Alliance of Artists & Recording Cos. v. Gen. Motors Co.

Citation306 F.Supp.3d 413
Decision Date22 August 2016
Docket NumberCivil Action No. 14–cv–1271 (KBJ)
Parties ALLIANCE OF ARTISTS AND RECORDING COMPANIES, INC., Plaintiff, v. GENERAL MOTORS COMPANY, et al., Defendants.
CourtUnited States District Courts. United States District Court (Columbia)

Richard Brian Dagen, Daniel K. Oakes, Morris A. Bloom, Axinn, Veltrop & Harkrider LLP, Washington, DC, Russell Mark Steinthal, Axinn, Veltrop & Harkrider LLP, New York, NY, for Plaintiff.

Annette L. Hurst, Orrick, Herrington & Sutcliffe LLP, Amy E. Hayden, Andrew Phillip Bridges, David Lloyd Hayes, Guinevere L. Jobson, Jedediah Wakefield, Fenwick & West LLP, San Francisco, CA, Diana Szego Fassbender, Orrick, Herrington & Sutcliffe LLP, James Mitchell Burger, Thompson Coburn, LLP, Ellen S. Kennedy, Ryan Lee Ford, Hogan Lovells US LLP, Joshua Hersh Packman, Baker Botts, LLP, David D. Golden, Robert S. Schwartz, Seth David Greenstein, Constantine Cannon, LLP, Megan Sunkel Woodworth, Venable LLP, Washington, DC, Steven John Routh, Seattle, WA, Lauren Beth Emerson, Baker & Botts, L.L.P., New York, NY, Paul J. Reilly, Van H. Beckwith, Baker & Botts, L.L.P., Dallas, TX, Armen Nercess Nercessian, Fenwick & West, LLP, Mountain View, CA, for Defendants.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTIONS FOR RECONSIDERATION AND CLARIFICATION

KETANJI BROWN JACKSON, United States District Judge

On February 19, 2016, this Court issued a Memorandum Opinion and Order that addressed a threshold question of law regarding the applicability of the Audio Home Recording Act of 1992 ("AHRA"), 17 U.S.C. §§ 1001 – 1010, to various in-car audio devices that Defendants manufacture and distribute. See All. of Artists & Recording Cos., Inc. v. Gen. Motors Co. ("AARC "), 162 F.Supp.3d 8 (D.D.C. 2016). The Court resolved a vigorous dispute over the proper interpretation of the AHRA, holding that devices such as Defendants' can constitute "digital audio recording devices" ("DARDs") as the AHRA defines that term, see 17 U.S.C. § 1001(3), and thus that the devices at issue (as described in Plaintiff's complaint) might well give rise to a statutory obligation on the part of Defendants to pay royalties to the AARC and implement certain copying control technology. See AARC , 162 F.Supp.3d at 21–24. But the Court also concluded that these duties were triggered only if the devices did, in fact, produce "digital audio copied recordings" ("DACRs") that satisfy the statute's definition of a "digital music recording" ("DMR," the statute's term of art for a DARD's input, see 17 U.S.C. § 1001(5) ), and that discovery would be required in order to ascertain whether any of the Defendant's recording devices actually produced recordings that met the prescribed statutory elements of a DMR. See AARC , 162 F.Supp.3d at 17–22, 22–23. Thus, although the Court held that Plaintiff's complaint stated a claim and Defendants' dispositive Rule 12 motions had to be denied, it reached this conclusion on the basis of a significantly narrower reading of the statute than Plaintiff had urged. See id. at 21–23, 24.

Before this Court at present are two motions that the AARC has filed pertaining to the Court's opinion. In the first of the two motions, the AARC implores the Court to reconsider the interpretation of the AHRA that the Court adopted, on the ground that the Court misunderstood the statute's legislative history. (See Pl. AARC's Mem. in Supp. of Mot. for Partial Recons. ("Pl.'s Recons. Mem."), ECF No. 81–1, at 5–7.)1 The second motion seeks to have the Court clarify the extent of its holding as it relates to a certain type of device (a hard drive with partitioned segments), or, alternatively, certify for interlocutory review the case's central conclusion about how the AHRA should be interpreted. (See Pl. AARC's Mem. in Supp. of Mot. for Clarification ("Pl.'s Clarification Mem."), ECF No. 82–1, at 5–6.) Defendants oppose both motions (see generally Defs.' Joint Mem. in Opp'n to Pl's. Mots. ("Defs.' Mem."), ECF No. 90), and this Court has now carefully considered the myriad arguments both parties have made with respect to the AARC's requests. As explained below, this Court concludes that Plaintiff's motion for reconsideration must be DENIED because its interpretation of the relevant statutory history is unpersuasive and cannot, in any event, overcome the plain text of the statute. However, because this Court agrees with Plaintiff that its opinion is ambiguous with respect to whether or not a hard drive partition can constitute a DACR under the statute, the AARC's motion for clarification is GRANTED , and the Court's prior opinion is clarified herein, to dispel the contention that hard drive partitions are categorically precluded.

I. THE AARC'S MOTION FOR RECONSIDERATION
A. Applicable Legal Standard

Federal Rule of Civil Procedure 54(b) governs the reconsideration of court orders that "do not constitute a final judgment in a case." See Pierce v. Dist. of Columbia , 146 F.Supp.3d 197, 198 (D.D.C. 2015) (citation omitted). Such relief "is available as justice requires, which amounts to determining, within the Court's discretion, whether reconsideration is necessary under the relevant circumstances." Id. (quoting Prince George's Hosp. Ctr. v. Advantage Healthplan Inc. , 985 F.Supp.2d 38, 42 (D.D.C. 2013) ); see also Capitol Sprinkler Inspection, Inc. v. Guest Servs., Inc. , 630 F.3d 217, 227 (D.C. Cir. 2011).

Generally, reconsideration is warranted "where the court has patently misunderstood the parties, made a decision beyond the adversarial issues presented, made an error in failing to consider controlling decisions or data, or a controlling or significant change in the law has occurred." Pierce, 146 F.Supp.3d at 198 (quoting Clayton v. Dist. of Columbia , 931 F.Supp.2d 192, 210 (D.D.C. 2013) ). Some courts have also said that justice requires reconsideration where the court has "made an error ... of apprehension," including a "failure to consider data that might reasonably be expected to alter the conclusion reached[.]" Singh v. George Washington Univ. , 383 F.Supp.2d 99, 101 (D.D.C. 2005) (internal quotation marks and citation omitted).

B. This Court Is Not Persuaded That It Has Misapprehended The Legislative History Of The AHRA

The AARC requests reconsideration of this Court's conclusions regarding the AHRA on the ground that the Court "misapprehended" relevant legislative history, which, in turn, purportedly led the Court to misinterpret the statute. (Pl.'s Recons. Mem. at 5–7.) Notably, the AARC's contention does not relate to the Court's affirmative analysis of the AHRA's text, but is based on a segment of the Court's opinion that addresses (and rejects) an argument that the AARC had made regarding surplusage. See AARC , 162 F.Supp.3d at 20. The specifics of that unsuccessful, manifestly peripheral argument are laid out fully in the opinion; it suffices to say here that the Court rejected the AARC's argument that "defendants' interpretation renders superfluous the phrase ‘in a digital recording format’ in the DACR definition[,]" because in the Court's view, the "statute's drafting history" revealed a "scrivener's error." Id.

Specifically, the Court explained that when Congress deleted the term "audiogram

" (which encompassed analog recordings) and inserted the term "digital musical recording" in the definition of a DACR, it did so to convey its intent that the DARD definition should be read to capture only those devices that could create digital copies of digital recordings. See

id. ("Congress changed ‘audiogram ’ to ‘digital musical recording,’ thereby requiring that both the DARD's input and its output be in a digital format."). The Court continued: "[b]ut the phrase ‘in a digital format’ remained in [the DACR definition]—a relic of the earlier draft, when it had meaning." Id. The AARC now insists that a proper understanding of the legislative history reveals that a DARD's input can be either analog or digital. (See Pl.'s Recons. Mem. at 6 ("Congress intended to include devices that recorded analog inputs as digital output as DARDs.") ); see also Pl.'s Reply Br., ECF No. 92, at 8 ("[W]hen analog sources are reproduced in a digital recording format, the result qualifie[s] as a [digital audio copied recording]." (internal quotation marks omitted).) And to the AARC, this revelation means that the Court was wrong in its broader holding that a DACR has to be a type of DMR, and thus must satisfy the statute's DMR definition. (See Pl.'s Recons. Mem. at 6 ("Because analog sources can be inputs to DARDs ... it is clear that the Act does not assume that a DACR is equivalent to or necessarily an example of a DMR.").)

Even assuming arguendo that a mistaken conclusion regarding a tangential point of legislative history suffices to upend a court's interpretation of the plain text of a statute, the AARC has not made a persuasive argument that this Court actually erred when it viewed the change from "audiogram

" to "digital musical recording" as evidencing Congress's intent to "requir[e] that both the DARD's input and its output be in a digital format." AARC , 162 F.Supp.3d at 20. The AARC bases its contention that the change from "audiogram" to "digital musical recording" was not intended to signal that the DARD's input (the DMR) must be digital upon various quotes from the House Report that accompanied H.R. 3204, one of which appears to indicate that the Judiciary Committee still envisioned the Act as addressing the copying of both analog and digital sources, despite the drafter's adoption of the term "digital musical recording." (See Pl.'s Recons. Mot. at 10–11 (quoting H.R. Rep. No. 102–873, pt. 1, at 19 (1992).) )2 Another section of the same report discusses copyright immunity; the AARC emphasizes its statement that "[i]n the case of home taping, the exemption protects all noncommercial copying by consumers of digital and analog musical recordings. " Id. at 24 (emphasis added). But careful review of the legislative record reveals that these...

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