Opinion
05 Civ. 4268 (RMB) (MHD).
January 27, 2006
DECISION AND ORDER
I. Background
On or about May 10, 2005, Daniel R. Solin ("Plaintiff") filed an amended complaint ("Am. Complaint") against the National Association of Securities Dealers, Inc. ("NASD") and NASD Dispute Resolution, Inc. (collectively, "Defendants"), seeking a declaratory judgment, pursuant to 28 U.S.C. § 2201, that the NASD arbitration awards database is not "protected by the copyright laws" and that Defendants do not "have the legal right to condition the use of [NASD's] website . . . on the agreement of users to limit, in any way, their use of NASD arbitration awards obtained from those sites or elsewhere." (Am. Complaint ¶¶ 1, 18.)
In February 2005, Plaintiff "made several requests to the NASD for permission to use its database of arbitration awards. Specifically, he requested permission (i) to use the LEXIS database of NASD arbitration awards . . . so that he and his colleague, could do an analysis of these awards and publish the results in a law review article, and (ii) to utilize the results of this study and analysis in a commercial database which would be made available to some or all securities arbitration attorneys and the investing public." (Am. Complaint ¶ 14.) "By letter dated February 16, 2005 the NASD granted [Plaintiff] the right to use the requested database for a law review article, but only on the condition that the article" include an acknowledgment of NASD's copyright. (Am. Complaint ¶ 15.) "By email dated April 13, 2005, the NASD refused to grant [Plaintiff's] request for use of the information, analysis and data extracted from the database of arbitration awards in a commercial database" without first obtaining additional information from Plaintiff to ensure that such use would conform to the terms of the NASD license. (Am. Complaint ¶ 16.) Plaintiff asserts that he "has a reasonable apprehension that he will face suit or threat of suit if he uses the LEXIS database for either his law review article (without the copyright acknowledgment required by the NASD) or if he uses the information, analysis and data extracted from the database of arbitration awards for a commercial web site." (Am. Complaint ¶ 19.)
On or about June 27, 2005, Defendants moved to dismiss the Amended Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (Notice of Defendants' Motion to Dismiss; Memorandum of Law in Support of Defendants' Motion to Dismiss ("Def. Mem."); Declaration of Carla B. Oakley in Support of Defendants' Motion to Dismiss.) Plaintiff filed an opposition on or about July 6, 2005. (Memorandum of Law in Opposition to Defendants' Motion to Dismiss and in Support of Plaintiff's Motion for Summary Judgment ("Opposition"); Affidavit of Daniel R. Solin, Esq ("Solin Aff.").) On or about July 19, 2005, Defendants filed a reply. (Reply Memorandum in Support of Defendants' Motion to Dismiss.)
II. Legal Standard
"As the party seeking to invoke the subject matter jurisdiction of the district court, plaintiff bears the burden of demonstrating that there is subject matter jurisdiction in this case. Subject matter jurisdiction under the Declaratory Judgment Act requires the existence of an actual case or controversy." Apotex, Inc. v. Pfizer Inc., 385 F. Supp. 2d 187, 191 (S.D.N.Y. 2005) (internal citations and quotation marks omitted). "If no actual case or controversy exists between the parties regarding the subject on which declaratory judgment is sought, the court lacks subject matter jurisdiction." Dr. Reddy's Labs., Ltd. v. Aaipharma, Inc., No. 01 Civ. 10102, 2002 WL 31059289, at *5 (S.D.N.Y. Sept. 13, 2002);see generally Flast v. Cohen, 392 U.S. 83, 94 (1968) ("The jurisdiction of federal courts is defined and limited by Article III of the Constitution. In terms relevant to the question for decision in this case, the judicial power of federal courts is constitutionally restricted to `cases' and `controversies.'").
III. Analysis
Defendants argue that "on the face of the Amended Complaint there is no justiciable controversy," in that "plaintiff does not allege . . . that the defendants threatened to sue him or even refused to negotiate with him. To the contrary, plaintiff concedes that NASD simply requested information regarding his planned use before acting on his request . . . [and] plaintiff concedes that NASD granted him the right to use the awards for a planned article, so long as plaintiff provided attribution and a copyright notice." (Def. Mem. at 5-6, 10.) Plaintiff responds that he "has commenced . . . the publication of the law review article as well as the launching of the commercial web site," and that his "proposed use is expressly prohibited by both the NASD's and SAC's web-based contractual restrictions." (Opposition at 9.)
"In the patent and copyright area, courts employ a `pragmatic two-part test' to determine whether a plaintiff seeking a declaratory judgment fulfills statutory and constitutional justiciability requirements. Under this test, `[t]here must be both (1) an explicit threat or other action by the [copyright holder], which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity.'" Matthew Bender Co., Inc. v. West Publ'g Co., Nos. 94 Civ. 0589, 95 Civ. 4496, 1996 WL 223917, at *1 (S.D.N.Y. May 2, 1996) (quoting BP Chems. Ltd. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed. Cir. 1993)). The "reasonable apprehension" prong "of the justiciability inquiry is satisfied by a showing of . . . direct threats or indirect threats or actions that place the declaratory plaintiff in reasonable apprehension of suit. In the absence of express threats, the `totality of circumstances' surrounding defendant's conduct will determine if the plaintiff had reasonable apprehension of suit." Matthew Bender, 1996 WL 223917, at *1 (internal citations and quotation marks omitted). "Reasonable apprehension must be proved by objective evidence of the conduct of the [Defendant]. A purely subjective apprehension of an infringement suit is insufficient to satisfy the actual controversy requirement." Eon Labs, Inc. v. Pfizer Inc., No. 05 Civ. 0002, 2005 WL 1705295, at *3 (S.D.N.Y. July 19, 2005) (internal citations and quotation marks omitted).
Here, Plaintiff has no reasonable apprehension of suit. Defendants have not threatened litigation, either directly or indirectly. Plaintiff's claim of an implied threat is that Defendants "will not, without a series of vague and threatening qualifications, permit him to publish a law review article without acknowledging [their] alleged copyright interest in these awards." (Opposition at 8-9.) The "qualifications" cited by Plaintiff appear neither vague nor threatening. (Solin Aff. ¶¶ 20, 23, 25.) For example, while Plaintiff claims that in an email, "NASD reserved the right to assert that its copyright had been infringed" by his law review article, the email cited by Plaintiff appears not to contain such language. (Solin Aff. ¶ 23 (citing Solin Aff. at Exh. M).) Plaintiff's claim of reasonable apprehension is conclusory and unsupported by facts in the record. (Solin Aff. ¶ 31 ("The fact that the NASD would continue to assert that it has a copyright interest in the awards themselves . . . is an indication of the tenacity with which it zealously will fight to keep this information from public scrutiny. I have no doubt that I will face the full wrath of this quasi-governmental entity in the absence of a favorable ruling by this Court.").)
Plaintiff states, among other things, "NASD granted me the right to use the requested database for a law review article, but only on the condition that the article made the following acknowledgment: `Arbitration award information ©2005 National Association of Securities Dealers, Inc. (NASD). Used with permission from NASD.'" (Solin Aff. ¶ 20.) Also, "the NASD refused to grant my request for use of the information, analysis and data extracted from the database of arbitration awards in a commercial database without first obtaining additional information in order `to verify that the licensee will be able to meet the terms of our license. . . .' The NASD asked me to fill out a questionnaire `describing in detail to use how our content will be displayed and include screen mockups.'" (Solin Aff. ¶ 25.)
And, considering the totality of the circumstances, Defendants' correspondence suggests the absence of threats and reasonable efforts to accommodate Plaintiff. (Solin Aff. at Exhs. L ("NASD hereby grants you permission to use NASD arbitration awards information for the above-stated uses."); M ("Although the complaint does not articulate why you object to the requested notice, this seems to be an issue that easily can be resolved. . . . Under these specific circumstances and for purposes of a noncommercial law review article only, NASD will not require an attribution or copyright notice. As a result, this issue is resolved."); O ("I am attaching a questionnaire that we typically use with new licensees before agreeing to send them our licensing terms. If you fill this out . . . we will revisit your request.").) "Plaintiff has failed to establish any reasonable apprehension of suit." Eon Labs, 2005 WL 1705295, at *4.
IV. Conclusion and Order
For the reasons set forth above, Defendants' motion to dismiss is granted. The Clerk of the Court is respectfully requested to close this case.