Opinion
Civil Action No. 00-3110 Section "A"(1)
June 17, 2002
MINUTE ENTRY
Before the Court is a Motion to Dismiss Based Upon Rule 12(b)(6) and 12(c) (Rec. Doc. 46) filed by defendants Guice Guice Advertising, Inc. and Godwin Advertising Agency, Inc. ("Guice"). Defendants Louisiana-I Gaming, Mississippi-I Gaming, L.P., and BTN, Inc. (collectively the "Boomtown Defendants") join in the motion. Plaintiff John Trevino d/b/a Innovative Graphics Design, Inc., opposes the motion. The motion, set for hearing on June 5, 2002, is before the Court on the briefs without oral argument.
Plaintiff alleges that Guice and Guice Advertising, Inc. and Godwin Advertising Agency, Inc. merged subsequent to many of the events giving rise to this lawsuit. Rec. Doc. 10.
Plaintiff John Trevino ("Trevino") is suing Guice and the Boomtown Defendants for copyright infringement pursuant to the Copyright Act, 17 U.S.C. § 101, et seq. Defendants have moved for dismissal pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(c). Defendants argue that Trevino's complaint fails to state a claim because this lawsuit is barred by the doctrine of res judicata and because Trevino previously relinquished ownership of the copyrights involved. For the reasons that follow the motion to dismiss is DENIED.
Factual Background
Trevino created two original works of art entitled "Boomtown Alligator" and "Boomtown Gulfport" for which he received copyright registrations. From the registered works, Trevino also created various derivative works. The Boomtown Defendants, owners and/or operators of several riverboat casinos, used the artworks for various marketing purposes. Guice, the advertising agency of record for the casinos, provided the artworks to the Boomtown Defendants pursuant to a contractual arrangement between itself and Trevino.
The artwork at issue in this litigation is appended to the original complaint. Rec. Doc. 1.
As far as the Court can ascertain from the evidence of record thus far, the contractual relationship between Guice and Trevino was memorialized by two single paragraph documents dated August 19, 1994. The first of those documents is signed only by Trevino and purports to "convey all rights to materials" created for Guice for its Boomtown clients. The second document, signed only by Reed Guice, President of Guice Guice Advertising, Inc., appears to establish an agreement whereby Guice would pay Trevino retainer payments for use of his works as long as Guice remained advertising agency of record for Boomtown. Trevino also alleges that certain artworks were subject to limited use in accordance with language contained in the Guice purchase orders that were used to submit the artworks to Boomtown.
These documents are appended to the complaint as Exhibits J and K.
Rec. Doc. 1, Exhibit J.
Id. at Exhibit K.
Two such purchase orders are attached to the complaint as Exhibits L and M.
At various times in the past, Guice had refused to pay Trevino the retainer payments in accordance with their agreement. Accordingly, Trevino filed suit in the Chancery Court of Harrison County Mississippi concerning the retainer payments that Guice owed to him. On December 11, 1998, that suit was dismissed with prejudice upon Trevino's motion following a compromise.
A copy of that state court petition is appended as an exhibit to Defendants' motion to dismiss. Rec. Doc. 46, Exhibit A.
Rec. Doc. 1, at ¶ 17.
Trevino also pursued litigation against the Boomtown Defendants in that same Mississippi court but that suit was dismissed for lack of subject matter jurisdiction. That state court petition is not a part of the instant record.
In its order of dismissal, the Mississippi court characterized the case as either one based in contract (for damages) or federal copyright law. The Mississippi chancery court is a court of equitable jurisdiction and therefore had no subject matter jurisdiction regardless of which characterization was correct.
In October 2000, Trevino filed suit against Guice and the Boomtown Defendants in this Court. The complaint purports to assert only federal copyright claims. Trevino alleges that Defendants infringed his copyrights by exceeding the scope of the licensing agreements detailed in the Guice purchase orders and by continuing to use his artworks even after Guice was no longer advertising agency of record for Boomtown. Trevino asserts that he remains the owner and proprietor of all right, title, and interest in all of the works at issue in this case, and seeks to be declared the sole copyright owner of the original works of art. He also seeks an award and accounting of the profits, gains, and advantages derived by Defendants as a result of the infringement as well as attorney's fees.
The ownership claim is not likely one "arising under" federal copyright law because the sole issue appears to be whether Trevino contractually assigned to Guice his ownership rights to the federal copyrights. Such a claim is nothing more than a contractual dispute based upon an agreement entered into between the parties following the issuance of a copyright registration. See Goodman v. Lee, 815 F.2d 1030, 1031-32 (5th Cir. 1987). Because resolution of such a claim does not involve a remedy expressly created by the Copyright Act or involve construction of the Act, it does not likely "arise under" federal copyright law. Id.; see also Kane v. Nace International, 117 F. Supp.2d 592 (S.D. Tex. 2000). A claim for copyright infringement, however, does arise under the Act. See id.
Defendants' Motion to Dismiss
Defendants move to dismiss all of Trevino's claims arguing that his complaint fails to state a claim for relief. Specifically, they argue that the documents appended to the complaint demonstrate that Trevino had previously relinquished all of his rights to the materials at issue thereby precluding any suit premised upon copyright infringement. Defendants also argue that the prior Mississippi litigation bars the instant claims under the doctrine of res judicata.
Discussion
A motion to dismiss under Rule 12(b)(6) "is viewed with disfavor and is rarely granted." Ships v. McMahon, 234 F.3d 907, 911 (5th Cir. 2000) (quoting Kaiser Aluminum Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982)). When considering a motion to dismiss, the court must liberally construe the complaint in favor of the plaintiff, and all facts pleaded in the complaint must be taken as true. Id. (citing Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1986)). The district court may not dismiss a complaint under Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). This strict standard of review under Rule 12(b)(6) has been summarized as follows: "The question therefore is whether in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the complaint states any valid claim for relief." Id. (citing 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure § 1357 (2d ed. 1990)).
Considering the foregoing principles governing motions to dismiss, the Court concludes that Defendants' motion should be denied. Construing the facts alleged in the complaint in the light most favorably to Trevino, he unarguably states a claim for relief. While the documents appended to the complaint could very well be later proven to support Defendants' version of the facts, i.e., that Trevino relinquished ownership of the copyrights and fully compromised these claims in the prior litigation, Trevino's version of the facts cannot be discounted at this juncture.
For instance, the two documents that purport to explain Trevino's contractual relationship with Guice are rather cryptic and thus require the Court to delve into the parties' intent when these documents were executed. In order to make such a determination, the Court would have to wholly reject Trevino's version of events, which although not unequivocally supported by the exhibits, is not completely implausible either. Given that these issues are before the Court pursuant to a Rule 12(b)(6) motion to dismiss for failure to state a claim, Trevino is entitled to the benefit of the doubt on all factual issues. Because the parties intent as to what rights were in fact transferred by Trevino to Guice is unclear, Defendants are not entitled to dismissal at this time.
Rec. Doc. 46, Exhibit A.
Although a Rule 12(c) motion for judgment on the pleadings involves more of a substantive determination on the merits than a Rule 12(b)(6) motion to dismiss, courts do not grant Rule 12(c) motions unless it is clear that the merits of the controversy can be fairly and fully decided in such a summary manner. 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure § 1369 (2d ed. 1990))
Even if this motion had been filed as one for summary judgment, absent some compelling evidence that the Court does not have at this time, the Court would still likely conclude that issues of fact to the parties' contractual intent would preclude summary judgment on the ownership issue.
For similar reasons, Defendants are not entitled to dismissal at this time due to res judicata with respect to the Mississippi state court litigation. To the extent that Trevino's complaint alleges copyright infringement claims, those claims are within the exclusive jurisdiction of this Court and therefore traditional concepts of claim preclusion would not apply. To the extent that a compromise had been reached following the first lawsuit, a contention Trevino now contests, the Court can make no determination based upon the pleadings and attachments thereto alone as to what the parties actually compromised if anything. As with the ownership claim, a ruling in Defendants' favor on the res judicata would require the Court to reject Trevino's version of events in favor of Defendants' version-a credibility determination inappropriately made in conjunction with a motion to dismiss under Rule 12.
In fact, the Mississippi court specifically dismissed Trevino's second lawsuit for lack of subject matter jurisdiction. Rec. Doc. 1, Exhibit O.
The Court assumes, without deciding, that Trevino could have agreed as part of a settlement to forego any potential infringement claims notwithstanding that the Mississippi state court would have been without subject matter jurisdiction to actually adjudicate any such claims.
In sum, construing the facts in the pleadings in Trevino's favor as the Court must do at this time, Defendants have failed to show that they are entitled to dismissal at this time.
Accordingly;
IT IS ORDERED that Defendants' Motion to Dismiss Based Upon Rule 12(b)(6) and 12(c) (Rec. Doc. 46) should be and is hereby DENIED.