Alicea v. Machete Music, of Umg Recordings, Inc. (In re in Records, Inc.)

• Decision Date: 07 March 2014
• Docket Number: No. 12–1548.,12–1548.
• Citation: 744 F.3d 773
• Court: U.S. Court of Appeals — First Circuit
• Parties: Angel Martinez ALICEA, p/k/a Ruf El Fantaztiko; Freddy Montalvo; Raul Rivera Roldan, p/k/a Thilo; Reynaldo Colon Vega, p/k/a Limits, Plaintiffs, Appellants, Jose Delgado, p/k/a Buk Dollar; Gerry Capo Hernandez, p/k/a Lionize, Plaintiffs, v. MACHETE MUSIC, a division of UMG Recordings, Inc.; UMG Recordings, Inc., Defendants, Appellees, LT's Benjamin Records, Inc.; Francisco Saldana, p/k/a Luny; Victor Cabrera, p/k/a Tunes; Ramon Ayala, p/k/a Daddy Yankee; Los Cangris, Inc.; El Cartel Records, Inc., Defendants.

744 F.3d 773

Angel Martinez ALICEA, p/k/a Ruf El Fantaztiko; Freddy Montalvo; Raul Rivera Roldan, p/k/a Thilo; Reynaldo Colon Vega, p/k/a Limits, Plaintiffs, Appellants,Jose Delgado, p/k/a Buk Dollar; Gerry Capo Hernandez, p/k/a Lionize, Plaintiffs,

v. MACHETE MUSIC, a division of UMG Recordings, Inc.; UMG Recordings, Inc., Defendants, Appellees,LT's Benjamin Records, Inc.; Francisco Saldana, p/k/a Luny; Victor Cabrera, p/k/a Tunes; Ramon Ayala, p/k/a Daddy Yankee; Los Cangris, Inc.; El Cartel Records, Inc., Defendants.

No. 12–1548.

United States Court of Appeals, First Circuit.

March 7, 2014.

David A. Mech, with whom Law Offices of David A. Mech was on brief, for appellants.

Linda M. Burrow, with whom Alison Mackenzie, Caldwell Leslie & Proctor, PC, Daniel J. Cloherty, and Collora LLP were on brief, for appellees.

Before HOWARD, SELYA, and STAHL, Circuit Judges.

HOWARD, Circuit Judge.

Over a century ago, Mark Twain lamented that “[o]nly one thing is impossible for God: to find any sense in any copyright law on the planet.” Mark Twain, The Complete Works of Mark Twain: Mark Twain's Notebook 381 (Albert Bigelow Paine ed., 1935). We fear that Twain's deity would fare little better with the tangled skein of copyright and contractual claims presented by the plaintiffs in this case. Confining our inquiry to the arguments seasonably raised before the district court and to the factual background at the time of summary judgment, we conclude that the district court did not err in granting the defendants' motion for summary judgment and denying the plaintiffs' subsequent motion for reconsideration.

I.

The plaintiffs Angel Martinez Alicea (“Martinez”), Freddy Montalvo, Raul Rivera Roldan (“Rivera”), and Reynaldo Colon Vega (“Colon”) are Massachusetts-based producers of “reggaeton” music, a musical genre originating in Puerto Rico and boasting such diverse origins as reggae, hip hop, salsa, and meringue.¹ This lawsuit concerns seven songs ultimately released on an album distributed by the defendants, allegedly infringing upon the plaintiffs' copyrights and breaching contracts to which the plaintiffs claim to be parties and/or third-party beneficiaries.²

The events underlying this case date back to 2006, when Francisco Saldana, a Puerto Rico-based reggaeton producer who with Victor Cabrera founded a record label named “Mas Flow,” began looking for a new vocalist. After posting an online advertisement, Saldana soon received numerous emails and recordings from Gerry Capo Hernandez (“Capo”), a reggaeton performer then residing in Springfield, Massachusetts. Saldana invited Capo to his recording studio in Puerto Rico, where Capo soon became part of a new reggaeton group known as “Erre XI.” In May 2007, Saldana reached out to Angel Martinez Alicea, Freddy Montalvo, and Etienne Gagnon, three reggaeton producers from Springfield who had worked with Capo in the past, and invited them to his studio to produce two songs for Erre XI. Upon hearing the two songs, Saldana pronounced Martinez and Montalvo his “new stars.” Martinez and Montalvo subsequently signed producer agreements with Mas Flow entitling them to royalty payments for the songs they produced.

Over the next several months, Martinez, Capo, Montalvo, and Gagnon worked in Saldana's studio on new songs for the Erre XI album, performing vocals, composing beats and instrumentals, and providing sound engineering services. They were joined by Reynaldo Colon Vega, a vocalist recruited by Martinez and Saldana in July 2007, and by Raul Rivera Roldan, a producer who had worked with Saldana since 2004 and who had previously produced two songs, “Mirala Bien” and “Paleta,” released on a CD titled “Pa'l Mundo” in 2005. Colon signed an exclusive recording agreement with Mas Flow in September 2007, while Rivera had signed a producer agreement with Mas Flow in June 2006.

Since April 2004, Mas Flow had licensed to Machete Music (“Machete”), a division of UMG Recordings, Inc. (“UMG”), the “exclusive right to sell and distribute” Mas Flow's recordings. In August 2007, Mas Flow and its successor in interest, LT's Benjamin Records, Inc. (“LT”), entered into a new Profit Share Agreement with Machete, creating a new record label and providing for the division of profits from the sale of albums delivered by Mas Flow and distributed by Machete.

Seven songs on which the plaintiffs worked eventually appeared on the Erre XI album distributed by Machete in 2008: “Al Desnudo,” “Carita Bonita,” “Dimelo,” “Ella Me Amo,” “La Carta,” “MSN,” and “Te Hice Volar.” Although the melodies to these songs remained largely identical to the versions produced by the plaintiffs, many of the plaintiffs' musical and vocal contributions were replaced with the work of other artists.

The plaintiffs filed suit on January 5, 2010, asserting counts of copyright infringement, breach of contract, fraudulent inducement of services, unjust enrichment, and intentional and negligent infliction of emotional distress. Their complaint named as defendants Saldana, Cabrera, White Kraft Music Publishing, and LT (the “LT defendants”); Ramon Ayala, professionallyknown as “Daddy Yankee,” El Cartel Records, Inc., and Los Cangris, Inc. (the “Daddy Yankee defendants”); and UMG and Machete (the “UMG defendants”). ³ Two months later, Capo and Colon registered with the U.S. Copyright Office the copyrights in the sound recordings for four of the songs, “Carita Bonita,” “Al Desnudo,” “Te Hice Volar,” and “Dimelo,” each of which had numerous composers and vocalists. In July 2010, the plaintiffs filed with the district court a printout from the Copyright Office indicating that they had filed for sound recording registration in the remaining three songs.

On January 11, 2011, the district court adopted the magistrate judge's report and recommendation, granting the motion to dismiss as to the Daddy Yankee defendants for failure to state a claim and lack of personal jurisdiction and also dismissing the emotional distress claims against the UMG defendants. However, the court denied the UMG defendants' Rule 12(b)(6) motion to dismiss the plaintiffs' copyright and contract claims. On October 6, 2011, the court adopted a second report and recommendation from the magistrate judge and dismissed the claims against the LT defendants for lack of personal jurisdiction.⁴ Neither the Daddy Yankee defendants nor the LT defendants remain parties to this appeal.

The remaining defendants, Machete and UMG, moved for summary judgment. With respect to the copyright claims, the defendants argued inter alia that as late as September 2011 the plaintiffs still had not shown that they had registered copyrights in the underlying compositions that they claimed were infringed, as is required under 17 U.S.C. § 411(a). As for the contract claims, the defendants argued that the plaintiffs had failed to establish either that they had a direct contractual relationship with the UMG defendants or that they were third-party beneficiaries of the distribution and profit share agreements between Machete and Mas Flow.

In opposition to the defendants' motion, the plaintiffs stated that they had filed copies of the allegedly infringing Erre XI recordings with the Copyright Office, and introduced an email from the Copyright Office explaining that the office was still in the process of determining whether the plaintiffs had submitted permissible deposits of the recordings.⁵ At a January 2012 hearing on the defendants' motion, plaintiffs' counsel informed the district court that the Copyright Office still had yet to determine whether the deposited recordings, although not the original recordings on which the plaintiffs had worked, were nevertheless acceptable for registration purposes.

On February 23, 2012, the court granted the UMG defendants' motion for summary judgment. The court concluded that even “[a]fter more than two years of litigation,” the plaintiffs had not satisfied the registrationprecondition of § 411(a), having neither obtained registration certificates for the compositions nor even shown that they had submitted all of the necessary application materials for registration. With respect to the breach of contract claims, the court found no evidence either of a direct agreement between the parties or of third-party beneficiary status. The court also denied the plaintiffs' motion for additional discovery under Fed.R.Civ.P. 56(d) and the plaintiffs' motion to transfer the case to the District of Puerto Rico and consolidate it with parallel litigation pending there.

Four weeks later, the plaintiffs filed a motion to reconsider under Fed.R.Civ.P. 59(e), claiming “new evidence” unavailable at the time of the district court's order: namely, newly obtained Copyright Office registration certificates for two of the Erre XI songs (“Carita Bonita” and “MSN”) and rejection letters for three other songs from the album (“Ella Me Amo,” “Dimelo,” and “Al Desnudo”).⁶ The district court denied this motion on April 18, 2012. This appeal followed.

II.

On appeal, the plaintiffs assign error to the district court's grant of summary judgment and its subsequent denial of their motion for reconsideration, along with its denial of their motions for transfer and additional discovery. We begin with the summary judgment order, which we review de novo. In so doing, we “draw[ ] all reasonable inferences in favor of the non-moving party while ignoring conclusory allegations, improbable inferences, and unsupported speculation.” Smith v. Jenkins, 732 F.3d 51, 76 (1st Cir.2013) (internal quotation marks omitted). In reviewing the district court's denial of the plaintiffs' subsequent motion to reconsider the summary judgment order, we “will not overturn the court's determination unless a miscarriage of justice is in prospect or the record otherwise reveals a manifest abuse of discretion.” Melendez v. Autogermana, Inc., 622 F.3d 46, 55 (1st Cir.2010) (internal quotation marks omitted). We are not bound...