Johnson v. Hill

• Decision Date: 01 June 2011
• Docket Number: Nos. 08–3810,10–1733.,09–2213,s. 08–3810
• Citation: 641 F.3d 867,98 U.S.P.Q.2d 1842
• Parties: Syl JOHNSON, also known as Sylvester Thompson, Plaintiff–Appellant,v.CYPRESS HILL, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

641 F.3d 867

2011 Copr.L.Dec. P 30,087

98 U.S.P.Q.2d 1842

Syl JOHNSON, also known as Sylvester Thompson, Plaintiff–Appellant,

v.CYPRESS HILL, et al., Defendants–Appellees.

Nos. 08–3810

09–2213

10–1733.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 10, 2011.Decided June 1, 2011.

Douglas K. Morrison (argued), Attorney, Morrison & Mix, Chicago, IL, for Plaintiff–Appellant.Andrew H. Bart (argued), Attorney, Jenner & Block LLP, New York, NY, for Defendants–Appellees.Before MANION, EVANS, and HAMILTON, Circuit Judges.EVANS, Circuit Judge.

Syl Johnson, an American blues and soul singer—well known in the 1960s and 1970s for his exploration of African–American identity and social problems—wrote a song entitled, “Is It Because I'm Black” (the “Song”). ¹ Twenty-five years later, Cypress Hill ², an extremely popular and successful hip-hop group, released the album, “Black Sunday.” One of the tracks on “Black Sunday,” titled “Interlude,” ³ plays a section of Johnson's Song.

In 2003, Johnson filed suit against Cypress Hill alleging copyright infringement of the Song. Over four years into litigation, the district judge granted Cypress Hill's motion for summary judgment after concluding that Johnson failed to prove he held a valid copyright in the Song. Johnson now appeals.

In 1968, Johnson, working with Glenn Watts and Jimmy Jones, wrote “Is It Because I'm Black.” In 1969, Twinight Records released a recorded version of the Song as a 45–RPM. That same year, the Song reached number 11 on the R & B charts. In 1972, Johnson re-recorded the Song. The 1972 recording was never released in the United States. In 1997, Johnson applied for and received United States copyright registration SRU–360–891 for a sound recording compilation. Johnson believed that he included the 1972 recording of the Song in his submission, but he did not. Therefore, the Song was not covered by a valid federal copyright. In June 2003, Watts filed a Form PA composition copyright registration on the words and music of the Song, listing Johnson and Jones as co-authors. The Copyright Office assigned it registration number PA 1–192–702.

In 1993, Cypress Hill released its “Black Sunday” album. The song in question in this case, “Interlude,” is a 77–second song in the middle of the 14–track album. “Interlude” includes 2.5 seconds of Johnson's Song “looped” for the entire 77 seconds. Cypress Hill admits that it failed to obtain permission from Johnson to use the Song.⁴

In 2003, Johnson—after listening to “Interlude” and deciding that his Song was used—filed a pro se complaint against Cypress Hill alleging copyright infringement and a state law fraud claim. Four months later, after obtaining counsel, Johnson filed an amended complaint asserting a single claim, infringement of the sound recording copyright SRU–360–891,⁵ asking for a staggering $29,000,000 in relief. Johnson made this claim under the mistaken belief that his Song was covered by the copyright. At no point during the next four years did he check to make sure it was actually covered.

In March 2006, Peter Wright, an owner of Twinight Records, filed a declaration stating that the SRU–360–891 registration did not include a recording of the Song. In June 2006, Johnson's co-writer, Watts, filed a lawsuit against Cypress Hill claiming infringement of copyrights PA 1–192–702 and SRU–360–891 (the SRU–360–891 claim was later dropped). In October 2007, Lawrence Muggerud, the member of Cypress Hill who created “Interlude,” testified that he came across the Song on the 1969 45–RPM single released by Twinight Records. This last event is particularly crucial to Johnson's claim because, under the Copyright Act, sound recordings fixed before February 15, 1972 are not subject to copyright protection, but may be protected by state law. See 17 U.S.C. § 301(c). Once Johnson affirmatively knew that Cypress Hill used the 1969 version, there was no situation under which his sound recording copyright infringement claim could succeed.

Meanwhile, the parties initiated and proceeded with discovery on the allegations in Johnson's amended complaint, namely the alleged copyright infringement of SRU–360–891. At the close of long and protracted discovery proceedings, and in accordance with the district judge's order, Cypress Hill filed a motion for summary judgment in February 2008. Cypress Hill argued that Johnson could not prove infringement of copyright SRU–360–891 because: (1) there is no copyright protection for a 1969 sound recording; and (2) the compilation submitted for the SRU–360–891 copyright did not include any version of the Song.

Johnson responded, in his brief opposing summary judgment, by arguing—for the first time—that he was entitled to relief under common law misappropriation and infringement of the composition copyright PA 1–192–702. He conceded that his 1969 recording of the Song cannot obtain a sound recording copyright.

In May 2008, Johnson filed a motion for leave to file a second amended complaint. The proposed amendment redacted Johnson's claim for infringement of his sound recording copyright and substituted claims for common law misappropriation and infringement of composition copyright PA 1–192–702. The judge denied Johnson's motion, finding that leave to amend was not warranted due to Johnson's undue delay and the “substantial prejudice” to Cypress Hill that would result from allowing an amendment four years into litigation and after the close of discovery. The judge then granted Cypress Hill's motion for summary judgment, finding that the compilation of songs Johnson submitted to the Copyright Office did not include a recording of the Song and, therefore, Johnson had “failed entirely to show ownership of a valid copyright in the 1969 sound recording.”

Johnson filed a motion under Rule 60(b) of the Federal Rules of Civil Procedure requesting that the court vacate its summary judgment order and enter an order dismissing the case for lack of subject-matter jurisdiction pursuant to Fed.R.Civ.P. 12(h)(3). Johnson argued that because he never had a copyright the district court did not have subject-matter jurisdiction over the action. The court denied his motion.

Cypress Hill then filed a motion for attorney's fees and costs pursuant to 17 U.S.C. § 505, arguing that Johnson knew or should have known from the outset of the litigation that he had no valid claim for infringement of copyright SRU–360–891 because no version of the Song was included in his registered compilation, and the 1969 recording could not be copyrighted. Johnson responded by maintaining that the action should have been dismissed for lack of subject-matter jurisdiction, and therefore 28 U.S.C. § 1919, which provides for an award of “just costs,” should govern the award. The court granted Cypress Hill's motion for attorney's fees and costs, finding that Johnson's amended complaint was “legally baseless” as he could not demonstrate ownership of a valid copyright in the Song. The court reduced Cypress Hill's requested attorney's fees by 15%, and awarded $321,995.25 in attorney's fees and $10,620.53 in costs.

In October 2008, Johnson filed a new action against Cypress Hill in the Circuit Court of Cook County ( Johnson II ), reasserting the state law misappropriation claim he had attempted to add in Johnson I. Cypress Hill removed the action to federal court based on diversity jurisdiction. After removal, Johnson moved to file an amended complaint—a claim for infringement of composition copyright PA 1–192–702. At this point, Johnson's claim was identical to the claim in the amended complaint he tried to file without success in the original case. Accordingly, Cypress Hill moved to dismiss the amended complaint as barred by res judicata. The judge granted the motion to dismiss with prejudice, holding that the Johnson II claims were barred by res judicata.

On appeal, Johnson argues that: (1) the district court abused its discretion in denying his motion for leave to amend; (2) the court lacked subject-matter jurisdiction over the action and therefore was without power to grant summary judgment on the merits; (3) the court erred in granting attorneys' fees pursuant to 17 U.S.C. § 505; and (4) the court erred in finding Johnson's amended complaint in Johnson II was barred by res judicata.

We begin with Johnson's primary claim; that the judge abused his discretion in denying his motion for leave to amend. We review a district judge's denial of a motion for leave to amend for abuse of discretion. Trustmark Insurance Co. v. General & Cologne Life Re of America, 424 F.3d 542, 553 (7th Cir.2005). Although Fed.R.Civ.P. 15(a) provides that leave to amend “ ‘shall be freely given when justice so requires,’ [it] is not to be automatically granted.” Johnson v. Methodist Medical Center of Ill., 10 F.3d 1300, 1303 (7th Cir.1993). “[District] courts have broad discretion to deny leave to amend where there is undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies, undue prejudice to the defendants, or where the amendment would be futile.” Hukic v. Aurora Loan Services, 588 F.3d 420, 432 (7th Cir.2009) (internal citation omitted). And while delay on its own is usually not reason enough for a court to deny a motion to amend, Dubicz v. Commonwealth Edison Co., 377 F.3d 787, 792–93 (7th Cir.2004), the “longer the delay, the greater the presumption against granting leave to amend.” King v. Cooke, 26 F.3d 720, 723 (7th Cir.1994) (internal citation omitted).

The district judge denied the motion, finding that Johnson's four-year wait to amend his complaint, after discovery closed and Cypress Hill filed its motion for summary judgment, was undue delay. Johnson argues in response that he made his motion shortly after learning that the Song Cypress Hill used was the 1969 version, not the 1972 version. But Johnson's argument fails for several reasons.

First, as the judge noted, in March, 2006, Johnson was on notice...