Repp v. F.E.L. Publications, Ltd.

Decision Date18 May 1982
Docket NumberNo. 80-2621,80-2621
Parties, 1982-2 Trade Cases 64,745, 1982 Copr.L.Dec. P 25,396 Raymond R. REPP, Plaintiff-Appellant, v. F. E. L. PUBLICATIONS, LTD., Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Robert V. Jambor, Chicago, Ill., for plaintiff-appellant.

Charles A. Laff, Chicago, Ill., for defendant-appellee.

Before SWYGERT, Senior Circuit Judge, PELL, Circuit Judge, and GRANT, Senior District Judge. *

GRANT, Senior District Judge.

This is an appeal from the dismissal of a nine-count complaint filed on June 26, 1980, by plaintiff-appellant Raymond Repp ("Repp") against defendant-appellee F.E.L. Publications, Ltd. ("FEL"). Repp has narrowed the issue on this appeal solely to the correctness of the district court's decision with respect to Count IX, which alleges violations of the Sherman and Clayton Acts, 15 U.S.C. §§ 1, 2, 14. Assuming as true the factual allegations in the complaint and viewing them, and the inferences reasonably to be drawn from them, in the light most favorable to Repp, see Barany v. Buller, 670 F.2d 726 (7th Cir. 1982), Powe v. City of Chicago, 664 F.2d 639 (7th Cir. 1981) and Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549 (7th Cir. 1980), we affirm.

I.

Repp, a citizen of the State of New York, is a composer and performer who has authored numerous original works in the field of liturgical music. FEL, an Illinois corporation whose principal place of doing business is in California, is primarily a publisher and distributor of liturgical music.

On November 7, 1966, Repp entered into an agreement with FEL whereby Repp assigned to FEL all of his rights, including all rights of copyright, in various musical compositions. FEL was also given the right to "market, vend, or otherwise exploit said work or works." In return, FEL agreed to the following:

II In further consideration for, and in full payment of the aforesaid sale, PUBLISHER agrees, in the event of the singular publication by PUBLISHER of the said work or works, in its or their entirety or any part thereof, to pay to AUTHOR as a royalty Ten Per Cent (10%) of the price at which each and every printed copy thereof is sold by PUBLISHER, or caused by PUBLISHER to be sold, which royalty is payable annually during the month of May commencing in the year 1967 during and throughout the period of time that statutory copyright protection thereof is in effect; and PUBLISHER agrees, in the event of the singular sound-recording of said work or works, in its or their entirety or any part thereof, to pay to AUTHOR as a royalty upon each and every sound record, in any form whatsoever, and copies thereof, serving to mechanically reproduce said work, manufactured and sold by PUBLISHER, or caused by PUBLISHER to be manufactured and sold, which royalty shall be payable annually during the month of May commencing in the year 1967, and shall be in accordance with the following schedule:

III In further consideration of the execution of this Agreement, PUBLISHER shall have the sole and exclusive Option privilege hereunder, to publish the aforesaid work or works of AUTHOR herein, in whole or in part, in collective conjunction with the work or works of other authors in a single publication; and PUBLISHER agrees that in the event of such collective publication, which may be in any form whatsoever elected by PUBLISHER in the exercise of its sole judgment and discretion, to pay to AUTHOR herein as a royalty, that proportion of Ten Per Cent (10%) of the price at which each and every printed ... copy thereof is sold by PUBLISHER, or caused by PUBLISHER to be sold, which the contribution to said collective publication made by the aforesaid work or works of AUTHOR herein, as determined by PUBLISHER with respect to the number of text or music lines, or both, bears to the aggregate total copyrighted and uncopyrighted content of said collective publication.

IV It is further agreed by and between the parties hereto that any publication by others of the subject work or works in whole or in part, pursuant to the written authorization of PUBLISHER, and resulting in the realization of cash proceeds by PUBLISHER by virtue and in consideration thereof, shall entitle AUTHOR to receive Fifty Per Cent (50%) of such cash proceeds.

In the middle and latter parts of 1967, Repp was "induced" to enter into six other written agreements with FEL which involved the assignment of other musical compositions as well as the personal services of Repp as a performer. (Contracts marked as Exhibits 1 thru 7 and attached to Repp's complaint). Repp emphasizes in paragraphs 10 and 11 of his complaint that prior to this time he had no experience in negotiating contracts while FEL "had been active in the business of publishing and marketing liturgical music for at least two years and possessed substantial knowledge and experience in dealing with contracts for the acquisition of works and the performance of recorded renditions thereof."

Paragraph IV of the November 7 contract provides in part that upon authorization by FEL for others to publish, in whole or in part, Repp's works, Repp would receive from FEL 50% of all cash proceeds realized by FEL in consideration for the authorization. The six subsequent contracts did not contain this provision. Furthermore, the later contracts, except for the specific recordings of Repp's musical performances already made, empowered FEL to make charges against royalties due Repp to reimburse itself for production and recording costs. Paragraphs 15 thru 19 of the complaint essentially allege that FEL failed to fulfill its obligations under these contracts by not paying Repp the amounts properly due. Those same paragraphs further allege FEL engaged in "threats, intimidation, concealment, and misrepresentations" to obtain the contracts in the first instance.

In 1972, FEL commenced a practice whereby it would grant to individuals or organizations an unlimited license to copy the works of Repp and other composers whose works were assigned to FEL for a blanket annual fee of $100.00. Since the institution of this business practice, sales of Repp's musical creations in printed form and his artistic performances in the form of phono-records have steadily and drastically diminished. Repp alleges that this licensing practice was without authority and directly contrary to the clear meaning and understanding of the contracts. He further alleges that this practice constituted a breach so material and fundamental, and so contrary to the express purposes and objectives of the contracts, as to defeat the intentions of the parties in making the contracts thereby rendering them totally null and void and without force or effect at law. The basis for Repp's allegations is his contention that the licensing practice detracted from and diminished interest in and demand for his works which resulted in lesser royalties being paid to him.

In greater detail, the licensing practice operated as follows. FEL offered approximately 1,145 separate works published and purportedly copyrighted by FEL, in a single lump sum package. The fee to obtain all these works, as noted earlier, was $100.00 annually. It granted the licensee the right to make unlimited copies of the musical works. The licenses were non-negotiable and FEL never made available licenses covering less than all 1,145 works or less than the $100.00 flat fee. One of the more interesting clauses of the annual copy license provided that upon the expiration of the license and a decision by the licensee not to seek renewal, the licensee was required to destroy, within 10 days from the date of expiration, all copies which had been made. See F. E. L. Publications, Ltd. v. Catholic Bishop of Chicago, No. 81-1333 (7th Cir. March 25, 1982), for further discussion of the licensing practice. Repp's works have only been marketed and distributed under this licensing practice. As a result, Repp alleges that he has been deprived of revenues which otherwise would have flowed to him had his works not been exclusively distributed through the licensing practice. In other words, demand for his works diminished because interested parties could only obtain his works by also obtaining and paying for other undesired musical works. Repp contends that FEL's licensing practice violates federal antitrust laws.

On October 8, 1980, Repp's action was dismissed in its entirety. The primary reason for the district court's action was that a nearly identical lawsuit was pending in a California state trial court, and Repp was capable of asserting all of his contractual claims there. In reaching its conclusion, the court applied the criteria set forth by the Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). With respect to the federal antitrust law violation claim asserted in Count IX, the court stated:

Repp's remaining attempt to create an illusion of exclusive federal jurisdiction in the form of antitrust violations fails as well. It is true that the remedies provided by the Sherman Act and the Clayton Act are exclusively cognizable in the federal courts. Hand v. Kansas City Southern Ry. Co., 55 F.2d 712, 713 (S.D.N.Y.1931). Nevertheless, Repp cannot assert that he is entitled (sic) to the remedies provided by these acts, because recovery is limited to those who have been "injured by restraints imposed by defendant on competitive forces in the economy." Lupia v. Stell (sic) D'Oro Biscuit Co., Inc., 586 F.2d 1163, 1168 (7th Cir. 1978), cert. denied, 440 U.S. 982 (99 S.Ct. 1791, 60 L.Ed.2d 242) (1979). Repp's injuries, if any, are actionable under contract rather than antitrust principles.

Mem.Op. at 5-6. It is from this last action that Repp appeals.

II.

The issue on this appeal is easily and simply stated: whether Repp has standing to bring this action. Resolution of this issue,...

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