The opinion of the court was delivered by: Blanche M. Manning United States District Judge
Henry Vaughn, a former employee of R. Kelly, contends that he is entitled to half of the proceeds from Kelly's popular song and video "Step in the Name of Love." Kelly's motion to dismiss Vaughn's breach of oral contract, unjust enrichment, and fraud claims for failure to state a claim is before the court.*fn1 For the following reasons, Kelly's motion is denied.
The following facts are drawn from Vaughn's amended complaint.*fn2 Vaughn is a songwriter, vocalist, and musician who has expertise in the dance style known as Steppin'. In late 2001, while working as part of Kelly's security team during a European tour, Vaughn proposed that he and Kelly jointly create and release a song and video featuring Steppin'. Kelly asked Vaughn to "[t]each [Kelly] the Steppin' dance, [w]ork with Defendant Kelly to develop a concept for a video revolving around the Steppin' dance . . . . and [a]ssist Defendant Kelly with a song based on the dance Steppin'." Amended Complaint at ¶ 51. In consideration for these services, Kelly agreed to pay Vaughn one-half of the money he earned from the release of the song and/or video.
Pursuant to this verbal contract, Vaughn "provided his time, talents, and experience" to Kelly. Id. at ¶ at 78. Specifically, Vaughn taught Kelly how to step, provided him with information regarding "the culture behind the Steppin' movement" that Kelly used to write the lyrics to the "Step in the Name of Love," and "assisted Defendant Kelly in establishing the concept for the song and video." Id. at ¶¶ 55, 57. The video featured Kelly using the "moves and dance steps [Vaughn] taught him." Id. at ¶ 59. "Without [Vaughn] tendering Defendant Kelly the concept for a song revolving around Steppin', and without [Vaughn's] efforts, talents, time and assistance, . . . the song 'Step in the Name of Love' and the video for the single would not have become a reality." Id. at ¶ 66. Indeed, Vaughn contends that Kelly acknowledged his contributions by speaking the following words on the single "Dedicated to Uncle Henry Love: Thank you! Ohh, I love you[.] Thank you." Id. at ¶ 68.
Vaughn filed a motion to remand, contending that none of his claims implicated the Copyright Act. Based on the original complaint, which was the operative document because jurisdiction is determined at the time of removal, the court found that Vaughn's unjust enrichment claim was preempted because it concerned works that came within the subject matter of copyright and sought relief equivalent to the rights protected by the Copyright Act. Having found that jurisdiction was proper, the court did not consider whether the remaining claims for breach of oral contract and fraud were preempted as well. Kelly presently seeks to dismiss all of the remaining claims, contending that they are preempted by the Copyright Act and, as such, are either time-barred or non-compensable works-for-hire.
A. Standard on 12(b)(6) Motion to Dismiss
In ruling on a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the court must assume the truth of all facts alleged in the complaint, construing the allegations liberally and viewing them in the light most favorable to the plaintiff. See, e.g., McMath v. City of Gary, 976 F.2d 1026, 1031 (7th Cir. 1992). Dismissal is properly granted only if it is clear that no set of facts which the plaintiff could prove consistent with the pleadings would entitle the plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). However, the court is neither bound by the plaintiff's legal characterization of the facts, nor required to ignore facts set forth in the complaint that undermine the plaintiff's claims. Scott v. O'Grady, 975 F.2d 366, 368 (7th Cir. 1992).
B. Vaughn's Unjust Enrichment Claim
The court previously held that Vaughn's unjust enrichment claim, as pleaded in the original complaint, was equivalent to one protected by the Copyright Act and thus was preempted by the Copyright Act. The question before the court today is whether the unjust enrichment claim, as pleaded in the amended complaint, is also preempted.
Section 301 of the Copyright Act preempts state law based causes of action that are equivalent to copyright infringement claims. 17 U.S.C. § 301(a). Specifically, it provides that:
[A]ll legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright . . . in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright . . . whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any ...