517 F.2d 976 (2nd Cir. 1975), 535, Bernstein v. Universal Pictures, Inc.

Docket Nº:535, Docket 74-2169.
Citation:517 F.2d 976
Party Name:1975-1 Trade Cases 60,338 Elmer BERNSTEIN et al., Plaintiffs-Appellants, v. UNIVERSAL PICTURES, INC., et al., Defendants-Appellees.
Case Date:May 27, 1975
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 976

517 F.2d 976 (2nd Cir. 1975)

1975-1 Trade Cases 60,338

Elmer BERNSTEIN et al., Plaintiffs-Appellants,

v.

UNIVERSAL PICTURES, INC., et al., Defendants-Appellees.

No. 535, Docket 74-2169.

United States Court of Appeals, Second Circuit

May 27, 1975

Argued May 12, 1975.

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[Copyrighted Material Omitted]

Page 978

Theodore W. Kheel, New York City (Battle, Fowler, Lidstone, Jaffin, Pierce & Kheel, New York City, on the brief), for plaintiffs-appellants.

Simon Rose, New York City (Robert R. Salman, Janet P. Kane, and Martin Stein, New York City, of counsel; Phillips, Nizer, Benjamin, Krim & Ballon, Cahill, Gordon & Reindel, Donovan, Leisure, Newton & Irvine, Hawkins, Delafield & Wood, Shea, Gould, Climenko & Kramer, and Simpson, Thacher & Bartlett, New York City, on the brief), for defendants-appellees.

Ronald S. Rolfe, New York City (Cravath, Swaine & Moore, New York City, on the brief), for defendant-appellee Columbia Broadcasting System, Inc.

Before KAUFMAN, Chief Judge, FEINBERG, Circuit Judge, and JAMESON, District Judge. [*]

IRVING R. KAUFMAN, Chief Judge:

This elaborate class action was conceived by 71 talented creators, all composers and lyricists, members of the Composers and Lyricists Guild of America (CLGA), and brought against 15 producers of motion pictures and television shows. Judge Brieant abruptly brought down the curtain on plaintiffs' production, however, when, sua sponte, he dismissed the complaint on the ground that the matter was within the exclusive jurisdiction of the NLRB. We find that the dismissal was premature since issues of fact remain to be resolved, and consequently that, in the tradition of the entertainment industry, the curtain must rise again.

I

The composers' 1 complaint alleges that the producers, acting appropriately enough in concert, refused to contract for their services except on certain standard terms, which reserved to the producers the copyright and other ownership rights in the words and music composed on their behalf. This was asserted to constitute a conspiracy in restraint of trade, as well as an attempt to monopolize the sheet music publishing industry.

The standard terms were contained in three contracts, entitled "Minimum Basic Agreements," negotiated and signed in 1960, 1965, and 1967 by CLGA and the trade association of the motion picture producers, the Association of Motion Picture and Television Producers (AMPTP). The three television networks, also defendants herein, were not members of AMPTP nor participants in the negotiations, but allegedly contracted with composers on terms similar to those contained in the agreements. Although each of the successive contracts, which represented the minimum terms under

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which composer's services could be obtained, provided increased wages and shares of the copyright royalties, the producers steadfastly refused to accede to CLGA's demand for copyright ownership by the individual composers.

This issue came to a head in November of 1971, when negotiations between CLGA and AMPTP reached an impasse over copyright ownership. On November 30, the composers launched what proved to be an unsuccessful strike, and simultaneously filed a charge with the National Labor Relations Board alleging that AMPTP's refusal to bargain over copyright ownership violated § 8(a)(3) of the Act. On January 31, 1972, a general membership meeting of CLGA approved the commencement of an antitrust suit against the producers, and the complaint was filed seven days later. On March 7, CLGA withdrew its unfair labor practice charge 2 because the composers now assert they realized that the Board would have no jurisdiction, since they were independent contractors rather than employees.

The producers answered the antitrust charges with the usual denials; in addition they raised the affirmative defenses that their conduct was protected by the labor exemption to the antitrust laws, and that the subject matter of the controversy was within the primary and exclusive jurisdiction of the NLRB. 3 In July of 1973, the composers moved pursuant to Fed.R.Civ.P. 12(f) and 56 to strike these affirmative defenses. Judge Brieant found Rule 56 an inappropriate vehicle for dismissal of affirmative defenses, and ruled the motion under Rule 12(f) untimely. He dismissed the complaint on his own initiative under Rule 12(h)(3), however, concluding that the refusal to bargain with respect to copyright ownership was a labor dispute over which the NLRB had exclusive jurisdiction. The composers appeal.

II

The composers contend that whether the NLRB had exclusive jurisdiction...

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