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TUFF-N-RUMBLE MANAGEMENT v. SUGARHILL MUSIC PUB.

May 24, 1999

TUFF-N-RUMBLE MANAGEMENT, INC., D/B/A TUFF CITY RECORDS, PLAINTIFF,
v.
SUGARHILL MUSIC PUBLISHING INC., SUGAR HILL RECORDS, LTD., SUGAR HILL RECORDS, INC., SUGAR HILL MUSIC, INC. AND SUGAR HILL MUSIC PUBLISHING, LTD., DEFENDANTS.



The opinion of the court was delivered by: Sweet, District Judge.

  OPINION

Plaintiff Tuff-N-Rumble Management, Inc. ("Tuff") has moved (1) pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure to dismiss the counterclaim for copyright interference asserted against it by defendants Sugarhill Music Publishing Inc., Sugar Hill Records, Ltd., Sugar Hill Records, Inc., Sugar Hill Music, Inc., and Sugar Hill Music Publishing, Ltd. (collectively, "Sugarhill"); and (2) for an order, pursuant to Rule 56 of the Federal Rules of Civil Procedure, dismissing Sugarhill's counterclaims for tortious interference with contract and defamation, and Sugarhill's affirmative defense of prior transfer. Defendants have moved to strike Tuff's First Amended Complaint.

For the reasons set forth below, Tuff's motions are granted in part and denied in part, and Sugarhill's motion is denied.

The Parties

Tuff is a New York corporation with its principal place of business in New York, New York.

Sugarhill Music Publishing, Inc., Sugar Hill Records, Inc., and Sugar Hill Music Publishing, Ltd. are New Jersey corporations with their principal place of business in Englewood, New Jersey.

Sugar Hill Records, Ltd. and Sugar Hill Music, Ltd. have their principal places of business in Englewood, New Jersey. In its complaint, Tuff asserted that these entities are New Jersey corporations, but Sugarhill denied these claims in its answer.

Defendants are engaged in the business of commissioning, acquiring, owning, licensing and selling musical compositions, works, songs, and the recorded performances thereof.

Prior Proceedings

The prior proceedings and facts of this case are set forth in a prior opinion of this Court, familiarity with which is assumed. See Tuff-N-Rumble Mgt., Inc. v. Sugarhill Music Publishing Inc., 8 F. Supp.2d 357 (S.D.N.Y. 1998). Prior proceedings and facts relevant to the instant motion are set forth below.

Tuff filed a complaint against Sugarhill alleging copyright infringement, violation of the Lanham Act, tortious interference with prospective economic advantage, and unfair business practices in violation of New York General Business Law on October 17, 1997. Sugarhill filed its answer and six counterclaims on March 9, 1998. Sugarhill alleges that Tuff committed copyright infringement in violation of copyright law and that Tuff is liable under New Jersey law for interference with prospective economic advantage, tortious interference with contract, slander of title, defamation, and malicious prosecution.

On March 26, 1998, Tuff filed a motion, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss the six counterclaims asserted against it by Sugarhill. By opinion and order dated June 15, 1998, the Court granted the motion to dismiss Sugarhill's counterclaim for malicious prosecution, but denied the motion to dismiss the counterclaims of interference with prospective economic advantage, tortious interference with contract, slander of title, defamation, and copyright infringement.

On December 15, 1998, Tuff moved to amend the complaint to join additional defendants. Tuff's motion was granted by order dated January 27, 1999. Tuff filed and served its amended complaint (the "Amended Complaint") on February 3, 1999.

On December 17, 1999, Tuff filed the instant motions to dismiss the Sugarhill counterclaims. Oral argument was heard on February 14, 1999, at which time the motions were deemed fully submitted.

Sugarhill moved to strike the Amended Complaint on February 12, 1999. Opposition and reply papers were received through March 10, 1999, at which time the motion was deemed fully submitted.

Facts

For the purposes of these motions addressed to the pleadings the factual allegations of the pleadings are taken as true, though it is appropriate when considering jurisdictional issues to consider matters outside the parameters of the pleadings. See Cargill Intern. S.A. v. M/T Pavel Dybenko, 991 F.2d 1012, 1019 (2d Cir. 1993); Kamen v. A.T. & T. Co., 791 F.2d 1006, 1011 (2d Cir. 1986). When considering Tuff's motion to dismiss the counterclaims for lack of subject matter jurisdiction, all material factual allegations in Sugarhill's answer must be accepted as true. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); see also Atlantic Mutual Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992); Rubin v. Tourneau, Inc., 797 F. Supp. 247, 248 (S.D.N Y 1992). However, the Court must examine the substance of the allegations and any other evidence before it in resolving the jurisdictional dispute, see Cargill, 991 F.2d at 1019, but need not draw argumentative inferences favorable to the party asserting jurisdiction. See Norton v. Larney, 266 U.S. 511, 515, 45 S.Ct. 145, 69 L.Ed. 413 (1925); Atlantic Mutual, 968 F.2d at 198. Therefore, the factual allegations set forth below do not constitute findings of fact by the Court. Unless otherwise indicated, the facts are drawn from the allegations made by Sugarhill in their counterclaims.

The dispute between Tuff and Sugarhill focuses on the copyright ownership of the song "Spoonin' Rap," a musical composition (the "Composition") by Gabriel Jackson, a/k/a Marion Jackson, professionally known as Spoonie Gee ("Jackson"). On or about November 1, 1979, Jackson sold to Heavenly Crown Music his rights to the Composition and the master recording (the "Master"). On June 9, 1980, Peter Brown, on behalf of Heavenly Crown Music, assigned the copyright to both the Composition and the Master to Sugarhill, which subsequently recorded the assignment in the United States Copyright Office on August 18, 1995.

According to Tuff, Jackson assigned his copyright interest in the Composition to Tuff in 1988, and it holds United States Copyright Registration SR 174-458, dated August 23, 1994 (the "Registration"). Sugarhill, however, maintains that Tuff's copyright registration covers only the sounding recording.

Although Tuff has had knowledge of Sugarhill's interest in "Spoonin' Rap," it has represented itself as the rightful owner of both the Composition and the Master and claimed exclusive entitlement to all royalties and licensing fees. As a result of Tuff's assertions, Sugarhill has had ...


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