CAMEO CLIPS

Federal copyright law didn't preempt state law claims brought over a settlement agreement for use of a song, the US District Court for the Eastern District of California has decided. (Johnson v. Tuff-n-Rumble Management Inc.,) 02-1734 (Dec. 13). The district court had previously found that the plaintiffs in part transferred part ownership of the song 'It Ain't My Fault' to Tuff-n-Rumble, which then entered into a settlement agreement with No Limit Records to allow the latter to license the song to third parties. The plaintiffs later filed suit in the Civil District Court for the Parish of New Orleans seeking damages and to nullify the settlement agreement. After co-defendants Priority Records and Sony Music Entertainment removed the case to federal court on preemption grounds, the plaintiffs moved to remand the case back to the state court. Granting the motion to remand, the district court found that 'It Ain't My Fault' fell within the subject matter of copyright, but remanded the case noting, 'The Court finds that all of plaintiffs' claims contain extra elements that render the claims qualitatively different from a copyright infringement claim. Plaintiffs' claims as to no meeting of the minds, fraud, and fraud in the inducement attack the validity of the contract by which [co-plaintiff Joseph] Johnson transferred an interest in the song It Ain't My Fault to Tuff City. They amount to a dispute over a contract, the subject of which happens to be a copyrighted work, instead of a dispute that requires application of copyright law, such as one involving co-authorship and joint work issues. 'Further, plaintiffs' claims of breach of contract, breach of mandate, and unjust enrichment raise issues over failure to provide accountings, royalty payments, and settlement proceeds. None of these claims arises directly under the Copyright Act, and their resolution does not depend on the application of the Copyright Act. ' Lastly, according to the Fifth Circuit [within which the district court resides],plaintiffs' claims of unfair trade practices, unfair competition, and misappropriation under the Louisiana Unfair Trade Practices Act require proof of an extra element of fraud, misrepresentation, or other unethical conduct.'In its first review of a rate-setting pursuant to the federal BMI consent decree, the US Court of Appeals for the Second Circuit has decided that the fair market value for use of the performing rights society's music by Music Choice over cable and satellite TV should be the price that retail customers pay for the TV-delivered music. U.S. v. Broadcast Music Inc., 01-6183 (Jan. 14). Under the consent decree, the US District Court for the Southern District of New York functions as the rate-setting court for the music that BMI monitors. The district court had rejected BMI's proposed blanket license fee of 3.75% of Music Choice's gross revenues from wholesale distribution to cable and satellite operators ' a percentage that took into consideration cable/satellite operator retail revenues. The court ruled instead that Music Choice should pay BMI 1.75% of wholesale gross (also the percentage BMI and Music Choice negotiated for Internet uses). The district court reasoned that cable/satellite retail revenues did not properly indicate fair market value because subscribers were paying for materials and services that music composers didn't provide, such as transmission machinery and delivery capability. Vacating and remanding, the appeals court concluded 'what retail customers pay to receive the product or service in question (in this case, the recorded music) seems to us to be an excellent indicator of its fair market value. While in some instances there may be reason to approximate fair market value on the basis of something other than the prices paid by consumers, in the absence of factors suggesting a different measure the price willing buyers and sellers agree upon in arm's-length transactions appears to be the best measure.'EMI Music Mexico was subject to personal jurisdiction in a personal injury suit filed in a Texas court over a car accident that occurred while EMI Music Mexico employees drove members of a Texas band through Mexico, the Court of Appeals of Texas, Thirteenth District, has ruled. EMI Music Mexico v. Rodriguez, 13-01-867-CV (Jan. 30). EMI Music Mexico's regional marketing manager had arranged a promotional tour for Intocable in Mexico. Two EMI Music Mexico employees drove from Mexico to Texas to pick up the band, but several members of the group and its entourage were killed or injured in an accident that happened on a Mexican highway. EMI Music Mexico had no offices or agents in Texas, but the court of appeals concluded that Texas had personal jurisdiction over the record label in part because EMI Music Mexico had 'purposefully directed its activities toward Texas by sending its employee[s] ' to Texas to pick up the band.'An English-based operator of two movie channels wasn't entitled to an expedited determination of its appeal of a bankruptcy court order that allowed a Dutch-based communications company in Chapter 11 bankruptcy in New York to reject an agreement for distribution of the movie channels on cable systems in the Netherlands and Belgium, a Manhattan federal court has held. In re United Pan-Europe Communications N.V., 02-16020 (Jan. 30). Europe Movieco Partners Ltd. claimed that extending Sec. 365 of the Bankruptcy Code to permit rejection of a contract between Movieco and Dutch debtor United Pan-Europe, to be performed overseas, violated international comity. But denying Movieco's request for an expedited determination, the district court concluded, 'The only potential 'irreparable harm' cited is the conclusory allegation that 'reputational harm' will ensue if the Agreement is rejected. There are no specific allegations as to what Movieco's current reputation is in the Benelux countries and how that reputation would be affected by the rejection of the Agreement. Nor has Movieco alleged that it could not in any case obtain a contract with another corporation that would provide similar services as UPC had done ' and perhaps lead to a better payment history.'

Federal copyright law didn't preempt state law claims brought over a settlement agreement for use of a song, the US District Court for the Eastern District of California has decided. (Johnson v. Tuff-n-Rumble Management Inc.,) 02-1734 (Dec. 13). The district court had previously found that the plaintiffs in part transferred part ownership of the song 'It Ain't My Fault' to Tuff-n-Rumble, which then entered into a settlement agreement with No Limit Records to allow the latter to license the song to third parties. The plaintiffs later filed suit in the Civil District Court for the Parish of New Orleans seeking damages and to nullify the settlement agreement. After co-defendants Priority Records and Sony Music Entertainment removed the case to federal court on preemption grounds, the plaintiffs moved to remand the case back to the state court. Granting the motion to remand, the district court found that 'It Ain't My Fault' fell within the subject matter of copyright, but remanded the case noting, 'The Court finds that all of plaintiffs' claims contain extra elements that render the claims qualitatively different from a copyright infringement claim. Plaintiffs' claims as to no meeting of the minds, fraud, and fraud in the inducement attack the validity of the contract by which [co-plaintiff Joseph] Johnson transferred an interest in the song It Ain't My Fault to Tuff City. They amount to a dispute over a contract, the subject of which happens to be a copyrighted work, instead of a dispute that requires application of copyright law, such as one involving co-authorship and joint work issues. 'Further, plaintiffs' claims of breach of contract, breach of mandate, and unjust enrichment raise issues over failure to provide accountings, royalty payments, and settlement proceeds. None of these claims arises directly under the Copyright Act, and their resolution does not depend on the application of the Copyright Act. ' Lastly, according to the Fifth Circuit [within which the district court resides],plaintiffs' claims of unfair trade practices, unfair competition, and misappropriation under the Louisiana Unfair Trade Practices Act require proof of an extra element of fraud, misrepresentation, or other unethical conduct.'In its first review of a rate-setting pursuant to the federal BMI consent decree, the US Court of Appeals for the Second Circuit has decided that the fair market value for use of the performing rights society's music by Music Choice over cable and satellite TV should be the price that retail customers pay for the TV-delivered music. U.S. v. Broadcast Music Inc., 01-6183 (Jan. 14). Under the consent decree, the US District Court for the Southern District of New York functions as the rate-setting court for the music that BMI monitors. The district court had rejected BMI's proposed blanket license fee of 3.75% of Music Choice's gross revenues from wholesale distribution to cable and satellite operators ' a percentage that took into consideration cable/satellite operator retail revenues. The court ruled instead that Music Choice should pay BMI 1.75% of wholesale gross (also the percentage BMI and Music Choice negotiated for Internet uses). The district court reasoned that cable/satellite retail revenues did not properly indicate fair market value because subscribers were paying for materials and services that music composers didn't provide, such as transmission machinery and delivery capability. Vacating and remanding, the appeals court concluded 'what retail customers pay to receive the product or service in question (in this case, the recorded music) seems to us to be an excellent indicator of its fair market value. While in some instances there may be reason to approximate fair market value on the basis of something other than the prices paid by consumers, in the absence of factors suggesting a different measure the price willing buyers and sellers agree upon in arm's-length transactions appears to be the best measure.'EMI Music Mexico was subject to personal jurisdiction in a personal injury suit filed in a Texas court over a car accident that occurred while EMI Music Mexico employees drove members of a Texas band through Mexico, the Court of Appeals of Texas, Thirteenth District, has ruled. EMI Music Mexico v. Rodriguez, 13-01-867-CV (Jan. 30). EMI Music Mexico's regional marketing manager had arranged a promotional tour for Intocable in Mexico. Two EMI Music Mexico employees drove from Mexico to Texas to pick up the band, but several members of the group and its entourage were killed or injured in an accident that happened on a Mexican highway. EMI Music Mexico had no offices or agents in Texas, but the court of appeals concluded that Texas had personal jurisdiction over the record label in part because EMI Music Mexico had 'purposefully directed its activities toward Texas by sending its employee[s] ' to Texas to pick up the band.'An English-based operator of two movie channels wasn't entitled to an expedited determination of its appeal of a bankruptcy court order that allowed a Dutch-based communications company in Chapter 11 bankruptcy in New York to reject an agreement for distribution of the movie channels on cable systems in the Netherlands and Belgium, a Manhattan federal court has held. In re United Pan-Europe Communications N.V., 02-16020 (Jan. 30). Europe Movieco Partners Ltd. claimed that extending Sec. 365 of the Bankruptcy Code to permit rejection of a contract between Movieco and Dutch debtor United Pan-Europe, to be performed overseas, violated international comity. But denying Movieco's request for an expedited determination, the district court concluded, 'The only potential 'irreparable harm' cited is the conclusory allegation that 'reputational harm' will ensue if the Agreement is rejected. There are no specific allegations as to what Movieco's current reputation is in the Benelux countries and how that reputation would be affected by the rejection of the Agreement. Nor has Movieco alleged that it could not in any case obtain a contract with another corporation that would provide similar services as UPC had done ' and perhaps lead to a better payment history.'