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"The Youngbloods" (Perry Miller P/K/A Jesse Colin Young; Lowell Levinger; Jerry Corbitt v. Bmg Music

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK


January 6, 2011

"THE YOUNGBLOODS" (PERRY MILLER P/K/A JESSE COLIN YOUNG; LOWELL LEVINGER; JERRY CORBITT MINA BAUER, THE WIDOW OF JOE BAUER; AND MANAGER STUART KUTCHINS), ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
BMG MUSIC,*FN1 DEFENDANT.

The opinion of the court was delivered by: Kevin Nathaniel Fox United States Magistrate Judge

MEMORANDUM AND ORDER

Before the Court is BMG Music's ("BMG") motion, made pursuant to Local Civil Rule 6.3*fn2 of this court, for reconsideration of the Court's November 9, 2010 memorandum and order ("Order") denying BMG's motion to stay the proceedings. The plaintiff opposes the motion. Legal Standard "The standard for granting . . . a motion [for reconsideration] is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked--matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). A motion for reconsideration "is not designed to allow wasteful repetition of arguments already briefed, considered and decided" and the movant "may not . . . advance new facts, issues or arguments not previously presented to the Court." Schonberger v. Serchuk, 742 F. Supp. 108, 119 (S.D.N.Y. 1990). "[A] motion to reconsider should not be granted where the moving party seeks solely to relitigate an issue already decided." Shrader, 70 F.3d at 257.

Application of Legal Standard

BMG contends the Court overlooked: (1) two facts that alter, fundamentally, the Court's analysis of judicial economy, namely that (i) "The Defendant in Youngbloods is Not the Same as the Defendant in Allman;*fn3 " and (ii) "The Agreements at Issue in Youngbloods and Allman Are Materially Different;" (2) the facts altering its balance-of-harm analysis, namely that (I) "Neither Plaintiff Nor The Youngblood Company Is a defendant in BMG's Rescission Claim in the California Action," and (ii) "Plaintiff Also is Not a Party to the 1995 Settlement Agreement;" and (3) "the case law, cited in BMG's Memorandum of Law, holding that any prejudice resulting from a delay in a case seeking monetary damages only can be remedied through an award of pre-judgment interest." The plaintiff contends the Court "did not overlook any controlling law in exercising its discretion to deny the extraordinary relief of a stay," and it "did not overlook any facts presented to it on the Motion for a Stay."

The Defendant in Youngbloods is Not the Same as the Defendant in Allman BMG contends that the Court's analysis of judicial economy was based on an erroneous assumption that the defendant in this action is the same as the defendant in the related Allman action. According to BMG, the Court's erroneous assumption is apparent from its statement: "In light of the fact that the two related actions contain identical claims against the defendant for breach of contract . . . the outcome of the California action is irrelevant to the Court's obligation to manage its cases and use judicial resources efficiently."

The Court was well aware, when it was determining the motion for a stay, that the defendant in this action is not the same as the defendant in the related Allman action. The use of a singular noun "defendant" in the Court's sentence: "In light of the fact that the two related actions contain identical claims against the defendant for breach of contract . . . the outcome of the California action is irrelevant to the Court's obligation to manage its cases and use judicial resources efficiently," was a typographical error. The noun "defendant" should have been in the plural. Since the Court did not overlook the fact that the defendant in this action is not the same as the defendant in the Allman action, but was well aware of this fact since May 4, 2009, when this action was referred to the Court, BMG's argument that the judicial economy analysis would be altered fundamentally, had the Court not overlooked this fact, is without merit.*fn4

The Agreements at Issue in Youngbloods and Allman Are Materially Different BMG contends that the "claims in the two cases also are not identical" because the two actions are "brought under different contracts and present different disputed terms for the Court to resolve," despite the "common factual predicate," which is that "both cases allege that the defendant record companies have licensed the respective plaintiffs' master recordings to digital retailers." According to BMG: (a) "[t]here are three disputed contractual provisions in Allman," none of which "appear in the Youngbloods agreement;" (b) "one of the critical issues in this case is whether those digital retailers license or sell downloads to the consumer. The Allman complaint, by contrast, does not allege that downloads are licensed rather than sold to consumers;" and (c) an "issue unique to this case is . . . whether BMG is paid for [the alleged digital download] license[s] on a flat fee or cent-rate basis."*fn5 BMG maintains that, "[g]iven the differences between the contractual terms in the two cases, the issues to be decided here are not identical to those in Allman, and the Allman Court would not have to consider these issues in the absence of the Youngbloods action."*fn6

Although BMG contends that "[t]he claims in the two cases also are not identical,"*fn7 its argument is, actually: "The Contractual Interpretation Issues To Be Determined On Summary Judgment in this Case Are Not Presented in Allman." None of the arguments concerning the differences between the terms of the agreements here and in the Allman action, or the facts raised in support of those arguments, have been raised in BMG's motion for a stay to demonstrate, as BMG contends here, "that allowing this case to go forward will result in a substantial waste of resources." The only argument raised in connection with the waste of resources, in BMG's motion for a stay, was that "a stay will avoid wasting the resources of the parties and the Court on potentially moot claims." The Court's analysis of judicial economy was not based on the material differences of the agreements at issue here and in Allman, nor on the interpretation of those agreements. The Court stated, in its November 9, 2010 Order, that "the two related actions contain identical claims . . . for breach of contract concerning royalties for digital downloads leased to music download service providers." The plaintiffs in both actions make the following claims: (1) "Breach of Contract with respect to Music Download Services," based on "Sony Music's improper calculation of leasing royalties for digital downloads leased to Music Download Services," in Allman (Third Am. Compl.¶ 74), and "BMG Music's improper calculation of licensing royalties for digital downloads licensed to Music Download Services," here (Second Am. Compl.¶ 55); (2) "Breach of Contract with respect to Ringtone Providers," based on "Sony Music's improper calculation of leasing royalties for digital downloads leased to third parties," in Allman ((Third Am. Compl.¶ 79), and "BMG Music's improper calculation of licensing royalties for digital downloads licensed to third parties," here (Second Am. Compl.¶ 64). That the agreements, at issue here and in Allman, vary in terms, which, in turn, may require differing interpretations of the terms, does not mean that the claims in the two actions are not identical. Nor is it required, for the Court's analysis of judicial economy, that the issues raised by different agreements in two actions be identical, or, even that the claims be identical. Accordingly, BMG's argument that the Court overlooked the differences between the terms of the agreements here and in Allman and the related issues, and that "[t]hese facts alter the analysis substantially," is without merit.

The Order's Balance-of-Harm Analysis Also Overlooks Several Factors BMG contends: In concluding that 'the balance of harm tips in favor of the plaintiff,' Order at 14, the Order discounted the possibility that BMG might be harmed by duplicative litigation and potentially inconsistent results. This conclusion was based largely on two beliefs: first, that the 1995 Settlement Agreement contains references to "The Youngbloods," and second, that BMG's rescission claims in California are brought against, inter alia, a Youngbloods-related entity, The Youngblood Company. . . . In light of these premises, the Order states that "it is not clear, at least with respect to The Youngbloods, that a decision by the Court on the question of rescission would not be binding on . . . The Youngbloods (the defendant in the California action) in the California federal district court."

According to BMG, "both of these premises reflect factual oversight," because "Neither Plaintiff Nor The Youngblood Company Is a Defendant in BMG's Rescission Claim in the California Action," and "Plaintiff Also Is Not a Party to the 1995 Settlement Agreement."

In determining BMG's motion for a stay, the Court considered all of its arguments, including: (i) "Given the fact that 'The Youngbloods' ('Plaintiff') was not a party to any of the agreements at issue, BMG's Answer duly alleged Plaintiff's lack of standing as an Eighth Affirmative Defense," and (ii) "The unincorporated association 'The Youngbloods,' which the [Second Amended Complaint] alleges is the successor to BSM Production's interest in the 1966 Recording Agreement, is the sole plaintiff in this action." The Court also reviewed BMG's complaint in the California action. Upon review of BMG's arguments in support of the instant motion,*fn8 concerning the Court's balance of harm to the parties, the Court finds that it did not overlook any facts, in connection with the balance-of-harm analysis.

Oversight in the Order's Analysis of the Other Stay Factors BMG contends that "the Court overlooked the case law, cited in BMG's Memorandum of Law, holding that any prejudice resulting from a delay in a case seeking money damages only can be remedied through an award of pre-judgment interest," namely, Wing Shing Prods. (BVI) Ltd. v. Simatelex Manufactory Co., 2005 WL 912184, at *2 (S.D.N.Y. Apr. 19, 2005). Moreover, BMG argues, "the Court's analysis of the public interest relied on plaintiff's unsubstantiated and tentative suggestion that 'a stay could also affect the general public to the extent that a decision in the class action could ultimately change the prices or licensing on digital downloads.'" According to BMG: given that plaintiff seeks a substantial increase in the royalties paid on digital downloads, the only logical pricing effect this action could have, if any, would be to increase consumer prices on digital downloads. It is unclear how the public interest favors accelerating a price increase for consumers. To the contrary, the public interest would be adversely affected if prices on downloads were to increase as a result of this lawsuit, only to be followed by rescission in the California Action of the contract that precipitated the price increase.

In determining BMG's motion for a stay, the Court has considered all the cases cited by parties. The court in Wing Shing Prods (BVI) Ltd. did not hold, as BMG claims, that "any prejudice resulting from a delay in a case seeking money damages only can be remedied through an award of pre-judgment interest." Rather, the Wing Shing Prods (BVI) Ltd. court concluded, that, in the circumstances of that case, on a motion to stay proceedings pending the outcome of an appeal of a related case, "any loss caused by the stay will be monetary in nature, and therefore will be susceptible to an award of interest." 2005 WL 912184, at *2. However, this Court is not bound by the holding of another district court. See Richardson v. Selsky, 5 F.3d 616, 623 (2d Cir. 1993). BMG's argument concerning public interest was not raised in its motion for a stay. In fact, not only did BMG not mention public interest in its motion for a stay, but it also failed to address, in its reply, the plaintiff's argument that a "stay could also affect the general public to the extent that a decision in the class action could ultimately change the prices of licensing restrictions on digital downloads."


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