Scott v. LSC Communications Book LLC — Copyright Settlement Enforcement Suit Dismissed for Lack of Subject Matter Jurisdiction

Background

Patricia Scott, proceeding pro se, commenced this breach-of-contract action on March 5, 2025, originally naming Dover Publications, Inc. After she failed to serve Dover, she served Lakeside, doing business as LSC Communications Book LLC, which appeared and accepted service as the real party in interest. Scott then filed an amended complaint on April 30, 2026 naming LSC as the sole defendant, alleging that LSC breached a Confidential Settlement Agreement that had resolved her earlier copyright infringement lawsuit filed in the same court in 2018 under docket number 18-CV-3436.

The 2018 action had been brought under federal copyright law and was dismissed with prejudice in October 2019 after the parties reached the settlement. In the new action, LSC filed a letter requesting a premotion conference for an anticipated motion to dismiss. Instead, the court alerted the parties on August 27, 2026 to a potential subject matter jurisdiction defect and gave both sides an opportunity to respond, which they did. The court then found the premotion conference unnecessary and proceeded to dismiss the complaint for lack of subject matter jurisdiction.

The Court’s Holding

The court first held that diversity jurisdiction was lacking. Although the amount in controversy exceeded $75,000, complete diversity was absent because foreign citizens appeared on both sides of the case. Several of LSC's members were citizens of the United Kingdom, Canada, Luxembourg, and Switzerland, and Scott herself was a United Kingdom citizen who resided there and had been domiciled there since at least 2021. Under Second Circuit precedent, the presence of aliens on both sides destroys complete diversity, so diversity jurisdiction did not exist.

The court next rejected Scott's argument that federal question jurisdiction existed because the settlement arose from her earlier copyright infringement action. Relying on Supreme Court and Second Circuit authority, the court explained that a suit to enforce a settlement agreement is fundamentally a breach-of-contract claim that requires its own independent basis for jurisdiction, even when the underlying case involved a federal question. Because the alleged breach did not itself arise under the Copyright Act, no federal question jurisdiction existed.

Finally, the court held that ancillary jurisdiction was unavailable. A district court retains jurisdiction to enforce a settlement only if it expressly retains jurisdiction or incorporates the settlement's terms into its dismissal order. Neither occurred here: the 2019 dismissal order merely approved the stipulation, dismissed the action with prejudice, and closed the case, and the settlement agreement itself was never so-ordered. A CSA provision designating EDNY and other courts as exclusive venues was merely a forum-selection clause, not a retention of jurisdiction, and party consent cannot create subject matter jurisdiction. The claims in the complaint were therefore dismissed without prejudice and the clerk was directed to close the case.

Key Takeaways

• A breach-of-contract action to enforce a settlement that resolved a federal copyright case does not automatically fall within federal question jurisdiction.
• Complete diversity is destroyed when foreign citizens appear on both sides of the litigation, even if the amount in controversy exceeds $75,000.
• Ancillary jurisdiction to enforce a settlement exists only when the district court expressly retains jurisdiction or incorporates the settlement terms into its dismissal order.
• A contractual forum-selection clause identifying certain courts as exclusive venues does not, by itself, constitute a court order retaining jurisdiction to enforce the agreement.
• Because the dismissal was without prejudice, Scott may pursue her contract claim in a court that has an independent basis for subject matter jurisdiction.

Why It Matters

The decision reinforces the settled principle that settlement agreements, even those ending federal intellectual property litigation, are enforced as ordinary contracts requiring their own jurisdictional foundation. It underscores that parties who want a federal court to retain enforcement power must ensure the dismissal order expressly says so or incorporates the agreement's terms.

For copyright practitioners and pro se litigants alike, the case illustrates the jurisdictional pitfalls of returning to federal court to enforce a settlement without verifying that diversity, federal question, or ancillary jurisdiction actually exists. The ruling also clarifies that forum-selection clauses and party consent cannot substitute for an independent basis of federal subject matter jurisdiction.