EMI v. Karen Records

7/28/2019 EMI v. Karen Records

1/10

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

xEMI ENTERTAINMENT WORLD, INC.,

P l a i n t i f f , 05 Civ. 390 (LAP)- aga ins t -

MEMORANDUM & ORDERKAREN RECORDS, INC., KARENPUBLISHING INC., BIENVENIDORODRIGUEZ, ISABEL RODRIGUEZ andFIDEL HERNANDEZ,

Defendants .- X

LORETTA A. PRESKA, Chief Uni ted Sta tes D i s t r i c t Judge:P l a i n t i f f , a f t e r being gran ted p a r t i a l summary judgment

[dkt . no. 90] in the above-referenced ac t ion , wa s awarded a$100,000 judgment in i t s ac t ion aga ins t Defendants fo r copyrightin f r ingement . See Memorandum and Order (Holwell , J . ) , Aug. 31,2011 [dkt . no. 110] ("Judgment").) Defendants move to s e t as idethe judgment pursuant to Federa l Rule of C iv i l Procedure60(b) (1), (3) , and (4) on the grounds t ha t i n t i f f l ackeds tanding to br ing the l awsu i t and the re fo re t ha t t h i s Courtlacked j u r i s d i c t i on to hear t h i s case . For the reasons s e tfo r th here in , Defendants ' motion [dkt . no. 128] i s GRANTED, th ejudgment [dkt . no. 110] i s VACATED, and th e compla in t i sDISMISSED.

USDCSDNYD O C U ~ , . f f i N 1 "ELECTRONICftJ.J..Y FILEDDOC II:DAlE F I L E j ) : ~ . F , 0-,3

- - ......_--,- , --.;..,.

Case 1:05-cv-00390-LAP-JCF Document 140 Filed 06/10/13 Page 1 of 10


2/10

2

I . BACKGROUNDThe backgr ound of t hi s act i on has been di scussed i n t wo

opi ni ons gr ant i ng par t i al summary j udgment and damages t o

Pl ai nt i f f , and f ami l i ar i t y wi t h whi ch i s pr esumed.

Pl ai nt i f f EMI Ent er t ai nment Wor l d I nc. ( EMI or

Pl ai nt i f f ) i s a musi c publ i sher t hat pur por t ed t o own or

cont r ol copyr i ght s t o f our musi cal composi t i ons t hat Def endant s

Karen Recor ds, I nc. and Karen Publ i shi ng I nc. owned by

i ndi vi dual Def endant s I sabel Rodr i guez and husband Bi enveni do

Rodr i guez( col l ect i vel y, Def endant s) used on r ecor ds t hey

r el eased between 1999 and 2001. ( J udgment at 2. ) Begi nni ng i n

1998, EMI i ni t i at ed sever al l egal act i ons agai nst Def endant s f or

copyr i ght i nf r i ngement based on unpai d r oyal t i es f or numer ous

composi t i ons, i ncl udi ng t he f our at i ssue i n t hi s acti on. ( I d. )

EMI f i l ed t hi s sui t i n 2005. Fol l owi ng di scover y i n 2008,

par t i es f i l ed cr oss- mot i ons f or summar y j udgment . ( I d. at 3. )

I n March 2009, t he Cour t grant ed summary j udgment t o EMI wi t h

r espect t o cer t ai n of i t s cl ai ms, speci f i cal l y t hat EMI had

t er mi nat ed Def endant s compul sory l i censes to cer t ai n of t he

composi t i ons, and t hat t he Def endant s never obt ai ned a l i cense

t o t he r emai ni ng composi t i on. ( I d. at 3. ) I n 2011, t he Cour t

f ound wi l l f ul copyr i ght i nf r i ngement , and gr ant ed Pl ai nt i f f s a

$100, 000 j udgment .



3/10

3

Def endant s f i l ed t hi s mot i on t o set asi de t he j udgment on

August 15, 2012. ( See Memor andum of Law i n Suppor t of

Def endant s Mot i on t o Set Asi de J udgment [ dkt . no. 130] ( Def .

Memo) . ) Def endants move t o set asi de t he j udgment on t he

gr ounds t hat newl y di scover ed evi dence shows t hat Pl ai nt i f f has

no di r ect owner shi p i nt er est i n t he copyr i ght s over whi ch i t has

sued because those r i ght s are owned by subsi di ar i es of t he

Pl ai nt i f f who wer e never j oi ned t o t he act i on. ( Def . Memo at

1. ) Thus, Def endant s ar gue, Pl ai nt i f f s l acked st andi ng t o br i ng

t he act i on. ( I d. ) Def endant s move t o vacate t he j udgment

pur suant t o Feder al Rul e of Ci vi l Pr ocedur e 60( b) ( 1) , ( 3) ,

and ( 4) .

I I . DI SCUSSI ONa. Legal St andard

Under Rul e 60( b) , a di st r i ct cour t may r el i eve a par t y f r om

a f i nal j udgment or or der f or , among ot her s, t he f ol l owi ng

r easons: ( 1) mi st ake, i nadver t ence, sur pr i se, or excusabl e

negl ect; ( 3) f r aud ( whet her i nt r i nsi c or ext r i nsi c),

mi sr epr esent at i on, or mi sconduct by an opposi ng par t y; or , ( 4)

t he j udgment i s voi d. Mot i ons under Rul e 60( b) are addr essed

t o t he sound di scret i on of t he di st r i ct cour t and ar e gener al l y

gr ant ed onl y upon a showi ng of except i onal ci r cumst ances.

Mendel l ex rel . Vi acom, I nc. v. Gol l ust , 909 F. 2d 724, 731 ( 2d



4/10

4

Ci r . 1990) ( ci t i ng Nemai zer v. Baker , 793 F. 2d 58, 61 ( 2d Ci r .

1986) ) .

Rul e 60( b) ( 1) per mi t s a di st r i ct cour t t o gr ant r el i ef

f r om a j udgment based on mi st ake, i nadver t ence, sur pr i se, or

excusabl e negl ect . J ohnson v. Uni v. of Rochest er Med. Ct r . ,

642 F. 3d 121, 125 ( 2d Ci r . 2011) ( quot i ng Fed. R. Ci v. P.

60( b) ( 1) ) . The Cour t of Appeal s has i nt er pr et ed mi st ake t o

i ncl ude bot h er r or s of a par t y or hi s r epr esent at i ves, see I n r e

Emergency Beacon Corp. , 666 F. 2d 754, 759 ( 2d Ci r . 1981) , and

mi st akes of l aw or f act made by t he di st r i ct cour t , see I n r e

310 Assocs. , 346 F. 3d 31, 35 ( 2d Ci r . 2003) .

Rul e 60( b) ( 4) pr ovi des t hat t he cour t may vacat e a j udgment

i f t he j udgment i s voi d. Fed. R. Ci v. P. 60( b) ( 4) . A

j udgment i s not voi d wi t hi n t he meani ng of Rul e 60( b) ( 4) mer el y

because i t i s er r oneous. I n r e Texl on Cor p. , 596 F. 2d 1092,

1099 ( 2d Ci r . 1979) ( ci t i ng 11 Wr i ght & Mi l l er , Feder al Pr act i ce

and Procedur es 2862, at 198 ( 1973) ) . A j udgment i s voi d onl y

i f t he cour t t hat r ender ed i t l acked j ur i sdi ct i on of t he subj ect

mat t er , or of t he par t i es, or i f i t act ed i n a manner

i nconsi st ent wi t h due pr ocess of l aw. Gr ace v. Bank Leumi

Tr ust Co. of N. Y. , 443 F. 3d 180, 193 ( 2d Ci r . 2006) ( quot i ng

Texl on, 596 F. 2d at 1099) .



5/10

5

Fi nal l y, even wher e a movant can demonst r at e t hat one of

t he enumer at ed gr ounds i n Rul e 60( b) appl i es, i n or der t o

pr evai l t he movant must st i l l demonst r at e a st r ong case t hat t he

movant has a mer i t or i ous cl ai m. Uni t ed St at es v. Bi l l i ni , No.

99 Cr . 156, 2006 WL 3457834, at *2 ( S. D. N. Y. Nov. 22, 2006)

( ci t i ng Uni t ed St at es v. Ci r ami , 563 F. 2d 26, 35 ( 2d Ci r .

1977) ) ; accor d Snyman v. W. A. Baum Co. , I nc. , 360 F. App x 251,

254 ( 2d Ci r . 2010) ( [ T] he di st r i ct cour t may pr oper l y consi der

t he mer i t s of t he under l yi ng act i on i n det er mi ni ng whet her t o

gr ant a mot i on pur suant t o Rul e 60( b) . ) .

b. Anal ysi sA cl ai m t hat a par t y l acks st andi ng t o br i ng sui t i s an

at t ack on a cour t s subj ect mat t er j ur i sdi ct i on over t hat par t y.

Bender v. Wi l l i amspor t Ar ea Sch. Di st . , 475 U. S. 534, 54142

( 1986) . St andi ng i s not subj ect t o wai ver , and t he cour t i s

obl i gat ed t o addr ess s t andi ng even i n t he absence of t he i ssue

bei ng r ai sed by t he par t i es t hemsel ves. Uni t ed St at es v. Hays,

515 U. S. 737, 742 ( 1995) . Lack of st andi ng of t he par t y

br i ngi ng sui t woul d r esul t i n a l ack of j ur i sdi cti on of t he

Cour t t o hear t he mat t er and woul d r equi r e a di smi ssal of t he

act i on. See Luj an v. Def ender s of Wi l dl i f e, 504 U. S. 555, 560

61 ( 1992) ; Abor t i on Ri ght s Mobi l i zat i on, I nc. v. Baker , 885 F. 2d

1020, 1023 ( 2d Ci r . 1989) . Pl ai nt i f f s st andi ng and owner shi p



6/10

6

i nt er est s i n t he copyr i ght s at i ssue wer e never chal l enged or

anal yzed by t he cour t . ( Def . Memo at 3. ) Thus, t hi s i ssue i s

r i pe f or r evi ew pur suant t o a Rul e 60 mot i on f or

r econsi der at i on. See I n r e Bul k Oi l ( USA) I nc. , No. 93 Ci v.

4492, 4494, 2007 WL 1121739, at *10 ( S. D. N. Y. Apr . 11, 2007) .

Pl ai nt i f f does not di sput e t hat i t does not have, and has

never had, di r ect owner shi p of any of t he copyr i ght s at i ssue i n

t hi s l awsui t but ar gues t hat t he r i ght s at i ssue ar e owned by

whol l y- owned subsi di ar i es of Pl ai nt i f f or ent i t i es on behal f

of whi ch Pl ai nt i f f was aut hor i zed t o act . ( See Let t er f r om Nei l

J . Sal t zman, Esq. , Sept . 7, 2012 [ dkt . no. 132] ( Def . Supp.

Memo) , at 1; Pl ai nt i f f s Memor andum i n Opposi t i on t o

Def endant s Mot i on, Sept . 27, 2012 [ dkt . no. 133] ( Pl . Opp. ) ,

at 3. ) Copyr i ght cer t i f i cat i on not i ces pr ovi ded by Pl ai nt i f f

demonst r ate t hat Pl ai nt i f f i s not t he named owner of t he

copyr i ght s. ( Decl . of J or dan Gr eenber ger i n Opposi t i on t o

Mot i on t o Set Asi de and St ay Enf orcement of J udgment , Sept . 27,

2012 [ dkt . no. 143] , at Ex. 3. ) Pl ai nt i f f has al so not

at t empt ed t o j oi n t he subsi di ar i es t hat do hol d t he r i ght s t o

t he composi t i ons at i ssue as r eal par t i es i n i nt er est pur suant

t o Fed. R. Ci v. P. 17 unt i l t hi s t i me. ( Def . Supp. Memo at 1. )

There i s suppor t f r om deci si ons i n t hi s ci r cui t f or t he

hol di ng t hat a parent company l acks st andi ng t o br i ng cl ai ms on



7/10

7

behal f of i t s subsi di ar y. See, e. g. , Fei nber g v. Kat z, No. 99

Ci v. 45, 2002 WL 1751135, at *6 (S. D. N. Y. J ul y 26, 2002) ; Di esel

Sys. , Lt d. v. Yi p Shi ng Di esel Eng g Co. , Lt d. , 861 F. Supp.

179, 181 ( E. D. N. Y. 1994) ; Br oss Ut i l s. Ser v. Cor p. v.

Aboubshai t , 618 F. Supp. 1442, 1445 ( S. D. N. Y. 1985) . Thi s

concl usi on f ol l ows f r om t he pr i nci pl e t hat a par ent cor por at i on

cannot cr eat e a subsi di ar y and t hen i gnor e i t s separ at e

corporat e exi st ence whenever i t woul d be advant ageous t o the

parent . Fei nberg, 2002 WL 1751135 at *6 ( quot i ng Pa. Eng g

Cor p. v. I sl i p Res. Recover y Agency, 710 F. Supp. 456, 465

( E. D. N. Y. 1989) ) . Pl ai nt i f f s do not pr ovi de i n t hei r paper s a

ci t at i on t o a case hol di ng ot her wi se. Al t hough Pl ai nt i f f ar gues

t hat i t was aut hor i zed t o act on t he copyr i ght cl ai mant s

behal f , ( Pl . Opp. at 3) , t he l aw r equi r es mor e t han an assurance

of aut hor i zat i on t o conf er Ar t i cl e I I I st andi ng upon a par t y.

I n l i ght of t he r ecent l y unear t hed det er mi nat i on t hat

Pl ai nt i f f l acks of st andi ng, Rul es 60( b) ( 1) and 60( b) ( 4) pr ovi de

appr opr i ate bases i n t hi s case t o vacat e t he j udgment . The

mi st ake i n t hi s case was t hat al l par t i es and t he Cour t

assumed j ur i sdi cti on over Pl ai nt i f f based on Pl ai nt i f f s

r epr esent at i ons t hat i t was t he owner of t he copyr i ght s at

i ssue. Al t hough Def endant coul d have r ai sed t hi s i ssue at an

ear l i er st age i n t he pr oceedi ng, and even admi t t ed t hat



8/10

8

Pl ai nt i f f cont r ol l ed t he copyr i ght s at i ssue, ( Pl . Opp. at 79,

12) , st andi ng cannot be wai ved by ei t her part y, and t he Cour t

has an obl i gat i on t o r ai se t he mat t er sua spont e. See Mancuso

v. Consol . Edi son Co. of N. Y. , 130 F. Supp. 2d 584, 58889

( S. D. N. Y. 2001) . Because of t hi s j ur i sdi cti onal f l aw, t he

j udgment i s voi d.

Fur t her , al t hough Pl ai nt i f f has at t empt ed t o pr ovi de

r at i f i cat i on by the subsi di ar y owner s of t he copyr i ght s, or t o

now j oi n t hose subsi di ar i es as par t i es i n r eal i nt er est pur suant

t o Fed. R. Ci v. P. 17, ( Pl . Opp. at 1213) , Rul e 17 r equi r es

t hat j oi nder t o be made wi t hi n a reasonabl e t i me af t er an

obj ect i on i s r ai sed, and t he par t y must have a r easonabl e basi s

f or nami ng t he wr ong par t y at t he out set . See Advanced

Magnet i cs, I nc. v. Bayf r ont Par t ner s, I nc. , 106 F. 3d 11, 20 ( 2d

Ci r . 1997) ( [ T] he di st r i ct cour t r et ai ns some di scret i on t o

di smi ss an act i on where t here was no sembl ance of any r easonabl e

basi s f or t he nami ng of an i ncor r ect par t y . . . . ) .

Def endant s st at e t hat t hey al er t ed Pl ai nt i f f t o t he

j ur i sdi ct i onal def ect i n Apr i l 2012, onl y t o be di r ect ed i n

ci r cl es t o t he or i gi nal copyr i ght not i ces and ot her sour ces over

t he cour se of sever al mont hs. ( See Decl . of Nei l J . Sal t zman i n

Support of Def endant s Mot i on t o Set Asi de J udgment , Aug. 15,

2012, [ dkt. no. 129] , at Ex. B. ) Pl ai nt i f f s counsel , who has



9/10

9

been r epr esent i ng Pl ai nt i f f t hr oughout t he ent i r e cour se of t hi s

l i t i gat i on begi nni ng i n 2005, di d not seek t o remedy t he

si t uat i on pr ocedur al l y. Thus, t he r easonabl e per i od of t i me f or

j oi nder of t he subsi di ar i es has passed. Addi t i onal l y, Pl ai nt i f f

has not i dent i f i ed a r easonabl e basi s f or f ai l i ng t o name t he

subs i di ar i es as pl ai nt i f f s i ni t i al l y. The i dent i t i es of t he

r eal par t i es i n i nt er est have been known t o Pl ai nt i f f si nce t he

i ni t i at i on of t he l awsui t , as demonst r at ed i n t he copyr i ght

paper s Pl ai nt i f f submi t t ed t o t he cour t . ( See Decl . of Chr i st os

P. Badavas, Mar . 14, 2008 [ dkt . no. 57] , at Exs. G- J . )

Fi nal l y, as st at ed above, Def endant s argument t hat

Pl ai nt i f f l acks st andi ng i s a mer i t or i ous def ense, and t hus

sat i sf i es t he r equi r ement of Rul e 60( b) t hat a movi ng part y must

demonst r ate a mer i t or i ous cl ai m. Bi l l i ni , 2006 WL 3457834, at

*2.



10/10

I I I . CONCLUSIONFor the foregoing reasons , Defendants ' motion [dkt . no.

128] i s GRANTED, the judgment [dkt . no. 110] i s VACATED, and thecomplaint i s DISMISSED. In l i gh t of the judgment be ingvacated, a i n t i f f ' s pending motion fo r a t to rne y ' s fees [dkt .no. 114] i s denied as moot.

SO ORDERED.

Dated: New York, New YorkJune A, 2013 ~ A l A { ) ' , y J ~UNITED STATES DISTRICT JUDGE

10


EMI v. Karen Records

Documents

Transcript of EMI v. Karen Records