The opinion of the court was delivered by: BONSAL
Plaintiff, Vanguard Recording Society, Inc. (Vanguard), instituted this action in Supreme Court, New York County, based on a contract between it and the defendant Jim Kweskin (Kweskin) dated April 17, 1963. Thereafter, on August 17, 1967, defendants Warner Bros. Records, Inc. (Warner Bros.) and Kweskin removed the action to this court on the ground of diversity of citizenship.
Vanguard moves pursuant to Rule 65, F.R.Civ.P., for a preliminary injunction enjoining:
a) defendants Kweskin and Warner Bros. from performing any agreements between them for the recording and sale of phonograph records embodying the performances of Kweskin;
b) defendant Warner Bros. from entering agreements with third persons for the production or distribution of phonograph records embodying the performances of Kweskin, from advertising or using the name and likeness of Kweskin with regard to phonograph records, and from interfering with the exclusive recording agreement that Vanguard claims exists between it and Kweskin;
c) defendant Warner Bros., its licensees and agents from manufacturing, selling or distributing any phonograph records embodying the performances of Kweskin, and ordering Warner Bros. to destroy any master tape recordings or other material embodying the performances of Kweskin.
Plaintiff's motion for a preliminary injunction is denied.
Kweskin is the leader of a musical group called "Jim Kweskin and The Jug Band," or "Jim Kweskin Jug Band" (hereinafter referred to as the Jug Band). The Jug Band entered into a recording contract with Vanguard dated April 1, 1963 (the Jug Band contract), that provided for an initial term until April 30, 1964 and provided for two options, each permitting Vanguard to extend the contract for one year by giving the Jug Band written notice at least 30 days prior to the expiration of the existing term of the contract. Thereafter, Kweskin entered into the recording contract with Vanguard dated April 17, 1963 (the solo contract), that also provided for an initial term until April 30, 1964 and for two options on the same terms as those in the Jug Band contract. In other respects, the provisions in the Jug Band contract are the same as those in the solo contract. Both contracts provide in part as follows:
"1 - We [Vanguard] hereby agree to employ your personal services as a recording artist for the purpose of making phonograph records and you [the Jug Band and Kweskin respectively] hereby agree to record solely and exclusively for us according to the terms and provisions of this agreement.
"2 - * * * A minimum of sixteen 45 or 78 rpm record sides shall be recorded during the initial term of this agreement, and additional recordings shall be made at our election. The musical compositions to be recorded shall be mutually agreed upon between you and us, and each recording shall be subject to our approval as satisfactory for manufacture and sale. We shall have the right to call upon you to repeat any work until a satisfactory master recording has been made.
"6 - During the term of this agreement you will not perform for the purpose of making phonograph records for any person other than us, * * * and you acknowledge that your services are unique and extraordinary."
"11 - If, by reason of illness, injury, accident or refusal to work, you fail to perform for us in accordance with the provisions of paragraph 2 of this agreement, * * * without limiting our rights in any such event, we shall have the option without liability to suspend operation of paragraph 2 of this agreement for the duration of any such contingency by giving you written notice thereof; and, at our election, a period of time equal to the duration of such suspension shall be added to the end of the then current period of the term hereof, and then such period and the term of this agreement shall be accordingly extended."
On February 23, 1967, Warner Bros. entered into a recording contract with the Jug Band (the Warner Bros. contract), and since that date, an LP album with recordings of the Jug Band has been made and 11,000 to 12,000 of the albums have been distributed at a cost of some $21,000. According to the affidavit of its Vice-President, Warner Bros. is a financially solvent ...