Roberts v. Gordy

• Citation: 359 F.Supp.3d 1231
• Decision Date: 04 January 2019
• Docket Number: Case No. 13-24700-CIV-WILLIAMS
• Parties: William L. ROBERTS, II, et al., Plaintiffs, v. Stefan Kendal GORDY, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

359 F.Supp.3d 1231

William L. ROBERTS, II, et al., Plaintiffs,

v.Stefan Kendal GORDY, et al., Defendants.

Case No. 13-24700-CIV-WILLIAMS

United States District Court, S.D. Florida.

Signed January 4, 2019

Jonathan L. Gaines, Karen Linda Stetson, GrayRobinson P.A., Richard Charles Wolfe, Wolfe Law Miami, P.A., Miami, FL, for Plaintiffs

Barry Lawrence Rothberg, Greenberg Traurig, Miami, FL, Nina D. Boyajian, Pro Hac Vice, Vincent H. Chieffo, Pro Hac Vice, Greenberg Traurig, LLP, Los Angeles, CA, for Defendants.

OMNIBUS ORDER

KATHLEEN M. WILLIAMS, UNITED STATES DISTRICT JUDGE

THIS MATTER is before the Court following the November 14, 2018 status conference, when the Court heard argument on certain ownership and damages issues. The Court's rulings on these issues follows.

I. BACKGROUND

The Court divides its background discussion into three sections: (A) a brief procedural history of the case before the Court's April 8, 2016 Order dismissing Plaintiffs' claims; (B) the Court's Dismissal Order; and (C) the Eleventh Circuit's Opinion reversing the Court's Dismissal Order and remanding for further proceedings.

A. Procedural History

Plaintiffs William L. Roberts, II, p/k/a Rick Ross, Jermaine Jackson, and Andrew Harr filed this action in December 2013 alleging that the musical composition Party Rock Anthem infringed on their copyright to the musical composition Hustlin'. (DE 1). Plaintiffs sued the authors of Party Rock Anthem and various individuals and entities involved in marketing, advertising, and otherwise exploiting that song.

In the operative second amended complaint (DE 158), Plaintiffs alleged four claims: Count l–Defendants' musical composition Party Rock Anthem infringes their copyright to the musical composition Hustlin' ; Count II—Defendants' licensing their musical composition Party Rock Anthem to KIA Motors for use in advertisements infringes their copyright to Hustlin' ; Count III—Defendants' marketing merchandise, including T-Shirts, bearing the phrase "Everyday I'm Shufflin" infringes on their copyright to Hustlin' ; and Count IV—Defendants' marketing merchandise, including T-Shirts, with the phrase "Everyday I'm Shufflin" infringes on their trademark to the phrase "Everyday I'm Hustlin'."

For their part, Defendants asserted many defenses to Plaintiffs' claims, including, among others, that (1) Plaintiffs do not own a valid copyright in Hustlin' and (2) Party Rock Anthem does not infringe on Hustlin' , based on the fair use doctrine. In May 2015, Plaintiffs dismissed their trademark claim (Count IV). (DE 201). Several months later, the Court granted Defendants' motion for summary judgment on Count III of the second amended complaint (DE 331), but denied their motion for summary judgment on fair use. (DE 347). The Court held that because Defendants' use of Party Rock Anthem does not constitute parody, they could not argue this at trial, but they could pursue their fair use defense outside the parody context. (DE 347).

The Parties also filed competing summary judgment motions on the merits elements of Plaintiffs' copyright infringement claims: (1) ownership of a valid copyright; and (2) copying. The Parties subsequently filed pretrial motions in limine, Daubert motions, as well as proposed jury instructions and a pretrial stipulation. The Court held a pretrial conference in October 2015. (DE 367). Following the pretrial conference, the Court issued a Request to the Register of Copyrights regarding the multiple registrations for the Hustlin' copyright.¹ The Parties then submitted supplemental briefing based on the Registrar's response that it would not have issued any of the three copyright registrations to Hustlin' had it known of the various inaccuracies in the registrations.

B. The Court's April 2016 Order Dismissing This Case

On April 8, 2016, the Court entered its Order dismissing Plaintiffs' claims. (DE 399). In the Order, the Court initially set out to resolve this issue: "Was the musical composition Hustlin' validly registered with the Copyright Office, and, if so, do Plaintiffs have an ownership interest in the exclusive right to prepare derivative works for the musical composition Hustlin' ?" Id. at 1.

As to copyright validity, the Court held that none of Plaintiffs' three copyright registrations were valid under 17 U.S.C. § 411, because (1) each contained inaccurate information and Plaintiffs had knowledge of the inaccuracies; and (2) the Registrar had established that the inaccuracies, if known, would have caused her to refuse registration for the copyrights.² Because registration is a prerequisite to filing an infringement suit, the Court held Plaintiffs' infringement claims were barred and dismissed the case. (DE 399 at 16-29).

As to copyright ownership, the Court first stated that because it had determined Plaintiffs lacked a valid copyright registration, it "need not decide whether Plaintiffs have standing to assert [their] copyright infringement claims in the first place." Id. at 29. Even so, the Court proceeded to "illustrate some of the problems with Plaintiffs' contention that they are ‘the legal and/or beneficial copyright owners of the musical work at issue, Hustlin '.’ " Id.

The Court then explained the facts about Roberts', Harr's, and Jackson's legal ownership interests. Id. at 29-39. The Court noted—without deciding—many legal and factual disputes relating to Plaintiffs' purported legal ownership of Hustlin', including: (i) the validity and effect of Roberts' 2006 assignment of his interest in Hustlin' to his wholly-owned company, 3 Blunts Lit at Once, LLC ("3 Blunts"), given that 3 Blunts was administratively dissolved in 2004 (Id. at 32); (ii) whether Harr & Jackson created Hustlin' as a "work for hire" for their wholly-owned company, Trac-N-Field Entertainment, LLC ("TNF") (Id. at 34); (iii) whether Harr and Jackson ever assigned their interest in Hustlin' to TNF (Id. at 35 FN 35); (iv) the effect and impact of the October 2005 SNS/TNF agreement, signed by Harr but not Jackson (Id. at 35); (v) the effect and meaning of the May 2006 co-publishing agreement (Id. at 36); (vi) the effect and meaning of the November 2006 NottingDale agreement (Id. at 37); and other legal and factual disputes on legal ownership.³ But the Court never ruled on any of these legal and factual disputes relating to legal ownership, nor did it otherwise resolve the Parties' respective legal ownership interests. (Indeed, with regard to Jackson and Harr, the Court presented five possible scenarios.) However, the Court did observe that "[u]nfortunately, as of this date, neither Harr, nor Jackson, nor Roberts, nor TNF, nor FNG, nor Sony, nor Defendants, nor their counsel, nor the Court can ‘figure out’ who owns what with regard to the musical composition Hustlin'. " Id. at 39.

The Court similarly did not address the crux of the Parties' dispute on beneficial ownership: their competing legal arguments about the definition and scope of beneficial ownership under 17 U.S.C. § 501(b).⁴ Instead, it determined there was no evidence that any of the Plaintiffs ever received—or were even entitled to receive—royalty payments for the preparation of derivative works based on Hustlin' :

The Court has not found in the voluminous briefing, nor have the Parties identified, any record evidence demonstrating any royalty payment to Roberts, Harr, or Jackson relating to the right to prepare derivative works of Hustlin'. Nor is there any evidence that Plaintiffs, themselves, are even entitled to royalties for the exploitation of Hustlin'. Roberts has not produced any royalty statements showing any royalties he received from 3 Blunts or FNG in exchange for any transfer of his ownership interest in Hustlin'. Likewise, Harr and Jackson have produced no royalty statements showing any royalties received from TNF or FNG in exchange for any transfer of any ownership interest in Hustlin .... And each of the agreements signed by TNF, 3 Blunts, Roberts, Harr or Jackson make clear that Roberts, Harr and Jackson do not have any right to authorize or create derivative works of Hustlin' ; rather, that exclusive right belongs to Sony/ATV, FNG, and NottingDale/Warner. In sum, there is no evidence that Harr, Jackson, or Roberts personally receive any royalties for the licensing or commercial exploitation of Hustlin'.

(DE 399 at 41).

In the conclusion section of the Dismissal Order, the Court stated that none "of these Plaintiffs, either legally or beneficially, hold the kind of clearly delineated exclusivity over at least one strand of the bundle of rights that would permit [them] to sue for infringement." Id. at 42 (internal quotation omitted). The Court then ruled: "Because Plaintiffs do not hold a valid copyright registration and because Plaintiffs have not established either legal or beneficial ownership of the exclusive right to prepare derivative works for Hustlin' , Plaintiff's motion for summary judgment is DENIED and this case is DISMISSED ." Id.

C. The Eleventh Circuit's Opinion

The Eleventh Circuit reversed this Court's ruling on the validity of the registrations. Roberts v. Gordy, 877 F.3d 1024 (11th Cir. 2017). At the outset of its Opinion, it stated: "The Court need not reach a decision on the ownership issue because the district court misapplied the law by invalidating the copyright registrations." Id. at 1025.

On copyright validity, it held that this Court had misapplied the law by holding the copyrights were invalid with no evidence of scienter. "A proper application of 17 U.S.C. § 411(b) under the framework of Original Appalachian and St. Luke's "—which, according to the Eleventh Circuit's Opinion, requires a showing of scienter—"would have yielded the result of validity of registration—albeit plural registrations." Roberts, 877 F.3d at 1030. "And while ‘[a]s a general rule only one copyright registration can be made for the same version of a particular work,’ specific exceptions are recognized by a federal regulation .... [L]ogic would dictate...