UMG's Venue And Transfer Motions Denied In Digital Class Action

Rick James v. UMG Recordings, No. 11-1613 (related case No. 11-2431) (N.D. Cal. filed Nov. 1, 2011) (Doc. 34).

Plaintiffs in two related cases filed putative nationwide class actions against UMG Recordings, Inc. Plaintiffs seek to represent a class of recording artists, music producers, and other royalty participants. The complaints allege that UMG has failed to properly account for and pay its recording artists and music producers for income it has received, and continues to receive, from the licensees of its recorded music catalog for the sale of digital downloads and ringtones.

Defendants moved to dismiss for improper venue. The Court concluded that under the circumstances, it would be unreasonable to transfer the action based on the forum selection clause contained in a 1977 contract. "Assuming arguendo that the forum selection clause is valid and enforceable, that clause only governs the claims brought under the 1977 agreement. In analogous circumstances, courts have found it unreasonable to enforce a forum selection clause that applied to some but not all of the plaintiff’s claims."

Alternatively, defendant moved to transfer venue pursuant to 28 U.S.C. § 1404(a), contending

that the Central District of California is a more convenient venue. The primary dispute was whether transfer will serve the convenience of the parties and witnesses. The Court concluded that defendant had not met its burden that the case should be transferred.

Defendant also moved to dismiss plaintiffs’ claims under California Business & Professions Code

§ 17200. In both cases, plaintiffs allege that UMG knowingly breached its contracts with recording artists and music producers, and that “UMG either knew, recklessly disregarded, or should have known that its collection of income from Music Download Services and Mastertone Providers was in connection with a license agreement and the royalties payable to Plaintiff and the Class should have been accounted for and paid on that basis.” The Court concluded that plaintiffs stated a claim under § 17200, and that the questions raised by defendants’ motions are better suited for determination on a full factual record (i.e., at summary judgment).

Lastly, a third-party ("The Tubes") sought to intervene. The Court denied the motion because the proposed intervenors assert claims “parallel” to those already pending before the Court, and thus their interest are already represented. "If plaintiffs in these cases, who the Court notes are represented by the same counsel as The Tubes, believe that The Tubes should be added

as a class representative, plaintiffs may seek to amend the complaints."

Transfer To Florida Appropriate Where Only Connection To New York Is Internet Access

Caldwell v. Slip-N-Slide Records, Inc., 10 Civ. 9106 (JFK), NYLJ 1202510748971, at *1 (SDNY, Decided July 26, 2011).

The Court granted defendants' motion to transfer to federal court in Florida, pursuant to 28 USC 1401(a). "Plaintiff brings this suit in New York under the theory that the allegedly infringing song was distributed in New York over the Internet, including through YouTube and iTunes. As the only apparent connection to this forum is the distribution of "Bond Money" over the Internet, a fact which would support venue in any district court in this country, Plaintiff's choice of forum is entitled to little weight."

Plaintiff alleged that in 2001 he created the musical composition and sound recording of a song entitled "Dim Hits," which he later registered with the United States Copyright Office. In 2004, Plaintiff gave a copy of "Dim Hits" to a vocalist known as Trina, who has a recording contract with the Defendants. In 2008, Plaintiff discovered that the Defendants had allegedly copied "Dim Hits," without his permission, and incorporated it into a song titled "Bond Money." Plaintiff also alleges that the Defendants have distributed "Bond Money" on several albums, web sites, and other outlets throughout the United States.

None of the parties demonstrated ties to New York. Plaintiff was a resident of Charlotte, North Carolina. Defendant corporation was a Florida corporation that "promotes, develops, markets and manages recording artists," with its principal place of business and sole office in Miami Beach, Florida. The song "Bond Money" was purportedly written and recorded in Florida. Individual defendants were a Florida and Georgia resident. Another corporate defendant was a Phoenix, Arizona limited liability company.