Am. Fed'n of Musicians of U.S. v. Rural Media Grp., Inc.
| Decision Date | 05 March 2021 |
| Docket Number | Case No. 3:20-cv-00318 |
| Parties | AMERICAN FEDERATION OF MUSICIANS OF THE UNITED STATES AND CANADA, AFL-CIO, Plaintiff, v. RURAL MEDIA GROUP, INC., and RFD-TV, LLC, Defendants. |
| Court | U.S. District Court — Middle District of Tennessee |
MEMORANDUM & ORDER
Rural Media Group, Inc. ("RMG") and RFD-TV, LLC ("RFD") have filed a Motion to Dismiss (Doc. No. 37), to which the American Federation of Musicians of the United States and Canada, AFL-CIO ("AFM") has filed a Response (Doc. No. 41), and RMG and RFD have filed a Reply (Doc. No. 43). For the reasons set out herein, the motion will be granted in part and denied in part.
AFM is a union representing instrumental musicians throughout North America. (Doc. No. 34 ¶ 1.) Among the workers represented by AFM are musicians who perform on two television programs, Ray Stevens CabaRay Nashville and The Marty Stuart Show. Ray Stevens CabaRay Nashville is produced by Ray Stevens Productions, LLC ("Stevens LLC"), which is a signatory employer to an AFM collective bargaining agreement, or "CBA," known as the National Public Television ("NPT") Agreement. The Marty Stuart Show is produced by Marty Stuart Tours, LLC("MST"), which is a signatory employer to another AFM CBA, the Basic Cable Agreement. (Id. ¶¶ 6-8.)
RMG and RFD are companies that own and/or operate television stations. Both companies are controlled by Patrick Gottsch. (Id. ¶¶ 14, 22, 64.) RMG has entered into a program license agreement with Stevens LLC that gives RMG the exclusive right to air rebroadcasts of Ray Stevens CabaRay Nashville. Pursuant to that license, RMG agreed that it would be responsible for payment of all union or guild fees, residuals, or other payments to any union or guild arising from RMG's use of the episodes. (Id. ¶ 22; Doc. No. 38-2 at 6-7.) The licensing contract between RMG and Stevens LLC, however, includes a "No Benefits to Others" provision, stating that "[t]he representations, warranties, covenants, obligations, and agreements contained in this Agreement are for the sole benefit of the parties hereto and their respective successors and permitted assigns, and they shall not be construed as conferring and are not intended to confer any rights on any other persons." (Doc. No. 38-2 at 10.) Since licensing the program, RMG has aired Ray Stevens CabaRay episodes, and each such airing, AFM claims, has entitled AFM to payment on behalf of its members under the NPT Agreement. RMG did pay AFM for its use of the program once, but it has since refused to make any further payments. (Doc. No. 34 ¶¶ 24-26.)
The situation with RFD is similar. RFD is party to an exclusive program license agreement with MST to air rebroadcasts of The Marty Stuart Show. AFM takes the position that, under the program license agreement, RFD has assumed the responsibility of paying the relevant AFM musicians the money owed to them based on each broadcast of the program pursuant to the Basic Cable Agreement. RFD did pay AFM under the License Agreement, not just once, but for several years. It has, however, since refused to do so, leaving the musicians unpaid for RFD's ongoing airing of the Marty Stuart Show. (Id. ¶¶ 14-21; Doc. No. 38-1 at 4.) The agreement between MSTand RFD, like the agreement between RMG and Stevens LLC, includes a provision disclaiming the existence of any third-party beneficiaries: (Doc. No. 38-1 at 12.)
On April 14, 2020, AFM filed a Complaint against RMG and RFD in this court. (Doc. No.1.) On August 21, 2020, AFM filed a First Amended Complaint. (Doc. No. 34.) AFM pleads five causes of action. Count I is for violations of the Digital Millennium Copyright Act ("DMCA"), 28 U.S.C. § 4001. Specifically, AFM alleges that, under the DMCA, the defendants' purchase of the rights to air the respective television programs also carried with it an assumption of the underlying collective bargaining agreement obligations, which the defendants have failed to honor. (Id. ¶¶ 29-35.) Count II is for violations of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, also based on the alleged violations of the CBAs. (Id. ¶¶ 36-45.) Count III is for breach of contract, namely, the program license agreements, to which AFM claims to be an intended third-party beneficiary. (Id. ¶¶ 46-52.) Count IV is a claim for unjust enrichment, should the defendants' failures to pay be found to be inequitable but not in violation of any particular contract. (Id. ¶¶ 53-59.) Count V is a claim for "estoppel," based on AFM's reliance on the defendants' representations. (Id. ¶¶ 60-68.)
On September 4, 2020, the defendants filed a Motion to Dismiss, arguing that the court should dismiss AFM's LMRA, breach of contract, unjust enrichment, and estoppel claims—that is, Counts II through V. (Doc. No. 37.) The defendants argue that their relationships with AFM are not governed by the LMRA and that, in the alternative, if those relationships are governed by the LMRA, then the LMRA preempts AFM's common law claims. The defendants also argue thatsome of the common law claims should fail as a matter of law, regardless of preemption. (Id. at 1-2.)
In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court will "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff." Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). The Federal Rules of Civil Procedure require only that the plaintiff provide "a short and plain statement of the claim that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). The court must determine only whether "the claimant is entitled to offer evidence to support the claims," not whether the plaintiff can ultimately prove the facts alleged. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
The complaint's allegations, however, "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To establish the "facial plausibility" required to "unlock the doors of discovery," the plaintiff cannot rely on "legal conclusions" or "[t]hreadbare recitals of the elements of a cause of action," but, instead, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679; Twombly, 550 U.S. at 556.
"The purpose of the LMRA is to allow unions and employers to enter collective bargaining agreements and to bind employees"—along with the employer and the union—"to the agreement's provisions." Apperson v. Fleet Carrier Corp., 866 F.2d 431 (table), 1989 WL 4165, at *2 (6th Cir. 1989). Section 301 of the LMRA states that "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter . . . may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." 29 U.S.C. § 185(a). There is no dispute, at least at this stage, that musicians represented by AFM were entitled to royalties under the relevant CBAs based on the rebroadcasts of the subject television shows. The defendants argue, however, that the LMRA would, at most, cover claims against Stevens LLC and MST—the companies that signed the CBAs and employed the AFM members. The defendants argue that any claim against the station owners themselves, insofar as such a claim would exist, would have to be a creature of ordinary, non-LMRA law—such as the law of contract.
As AFM points out, however, there is no categorical rule that only signatory employers may be sued under the LMRA. Certainly, the relationship between the signatory employer and the union-represented employee could be fairly characterized as the central concern of the Act. Nevertheless, other relationships may fall within the scope of the LMRA, if they are sufficiently bound up with that core subject matter. Cf. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 550 (1964) ("While the principles of law governing ordinary contracts would not bind to a contract an unconsenting successor to a contracting party, a collective bargaining agreement is not anordinary contract." (footnote omitted) (citing United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 578 (1960)). For example, "[t]he Sixth Circuit has explicitly stated that . . . a joint employer is liable . . . under a CBA signed by its co-joint employer," despite that employer's non-signatory status. Cent. States, Se. & Sw. Areas Pension Fund v. Int'l Comfort Prod., LLC, 787 F. Supp. 2d 696, 701 (M.D. Tenn. 2011) (citing Metro. Detroit Bricklayers Dist. Council v. J.E. Hoetger & Co., 672 F.2d 580, 583-84 (6th Cir. 1982)).
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