Insurer Must Indemnify Fat Joe in “All the Way Up” Plagiarism Lawsuit

Cartagena v. Homeland Ins. Co. of New York, No. 19-cv-6287-CM, 2019 WL 6878243 (S.D.N.Y. Dec. 16, 2019).

On December 16, 2019, Chief Judge McMahon granted summary judgment to Rapper Fat Joe against a Defendant insurance company for refusing to indemnify and defend him in a lawsuit alleging that he plagiarized his double-platinum song “All the Way Up.”

In January of 2019, Defendant issued Plaintiff a Music Professional Liability Insurance Policy covering various claims brought against Plaintiff relating to producing and publishing music, including copyright infringement, plagiarism, and misappropriation of ideas. In March of 2019, a third party filed suit against Plaintiff claiming that he authored “All the Way Up” and that Plaintiff plagiarized it. When Fat Joe submitted an insurance claim to Defendant under the policy the Defendant denied the claim, stating that the policy didn’t cover the claims alleged in the third-party suit. Defendant also stated that Fat Joe knew that the third-party would likely make a claim but misrepresented this when taking out the policy.

The court determined that the plain language of the insurance policy covered the plagiarism and misappropriation claims alleged in the third-party lawsuit. As a result, the court granted Plaintiff summary judgment on his breach of contract and declaratory relief claims. The court also dismissed Plaintiff’s count alleging breach of implied covenant of good faith and fair dealing because it was asserted prematurely. [JM]

Former Jefferson Starship Founder Can Sue Over Band Name

Chaquico v. Freiberg, 2017 US Dist LEXIS 128167 [ND Cal Aug. 11, 2017, No. 17-cv-02423-MEJ].

A California Federal Judge determined that the band ‘Jefferson Starship’ lost the right to use their name when co-founder Paul Katner died in 2016. The band name had been contractually retired in 1985 under an agreement, after Katner and various other founders left the band. In 1993, Craig Chaquico, whom brought the suit, agreed to allow Katner to use the name for a new band under a new agreement. The Judge determined that Katner’s death terminated the ’93 agreement and the band’s new members as well as older founders were barred from using the name as they were not parties to the agreement. While the Judge dismissed Chaquico’s Lanham Act claims that the former band members’ imagines in marketing creates confusion, she is allowing the breach of contract claim to proceed.

Copyright Suit Dismissed Against Beatles Company

Sid Bernstein Presents LLC v. Apple Corps Ltd. et al., No. 1:16-cv-07084 (S.D.N.Y. July 26, 2017)

The Court dismissed a copyright suit against the Beatles' Apple Corp. company, determining that Sid Bernstein Presents LLC – the company that currently owns intellectual property rights of a promoter who is credited with bringing The Beatles to the U.S. – did not have rights over footage from the band’s 1965 concert at Shea Stadium. The complaint alleged that Sid Bernstein Presents LLC retained copyrights to the footage and that The Beatles Company had infringed their copyright by allowing it to be used in Ron Howard’s “Eight Days a Week.” After reading through the contracts, the Judge determined that the language makes an admission that Sid Bernstein was not involved in the filming of the concert and was not the “author” of the footage for the purposes of copyright law.

Michael Jackson’s Production Company to pay $9.4M in Royalty Damages to Quincy Jones

Jones  v. MJJ Productions Inc. et al., No. BC525803 (Superior Court of the State of Cal. For the Cty. Of L.A.)

Michael Jackson’s production company was ordered to pay producer Quincy Jones more than $9.4 million in royalty damages for his work on “Thriller,” “Bad,” and “Off the Wall.” The jury determined that Jones was shorted after Jackson’s estate had breached contracts but declined to award Jones the full $30 million sought

Beats, Dre & Iovine May Owe Royalties For More Than First Model Headphone; Question for Jury

Jibe Audio v. Beats Elec., No, B267633 (Cal. App. - 2nd Dist. Sep. 19, 2016).

A California appellate court holds that the headphone company Beats, Dr. Dre and Jimmy Iovine may owe the plaintiff royalties for more than the first headphone model, the Studio model, because the contract at issue (a settlement agreement) was ambiguous and disputes of material fact existed.  Accordingly, summary judgment in favor of the defendants was reversed so that a jury could decide the case.

The case was a question of contract interpretation under California law, and the Court considered extrinsic evidence outside of the 4 corners of the contract.  "The Beats parties and Brunner contend that the Royalty Agreement was only intended to cover one product: the Studio headphone. They argue that the agreement was not intended to cover sales of the entire line of Beats headphones. Lamar, on the other hand, argues that the Royalty Agreement requires Beats to pay a royalty on the sale of every headphone whose design embodies or is a minor or cosmetic modification to the original headphones design."

We find that the contract is ambiguous as to whether it contemplated royalties only for the Studio headphone model or for other headphones that embody the headphones design depicted in Schedule I to the Royalty Agreement. The extrinsic evidence thus must be admitted to assist in the second step of contract interpretation. The factual conflict in the evidence regarding the meaning of the contract must be resolved by a jury. 

Band Member May Sue As Third-Party Beneficiary Of Contract Between Record Label and Suspended Loan-Out Company

Bozzio v. EMI Group Ltd. et al., No. 13-15685 (9th Cir. Jan. 26, 2016).

The 9th Circuit held that the front-woman of the '80s new-wave band "Missing Persons" could sue the band's record label for breach of contract (whether proper royalty rates were paid) as a third-party beneficiary of the contract between the record label and the "loan-out" company created by the band, even though the State of California had suspended the corporation's status for failure to pay certain taxes.  "The parties have not cited, and we have not found, any California case holding that a third-party beneficiary cannot sue the promisor for breach of contract when the promisee is a suspended corporation."  Additionally, interpreting a related Artist Declaration, the 9th Circuit held that plaintiff did not necessary waive the benefits of the contract under the provision requiring band-members to look to the loan-out company (not the label) for the payment of royalties.  Language in the Loan-Out Agreement was in tension with language in the artist declaration.  Accordingly, the district court -- which had dismissed with prejudice believing that amendment would be futile -- was reversed.

Breach Of Contract Claim Survives In "Daydream Believer" Royalty Suit Concerning Foreign Publishing

Stewart v. Screen Gems-EMI Music, Inc., No. 3:14-cv-04805 (N.D. Cal. filed Mar. 2, 2015) [Doc. 45].

Plaintiff alleges that defendants -- various EMI defendants -- wrongfully withheld publishing royalties to the song "Daydream Believer" written by Plaintiff's late-husband.  The claims arise out of a 1967 songwriter's agreement, which has a "net receipts" (not "at source") arrangement, meaning that the publisher is only obligated to remit to the songwriter a certain percentage of revenue the publisher actually receives after deducting applicable fees and costs.  Plaintiff contended that Defendants were improperly deducting from the song's foreign receipts fees that defendant paid to affiliated foreign sub-publishers that are alter egos of defendant and operate as part of a single enterprise (i.e., defendant was effectively paying itself and then deducting those payments from the receipts to reduce the "net receipts").  Defendants moved to dismissed.  The Court granted the motion to dismiss of defendants EMI and EMI North America for lack of personal jurisdiction; but, found that Plaintiff had stated a claim against defendant Screen Gems-EMI for breach of contract, breach of the implied covenant of good faith and fair dealing, and for an accounting.

Management Agreement With "Ginuwine" Abandoned

Reives v. Lumpkin, 08-CV-7797, NYLJ 1202716836270, at *1 (S.D.N.Y. decided Jan. 30, 2015).

Plaintiff's suit, claiming that the artist Ginuwine failed to make payments under a 1996 Management Agreement, was dismissed because the parties mutually abandoned the contract less than one year after after entering into the agreement.  The Court found that New York law applied, under which a contract is unenforceable where the parties have abandoned or ignored it.  "In such cases, a later cause of action for breach is typically barred, and will only lie where the agreement of the parties to terminate the contract expressly or impliedly reserved a later cause of action."  Here, the Court found as a matter of fact that Ginuwine had satisfied his burden of proof and sufficiently demonstrated that the parties mutually agreed to abandon the Management Agreement in late summer of 1996.  The Court further found that this abandonment precluded plaintiff's current action for breach as a matter of law.

Only Breach Of Contract Claim Survives in Ozzy Osbourne Guitarist Case

Rhoads v. Margolis, No. B249800 (Cal. App. Ct., 2d Dist. - Div. 7, Jan. 26, 2015).

Only a breach of contract claim survived in an action, brought by the family of a well-known rock guitarist who died in a 1982 plane crash, against Defendants based on the family's grant of the right to use personal information and memorabilia to make a documentary film about the deceased guitarist.  When the documentary project faltered, defendants instead published a book about the guitarist.  The family sued, alleging the book was based on materials they had provided for the exclusive purpose of making the documentary film.  Defendants moved to dismiss the complaint.

On appeal, the Court found that the Anti-SLAPP Statute (section 425.16) applied because the principal thrust of every claim was premised on the allegation that the defendants, in researching, writing and publishing the book, used the family's proprietary material provided solely for the purpose of the documentary.  Whether or not defendants violated the terms of the agreement, their conduct in writing and publishing the book qualified as a form of protected activity.  With the exception of the breach of contract claim, the family failed to establish a probability of prevailing on its claims. The fraud claim failed because there was no allegation that the defendants intended to create the book at the time of the agreement.  The misappropriation claim (based on the right of privacy) failed because the alleged acts did not implicate the personal privacy or publicity rights of the guitarist's family members.  Additionally, the life and death of the guitarist was a matter of public interest.  The unfair competition claim failed because plaintiffs had not articulated an actionable manner in which the public was likely to be deceived by the book or that consumers suffered substantial injury.

Covenant Not To Sue Upheld In Run-DMC Co-Author's Case Against Publisher Assignee For Royalties

Reach Music Publishing, Inc. v. Warner/Chappell Music, Inc., No. 09-cv-5580, 2014 BL 317978 (S.D.N.Y. Nov. 2014).

A Run-D.M.C. co-author's claim for breach of contract failed because that co-author "long ago sold all rights to the subject songs -- including his entire copyright interest -- in exchange for royalty payments," and in that agreement, he plainly acknowledged that the songs could be transferred to another publisher (Protoons) and that "he would only ever seek royalty payments from" the original publisher (Rush Grooves).  The Court found that the covenant not to sue Protoons was enforceable and was not unconscionable under New York law.  Therefore, the co-author breached the contract when he filed suit in 2008, and the defendant's damages were their resulting attorney's fees pursuant to the express attorney's fees provision in the contract.  Defendant also counterclaimed that the plaintiff (another publisher, Reach, to whom the co-author had purportedly transferred his interest), tortiously induced the co-author to breach the covenant not to sue.  The Court found that there was a question of material fact whether Reach had knowledge of the covenant not to sue, preventing either party from winning summary judgment on the tortious interference claim.  "Even though knowledge of the contract need not be perfect, Reach must have knowledge of the covenant not to sue in order to be liable for helping Reeves violate that particular contractual provision."

Publisher Not Double Dipping Foreign Royalties Under Terms Of 1961 Agreement With Duke Ellington

Ellington v. EMI Music et al., 2014 NY Slip Op 07197, NYLJ 1202674400667 (N.Y. Court of Appeals Oct. 23, 2014).

New York's highest court affirmed dismissal of a breach of contract claim brought by Duke Ellington's heir, against Ellington's publisher (EMI), seeking unpaid royalties under a 1961 agreement.  The majority of the Court of Appeals held that, under the contract's clear and unambiguous terms, Ellington was entitled to 50% "net receipts" from foreign publishers, even if those foreign publishers were now-affiliated with the US publisher.

Plaintiff had claimed that by using affiliated foreign subpublishers, EMI was double-dipping into the entire pot of revenue generated from the foreign sale of the relevant musical compositions.  Essentially, plaintiff claimed that the amount retained by the affiliated foreign subpublishers prior to remittal of the remainder to EMI was an amount received by EMI, and therefore, when using affiliated foreign subpublishers, EMI should remit to the First Parties half of the entire amount generated from the foreign sale of the relevant musical compositions.  The trial court disagreed and dismissed the complaint; the appellate division affirmed; and the Court of Appeals affirmed.

First, as to "net revenue actually received," the Court of Appeals found that the royalty provision makes no distinction between affiliated and unaffiliated foreign subpublishers.  Therefore,  the courts below properly declined to read such a distinction into the contract as it does not appear to have been the intent of the parties that such a distinction be included, primarily because they were understandably unaware that such a change in the industry would occur.

Second, as to "any other affiliate," the Court of Appeals found that "[a]bsent explicit language demonstrating the parties' intent to bind future affiliates of the contracting parties, the term 'affiliate' includes only those affiliates in existence at the time that the contract was executed."  In other words, the publisher was not double dipping because its later-foreign-affiliates were not "affiliates" of the publisher under the contract.

There were two dissents.  In sum, the dissents found it "wrong... that, when a contract is written to bind 'any . . . affiliate' of a party, its effect should be limited to affiliates in existence at the time of contracting."  In other words, the dissent would have held that the term "affiliate" as used in the Agreement may be interpreted as appellant suggests to include EMI's foreign affiliated entities.

Toto Loses Breach Of Contract Claim Against Label For Digital Download Royalties

Toto, Inc. v. Sony Music Entertainment, No. 1:12-cv-01434-RJS (S.D.N.Y. filed Oct. 8, 2014) [Doc. 117].

In this breach of contract action concerning royalties for digital downloads (and master and ringtones) payable by the record label to the 80's band "Toto", the Court granted the record label summary judgment finding that the proper royalty rate had been paid.  The Court applied New York law to interpret the relevant recording agreements, and found that one provision (the "Audiophile Provision" in 1986 and 2002 amendments) supplied the applicable royalty rate for the sale of downloads through digital retailers, regardless of whether the downloads were sold by the record company or unaffiliated third-party licensees.  The dispute turned on the meaning of the terms "Licensee" and "lease", which had different royalty rates.  Toto argued the term "lease" referred to a license to any party, regardless of whether that party is affiliated with the record company; the record company argued that the term "lease" referred to a special license whereby a third party incorporates the recordings into its own product, such as a compilation record.  The Court found that the inclusion of the record company's affiliates in the contractual definition of "licensee" did not limit the scope of that term; the definition included the term "without limitation".  Accordingly, digital retailers were licensees, and industry custom defined the term "lease" as a limited license to a third party to incorporate recording into their own unique product.  However, the Court found that the record company did not have a declaratory judgment claim because the dispute was "far more hypothetical than real."  The declaratory judgment dispute arose from Toto's threat to sue the label for breach of the implied covenant of good faith and fair dealing if the label ceased distributing Toto's records through certain retailers.

Royalties Dispute Between Co-Authors Of Song Not Preempted

McCants v. Tolliver, 2014-Ohio-3478 (Ohio. Ct. App., 9th Dist. Aug. 13, 2014).

An Ohio appellate court held that the trial court erred in dismissing the plaintiff's breach of contract claim as pre-empted by the Copyright Act.  The dispute concerned a royalty-split between co-authors of a song, later licensed to the Blacked Eyed Peas, pursuant to an alleged oral agreement.  Although the dispute did concern a song and recording, there was no "extra element" because "Th[e] alleged promise to split the proceeds is 'qualitatively different' than that of a copyright infringement claim."

McCants does not argue that Tolliver could not reproduce, perform, or distribute the song. See 17 U.S.C. § 106. Instead, McCants argues that he should be compensated according to the alleged agreement between the parties. Because McCants’ claim for breach of contract is qualitatively different than that of a copyright infringement claim, his claim is not preempted by the Copyright Act and the court erred in finding that it was preempted.

Workshop Agreement Does Not Permit Attorneys Fees Or Indemnification

Bowen v. Paisley, No. 3:13-cv-0414 (M.D. Tenn. June 16, 2014).

The Court held that defendant's counterclaims for breach of contract would proceed, but their counterclaims for indemnification and attorney's fees would be dismissed.  Plaintiff wrote and recorded a song and alleged that two popular country music artists (Brad Paisley and Carrie Underwood) violated her copyright interests.  Plaintiff alleged that defendants gained access to her song when she performed it during a 2008 country music songwriting workshop in Nashville, in which two other defendants served as guest instructors.  Those defendants alleged that s a condition of participation in the workshop, plaintiff signed a consent agreement, in which the plaintiff effectively waived her right to bring the copyright claims asserted, at least as they related to access gained in the workshop.  First, the Court found that the defendants could not assert contractual indemnification under the agreement because it would lead to an "absurd result" of requiring plaintiff to defend the defendants against her own claims.  Second, the Court held that it would permit the defendant's breach of contract claim -- based on a covenant not to sue provision -- to remain, but recognized that the claim would eventually lead to "a doctrinal thicket" as to its viability.  Lastly, the Court held that the attorneys fees claim failed under the language of the contract.

Monster's 3rd Party Claims Against DJ Dismissed In Beastie Boys Case

Beastie Boys v. Monster, No. 12-cv-6065 (S.D.N.Y. filed Nov. 4, 2013) [Doc. 51].

The Beastie Boys sued Monster Energy drinks under Lanham Act for the allegedly unauthorized publication of a promotional video that used as its soundtrack a remix including songs originally composed and recorded by the Beastie Boys.  Monster brought third-party claims for breach of contract and fraud against a DJ, who originally made the remix (with the Beastie Boys' permission) and furnished it to Monster.  After discovery, the Court granted the DJ summary judgment dismissing the third-party claims.

First, the Court found that there was no binding agreement between the DJ and Monster.  "...[A] reasonable
juror could not find an offer, sufficiently clear acceptance, or consideration, e.g., a legal duty which Monster incurred to Z-Trip, let alone all three."  Second, the Court found that there was no fraud.

"In sum, if Monster is liable to the Beastie Boys, it may not shift legal responsibility for such lapses to Z-Trip.  Any such liability on Monster’s part would arise instead because Monster left these matters in the hands of an employee insensitive to the legal issues presented by making derivative use of, and commercially exploiting, the Beastie Boys’ original work. In musical terms, Z-Trip can now, therefore, rest at least “as cool as a cucumber in a bowl of hot sauce,” because Monster’s Third-Party Complaint against him has “got the rhyme and reason but no cause.” Beastie Boys, So Watcha Want (Capitol Records 1992). It is therefore dismissed, with prejudice."

The Court, in a separate order, further urged the parties to settle the case rather than to go to trial.  [Doc. 53].

Radio Station Not Liable On Claims Based On Number Of Podcast Downloads

Cmty. Music Ctrs. of Atlanta, LLC v. JW Broad., Inc., 2013 ILRC 2580, 2013 WL 4516739 (Ga. Ct. App. 2013).

Plaintiff advertised its music education services on defendant's radio station, but failed to pay.  The radio station sued for "open account", and the plaintiff counter-claimed for breach of contract and fraud.  The crux of plaintiff's claims was that the radio station misrepresented the exposure it would provide through podcast downloads.  According to plaintiff, the radio station failed to fulfill its promise that there would be “hundreds of thousands of downloads” of the program plaintiff sponsored and, as a result, plaintiff did not receive the advertising exposure it had bargained for.

The court found that the radio station was not liable on the breach of contract claim because the plaintiff failed to present any evidence to show that the radio station promised that there would be a certain number of future downloads of the program.  Instead, the radio station "promoted the program's national popularity by stating that it 'has received hundreds of thousands of downloads,' in other words, in the past".  The fraud claim similarly failed because the plaintiff sought, not a certain number of downloads, but, rather, to sponsor a radio show for a specific time period.  Any prediction regarding future download statistics would be conjecture, falling short of fraud.

Dismissal Of Bay City Rollers' Royalties Suit Upheld By 2nd Circuit

Mitchell v. Faulkner, No. 13-576-cv (2d Cir. filed 8/29/2013).

The Second Circuit affirmed the lower court's Rule 12(b)(6) dismissal of plaintiffs' (Bay City Rollers) claims for unpaid royalties based in the alternative on breach of contract and unjust enrichment.  The contract claim failed because it was barred by the statute of frauds, in that any agreement to pay royalties extending beyond one year must be in writing to satisfy the statute of frauds.  The unjust enrichment claim failed because it was barred by the statute of limitations.  As stated by the Second Circuit

A claim for unjust enrichment must be based on the value of plaintiffs’ contribution to the joint effort of the band at the time it made the relevant records, not on the income stream resulting from a revival over thirty years later. That contribution and the failure of the defendants to pay for the value of the effort occurred well over six years ago and is barred by the statute of limitations.  N.Y.C.P.L.R. § 213.

Class Action Brought Against eMusic

Dabaghian v. eMusic.com, No. 651794/2013 (Sup. Ct., N.Y. Co. filed 5/20/2013).

Plaintiff brought a class action for breach of contract, breach of warranty and violations of N.Y. Gen. Bus. Law.  Plaintiff alleges that eMusic sells music download cards that represent that a specific number of songs can be purchased for a fixed price.  Plaintiff allegedly purchased such a card that advertised 30 songs for $15.  However, plaintiff allegedly was only able to download 16 songs before the card was depleted.  Plaintiff alelges that eMusic failed to disclose it had switched to a monetary based credit system where each song is individually priced.  Under this system, a song may cost 89 cents, and allegedly only rarely costs 50 cents.  Accordingly, Plaintiff alleges it is impossible to purchase 30 songs for $15.

Composer's Suit Against Orchestra Survives Summary Judgment

Currier v Brooklyn Philharmonic Symphony, No. 7661/2009 (N.Y. Sup. Ct., Kings Co. May 6, 2013).  Decision here.

Defendant symphony motion for summary judgment on Plaintiff's claims for breach of contract denied (though the claim for breach of the duty of good faith and fair dealing was dismissed).  The dispute is based on the symphony's failure to perform the entirety of Plaintiff's 3-act piece, and on issues relating to the length of breaks and overtime for the musicians.

Dismissal of Duke Ellington Royalty Suit Affirmed

Ellington v. EMI Music, No. 651558/10, NYLJ 1202598616249 (1st Dep't May 2, 2013)

The First Department affirmed dismissal of Duke Ellington heirs' breach of contract action against a group of music publishers.  The dispute was based on a 1961 songwriter agreement, and called for an interpretation of paragraph 3(a) of the agreement which, where relevant, required payment to Ellington of "a sum equal to fifty (50 percent) percent of the net revenue actually received by the Second Party from…foreign publication" of Ellington's compositions.  This is known in the music publishing industry as a "net receipts" arrangement by which a composer, such as Ellington, would collect royalties based on income received by a publisher after the deduction of fees charged by foreign subpublishers.

Fees that previously had been charged by independent foreign subpublishers under the instant net receipts agreement were now being charged by subpublishers owned by Defendant.  Plaintiff asserted that Defendant had enabled itself to skim his claimed share of royalties from the Duke Ellington compositions by paying commissions to its affiliated foreign subpublishers before remitting the bargained-for royalty payments to Duke Ellington's heirs.  In dismissing the complaint, the motion court declined to read into the royalty payment terms any distinction between affiliated and unaffiliated foreign subpublishers inasmuch as the contracting parties themselves chose not to make such a distinction.  The First Department affirmed.

The Court found no ambiguity in the agreement which, by its terms, required EMI to pay Ellington's heirs 50 percent of the net revenue actually received from foreign publication of Ellington's compositions. "'Foreign publication' has one unmistakable meaning regardless of whether it is performed by independent or affiliated subpublishers. Given the plain meaning of the agreement's language, plaintiff's argument that foreign subpublishers were generally unaffiliated in 1961, when the agreement was executed, is immaterial."