Jordan v. Sony Bmg Music Entertainment, Inc.

Citation637 F.Supp.2d 442
Decision Date25 November 2008
Docket NumberCivil Action No. H-06-1673.
PartiesMaurice S. JORDAN, Plaintiff, v. SONY BMG MUSIC ENTERTAINMENT, INC., et al., Defendants.
CourtU.S. District Court — Southern District of Texas

D. Scott Hemingway, Hemingway Hansen, LLP, Dallas, TX, for Plaintiff.

Geoffrey H. Bracken, Samantha Trahan, Gardere Wynne et al., Shane A. McClelland, Simon Herbert and McClelland, L.L.P., Ronald M. Cohen, Cohen & Raymond, Houston, TX, for Defendants.

MEMORANDUM AND ORDER ON SONY SUMMARY JUDGMENT MOTION

NANCY F. ATLAS, District Judge.

This case arises from Plaintiff Maurice S. Jordan's (p/k/a "Kenoe") ("Jordan") involvement in the creation of the songs 8 Rulez, Haters Still Mad, and We Ain't Scared (collectively, the "Songs"). The Songs appeared on a 2002 album of Defendant Wesley Eric Weston (p/k/a "Lil' Flip") ("Weston"), Undaground Legend, and his 2003 album, Lil' Flip and Sucka Free Present: 7-1-3 and the Undaground Legend ("7-1-3 Album"). Pending before the Court is a Motion for Summary Judgment [Doc. # 72], filed by Defendant Sony BMG Music Entertainment, Inc. ("Sony"). Upon review of the parties' submissions,1 all pertinent matters of record, and applicable legal authorities, the Court concludes that Sony's motion should be granted.

I. FACTUAL BACKGROUND

Jordan composes music and, on occasion, works as a music producer. In July 2000, Jordan composed works that became the underlying melodies for the Songs. On January 10, 2002, Weston entered into an Agreement with Defendant Suckafree Records, Inc. ("SRI") to provide recordings to SRI (the "Artist Agreement"). On the same date, SRI entered into a Distribution Agreement with Sony for the recordings that would be provided by Weston to SRI under the Artist Agreement (referred to hereafter as the "Sony/SRI Distribution Agreement").2 Under the Sony/SRI Distribution Agreement, Sony and SRI agreed to specific royalties3 and agreed that Sony (through its record label entity "Loud Records, LLC") would compute royalties due to SRI twice a year, as of each June 30th and December 31st.4 The parties also agreed to licenses and formulas for "mechanical royalties."5 On January 10, 2002, Sony and SRI also entered into a Distribution Agency Agreement for albums that Weston had released prior to establishing a relationship with Sony (referred to hereafter as the "Prior Albums Agreement").6 Four months later, on May 27, 2002, Jordan entered into a "Production Services Agreement" with SRI to produce three recordings for Weston.7 This agreement provided that if Weston used one or more of the recordings on his album, Jordan would be entitled to producers' royalties equal to "three percent (3%) per Recording [of] the sale of any such records embodying the Recordings."8 The agreement also provided that Weston would pay Jordan a $3,000 advance against any royalties due to Jordan.

The Songs were later released in August 2002 as part of an album, Undaground Legend, recorded by Weston, performing under the name "Lil' Flip." This album was the first album released under the Sony/SRI Distribution Agreement. The song Haters Still Mad was also included on a bonus CD distributed with certain versions of the Undaground Legend album. In September 2002, Sony, through Loud Records, LLC, registered the sound recordings contained on the Undaground Legend album with the United States Copyright Office ("Copyright Office"). In March 2003, Defendants released, the 7-1-3, Album, which contained versions of the Songs. In May 2003, Sony registered the sound recordings contained on the 7-1-3 Album with the Copyright Office.

Between September 2003 and February 2006, Jordan repeatedly contacted Sony requesting royalty payments for his services under the Production Service Agreement with SRI. When no payments were forthcoming, Jordan filed this action on May 16, 2006. On January 18, 2008, Jordan amended his Original Complaint to include a claim for copyright infringement.

II. LEGAL STANDARD

Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing of the existence of an element essential to the party's case, and on which that party will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Baton Rouge Oil and Chem. Workers Union v. ExxonMobil Corp., 289 F.3d 373, 375 (5th Cir.2002). In deciding a motion for summary judgment, the Court must determine whether the "pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R.CIV. P. 56(c); Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548; Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008).

For summary judgment, the initial burden falls on the movant to identify areas essential to the non-movant's claim in which there is an "absence of a genuine issue of material fact." Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005). The moving party, however, need not negate the elements of the non-movant's case. See Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). The moving party may meet its burden by pointing out "`the absence of evidence supporting the non-moving party's case.'" Duffy v. Leading Edge Products, Inc., 44 F.3d 308, 312 (5th Cir.1995) (quoting Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 913 (5th Cir.1992)). However, if the moving party fails to meet its initial burden, the motion for summary judgment must be denied, regardless of the non-movant's response. ExxonMobil Corp., 289 F.3d at 375.

If the moving party meets its initial burden, the non-movant must go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial. Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir.2001). "An issue is material if its resolution could affect the outcome of the action. A dispute as to a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." DIRECTV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir.2005) (internal citations omitted).

In deciding whether a genuine and material fact issue has been created, the facts and inferences to be drawn from them must be reviewed in the light most favorable to the non-moving party. Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412 (5th Cir.2003). However, factual controversies are resolved in favor of the non-movant "only when there is an actual controversy—that is, when both parties have submitted evidence of contradictory facts." Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th Cir.1999). The non-movant's burden is not met by mere reliance on the allegations or denials in the non-movant's pleadings. See Diamond Offshore Co. v. A & B Builders, Inc., 302 F.3d 531, 545 n. 13 (5th Cir.2002) (noting that unsworn pleadings do not constitute proper summary judgment evidence). Likewise, "unsubstantiated or conclusory assertions that a fact issue exists" do not meet this burden. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.1998). Instead, the non-moving party must present specific facts which show "the existence of a `genuine' issue concerning every essential component of its case." Id. In the absence of any proof, the court will not assume that the non-movant could or would prove the necessary facts. Little, 37 F.3d at 1075 (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990)).

Finally, "[w]hen evidence exists in the summary judgment record but the non-movant fails even to refer to it in the response to the motion for summary judgment, that evidence is not properly before the district court." Malacara v. Garber, 353 F.3d 393, 405 (5th Cir.2003). "Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Id. (internal citations and quotations omitted); see also de la O v. Hous. Auth. of El Paso, 417 F.3d 495, 501 (5th Cir.2005).

III. ANALYSIS
A. Express and Implied Contract Claims

Jordan alleges that Sony was contractually obligated to compensate him for production and use of the Songs, and that Sony is liable for breach of contract for failing to do so. On May 27, 2002, Jordan entered into the Production Services Agreement with SRI to produce three recordings for Weston. Sony was not a party to this agreement and Jordan does not argue to the contrary. Rather, Jordan advances several other theories of Sony's contractual liability. First, Jordan alleges that Sony was an agent of SRI under the Prior Albums Agreement, and that as an agent it was obligated to make the payments SRI owed to Jordan under the Production Services Agreement. Second, Jordan alleges that he was an intended third-party beneficiary of a "Payment Authorization Contract" between Sony and SRI, and that Sony breached this contract by failing to pay Jordan the money owed to him under the Production Services Agreement. Finally, Jordan alleges that Sony is in breach of an "implied contract arising from its words and deeds with Mr. Jordan."9

The Court's jurisdiction in this case is based on diversity of citizenship, and therefore, the Court applies state law rules of contract construction. See Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir.2000); see also Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). With respect to Jordan's express contract claims, the relevant contracts all contain valid choice of law clauses designating the laws of the State of New York....

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