Severe Records Llc v. Rich

• Decision Date: 23 September 2011
• Docket Number: No. 09–6175.,09–6175.
• Citation: 100 U.S.P.Q.2d 1275,658 F.3d 571,2011 Copr.L.Dec. P 30143
• Parties: SEVERE RECORDS, LLC; Chris Sevier, Plaintiffs–Appellants,v.John RICH; Shanna Crooks; Muzik Mafia, LLC; John D. Richafella Publishing, Defendants–Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

658 F.3d 571

2011 Copr.L.Dec. P 30,143

100 U.S.P.Q.2d 1275

SEVERE RECORDS, LLC; Chris Sevier, Plaintiffs–Appellants,

v.John RICH; Shanna Crooks; Muzik Mafia, LLC; John D. Richafella Publishing, Defendants–Appellees.

No. 09–6175.

United States Court of Appeals, Sixth Circuit.

Argued: July 21, 2011.Decided and Filed: Sept. 23, 2011.

ARGUED: Mark Christopher Sevier, Nashville, Tennessee, for Appellants. Cynthia S. McKenzie, McKenzie Hyde, PLC, Nashville, Tennessee, for Appellees. ON BRIEF: Mark Christopher Sevier, Nashville, Tennessee, Jay S. Bowen, Bowen & Unger, PLC, Nashville, Tennessee, for Appellants. Cynthia S. McKenzie, McKenzie Hyde, PLC, Nashville, Tennessee, William T. Ramsey, Neal & Harwell, PLC, Nashville, Tennessee, J. Matthew Blackburn, Cornelius & Collins, LLP, Nashville, Tennessee, for Appellees.Before: KENNEDY, SILER, and McKEAGUE, Circuit Judges.

OPINION

CORNELIA G. KENNEDY, Circuit Judge.

Plaintiff Mark Christopher “Chris” Sevier authored a song entitled “Better.” Defendant Shanna Crooks recorded the song and, because they were pleased with the results, they co-authored and recorded a second song, “Watching Me Leave.” Their relationship then collapsed, Crooks signed as a recording artist with unrelated recording and management companies, and various accusations and altercations followed, precipitating this action. Sevier and his recording company, Severe Records, LLC (collectively, “Plaintiffs”) filed suit, alleging what Sevier characterized as a “novel” claim of copyright infringement against Crooks and others for preventing Plaintiffs from commercially exploiting the two songs through threats contained in cease-and-desist letters and requests to music retailers that the songs not be offered for sale. Plaintiffs also sought a declaratory judgment regarding the authorship of the songs and ownership of the copyrights to the two songs. The district court dismissed the amended complaint for failing to state a claim of copyright infringement and declined to consider Plaintiffs' pendent state law claims or issue a declaratory judgment. For the reasons that follow, we AFFIRM the district court's dismissal of the copyright infringement claim and REVERSE its dismissal of the declaratory judgment claim.

FACTUAL BACKGROUND ¹

Sevier, in addition to being a licensed attorney ² and serving in the Tennessee Army National Guard Judge Advocate General Corps, works in the music-recording industry and is the managing member of Severe Records. He characterizes himself as a “highly prolific songwriter and professional music producer who has written and produced hundreds of works.”

In 2002, Sevier authored the music and lyrics for “Better,” recorded the song, and began pitching the song to recording artists. Crooks is a recording and performing artist with whom Sevier entered into an oral agreement to record “Better.” Both expected to commercially and noncommercially benefit from their relationship through exploitation of the song. According to Sevier, their oral agreement was structured to make them both authors of the copyright in the sound recording they created together. Sevier claimed that he planned to give Crooks half of the income generated through the commercial exploitation of the version of the song they collectively recorded. In exchange for Sevier's time, labor, and equipment, he was permitted to use Crooks's name, likeness, and photographs in connection with the works they created. Sevier mixed and edited “Better” and gave Crooks a copy for her to use and exploit, as well as to aid her in preparing to record a full-band version of the song.

Crooks and Sevier were pleased with the response they received to their recording of “Better,” and decided to record another song together. This time, they opted to write and record a new song because Sevier was better acquainted with Crooks's vocal talents. So, in Spring 2005, Sevier authored the music for “Watching Me Leave” and he and Crooks coauthored the song's lyrics. They then made a sound recording of the composition.

Crooks included the recordings of “Better” and “Watching Me Leave” on a compilation she shopped to third-party record companies. Sevier alleges that this helped her secure a publishing and management deal with defendants John Rich and/or Richafella Music Publishing and/or Godfather Music, and also a management deal with defendant Muzik Mafia, LLC (all collectively with Crooks, “Defendants”). In signing with these entities, Crooks assigned her copyright ownership in her songs, purportedly including “Better” and “Watching Me Leave,” to Rich and/or his publishing company.

Severe Records also sought to profit from the two songs during the Spring of 2005 by commercially releasing them through retailer CD Baby's online store and by having the songs digitally distributed to third-party digital music stores. Sevier informed Crooks of the release and told her that he would account to her for prorated portions of any sales.

Then the parties' relationship collapsed.

On October 22, 2005, Rich sent an email to members of Muzik Mafia ³ and other members of the music industry entitled “Illegal Activity,” accusing Sevier of “illegally selling music,” including that of Crooks. On October 24, 2005, through counsel, Muzik Mafia sent Sevier a cease-and-desist letter concerning music by artists including Crooks that was available for sale via CD Baby, was featured on the social network MySpace.com, and was available on Sevier's website. The cease-and-desist letter accused Sevier of copyright infringement for the sale of unauthorized recordings and of false endorsement. Sevier responded through counsel. Muzik Mafia's counsel emailed Sevier again on October 28, 2005 reiterating its demands and referring Sevier to the Copyright Act and Lanham Act to elucidate how Sevier's actions constituted copyright infringement and false endorsement.

Several months later, on May 4, 2006, Rich emailed Sevier, informing Sevier that he would not grant Sevier a licence to sell or distribute any of Crooks's music. Sevier responded that he was a co-author of the songs in question and could exploit them for commercial use as a co-owner. He also referred to Crooks's contributions to the songs in question as de minimis, particularly in regard to “Better.” Rich responded caustically and threatened to send Sevier another cease-and-desist letter. Sevier responded that “I could technically come after you under unjust enrichment, quantum meruit, tortous [sic] interference, and infringement (if [sic] you did not allow me to exercise my exploitation rights), but that would be a drag, and I've got way too much respect for leaders like you.” Rich stated in response that he would be “monitoring [Sevier's] activity closely with Shanna Crook's music regarding sales and distribution” and that Sevier should “go ahead and file a lawsuit against [Rich] and [his] company [Muzik Mafia] ... [and take] this [dispute] to court.” On May 6, 2006, in an email addressed to Rich, but sent to Rich's counsel, Sevier warned Rich not to “commit intentional defamation.”

In May 2006, Sevier recorded a certificate of registration for “Better” and “Watching Me Leave” with the United States Copyright Office. Sevier listed himself and Crooks as the co-authors of the songs. He noted that he was the “co-owner of the sound recording, music, words, art work compilation” and that Crooks was the “co-owner of the sound recording, & works.”

Near the end of August 2006, an agent of Muzik Mafia called CD Baby on behalf of Rich, Muzik Mafia, and Crooks and demanded that the store permanently remove and disable access to Crooks's works that Sevier had licensed to CD Baby for commercial exploitation, asserting that Plaintiffs had acted illegally and that use of the works was not authorized by the actual owners. CD Baby officials contacted Sevier and determined that Plaintiffs' use of the works was legitimate and Muzik Mafia's assertions were without merit. Though CD Baby ultimately elected not to remove the challenged works from their stores, for a period of time, the songs were unavailable for purchase.

On September 12, 2006, Sevier, after hearing from several of his current and prospective artists that Crooks was talking about him, contacted Crooks and demanded that she stop defaming him, stating that he “did not believe in her as an artist anymore as a result of her self-entitlement/narcissistic syndrome” and that any license he had orally extended to her was revoked. Crooks responded the next day that she would not be his friend, thought he was a good songwriter, but that he was “poison in this industry.” In a separate message, she wrote that Sevier was “developing quite a reputation in this town” after speaking to someone else in the Nashville music industry.

Also in September 2006, Sevier made several attempts to account to Rich's accountant for proceeds owed to Crooks from his exploitation of the two songs. In November 2006, when Sevier met with Rich's accountant, the accountant told Sevier that if Plaintiffs did not conform to Defendants' wishes, they would see to it that “music industry members would not work with Plaintiffs.”

On October 2, 2006, a Muzik Mafia agent emailed Plaintiffs asking if they had “any concerns.” Sevier responded by email that same day, warning the agent that he was “either the sole author or a co-author of the copyrights vested in either or both song recordings or underlying compositions,” and that he had registered his ownership interests in the songs with the copyright office. He further threatened legal action if Muzik Mafia infringed on Severe Records's property rights. Finally, Sevier accused Muzik Mafia of “attempting to prevent [Plaintiffs] from exploiting [their] right of distribution under [17 U.S.C. § ] 106 ... [and of] initiating schemes and activities to have my co-authored worked [sic] removed from digital stores....” Sevier characterized these actions as “willful and...