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Ole Media Management, L.P. v. Emi April Music, Inc.

United States District Court, Second Circuit

June 10, 2013

OLE MEDIA MANAGEMENT, L.P., Plaintiff,
v.
EMI APRIL MUSIC, INC., and EMI BLACKWOOD MUSIC, INC., Defendants.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge.

Defendants EMI April Music, Inc. and EMI Blackwood Music, Inc. (collectively, "EMI") bring this motion to dismiss or, in the alternative, stay plaintiff Ole Media Management, L.P. ("Ole")'s breach of contract action pending the outcome of a previously-filed action in an Ontario, Canada court that substantially overlaps with the issues raised here. For the reasons that follow, the Court grants EMI's motion for a temporary stay of this case but denies its motion to dismiss.

I. Background

A. Facts[1]

Plaintiff Ole is a partnership made up of Ole Media Management (GP) L.P. and Ole Media Management (GP) Inc., which are Canadian entities with their principal places of business in Toronto, Ontario. Am Compl. ¶ 1. Ole is one of the world's largest independent music publishers. Id. ¶ 7; Ole Br. 2. Defendants are both Connecticut corporations with their principal places of business in New York, New York. Am. Compl. ¶¶ 2-3.

Two sets of agreements to which Ole and EMI are parties form the background to this dispute. First, on or about January 1, 2007 and March 21, 2007, Ole and EMI entered into two exclusive administration agreements (collectively, the "Administration Agreements"). Am. Compl. ¶ 8; Ole Br. 3. Under those agreements, EMI assumed a duty to administer certain of Ole's compositions. Am. Compl. ¶ 15; Ole Br. 3. That duty included collecting royalties and all monies payable to Ole for the compositions covered by the Administration Agreements, and providing regular accountings to Ole. Am. Compl. ¶¶ 16-17; Ole Br. 3.

Second, on or about February 23, 2007 and March 21, 2007, Ole entered into two asset purchase agreements (collectively, the "Asset Purchase Agreements") with EMI Entertainment World, Inc., an affiliate of EMI. Am. Compl. ¶ 9; Ole Br. 2. Those agreements transferred a number of musical compositions to Ole. Am. Compl. ¶ 10; Ole Br. 2.

Disputes have arisen regarding both sets of agreements. As to the Administration Agreements, according to Ole, after EMI began administering the compositions covered thereby, the income Ole earned from those compositions declined significantly. Am. Compl. ¶ 18; Ole Br. 3. Ole then engaged an accounting firm to examine EMI's books and records, Am. Compl. ¶ 20; Ole Br. 3, as provided for in the Administration Agreements, Am. Compl. ¶ 19. Ole asserts that the audit performed by that firm revealed "vast and systematic underpayments" to Ole. Am. Compl. ¶ 20; Ole Br. 3. Additionally, Ole claims, even after it provided EMI with its objections, EMI has failed to cure, and continues to be in breach of the Administration Agreements. See Am. Compl. ¶¶ 21-39. In this lawsuit (the "New York action"), Ole seeks more than $800, 000 in compensatory damages for EMI's breach of contract.

As to the Asset Purchase Agreements, Ole and EMI Entertainment World, Inc. dispute which compositions and other musical assets were included in Ole's purchases. Ole therefore has sought "a reformation of the Asset Purchase Agreements to fully encompass the assets which rightfully belong to Ole" by filing suit in Canada against EMI Entertainment World, Inc. and EMI (the "Canada action"). Am. Compl. ¶¶ 11-12. That suit was filed on June 20, 2011. Id. ¶ 11.

B. Procedural History

On September 26, 2012, Ole filed the New York action against EMI, claiming breach of the Administration Agreements. Dkt. 1. On February 15, 2013, EMI filed a motion to dismiss, Dkt. 10, an accompanying memorandum of law in support of its motion to dismiss ("EMI Br."), Dkt. 12, and the Declaration of Bruce D. Scavuzzo ("Scavuzzo Decl.") and accompanying exhibits, [2] Dkt. 11. The Court held an initial conference with the parties on May 10, 2013. See Dkt. 16. Per the parties' request, Ole's opposition to EMI's motion to dismiss, or its amended complaint, was due 14 days after that conference. See Dkt. 15, 19. On May 24, 2013, Ole filed both the Amended Complaint, Dkt. 21, and its brief in opposition to EMI's motion to dismiss, Dkt. 20. On May 31, 2013, EMI filed a reply to Ole's opposition ("EMI Reply Br.").[3] Dkt. 22.

II. Discussion

EMI argues that the Court should dismiss or, in the alternative, stay the New York action in deference to the Canada action regarding the Asset Purchase Agreements. According to EMI, Ole's claims in the instant action depend upon resolution of the disputes surrounding the Asset Purchase Agreements that are being litigated in a Canadian court. EMI contends that much of the dispute between Ole and EMI about the Administration Agreements is predicated upon Ole's mistaken belief that it was owed royalties in connection with compositions that it did not in fact purchase as part of the Asset Purchase Agreements. Therefore, EMI states, the issue presently being litigated in Canadian court is foundational to the claims of the New York action, and Ole's New York action represents an attempt to litigate its claims in a separate venue, thus creating piecemeal and duplicative litigation.

Ole counters that the contractual issues presented here are properly decided in this Court, and now. According to Ole, the two actions do not overlap so substantially as to justify a dismissal or stay. Ole asserts that the issues presented ...


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