Precedents Cited and Their Influence

• St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938): The Supreme Court’s “legal certainty” test anchors amount-in-controversy analysis: a good-faith jurisdictional allegation controls unless it appears to a legal certainty that the claim is for less than the jurisdictional amount. The Eleventh Circuit applied this standard through its own precedent to uphold jurisdiction.
• Fastcase, Inc. v. Lawriter, LLC, 907 F.3d 1335 (11th Cir. 2011): Reiterates that a plaintiff’s amount-in-controversy allegation stands unless it is legally certain the amount is less than $75,000. The court cites Fastcase to confirm the governing framework.
• Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805 (11th Cir. 2003): Confirms the “good faith” pleading requirement for the amount in controversy in diversity cases.
• United States v. Iguaran, 821 F.3d 1335 (11th Cir. 2016): Establishes that subject-matter jurisdiction is reviewed de novo and can be raised at any time, even for the first time on appeal. The panel applies that standard to reach and reject McLean’s jurisdictional challenge.
• Sutton v. Wal-Mart Stores East, LP, 64 F.4th 1166 (11th Cir. 2023): Restates the summary judgment standard: de novo review, all inferences in favor of the nonmovant, and summary judgment only where no genuine dispute of material fact exists.
• California Civil Code § 1550: Provides the essential elements of a contract under California law: capacity, consent, lawful object, and consideration. The undisputed satisfaction of these elements supported the finding of a valid contract.
• Fresno Canal & Irr. Co. v. Perrin, 149 P. 805 (Cal. 1915): A longstanding California authority on independent contractual obligations: a breach by one party does not excuse performance by the other where obligations are independent. This was critical to rejecting McLean’s “excuse” theory.
• Lipofsky v. N.Y. State Workers Comp. Bd., 861 F.2d 1257 (11th Cir. 1988): Venue defenses (including those premised on forum-selection clauses) are waived if not timely raised in a responsive pleading or Rule 12 motion. The court applies Lipofsky to dispose of McLean’s venue argument.
• Henson v. Columbus Bank & Trust Co., 770 F.2d 1566 (11th Cir. 1985): Denial of a motion to amend is reviewed for abuse of discretion. Henson provides the standard of review for the district court’s refusal to permit McLean’s late counterclaims.
• Lowe’s Home Ctrs., Inc. v. Olin Corp., 313 F.3d 1307 (11th Cir. 2002): It is not an abuse of discretion to deny leave to amend after the close of discovery and after amendment and dispositive motion deadlines have passed. This supports the district court’s denial of McLean’s belated amendment.
• Lockard v. Equifax, Inc., 163 F.3d 1259 (11th Cir. 1998); Farris v. United States, 333 F.3d 1211 (11th Cir. 2003): The court reviews denials of Rule 59(e) and Rule 60(b) motions for abuse of discretion. Applied to uphold denial of McLean’s reconsideration motion regarding transcript accuracy.
• Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678 (11th Cir. 2014): Issues not properly raised in an appellant’s brief, or raised for the first time on appeal, are deemed abandoned. The court used Sapuppo to disregard McLean’s new appellate arguments (e.g., upfront payment and ambiguity).

Legal Reasoning

1) Subject-Matter Jurisdiction: Good-Faith Pleading and the Legal-Certainty Test

McLean argued that MRCI inflated its damages to clear the jurisdictional threshold. The court applied the “good faith” pleading requirement and the “legal certainty” test. MRCI’s complaint alleged “at least” $150,000 in damages. At the time of filing, it was not legally certain that the amount in controversy was under $75,000. Indeed, the district court later quantified royalties owed at $87,948.12 (Order of Aug. 30, 2024), reinforcing that the controversy’s value exceeded the threshold. Under St. Paul Mercury, Federated Mutual, and Fastcase, jurisdiction stands.

McLean also conflated jurisdiction with venue, arguing the contract’s forum-selection clause required litigation in California. Venue is a waivable, non-jurisdictional defense. Because McLean failed to raise improper venue in his answer or via a Rule 12 motion, the defense was waived (Lipofsky).

2) Breach of Contract Under California Law: Independent Obligations and “Full Cooperation”

Applying California law per the contract’s choice-of-law clause, the court first found a valid contract under Cal. Civ. Code § 1550. The parties did not seriously dispute capacity, consent, lawful object, or consideration. The contract obligated McLean to “fully cooperate” with the royalty assignment and in securing the licensing organizations’ “acceptance and acknowledgment” of that assignment. By instructing ASCAP and SoundExchange to stop paying MRCI, McLean violated this duty, thereby breaching the contract.

McLean’s core defense was that MRCI’s alleged underpayment of “bonus rights” justified his cessation of performance. The court, relying on Fresno Canal, rejected that theory: the parties’ obligations were independent. MRCI’s obligation to “pay [McLean] a bonus when earned” was separate from McLean’s obligation “to cooperate in enforcing the contract.” Even if MRCI breached, that would not relieve McLean of his duty to cooperate in keeping the assignment operative. The proper vehicle for McLean’s grievances was a counterclaim or separate suit, not self-help cancellation.

3) Summary Judgment and the Effect of Unraised Counterclaims

McLean argued summary judgment was improper because factual disputes existed regarding MRCI’s royalty collections, bonus disbursements, and its use of redacted evidence. The court concluded these issues did not preclude summary judgment for two reasons:

• First, because the obligations were independent, alleged nonpayment by MRCI did not negate the elements of MRCI’s breach claim nor create a genuine dispute over McLean’s duty to cooperate.
• Second, McLean did not properly raise his payment-related grievances as counterclaims. His belated attempt to amend (over a year beyond the amendment deadline and eight months after the dispositive motion deadline) was denied. That denial was within the district court’s discretion under Henson and Lowe’s. With no properly pleaded counterclaims or defenses that would undercut MRCI’s claim, summary judgment was appropriate under Sutton.

4) Transcript Challenge and Motions for Reconsideration

McLean sought to challenge the accuracy of an evidentiary hearing transcript. The court reporter re-reviewed the contested portions and confirmed accuracy. The district court twice denied requests for the audio recording and later denied reconsideration under Rule 59(e) or 60(b). On appeal, the Eleventh Circuit found no abuse of discretion (Lockard; Farris) because McLean did not make a sufficient showing of inaccuracy to warrant the extraordinary relief he sought.

5) Abandonment of Issues First Raised on Appeal

The court deemed abandoned any issues first raised on appeal, such as whether MRCI paid the $72,000 upfront or whether the contract was ambiguous (Sapuppo). New theories cannot be deployed for the first time before the appellate court to defeat an otherwise proper judgment.

Impact and Practical Implications

• Contract Enforcement in Royalty Assignments: Artists and rights holders should not resort to unilateral “self-help” with third-party payors (e.g., ASCAP, SoundExchange) when disputes arise. If duties are independent, a payment dispute does not authorize cancelling an assignment. The proper route is to sue or counterclaim while continuing to honor independent obligations.
• Pleading Strategy and Case Management: Alleged underpayments or accounting disputes must be timely pleaded as counterclaims or affirmative defenses. Courts strictly enforce scheduling orders; attempts to add counterclaims after amendment and dispositive deadlines will likely be denied. Parties cannot rely on unpleaded grievances to block summary judgment on an opposing party’s straightforward contract claim.
• Jurisdictional Allegations: Good-faith allegations of the amount in controversy control unless it is legally certain the value is below the jurisdictional threshold. Later events or calculations confirming a higher value bolster jurisdiction. Defendants should recognize the high bar for dislodging jurisdiction premised on a good-faith damages allegation.
• Forum-Selection Clauses: Venue objections, including those based on forum-selection clauses, are waivable and must be raised in the first responsive pleading or a Rule 12 motion. Litigants should not conflate venue with subject-matter jurisdiction.
• Evidence and Transcripts: Challenging a transcript requires a concrete, substantiated showing. Mere disagreement with the reporter’s certification is unlikely to carry Rule 59(e) or 60(b) burdens.
• Drafting Lessons for California Contracts: If parties intend one party’s payment to be a condition precedent to the other’s performance (rather than an independent promise), they must say so unambiguously. Otherwise, courts may treat promises as independent, foreclosing “excuse of performance” arguments and exposing self-help termination to breach claims.
• Persuasive, Not Binding: As an unpublished, per curiam decision, the opinion is not binding precedent in the Eleventh Circuit. Nonetheless, it is a useful illustration of litigating royalty assignments, managing counterclaims, and applying California contract principles in federal diversity cases.