Mtume v. Sony Music Entm't

Decision Date30 September 2019
Docket Number18 Civ. 6037(ER)
Citation408 F.Supp.3d 471
Parties James MTUME, Plaintiff, v. SONY MUSIC ENTERTAINMENT, Defendant.
CourtU.S. District Court — Southern District of New York

David B. Rosemberg, Rosemberg Law, Aventura, FL, Zachary Winthrop Silverman, Steven Miles Lucks, Fishkins Lucks LLP, Newark, NJ, for Plaintiffs.

Andrew Harrison Bart, Brittany Regan Lamb, Jenner & Block LLP, New York, NY, for Defendants.

OPINION AND ORDER

Edgardo Ramos, U.S.D.J.

James Mtume ("Mtume") brings this action against Sony Music Entertainment ("Sony") for declaratory judgment, copyright infringement, and accounting. Pending before the Court is Sony's motion to dismiss all claims. Doc. 22. For the reasons discussed below, the motion is DENIED.

I. BACKGROUND
A. Mtume's Complaint

Mtume is "an award-winning musician, songwriter, activist, and radio personality." Am. Compl. ¶ 7. His dispute with Sony involves two long playing ("LP") records and one single record album that he created while he was under contract with Zembu Productions, Inc. ("Zembu"). Id. ¶¶ 12, 15. Mtume first entered into a recording contract with Zembu on June 24, 1977 (the "1977 Agreement"). Id. at ¶ 12. According to Mtume, this was not a work for hire agreement. Id.

As per the 1977 Agreement, Mtume agreed to render his services exclusively to Zembu and to deliver up to two LP records per contract year. Id. ¶ 13; 1977 Agreement ¶¶ 2–3. Under the 1977 Agreement, Zembu owned all copyright rights to master recordings made during the term of the Agreement.1 Am. Compl. ¶ 14. The agreement further stated that "[i]n the event that [Zembu] shall enter into an agreement with CBS Records ["CBS"], or any affiliate thereof, to supply the services of [Mtume] to such entity pursuant to this agreement, CBS ... or its designee shall be deemed a third party beneficiary." 1977 Agreement ¶ 4(e). Neither the parties' briefs nor the 1977 Agreement explain the precise nature of the relationship between Zembu and CBS at the time the contract was signed. On August 27, 1979, Zembu assigned the 1977 Agreement to CBS. Am. Compl. ¶ 18.

There are three works at issue in this litigation: (1) Kiss this world goodbye , Mtume's first LP album, which was released in the United States in May 1978 and to which either CBS or Zembu secured copyright registration on July 14, 1978; (2) In search of the rainbow seekers , his second LP album, which was released in 1980 and to which CBS secured a copyright registration on November 6, 1980; and (3) "Juicy Fruit: pt. 2 (reprise); Juicy Fruit" ("Juicy Fruit"), a single-song recording, which was recorded and released in early 1983 and to which CBS secured copyright registration on May 23, 1980 [sic ]. Id. ¶¶ 16–17, 19–24. Mtume concedes that because the 1977 Agreement had been assigned to CBS in August 1979, the ownership and all rights of copyright to the two works that post-dated the transfer—i.e. In search of the rainbow seekers and "Juicy Fruit"—were granted to CBS. Id. ¶¶ 20, 23.

Mtume and CBS entered into a new agreement in October 1983. Id. ¶ 25. That agreement terminated the 1977 Agreement, but the rights granted under the 1977 Agreement remained intact. Id. In 1987, Sony acquired CBS, making Sony the successor in interest to the 1977 Agreement and the copyright interests created under that agreement. Id. ¶ 26.

On July 9, 2015, Mtume sent a termination notice to Sony (the "Termination Notice") regarding the three works, with termination effective dates ranging from July 6, 2017 (for Kiss the world goodbye ) to April 23, 2018 (for "Juicy Fruit"). Id. ¶¶ 27–28. Among other information, the Termination Notice listed the dates of publication for the three Sound Recordings as May 19, 1978 for Kiss this world goodbye ; September 12, 1980 for "In search of the rainbow seekers"; and February 15, 1983 for "Juicy Fruit." Doc. 11, Ex. A (Termination Notice) ¶ 3. It also listed the date of execution of all three recordings as August 27, 1979. Id. at ¶ 2. It further specified that:

The grant to which this termination notification applies is described on the form used as an ‘Agreement’ dated June 24, 1977 by and between Zembu Productions, Inc. and Mtume (Artist). This agreement was subsequently assigned to CBS Records by agreement dated August 27, 1979 [CRU 79-454.1(a)(1) ]. This termination applies to any and all grants or transfers of copyright and all rights of the copyright proprietor, including, without limitation, publication and recording rights to the sound recordings set forth herein.

Id. ¶ 7 (alteration in original).

Sony responded to the Termination Notice on July 21, 2017, over two years after it was sent and more than two weeks after the effective date of termination for "Kiss this world goodbye." Am. Compl. ¶ 29. Sony claimed that the Termination Notice did not comply with the requirements of the Copyright Act and that Mtume was therefore not entitled to the copyright for "Kiss this world goodbye." Id. Sony sent similar letters regarding the other two works, each just before the work's effective date of termination. Id. ¶¶ 30–31.

In its letters, Sony gave several reasons why it considered the Termination Notice ineffective. According to Mtume, these reasons include the following:

(a) the recordings at issue are allegedly works made for hire; (b) the recordings at issue are not subject to termination pursuant to Section 203 because they were created pursuant to a grant contained in a 1977 agreement; (c) there may be additional potential authors other than Mtume whose grants were not noticed for termination; and (d) the termination notice relating to the First and Second Albums purportedly seeks only to terminate the copyright in and to the compilation of tracks on the album, and not the individual sound recordings that appear on the albums.

Id. ¶ 32.

B. Procedural History

Mtume filed the instant action on July 3, 2018 for declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201, et. seq. , and the Copyright Act, 17 U.S.C. § 203, as well as for common-law accounting. He amended the Complaint on August 23, 2018 to add three causes of action for copyright infringement.

On October 26, 2018, Sony moved to dismiss the Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Doc. 22. Sony argues that Mtume's termination notice was invalid, and that, therefore, he is not entitled to declaratory or any other kind of relief. In response, Mtume argues that granting Sony's motion to dismiss would be inappropriate because significant factual disputes remain.

The Court agrees with Mtume.

II. LEGAL STANDARD

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). The plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). However, this "flexible ‘plausibility standard’ " is not a heightened pleading standard, In re Elevator Antitrust Litig. , 502 F.3d 47, 50 n.3 (2d Cir. 2007) (quotation marks and citation omitted), and "a complaint ... does not need detailed factual allegations" to survive a motion to dismiss, Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

The question on a motion to dismiss "is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Sikhs for Justice v. Nath , 893 F. Supp. 2d 598, 615 (S.D.N.Y. 2012) (quoting Villager Pond, Inc. v. Town of Darien , 56 F.3d 375, 378 (2d Cir. 1995) ). "[T]he purpose of Federal Rule of Civil Procedure 12(b)(6) is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits" or "weigh[ing] the evidence that might be offered to support it." Halebian v. Berv , 644 F.3d 122, 130 (2d Cir. 2011) (internal quotation marks and citations omitted). Accordingly, when ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts all factual allegations in the complaint as true and draws all reasonable inferences in the plaintiff's favor. Nielsen v. Rabin , 746 F.3d 58, 62 (2d Cir. 2014) ; see also Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ("[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable ...."). "For purposes of this rule, the complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference." Chambers v. Time Warner, Inc. , 282 F.3d 147, 152 (2d Cir. 2002) (internal quotation marks and citations omitted).

III. DISCUSSION

Sony argues that the Termination Notice is invalid because Mtume failed to follow the specific instructions promulgated by the Copyright Office. Doc. 23. at 8–13. Specifically, Sony argues that Mtume failed to list the correct date of execution for the works as required by statute.2 Therefore, it follows that Mtume's remaining claims for accounting and copyright infringement must also be dismissed. Id. at 13–14. The Court disagrees.

A. Requirements for Termination Notices

The Copyright Act provides two separate termination regimes. Section 304 describes a process for terminating grants of renewal rights that were executed prior to 1978 for works that were copyrighted and created as of January 1, 1978. 17 U.S.C. § 304. None of the sound recordings here fall within this definition. Section 203 sets forth a...

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