Chambers v. Time Warner, Inc.

• Decision Date: 04 December 2000
• Docket Number: No. 00 CIV. 2839(JSR).,00 CIV. 2839(JSR).
• Citation: 123 F.Supp.2d 198
• Parties: Lester CHAMBERS d/b/a The Chambers Brothers, Carl Gardner d/b/a The Coasters, Bill Pinkney d/b/a The Original Drifters, Tony Silvester d/b/a The Main Ingredient, on behalf of themselves and all others similarly situated, Plaintiffs, v. TIME WARNER, INC., in its own right and as successor in interest to Warner Bros. Records, Atlantic Records, Elektra Records, and associated labels; Sony Music Entertainment, Inc. in its own right and as successor in interest to Columbia Records and associated labels; BMG Entertainment, Inc., in its own right and as successor in interest to RCA Records, Arista Records, and associated labels; Universal Music Group, Inc. in its own right and as successor in interest to MCA Records, Polydor Records, and associated labels; and MP3.Com, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

123 F.Supp.2d 198

Lester CHAMBERS d/b/a The Chambers Brothers, Carl Gardner d/b/a The Coasters, Bill Pinkney d/b/a The Original Drifters, Tony Silvester d/b/a The Main Ingredient, on behalf of themselves and all others similarly situated, Plaintiffs, v. TIME WARNER, INC., in its own right and as successor in interest to Warner Bros. Records, Atlantic Records, Elektra Records, and associated labels; Sony Music Entertainment, Inc. in its own right and as successor in interest to Columbia Records and associated labels; BMG Entertainment, Inc., in its own right and as successor in interest to RCA Records, Arista Records, and associated labels; Universal Music Group, Inc. in its own right and as successor in interest to MCA Records, Polydor Records, and associated labels; and MP3.Com, Inc., Defendants.

No. 00 CIV. 2839(JSR).

United States District Court, S.D. New York.

December 4, 2000.

Fred Taylor Isquith, Wolf Haldenstein Adler Freeman & Herz LLP, New York City, Lawrence Feldman, Lawrence E. Feldman & Associates, Jenkintown, PA, Mark C. Rifkin, Rifkin & Associates LLC, Paoli, PA, for Plaintiffs.

Jeffrey A. Conciatori, Michael Carlinsky, Orrick, Herrington & Sutcliffe LLP, New York City, for MP 3.Com, Inc.

Jay Cohen, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for Sony Corp.

Katherine B. Forrest, Cravath Swaine & Moore, New York City, for Time Warner, Inc.

Charles B. Ortner, Proskauer Rose LLP, New York City, for BMG Music.

Suzan Arden, Pryor Cashman Sherman & Flynn, New York City, Russell J. Frackman, Jeffrey D. Goldman, Mitchell Silberberg & Knupp LLP, Los Angeles, CA, for Universal Music Group, Inc.

Michael G. Rhodes, James J. Donato, Cooley Godward LLP, San Diego, CA.

OPINION AND ORDER

RAKOFF, District Judge.

Plaintiffs are members of musical groups that, pursuant to contract, made recordings, mostly in the 1950's and '60's, for defendant companies Time Warner, Inc. ("Time Warner"), Sony Music Entertainment, Inc. ("Sony"), BMG Entertainment, Inc. ("BMG"), Universal Music Group, Inc. ("Universal") and their predecessors (collectively "the Record Companies"). Spurred by the actions of co-defendant MP3.com, Inc. ("MP3.com") in converting such recordings to digital format, see UMG Recordings, Inc. v. MP3.Com, Inc., 92 F.Supp.2d 349 (S.D.N.Y.2000), plaintiffs brought this action under federal copyright law, federal trademark law, and sections 50 and 51 of the New York State Civil Rights Law, seeking not only monetary damages and injunctive relief but also a declaration of their rights under these laws with respect to Internet use of such of their recordings as were made before February 1, 1996 (the effective date of the Digital Performance Rights in Sound Recordings Act of 1995). Defendants responded by moving to dismiss the action pursuant to Fed.R.Civ.P. 12(b)(6).¹ For the following reasons the motion is granted.

Although plaintiffs' Amended Complaint asserts no fewer than nine separate counts, most of their claims are premised on the contention that the plaintiffs hold property rights in the digital versions of their recordings. In fact, however, plaintiffs assigned such rights to the Record Companies.

The recordings in question were made pursuant to contracts between the plaintiffs and the Record Companies, under which the Record Companies advanced monies to the plaintiffs to make the recordings and agreed to pay royalties to plaintiffs for certain uses of the recordings, in return for transfer of ownership of the recordings to the Record Companies. See, e.g., Am. Compl. ¶¶ 15, 19-21.² While the contracts vary from one another in ways not here relevant, they all contain language identical or equivalent to the following:

All recordings, phonograph record masters and reproductions made therefrom, together with the performances embodied therein, shall be entirely [the Record Company's] property. [The Record Company] shall have the unrestricted right to manufacture, use, distribute and sell sound productions of the performances recorded hereunder made by any method now known, or hereafter to become known ...

Aff. of Katherine B. Forrest, Ex. 1, at ¶ 5 (Atlantic Contract); see also, e.g., id., Ex. 8, at ¶ 4 (Columbia Contract); id., Ex. 9, at ¶ 13 and Ex. 11, at ¶ 9(f) (RCA Contracts); id., Ex. 13, at § 5.01 (PolyGram Contract).

This language (and the equivalent language in the other contracts) is clear. Without limitation it conveys all of plaintiffs' rights in these recordings to the Record Companies, including the right to exploit the recordings by any method whatsoever, whether known at the time or "hereafter to become known."

Despite their best efforts, plaintiffs are unable to offer any argument that defeats the plain meaning of this contractual language. Most of their arguments, indeed, are premised on trivial differences in the wording of the various contracts that in no way alters the basic meaning here relevant. For example, plaintiff Pinkney argues that the clause in the contract he signed with Atlantic Records (a predecessor of defendant Time Warner) that gives Atlantic the exclusive right to manufacture and sell "records embodying the Recordings" refers only to vinyl records and not to digital recordings. See Aff. of Silda Palerm, Ex. 1, at ¶ 1(a) (Pinkney contract with Atlantic). Even if this were true in the case of this one contract, it would have limited application to the rest of this case, since other contracts expressly define "records" more liberally.³ But even in the case of Pinkney's own contract, the restrictive meaning he posits for "records" is refuted by the rest of the very sentence on which he relies, which gives Atlantic the right to manufacture such records "by any method now or hereafter known." Id. at ¶ 1(a). Similarly, the contract also gives Atlantic the right "[t]o perform the records publicly and to permit public performances thereof by means of radio broadcast, television or any other method, medium or technology now or hereafter known." Id. at ¶ 1(e). Finally, definitions of "records" quite aside, the contract provides generally that Atlantic owns "all rights, title and interests in and to the Recordings and all reproductions derived therefrom and performances embodied therein, from the inception of recording thereof, free and clear from the claims of you or anyone claiming through you." Id. at ¶ 1. Reading these provisions together, no reasonable person could understand the contract to assign only the rights relating to vinyl records, with plaintiffs retaining the digital rights.⁴

Perhaps recognizing the poverty of such arguments, plaintiffs' counsel, at oral argument on the instant motion, essayed a new contention to the effect that the above-discussed contractual language, even if facially sufficient to encompass digital versions of the recordings, is effectively narrowed by the definition of "recording" contained in some of the versions of the National Code of Fair Practice for Sound Recordings of the American Federation of Television and Radio Artists' (the "AFTRA Code"). Despite the untimeliness of this argument, the Court has therefore reviewed both the versions of the AFTRA Code that plaintiffs submitted in connection with the plaintiffs' motion for class certification as well as those submitted after oral argument of the instant motion. Quite aside from the fact that the Record Companies do not appear as signatories on any of these versions, however, there is no language in any of them that may be held to narrow, or override, the plain language of the recording contracts discussed above. At most, they show that prior to 1965 (when some, but not all, of the recording contracts here in issue were entered into) the AFTRA Code's own definition of "recordings" was arguably limited to phonograph recordings. But, as all versions of the Codes state, the Codes merely set forth the minimum required terms for the recording contracts they cover and are in no way intended to prohibit broader provisions or definitions.

Finally, after the instant motion had been fully submitted, plaintiffs sought (and received) permission to submit several additional cases that, they represented, would contradict the interpretation favored by the Court. But the cases they then submitted — notably, Manners v. Morosco, 252 U.S. 317, 325-27, 40 S.Ct. 335, 64 L.Ed. 590 (1920), Harper Bros. v. Klaw, 232 F. 609, 612-13 (S.D.N.Y.1916), and Kirke La Shelle Co. v. Paul Armstrong Co., 263 N.Y. 79, 188 N.E. 163, 165-68 (N.Y.1933) — do nothing of the kind. Rather, these old cases deal with the construction of contracts that, unlike the contracts here, made no provision for the future reproduction of assigned works "by any method now known, or hereafter to become known," or words to that effect. Obviously in the absence of such language courts might be hard pressed to determine that reproduction of recordings by a new method such as a digital recording was covered by the assignment. But where, as in the instant case, such language is present, courts have had no difficulty in construing these contracts to extend the assignment to...