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Crosstown Songs U.K. Ltd. v. Spirit Music Group

October 4, 2007


The opinion of the court was delivered by: Cedarbaum, J.


Plaintiffs Crosstown Songs U.K. Limited ("Crosstown") and Kingstreet Media (Songs) 1 Limited ("Kingstreet"), both U.K. companies, sue defendant Spirit Music Group, Inc. ("Spirit"), a Delaware corporation with its principal place of business in New York, for breach of contract and copyright infringement. Spirit moves to dismiss the complaint on the ground of forum non conveniens. For the following reasons, Spirit's motion is granted.


Spirit is a New York-based independent music publisher. It owns or controls numerous catalogs of musical compositions, which it licenses for use in North America in exchange for royalty payments. This is commonly referred to as "music administration." Spirit pays other companies to administer its compositions overseas. In addition, it administers compositions in North America for publishing companies that are based overseas. When Spirit serves as an administrator for another publishing company, it turns over the royalties it collects less a pre-arranged fee.

On January 1, 1996, Spirit contracted with Palan Music Publishing Ltd. ("Palan"), a music publisher based in the United Kingdom, to administer in North America a catalog of musical compositions owned by Palan (the "Palan catalog"). Pursuant to the parties' Letter Agreement, Spirit was entitled to keep between 15% and 30% of each royalty it collected. Sometime after the Letter Agreement was signed, Palan engaged Music Copyright Services PLC ("MCS") to administer the Palan catalog worldwide. MCS allowed Spirit to continue administering the Palan catalog in North America on MCS's behalf, and Spirit continued to perform under the terms of the Letter Agreement.

In early 2005, unbeknownst to Spirit, Kingstreet acquired the Palan catalog. Kingstreet engaged another U.K. company, Kingstreet Media Group Limited ("KMG"), to administer the Palan catalog on Kingstreet's behalf. In turn, KMG contracted with MCS to allow MCS to continue to subadminister the Palan catalog, and MCS continued to allow Spirit to subadminister the Palan catalog in North America. Spirit and MCS did not sign another contract, but continued to operate under the Letter Agreement. Spirit did not enter into any contract with KMG or Kingstreet.

One year earlier, on January 5, 2004, Spirit had engaged MCS to administer a catalog of Spirit's music compositions (the "Spirit catalog") overseas. However, MCS failed to render timely payment to Sprint of the royalties it collected on the Spirit catalog. As an excuse for its non-payment, MCS contended that, for reasons unknown to Spirit, it was actually KMG who had been collecting the Spirit-owned royalties, and that MCS had never received the royalties from KMG. On April 25, 2005, at Spirit's insistence, KMG signed an agreement promising to pay Spirit the unpaid royalties owed on the Spirit catalog. Notwithstanding this agreement, neither MCS nor KMG ever made royalty payments to Spirit for any accounting period after September 2005.

As of January 2006, KMG and MCS owed Spirit approximately £95,220 in unpaid royalties. Spirit continued to administer the Palan catalog, but ceased turning over the royalties it collected to MCS or KMG in order to offset the royalties to which it was entitled on the Spirit catalog.

On March 10, 2006, Kingstreet terminated its agreement with KMG. Several days later, KMG filed for bankruptcy in the United Kingdom. Kingstreet informed MCS that its contract with KMG to subadminister the Palan catalog had been terminated. It is not clear whether Kingstreet or MCS informed Spirit that its subadministration rights also had been terminated. In any event, Spirit continued to administer the Palan catalog well into 2007. In August of 2006, Kingstreet granted Crosstown the exclusive right to administer the Palan catalog throughout the world.

Kingstreet alleges that Spirit owes the unpaid Palan catalog royalties to Kingstreet, because Kingstreet is "an intended third-party beneficiary of Spirit's sub-administration contracts with MCS and KMG." (Compl. ¶ 50) Since the filing of the complaint in this action, Spirit has accounted to Kingstreet for all royalties collected on the Palan catalog for the years 2006 and 2007. Thus, the only Palan royalties still at issue in this suit are those collected by Spirit prior to December 31, 2005. Spirit argues that it is not obligated to pay those royalties to Kingstreet because it has properly offset them against the sums owed to it by KMG and MCS.

Spirit alleges and plaintiffs dispute that both KMG and MCS have asserted claims for the very same royalties pursued by plaintiffs in this suit. Spirit submits an August 17, 2007 email from KMG's administrators to Spirit's U.K. counsel, which states that Spirit owes KMG "$215,416.89 for the periods 1 April 2005 to 31 December 2005." (Ware Decl. Ex. A) Spirit also submits an April 17, 2007 letter from MCS's counsel to Spirit's counsel stating that "it is not possible for MCS to confirm it has no claim" to the Palan catalog royalties. (Fried Decl. Ex. L) In an effort to resolve all of these outstanding claims at once, Spirit has taken initial steps toward litigation in the United Kingdom.


The factors to be considered in deciding a motion to dismiss on the ground of forum non conveniens were set out by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). Although a plaintiff's choice of forum is entitled to great deference and "should rarely be disturbed," Gilbert, 330 U.S. at 508, where, as here, a foreign plaintiff has chosen to sue in an American forum, its choice of forum is entitled to somewhat less deference. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-256 (1981).

As a threshold matter, a defendant seeking dismissal on the ground of forum non conveniens must show that an adequate alternative forum exists. Plaintiffs do not dispute that the courts of the ...

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