Bray v. Purple Eagle Entm't, Inc.

• Decision Date: 18 January 2019
• Docket Number: 18 Civ. 5205 (GBD)(HBP)
• Parties: DAVID BRAY, Plaintiff, v. PURPLE EAGLE ENTERTAINMENT, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

DAVID BRAY, Plaintiff, v. PURPLE EAGLE ENTERTAINMENT, INC., et al., Defendants.

18 Civ. 5205 (GBD)(HBP)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

January 18, 2019

REPORT AND RECOMMENDATION

PITMAN, United States Magistrate Judge:

TO THE HONORABLE GEORGE B. DANIELS, United States District Judge,

I. Introduction

By notice of motion dated August 14, 2018, defendants seek an Order dismissing plaintiff's amended complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure and for partial summary judgment pursuant to Rule 12(d) (Notice of Mot., dated Aug. 14, 2018, (Docket Item ("D.I.") 21)). By separate notice of motion, also dated August 14, 2018, defendants seek an Order striking portions of plaintiff's amended complaint pursuant to Rule 12(f) (Notice of Mot., dated Aug. 14, 2018 (D.I. 23)).

For the reasons set forth below, I respectfully recommend that (1) the motion to dismiss for lack of subject matter jurisdiction be denied, (2) the motion to dismiss for failure to state a claim be granted with leave to replead, (3) the motion for partial summary judgment be denied and (4) the motion to strike be granted in part and denied in part.

II. Background

This case arises from the contentious departure of plaintiff David Bray from the band Madison Rising, which was founded and managed by defendant Robert Mgrdechian and his corporation, Purple Eagle Entertainment, Inc. A separate but related action is pending before this court under docket number 18 Civ. 3767.

In 2011, Bray, a Pennsylvania resident, responded to an online advertisement posted by Purple Eagle, a New York corporation, seeking musicians to join a band (Amended Complaint, dated Aug. 3, 2018 (D.I. 19) ("Am. Compl."), ¶¶ 17-18, 33-34, 36). On May 31, 2011, Bray and Mgrdechian entered into the Band Member Agreement ("the Agreement"), under which Bray agreed to join defendants' band (Am. Compl., ¶ 37 and Ex. A at 8). The Agreement provided that Bray would work for Purple Eagle "as a work-for-hire . . . band member in recording and performing (the'Obligations') the music, songs and lyrics (the 'Material') as provided to [Bray] by the Company" (Am. Compl., ¶ 37 and Ex. A, ¶ 1). With respect to the ownership of any Material created in the course of the Agreement, paragraph 2 provided that:

Except as otherwise provided in this Agreement or at law:

a) the Obligations and the Material shall be a work-for-hire, and the Company shall own the Material, and shall be the sole and exclusive owner of the copyright in the Material, including all rights of copyright registration, renewal and extension;

b) the Company (or an assignee of the Company) shall also be considered to be the author of the Material for the purposes of U.S. copyright law, and for the purposes of any other applicable state or federal laws;

c) Musician shall make no claim to ownership of the copyright in the Material unless expressly agreed to otherwise by the Company in writing or as set forth herein, nor shall Musician attempt to exercise any rights, privileges or protections afforded to a copyright holder; and

d) Musician waives all moral rights in the Material.

Subject to paragraph 6 below, Musician understands that all material prepared, written, and/or created by Musician, or contributed to the Material by Musician shall be on a work-for-hire basis as that term is defined under U.S. copyright law and shall belong solely to the Company. In the even any such contribution or material is not considered a work-made-for hire, Musician hereby irrevocably assigns to the Company all of Musician's right, title and interest in such Material.

(Am. Compl., Ex. A, ¶ 2). Paragraph 6 of the Agreement provided that:

in the event that Musician contributes materially to the authorship of any of the Material, Musician shall receive writers' credit and royalties in conjunction with all other co-author's [sic] of such Material for such Material per the terms of this Agreement, other third party agreements and pursuant to the music industry standards. Musician acknowledges and agrees that Musician shall contribute if and only when request [sic] by the Company, and then Musician shall only contribute at his reasonable discretion.

(Am. Compl., ¶ 38 and Ex. A, ¶ 6). The Agreement specified a three-year term, with the option for the parties "to mutually agree, in good faith, to extend the Employment Period for an additional three (3) year period upon payment of a mutually agreed to extension fee to Musician not to exceed $25,000" (Am. Compl., ¶ 41 and Ex. A, ¶ 3).

The band, under the new name Madison Rising, released its debut album on October 17, 2011 (Am. Compl., ¶¶ 42-43). Bray wrote or contributed to four songs on the album and received a writer's credit, but no royalties (Am. Compl., ¶ 46). On March 11, 2012, Madison Rising performed Bray's adaptation of "The Star-Spangled Banner" at a show in Nashville and then recorded the song in April 2012 (Am. Compl., ¶¶ 51-53, 55, The band released its second album, American Hero, on November 5, 2013; it consisted of original songs composed by Bray and Bray's adapta-tion of "America the Beautiful" (Am. Compl., ¶ 62). On June 15, 2015, Madison Rising released American Hero (Red), "a deluxe remastered edition of American Hero," with all but one of the same songs as the original album, two new songs by Bray and "rock versions" of "The Marine Hymn" and "God Bless America" (Am. Compl., ¶ 66). Purple Eagle did not pay Bray any royalties for his contributions to either of these albums or "some associated singles," nor did it pay Bray for designing the artwork on either album (Am. Compl., ¶¶ 67, 69).

When Bray's initial employment term was about to expire, Mgrdechian refused to pay the fee to extend the contract (Am. Compl., ¶ 92). Instead, Mgrdechian told Bray that "they did not need a new or extended contract because, with all of the valuable contributions [Bray] had made, they would continue without a contract and were 'basically partners'" (Am. Compl., ¶ 95). Although Mgrdechian promised to issue Bray stock certificates reflecting his partnership in Purple Eagle, he never issued the certificates (Am. Compl., ¶ 95).

On February 29, 2016, Mgrdechian suspended Bray without pay for 30 days for "alleged behavioral issues" (Am. Compl., ¶ 101). In addition to the suspension, Mgrdechian insisted that Bray sign a new contract or be fired within seven days (Am.Compl., ¶ 102). Bray refused to sign the new contract, and Mgrdechian fired him (Am. Compl., ¶ 102).

Plaintiff commenced this action on June 10, 2018, alleging five claims which he denominates as: (1) declaratory relief; (2) copyright infringement; (3) accounting; (4) unjust enrichment and (5) constructive trust (Compl., dated June 10, 2018 (D.I. 1), ¶¶ 112-147). Defendants moved to dismiss the complaint on July 13, 2018 and moved to strike certain allegations three days later (Notice of Mot., dated July 13, 2018 (D.I. 10); Notice of Mot., dated July 16, 2018 (D.I. 12)). Plaintiff then filed an amended complaint on August 3, 2018, alleging the same five claims that he previously alleged (Am. Compl., ¶¶ 115-154).¹ Plaintiff's amended complaint alleges that plaintiff has registered copyright interests in the songs "Soldier's Christmas," "Warrior Inside," "Last Call," "God Bless America (original arrangement)" and "Amazing Grace/Taps (original arrangement)" (Am. Compl., ¶ 127). Plaintiff further claims that he filed copyright registrations of eleven other works (Am. Compl., ¶ 128).

III. Analysis

A. Applicable Legal Standards

Where, as here, a defendant seeks dismissal of the complaint on multiple Rule 12(b) grounds, a court should ordinarily address the movant's jurisdictional arguments before considering whether the complaint states a claim. Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir. 1963) (Friendly, Cir. J.); see also Prout v. Vladeck, 18 Civ. 260 (JSR), 2018 WL 6332898 at *2 (S.D.N.Y. Nov. 1, 2018) (Rakoff, D.J.); Backus v. U3 Advisors, Inc., 16 Civ. 8990 (GHW), 2017 WL 4600430 at *10 (S.D.N.Y. Aug. 18, 2017) (Woods, D.J.); Artists Rights Enf't Corp. v. Jones, 268 F. Supp. 3d 491, 495 (S.D.N.Y. 2017) (Marrero, D.J.). If the court concludes that subject matter jurisdiction is lacking, it should not consider any remaining grounds asserted for dismissal. See Arrowsmith v. United Press Int'l, supra, 320 F.2d at 221.

1. Motion to Dismiss Pursuant to Rule 12(b)(1)

"A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it."Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). The party asserting that the court has subject matter jurisdiction bears the burden of proving the court's jurisdiction. FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990); Chayoon v. Chao, 355 F.3d 141, 143 (2d Cir. 2004) (per curiam); Bd. of Educ. v. N.Y. State Teachers Ret. Sys., 60 F.3d 106, 109 (2d Cir. 1995). In resolving a motion to dismiss for lack of subject matter jurisdiction,

"[T]he court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff, Natural Res. Def. Council v. Johnson, 461 F.3d 164, 171 (2d Cir. 2006) (citation and internal quotation marks omitted), but "jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it." APWU v. Potter, 343 F.3d 619, 623 (2d Cir. 2003). In resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) a district court may consider evidence outside the pleadings. Makarova, 201 F.3d at 113.

Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff'd, 561 U.S. 247 (2010).

28 U.S.C. § 1332 confers subject matter jurisdiction on district courts when the parties are citizens of different states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. The...