United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Z. Lee United States District Judge.
Tollie Carter has sued Maria A. Pallante in her capacity as
the Register of Copyrights,  as well as ARC/Conrad Music, LLC
(“ARC”), Fuji Music Group, Inc.
(“Fuji”), and BMG Rights Management (US) LLC
(“BMG”). He challenges certain actions of the
Register of Copyrights, which are not at issue for purposes
of the present motion, and charges that ARC, Fuji, and BMG
(hereafter “the Publisher Defendants”) infringed
his copyrights in certain songs by selling unauthorized
licenses to third parties, who in turn publicly performed the
songs. The Publisher Defendants have moved to dismiss
Carter's claims against them under Federal Rules of Civil
Procedure 12(b)(1), 12(b)(2), and 12(b)(6). For the reasons
that follow, the motion  is granted in part and denied in
Tollie Carter's father, Calvin Carter, and his uncle,
James Bracken, were songwriters. Verified 1st Am. Compl.
¶¶ 16, 21-22, ECF No. 34. They wrote and published
a number of songs in the 1950s, 1960s, and 1970s.
Id. Calvin Carter's works included the song,
“Goodnight Sweetheart Goodnight, ” “a big
hit during the mid-1950's and decades thereafter.”
Id. ¶ 19.
Carter and James Bracken are now deceased. Id.
¶ 17, 23. Plaintiff Tollie Carter (hereafter
“Carter”) is the sole heir to each of their
estates, including rights in many of their copyrighted works.
Id. ¶¶ 19, 23. Prior to their deaths, each
assigned rights in many of their songs to ARC. Id.
¶¶ 16, 64. Carter, however, has regained rights to
many of these songs. First, in the late 1980s and early
1990s, Carter utilized a procedure under the version of the
Copyright Act then in effect to exercise “renewal
rights” in certain songs, thereby reacquiring them from
ARC. See Id. ¶¶ 81-83, 89-91. Then, in
2012, Carter required the rights to still more songs by
utilizing a procedure under the current version of the
Copyright Act to terminate ARC's rights in them. See
Id. ¶¶ 55-63. These terminations had an
effective date of December 31, 2014. Id. ¶
his regaining rights to the songs, Carter claims that ARC,
along with the other Publisher Defendants (ARC is owned by
Fuji and administered by BMG, id. ¶¶ 3,
64), have infringed his copyrights in the songs and taken
other unlawful actions in relation to his songs.
Specifically, Carter alleges that the Publisher Defendants,
“without [Carter's] authorization or consent,
represented to numerous third parties it could license-and
did license to those third parties-the performance rights and
other rights to [Carter's songs].” Id.
¶ 69; accord Id. ¶¶ 75, 78, 86, 94.
These third parties in turn publicly performed and otherwise
exercised Carter's exclusive rights in the songs, and the
Publisher Defendants thereby financially benefited from their
conduct by collecting royalties. Id. ¶¶
70-71, 76, 79-80, 87-88, 95-96. Carter maintains that the
Publisher Defendants have failed to pay royalties owed to
him. Id. ¶¶ 98-99.
Verified First Amended Complaint, Carter includes the
following counts: Count II, “Federal Copyright
Infringement”; Count III, “Contributory Copyright
Infringement”; Count IV, “Vicarious Copyright
Infringement”; Count V, Falsification of Copyright
Management Information”; Count VI, “Unjust
Enrichment”; Count VII, “Deceptive Trade
Practices”; and Count VIII, “Tortious
Interference with Prospective Business Interests.”
Publisher Defendants have moved to dismiss Carter's
claims for lack of subject matter jurisdiction under Federal
Rule of Civil Procedure (“Rule”) 12(b)(1), for
want of personal jurisdiction under Rule 12(b)(2), and for
failure to state a claim under Rule 12(b)(6). The Court will
address each of these in turn.
Subject Matter Jurisdiction: Rule 12(b)(1)
with respect to subject matter jurisdiction, Carter's
claims arise in large part under federal copyright law, and
therefore invoke the Court's federal question
jurisdiction under 28 U.S.C. § 1331. Carter's state
law claims, in turn, arise from the same case or controversy,
and the Court may therefore exercise supplemental
jurisdiction over them under 28 U.S.C. § 1367. The
Publisher Defendants do not dispute these elemental
principles, but instead argue that because Carter's
copyright infringement allegations fail to state a claim, the
Court lacks subject matter jurisdiction over Carter's
claims. Def.'s Mot. Dismiss 3-5, ECF No. 43. This
argument, however, conflates the bases of Rule 12(b)(1) and
12(b)(6) motions. Bell v. Hood, 327 U.S. 678, 682
(1946) (“[I]t is well settled that the failure to state
a proper cause of action calls for a judgment on the merits
and not for a dismissal for want of jurisdiction.”).
While there is an exception to this rule where a federal
claim “clearly appears to be immaterial and made solely
for the purpose of obtaining jurisdiction or where such a
claim is wholly insubstantial and frivolous, ”
id. at 682-83, that exception does not apply here
(nor do the Publisher Defendants argue that it should). In
any case, as we will see, Carter's copyright allegations
do not fail to state a claim. The Publisher Defendants'
motion under Rule 12(b)(1) is therefore denied.
Personal Jurisdiction: Rule 12(b)(2)
with respect to personal jurisdiction, the Publisher
Defendants contend that Carter's personal jurisdiction
allegations are inadequate. Specifically, they assert that
“[t]he Amended Complaint contains no specific factual
allegations that Publisher Defendants purposely directed
activities towards or had anything more than incidental
contact with Illinois.” Mot. Dismiss at 7. Carter's
principal basis for alleging personal jurisdiction is as
This Court has specific personal jurisdiction over [the
Publisher Defendants] because they have engaged in conduct,
giving rise to the claims herein, that satisfies the Illinois
long-arm statute . . . including the commission of tortious
acts within Illinois and the commission of tortious acts
outside Illinois knowing and intending that such act[s] would
interfere with Illinois interests and cause injury within
Illinois. Based on information and belief, [the Publisher
Defendants] have licensed for profit the copyrighted music at
issue to Illinois-based and non-Illinois entities and
individuals to the injury of Plaintiff, an Illinois resident.
Am Compl. ¶ 8. Carter argues that this Court may
exercise specific personal jurisdiction over the Publisher
Defendants as to these actions. See Pl.'s Resp.
7-9, ECF No. 49.
motion to dismiss stage, the plaintiff's burden to
establish personal jurisdiction depends on whether material
facts are in dispute, and, in turn, whether an evidentiary
hearing has been held. Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). Where no material facts are in dispute, the plaintiff
need only make out a prima facie case of personal
jurisdiction, which the district court can resolve on the
basis of written submissions, drawing all inferences and
resolving all conflicts in favor of the plaintiff.
Id. at 782-83. Here, personal jurisdiction is
governed by the law of the forum state and the Fourteenth
Amendment Due Process Clause, and because Illinois's
long-arm statute permits the exercise of personal
jurisdiction to the extent permitted by the federal
Constitution, the state and federal law inquiries merge.
Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir.
2010). “The key question is therefore whether the
defendants have sufficient ‘minimum contacts' with
Illinois such that the maintenance of the suit ‘does
not offend traditional notions of fair play and substantial
justice.'” Id. at 700-01 (quoting
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
court to exercise specific personal jurisdiction over a
defendant, the defendant must have “purposefully
directed his activities at the forum state or purposefully
availed himself of the privilege of conducting business in
that state” such that the defendant could reasonably
anticipate being haled into court there, and “the
alleged injury [must] arise out of the defendant's
forum-related activities.” Id. at 702.
“The exercise of specific personal jurisdiction must
also comport with traditional notions of fair play and
substantial justice as required by the Fourteenth
Amendment's Due Process Clause.” Id.
Carter's suit is based on intentional actions that the
Publisher Defendants allegedly took in Illinois-specifically,
selling licenses to his copyrighted songs to Illinois-based
entities-knowing and intending that the effect of such
actions would be felt in Illinois. Am. Compl. ¶ 8. This
is a sufficient basis on which to conclude at the present
stage that the Publisher Defendants purposefully directed the
alleged conduct at Illinois and that Carter's suit arises
directly from that conduct. Tamburo, 601 F.3d at
703, 708-09. In addition, exercising jurisdiction would not
offend traditional notions of fair play and substantial
justice, given that Carter resides here, and it would be
unreasonable to expect him to file separate suits against the
Publisher Defendants in their home jurisdictions (ARC and
Fuji in California, BMG in Delaware or New York). Am. Compl.
¶¶ 3-4; see Tamburo, 601 F.3d at 709-10.
while the Publisher Defendants deny that the licenses they
sold violated the law, they have not denied that they sold
licenses to Illinois-based entities. Carter has therefore
satisfied his burden of establishing a prima facie
case of personal jurisdiction. Purdue Research, 338
F.3d at 782-83 & nn.13-14. Nor is the Publisher
Defendants' argument that Carter has failed to state a
claim for copyright infringement, Defs.' Reply 5, ECF No.
50, sufficient to negate personal jurisdiction. Accordingly,
the Publisher Defendants' motion to dismiss for want of
personal jurisdiction is denied.
Failure to State a Claim: Rule 12(b)(6)
motion under Rule 12(b)(6) challenges the sufficiency of the
complaint. Christensen v. Cty. of Boone, 483 F.3d
454, 457 (7th Cir. 2007). Under federal notice pleading
standards, “[a] plaintiff's complaint need only
provide a short and plain statement of the claim showing that
the pleader is entitled to relief, sufficient to provide the
defendant with fair notice of the claim and its basis.”
Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir.
2008) (internal quotation marks omitted); see also
Fed R. Civ. P. 8(a)(2). When considering a motion to dismiss
under Rule 12(b)(6), the Court must “accept[ ] as true
all well-pleaded facts alleged, and draw[ ] all possible
inferences in [the plaintiff's] favor.”
Tamayo, 526 F.3d at 1081.
a complaint must allege “sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). For a claim
to be facially plausible, the plaintiff must plead facts
allowing the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged in the
complaint. Id. Accordingly, “[t]hreadbare
recitals of the elements of the cause of action, supported by
mere conclusory statements, do not suffice.”
Id. Finally, the plausibility standard is not akin
to a probability requirement but, rather, asks for more than
a sheer possibility that a defendant acted unlawfully.