Tape Industries Association of America v. Younger

Citation316 F. Supp. 340
Decision Date27 July 1970
Docket NumberCiv. No. 68-1938.
PartiesTAPE INDUSTRIES ASSOCIATION OF AMERICA, a California corporation, Barry Pressman, Donald Koven, Jean Holmquist, Robert Holmquist, and Stanley Meckler, Plaintiffs, v. Evelle J. YOUNGER, District Attorney, County of Los Angeles, and Roger Arnebergh, City Attorney, City of Los Angeles, Defendants.
CourtU.S. District Court — Central District of California

Charles E. Beardsley, Arthur Leeds, and Beardsley, Hufstedler & Kemble, Los Angeles, Cal., for plaintiffs.

John D. Maharg, County Counsel, Robert C. Lynch, Asst. County Counsel, Howard S. Smith, and Mitchell, Silberberg & Knupp, Los Angeles, Cal., for defendant Younger.

Roger. Arnebergh, pro se, and Philip E. Grey, Asst. City Atty., for defendant Arnebergh.

Henry Kaiser, Eugene Gressman, Ronald Rosenberg, and Van Arkel & Kaiser, Washington, D. C., for American Federation of Musicians, amicus curiae.

Mortimer Becker and Becker & London, New York City, for American Federation of Television and Radio Artists, as amicus curiae.

Before TRASK, Circuit Judge,* and WHELAN and HAUK, District Judges.

DECISION, FINDINGS OF FACT AND CONCLUSIONS OF LAW

HAUK, District Judge.

This is an action for declaratory and injunctive relief. Plaintiffs contend that the so-called "tape piracy" law of California, Penal Code, Section 653h (1968)1 is in conflict with the Copyright Clause of the United States Constitution, art. I, § 8, cl. 8,2 and the implementing Federal copyright statutes, 17 U.S.C. §§ 1-215. Plaintiffs seek preliminary and permanent injunctions restraining defendants from initiating or continuing any proceedings to enforce this purportedly unconstitutional section of the California Penal Code. Further, plaintiffs seek a declaratory judgment that Calif.P.C. § 653h (1968) is unconstitutional.

Federal jurisdiction is invoked pursuant to 28 U.S.C. § 1331, Federal Question; U.S.Const. Art. I, § 8, cl. 8, Copyright Clause; 17 U.S.C. §§ 1-215, Copyright Statutes; 28 U.S.C. § 1343, Civil Rights; and 28 U.S.C. §§ 2201 and 2202, Declaratory Judgment.

Plaintiffs requested a Three-Judge Court to hear and determine their right to interlocutory and permanent injunctions restraining the enforcement of the California statute on the ground of unconstitutionality. 28 U.S.C. §§ 2281 and 2284. After a hearing conducted on March 10, 1969, the single-judge District Court held that a Three-Judge Court must be convened because there was not a "clear and unequivocal showing that there was no substantial issue of constitutionality raised by the complaint, * * *" Accordingly, the Three-Judge Court was appointed and convened, and the case was tried on May 15, 1970. Except for the limited amount of testimony that was presented at the trial the case was heard on stipulated facts.

Defendant Evelle J. Younger is the duly elected and qualified District Attorney of the County of Los Angeles, and charged with the responsibility of enforcing Calif.P.C. § 653h (1968) within the unincorporated area of the County of Los Angeles and, by contract, in certain cities within the County of Los Angeles. Defendant Roger Arnebergh is the duly elected and qualified City Attorney of the City of Los Angeles, and charged with the responsibility of enforcing Section 653h within the City of Los Angeles.

The plaintiffs still remaining in this suit are Tape Industries Association of America, Barry Pressman, Donald Koven, Jean Holmquist, and Robert Holmquist. Upon stipulation of counsel, plaintiff Stanley Meckler dismissed his action against all defendants with prejudice on April 20, 1970.

Plaintiffs Pressman, Koven, Holmquist, and Holmquist are in the business of making and selling sound tapes and cartridges. These plaintiffs purchase on the open market long playing disc phonograph records which have been manufactured and sold through the usual commercial channels by record companies. Such disc phonograph records are generally referred to as albums and they usually contain 10 to 12 performances of one artist or group of artists. A label containing the title or name of the album, the name of the recording artist or group of artists and the name of the record company, is affixed to each of the albums and the packages in which they are sold.

After purchasing an album, plaintiffs Pressman, Koven, Holmquist, and Holmquist make a tape recording of the exact sounds recorded on the album. The tape is made by playing the album on a record player connected to a tape recorder which turns out a tape. When this master tape is finished, it is placed on a machine known as a "tape playback deck". The "tape playback deck" is connected to machines known as "tape slaves" which in turn make additional tape recordings of the sounds which have been transferred from the record album to the master tape. A large number of "tape slaves" may be connected to one "tape playback deck" so that a correspondingly large number of tape recordings can be made at one time. After the tapes have been made by use of the "tape playback deck" and the "tape slaves", each of the new tapes is placed on a hub. Each hub is placed into a plastic cartridge, and the ends of the tape are spliced together so that it forms a continuous "loop" in the cartridge. The cartridge is sealed, tested, packaged, and labeled.

Plaintiffs affix to each tape cartridge recorded in the above manner a label which states the title of the original record album or albums from which the tape has been copied and the name of the recording artist or artists who made the album or albums. Each such tape cartridge also contains a label which states the following:

"No relationship of any kind exists between plaintiffs and the original recording company nor between this recording and the original recording artist. This tape is not produced under a license of any kind from the original company nor the recording artist(s) and neither the original recording company nor artist(s) receives a fee or royalty of any kind from plaintiffs. Permission to produce this tape has not been sought nor obtained from any party whatsoever."

Plaintiff Tape Industries Association of America is a California Corporation duly organized under the laws of the State of California for the purpose of helping to solve the problems of the various small tape manufacturers who produce tapes in the manner described above. Plaintiff Tape Industries distributes the disclaimer labels to its members for a fixed fee.

The record companies which manufacture and sell the albums which plaintiffs use to make their unauthorized tapes expend great efforts and substantial sums of money for the commercial exploitation of their albums. Some of the costs incurred by these record companies are: the various expenses in producing a master record of a performance which can be used to manufacture albums and authorized tapes; the expense of manufacturing records and tapes; the expense of advertising and promoting albums and tapes; and the expense of paying royalties to the recording artists and to the various trust funds established by collective bargaining agreements. Other than the small sums required to make and distribute their tapes, plaintiffs do not pay any other expenses. The issue of payment or non-payment of royalties to the proprietors of copyrights of musical compositions involved was stipulated by the parties not to be relevant to this action.

There are presently at least 900 commercial record companies in operation in the United States. During 1968, the latest year for which figures are available, the sale of disc phonograph records by commercial companies in the United States had a list price value of at least $860 million. In addition to the market for albums, there is also a large demand in the United States for prerecorded tapes and tape cartridges. The record companies which manufacture and sell albums also either manufacture the prerecorded tapes themselves, or license others to produce the tapes. These authorized tapes are sold in packages which bear labels containing the name of the record company that manufactures and sells the album, the name or title of the album, and the name of the recording artist or artists. The best estimates that are available show that in 1968, the sale of authorized tapes had a retail list value of at least $250 million.

Through a witness at the trial and by an affidavit of the Controller of Atlantic Recording Corporation, defendants produced, as examples, the costs of production and the sales figures for two of the albums which were in evidence in this case.

At the trial, Mr. Murray Gitlan, Controller of Warner Bros. Records, described the financial arrangements for an album entitled "The Association". Mr. Gitlan testified that the master recording for "The Association" cost $71,000, and that this figure included musicians' and arrangers' salaries, cost of studio, and other related studio charges. In addition, Mr. Gitlan testifed that $88,000 was paid to the performing artist and $12,000 was paid to the American Federation of Musicians' Pension and Trust Fund. Mr. Gitlan further testified that the first six months' sales figures for "The Association" totalled approximately $549,000.

Mr. Melvin Lewinter, Controller of Atlantic Recording Corporation, submitted an affidavit wherein he detailed the financial aspects of an album recorded by Crosby, Stills and Nash. Through March 31, 1970, the gross sales by Atlantic in the United States of the phonograph disc album was in excess of 1.1 million copies, and gross sales of this album by Atlantic in the United States in the form of prerecorded tapes was in excess of 100,000 copies. Through December 31, 1969, Atlantic's licensee, Ampex Corporation, had sales in excess of 70,000 copies of authorized prerecorded tapes. The cost of recording the album was approximately $80,000 and the costs of advertising and promoting this album were estimated at $20,000 to $30,000. Mr. Lewinter added that Atlantic's costs...

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