Allegiant Marketing Group, Inc. v. May Avenue Ford, LLC

986 F. Supp. 2d 1259, 2013 WL 6037107, 2013 U.S. Dist. LEXIS 162314
CourtDistrict Court, W.D. Oklahoma
DecidedNovember 14, 2013
DocketNo. CIV-12-1212-HE
StatusPublished

This text of 986 F. Supp. 2d 1259 (Allegiant Marketing Group, Inc. v. May Avenue Ford, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allegiant Marketing Group, Inc. v. May Avenue Ford, LLC, 986 F. Supp. 2d 1259, 2013 WL 6037107, 2013 U.S. Dist. LEXIS 162314 (W.D. Okla. 2013).

Opinion

ORDER

JOE HEATON, District Judge.

Plaintiff Allegiant Marketing Group, Inc. (“Allegiant”) sued May Avenue Ford, L.L.C., Chad Brooks, Accelerated Dealer Services, LLC, Platinum Plus Printing, LLC, M & N Dealerships V, LLC, Veugeler Design Group, Inc., and M & N Dealerships IV, LLC alleging claims under the federal Copyright Act and a claim under state law for interference with prospective business interests. Defendants have filed motions to dismiss plaintiffs tortious interference claim, pursuant to Fed.R.Civ.P. 12(b)(6),1 which the court concludes should be granted.2

Defendants assert that plaintiffs state law interference claim is preempted by the Copyright Act, 17 U.S.C. § 101 et seq. Section 301 of the Act describes the extent to which state common-law and statutory causes of action are preempted. It provides in part:

(a) [A]ll legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.
(b) Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to—
(3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106;

[1261]*126117 U.S.C. § 301. “[A] state-law claim is preempted if ‘(1) the work is within the scope of the “subject matter of copyright” as specified in 17 U.S.C. §§ 102 and 103; and (2) the rights granted under state law are equivalent to any exclusive rights within the scope of federal copyright as set out in 17 U.S.C. § 106.’ ” R.W. Beck, Inc. v. E3 Consulting, LLC, 577 F.3d 1133, 1146 (10th Cir.2009) (quoting Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 838 (10th Cir.1993)).

Defendants contend that plaintiff’s claim meets both prongs of the preemption test. As plaintiff does not challenge the first requirement, preemption “turns on whether the state-law rights asserted by [plaintiff] are equivalent to any of the exclusive rights within the general scope of copyright, as specified in 17 U.S.C. § 106.” Id. at 1147. Section 106 grants copyright owners the exclusive rights to “(1) reproduce the copyrighted work; (2) prepare derivative works; (3) distribute copies of the work; (4) perform the work publicly; and (5) display the work publicly.” Id. As explained by the Tenth Circuit, a state law violation is deemed preempted, “[w]hen a right defined by state law may be abridged by an act which, in and of itself, would infringe one of the exclusive rights.” Id. (internal quotations omitted). It is not preempted if the state law violation is “predicated upon an act incorporating elements beyond mere reproduction or the like.” Id. (internal quotations omitted).

In its second amended complaint, plaintiff alleges that:3

By copying, reproducing, distributing and selling Plaintiffs works for their own commercial use and benefit, Defendants interfered with, impeded and/or prevented Plaintiffs ability to realize commercial gain from their creative efforts. Specifically, Defendants poached particular customers who desired to run marketing promotions using Plaintiffs’ works. In addition, the sale of copies of Plaintiffs copyrighted work to Plaintiffs potential customer has decreased Plaintiffs’ ability to build further market its Mystery Mania program.
As a result of Defendants’ conduct, Plaintiff has been denied the right and opportunity to create business relationships and to generate income therefrom.

Doc. # 74, ¶¶ 42, 43. Plaintiff argues that it has alleged two types of interference— interference with its contractual relationship with the Connor Auto Group4 and a “general claim” of interference with prospective business interests, based on lost sales of non-copyrighted mail programs or “follow-on mail campaigns.” Doc. # 95, pp. 6-7. It asserts that, because the elements of its state law claim “differ from those of copyright claims,” Doc. # 95, p 2, its tortious interference claim is not preempted.

Plaintiffs argument is flawed. First, it has not alleged in the second amended complaint that it had a “valid and enforceable contract with Connor.” Doc. # 95, p. 4.5 Second, the extra element it relies on to [1262]*1262distinguish its claim of interference with prospective business interests from mere copyright infringement is intent, whether the defendant’s conduct is “ ‘malicious and wrongful.’” Id. at p. 7. However, “[t]he addition of a scienter element does not change what acts are prohibited but merely narrows the applicability of the statute.” Beck, 577 F.3d at 1148 (internal quotations omitted). It does not alter the fundamental nature of the action or “convert [Allegiant’s] claim to something more than the equivalent of a claim of copyright infringement.” Id. See Stromback v. New Line Cinema, 384 F.3d 283, 301 (6th Cir.2004) (“The existence of an extra element precludes preemption only where the element changes the nature, rather than the scope, of the action.”).

In Ehat v. Tanner, 780 F.2d 876 (10th Cir.1985), the plaintiff sued the defendants alleging he was injured by their “unauthorized reproduction and sale of literary material in which [the plaintiff] claimed a proprietary interest.” Id. at 877. Plaintiff sought, as part of his damages, to recover for the “reduction in the market value of his master’s thesis due to the misappropriation” and “for general damage to his reputation as a scholar resulting from defendant’s unlawful and improper publication.” Id. at 879 (internal quotation omitted).

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986 F. Supp. 2d 1259, 2013 WL 6037107, 2013 U.S. Dist. LEXIS 162314, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allegiant-marketing-group-inc-v-may-avenue-ford-llc-okwd-2013.