WB Music Corp. v. Royce Int'l Broad. Corp.

• Decision Date: 31 August 2022
• Docket Number: 21-55264
• Parties: WB MUSIC CORP.; But Father I Just Want to Sing Music; Hunterboro Music; Universal Polygram International Publishing, Inc.; Sony/ATV Tunes, LLC; Obverse Creation Music; Nice Hair Publishing; Party Rock Music; Yeah Baby Music; ESKAYWHY Publishing; Uh Oh Entertainment; Divine Mill Music; Fingaz Goal Music; EMI April Music Inc. ; Hi Mom I Did It; Chebra Music; Universal Music Corp., Plaintiffs-Appellees, v. ROYCE INTERNATIONAL BROADCASTING CORPORATION; Playa Del Sol Broadcasters; Silver State Broadcasting, LLC ; Golden State Broadcasting; Edward R. Stolz, Esquire, Defendants-Appellants, W. Lawrence Patrick, Receiver-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

47 F.4th 944

WB MUSIC CORP.; But Father I Just Want to Sing Music; Hunterboro Music; Universal Polygram International Publishing, Inc.; Sony/ATV Tunes, LLC; Obverse Creation Music; Nice Hair Publishing; Party Rock Music; Yeah Baby Music; ESKAYWHY Publishing; Uh Oh Entertainment; Divine Mill Music; Fingaz Goal Music; EMI April Music Inc. ; Hi Mom I Did It; Chebra Music; Universal Music Corp., Plaintiffs-Appellees,
v.
ROYCE INTERNATIONAL BROADCASTING CORPORATION; Playa Del Sol Broadcasters; Silver State Broadcasting, LLC ; Golden State Broadcasting; Edward R. Stolz, Esquire, Defendants-Appellants,

W. Lawrence Patrick, Receiver-Appellee.

No. 21-55264

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 25, 2022 Pasadena, California
Filed August 31, 2022

Donald C. Schwartz (argued), Law Office of Donald C. Schwartz, Aptos, California; G. Scott Sobel, Law Offices of G. Scott Sobel, Los Angeles, California; for Defendants-Appellants.

Sharon D. Mayo (argued), Arnold & Porter Kaye Scholer LLP, San Francisco, California; Laura E. Watson, Arnold & Porter Kaye Scholer LLP, Los Angeles, California; Richard H. Reimer, Jackson Wagener, American Society of Composers, Authors and Publishers, New York, New York; for Plaintiffs-Appellees.

Fred D. Heather (argued), Glaser Weil Fink Howard Avchen & Shapiro LLP, Los Angeles, California, for Appellee Court-Appointed Receiver W. Lawrence Patrick.

Before: A. Wallace Tashima, Paul J. Watford, and Michelle T. Friedland, Circuit Judges.

TASHIMA, Circuit Judge:

Plaintiffs obtained a judgment against Defendants for violations of the Federal Copyright Act. After Defendants failed to satisfy the judgment, Plaintiffs moved for appointment of a receiver to aid in the execution of the judgment. The district court appointed a Receiver and authorized the Receiver to sell Defendants' property—three radio stations—to generate the funds needed to satisfy the judgment. Defendants eventually deposited certain sums with the district court. Then, contending that they had satisfied the judgment, Defendants moved to discharge the Receiver, terminate the receivership, and enjoin the sale of the radio stations. The district court denied the motion, holding that it was within its discretion to prolong the receivership in order to protect other creditors

47 F.4th 947

and ensure that the Receiver would be paid for his services. WB Music Corp. v. Royce Int'l Broad. Corp. , No. EDCV 16-600 JGB, 2021 WL 3721342, at *2–3 (C.D. Cal. Mar. 18, 2021).

We affirm. We need not decide whether Defendants satisfied the judgment by depositing certain funds with the district court. Even assuming they did so, we reject Defendants' contention that the district court lacked discretion to continue the receivership. Agreeing with the First Circuit, we hold that "it is discretionary and not incumbent upon the court to dismiss the receiver when the debt is discharged." Consol. Rail Corp. v. Fore River Ry. Co. , 861 F.2d 322, 327 (1st Cir. 1988). We also reject Defendants' contention that the district court abused its discretion in denying Defendants' motion to terminate the receivership. The district court offered valid reasons for not terminating the receivership—protecting creditors, permitting the Receiver to prepare a final accounting, ensuring that the Receiver would be compensated for his time, and seeing to it that obligations incurred during the receivership would be paid. Given Defendants' history of nonpayment, the court acted within its broad discretion.

BACKGROUND

Defendants—Royce International Broadcasting Corp., Playa Del Sol Broadcasters, Silver State Broadcasting, LLC, Golden State Broadcasting, and Edward R. Stolz—are the owners and operators of three radio stations located in California and Nevada. Plaintiffs—WB Music Corp., But Father I Just Want to Sing Music, Hunterboro Music, Universal Polygram International Publishing, Inc., Sony/ATV Tunes LLC, Obverse Creation Music, Nice Hair Publishing, Party Rock Music, Yeah Baby Music, ESKAYWHY Publishing, Uh Oh Entertainment, Divine Mill Music, Fingaz Goal Music, EMI April Music Inc., Hi Mom I Did It, Chebra Music, and Universal Music Corp.—are the owners of copyrights of certain musical works. Plaintiffs commenced this action in 2016, alleging that Defendants violated the Federal Copyright Act, 17 U.S.C. § 101 et seq. , by broadcasting unauthorized performances of Plaintiffs' musical compositions on their radio stations.

In 2017, the district court granted Plaintiffs partial summary judgment, holding Defendants jointly and severally liable for infringing the copyrights of these musical works. In March 2018, a jury determined that Defendants' acts of infringement were willful and awarded Plaintiffs statutory damages totaling $330,000. In May 2018, the Court entered a judgment awarding Plaintiffs $330,000.

In August 2018, the district court entered an amended judgment in the amount of $1,249,563.46. In addition to the amount awarded previously, the amended judgment included $864,278.75 in attorneys' fees and $55,284.71 in costs. We affirmed this judgment in WB Music Corp. v. Stolz , 814 F. App'x 286 (9th Cir. 2020).

In June 2019, following unsuccessful efforts to collect on the judgment, Plaintiffs moved for the appointment of a receiver to facilitate execution on the amended judgment. The district court initially did not rule on Plaintiffs' motion, giving Defendants more time to attempt to obtain the funds necessary to satisfy the judgment. After months in which Defendants had not demonstrated any progress toward raising the funds, Plaintiffs renewed their motion for appointment of a receiver. Plaintiffs argued that Defendants had "admitted that the only assets that they possess that may be sufficient to cover the Amended Judgment entered against them are the broadcast licenses issued by the Federal Communications Commission" ("FCC") for the three radio stations. Accordingly, Plaintiffs asked the court to "(i) appoint

47 F.4th 948

W. Lawrence ‘Larry’ Patrick of Patrick Communications, LLC, as receiver over Defendants radio-station-related assets, including Defendants' Radio Stations' FCC Licenses; and (ii) authorize Patrick to manage and operate the stations until such time as he can arrange...