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MARCY PLAYGROUND, INC. v. CAPITOL RECORDS

July 13, 1998

MARCY PLAYGROUND, INC., et al., Plaintiffs, against CAPITOL RECORDS, INC., et al., Defendants.


The opinion of the court was delivered by: KAPLAN

MEMORANDUM OPINION

 LEWIS A. KAPLAN, District Judge.

 Plaintiffs here seek to enjoin the continued distribution of the hit album entitled Marcy Playground and the "single" entitled Sex and Candy on the theory that these recordings have been released without crediting the plaintiffs for their alleged contributions as producers and therefore violate the Lanham Act and plaintiffs' contractual rights. The Court concludes that plaintiffs have failed to show the necessary threat of immediate and irreparable injury both because they delayed too long in seeking interlocutory relief and because the alleged irreparable injury is speculative. In any case, plaintiffs have not shown a strong likelihood of success on the merits because the facts critical to determination of the action are sharply disputed and have failed to demonstrate that the balance of hardships tips decidedly in their favor. Accordingly, the motion for a preliminary injunction is denied.

 Facts

 Background

 Plaintiff Jared Kotler and defendant John Wozniak meet as high school classmates and budding musicians in the mid-1980's. Both aspired to careers in the music business. Their paths diverged, but they resumed contact in or about 1993 or 1994. Although the details of Kotler's right to have done so are hotly disputed, Kotler obtained a "demo" recording which included, perhaps among other things, certain of Wozniak's compositions, and submitted it to EMI-America, then a significant record company. While this did not result in a deal, Don Rubin of EMI expressed interest in considering additional material, although the parties disagree as to whether the additional material in which he was interested consisted only of Wozniak's music or of the joint efforts of Wozniak and Kotler.

 In 1995, Wozniak moved to New York. He and Kotler began playing together on an almost daily basis, Wozniak on guitar and Kotler on drums. According to Kotler, they agreed that the pair would perform and record together as a two-member musical group known as "Marcy Playground," that Kotler would be the producer of the project, and that Jeff White, Kotler's cousin and the financier of their efforts, would be the executive producer. Wozniak, on the other hand, contends that he coined and began using the name "Marcy Playground" years before, although he does not directly dispute the other aspects of Kotler's account of this phase of their endeavors.

 Whatever the precise arrangements among Kotler, White and Wozniak, the group, assisted by studio musicians, participated in a significant recording session in the spring of 1995 at Sabella Recording Studios in Roslyn, New York. The session was financed by White. The group recorded 13 to 15 compositions by Wozniak, with Wozniak on guitar and Kotler on drums, although the parties are at loggerheads concerning who "produced" the recording.

 The EMI Deal and the Formation of Marcy Playground, Inc.

 The product of the Sabella Recording session was another "demo" which was submitted to EMI. This led to a live audition on May 31, 1995 at which EMI executives expressed an intention to sign a record deal with Marcy Playground, which of course then included Kotler as its drummer. Wozniak, to be sure, contends that he was the "key artist" whose presence was the real attraction to EMI.

 Although success appears to have been on the horizon, Wozniak contends that it had become increasingly clear to him by mid-1995 that Marcy Playground was being harmed because Kotler's skills as a drummer were not at a professional level. Although it is unclear whether there a connection with Wozniak's claimed dissatisfaction with Kotler's drumming, he and Kotler recruited Dylan Keefe, a bass guitarist, and Keefe began playing with them over the summer of 1995.

 At about this time, White suggested that the group retain a music industry lawyer in connection with the EMI recording deal, and the trio -- White,Kotler and Wozniak-retained Fred Davis for that purpose. Marcy Playground, Inc. ("MPI"), the corporate plaintiff was formed, with Kotler and Wozniak each allegedly owning 45 percent of the shares and White the balance, to exploit the products of the group -- although Wozniak claims that he was neither consulted nor advised concerning the implications of this step and asserts that Davis had a conflict of interest in representing all three in this connection.

 On October 27, 1995, MPI entered into a recording contract, signed on its behalf by Wozniak, with EMI pursuant to which it granted EMI the exclusive recording artist services of Wozniak and Kotler performing as Marcy Playground. The contract was accompanied by a so-called Inducement Letter in which MPI represented and agreed that it possessed the exclusive right to the services of Wozniak and Kotler as recording artists and that it was the sole owner of their product to date including what the parties have referred to as the Original Marcy ...


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