J. Walter Thompson P.R. Inc. v. Latin Am. Music Co.

Decision Date06 April 2018
Docket NumberCivil No. 17–1094 (FAB)
Citation308 F.Supp.3d 611
Parties J. WALTER THOMPSON PUERTO RICO INC., Plaintiff, v. LATIN AMERICAN MUSIC COMPANY, INC., et al., Defendants.
CourtU.S. District Court — District of Puerto Rico

Patricia Rivera–MacMurray, Hernandez Mayoral Law Office, San Juan, PR, for Plaintiff.

Ibraham Latiff–Carrasquillo, ILC Law Office, Jelka L. Duchesne, EDGE Legal Strategies, P.S.C., Katarina Stipec–Rubio, Adsuar Muniz Goyco Seda & Perez Ochoa PSC, San Juan, PR, Robert Penchina, Pro Hac Vice, Ballard Spahr LLP, Barry I. Slotnick, Pro Hac Vice, Frank D'Angelo, Pro Hac Vice, Loeb & Loeb LLP, New York, NY, Kelly D. Talcott, Pro Hac Vice, The Talcott Law Firm PC, Sea Cliff, NY, for Defendants.

OPINION AND ORDER

FRANCISCO A. BESOSA, UNITED STATES DISTRICT JUDGE

Before the Court is defendant Peer International Corporation of Puerto Rico ("Peer International")'s motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) (" Rule 12(c)"). (Docket No. 52.) Also before the Court is defendants Latin American Music Company, Inc. ("LAMCO") and ACEMLA de Puerto Rico, Inc. ("ACEMLA")'s motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) (" Rule 12(b)(6)"). (Docket No. 45.) For the reasons set forth below, the Court GRANTS Peer International's motion for judgment on the pleadings. (Docket No. 52.) Consequently, LAMCO and ACEMLA's motion to dismiss is moot. (Docket No. 45.)

I. Background

Plaintiff J. Walter Thompson Puerto Rico ("Walter Thompson"), an advertising company, commenced this action on January 23, 2017 to resolve competing claims of ownership regarding "Llegó la Navidad" ("the composition") by Raúl Balseiro ("Balseiro").1 (Docket No. 1.) Walter Thompson filed an interpleader complaint pursuant to Federal Rule of Civil Procedure 22 (" Rule 22") because the "claims of several claimants or the titles on which their claims depend lack a common origin or are adverse." Fed. R. Civ. P. 22(a)(1)(A).

The parties concur that Walgreens commissioned Walter Thompson to produce a marketing campaign for the 2016 Christmas season. (Docket No. 1 at p. 3.) Walter Thompson agreed to indemnify and defend Walgreens against all litigation relating to the marketing campaign. Id. In furtherance of the campaign, Walter Thompson obtained a license from music publisher Peer International to use "Llegó la Navidad" for a $5,500.00 fee. Id. at p. 3.

After the marketing campaign aired throughout Puerto Rico, defendants LAMCO, a music publisher, and ACEMLA, a performing arts society, contacted Walgreens, claiming that LAMCO and ACEMLA possessed exclusive rights to the composition.2 Id. at pp. 2–3. Walter Thompson informed LAMCO and ACEMLA that it procured a license for "Llegó la Navidad" from Peer International. Id. at p. 2. Moreover, Walter Thompson provided LAMCO and ACEMLA with the following documents: (1) an October 1992 contract between Peer International and Balseiro transferring all rights and title of the composition to Peer International, (2) a certificate of registration from the United States Copyright Office, and (3) a certificate of recordation dated September 15, 2002. Id. at p. 4.

LAMCO and ACEMLA again contacted Walgreens, providing Walgreens with an additional copyright certificate for "Llegó la Navidad." Id. at p. 5. Because ownership of the composition remained in dispute, Walter Thompson withheld payment of the $5,500 licensing fee from Peer International, and initiated an interpleader action because "neither Peer Music nor LAMCO ACEMLA has taken any action among themselves in order to clarify the ownership of the copyright in the composition Llegó la Navidad.’ " Id.

LAMCO and ACEMLA asserted a counterclaim, cross-claim, and third-party complaint against Walter Thompson, Peer International, and Walgreens, respectively. (Docket No. 14.) In the counterclaim, LAMCO alleges that it owns the copyright to "Llegó la Navidad." Id. at p. 6. LAMCO argues that Walter Thompson failed to secure a license from LAMCO, entitling LAMCO and ACEMLA to damages, attorney's fees, and injunctive relief pursuant to 17 U.S.C. sections 502 and 503. Id. at p. 7. With regard to the cross-claim, LAMCO and ACEMLA request a declaratory judgment that "as between LAMCO/ACEMLA and Peer [International], Peer [International] has no rights in and to Llegó la Navidad.’ " Id. at p. 8. Finally, in the third-party complaint, LAMCO and ACEMLA maintain that Walgreens is liable for copyright infringement because Walgreens "never secured a license" to use the composition from LAMCO or ACEMLA. Id. at p. 9.

Walter Thompson asserted a cross-claim against Peer International, contending that Peer International is liable to Walter Thompson for damages stemming from use of the composition in the event that LAMCO is the legal owner of the composition.3 (Docket No. 16 at p. 5.) Subsequently, Peer International cross-claimed against LAMCO and ACEMLA, seeking a declaratory judgment, injunctive relief, and attorney's fees. (Docket No. 21.)

Two dispositive motions are pending before the Court. LAMCO and ACEMLA move to dismiss Peer International's cross-claim pursuant to Federal Rule of Civil Procedure 12(b)(6) (" Rule 12(b)(6)"). (Docket Nos. 21 & 45.) Additionally, Peer International moves for judgment on the pleadings pursuant to Rule 12(c). (Docket No. 52.) LAMCO and ACEMLA's motion to dismiss is moot because the Court grants Peer International's motion for judgment on the pleadings.

II. Motion for Judgment on the Pleadings Standard

When considering a motion pursuant to Rule 12(c), a "court must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences therefrom." Id. (internal quotation and citation omitted). "[A]n adequate complaint must provide fair notice to the defendants and state a facially plausible legal claim." Ocasio–Hernández v. Fortuño–Burset, 640 F.3d 1, 12 (1st Cir. 2011). When faced with a motion for judgment on the pleadings, "[a] plaintiff is not entitled to ‘proceed perforce’ by virtue of allegations that merely parrot the elements of the cause of action." Ocasio–Hernández, 640 F.3d at 12 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). Any "[n]on-conclusory factual allegations in the complaint [, however,] must ... be treated as true, even if seemingly incredible." Ocasio–Hernández, 640 F.3d at 12 (internal citation omitted). Where those factual allegations "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged," the claim has facial plausibility. Id., 640 F.3d at 12. A motion for judgment on the pleadings should only be granted if "it clearly appears according to the facts alleged, that the plaintiff cannot recover on any viable theory." Garita Hotel Ltd. P'ship. v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st Cir. 1992).

A. Collateral Estoppel

Disposition of this action hinges on whether LAMCO and ACEMA, or Peer International own the composition. The doctrine of collateral estoppel, or issue preclusion, is dispositive and compels this Court to grant judgment on the pleadings in favor of Peer International.

1. Legal Standard

Collateral estoppel preserves judicial resources and prevents inconsistent dispositions by "bar[ring] parties from relitigating issues of either fact or law that were adjudicated in an earlier proceeding." Vargas–Colón v. Fundación Damas, Inc., 864 F.3d 14, 29 (1st Cir. 2017) (internal citation omitted). Federal common law governs the Court's analysis because Peer International predicates collateral estoppel on a prior federal district court action. (Docket No. 52; citing Latin Am. Music Co. v. Media Power Grp., Inc., Civil No. 07–2254 (ADC) ); see Taylor v. Sturgell, 553 U.S. 880, 891, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008) ("The preclusive effect of a federal-court judgment is determined by federal common law.").

To invoke collateral estoppel, federal common law requires Peer International to establish that:

(1) the issue sought to be precluded in the later action is the same as that involved in the earlier action; (2) the issue was actually litigated; (3) the issue was determined by a valid and binding final judgment, and (4) the determination of that issue was essential to the judgment.

Latin Am. Music. Co. v. Media Power Grp., Inc., 705 F.3d 34, 42 (1st Cir. 2014) (internal citation omitted) (holding that "[t]he district court correctly concluded that LAMCO was collaterally estopped from litigating the claims as to the four Corretjer songs"); Robb Evans & Assocs., LLC v. United States, 850 F.3d 24, 32 (1st Cir. 2017). For collateral estoppel to attach, the overlapping issue "need not be absolute, it is enough that the issues are in substance identical." Jones v. City of Boston, 845 F.3d 28, 33 (1st Cir. 2016) (citing Montana v. United States, 440 U.S. 147, 155, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979) ). Indeed, collateral estoppel may apply "where the subsequent proceeding involves a cause of action different from the first." Manganella v. Evanston Ins. Co., 700 F.3d 585, 591 (1st Cir. 2012). A defendant may premise collateral estoppel on an earlier determination in which the defendant was not a party. See Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 327–30, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979) ("Permitting repeated litigation of the same issue as long as the supply of unrelated defendants holds out reflects [ ] the aura of the gaming table."). Ultimately, the Court must determine "whether a party has had a full and fair opportunity for judicial resolution of the same issue." Rodríguez–García v. Miranda–Marín, 610 F.3d 756, 771 (1st Cir. 2010) (internal citation omitted).

An assessment of Latin Am. Music Co. v. Media Power Grp., Inc., Civil No. 07–2254, is necessary to determine whether LAMCO and ACEMLA had a full and fair opportunity to assert ownership over the composition.

2. Prior Litigation

In 2007, LAMCO and ACEMLA sued Media Power Group, Inc. ...

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  • J. Walter Thompson P.R., Inc. v. Latin Am. Music Co.
    • United States
    • U.S. District Court — District of Puerto Rico
    • January 14, 2019
    ...compelled this Court to grant Peer International's motion for judgment on the pleadings. J. Walter Thompson P.R., Inc. v. Latin Am. Music. Co., 308 F.Supp.3d 611 (D.P.R. 2018) (Besosa, J.).Because LAMCO and ACEMLA's copyright infringement claims are frivolous, the Court issued an Order to S......

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