Manager's Suit Against Band Not Stayed By Parallel State Proceeding

Tramposch v. Winter, 10 Civ. 8286 (TPG), NYLJ 1202496374985, at *1 (SDNY, Decided May 25, 2011).

Plaintiff brought an action for breach of contract, unjust enrichment, etc. Plaintiff was the manager of the band "Red Jumpsuit Apparatus" until the band terminated the relationship in January 2010. According to plaintiff, prior to his termination, he and the band had a series of disputes regarding payment of commissions and repayment of loans made by plaintiff to the band. Defendants, members of the band, moved to stay the action pending resolution of a parallel proceeding brought by defendants against plaintiff in California. The Court denied the motion.

Plaintiff was not served with the complaint in the California state proceeding until AFTER he had commenced the Federal proceeding in New York (diversity jurisdiction). The Court found that there was no basis to abstain from hearing the federal case.

Bay City Rollers' Royalty Suit Not Time-Barred

Faulkner v. Arista Records LLC, 07 Civ. 2318 (LAP), NYLJ 1202495926616, at *1 (SDNY, Decided May 23, 2011).

Plaintiffs, all former members of 1970s-era musical group the Bay City Rollers, brought this action alleging that they were owed tens of millions of dollars in unpaid royalties from their record company, Defendant Arista Records, LLC ("Arista"). Plaintiffs claim these royalties pursuant to a 1981 agreement; accordingly, Arista argues that even if it owes Plaintiffs accrued royalties from the time period prior to 2001, the statute of limitations bars Plaintiffs' claim. Plaintiffs counter that Arista acknowledged its debt in a writing, thereby satisfying Section 17-101 of New York's General Obligations Law, which restarts the statute of limitations to revive the debt.

Section 17-101 of New York's General Obligations Law ("Section 17-101") codifies and restricts the common-law rule that an acknowledgement of a debt is sufficient to refresh the obligation, thereby restarting the running of the statute of limitations. To restart the running of the statute of limitations under Section 17-101, an acknowledgment or promise must be in writing, be signed by the debtor party, recognize an existing debt and contain nothing inconsistent with an intention on the part of the debtor to pay it.

Plaintiffs and Arista have each moved for partial summary judgment on Arista's affirmative defense that the statute of limitations bars Plaintiffs' claim. The Court granted Plaintiffs' motion for partial summary judgment, and denied Defendant's motion for partial summary judgment.

LimeWire Settlement

http://www.digitalmusicnews.com/stories/051211limewire

"Limewire and the four major labels have now reached an out-of-court settlement for $105 million, according to information confirmed by the RIAA"

Copyright Case Dismissed As Time Barred

Brand v. RMM, Universal Music Group, NYLJ 1202491912221, at *1 (SDNY, Decided April 18, 2011).

Plaintiff sued alleging that defendants infringed the copyright to his rap vocals by adding them to a song by recording artist Tito Nieves. The Court granted defendant's motion for summary judgment -- the claim was time-barred.

Plaintiff alleged that defendant infringed his copyright when it "used, sold and manufactured without his permission his rap vocals." Although styled as an infringement claim, the gravamen of Plaintiff's complaint is that he is the owner of the rap lyrics on Nieves' song.

The Court cited cases that a claim involving a dispute over copyright ownership accrues when a plaintiff knows or has reason to know of the injury upon which the claim is premised. A defendant's express assertion of adverse ownership or a plain and express repudiation of plaintiff's ownership such as registering the copyright in defendant's own name, distributing the work with copyright notice identifying defendant as the owner, or exploiting the work for years without paying royalties to plaintiff will trigger the accrual of the statute of limitations. If a plaintiff does not sue within three years from the date his copyright claim accrues, his complaint is time-barred. 17 U.S.C. §507(b).

In this case, the song was first released in 1991. The back of the CD cover listed defendant as the copyright owner. The song was released again in 1997 on another CD, which also listed defendant as the copyright owner on the back cover. Plaintiff never received royalties from either CD. The Court held that given this history, Plaintiff reasonably should have know of the injury upon which his claim was premised by 1991 or at the latest by 1997, thirteen years before he filed the complaint. Because Plaintiff's ownership claim was time-barred, his infringement claim also failed as a matter of law.

Plaintiff Cannot Swap Election Of Statutory Damages

Arista Records LLC v. Lime Group LLC, NYLJ 1202490027721, at *1 (SDNY, Decided April 11, 2011)

The Court finds that Defendants would be unduly prejudiced if Plaintiffs were permitted to amend their election of remedies under the Copyright Act, just one month before trial. Accordingly, Plaintiffs may not seek to recover actual damages for those sound recordings with respect to which they have already elected to recover statutory damages.

"Work" Defined For Statutory Damages Against Limewire

Arista Records LLC v. Lime Group LLC, 06 CV 5936 (KMW), NYLJ 1202489939713, at *1 (SDNY, Decided April 4, 2011)

The Court had granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced multiple users of the LimeWire online file-sharing program ("LimeWire") to infringe Plaintiffs' copyrights. The litigation is now in the damage phase, with a trial on damages scheduled. Plaintiffs identified approximately 11,205 sound recordings that had allegedly been infringed through the LimeWire system. Of those, approximately 9,715 are sound recordings as to which Plaintiffs have elected to seek statutory damages under Section 504(c)(1) of the Copyright Act.

On March 10, 2011, the Court held that Plaintiffs are entitled to a single statutory damage award from Defendants for each "work" that was infringed by a direct infringer on the LimeWire system. The parties now seek a resolution of a threshold legal dispute regarding what constitutes a "work" as to which Plaintiffs can recover a statutory damage award.

The Court holds that both an album, and a sound recording that Plaintiffs issued as an individual track may constitute a "work" infringed. Accordingly, Plaintiffs are entitled to a statutory damage award for each sound recording that was infringed on the LimeWire system during the time period that Plaintiffs made that sound recording available as an individual track. However, for those sound recordings that Plaintiffs issued only as part of an album, Plaintiffs can recover only one statutory damage award for that album, not for each individual sound recording.

Claims Dismissed In Aretha Contract Suit

BLD Productions, LLC v. Viacom, Inc., NYLJ 1202489492977, at *1 (SDNY, Decided March 31, 2011) (Gardephe, J.)

Summary: Plaintiff and defendant Viacom's affiliate negotiated a March 8, 2001, agreement for a benefit concert by Aretha Franklin. On April 10, 2001, Franklin granted plaintiff her rights to video and audio recordings of the concert. Despite the agreement's March 8, 2001, date and the concert's April performance, plaintiff claimed that the agreement was not finalized until 2006. Plaintiff alleged breaches of oral and written contract, and the implied duty of good faith and fair dealing, contending that Viacom and its affiliate failed to engage a distributor to make, market and distribute recordings of the concert, their failure to account for sales and revenues and to pay royalties to plaintiff.

Judge Gardephe dismissed the case against Viacom because it was not a party to the agreements, and plaintiff did not plead sufficient facts to pierce the corporate veil. Judge Gardephe also dismissed claims against Viacom's affiliate to the extent that plaintiff's breach of written contract claim were based on the affiliate's failure to provide master recordings to plaintiff. Plaintiff's claim that the agreement required the affiliate to secure a distributor was deemed time-barred by the New York statute of limitations. Judge Gardephe alsor dismissed plaintiff's claim for breach of an oral contract.