New York State Court of Claims

New York State Court of Claims

LIFELINE v. STATE OF NEW YORK, #2007-039-015, Claim No. 110129, Motion No. M-71680


Synopsis


Claimant alleges, among other things, that it provided various state senators with its National Child I.D. KitsTM and that the recipients unlawfully reproduced and distributed the i.d. kits in violation of “claimant’s copyright, trademark and other property rights” and the Lanham Act (15 USC § 1125). Defendant’s motion to dismiss the claim pursuant to CPLR 3211 (a) (2) and (8) on the grounds that the Court lacks subject matter and personal jurisdiction is granted in part and denied in part. The Court concludes that, insofar as claimant has alleged (1) a violation of the Copyright Act, (2) breach of a duty to refrain from producing unauthorized copies of claimant’s i.d. kit and duty to honor federal copyright and trademark notices on claimant’s i.d. kits, and (3) commission of a federal constitutional tort, it does not possess subject matter jurisdiction of such claims. To the extent that claimant alleges (1) violation of the Lanham Act, (2) trade dress infringement and (3) commission of a state constitutional tort, the Court concludes that it does possess subject matter jurisdiction of such claims. The Court further concludes that defendant, the Senate of the State of New York, is not immune from suit as the alleged activity involved a constituent service rather than a legitimate legislative activity.

Case Information

UID:
2007-039-015
Claimant(s):
STUDENT LIFELINE, INC.
Claimant short name:
LIFELINE
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
110129
Motion number(s):
M-71680
Cross-motion number(s):

Judge:
JAMES H. FERREIRA
Claimant’s attorney:
John A. Dalley, Esq.
Defendant’s attorney:
Hon. Andrew M. Cuomo
Attorney General of the State of New York
By: Glenn C. KingAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
August 10, 2007
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Student Lifeline, Inc. (hereinafter “claimant”) commenced this claim against the Senate of the State of New York (hereinafter “Senate”) and various state senators in their individual and “respective” capacities (hereinafter “senators” and collectively with the Senate as “defendants”) during November 2004. Claimant alleged, among other things, that it provided defendants with its National Child I.D. KitsTM (hereinafter “i.d. kits”) and that defendants unlawfully reproduced and distributed the i.d. kits in violation of “[c]laimant’s copyright, trademark and other property rights” and the Lanham Act (15 USC § 1125). During December 2004, claimant commenced a companion federal action against the Senate and various state senators, in their individual and “respective” capacities, alleging violations of the Copyright Act of 1976 (17 USC § 101 et seq.) and the Lanham Act (15 USC § 1051 et seq.). During January 2005, defendants moved to dismiss the state claim. The motion was resolved by agreement of the parties and the court ordered a stipulation of conditional dismissal (Hard, J.) dated October 7, 2005. The parties agreed to dismiss the claim, but provided for its reactivation conditioned upon the status of the federal court action. During November 2005, the United States District Court for the Eastern District of New York (Seybert, J.) granted partial summary judgment to defendants therein and dismissed the action as against the Senate based on Eleventh Amendment immunity, but denied summary relief with respect to the senators in their individual capacities (see Student Lifeline, Inc. v The Senate of the State of New York, et al., No. 04-CV-5484).[1]

Thereafter, the claim was reactivated in this Court, pursuant to the parties’ stipulation. Following a telephone conference with the Court, claimant served an amended claim.[2] The Senate (hereinafter “defendant”) is the sole defendant named in the amended claim which alleges, in relevant part, as follows:
“In or about May 2004, a New York State senator, ... contacted Claimant for the purpose of purchasing via ad sponsors plaintiff’s National Child I.D. Kits.TM After Claimant furnished its products to defendants, a State Senate representative stated they ‘no longer required [Claimant’s] services’ and then willfully reproduced and distributed unauthorized copies of Claimant’s products in violation of Claimant’s copyright, trademark and other State and common law property rights. Some of Defendant’s members have further falsely represented to the public that he/she designed, developed and authored the infringing kits in violation of the Lanham Act, Title 15 USC § 1125 et seq., causing a likelihood of confusion and actual confusion in commerce.

As well, defendant infringed upon Claimant’s federally protected and common law trade dress contained within its products, causing a likelihood of confusion and actual confusion in commerce. Defendant’s copying and distribution of its copies violated Claimant’s Due Process rights, under the United States and New York Constitutions, by reason of defendant’s intentional taking and usurpation of Claimant’s property without due process of law or just compensation.

Further, defendant owed Claimant a duty not to have its members, agents and/or its employees produce unauthorized copies of Claimant’s products and in failing to honor and heed conspicuous federal copyright and trademark notices placed on Claimant’s products.”

Defendant now seeks to dismiss the claim pursuant to CPLR 3211 (a) (2) and (8) on the grounds that the Court lacks subject matter jurisdiction and personal jurisdiction. The Court is mindful that “[o]n a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction (see, CPLR 3026)” (Leon v Martinez, 84 NY2d 83, 87 [1994]). The Court must “accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (id. at 87-88).

With these principles in mind, the Court concludes that, insofar as claimant has alleged (1) a violation of the Copyright Act, (2) the breach of a duty to refrain from producing unauthorized copies of claimant’s i.d. kit and a duty to honor federal copyright and trademark notices on claimant’s i.d. kits, and (3) the commission of a federal constitutional tort, it does not possess subject matter jurisdiction of such claims. However, to the extent that claimant alleges (1) violation of the Lanham Act, (2) trade dress infringement and (3) the commission of a state constitutional tort, the Court concludes that it does possess subject matter jurisdiction of such claims. The Court further concludes that defendant is not immune from suit.

As a general rule, copyright law is governed by 17 USC § 101 et seq., also referred to as the Copyright Act. 28 USC § 1338 (a) provides for exclusive federal jurisdiction over actions involving alleged violations of the Copyright Act which states, in relevant part, that
“[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks. Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases.”
In fact, absent certain discrete statutory exceptions, the Copyright Act preempts state copyright protections. More specifically, section 301 of the Act provides, in pertinent part, that
“(a) On and after January 1, 1978, all 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 –

(1) subject matter that does not come within the subject matter of copyright as specified by sections 102 and 103, including works of authorship not fixed in any tangible medium of expression; or

(2) any cause of action arising from undertakings commenced before January 1, 1978; or

(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; or

(4) State and local landmarks, historic preservation, zoning, or building codes, relating to architectural works protected under section 102(a)(8)” (17 USC § 301 [a] [b]).

“The intention of section 301 . . . is to preempt and abolish any rights under the common law or statutes of a State that are equivalent to copyright and that extend to works coming within the scope of the Federal copyright law” (Judiciary Comm Notes, reprinted following USC Ann., Book 17, § 301, at 608). Indeed, section 301 of the Act is “intended to be stated in the clearest and most unequivocal language possible so as to foreclose any conceivable misinterpretation of its unqualified intention that Congress shall act preemptively, and to avoid the development of any vague borderline areas between State and Federal protection” (Judiciary Comm Notes, supra; see also Katz Dochrermann & Epstein, Inc. v Home Box Office, 1999 WL 179603, *2 [SDNY]). Thus, New York courts have held that State courts are divested of jurisdiction over claims seeking redress for the alleged violation of rights equivalent to those provided for by the Copyright Act including common law copyright claims (see Editorial Photocolor Archives v Granger Collection, 61 NY2d 517, 522 [1984]; Walker v Time Life Films, 1983 WL 37482 [Sup Ct, Bronx County 1983]; compare Grecco v Sygma, 284 AD2d 234, 235 [2001]; Jordan v Aarismaa, 245 AD2d 616, 617 [1997]).

Here, while the amended claim does not contain a direct reference to the Copyright Act, claimant does aver that defendant “willfully reproduced and distributed unauthorized copies of [the i.d. kits] in violation of Claimant’s copyright, trademark and other State and common law property rights.” Additionally, in opposition to the instant motion, claimant’s attorney characterizes the allegations contained within the original claim as including copyright infringement pursuant to 17 USC §§ 101, 501 et seq. Moreover, the gravamen of the claim is that defendant engaged in the unauthorized reproduction and distribution of claimant’s products - rights equivalent to those under the Federal copyright law (see 17 USC §§ 102 [a], 106 [1], [3]). Based upon the language employed in the amended claim, counsel’s characterization of the original allegations and the essence of the claim, the Court finds that it is divested of jurisdiction over this aspect of the claim (see 28 USC § 1338 [a]; 17 USC § 301). Nor can claimant salvage the Court’s jurisdiction by characterizing defendant’s alleged conduct as violations of “other State and common law property rights” or by characterizing the claim as one sounding in negligence (see Editorial Photocolor Archives v Granger Collection, supra at 523).

As for the alleged Lanham Act violation, the Court finds that it does possess subject matter jurisdiction over claimant’s allegations that defendant violated the federal statute (see 15 USC § 1051 et seq.), that defendant engaged in trade dress infringement, and that defendant engaged in conduct constituting an intentional taking and usurpation of claimant’s property in violation of the due process clause of the Constitution of the State of New York.

There can be little dispute that claimant has alleged violation of the Lanham Act. The amended claim states, in relevant part, that “[s]ome of Defendant’s members have . . . falsely represented to the public that he/she designed, developed and authored the infringing kits in violation of the Lanham Act, Title 15 USC § 1125 et seq., causing a likelihood of confusion and actual confusion in commerce.” That section provides, in relevant part, that
“[a]ny person who, on or in connection with any goods or services . . . uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . . is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . . shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.”

Unlike the Copyright Act, which bestows original and exclusive jurisdiction of such matters upon the federal district courts (see 28 USC § 1338 [a]), the Lanham Act confers only original jurisdiction of all actions arising thereunder upon the federal district courts (see 15 USC § 1121 [a]). Congress has not restricted the jurisdiction of state courts over suits arising under the Lanham Act. In fact, several New York courts have considered causes of action arising under the Lanham Act (see Dell Pub. Co. v Stanley Pub., 9 NY2d 126, 133-138 [1961]; A-Frame, Inc. v Concord Pools, 289 AD2d 921 [2001]; Wyndham Co. v Wyndham Hotel Corp., 261 AD2d 242, 243 [1999], lv denied 93 NY2d 812 [1999]; American Preferred Prescription v Health Mgt., 252 AD2d 414, 415, 419-420 [1998]).

Thus, the Court is not persuaded by defendant’s argument that the mere passage of federal legislation providing for a new cause of action - here, the Lanham Act - confers exclusive jurisdiction of such causes of action upon the federal courts. To hold as defendant suggests would be to depart from the well-settled doctrine that “the state and federal courts have concurrent jurisdiction of suits of a civil nature arising under the Constitution and laws of the United States, save in exceptional instances where the jurisdiction has been restricted by Congress to the federal courts” (Grubb v Public Utilities Commission, 281 US 470, 476 [1930]; see Howlett v Rose, 496 US 356, 367-369 [1990]; Simpson Elec. Corp. v Leucadia, Inc., 128 AD2d 339, 342 [1987], appeal dismissed 70 NY2d 708 [1987]; Bronson v Potsdam Urban Renewal Agency, 82 AD2d 946, 947 [1981]).

Likewise, since the total image or “trade dress” of a product is protected by the unfair competition provisions of the Lanham Act (see Forschner Group, Inc. v Arrow Trading Co., Inc., 904 F Supp 1409, 1417 [SDNY 1995], affd 124 F3d 402 [2nd Cir (NY) Sep 04, 1997]), and federal copyright law does not preempt claims of common law trade dress infringement (see U-neek, Inc. v Wal-Mart Stores, Inc., 147 F Supp 2d 158, 178 [SDNY 2001]), it stands to reason that state and federal courts have concurrent jurisdiction of suits involving allegations of trade dress infringement (see Eliya Inc. v Kohl’s Dept. Stores, 2006 WL 2645196, *5 [SDNY 2006]; Cartier Inc. v Four Star Jewelry Creations, Inc., 348 F Supp 2d 217, 251 [SDNY 2004]).

Regarding the alleged violation of the Federal and State Constitutions, “no cause of action lies against the State of New York for alleged violations of an individual’s rights secured by the United States Constitution” (Ferrer v State of New York, 172 Misc 2d 1, 5 [Ct Cl 1996], but tort claims may be brought against the State of New York based upon violations of the State Constitution (see Brown v State of New York, 89 NY2d 172, 183 [1996]). Thus, to the extent that claimant alleges a violation of its due process rights arising under the United States Constitution “by reason of defendant’s intentional taking and usurpation of Claimant’s property,” or conversion as it is more commonly referred to, the Court is without jurisdiction over this aspect of the claim. However, the Court retains jurisdiction insofar as claimant seeks the same relief pursuant to the State Constitution.

Finally, as for the argument that the Court lacks personal jurisdiction over defendant, the Court concludes that defendant is not immune from judicial interference with respect to the alleged activity. The Court is not persuaded by defendant’s argument that, like the District Court (Seybert, J.), this Court should conclude that defendant is immune from suit pursuant to the Eleventh Amendment of the United States Constitution. “In short, the principle of [Eleventh Amendment] immunity is a constitutional limitation on the federal judicial power established in Art. III” (Pennhurst State School and Hosp. v Halderman, 465 US 89, 98 [1984]; see also Seminole Tribe of Florida v Florida, 517 US 44 [1996]). Thus the Appellate Court’s holding in Morrison v Budget Rent A Car Sys. (230 AD2d 253, 264 [1997]) that “South Carolina’s waiver of its right to be sued in its own courts is not a waiver of the immunity that it enjoys under the Eleventh Amendment of the United States Constitution, which bars Federal courts from entertaining several types of suits against unconsenting States.”

Unlike federal courts, state courts are guided by New York’s Speech and Debate Clause which, “like its Federal counterpart, ‘not only shields legislators from the consequences of litigation, but also protects them from the burden of defending themselves in court’ . . . as long as their actions fall within the ‘sphere of legitimate legislative activity’ ”(Matter of Urbach v Farrell, 229 AD2d 275, 277 [1997], appeal dismissed 90 NY2d 888 [1997], quoting Matter of Straniere v Silver, 218 AD2d 80, 83 [1996], affd 89 NY2d 825 [1996] and Eastland v U.S. Servicemen’s Fund, 421 US 491, 503 [1975]; see also NY Const, art. III, § 11). “The line separating protected from unprotected legislative activity is ultimately one between ‘purely legislative activities’ and ‘political’ matters” (Matter of Straniere v Silver, supra at 83 quoting U.S. v Brewster, 408 US 501, 512 [1972]). “Legislative activities include those acts that are . . . ‘an integral part of the deliberative and communicative process by which Members participate in committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation or with respect to other matters which the Constitution places within the jurisdiction of either House’ ” (id., quoting Gravel v U.S., 408 US 606, 625 [1972]). “The immunity does not extend, however, to constituent services” (id.).

Here, the alleged activity involved a constituent service - the provision of i.d. kits to citizens of the State of New York. As such, it cannot be considered a protected legislative activity and defendant is not immune from suit with respect thereto. Thus, this aspect of defendant’s motion must be denied.

Finally, the Court notes that the caption of the amended claim erroneously contains the name of the state entity. The error in the caption is not a jurisdictional defect, however, and the misnomer shall be disregarded (see Schwartzberg v State of New York, 121 Misc 2d 1095,1097 [Ct Cl 1983], affd 98 AD2d 902 [1983]; see also Van Allen v State of NewYork, Ct Cl, Hard, J., June 22, 2004, UID #2004-032-054). The caption has therefore been amended, sua sponte, to indicate that the State of New York is the only properly named defendant (see Boyd v Town of N. Elba, 28 AD3d 929, 930 [2006], lv dismissed Spellman v Town of N. Elba, 7 NY3d 783 [2006]; Van Allen v State of NewYork, supra; CPLR 2001).

Accordingly, it is hereby

ORDERED that Motion No. M-71680 is granted in part and denied in part; and it is further

ORDERED that claimant must file the original and two (2) copies of the amended claim with the Chief Clerk of the Court of Claims within 20 days of the filing date of this Decision and Order.


August 10, 2007
Albany, New York

HON. JAMES H. FERREIRA
Judge of the Court of Claims


Papers Considered
:
  1. Notice of Motion to Dismiss filed on May 3, 2006;
  2. Affirmation in Support of Motion to Dismiss dated April 26, 2006, with exhibits;
  3. Affirmation in Opposition to Motion to Dismiss dated June 19, 2006, with exhibits; and
  1. Defendant’s Response to Claimant’s Opposition to Dismiss the Claim dated June 26, 2006.

[1].Upon information and belief, the parties continue to litigate the matter in federal court.
[2].Claimant is directed to file the amended claim in the Clerk’s office pursuant to §206.5 of the Uniform Rules for the Court of Claims.