Kamakazi Music Corp. v. Robbins Music Corp., 80 Civ. 2877 (RWS).

• Decision Date: 03 August 1981
• Docket Number: No. 80 Civ. 2877 (RWS).,80 Civ. 2877 (RWS).
• Citation: 522 F. Supp. 125
• Parties: KAMAKAZI MUSIC CORP., Barry Manilow and Warner Bros. Publications, Inc., Plaintiffs, v. ROBBINS MUSIC CORPORATION and Vicks Lithograph, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

522 F. Supp. 125

KAMAKAZI MUSIC CORP., Barry Manilow and Warner Bros. Publications, Inc., Plaintiffs, v. ROBBINS MUSIC CORPORATION and Vicks Lithograph, Inc., Defendants.

No. 80 Civ. 2877 (RWS).

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

August 3, 1981.

Bender & Frankel, New York City, for plaintiffs; Sandor Frankel, New York City, of counsel.

Abeles, Clark & Osterberg, New York City, for defendant Robbins Music Corp., Robert C. Osterberg, New York City, of counsel.

Evans, Severn, Bankert & Peet, Utica, N. Y., for defendant Vicks Lithograph Corp.; Philip A. Rayhill, Utica, N. Y., of counsel.

OPINION

SWEET, District Judge.

This is an action in which injunctive relief and damages were sought for copyright infringement, interference with contractual rights and related violations of state law. The plaintiff Kamakazi Music Corp. ("Kamakazi") has moved pursuant to 9 U.S.C. § 9 (1970) to confirm certain awards of an arbitrator, and defendant Robbins Music Corp. ("Robbins") has cross-moved to vacate those awards. Robbins also moves to dismiss the claim of Kamazaki and plaintiff Warner Brothers Publications, Inc. ("Warner") for tortious interference with contractual rights — the fifth cause of action of Kamakazi and Warner. The motion to confirm will be granted in part and denied in part in accordance with this opinion. Robbins' motion to vacate will be denied, and the motion to dismiss the tortious interference claim will be granted.

This arduous litigation arises out of Robbins' printing and selling of the compositions of plaintiff Barry Manilow ("Manilow"), a well-known songwriter and recording artist, in so-called personality folios and other formats allegedly in violation of copyrights owned by Kamakazi and in violation of the interests of Manilow and Warner. The fervor of the litigants is understandable in view of the large profits at stake in the high-volume commerce of popular music and of these copyrights in particular. Manilow is the sole stockholder in Kamakazi. Kamakazi, a New York corporation, apparently is the duly registered owner of the copyrights in musical compositions written in whole or in part by Manilow, who receives percentage royalties from Kamakazi based on sales or license fees. In November, 1976 Kamakazi and Robbins entered into a written license agreement (the "Agreement") with respect to the publication of certain Manilow compositions by Robbins, which provided that Robbins would have the exclusive right to publish and sell those compositions in various forms, including personality folios — printed publications which feature musical compositions by a particular artist, in this case, Manilow. After the alleged expiration of the Agreement, plaintiff Warner was secured by Kamakazi to produce and sell its Manilow compositions and this dispute arose.

Plaintiffs alleged that by the terms of the Agreement, Robbins' right to print and manufacture copies of the compositions in the form of Manilow personality folios would "immediately cease" on December 31, 1979, and, given appropriate notice by Robbins, the right to sell off these folios would continue until July 31, 1980. Robbins alleged that pursuant to paragraph 6 of the Agreement, it had the right to print and manufacture the personality folios until December 31, 1980, and to sell off these folios thereafter. Defendant Vicks Lithograph, Inc., has been printing the Manilow material for Robbins, and presumably was brought into this action by Kamakazi only to enhance the effectiveness of the injunctive relief sought in the complaint.¹

The complaint was filed on May 19, 1980. Three days later Kamakazi first sought the intercession of the court, seeking a preliminary injunction to bar Robbins from manufacturing and selling copies of the personality folios during the pendency of the action. Robbins cross-moved for dismissal for lack of jurisdiction or alternatively, pursuant to 9 U.S.C. § 3, for a stay of all further proceedings pending arbitration, as provided for in the Agreement.² A hearing was held and by opinion dated June 5, 1980, the court concluded that the action arose under the copyright laws, and so denied Robbins' motion to dismiss for lack of jurisdiction, but granted Robbins' alternative motion to stay proceedings pending arbitration. Kamakazi's motion for preliminary injunction was denied because of the court's concern that any determination as to the merits of the complaint, a prerequisite to the granting of such relief, would threaten the independence of the arbitral process. The parties were ordered to proceed forthwith to arbitration where, it was anticipated, injunctive relief as well as damages could be granted.

Kamakazi immediately thereafter filed a demand for arbitration and, following some initial difficulties which caused Kamakazi to seek reconsideration of the court's denial of its motion for preliminary injunction,³ the arbitration went forward. During the course of those proceedings, in November, 1980, Kamakazi once again returned to this court seeking a preliminary injunction, on the basis of certain internal memoranda produced by Robbins in the arbitration which, Kamakazi alleged, evidenced the correctness of Kamakazi's position on the merits of the dispute over the interpretation of the Agreement and Robbins' awareness that its printing and sales of personality folios in 1980 violated the Agreement. For reasons similar to those behind the court's denial of Kamakazi's original application for injunctive relief, this motion was denied by opinion of December 1, 1980.

Upon a record compiled over some eight months of litigation before the American Arbitration Association ("AAA"), appearing in over 2,000 pages of transcript, the arbitrator rendered a decision on March 6, 1981 (the "March Award"), which is set out in full as Appendix A to this opinion. In essence, the arbitrator vindicated Kamakazi's interpretation of the Agreement and the rights of Robbins upon its termination, concluding that Robbins' printing and sale of Manilow personality folios as well as individual sheet music and individual editions after December 31, 1979 was without license and therefore constituted copyright infringements. Robbins' activities were found to have infringed twenty five separate copyrights of Kamakazi's comprising twelve individual works of Manilow and thirteen so-called compilations or derivative works.⁴ Robbins' printing and sale of mixed folios was found to be under license. Acting upon Kamakazi's election of statutory "in lieu" damages under the Copyright Act, 17 U.S.C. § 504(c), the arbitrator found that the Robbins infringements were "willful," and concluded that a "just" recovery for Kamakazi would be $10,000 for all of the multiple infringements of each copyright,⁵ for a total of $250,000, plus costs and reasonable attorney's fees pursuant to 17 U.S.C. § 505. Kamakazi was awarded $250,000 damages in accordance with the foregoing findings, as well as appropriate permanent injunctive relief. Robbins was taxed costs and fees. Robbins' counterclaim, alleging damages to its exclusive sell-off rights under the Agreement, was dismissed. The award of attorney's fees was postponed pending receipt of an affidavit of legal services. On April 7, 1981, in a supplemental award of the arbitrator (the "April Award"), set forth as Appendix B to this opinion, Robbins was assessed $50,127.72 in legal fees, to be divided between present and previous counsel for Kamakazi.

The instant motions, respectively to confirm and to vacate the awards, and Robbins' motion to dismiss the interference with contract cause of Kamakazi and Warner, followed.⁶ Standing alone, Kamakazi's motion to confirm the awards of course requires little discussion, as pursuant to 9 U.S.C. § 9 such an order is routinely granted in the absence of a cross-motion to vacate or modify. It is Robbins' broadside assault on the March and April Awards (collectively the "Awards"), pursuant to 9 U.S.C. § 10, which has required this opinion.

Capsulized, Robbins' position is that pursuant to this court's opinion of June 5, 1980 and the arbitration clause of the Agreement, the arbitrator was given, and accepted, jurisdiction to determine whether or not Robbins' publication and sale of the Manilow compositions in various forms was under license — a matter of interpretation of the Agreement between it and Kamakazi. This, it is submitted, simply involves the application of principles of contract law and, if need be, consideration of evidence as to damages — all under the law of New York. In springing from his interpretation (essentially favorable to Kamakazi) of the Agreement, to the application of the federal copyright laws to find willful infringements (after presuming the validity of the allegedly infringed copyrights) and to the award of statutory damages and attorney's fees, Robbins asserts, the arbitrator exceeded his jurisdiction, violated public policy, and manifestly disregarded the law. Thus, it is argued, pursuant to 9 U.S.C. § 10(d) and the case law, the awards must be vacated.⁷ See e. g., Perma-Line Corp. of America v. Sign Pictorial, 639 F.2d 890, 895 (2d Cir. 1981); Sobel v. Hertz, Warner & Co., 469 F.2d 1211 (2d Cir. 1972).

Kamakazi, in turn, asserts that the arbitrator acted properly under the circumstances and the law to resolve the entire dispute between it and Robbins which was before him. In this regard Kamakazi presses that it was Robbins which successfully urged, over Kamakazi's objection, that the dispute be relegated to arbitration; that, contrary to Robbins' professed view, the nature and scope of the arbitration proceedings was made clear from the outset, when Kamakazi, in its demand for arbitration, characterized the dispute being submitted as "violations by Robbins Music Corporation of copyrights owned by Kamakazi Music Corp." and constantly thereafter; and that it was Robbins, again over Kmakazi's objection, which prevailed in its insistence...