Bridgeport Music, Inc. v. Justin Combs Pub.

Decision Date17 October 2007
Docket NumberNo. 06-6294.,06-6294.
Citation507 F.3d 470
PartiesBRIDGEPORT MUSIC, INC.; Westbound Records, Inc., Plaintiffs-Appellees, v. JUSTIN COMBS PUBLISHING and Bad Boy Entertainment, individually and doing business as Bad Boy Records; Universal Records, a division of UMG Recordings, Inc.; UMG Recordings, Inc.; Bad Boy LLC, Defendants-Appellants.
CourtU.S. Court of Appeals — Sixth Circuit

ARGUED: Jay S. Bowen, Bowen Riley Warnock & Jacobson, Nashville, Tennessee, for Appellants. Richard S. Busch, King & Ballow, Nashville, Tennessee, for Appellees. ON BRIEF: Jay S. Bowen, Amy Jo Everhart, Timothy L. Warnock, Bowen Riley Warnock & Jacobson, Nashville, Tennessee, Jonathan D. Davis, Jonathan D. Davis, P.C., New York, New York, for Appellants. Richard S. Busch, King & Ballow, Nashville, Tennessee, for Appellees.

Before: MARTIN and ROGERS, Circuit Judges; HOOD, District Judge.*

OPINION

ROGERS, Circuit Judge.

Plaintiffs, Bridgeport Music, Inc., and Westbound Records, Inc., owned the copyright to the Ohio Players' song, "Singing in the Morning." Defendant music publishers1 released the Notorious B.I.G. album Ready to Die, the title song of which contained an unlicensed sample of "Singing in the Morning." After plaintiffs brought suit against defendants for copyright infringement, a jury found in favor of plaintiffs and awarded compensatory and punitive damages. Bridgeport elected statutory damages under the federal Copyright Act, 17 U.S.C. § 101 et seq., and received the maximum award of $150,000. Westbound received its one-half share of compensatory damages, $366,939, and punitive damages in the amount of $3.5 million.

Defendants make ten arguments on appeal: (1) the jury verdict was the result of passion and prejudice; (2) the district court erroneously excluded evidence that defendants argue demonstrates that they did not infringe willfully; (3) the district court erroneously bifurcated the trial into liability and punitive damages phases after the trial had commenced; (4) UMG was released from liability; (5) the district court erred by failing to apportion compensatory damages between the infringing and non-infringing portions of the song and album; (6) the jury's award of compensatory damages improperly included compounded interest; (7) the jury's award of compensatory damages improperly included prejudgment interest; (8) the jury's selection of May 4, 1998, as the date from which prejudgment interest should be calculated was in conflict with state law; (9) the jury's $3.5 million punitive damage award was unconstitutionally excessive; and (10) the district court erred by entering an injunction and impoundment order.

Defendants are correct only with respect to issues six, seven, eight, and nine. The jury's compensatory damage award appears to have been the result of a mistake, which resulted in the award's including compounded, prejudgment interest. The date that the jury selected for the time from which prejudgment interest should be awarded was the beginning of the statute of limitations period, and thus conflicts with New York law (which governed Westbound's claims). The punitive damages award violates due process when measured against defendants' conduct, the harm that plaintiffs suffered, and the statutory damages that federal law permits. The other issues raised by defendants are without merit. We remand with instructions for the district court to offer plaintiffs a remittitur with respect to the compensatory and punitive damages award and to select a reasonable date from which to calculate prejudgment interest.

I.

Christopher Wallace a/k/a Notorious B.I.G. was one of the rap world's biggest stars in the mid-1990s. In 1994, Bad Boy Entertainment, Inc., d/b/a Bad Boy Records ("BBE"), as a joint-venturer with Arista Records, Inc., released Notorious B.I.G.'s first album, Ready to Die. The album was a tremendous success, selling millions of copies and attaining multi-platinum status. A version of the album with additional content was later re-released in 2004.

The title song of the album, "Ready to Die,"2 was produced by Osten Harvey, Jr. Sean "Diddy" Combs, BBE's principal, objected to the use of Jimi Hendrix's "Power of Love" as a sample in "Ready to Die" because the Hendrix song was denied clearance. Harvey then substituted a portion of the Ohio Players' song "Singing in the Morning." BBE did not obtain a license to "Singing in the Morning" and authorized the release of Ready to Die with the understanding that not all samples on the album had been cleared.

A funk group, the Ohio Players, had released "Singing in the Morning" in 1972. Bridgeport Music, Inc. owned the copyright to the musical composition "Singing in the Morning," and Westbound Records, Inc. owned the common-law copyright to the sound recording embodying the musical composition of "Singing in the Morning."

Between April 16, 1998, and September 30, 1999, Jane Peterer, Administrator at Bridgeport, wrote letters (hereinafter referred to as "the Peterer letters") to BMG Records (which is a part of Arista Records), EMI Music Publishing (which, according to plaintiffs, administers JCP), and Big Poppa Music. In the letters, Peterer claimed that "Ready to Die" infringed on Bridgeport's copyright to "Singing in the Morning" and requested "a share of 25% of the new copyright `Ready to Die'" to be made retroactive.

Plaintiffs did not receive a favorable response to the Peterer letters. On February 25, 2005, plaintiffs filed a complaint against defendants in the United States District Court for the Middle District of Tennessee.3 This action was related to an earlier lawsuit filed May 4, 2001, and the parties stipulated that the action would be deemed to have been filed on that date for statute of limitations purposes. Although both Bridgeport and Westbound initially sued under the federal Copyright Act, an amended complaint pleaded alternative claims of common law copyright infringement, unfair competition, and misappropriation. The district court dismissed Westbound's claims under the federal Copyright Act because the sound recording, to which Westbound owned the rights, was not fixed in a tangible medium on or after February 15, 1972, see 17 U.S.C. § 301(c), but held that New York law governed Westbound's common law claims. Thus, at trial, Bridgeport was seeking relief under the federal Copyright Act and Westbound was seeking relief under New York common law. Both plaintiffs also sought punitive damages.

A nine-day trial ensued. Although neither party asked for, nor was in favor of, bifurcation, the district court decided, sua sponte, during the defendants' case-in-chief, to bifurcate the trial into liability and punitive damages phases. During closing arguments, plaintiffs' counsel asked the jury to award damages in the amount of $733,878 each to both Bridgeport and Westbound, and stated that although plaintiffs could not "collect double," the district court would "make sure that there is no double recovery."

On March 20, 2006, a jury found each of the defendants liable to Bridgeport for copyright infringement under the federal Copyright Act. The jury awarded Bridgeport actual damages and profits of $733,878, and, in the alternative, statutory damages of $150,000.

The jury also found each defendant, other than JCP, liable to Westbound under New York common law for copyright infringement and unfair competition. The jury awarded Westbound damages of $733,878. The jury chose May 4, 1998, as the date from which prejudgment interest would be awarded to Westbound. The jury also decided that Westbound was entitled to punitive damages against each defendant. After the punitive damages portion of the trial, the jury awarded Westbound punitive damages of $1.5 million from Bad Boy Entertainment, $1 million from Bad Boy, LLC, and $1 million from Universal Records/UMG Recordings, Inc.

After the jury verdict, on April 28, 2006, defendants filed a "Motion for Mistrial or Modification of Verdict." Among other things, defendants argued that plaintiffs were entitled to receive one compensatory judgment award of $733,878, and that Bridgeport and Westbound were not both entitled to separate awards of $733,878 each. The district court noted that plaintiffs' counsel argued during closing remarks that the district court would prevent double recovery, and did just that by ruling that the compensatory damages would be split equally between Bridgeport and Westbound. Because Bridgeport elected statutory damages, see 17 U.S.C. § 504(c)(1), the district court ruled that Bridgeport would receive $150,000 in statutory damages under the federal Copyright Act, whereas Westbound would receive its share of the compensatory damages award, $366,939. In addition, the district court awarded Westbound $276,763.93 in prejudgment simple interest from May 4, 1998. The district court, however, ruled against defendants with respect to their arguments about the exclusion of post-litigation settlement offers, bifurcation, apportionment of damages, punitive damages, and the date from which prejudgment interest should have been awarded.

II.

Defendants raise three issues on appeal that, if we were to agree had merit, would require a new trial. These issues, however, do not have merit and therefore we affirm the district court's judgment entered on the verdict with respect to these issues.

A. Passion & Prejudice (Issue 1)

The district court did not abuse its discretion by denying defendants' post-verdict motion for a mistrial based on defendants' arguments that the verdict was the result of the "passion and prejudice" of the jury. We reach this conclusion because the purportedly improper comments made by plaintiffs' counsel were not sufficiently prejudicial. If statements made during the course of closing arguments are improper, then this court may only set aside the verdict if "there is a reasonable probability that the verdict" was influenced...

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