Luar Music Corp. v. Universal Music Grp., Inc.

• Decision Date: 06 March 2012
• Docket Number: Civil No. 09–2263 (DRD).
• Citation: 847 F.Supp.2d 299
• Parties: LUAR MUSIC CORP., Plaintiff, v. UNIVERSAL MUSIC GROUP, INC. and UMG Recordings, Inc., Defendants.
• Court: U.S. District Court — District of Puerto Rico

847 F.Supp.2d 299

LUAR MUSIC CORP., Plaintiff,

v.UNIVERSAL MUSIC GROUP, INC. and UMG Recordings, Inc., Defendants.

Civil No. 09–2263 (DRD).

United States District Court, D. Puerto Rico.

March 6, 2012.

Carlos G. Dalmau–Ramirez, Carlos Dalmau Law Offices, Christina M. Beauchamp–Richards, Guaynabo, PR, Roberto Sueiro–Del–Valle, Roberto Sueiro Del Valle LLM, Freddie O. Torres–Gomez, San Juan, PR, Juan C. Bigas–Valedon, Ponce, PR, for Plaintiff.

Roberto C. Quinones–Rivera, Isabel Torres–Sastre, McConnell Valdes, San Juan, PR, for Defendants.

OPINION AND ORDER

DANIEL R. DOMÍNGUEZ, District Judge.

This is a copyright infringement action brought under the Copyright Act of 1976, as amended, 17 U.S.C. § 101, et seq., (the “Copyright Act”). The case arises from the reproduction, distribution and adaptation of the song and sound recording “Dale Don Dale” (the “Copyrighted Work”). (Docket No. 1, ¶¶ 1, 55–75). Plaintiff Luar Music Corp., (“Plaintiff” or “Luar”) alleges that Defendants Universal Music Group (“Universal Music”) and UMG Recordings (“UMG Recordings”)(collectively, “Defendants”) violated Plaintiff's rights to the Copyrighted Work when they released the phonorecords Don Omar Da Hitman presents Reggaeton Latino (“Reggaeton Latino”), Fiebre de Reggaeton, The Last Don and The Last Don Live. (Docket No. 1, ¶¶ 31–32, 42–46).

Currently before the Court is Defendants' motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) contending that Plaintiff's action is barred by the Copyright Act's three (3) year statute of limitations (Docket No. 118). Also pending before the Court is Plaintiff's converted motion for summary judgment (Docket No. 127) and Defendants' cross-motion for partial summary judgment, both addressing whether the equitable estoppel doctrine applies (Docket No. 141).¹ For the reasons set forth below, the Court hereby GRANTS in part and DENIES in part Defendants' motion to dismiss and GRANTS Defendants' cross-motion for partial summary judgment. Plaintiff's converted motion for summary judgment is hereby DENIED.

I. BackgroundA. Procedural History

On December 18, 2009, Plaintiff commenced an action against Defendants in the United States District Court for the District of Puerto Rico alleging several violations of the Copyright Act. (Docket No. 1). In an Order dated July 29, 2011, the Court dismissed Plaintiff's claims relating to the electronic exploitation of the Copyrighted Work because they were subject to a mandatory forum selection clause (Docket No. 107, page 11).

On October 9, 2011, Defendants filed a Motion to Dismiss Plaintiff's Time–Barred Copyright Claims Pursuant to Fed.R.Civ.P. 12(b)(6) (Docket No. 118). On October 3, 2011, Plaintiff opposed the motion to dismiss (Docket No. 127) and raised, inter alia, an equitable estoppel argument (Docket No. 127, pages 17–18). In support of Plaintiff's opposition, Plaintiff submitted a number of e-mail communications, an affidavit and other exhibits that were not attached to or referenced in the complaint (Docket No. 127). Thereafter, Defendants filed a motion to strike (Docket No. 130), which Plaintiff opposed (Docket No. 136).

In an Order dated November 1, 2011, the Court converted Plaintiff's opposition to Defendants' motion to dismiss into a Fed.R.Civ.P. 56 motion for summary judgment only with respect to Plaintiff's contention that the statute of limitations was tolled under the doctrine of equitable estoppel (Docket No. 137). In compliance with the Court's Order, Defendants filed a Response in Opposition to Motion for Summary Judgment and Cross–Motion for Partial Summary Judgment on December 2, 2011 (Docket No. 141). On December 12, 2011, Plaintiff submitted Plaintiff's Response in Opposition to Counter–Motion for Summary Judgment and Requestfor Summary Judgment (Docket No. 142).

B. Facts

As the permissible scope of facts the Court is able to consider differs on a motion for summary judgment and a motion to dismiss, the Court divides the presentation of facts between those admissible on a motion to dismiss and those admissible on summary judgment.

1. Motion to Dismiss Facts

The facts taken from the complaint are as follows: ²

The Copyrighted Work was authored by William Omar Landrón, a Reggaeton artist professionally known as Don Omar (“Don Omar”). (Docket No. 1, ¶ 16). By written contract, Don Omar transferred his rights to the Copyrighted Work to Plaintiff, a corporation dedicated to project management and licensing songs and sound recordings. ( Id., ¶ 6). Subsequently, Plaintiff received Certificates of Registration from the United States Copyright Office for the Copyrighted Work, effective June 24, 2004. (Docket No. 1, ¶ 17–18).

Plaintiff filed an action in the United States District Court for the District of Puerto Rico against non-party VI Music Corporation (“VI Music”). (Docket No. 1, ex. 4). VI Music is a joint venture involving Defendant UMG Recordings. (Docket No. 107, page 5). Plaintiff alleged that VI Music infringed on Plaintiff's rights to the Copyrighted Work by reproducing and distributing the phonorecords “The Last Don” and “The Last Don Live.” ( Id.). In November of 2005, Plaintiff and VI Music entered into an agreement to resolve Plaintiff's claim (the “Agreement”). (Docket No. 1, ¶ 21).

The Agreement included a license detailing VI Music's authorized uses of the Copyrighted Work (the “November License”). (Docket No. 1, page 21). According to Plaintiff, the November License permitted VI Music to manufacture and distribute the Copyrighted Work, as part of The Last Don in “the United States, the United States territories and possessions, and Puerto Rico” and the The Last Don Live.³ (Docket No. 1, page 22). On April 1, 2005, Plaintiff granted VI Music a separate license authorizing the digital and mobile distribution of the Copyrighted Work (“April License”). (Docket No. 1, page 28). According to the complaint, Defendants' uses of the Copyrighted Work exceeded the scope of the November License and April License by including, reproducing, adapting, distributing and publicly performing the Copyrighted Work in connection with the reproduction and distribution of Reggaeton Latino, Fiebre de Reggaeton, The Last Don and The Last Don Live.⁴ (Docket No. 1, ¶¶ 30–32, 39, 42–43). Plaintiff avers that the infringement in connection with the album Reggaeton Latino has been ongoing at least since January of 2006. (Docket No. 1, page 43). It is unclear when Fiebre de Reggaeton was released. (Docket No. 1, page 45).

2. Summary Judgment Facts

When analyzing a motion for summary judgment, the Court must view the facts in the light most favorable to the non-moving party. See Vera v. McHugh, 622 F.3d 17, 26 (1st Cir.2010); See also Agusty–Reyes v. Dept. of Edu., 601 F.3d 45, 48 (1st Cir.2010); Cadle Co. v. Hayes, 116 F.3d 957, 959–60 (1st Cir.1997). However, while the Court “draw[s] all reasonable inferences in the light most favorable to [the non-moving party] ... we will not draw unreasonable inferences or credit bald assertions, empty conclusions or rank conjecture.” Vera, 622 F.3d at 26 (internal quotations and citations omitted); see also Ayala–Gerena v. Bristol Myers–Squibb Co., 95 F.3d 86, 95 (1st Cir.1996). Further, the Court will not consider hearsay statements or allegations presented by parties that do not properly provide specific reference to the record. SeeD.P.R. Civ. R. 56(e)(“The [C]ourt may disregard any statement of fact not supported by a specific citation to the record material properly considered on summary judgment. The [C]ourt shall have no independent duty to search or consider any part of the record not specifically referenced.”); see also Morales v. A.C. Orssleff's EFTF, 246 F.3d 32, 33 (1st Cir.2001)(finding that, where a party fails to buttress factual issues with proper record citations, judgment against that party may be appropriate); Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)( “Hearsay evidence, inadmissible at trial, cannot be considered on a motion for summary judgment.”) Accordingly, all statements of fact herein are drawn solely from the properly-supported statements of proposed fact proffered in conjunction with Plaintiff's converted motion for summary judgment and Defendants' counter-motion for partial summary judgment.⁵ When setting forth the facts, the Court keeps in mind that it is the provenance of the jury, not the judge, to determine credibility, weigh evidence and draw inferences. Reeves v. Sanderson Plumbing Prod., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)(internal citations omitted).

On November 13, 2006, Raul Lopez (“Raul”), Plaintiff's president, sent an email to Tere Batista (“Batista”).⁶ (Docket No. 127–7). Raul stated that he could not wait much longer to resolve an apparent dispute with Defendants and wanted to settle the dispute “peacefully.” ⁷ (Docket No. 127–7). On the same day, Batista told Raul that the finance and central royalties departments were handling the matter. (Docket No. 127–7; Docket No. 143). Subsequently, Ivan J. Parron, Universal Music's Business and Legal Affairs Manager, sent Raul an email with royalty statements attached.⁸ (Docket No. 143, ¶ 9b; Docket No. 143–8). According to Raul, Gustavo Lopez (“Gustavo”), Defendants' employee offered him to pay twenty-one (21) cents per copy to use the Copyrighted Work sometime in 2006. (Docket No. 143–3, ¶ 2). However, the parties did not reach an agreement. (Docket No. 143–3, ¶ 3). Plaintiff states that they offered Defendants twenty-five (25) cents per copy in early 2007. (Docket No. 143, ¶ 15). The record does not show conclusively that the parties reached an agreement.

On January 24, 2007, Raul wrote Patricia Rivera Macmurray [sic] (“Macmurray”), Plaintiff's legal counsel from 2005 to 2008. (Docket No. 143, ¶ 9c; Docket No. 143–5; Docket No. 143–2, ¶ 2). Raul stated that he was affected by Defendants' delays. He stated that he refused to be the “neighborhood idiot” who Defendants “step all...