Clause & Effect

Song-Rights Transfers/Fraud Claims

The U.S. District Court for the Southern District of New York ruled that the owner of an interest in a song failed to show that he reasonably relied on an alleged materially false representation regarding the transfer of his interest in the song ' and thus failed to establish his fraud claim. Jackson v. Broadcast Music Inc., 04 CV 5948 (TPG).

Plaintiff Clarence Jackson, who owned Clamike Music, co-wrote the song “It's a Man's World” with Betty Newsome in 1964. Newsome later sang the melody to soul singer James Brown, who had a hit in 1966 with “It's a Man's Man's Man's World.” Jackson's company and Newsome sued Brown and his publisher, Dynatone Publishing, but the case was settled in 1967, with Clamike receiving a 1/3 interest in “It's a Man's Man's Man's World.”

In the 1990s, Jackson asked his son, Michael, to help deal with Warner-Chappell Music, Dynatone's successor-in-interest, which Clarence claimed had been underpaying him royalties owed under the 1967 settlement agreement. Michael then hired New York attorney William Krasilovsky. In 1997, Clarence Jackson signed two documents allegedly prepared by Krasi-lovsky that affected Clarence's interest in the James Brown hit.

A “Purchase Agreement” that cited “Clarence Jackson DBA CLAMIKE MUSIC PUBLISHING CO. as Seller, and MICHAEL WYNN JACKSON as Purchaser,” provided:

Subject to the terms and conditions set forth in this Agreement, Seller will sell to Purchaser and Purchaser will Purchase at the Closing, all of the business, assets, goodwill, and rights of Seller (“Seller's assets”) including all assets named hereto:

a. All copyrights registered under Seller and all name and likenesses of the Seller
b. The name CLAMIKE
c. Contracts between music writers and Seller
d. Agreements and/or contracts with music publishers, distributors and music houses. Seller's Assets shall be conveyed free and clear of all liens and liabilities and encumbrances.

A second document, in the form of a “To whom it may concern” letter, stated in part:

By this letter, I confirm my intent to sell my assets of said company. These assets are:

1. Copyright of “it's a man's man's man's world” and all name similarities of this title, and all other copyrights.
2. Use of the name CLAMIKE
3. Contracts between Betty Newsome and Clamike Music Publishing Co. and all other writers.
4. Agreements and/or contracts with any other music publisher or distributor.

In 1998, Michael sold Clamike's interest in “It's a Man's Man's Man's World” to a Warner-Chappell subsidiary for $950,000. Michael, as current Clamike owner, signed the agreement, with Clarence's signature allegedly forged.

In addition, as part of a series of documents for BMI to pay Clamike's royalties directly to Warner-Chappell, a 1999 letter containing the signatures of a BMI representative and Michael, and an alleged forgery of Clarence's signature noted:

“This will confirm our understanding with respect to the modification of the agreement dated July 1, 1963 between Clamike Music, a division of Clamike Records, Inc., a New York Corporation (herein called the 'former owner') and Broadcast Music Inc., as modified (herein called the 'basic agreement'):

All right, title, and interest of the former owner in and to the basic agreement and in and to the works embraced thereby has been sold, assigned and transferred to Clamike Music Publishing Co., a division of Clamike Music Publishing, Inc., a New Jersey corporation (herein called the new owner).”

In 2004, Clarence Jackson filed suit in New York state court alleging fraud and conversion. After Warner-Chappell had the case removed to federal court, Jackson added claims of breach of fiduciary duty by the performing rights society Broadcast Music Inc. (BMI) and for copyright infringement. Named defendants also included attorney Krasilovsky. (Michael Jackson was also named as a defendant but not served with process and thus not a party to the action.)

Clarence claimed in part that he thought that the 1997 agreements dealt with a transfer of copyright administration rights, rather than copyright interests.

The district court first found that the fraud claim against Krasilovsky was barred by New York's limitations period of 6 years from the alleged fraud, or 2 years from when a plaintiff discovers or should have discovered an alleged fraud. This was because: Clarence Jackson filed suit in 2004, and the copyright-sale agreements were signed in 1997. Clarence had filed documents in a suit Betty Newsome brought in Manhattan federal court in 2001 that would have given him notice of the alleged fraud. (The Newsome suit was dismissed under the 3-year limitations period of the Copyright Act; Newsome v. Brown, 01-CV-2807 (2005).)

The Jackson district court went on to determine that, in any case, Clarence had failed to show reasonable reliance, noting: “Plaintiff states that Michael misrepresented the content of the 1997 documents as relating solely to copyright administration in order to procure plaintiff's signature. However, both of the one-page documents comprising the 1997 Agreement, which were admittedly signed by plaintiff, clearly and explicitly state that plaintiff was thereby conveying to Michael his rights in Clamike Music Publishing Co. and the Song. Plaintiff could not reasonably have relied on any alleged misrepresentations to the contrary. … Since there is no valid claim that Michael committed fraud in connection with the 1997 Agreement, Krasilovsky cannot be liable for assisting Michael in the commission of fraud.”

And because the 1997 sales agreements were valid, the district court dismissed Clarence's fraud claims against Warner-Chappell and Krasilovsky over the 1998 sales agreement, explaining: “Therefore, no viable fraud claim exists as to that transaction either, as plaintiff may not be defrauded out of an asset that he does not own.” As for BMI, Clarence had made no specific allegations against the performing rights society.

The district court then dismissed Clarence's conversion claim as time-barred by New York's 3-year statute of limitations for that cause of action, as well as the copyright claim because Clarence had given up his copyright interests and the fiduciary-duty claim because Clarence had no copyright interest in the James Brown hit when BMI had begun paying royalties directly to Warner-Chappell.

Song-Rights Transfers/Fraud Claims

The U.S. District Court for the Southern District of New York ruled that the owner of an interest in a song failed to show that he reasonably relied on an alleged materially false representation regarding the transfer of his interest in the song ' and thus failed to establish his fraud claim. Jackson v. Broadcast Music Inc., 04 CV 5948 (TPG).

Plaintiff Clarence Jackson, who owned Clamike Music, co-wrote the song “It's a Man's World” with Betty Newsome in 1964. Newsome later sang the melody to soul singer James Brown, who had a hit in 1966 with “It's a Man's Man's Man's World.” Jackson's company and Newsome sued Brown and his publisher, Dynatone Publishing, but the case was settled in 1967, with Clamike receiving a 1/3 interest in “It's a Man's Man's Man's World.”

In the 1990s, Jackson asked his son, Michael, to help deal with Warner-Chappell Music, Dynatone's successor-in-interest, which Clarence claimed had been underpaying him royalties owed under the 1967 settlement agreement. Michael then hired New York attorney William Krasilovsky. In 1997, Clarence Jackson signed two documents allegedly prepared by Krasi-lovsky that affected Clarence's interest in the James Brown hit.

A “Purchase Agreement” that cited “Clarence Jackson DBA CLAMIKE MUSIC PUBLISHING CO. as Seller, and MICHAEL WYNN JACKSON as Purchaser,” provided:

Subject to the terms and conditions set forth in this Agreement, Seller will sell to Purchaser and Purchaser will Purchase at the Closing, all of the business, assets, goodwill, and rights of Seller (“Seller's assets”) including all assets named hereto:

a. All copyrights registered under Seller and all name and likenesses of the Seller
b. The name CLAMIKE
c. Contracts between music writers and Seller
d. Agreements and/or contracts with music publishers, distributors and music houses. Seller's Assets shall be conveyed free and clear of all liens and liabilities and encumbrances.

A second document, in the form of a “To whom it may concern” letter, stated in part:

By this letter, I confirm my intent to sell my assets of said company. These assets are:

1. Copyright of “it's a man's man's man's world” and all name similarities of this title, and all other copyrights.
2. Use of the name CLAMIKE
3. Contracts between Betty Newsome and Clamike Music Publishing Co. and all other writers.
4. Agreements and/or contracts with any other music publisher or distributor.

In 1998, Michael sold Clamike's interest in “It's a Man's Man's Man's World” to a Warner-Chappell subsidiary for $950,000. Michael, as current Clamike owner, signed the agreement, with Clarence's signature allegedly forged.

In addition, as part of a series of documents for BMI to pay Clamike's royalties directly to Warner-Chappell, a 1999 letter containing the signatures of a BMI representative and Michael, and an alleged forgery of Clarence's signature noted:

“This will confirm our understanding with respect to the modification of the agreement dated July 1, 1963 between Clamike Music, a division of Clamike Records, Inc., a New York Corporation (herein called the 'former owner') and Broadcast Music Inc., as modified (herein called the 'basic agreement'):

All right, title, and interest of the former owner in and to the basic agreement and in and to the works embraced thereby has been sold, assigned and transferred to Clamike Music Publishing Co., a division of Clamike Music Publishing, Inc., a New Jersey corporation (herein called the new owner).”

In 2004, Clarence Jackson filed suit in New York state court alleging fraud and conversion. After Warner-Chappell had the case removed to federal court, Jackson added claims of breach of fiduciary duty by the performing rights society Broadcast Music Inc. (BMI) and for copyright infringement. Named defendants also included attorney Krasilovsky. (Michael Jackson was also named as a defendant but not served with process and thus not a party to the action.)

Clarence claimed in part that he thought that the 1997 agreements dealt with a transfer of copyright administration rights, rather than copyright interests.

The district court first found that the fraud claim against Krasilovsky was barred by New York's limitations period of 6 years from the alleged fraud, or 2 years from when a plaintiff discovers or should have discovered an alleged fraud. This was because: Clarence Jackson filed suit in 2004, and the copyright-sale agreements were signed in 1997. Clarence had filed documents in a suit Betty Newsome brought in Manhattan federal court in 2001 that would have given him notice of the alleged fraud. (The Newsome suit was dismissed under the 3-year limitations period of the Copyright Act; Newsome v. Brown, 01-CV-2807 (2005).)

The Jackson district court went on to determine that, in any case, Clarence had failed to show reasonable reliance, noting: “Plaintiff states that Michael misrepresented the content of the 1997 documents as relating solely to copyright administration in order to procure plaintiff's signature. However, both of the one-page documents comprising the 1997 Agreement, which were admittedly signed by plaintiff, clearly and explicitly state that plaintiff was thereby conveying to Michael his rights in Clamike Music Publishing Co. and the Song. Plaintiff could not reasonably have relied on any alleged misrepresentations to the contrary. … Since there is no valid claim that Michael committed fraud in connection with the 1997 Agreement, Krasilovsky cannot be liable for assisting Michael in the commission of fraud.”

And because the 1997 sales agreements were valid, the district court dismissed Clarence's fraud claims against Warner-Chappell and Krasilovsky over the 1998 sales agreement, explaining: “Therefore, no viable fraud claim exists as to that transaction either, as plaintiff may not be defrauded out of an asset that he does not own.” As for BMI, Clarence had made no specific allegations against the performing rights society.

The district court then dismissed Clarence's conversion claim as time-barred by New York's 3-year statute of limitations for that cause of action, as well as the copyright claim because Clarence had given up his copyright interests and the fiduciary-duty claim because Clarence had no copyright interest in the James Brown hit when BMI had begun paying royalties directly to Warner-Chappell.