King v. Ames

• Decision Date: 06 July 1999
• Docket Number: No. 97-11149,97-11149
• Parties: Wanda KING, on behalf of Freddie King, Plaintiff-Appellant-Cross-Appellee, v. Roy C. AMES, et al., Defendants, Roy C. Ames, Individually, doing business as Clarity Music & Home Cooking Records, Defendant-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 370

179 F.3d 370

Wanda KING, on behalf of Freddie King, Plaintiff-Appellant-Cross-Appellee, v. Roy C. AMES, et al., Defendants, Roy C. Ames, Individually, doing business as Clarity Music &

Home Cooking Records, Defendant-Appellee-Cross-Appellant.

No. 97-11149.

United States Court of Appeals, Fifth Circuit.

July 6, 1999.

David W. Showalter, Spencer Layne Edwards, Bellaire, TX, for King.

Bruce E. Rothstein, Dallas, TX, for Ames.

Appeals from the United States District Court for the Northern District of Texas.

Before WISDOM, STEWART and DENNIS, Circuit Judges. ^*

STEWART, Circuit Judge:

Wanda King, on behalf of Freddie King, seeks reversal of the district court's order granting summary judgment for Roy C. Ames on three of her six claims, and judgment as a matter of law on two of the remaining three claims. Ames cross-appeals seeking judgment as a matter of law or remittitur as to the sixth claim. For the reasons that follow, we affirm the decision of the district court in part, and reverse in part.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant Wanda King ("King") is the daughter of Freddie King, a deceased internationally-recognized blues musician. Roy C. Ames ("Ames") is a music producer doing business as Clarity Music and Home Cooking Records. Through a series of agreements beginning in 1990 and ending in 1994, Ames licensed Collectables [sic] Records to use three master recordings made by Freddie King. Two were full-length compact discs, Freddie King Live! ("Live" ) and Freddie King Live at the Texas Opry ("Opry" ). The third was the song "Bluesband Shuffle," also known as "Boogie on Down" ("Bluesband Shuffle").

Upon learning that Ames was marketing her father's recordings, King contacted Ames for the purpose of executing a licensing agreement. On August 17, 1993, an agreement ("1993 agreement") was reached between Ames and King's mother, Jessie King, the widow of Freddie King. King contends that this agreement permitted Ames to market the Opry disc, and to use Freddie King's name, likeness, and biographical information to assist in that marketing. Ames contends that the agreement covered all three masters in question, Opry, Live, and "Bluesband Shuffle."

Ames claims that he made an initial payment of $3,000.00 to Jessie King at the same time he sent the 1993 agreement. Ames further contends that between the initiation of the 1993 agreement and November 2, 1994, he made additional payments to Jessie King totaling $1,500.00. Nevertheless, on November 2, 1994, King sent Ames a letter expressing concern over the payments. Specifically, King focused on the scope of the licensing agreement and the timeliness of royalty statements and payments. In this letter, King informed Ames that she was terminating the licensing agreement. ¹

On November 30, 1994, Wanda King filed copyright certificates with the Copyright Office of the United States for Opry and Live. Later, on March 27, 1995, King filed copyright certificates with the copyright office for "Bluesband Shuffle."

On September 18, 1995, Ames sent King a royalty check for $2,440.63. King cashed the check but wrote "account against damages" on it. On December 28, 1995, King filed a complaint on behalf of her deceased father against Ames and Collectibles, Inc. (collectively, the "defendants"). ² Collectibles Inc., which conducts business as Collectables Records, is no longer a party to this suit. Collectibles Inc., which conducts business as Collectables Records, is no longer a party to this suit. Therein, she alleged violations of the Lanham Trade-Mark Act of 1946 (the "Lanham Act"), 15 U.S.C. §§ 1051-1127 (1997 & Supp.1999); the Copyright Act of 1976 (the "Copyright Act"), 17 U.S.C. § 101, et seq. (1995 & Supp.1999); unfair competition; negligence; misappropriation; and breach of contract. The district court exercised federal question jurisdiction pursuant to 28 U.S.C. § 1331 (1999) over the Lanham Act and Copyright Act claims and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367 (1999).

Ames filed a motion for summary judgment which the district court granted as to the Lanham Act claim, the unfair competition claim, and the negligence claim. A jury trial was held on the remaining three claims: copyright infringement, misappropriation, and breach of contract. The jury found in favor of King on all three claims. Upon motion of Ames, the district court granted judgment as a matter of law for the defendants on the copyright infringement and misappropriation claims. The court ordered judgment entered for King on the only remaining claim, breach of contract.

King appeals the district court's rulings granting summary judgment on the Lanham Act, unfair competition, and negligence claims. She also appeals the district court's order granting judgment as a matter of law for the defendants on her copyright infringement and misappropriation claims. Ames cross-appeals the district court's denial of judgment as a matter of law on the breach of contract claim and argues, in the alternative, for a reduction of damages. ³ We exercise jurisdiction pursuant to 28 U.S.C. § 1291 (1999).

DISCUSSION

A. Standards of Review

We review a grant of summary judgment de novo, applying the same criteria as the district court. See Merritt-Campbell, Inc. v. RxP Products, Inc., 164 F.3d 957, 961 (5th Cir.1999). Summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party must first demonstrate that there are no genuine issues of material fact. See 477 U.S. at 248, 106 S.Ct. 2505. Once the moving party makes this showing, the nonmovant must come forward with summary judgment evidence sufficient to establish the existence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.1992) ("The nonmovant must come forward with evidence establishing each of the challenged elements of its case for which the nonmovant will bear the burden of proof at trial.").

This court reviews a judgment as a matter of law de novo. See Ensley v. Cody Resources, Inc., 171 F.3d 315, 319 n. 4 (5th Cir.1999); Burch v. Coca-Cola, 119 F.3d 305, 313 (5th Cir.1997). Judgment as a matter of law is proper only where "there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." FED.R.CIV.P. 50(a)(1). We review the record in the light most favorable to the party opposing the motion. See Burch, 119 F.3d at 313.

Finally, we review the district court's adjudication of a subsequent motion to alter or amend judgment pursuant to FED. R. CIV. P. 59(e) for abuse of discretion. See Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 353 (5th Cir.1993).

B. Lanham Act and Unfair Competition

The Lanham Act imposes liability on

[a]ny person who, in connection with any goods ... uses in commerce any word, term, name ... or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which ... is likely to cause confusion, or cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services or commercial activities by another person[.]

15 U.S.C. § 1125(a)(1)(A) (1997). Persons bringing an action pursuant to this provision must demonstrate that (1) the defendants made false statements of fact about recordings; (2) those statements deceived, or had the potential to deceive, a substantial segment of potential customers; (3) the deception was material, in that it tended to influence purchasing decisions; (4) the defendants caused their products to enter interstate commerce; and (5) the claimant has been or is likely to be injured as a result. See Taquino v. Teledyne Monarch Rubber, 893 F.2d 1488, 1500 (5th Cir.1990).

"Likelihood of confusion" is the essential element in both King's Lanham Act claim and her common law claim for unfair competition. As a result, our adjudication and analysis of the Lanham Act claim applies to King's unfair competition claim and we dispose of the two in tandem.

King argues that Ames made false statements on the back of the compact discs in question. King contends that the masters are of live recordings, yet Ames has listed himself as the "producer" of the recordings. King contends that, as there is no "producer" of a live recording, this statement was both false and likely to cause confusion among the record-buying public. On appeal, she argues that the "likelihood of confusion" issue does not lend itself to disposition on summary judgment. See Society of Financial Examiners v. National Association of Certified Fraud Examiners, Inc. ("SOFE "), 41 F.3d 223, 225 (5th Cir.1995) (holding that the likelihood of confusion in use of acronym, "CFE," to specify certification within two different and unrelated organizations was a question of fact); Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 258 (5th Cir.1980) (recognizing that likelihood of confusion is a question of fact). King further argues, in the alternative, that even if the district court properly reached the issue, it erred as a matter of law.

The district court held that King had failed to offer any evidence that this alleged deception affected a substantial segment of potential purchasers of Freddie King recordings, that it influenced purchasing decisions or otherwise injured her. Additionally, the district court explained that the liner notes to the recordings at issue specifically acknowledge that the recordings are of a live Freddie King performance. According to the district court, the absence of an "actual" producer, who...