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.

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.

Capitol's Motion To Dismiss Class Action Denied

Davis v. Capitol Records, LLC, No. 4:12-cv-01602-YGR  (N.D. Cal. filed 04/18/13) [Doc. 73].


Plaintiff brought the action as a member of the music group, “The Motels,” and a shareholder, beneficiary, and/or successor-in-interest of the now-dissolved The Motels Music Corporation, Inc.  She brought the complaint alleging a nationwide class action for breach of standard recording contracts and for statutory violations of California law against Defendant Capitol Records, LLC (“Capitol”).  Plaintiff alleged that Capitol failed to account properly for royalties stemming from the licensing of musical performances or recordings produced by Plaintiff and putative class members under contract with Capitol, which were then were utilized by digital content providers, such as music download providers, music streaming providers, and ringtone providers, for digital download, streaming and distribution.  Capitol moved to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6).

First, Capitol argued that the claims were time-barred under the parties' agreement relating to objecting to royalty statements.  However, the Court found that Plaintiff's allegations "arguably support a basis for tolling of the contractual limitations period."  (Emphasis added).  Accordingly, the motion to dismiss on limitations grounds was denied.

Second, Capitol moved to dismiss Plaintiff's claim for declaratory relief as duplicative of her claim for
breach of contract.  The Court held that it could not determine, as a matter of law, that declaratory relief would be duplicative or otherwise inappropriate such that it should be dismissed at the pleading stage.

Third, Capitol moved to dismiss Plaintiff;s claim for breach of the implied covenant of good faith and fair dealing on the grounds that it is duplicative of her breach of contract claim. The Court disagreed.

Fourth, Plaintiff alleged a claim for violation of California Business & Professions Code section 17200, California’s Unfair Competition Law (“UCL”), based upon all three prongs of the statute – that is, unfair, unlawful, and fraudulent conduct. Capitol sought to dismiss the claim to the extent it is based upon either unlawful or fraudulent conduct.  As to the fraud prong, the Court found that Plaintiff's pleadings contained sufficient particularity to survive.  As to the unlawful prong, the Court found that, "Where, as here, the complaint alleges systemic conduct meant to breach the terms of, or deny the benefits of, agreements between the defendant and a group of similarly situated parties, it is sufficient state a claim for an unfair business practice in violation of the UCL."

Fifth, the Court struck Plaintiff's demand for punitive damages.

Toto's Royalty Suit Against Sony Limited By Magistrate

Toto, Inc. v. Sony Music Entertainment, No. 12-cv-1434-LAK-AJP (SDNY report and recommendation Dec. 11, 2012).

Plaintiff Toto brought the action against Sony Music based on a dispute over the amount of royalties owed under the parties' recording contract.  Sony moved to dismiss, and the motion was granted in part and denied in part. The primary issue in the case ise the royalty rate for music distributed through download and mastertone providers (e.g., iTunes, eMusic, Amazon.com and Verizon Wireless).

The magistrate judge found that Toto's first claim based on royalty accountings for the audit period should be dismissed as contractually time barred.  The parties agreement had a 3 year limitation period (i.e., claims had to be brought within 3 years from the royalty report).  Toto's argument that August 2010 and December 2011 documentation restarted the time limitation was unavailing.  However, the magistrate judge found that the portion of Toto's first claim based on royalty accountings for the post-audit period should not be dismissed with respect to the digital download issue.  In other words, Toto stated a claim for breach of the recording contract for the period within the contractually agreed to 3 year limitation period.

The magistrate judge also found that Toto failed to plead the elements of equitable estoppel.  The Court held that purposefully delaying an audit was not a ground for invoking equitable estoppel.  Also, participation in settlement negotiations was not a ground for invoking equitable estoppel.

The magistrate judge also found that Toto's claim for breach of the implied covenant of good faith and fair dealing should be dismissed.  The claim did not state a distinct cause of action based on a separate set of facts and was not independent of the breach of contract claim.  The good faith and fair dealing claim was duplicative of the breach of contract claim.

Sony Loses Employment Suit Against EMI and Top Executive

Sony Music Entertainment, Inc. v. Werre, No. 601441/09 (Sup. Ct., N.Y. Co. Mar. 19, 2010)

Sony sued a top EMI executive for alleged breach of contract, and EMI for tortious interference with that contract. The Court granted Defendants' motion to dismiss for failure to state a claim. (CPLR 3211(a)(7)). The Court found that the letter agreement at issue was not a binding, enforceable contract because a contingency, namely the executive's availability for employment on April 1, 2010, did not occur. Nor did the "prevention doctrine" apply because there was not binding contract in effect that contained the condition precedent in question; the contract was not binding on the parties until the condition precedent occurred such that the prevention doctrine did not apply. Similarly, since there was no valid contract, the tortious interference claim against EMI failed. Lastly, the fraud and breach of covenant of good faith and fair dealing claims against the executive were dismissed as duplicative of the (failed) breach of contract claim.

Sony v Werre (NYS)