correct owner of the copyright of the music product produced at the request of plaintiff, originally to be entitled Titantic Passion." Similarly, in paragraph nine of the same clause, Plaintiff requests that the Court declare "the music product produced at the request of plaintiff, originally to be titled Titantic Passion a `Work for Hire.'" In those two requests for relief, Plaintiff expressly seeks copyright protection and any ancillary or associated rights. Such claims plainly are governed by federal copyright law, and as such, are within the exclusive jurisdiction of the federal courts.

Furthermore, at oral argument, Plaintiff's attorney stated on the record that "there's going to be a serious factual issue whether it's a joint authorship, and, therefore, both parties have a right to the copyright." Tr. Oral Argument 1/29/1999, at 46. Plaintiff's attorney made that statement after earlier telling this Court, in support of his pure contract theory, that his work for hire argument was not his primary argument and that he concedes that there was no evidence that this was a work for hire. See id. at 7. Plaintiff's attorney's statements on the record and Plaintiff's complaint convince this Court that this case involves a dispute over who is the rightful owner of the copyright rights to the underlying sound recordings. This matter is governed by the Copyright Act.

Plaintiff's motion to remand is denied.*fn16 Defendants have established that this matter involves rights arising under the Copyright Act. Those claims are within the exclusive jurisdiction of the federal courts.

Temporary Restraining Order

Defendants seek a TRO to restrain Plaintiff from marketing or selling CDs embodying the disputed sound recordings. Defendants request that this Court enter a TRO requiring Plaintiff to turn over all copies of the infringing CDs to the Court and thereby maintain the status quo until this litigation is resolved.

"It is fundamental that `the purpose of a[n] interlocutory injunction is to preserve the status quo to protect the respective rights of the parties pending determination on the merits.'" Value Group, Inc. v. Mendham Lake Estates, L.P., 800 F. Supp. 1228, 1231 (D.N.J. 1992) (quoting Cordis Corp. v. Medtronic, Inc., 780 F.2d 991, 994 (Fed.Cir. 1985), cert. denied, 476 U.S. 1115, 106 S.Ct. 1971, 90 L.Ed.2d 655 (1986)). This Court must consider four factors in determining whether to grant Defendants' motion for a TRO: "(1) the likelihood of success on the merits after a full hearing; (2) whether the movant will be irreparably injured without the restraint; (3) whether the party to be enjoined will be irreparably injured if the preliminary relief is granted; and (4) whether the public interest will be served by the preliminary relief." Id. ...


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