Downing v. A&E Television Networks LLC
| Decision Date | 10 September 2021 |
| Docket Number | 20-CV-4747 (KMW) |
| Court | U.S. District Court — Southern District of New York |
| Parties | RAYMOND DOWNING and STUDIO MACBETH, INC., Plaintiffs, v. A&E TELEVISION NETWORKS, LLC, and DIVISA RED SAU d/b/a DIVISA HOME VIDEO, Defendants. |
Plaintiffs Ray Downing and Studio Macbeth, Inc., (“Macbeth”) bring this action against Defendants A&E Television Networks, LLC, (“AETN”) and Divisa Red SAU (“Divisa”), alleging copyright infringement in relation to two Spanish-language television programs on the History en Espanol channel. Defendant AETN asserts that this suit is foreclosed by a prior agreement to arbitrate such disputes, and has moved to compel arbitration and stay proceedings. For the reasons set forth below, AETN's motion to compel arbitration of Plaintiffs' claims against AETN is GRANTED and all proceedings are stayed pending arbitration.
Ray Downing is an artist specializing in three-dimensional computer graphics, and the founder, owner, and operator of Macbeth, a firm engaged in this type of graphics work. (First Downing Decl. ¶¶ 1-2, ECF No. 33.) AETN is a television network whose primary business is to operate television channels including the History Channel and History en Espanol and offer access to its content library through sub-licensing arrangements on other channels and consumer purchases of digital downloads or DVDs. (Id. ¶¶ 5, 7, 16.) Divisa is a Spanish company engaged in the sale and production of Spanish-language videos.
The parties' engagement began in 2008, when an AETN executive inquired about using graphics created by Macbeth for a documentary regarding President Abraham Lincoln. (Id. ¶ 7.) Macbeth began collaborating in 2009 with Left/Right, Inc., (“Left/Right”), a production company creating the planned documentary for AETN. (Id. ¶ 8.) Over the following one and a half years, Macbeth granted licenses to Left/Right for the use of a number of Macbeth's works in three programs created for AETN: Stealing Lincoln's Body, The Real Face of Jesus, and Jesus: The Lost 40 Days. (Id. ¶¶ 8, 13-14, 17-18.) After Downing's working relationship with Left/Right soured, he and Macbeth filed suit in 2012 against AETN and Left/Right alleging copyright infringement for unauthorized uses of Macbeth's materials in the three original programs. (See id. ¶ 19; Seibel Decl., Exs. A, B, ECF No 27.)
(Seibel Decl., Ex. C ¶ 3.) The contract also had a mutual release provision, by which Macbeth and the Downings released AETN from all claims and causes of action “known or unknown, that arose or may have arisen prior to the date of this Agreement.” (Id. ¶ 7.) An arbitration clause in the 2014 Agreement provided that “[t]he Parties agree that any disputes regarding the enforcement, interpretation, or effect of this Settlement Agreement will be submitted to arbitration through JAMS, The Resolution Experts (“JAMS”) . . . for binding arbitration pursuant to JAMS rules[.]” (Id. ¶ 14.)
While the 2014 Agreement put an end to the earlier litigation, it paused the parties' intellectual property disputes only temporarily. After AETN aired a new program in early 2017, The Face of Jesus Uncovered?, which contained materials created by Macbeth that had appeared in The Real Face of Jesus, Macbeth's counsel wrote to AETN asserting claims for copyright infringement. (Seibel Decl., Ex. D, at 1.) AETN and Macbeth entered into a second settlement agreement in June 2018 to resolve these claims. (See id. at 1, 10.) One provision clarified the parties' understanding that the license in the 2014 Agreement “authorizes AETN to air each of the three programs as is or with non-material edits, including but not limited to edits to shorten or lengthen the program to fit current scheduling requirements, but does not authorize airing the programs with material edits.” (Id. ¶ 9.) Each party again released the other of liability, this time covering any “claim or potential claim related in any way to” the 2012 litigation, 2014 Agreement, copyright claims asserted in the 2017 letter, or The Face of Jesus Uncovered?. (Id. ¶ 3.) The contract included an arbitration clause nearly identical to the one found in the 2014 Agreement. (See id. ¶ 10.)
The peace bought by the second settlement did not last. In October 2019, Macbeth's counsel sent a letter asserting that AETN's airing of El Verdadero Rostro de Jesus and Los 40 Dias Ignorados de Jesus during the November 2016 re-launch of the History en Espanol channel infringed Macbeth's copyrights by using sixty-four of Macbeth's materials without the studio's consent. (See Seibel Decl., Ex. E, at 3.) Plaintiffs Macbeth and Downing filed suit in the U.S. District Court for the Southern District of New York in June 2020 alleging one count of copyright infringement under 17 U.S.C. § 501 against AETN and its purported Spanish-language partner, Divisa.[1] (Compl. ¶ 24.) Defendant AETN has moved to compel arbitration and stay proceedings pending arbitration. (ECF No. 25.)
The Federal Arbitration Act requires courts to enforce arbitration agreements according to their terms, “save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2; see Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010). Still, “[a]rbitration is strictly a matter of consent, and thus is a way to resolve those disputes-but only those disputes-that the parties have agreed to submit to arbitration.” Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 299 (2010) (internal quotation marks, citations, and emphasis omitted). Such agreements to arbitrate disputes are construed under state contract law. See Meyer v. Uber Techs., Inc., 868 F.3d 66, 73-74 (2d Cir. 2017).
When adjudicating a motion to compel arbitration, “courts apply a standard similar to that applicable for a motion for summary judgment, ” considering “all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with . . . affidavits” and “draw[ing] all reasonable inferences in favor of the non-moving party.” Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016) (internal quotation marks and citations omitted). Courts in this circuit undertake a two-part inquiry to determine whether a particular dispute is subject to arbitration, assessing “(1) whether the parties have entered into a valid agreement to arbitrate, and, if so, (2) whether the dispute at issue comes within the scope of the arbitration agreement.” In re Am. Express Fin. Advisors Sec. Litig., 672 F.3d 113, 128 (2d Cir. 2011). The second prong includes an antecedent step of ascertaining who is to decide whether the parties agreed for the dispute to be resolved in arbitration: the court or an arbitrator. Such “threshold questions of arbitrability presumptively should be resolved by the court and not referred to the arbitrator” unless there is evidence that “the parties clearly and unmistakably agree[d] to arbitrate threshold questions such as whether the arbitration clause applies to a particular dispute.” Doctor's Assocs., Inc. v. Alemayehu, 934 F.3d 245, 250-51 (2d Cir. 2019) (internal quotation marks omitted).
AETN argues that Downing and Macbeth agreed in the 2014 and 2018 Agreements to delegate to an arbitrator the question of whether future disputes were to be resolved in binding arbitration. In the alternative, it asserts that a court reaching the merits of the arbitrability question must find that copyright claims are within the scope of the parties' agreements to arbitrate. Plaintiffs counter that qualifying language in the arbitration clauses creates ambiguity as to who should resolve the question of arbitrability and that the failure to identify the Spanish-language programs within the Agreements makes the claims in this case not arbitrable. Because the parties evinced “clear and unmistakable” intent that an arbitrator decide the question of whether Plaintiffs' claims are subject to arbitration, the Court grants the motion to compel arbitration and declines to reach the merits of that question.
The first prong of this inquiry is easily satisfied as to the disputes between each plaintiff and AETN. Each plaintiff has at least one valid agreement to arbitrate with AETN: Downing agreed to arbitrate disputes pursuant to the 2014 Agreement, while Macbeth agreed to arbitrate in both the 2014 and 2018 Agreements. In contrast, no party argues that the other defendant, Divisa, has entered into an agreement to arbitrate disputes. Plaintiffs' claims against Divisa are thus addressed below only in connection with the motion for stay of proceedings.
In assessing whether parties have agreed to arbitrate disputes between them, Holick v. Cellular Sales of N.Y., LLC, 802 F.3d 391, 395 (2d Cir. 2015) (quoting Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp. ...
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