Margo, Seigel, et al. v. Weiss, Peretti, et al.

• Citation: 213 F.3d 55
• Decision Date: 01 August 1999
• Docket Number: Docket Nos. 98-9609
• Parties: (2nd Cir. 2000) PHILIP MARGO, MITCHELL MARGO, JAY SIEGEL, and HENRY MEDRESS, Plaintiffs-Appellants, STEPHEN J. KING and MITCHELL J. STEIN, Appellants, v. GEORGE DAVID WEISS, JUNE PERETTI, and LUIGI CREATORE, Defendants-Appellees, ABILENE MUSIC CORP., Defendant. (L), 99-7081(Con)
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 55

213 F.3d 55 (2nd Cir. 2000)

PHILIP MARGO, MITCHELL MARGO, JAY SIEGEL, and HENRY MEDRESS, Plaintiffs-Appellants, STEPHEN J. KING and MITCHELL J. STEIN, Appellants, v. GEORGE DAVID WEISS, JUNE PERETTI, and LUIGI CREATORE, Defendants-Appellees, ABILENE MUSIC CORP., Defendant.

Docket Nos. 98-9609(L), 99-7081(Con)

August Term, 1999

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: January 3, 2000

Decided: May 22, 2000

The plaintiffs appeal from a judgment of the United States District Court for the Southern District of New York (Michael B. Mukasey, Judge) dismissing the plaintiffs' complaint, in which they sought, inter alia, a declaratory judgment that they were co-authors of, and co-owners of defendants' copyright in, the song "The Lion Sleeps Tonight." The plaintiffs and their counsel also appeal from the district court's assessment of attorneys' fees against them for objectively unreasonable conduct.

Affirmed.

[Copyrighted Material Omitted]

TAB K. ROSENFELD, Stein & Associates, New York, NY, for Plaintiffs-Appellants.

STEPHEN J. KING, pro se, New York, NY (Mitchell A. Stein, pro se, on the brief), for Non-Party Appellants.

DAVID BLASBAND, Deutsch Klagsbrun & Blasband, New York, NY, for Appellees.

Before: FEINBERG, KEARSE, and SACK, Circuit Judges.

SACK, Circuit Judge:

In a complaint filed May 22, 1996, the plaintiffs Philip Margo, Mitchell Margo, Jay Siegel and Henry Medress, one-time members of a musical group calling itself "The Tokens," sought a declaratory judgment that they are co-authors of, and co-owners of the defendants' copyright in, the song "The Lion Sleeps Tonight." The plaintiffs further alleged that the defendants were liable to them for fraud, breach of fiduciary duty, and various violations of the Lanham Act. The United States District Court for the Southern District of New York (Michael B. Mukasey, Judge) granted summary judgment to the defendants, see Margo v. Weiss, No. 96 Civ. 3842 (MBM), 1998 WL 2558, 1997 U.S. Dist. LEXIS 20867 (S.D.N.Y. Jan. 5, 1998) ("Margo I"), and awarded attorneys' fees against the plaintiffs and their legal counsel, Stephen J. King and Mitchell A. Stein, pursuant to Fed. R. Civ. P. 11 and § 505 of the United States Copyright Act of 1976, 17 U.S.C. §505, see Margo v. Weiss, No. 96 Civ. 3842 (MBM), 1998 WL 765185, 1998 U.S. Dist. LEXIS 17258 (S.D.N.Y. Nov. 3, 1998) ("Margo II"). Plaintiffs and their attorneys appeal.

We affirm the judgment of the district court in all respects.

BACKGROUND

This litigation has a long, complicated, and decidedly unlyrical history. Because the plaintiffs appeal from the district court's grant of the defendants' motion for summary judgment, we present that history in the light most favorable to the plaintiffs. See, e.g., Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995).

In 1959 the plaintiffs began performing as a musical group calling itself "The Tokens." The group met with some success, particularly with respect to their performance of a song based on an African lullaby called "Mbube." In 1961 the plaintiffs signed a recording contract with RCA Victor Records ("RCA"). At RCA they began working with Luigi Creatore, Hugo Peretti and George David Weiss (the "Lyricists"), who were experienced record producers and songwriters.¹ In the Fall of 1961, the Lyricists wrote English lyrics to "Mbube," and The Tokens recorded the resulting song under the title "The Lion Sleeps Tonight" (the "Lion"). The Lion became a hit. The Tokens formed a publishing company, Token Music Corp., which was assigned ownership of the publishing rights to the Lion, while the Lyricists retained authors' or songwriters' rights to it. Nearly forty years later, the Lion remains ubiquitous.

Notwithstanding the song's success, events did not proceed harmoniously after the Lyricists completed the lyrics. In 1952 a group called "The Weavers" had recorded a different version of "Mbube" called "Wimoweh." Folkways Music Publishers Co., Inc., ("Folkways") owned the copyright to that song. In October 1961 Folkways sent a letter to The Tokens alleging that the Lion infringed on Folkways's "Wimoweh" copyright. Believing that RCA would cease to manufacture and distribute recordings of the Lion if Folkways brought a copyright action, and worried that they would then lose the performance royalties and publicity the Lion generated for the group, The Tokens relinquished their copyright in the Lion in favor of Folkways on November 6, 1961. Unbeknownst to the plaintiffs, the Lyricists simultaneously entered into a contract (the "Songwriters Agreement") with Folkways under which they assigned any copyright rights they had in the Lion to Folkways in return for the right to receive songwriters' royalties.

The initial copyright term on the Lion expired in 1989. Folkways and the Lyricists each claimed renewal rights. Pursuant to an arbitration clause in the Songwriters Agreement, an arbitrator decided that all rights to the Lion had reverted to the Lyricists at the end of the initial copyright term. That decision was confirmed by the United States District Court for the Southern District of New York, see Folkways Music Publishers, Inc. v. Weiss, No. 90 Civ. 6415 (JFK), 1992 WL 230192, 1992 U.S. Dist. LEXIS 13006 (S.D.N.Y. Aug. 31, 1992), and the district court's decision was affirmed by this court, see Folkways Music Publishers, Inc. v. Weiss, 989 F.2d 108 (2d Cir. 1993). As noted, it was not until May 1996, three years after the completion of the Folkways litigation and some thirty-five years after the Lion was written, that the plaintiffs filed their complaint in the present action claiming, for the first time, that they were co-authors of the Lion.

The plaintiffs' depositions were taken in January and February 1997. They testified that they had first learned about the dispute between Folkways and the Defendants-Appellees from the public press in 1992, and that in the process they discovered that the defendants had been receiving payments under the Songwriters Contract. The plaintiffs maintain that until they learned of the dispute over renewal rights they believed that the Lyricists had also given up all of their rights in the Lion in 1961. In fact, the Lyricists had assigned the rights to Folkways in return for the payment of royalties. Prior to learning that the Defendants-Appellees had been receiving royalty payments, the plaintiffs assert, they had no reason to think they had a co-authorship claim against the Defendants-Appellees.

In March 1997, after the depositions had been completed, defendants' counsel suggested that the plaintiffs withdraw their complaint. The plaintiffs' deposition testimony indicated that their cause of action could have accrued no later than 1992 when, they testified, they learned of the dispute between Folkways and the Defendants-Appellees over renewal rights. They brought suit some four years later. Defendants' counsel argued that the action was therefore untimely under Merchant v. Levy, 92 F.3d 51 (2d Cir. 1996), cert. denied, 519 U.S. 1108 (1997), which held that the Copyright Act's three-year statute of limitations for civil actions, 17 U.S.C. §507(b), applies to a suit seeking a declaration of copyright co-ownership rights such as the one sought by the plaintiffs here. See id. at 56-57.

When the plaintiffs failed to withdraw their complaint, defendants' counsel, in a March 10, 1997 letter to plaintiffs' counsel, reiterated his suggestion that they do so. The plaintiffs again refused to withdraw their complaint. On April 25, 1997, the defendants filed a Supplemental Motion to Dismiss in which they raised the statute of limitations issue.

In response, on May 30, 1997, the plaintiffs filed an amended complaint. In affidavits accompanying it, each plaintiff claimed to have learned of the Lyricists' agreement with Folkways in late 1994, rather than in 1992 or early 1993 as he had testified in his deposition. Late in July 1997, some five or six months after the depositions had been concluded and more than three months after the plaintiffs had been served with the defendants' motion papers based on the deposition testimony, the plaintiffs submitted errata sheets for their deposition transcripts. By asserting the existence of more than seventy errors in the transcripts, they sought to change their testimony so as to establish that their discovery of the dispute between Folkways and Defendants-Appellees had occurred less than three years before their initiation of suit. At the same time, they submitted "supplemental answers" to a set of defendants' interrogatories in which one of the plaintiffs changed his interrogatory answers to assert that the plaintiffs had learned of the Songwriters Agreement "in late 1994 or early 1995" rather than "in or about 1993" as he had sworn in his initial interrogatory answers a year before. If their claim had accrued in late 1994, it would not have been time barred under Merchant. On June 13, 1997, the defendants served but did not file a motion for sanctions under Fed. R. Civ. P. 11, based on the plaintiffs' refusal to withdraw their complaint and their submission of affidavits, errata sheets and interrogatories that contradicted their deposition testimony.

In Margo I, filed on January 5, 1998, the district court granted defendants' motion for summary judgment and dismissed the amended complaint. The defendants then moved for counsel fees under §505 of the Copyright Act and filed the Rule 11 motion that they had served, but not filed, in June of 1997. In reply, the plaintiffs submitted a memorandum of law and a declaration in opposition given by their counsel, Messrs. King and Stein. In Margo II, filed on November 3, 1998, the district court granted defendants' Rule 11 and counsel fees motions, awarding the defendants $22,680, $7,680 of which was assessed against the plaintiffs, jointly and severally, pursuant to both Rule 11 and the Copyright Act, and the...