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Elektra Entertainment Group Inc. v. Santangelo

February 15, 2008

ELEKTRA ENTERTAINMENT GROUP INC., ET AL., PLAINTIFFS,
v.
MICHELLE SANTANGELO AND ROBERT SANTANGELO, JR., DEFENDANTS.



The opinion of the court was delivered by: Mark D. Fox, United States Magistrate Judge

MEMORANDUM & ORDER

Defendants, Michelle Santangelo and Robert Santangelo, Jr., move for leave to serve a third-party complaint in the above-captioned action, which motion (Doc. #'s 36, 37, 40, 41, 48) has been referred to me for decision.*fn1 The original complaint filed by Plaintiffs -- Elektra Entertainment Group, Inc., Virgin Records America, Inc., UMG Recordings, Inc., BMG Music, and Sony BMG Music Entertainment -- asserts a single claim for copyright infringement, claiming that Defendants, without Plaintiffs' permission or consent, used an online media distribution system to download, distribute, and/or make available for distribution, certain of Plaintiffs' copyrighted sound recordings. Compl. ¶ 18. Pursuant to the Copyright Act, 17 U.S.C. §§ 504(c) and 505, they seek statutory damages, including attorneys' fees and costs. Id. ¶ 20. In addition, pursuant to 17 U.S.C. §§ 502 and 503, they seek an injunction against further infringement of their copyrights by Defendants, as well as an order that Defendants destroy all copies of sound recordings made in violation of Plaintiffs' exclusive rights. Id. ¶ 21.

Defendants now seek leave, under Fed. R. Civ. P. 14(a), to serve a third-party complaint upon AOL, LLC ("AOL"), Sharman Networks, PLC ("Sharman"), and Matthew Seckler ("Seckler"). The proposed third-party complaint*fn2 asserts four causes of action, three of which are asserted against each of the Third-Party Defendants individually: 1) against AOL for entrapment, failure to warn, reckless endangerment of children, general tort, and breach of contract; 2) against Sharman for trespass, general tort, destruction of personal property, theft, and installation of a dangerous instrument on the property of another; and 3) against Seckler for trespass, general tort, destruction of personal property, and installation of a dangerous instrument on the property of another. The fourth cause of action is asserted against all of the Third-Party Defendants for indemnification and/or contribution in the event that Defendants are held liable to the original Plaintiffs. Plaintiffs oppose Defendants' motion for leave to serve the third-party complaint.

DISCUSSION

Rule 14 Standard

Rule 14(a) of the Federal Rules of Civil Procedure, as amended, states that "[a] defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it." "Although Rule 14(a)'s purpose is to promote judicial economy, . . . the right to implead third parties is not automatic, and the decision whether to permit impleader rests within the sound discretion of the district court." Doucette v. Vibe Records, Inc., 233 F.R.D. 117, 120 (E.D.N.Y. 2005) (internal quotation marks and citation omitted).

"It is well-settled that a third-party action, also known as an impleader action, must be dependent on, or derivative of, the main claim. . . . [W]hen determining whether impleading a third-party is appropriate, the third-party defendant's liability to the third-party plaintiff must be 'dependent upon the outcome of the main claim' or the third-party defendant must be 'potentially secondarily liable as a contributor to the defendant.'" Id. (citations omitted) (emphasis in original). Generally, the traditional grounds for a third-party action are indemnification, contribution, or subrogation, but other types of claims may be brought in a third-party complaint. Id. Nonetheless, "regardless of the type of claim asserted, the 'third party must necessarily be liable over to the defendant for all or part of the plaintiff's recovery,' or 'the defendant must attempt to pass on to the third party all or part of the liability asserted against the defendant.' In other words, '[t]he outcome of the third-party claim must be contingent on the outcome of the main claim. . . .'" Id. (citations omitted).

Claim of Indemnification and/or Contribution for Copyright Infringement

In their proposed third-party complaint, Defendants include a cause of action for indemnification and/or contribution against the Third-Party Defendants in the event that they are found liable on Plaintiffs' claim for copyright infringement. However, such a claim for indemnification or contribution will lie only if: "(1) the Copyright Act creates such a right to [indemnification or] contribution either explicitly or implicitly, or (2) such a right inheres as a matter of federal common law." Lehman Bros., Inc. v. Wu, 294 F. Supp. 2d 504, 504-05 (S.D.N.Y. 2003) (citing Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 638 (1981)). Courts have held that no such rights exist under either the Copyright Act or federal common law.

See Lehman Bros., Inc., 294 F. Supp. 2d at 505 (dismissing contribution claim); Pure Country Weavers, Inc. v. Bristar, Inc., 410 F. Supp. 2d 439, 447-48 (W.D.N.C. 2006) (dismissing indemnification claim). Therefore, Defendants cannot proceed with their proposed third-party claim of indemnification and/or contribution for copyright infringement.*fn3

Additional Claims in the Proposed Third-Party Complaint

As set forth above, aside from the cause of action for indemnification and/or contribution, Defendants seek to bring three other causes of action for various claims against the Third-Party Defendants. However, a close reading of those causes of action reveals them to be independent claims, rather than derivative of or dependent upon the outcome of Plaintiffs' claim. "A third-party complaint 'is a narrow device' and cannot be used to bring in other matters that may have some relationship to the case." Doucette, 233 F.R.D. at 120 (citations omitted); see also Schwabach v. Mem'l Sloan-Kettering Cancer Ctr., 99 Civ. 1320, 2000 U.S. Dist. LEXIS 797, at *8 (S.D.N.Y. Jan. 31, 2000) ("An entirely separate and independent claim cannot be maintained against a third party under Rule 14, even though it arises out of the same general set of facts as the main claim.") (internal quotation marks and citation omitted).*fn4

In the original complaint, Plaintiffs assert a single claim of copyright infringement. "A successful claim of copyright infringement pursuant to the Copyright Act, 17 U.S.C. § 501 et seq., requires proof that (1) the plaintiff had a valid copyright in the work allegedly infringed and (2) the defendant infringed the plaintiff's copyright by copying protected elements of the plaintiff's work." Lipton v. Nature Co., 71 F.3d 464, 469 (2d Cir. 1995) (citation omitted). A finding that Defendants infringed Plaintiffs' copyrights does not require proof of intent to infringe or knowledge of infringement. Id. at 471 (citing cases).

Defendants' causes of action, in contrast, contain a whole host of claims completely unrelated, either factually or legally, to copyright infringement. To begin, Defendants' cause of action against AOL -- for entrapment, failure to warn, reckless endangerment of children, general tort, and breach of contract -- is based on the contractual relationship between AOL and parents, such as Defendants' mother, who used its Internet Service Provider services and were led to believe that AOL had parental controls in place to prevent children from illegally downloading music files. Thus, this cause of action involves the independent contractual relationship that AOL had with Defendants' mother, and any alleged breach of that contract, or the duties arising thereunder, may still be litigated ...


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