Tempest Publ'g, Inc. v. Hacienda Records & Recording Studio, Inc.
| Decision Date | 07 November 2013 |
| Docket Number | CIVIL ACTION NO. H-12-736 |
| Parties | TEMPEST PUBLISHING, INC., Plaintiff, v. HACIENDA RECORDS AND RECORDING STUDIO, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of Texas |
AMENDED
Tempest Publishing, Inc. sued Hacienda Records and Recording Studio, Inc., Hacienda Records, L.P., and Latin American Entertainment, LLC (together, "Hacienda"), alleging infringement of the copyrights to four songs and seeking damages and attorney's fees under the federal Copyright Act, 17 U.S.C. § 101 et seq. After extensive discovery, Tempest moved for summary judgment, and Hacienda moved for partial summary judgment. On October 4, 2013, the court granted Hacienda's motion for partial summary judgment on Tempest's claims relating to the songs Buscando Un Carino and Morenita de Ojos Negros. (Docket Entry No. 104.) On October 8, 2013, Tempest moved for rehearing. Tempest asked the court to change its ruling based on two documents that it asserted cured the legal deficiency Hacienda had identified in its motion for partial summary judgment and on which the court based its ruling. Those documents were drafted and signed after the court's ruling granting Hacienda's motion for partial summary judgment.
This Memorandum and Opinion addresses Tempest's motion for rehearing. Because Tempest's motion seeks rehearing of a bench ruling, and because the motion cites no legalauthority, the Memorandum and Opinion sets out in detail the reasons for granting the motion for partial summary judgment as well as for denying rehearing.1
The relevant facts in the summary-judgment record are largely undisputed. The record includes the deposition testimony of Roman Martinez, Sr., the songwriter's agreements that Martinez entered into with Musica Adelena, the registrations related to those songs filed with the United States Copyright Office, the Ownership Transfer Agreement between Musica Adelena and Tempest, the recording invoices and agreements that Martinez and his band entered into with Hacienda in the early 1980s, and the various invoices from Hacienda showing that Martinez or his band purchased certain recordings.
In 1966, Roman Martinez, Sr. started the band "El Grupo Internacional de Ricky and Joe" with three of his children, Ricky, Joe, and Bobby. (Docket Entry No. 89-1, Martinez Depo., at 53.)2 That same year, Martinez decided that "El Grupo" would record an 8-track of ten unoriginal songs with Johnny Gomez at Cielo Records in Amarillo, Texas. (Id. at 56.) Martinez did not sign a contract with Cielo Records but understood that it would sell the recordings and would also provide "El Grupo" copies to sell at performances. (Id. at 59.)
Through the late 1960s, "El Grupo" would play at "dances" for $300 to $800 per performance, depending on the length of the performance and the fame of the head liners. (Id. at 62.) During that period, "El Grupo" played a set list of the unoriginal works from the 8-track "so that people would hear them and know them." (Id. at 63.) On occasion, the band would "play other songs that other people had [] recorded." (Id.) The band obtained no licenses to perform these songs and paid no royalties to songwriters or publishers for using the songs at the dances. (Id. at 64.)
Sometime in the late 1960s or early 1970s, Martinez's other son, Jesse, and his daughter, Rosie, joined the band. In 1977, "El Grupo" recorded its second album, a two-song single, with Caldwell Studios in Lubbock, Texas. (Id. at 59-59.) That single's two songs were also unoriginal. (Id. at 61.) Sometime around 1978 or 1979, Ricky and Joe began learning how to manage the band and became the bandleaders.
The band recorded its next album in San Antonio with Joey Lopez. (Id. at 65.) The album had four songs on two singles and the band received an unspecified number of copies. (Id.) Martinez did not sign a contract for this album. He paid for the studio time and for 45s. These 45s were "not really" sold. Instead, they were intended to be "promotional so that ["El Grupo"] could give them to the radio stations, give them to people so that they would know the band's music." (Id. at 68.) The songs were older, unoriginal works. Martinez did not know who wrote them or how to find their authors. He did not get a license to record the four songs or to distribute them.
Martinez learned about Hacienda from another musician while in Lubbock. (Id.) The "El Grupo" members decided "to see if [they could] do something with the band." The musician suggested that the band "'go try out Hacienda and see if that will work.'" Id. In 1981, Martinez,Ricky, Joe, and Jesse went to Hacienda without an appointment and discussed recording opportunities with Roland Garcia, Sr. He told Martinez that it would cost about $2,000 to record and mix ten songs and that the band would receive 8-tracks and 45s. (Id. at 70-71.)3 "El Grupo" decided to record an album with Hacienda. During this 1981 recording session, "El Grupo" recorded their original works, Morenita and Buscando.
Martinez testified that he signed no contract with Hacienda when he recorded those two songs. (Id. at 155.) He also testified that he had no discussions about Hacienda selling the songs to the public. He believes that when he recorded the songs, he retained ownership. (Id. at 156.)
Hacienda produced a June 5, 1981 invoice for the first recording session. The invoice identified "Joe and Ricky Martinez" as the client. Hacienda also produced a receipt dated June 6, 1981 showing the invoice paid in full.4 For $1,900, Hacienda recorded and mixed 10 songs, "release[d] 1 - 45 - with Texas Promotion," and distributed 300 8-tracks and 300 45s to the band. (Docket Entry No. 89-2, Martinez Ex. 6, at 2.) Hacienda also produced invoice number 507 dated September 29, 1981, which shows that "El Grupo" received "300 LAB 8 trks #1006." (Id. at 4). LAB # 1006 is an 8-track titled La Prieta Casada. (Docket Entry No. 89-2 at 74). Morenita is track two of that 8-track; Buscando is track 7. (Id.; see also Docket Entry No. 89-1, Martinez Depo., at151-54.) The summary-judgment evidence shows that "El Grupo" recorded those two songs at Hacienda's studios in 1981.
Hacienda also produced an invoice for a second recording session. The invoice is dated January 7, 1982. For $2,000, Hacienda recorded and mixed another 10 songs, "[r]eleased 1-45 Texas Promotion," and distributed 150 LPs, 150 8-tracks, and 200 45s to the band. (Id., Martinez Exhibit 3, at 102.) The invoice was signed by Martinez, Ricky, and Joe. (Id.)
Hacienda also produced an "option agreement" dated January 11, 1982, signed by Martinez, Ricky, and Jesse. The agreement stated:
(Id. at 101.) The parties dispute whether this option agreement gave Hacienda the authority to sell "El Grupo" songs and albums. Martinez testified that the group received no royalties under the agreement. The parties also dispute whether, if the agreement covered any songs, it covered songs recorded under the June 5, 1981 invoice or only those recorded under the January 7,1982 invoice.
On January 11, 1982, Ricky also purchased an additional "50 copies of Lab 8trk # 1006." (Docket Entry No. 89-2 at 6.)
Martinez testified that they were using the 45s and the 8-tracks to pass out and sell at their concerts. (Docket Entry No. 89-1, Martinez Depo., at 160.) Martinez also testified that it was important for the band to have the albums to pass out at the concerts.
In 1982, "El Grupo" changed its name to "El Conjunto Internacional de Ricky and Joe." In 1990, the band changed its name to "The Hometown Boys" after Bobby and Rosie left. Sometime in 1989 or 1990, the band played a concert in San Antonio. At that concert, a family asked them to sign a Hacienda CD that had the Morenita and Buscando tracks. This was the first time Martinez realized that Hacienda was selling CDs with the songs that the band recorded at the studio in 1981. Martinez and the band never contacted Hacienda about its use of these songs. (Id. at 85-86.)
"The Hometown Boys" became popular in the 1990s. Radio stations played their songs frequently and their CD Mire Amigo went gold in one week. "The Hometown Boys" have received several awards, including for recognition for the album of the year, vocals of the year, and instrumentalist of the year. In 2010, "The Hometown Boys" were inducted into the Tejano Hall of Fame. (Id. at 131.)
In 1994, "The Hometown Boys" made a new recording of Morenita for a CD released by Discos MM. (Id. at 173.) On June 30, 1994, Martinez Sr. sold the rights to Morenita to Musica Adelena (BMI) under a songwriter's contract. Michael Sharkey of Musica Adelena produced thecontract. Martinez signed it in the presence of his now-deceased sons, Ricky and Joe. The contract stated that:
(1) The Writer [Martinez Sr.] hereby sells, assigns, transfers and delivers to the Publisher, its successors and assigns, all his rights, title and interest in and to certain heretofore unpublished original musical works, as annexed hereto, written and/or composed by the Writer, now entitled, "Morenita De Ojos Negros"
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