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Jayboy Music Corp. v. Metro-Goldwyn-Mayer Pictures

June 23, 2006

JAYBOY MUSIC CORP., PLAINTIFF,
v.
METRO-GOLDWYN-MAYER PICTURES, INC., DEFENDANT.



The opinion of the court was delivered by: John F. Keenan, United States District Judge

OPINION and ORDER

Defendant Metro-Goldwyn-Mayer Pictures, Inc. ("MGM") moves for compulsory joinder of certain third party entities as defendants pursuant to Rule 19(a) of the Federal Rules of Civil Procedure. For the following reasons, the motion is denied.

BACKGROUND

This is a copyright action. Plaintiff Jayboy Music Corp. ("Jayboy") holds the copyright to the song "You Really Got Me" by virtue of an assignment from Edward Kassner Music Co., Ltd. of London, England. (Compl. ¶ 6.) Jayboy renewed this copyright on December 31, 1992. (Compl. ¶ 6.) Defendant produced and distributed the 2005 motion picture Be Cool. (Compl. ¶ 3.) The song "Sexy" appears on the Be Cool soundtrack. The opening verses to "You Really Got Me" are "Girl, you really got me going. You got me so I don't know what I'm doing." (Compl., Ex. 1.) The chorus in "Sexy" begins with "girl u really got me goin out of control I dot know what im doin." (Compl., Ex. 2.)*fn1 Jayboy alleges that the "Sexy" lyricist engaged in "sampling" by deliberately incorporating a key portion of "You Really Got Me" into "Sexy" without authorization. (Compl. ¶ 11.)

On May 14, 2004, Jayboy commenced a copyright action in this district against Universal Music Group, Inc. ("UMG"), Interscope Records, Inc., Universal Music and Distribution Corp. ("UM&D") and the "Sexy" lyricist, William Adams. On December 22, 2004, the parties entered into a settlement agreement (the "Settlement"). As part of the Settlement, Adams and the other authors of "Sexy" (collectively, the "Artists") agreed to pay Jayboy $75,000 as compensation for the prior distribution of "Sexy." For future sales, the Artists agreed to pay royalties of 1.5 cents per unit. UMG, UM&D, and another Universal signatory --Songs of Universal, Inc. ("Songs") -- were not obliged to make payments. In return, Jayboy granted the Artists (but not UMG, UM&D or Songs) an irrevocable license to use the lyrics at issue in "Sexy." Jayboy granted UMG, UM&D and Songs (as well as the Artists) a general release from all future claims and liabilities arising out the alleged use of "You Really Got Me." (See Valliere Decl., Ex. A.) The Court so-ordered a Rule 41(a) stipulation of dismissal on March 23, 2005.

On April 9, 2005, retroactive to March 4, 2005, MGM entered into a licensing agreement with Universal Music Publishing Group ("UMPG"). According to the agreement, UMPG acted on behalf of Songs and Universal Music Corp. Representing that it controlled the copyright to "Sexy," UMPG licensed MGM to use "Sexy" in the 2005 movie Be Cool. The UMPG-MGM licensing agreement contains a California forum selection clause. (See Valliere Decl., Ex. B.) On March 31, 2005, Universal Music Enterprises ("UME") entered into a licensing agreement with MGM that permitted MGM to use "Sexy" and other songs in just about any worldwide medium, including movie theaters, TV and internet. This agreement is evidenced by a letter of intent, in which UME purports to be a division of UMG. There is no forum selection clause in the letter of intent. (See Valliere Decl., Ex. C.)

On October 6, 2005, Jayboy filed a complaint against MGM for copyright infringement arising out of the presence of "Sexy" in Be Cool. Jayboy seeks compensatory and statutory damages, and costs. See 17 U.S.C. §§ 504(b), 504(c), 505. MGM answered and raised an affirmative defense that Jayboy authorized and licensed certain Universal entities to grant licenses, and that these Universal entities in turn granted licenses to MGM. (Ans. ¶ 22.) MGM now brings this motion to compel joinder of Songs (signatory to the Settlement), UMPG (signatory to the April 9, 2005 licensing agreement), UME (signatory to the March 31, 2005 letter of intent) and Universal Music Corp. ("UMC").

MGM makes four arguments in support of its motion. First, MGM contends that the "Universal entities" licensed "Sexy" to MGM.*fn2 To prevail against MGM, Jayboy must obtain a judicial declaration that Universal did not have the right to license "Sexy" to MGM. Any such declaration, MGM claims, would nullify the Universal-MGM license and negatively affect Universal's interests. (MGM Br. 5-6). Second, the resolution of the instant action in Universal's absence would result in piecemeal litigation and substantial risk of potentially inconsistent results. (MGM Br. 6). Third, complete and final relief cannot be afforded in Universal's absence. Even if Jayboy wins, Universal could continue licensing "Sexy" even though MGM's use of the song would be an infringement. (MGM Br. 6). Finally, joinder is feasible because there are no problems with subject matter or personal jurisdiction, or venue. (MGM Br. 7).

Jayboy counters with three arguments. Jayboy argues first that it should not be compelled to sue "Universal" when it has chosen not to do so. Rather, MGM should implead Songs, UMPG, UME and UMC under Rule 14. Even if UMPG enforces the California forum selection clause in its licensing agreement, MGM can implead UME, and any final determination as to UME would be res judicata with respect to the UMPG license. (Jayboy Br. 2-4). Second, Jayboy insists that it never licensed any Universal entity to use "You Really Got Me." Jayboy licensed only the Artists to exploit "Sexy" in return for a payment plus royalties. Both of Universal's licenses to MGM, therefore, were worthless. (Jayboy Br. 4-6). Third, Universal could not license MGM to use "Sexy" because the Artists had no authorization to sublicense their non-exclusive license to Universal. (Jayboy Br. 6-9).

DISCUSSION

In a motion for compulsory joinder, the Court first decides under the criteria set out Rule 19(a) whether the absentee is a necessary party. If the absentee is necessary, the Court then assesses whether joinder is feasible in terms of jurisdiction and venue. If so, the Court joins the absent party. If joinder is not feasible, the Court must determine under Rule 19(b) whether the action may proceed without the absentee. If the Court concludes that the action cannot proceed, the absentee is termed "indispensable" and the complaint is dismissed.

A. Whether Songs, UMPG, UME and UMC are "Necessary" Parties

1. "Complete Relief"

Rule 19 provides that an absentee is a necessary party if "in the person's absence complete relief cannot be accorded among those already parties." Fed. R. Civ. P. 19(a). This clause "refers only to relief as between the persons already parties, and not as between a party and the absent person whose joinder is sought." ...


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