Bit Parts

North Carolina Federal Court Dismisses Suit by Sellers Against Lawyers for Music Company Purchaser

The U.S. District Court for the Middle District of North Carolina decided that the sellers of a music company weren't third-party beneficiaries of advice given by the buyer's attorney to the buyer. Pearson v. Gardere Wynne Sewell LLP. Curtis and Robert Pearson sued the attorneys for Brooks Mays Music Co. over the latter's purchase of Curtis B. Pearson Music. The Pearsons claimed they were unaware the purchase agreement contained a clause stating that installment payments to the sellers “would terminate in the event such person [the Pearsons] ceases to be employed by [Brook Mays].” Dismissing the Pearsons' suit, District Judge James A. Beaty Jr. noted, among other things, that in “attempting to hold opposing counsel liable for actions taken during an arms-length business transaction ' Plaintiffs have not submitted any evidence that the express language of the professional services contract between Brook Mays and its attorneys includes any express language indicating any intent to directly benefit Plaintiffs.” Judge Beaty then ruled on the Pearsons' claim for fraud, “there exists no evidence of any intent to hide the Purchase Agreement from Plaintiffs or otherwise impair Plaintiffs' access to the Purchase Agreement at any time.” The district court also found for the Brooks Mays lawyers on the Pearson's claim of negligent misrepresentation. Judge Beaty observed: “Plaintiffs understood that Defendants represented only the interests of Brook Mays, and that Plaintiffs had their own independent counsel to review the drafted documents throughout the transaction.”

Sixth Circuit Has Jurisdiction over Declaratory Claim for Song Authorship

The U.S. Court of Appeals for the Sixth Circuit reversed a district court dismissal of an action by songwriter Chris Sevier seeking a declaratory judgment of co-authorship of two songs. In its decision, the appeals court stated it was for the first time adopting the view, recognized among other federal circuits, that a dispute over authorship of a copyright arises under federal, rather than state, law. Severe Records LLC v. Rich, 09-6175. Sevier sued Shanna Crooks, whom he had helped with artist development, Muzik Mafia and its principal John Rich, and Mafia affiliated companies. The Sixth Circuit noted the case involved “what Sevier characterized as a 'novel' claim of copyright infringement against Crooks and others for preventing Plaintiffs from commercially exploiting the two songs ['Better' and 'Watching Me Leave'] through threats contained in cease-and-desist letters and requests to music retailers that the songs not be offered for sale.” First, affirming the dismissal ' by the U.S. District Court for Middle District of Tennessee ' of Sevier's copyright infringement claim against the defendants, the Sixth Circuit emphasized: “Plaintiffs' allegation that 'Crooks attempted to transfer and did transfer an interest in the composition 'Better', [sic] which she did not own, to the Rich Defendants' is not the same thing as creating an improper copy of 'Better.' We read nothing in the plain language of the Copyright Act, 17 U.S.C. '106, to suggest that such a transfer constitutes copyright infringement.” But finding that Sevier's bid for a declaratory judgment stated a federal claim, the appeals court noted: “Defendants' numerous cease-and-desist letters, attached to the amended complaint, certainly suggest a dispute over authorship ' namely, whether Sevier or Crooks or both authored the songs in question. They charge Sevier with conduct violative of the Copyright Act without acknowledging his asserted authorship of the songs.” The appeals court added: “Neither Defendants nor the district court have identified any supposed contractual [state law] dispute that is really at the heart of the declaratory judgment claim. Where Defendants persisted in accusing Sevier of copyright infringement despite his assertions of authorship, they can hardly be heard to complain, 'But we didn't really mean it,' when they are haled into federal court on a claim for declaration of non-infringement. Consequently, viewing the allegations in the light most favorable to Plaintiffs, we conclude that Defendants' cease-and-desist letters were premised on an authorship dispute; no other explanation seems plausible from the face of the amended complaint.”

North Carolina Federal Court Dismisses Suit by Sellers Against Lawyers for Music Company Purchaser

The U.S. District Court for the Middle District of North Carolina decided that the sellers of a music company weren't third-party beneficiaries of advice given by the buyer's attorney to the buyer. Pearson v. Gardere Wynne Sewell LLP. Curtis and Robert Pearson sued the attorneys for Brooks Mays Music Co. over the latter's purchase of Curtis B. Pearson Music. The Pearsons claimed they were unaware the purchase agreement contained a clause stating that installment payments to the sellers “would terminate in the event such person [the Pearsons] ceases to be employed by [Brook Mays].” Dismissing the Pearsons' suit, District Judge James A. Beaty Jr. noted, among other things, that in “attempting to hold opposing counsel liable for actions taken during an arms-length business transaction ' Plaintiffs have not submitted any evidence that the express language of the professional services contract between Brook Mays and its attorneys includes any express language indicating any intent to directly benefit Plaintiffs.” Judge Beaty then ruled on the Pearsons' claim for fraud, “there exists no evidence of any intent to hide the Purchase Agreement from Plaintiffs or otherwise impair Plaintiffs' access to the Purchase Agreement at any time.” The district court also found for the Brooks Mays lawyers on the Pearson's claim of negligent misrepresentation. Judge Beaty observed: “Plaintiffs understood that Defendants represented only the interests of Brook Mays, and that Plaintiffs had their own independent counsel to review the drafted documents throughout the transaction.”

Sixth Circuit Has Jurisdiction over Declaratory Claim for Song Authorship

The U.S. Court of Appeals for the Sixth Circuit reversed a district court dismissal of an action by songwriter Chris Sevier seeking a declaratory judgment of co-authorship of two songs. In its decision, the appeals court stated it was for the first time adopting the view, recognized among other federal circuits, that a dispute over authorship of a copyright arises under federal, rather than state, law. Severe Records LLC v. Rich, 09-6175. Sevier sued Shanna Crooks, whom he had helped with artist development, Muzik Mafia and its principal John Rich, and Mafia affiliated companies. The Sixth Circuit noted the case involved “what Sevier characterized as a 'novel' claim of copyright infringement against Crooks and others for preventing Plaintiffs from commercially exploiting the two songs ['Better' and 'Watching Me Leave'] through threats contained in cease-and-desist letters and requests to music retailers that the songs not be offered for sale.” First, affirming the dismissal ' by the U.S. District Court for Middle District of Tennessee ' of Sevier's copyright infringement claim against the defendants, the Sixth Circuit emphasized: “Plaintiffs' allegation that 'Crooks attempted to transfer and did transfer an interest in the composition 'Better', [sic] which she did not own, to the Rich Defendants' is not the same thing as creating an improper copy of 'Better.' We read nothing in the plain language of the Copyright Act, 17 U.S.C. '106, to suggest that such a transfer constitutes copyright infringement.” But finding that Sevier's bid for a declaratory judgment stated a federal claim, the appeals court noted: “Defendants' numerous cease-and-desist letters, attached to the amended complaint, certainly suggest a dispute over authorship ' namely, whether Sevier or Crooks or both authored the songs in question. They charge Sevier with conduct violative of the Copyright Act without acknowledging his asserted authorship of the songs.” The appeals court added: “Neither Defendants nor the district court have identified any supposed contractual [state law] dispute that is really at the heart of the declaratory judgment claim. Where Defendants persisted in accusing Sevier of copyright infringement despite his assertions of authorship, they can hardly be heard to complain, 'But we didn't really mean it,' when they are haled into federal court on a claim for declaration of non-infringement. Consequently, viewing the allegations in the light most favorable to Plaintiffs, we conclude that Defendants' cease-and-desist letters were premised on an authorship dispute; no other explanation seems plausible from the face of the amended complaint.”