United States District Court, D. South Carolina, Columbia Division
ORDER AND OPINION
MARGARET B. SEYMOUR Senior United States District Court
matter is before the court on a motion for remand brought by
Plaintiff Hireguru, LLC (“Plaintiff”). ECF No.
11. Defendants Julius Walker McKay, Jr.; McKay Consulting
Group, LLC; and Sean Rankin (“Defendants”) have
filed a memorandum in opposition to Plaintiff's motion.
ECF No. 17.
commenced this action on April 21, 2016 in the Court of
Common Pleas for the Fifth Judicial Circuit, Richland County,
alleging that Defendants conspired to access and use
proprietary information from Plaintiff's website,
accessible at www.hireguru.com and
www.inervue.net. ECF No. 1-1. Plaintiff requested
injunctive relief and asserted the following state law causes
of action: civil conspiracy, fraud, and breach of terms and
conditions. Id. On May 24, 2016, Defendants removed
the action to this court pursuant to 28 U.S.C. §§
1331 and 1338(a). ECF No. 1. In their notice of removal,
Defendants alleged that some or all of Plaintiff's state
law causes of action were preempted by the Copyright Act of
1976, codified at 17 U.S.C. §§ 101, et
seq. (“Copyright Act”). On June 17, 2016,
Plaintiff filed the instant motion to remand. ECF No. 11.
Defendants filed a response in opposition on July 5, 2016.
ECF No. 17. Plaintiff filed a reply on July 15, 2016.
motion for remand, Plaintiff argues that Defendants have
failed to meet their burden in seeking removal under the
doctrine of complete preemption. ECF No. 11 at 3.
“[A]ny civil action brought in a State court of which
the district courts of the United States have original
jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for
the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). In order
to determine if an action arises under federal law, the court
must apply the well-pleaded complaint rule. See
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).
This rule provides that “federal jurisdiction exists
only when a federal question is presented on the face of the
plaintiff's properly pleaded complaint.”
Id. A plaintiff “may avoid federal
jurisdiction by exclusive reliance on state law” in
pleading its case. Id.
there is an “independent corollary” to the
well-pleaded complaint rule, which is known as the complete
preemption doctrine. Caterpillar, 482 U.S. at 393.
Under this doctrine, a defendant may argue federal preemption
as a defense to a federal suit; and in certain instances, the
force of the preemptive statute may be “so
extraordinary that it converts an ordinary state common-law
complaint into one stating a federal claim for purposes of
the well-pleaded complaint rule.” Id.
(internal quotations omitted). A complaint purporting to
raise only state law claims may be deemed to “aris[e]
under the . . . laws . . . of the United States”
pursuant to 28 U.S.C. § 1331, and be deemed removable to
federal court pursuant to 28 U.S.C. § 1441(b). In their
notice of removal and subsequent memorandum, Defendants
contend that Plaintiff's claims are subject to the
doctrine of complete preemption. ECF Nos. 1 and 17.
Fourth Circuit has addressed the doctrine of complete
preemption as it relates to the Copyright Act. In
Rosciszewski v. Arete Associates, Inc., 1 F.3d 225,
229 (4th Cir. 1993), the Fourth Circuit noted that the aim of
the Act is to provide for the protection of “original
works of authorship fixed in [a] tangible medium of
expression, ” including “compilations and
derivative works.” 17 U.S.C. §§ 102 and 103.
Section 106 then enumerates the specific rights a copyright
owner possesses in exclusivity: (1) reproduce the copyrighted
work; (2) prepare derivative works; (3) distribute copies of
the work by sale or otherwise; and, with respect to certain
artistic works, (4) perform the work publicly; and (5)
display the work publicly. Rosciszewski, 1 F.3d at
Next, the Fourth Circuit examined the portion of the Act
providing for federal preemption:
[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 [of the Copyright Act] 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 . . . are governed exclusively by
17 U.S.C. § 301. In examining the language of §
301, the Fourth Circuit established a two-prong inquiry to
aid courts in identifying whether state law claims are
preempted: (1) the work is within the scope of the
“subject matter of copyright, ” as specified in
§§ 102 and 103; and (2) the rights granted under
state law are equivalent to any exclusive rights within the
scope of federal copyright as specified in § 106.
Rosciszewski, 1 F.3d at 229.
assert that Plaintiff's state law claims meet both prongs
of the Rosciszewski inquiry and are therefore
preempted. Under the first prong, Defendants look to the
“original works of authorship” language of §
102. Defendants appear to characterize Plaintiff's
“ computer program and/or software” as original
works of authorship, rendering them subject matters of
copyright. ECF No. 17 at 5. Plaintiff does not dispute that
its “proprietary ideas and trade secrets” do not
qualify as original works of authorship.
does, however, argue that the second prong of
Rosciszewski has not been met. According to
Plaintiff, the terms and conditions to which Defendants
agreed,  offer protections “well beyond what
is offered by the Copyright Act.” ECF No. 18 at 3. For
example, Plaintiff highlights language in its terms and
conditions that prohibits users from “reverse
enginer[ing] . . . any part of the Website, Service or
Content or any parts thereof.” ECF No. 11 at 4 n.3.
However, under the Copyright Act, reverse engineering has
been deemed “fair use” and is not afforded
protection. Atari Games Corp. v. Nintendo of Am.
Inc., 975 F.2d 832, 843 (Fed. Cir. 1992)
(“[R]everse engineering object code to discern the
unprotectable ideas in a computer program is a fair
use.”). From this, Plaintiff argues that the terms and
conditions on its website offer protections in excess of
those offered by the Copyright Act. Therefore, Plaintiff
concludes, a breach of contract action seeking to enforce
those terms and conditions is broader than, and thus not
equivalent to, a copyright infringement cause of action.
argue that Plaintiff's breach of contract claim is not
“qualitatively different from a copyright infringement
claim, ” and thus preemption must occur. ECF No. 17 at
12 (citing Rosciszewski, 1 F.3d at 229-30).
Defendants rely on U.S. ex rel. Berge v. Bd. of Tr. of
the Univ. ofAlabama, 104 F.3d 1453, 1463 (4th
Cir. 1997), wherein the court stated that the second prong of
Rosciszewski will be satisfied unless there is an
“extra element” to the state law claim. Under
this precedent, Defendants assert that Plaintiff's state
law claims have offered no such element. However, Defendants
do not address Plaintiff's discussion of reverse
engineering. Defendants fail to address the “extra
element” asserted by Plaintiff and instead surmise that
Plaintiff's breach of contract claim is
“substantively identical.” ECF No. 17 at 16. The
court is unpersuaded by ...