United States District Court, Southern District of New York
July 2, 2003
ARISTA RECORDS, INC., ET AL., PLAINTIFFS,
MP3BOARD, INC., DEFENDANT. RECORDING INDUSTRY OF AMERICA, INC. ADDITIONAL DEFENDANT ON COUNTERCLAIM.
The opinion of the court was delivered by: Sidney Stein, United States District Judge
OPINION AND ORDER
Third party defendant the Recording Industry Association of America, Inc. ("RIAA"), brings this motion pursuant to Fed.R.Civ.P. 54(b) for an order directing partial final judgment in its favor. As set forth below, because all claims against the RIAA have been dismissed from this action and because there is "no just reason for delay," Fed.R.Civ.P. 54(b), the RIAA's motion is granted and partial final judgment shall enter in its favor.
Rule 54(b) provides that when multiple parties or claims for relief are presented in an action — "whether as a claim, counterclaim, cross-claim, or third-party claim" — the district court may direct the entry of a final judgment "as to one or more but fewer than all of the claims or parties," so long as there is "no just reason for delay." Fed.R.Civ.P. 54(b).
The U.S. Supreme Court has set forth the steps a district court should follow in making determinations pursuant to Rule 54(b). See Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 7-8 (1980). First, the district court must determine that it is dealing with a "final judgment." Id. at 7. "It must be a `judgment' in the sense that it is a decision upon a cognizable claim for relief, and it must be `final' in the sense that it is `an ultimate disposition of an individual claim entered in the course of a multiple claims action.'" Id. (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956)). Second, the district court must determine whether there is any just reason for delay, taking into account equitable considerations and the interests of efficient judicial administration. Id. at 8; see also Ginett v. Computer Task Group, 962 F.2d 1085, 1095 (2d Cir. 1992). The district court should consider whether the claims being reviewed are separate from those that remain to be adjudicated in the action and "whether the nature of the claims already determined was such that no appellate court would have to decide the same issue more than once even if there were subsequent appeals." Id.
The only claims against the RIAA in this action were those brought by MP3Board, which named the RIAA as a third party defendant. See MP3Board's Amended Answer and Counterclaim. Those claims were discussed extensively in the Court's Orders of February 1, 2001 (and on the record in the proceedings of that date) and August 28, 2002, Arista Records. Inc. v. MP3Board. Inc., 2002 WL 1997918 (S.D.N.Y. Aug. 28, 2002). Therefore, only the details most relevant to the instant motion will be reviewed here.
In short, MP3Board's claims against the RIAA stemmed from the notices of copyright infringement that the RIAA sent to MP3Board's internet service providers pursuant to the Digital Millennium Copyright Act ("DMCA"). MP3Board alleged that there were flaws in the RIAA's DMCA notices and that the RIAA wrongfully demanded that MP3Board and its service providers cease allegedly-infringing activities.
On February 1, 2001, this Court ruled on the RIAA's motion to dismiss MP3Board's claims against it, dismissing MP3Board's claim for declaratory relief and, by logical extension, as will be discussed below, its duplicative claim for injunctive relief for failure to state a claim upon which relief can be granted. See Order of Feb. 1, 2001.
As a result of the February 1 Order, only two claims remained against the RIAA: (1) knowing material misrepresentation of infringement in violation of the DMCA and (2) tortious interference with contractual relations and prospective economic advantage. Each of those claims was adjudicated in its entirety by this Court in its Opinion and Order on summary judgment dated August 28, 2002.
Thus, all of the claims brought by MP3Board against the RIAA as a third party defendant have been dismissed pursuant to this Court's Orders of February 1, 2001 and August 28, 2002. Therefore, all of those claims have been adjudicated to final judgment.
In opposing the instant motion, MP3Board maintains that the Court's previous rulings did not foreclose MP3Board's claim for injunctive relief and that therefore, there is no "final judgment" with respect to MP3Board's claims against the RIAA. That argument is without merit.
As a preliminary matter, MP3Board's request for injunctive relief contains no factual allegations or legal assertions independent of those underlying its claim for a declaratory judgment. Indeed, in MP3Board's own words, its request for injunctive relief simply "repeats and incorporates" the allegations in the claim for declaratory relief. See MP3Board's Amended Answer and Counterclaim, at ¶ 76. Once the Court found the substantive allegations underlying the claim for declaratory relief to be entirely without merit, it follows logically that MP3Board's request for injunctive relief became moot.
In addition, this Court analyzed all three of the DMCA notices that form the basis of MP3Board's counterclaims and concluded that, while only one notice satisfied the requirements of the DMCA, none was actionable because each notice was legally justified, and therefore privileged, as a matter of California law. See Order of Aug. 28, 2002, at 23-29. Because of this determination, there are no claims remaining upon which MP3Board can base any request for relief.
In sum, because the Court has determined that all of the claims underlying MP3Board's requests for relief are barred, no claim for relief — including injunctive relief — remains in this action as against the RIAA. Thus, this Court has before it a "final judgment" well within the meaning provided by the U.S. Supreme Court for purposes of determining a motion pursuant to Rule 54(b).
Turning to the second element of the Rule 54(b) analysis, the Court expressly determines that there is "no just reason for delay" in issuing a final judgment in favor of the RIAA. Fed.R.Civ.P. 54(b); Curtiss-Wright Corp., 446 U.S. at 8.
In addition, the interests of sound judicial administration support a judgment pursuant to Rule 54(b) in the RIAA's favor. As set forth above, judgment in favor of the RIAA pursuant to this Court's previous Orders has resolved all claims against it. The remaining claims in this case — for copyright infringement and unfair competition, alleged by the plaintiff record companies against MP3Board — are entirely severable from MP3Board's claims against the third party defendant RIAA. The adjudication of the remaining claims will rely on facts and law separate from those underlying MP3Board's claims against the RIAA. "[N]o appellate court would have to decide the same issues more than once even if there were subsequent appeals." Curtiss-Wright Corp., 446 U.S. at 8.
Finally, granting partial final judgment in favor of the RIAA would assist the interests of sound judicial administration because the parties would be able to argue the res judicata effect vel non of this judgment in the action between them currently pending in the Northern District of California, MP3Board, Inc. v. Recording Indus. Ass'n. of Am., Inc., Case No. C-00-20606. See Shamley v. ITT Corp., 869 F.2d 167, 170 (2d Cir. 1989) ("Rule 54(b) authorizes entry of partial final judgment in order to create res judicata effects elsewhere."). The court in California stayed that action pending resolution of the parallel claims against the RIAA by MP3Board in this Court. It is therefore in the interests of judicial administration to terminate RIAA's involvement in this action and to allow the California action to either proceed or be terminated on the basis of res judicata.
For the reasons set forth above, the RIAA's motion pursuant to Fed.R.Civ.P. 54(b) is granted and a final judgment shall be entered in its favor concerning all claims asserted against it by MP3Board.
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