Emi Mills Music, Inc. v. Empress Hotel, Inc.

• Decision Date: 20 September 2006
• Docket Number: No. CIV. 03-1940(RLA).,CIV. 03-1940(RLA).
• Parties: EMI MILLS MUSIC, INC., et al., Plaintiffs, v. EMPRESS HOTEL, INC., et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

470 F.Supp.2d 67

EMI MILLS MUSIC, INC., et al., Plaintiffs, v. EMPRESS HOTEL, INC., et al., Defendants.

No. CIV. 03-1940(RLA).

United States District Court, D. Puerto Rico.

September 20, 2006.

COPYRIGHT MATERIAL OMITTED

Raul Barrera-Morales, Raul Barrera Morales Law Office, San Juan; PR, Jesus M. Hernandez-Sanchez, Ariel Hernandez-Santana, Hernandez Sanchez Law Firm, San Juan, PR, Rafael Melendez-Ramos, Rafael Melendez Ramos Law Office, San Juan, PR, Damaris Quinones-Vargas, Damarls Quinones, Cabo Rojo, PR, for Empress Hotel, Inc., Defendant.

Jose L. Ramirez-Coll, Diego A. Ramos, Fiddler, Gonzalez & Rodriguez, San Juan, PR, Jorge R. Roig-Colon, P.R. Department of Justice—Federal Litigation, San Juan, PR, PHV Andrew Schaeffer, New York, NY, for Billy Strayhorn Songs, Inc., Dreamworks Songs, Emi Mills Music, Inc, Universal Polygram International Publishing, Inc., Universal Studios, Plaintiffs.

OPINION AND ORDER

ACOSTA, District Judge.

This is an action for copyright infringement under the United States copyright laws, 17 U.S.C. §§ 101, et seq. In their complaint, plaintiffs Emi Mills Music, Inc., Universal-Polygram International Publishing, Inc., Dreamworks Songs, Billy Strayhorn Songs, Inc. and Universal Studios, Inc. ("Plaintiffs" or "Copyright Owners") alleged that defendants, Empress Hotel, Inc./and Mr. Carl Palermo (collectively "Defendants"), infringed Plaintiffs' copyrights in four songs through their unauthorized public performance in defendants' premises (the "Empress Hotel"). Plaintiffs further claimed that defendants threatened to continue such infringing performances.

Non jury trial was held on August 7 and August 8, 2006. The court having heard the testimony of the witnesses presented by the parties, reviewed the documentary evidence introduced at trial as well as the stipulations submitted thereat hereby finds as follows.

FINDINGS OF FACT

The songs "CARAVAN," "ALL THE THINGS YOU ARE, ARE MINE," "TAKE THE `A' TRAIN," and "A NIGHT IN TUNISIA" (a/k/a THE MELODY STILL LINGERS ON) (collectively "the Copyrighted Works") are original works afforded protection under the copyright laws of the United States, 17 U.S.C. §§ 101, et seq., and properly registered thereunder.

Plaintiffs Emi Mills Music, Inc., Universal-Polygram International Publishing, Inc., Dreamworks Songs, Billy Strayhorn Songs, Inc. and Universal Studios, Inc. are owners of the Copyrighted Works.

Plaintiffs are members of the American Society of Composers, Authors and Publishers ("ASCAP") and at all times pertinent, their songs, including each of the four songs listed above, have been in the ASCAP repertory.

ASCAP is an unincorporated membership association whose more than 230,000 members write and publish musical compositions.

Each member, including each plaintiff herein, has granted to ASCAP a non-exclusive license to authorize public performances of the members' copyrighted music. In this capacity ASCAP licenses, inter alios, music users, television networks and stations, radio stations, restaurants, nightclubs and hotels.

The San Juan Empress Hotel (hereinafter "Empress Hotel") is owned by defendant Empress Hotel, Inc.

Defendant Carl Palermo, at all relevant times, was President and Treasurer of Empress Hotel, Inc., and had responsibility for the control, management operations and maintenance of the affairs of said corporation.

Defendants regularly hire musicians to publicly perform musical compositions for the entertainment of Defendants' patrons. As a result thereof they derive financial benefit from these public performances inasmuch as the musicians attract or entertain paying patrons of the Empress Hotel.

Beginning on or about February 13, 1998, ASCAP took several steps to persuade the Defendants to obtain an ASCAP license and thereby obtain permission to perform lawfully copyrighted musical works in the ASCAP repertory.

During the period from February 13, 1998 through December 14, 2001, ASCAP representatives contacted defendants by way of at least 10 letters, telephone calls and personal visits as part of ASCAP's unavailing efforts to persuade Defendants to obtain a license for the Empress Hotel.

Defendants were repeatedly advised that in order to lawfully perform any of the copyrighted musical compositions in the ASCAP repertory at the Empress Hotel, permission was required from either ASCAP or the individual copyright owners directly.

Moreover, ASCAP consistently reminded Defendants of their potential liability under the United States copyright laws for the unauthorized public performance of copyrighted musical compositions at the Empress Hotel. Nevertheless, Defendants repeatedly ignored and rejected AS CAP's licensing offers.

The Defendants have not obtained an ASCAP license, nor have they obtained permission directly from ASCAP members to perform copyrighted music at the Empress Hotel.

During trial, Dean Demerritt, Director of Licensing for ASCAP, testified that ACAP calculates the license fees charged to hotels based on the hotel/motel's expenditure statement and ASCAP's licence fee schedule. Mr. Demerritt testified that, in the normal course of business, the, information provided by hotels and motels in these statements is used to calculate the appropriate fees with the assistance of the fee schedule.

Defendants never filled out an expenditure statement for the Empress Hotel from the time they were contacted in 1998 up to the present. Nevertheless, relying on admissions from Mr. Palermo's testimony at his deposition in this case, Mr. Demerritt was able to estimate the Empress Hotel's license fees for the year 2006.

In his deposition Mr. Palermo testified that: (1) the Empress Hotel has 31 rooms; (2) he spent approximately $1,050.00 per week for musical performers; (3) there was dancing at the Empress Hotel but no cover charge, shows or acts, and (4) music was also played at the Empress Hotel by means of a jukebox.

Based on the aforementioned admissions and ASCAP's license fee schedule, Mr. Demerritt was able to estimate the Empress Hotel's license fees for 2006 at $2,095.00. Mr. Demerritt further explained that, as a general rule, ASCAP license fees have varied from year to year in accordance with changes in the Consumer Price Index ("CPI"). This testimony was not impeached by Defendants.

Even in the light most favorable to Defendants, the percentage decrease in license fees going back from 2006 to 1998 based on changes in the CPI would be balanced out by the increase in the value of money if ASCAP had been able to invest or use the license fees that the Empress Hotel would have paid if licensed from 1998 to the present. Thus, in light of the actual fees due for 2006 ($2,095.00), it would be reasonable to estimate the license fees due from 1998-2006 at about $2,000.00 per year. The Court finds this computation reasonable, since the amount of ASCAP fees are just a guide in its discretionary determination of statutory damages for copyright infringement. See, Morley Music Co. v. Dick Stacey's Plaza Motel, Inc., 725 F.2d 1, 3 (1st Cir.1983) ("[since] district court[s][are] not constrained to award only an amount equal to plaintiffs' lost license fees, H the question of what plaintiffs would have received had defendants bought an ASCAP license is not determinative.")

Based on the foregoing, the estimated license fees that Defendants would have paid had the Empress Hotel been properly licensed by ASCAP from 1998 to 2006 total approximately $18,000.00.¹

On the nights of June 20-22, 2002, Mr. Busse, an independent investigator hired by ASCAP, visited the Empress Hotel, and, while there, made contemporaneous notes of the songs he heard performed which included the four songs object of this litigation.

Specifically, on June 20, 2002 at 8:33 p.m. Mr. Busse heard the song "ALL THE THINGS YOU ARE, ARE MINE" performed at the Empress Hotel; the song "TAKE THE `A' TRAIN" performed at 9:51 p.m. and the song "A NIGHT IN TUNISIA" performed at 10:24 p.m.

Mr. Busse heard the song "CARAVAN" performed at the Empress Hotel on the night of June 22, 2002 at 3:17 a.m.

On June 24, 2002 Mr. Busse prepared an "Investigator's Report" based on his notes regarding the songs performed at the Empress Hotel on the nights of June 20-22, 2002.

Defendants presented no credible evidence to contradict Mr. Busse's detailed testimony as to public performance of the Copyrighted Works at the Empress Hotel on the nights of June 20 and 22, 2002 which the court finds warrants entire credence. The Court, on the other hand, did not believe the testimony of Defendants' key witness, James Fraschetti. The testimony of Daisy Jimenez was not relevant to the issue of performance inasmuch as she admitted to not being present at the Empress Hotel on the nights of the aforementioned infringements. The testimony of Fernando Rijo was vague and unreliable. The witness could recall whether or not he had performed at the Empress Hotel on June 22, 2002, the night when Dr. Busse identified the song "Caravan" as having been played or whether there was a substitute band performing that evening. The Court finds that, more likely than not, another Latin band was performing that evening and it played a Latino version of "Caravan," as testified to by Dr. Busse.

All of the performances at issue occurred without a license from ASCAP, or permission obtained from either the Plaintiffs or anyone acting on their behalf.

As previously noted, for more than three years prior to the aforementioned infringing performances, Defendants were aware that the Empress Hotel was not licensed to perform copyrighted musical compositions in the ASCAP repertory and that unlicensed performances of such music constituted copyright infringement, exposing them to liability and the risk of paying substantial monetary damages.

Defendants consciously chose to disregard the rights and protection afforded to Plaintiffs under the copyright laws. Defendants did not respond to any of the...