United States District Court, S.D. New York
Mark Andrews p/k/a Sisqo et al. Plaintiffs,
Sony/ATV Music Publishing, LLC et al, Defendants.
MEMORANDUM & ORDER
J. NATHAN, UNITED STATES DISTRICT JUDGE
diversity action arises from disputes concerning agreements
relating to the publishing and administration of popular
music compositions and the collection and distribution of
royalties flowing from their exploitation. Before the Court
is a motion by Defendants Sony/ATV Music Publishing LLC
("Sony"), EMI April Music, Inc., and EMI Blackwood
Music, Inc. (together with EMI April Music, Inc.,
"EMI") to dismiss implied contract and declaratory
judgment claims asserted against them in Plaintiffs'
Second Amended Complaint, Dkt. No. 50 ("SAC"). For
the reasons set forth below, that motion is GRANTED in full.
in this case are the well-known recording artists and
songwriters Mark Andrews, professionally known as
"Sisqo"; James Green, professionally known as
"Woody"; and Larry Anthony, Jr., professionally
known as "Jazz." SAC ¶¶ 3-6. In 1996,
Plaintiffs, then-members of the popular recording group known
as "Dru Hill, " entered into individual music
publishing and administration agreements with non-party Art
of War Music Publishing, Inc. ("Art of War").
Id. ¶ 20. In approximately 2002, Art of War
entered into an exclusive administration agreement with EMI
(the "EMI Administration Agreement" or
"Agreement"). Id. ¶ 21. The EMI
Administration Agreement provided, among other things, that
EMI would pay royalties to artists under contract with Art of
War - including Plaintiffs - directly to the artists on Art
of War's behalf. ¶ 21.
2005, Plaintiff Andrews contracted with Defendants 27 Red
Music Publishing, LLC (or its predecessor entity) ("27
Red") and 27 Red's sole owner, the now-deceased
Rhondo Robinson, to collect from EMI certain allegedly unpaid
royalties covering the period from 1996 to 2005 (the
"Collection Agreement"). Id. ¶¶
7, 24-25. Notwithstanding the limited temporal scope of the
royalties to be collected under the Collection Agreement,
EMI, Plaintiffs allege, paid royalties due to Andrews for the
years 2005 to 2015 to 27 Red, Robinson, and/or other
"John Doe" and "ABC Company" Defendants
purportedly affiliated with Robinson. Id.
¶¶ 17-18, 26. Andrews never received those
royalties. Id. ¶27. EMI also paid royalties due
to Plaintiffs Anthony and Green to 27 Red, Robinson, and/or
the unidentified Defendants, despite the lack of contractual
authority to do so. Id. ¶ 28.
initiated this action on September 23, 2015, naming as
Defendants Sony, 27 Red's predecessor entity,
Robinson's estate, and Robinson's unidentified
affiliates, and asserting claims for breach of contract,
breach of fiduciary duty, and conversion. See
generally Complaint, Dkt. No.l ("Complaint" or
"Compl."). As relevant here, the original Complaint
alleged that Plaintiffs were "intended
beneficiaries" under the EMI Administration Agreement
and asserted a single breach of contract claim against Sony,
averring that its payment to 27 Red, Robinson, and
Robinson's unidentified affiliates of post-2005 royalties
due to Andrews, as well as any royalties due to Green and
Anthony, violated that Agreement. Comp. ¶¶ 31-35.
In February 2016, Plaintiffs filed an amended complaint, Dkt.
No. 18 ("FAC"), continuing to maintain breach of
the EMI Administration Agreement as their sole theory of
liability as against Sony and/or EMI. FAC ¶¶51-56.
and EMI moved to dismiss the FAC. Dkt. Nos. 36-38. They argued
primarily that Plaintiffs' contract claim was foreclosed
by the plain language of the EMI Administration Agreement,
which ran between EMI and Art of War and specifically recited
that Plaintiffs would not be third-party beneficiaries of the
Agreement or enjoy any rights thereunder against EMI.
See Dkt. No. 37 at 3-4, 6-8.
after Sony and EMI moved, the Court issued an Order requiring
Plaintiffs to give notice as to whether they would file
another amended pleading or rely on the FAC, and advising
Plaintiffs that failure to timely amend could constitute a
waiver of their amendment rights moving forward. Dkt. No. 39.
response, Plaintiffs submitted a letter representing that
they would file another amended complaint that would add both
new claims and new parties, including Art of War among
others. Dkt. No. 43. Plaintiffs subsequently filed the
operative SAC. In contrast to its predecessor complaints, the
SAC alleges "upon information and belief that the EMI
Administration Agreement - which Plaintiffs originally sued
to enforce - in fact automatically terminated after three
years but that EMI has nevertheless "continued to
administer the Art of War catalog, " including
Plaintiffs' compositions. SAC ¶¶ 22-23.
Accordingly, rather than assert, as before, a claim for
breach of the express EMI Administration Agreement, the SAC
alleges that an "implied contract was created between
[EMI] and [Sony] and Plaintiffs after the term of the EMI
Administration Agreement ended, " and that Sony and EMI
breached that implied contract by failing to pay certain
royalties directly to Plaintiffs (instead paying them,
purportedly, to 27 Red, Robinson, and/or the unidentified
Defendants). SAC ¶¶ 52-60. The SAC also includes
what appears to be a declaratory judgment claim, seeking
"a declaration .. . that the EMI Administration
Agreement is terminated and that [EMI and Sony] no longer
have the right to administer the Dru Hill musical
compositions." SAC ¶¶ 61-62. The SAC does not
name Art of War as a party, notwithstanding Plaintiffs'
suggestion that they anticipated adding it.
and EMI moved to dismiss the SAC. Dkt. Nos. 53-55. Five days
after Defendants' motion was fully submitted, Art of War,
now represented by the same counsel as Plaintiffs, moved to
intervene in this action pursuant to Federal Rule of Civil
Procedure 24. Dkt. Nos. 62-63. At Sony and EMI's request,
the Court stayed further briefing on Art of War's motion
pending resolution of the motion to dismiss. Dkt. No. 65.
survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), a plaintiff is required to plead
"sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its
face.'" Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). "A claim has facial
plausibility when the plaintiff pleads sufficient factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. "The plausibility standard
is not akin to a 'probability requirement, ' but it
asks for more than a sheer possibility that a defendant has
acted unlawfully. Where a complaint pleads facts that are
'merely consistent with' a defendant's liability,
it 'stops short of the line between possibility and
plausibility of entitlement to relief" Id.
(quoting Twombly, 550 U.S. at 557) (additional
internal quotation marks omitted).
deciding a motion to dismiss, a court is required to
"accept the complaint's factual allegations as
true and draw all reasonable inferences in the plaintiffs
favor." Steginsky v. Xcelera Inc. 741 F.3d 365,
368 (2d Cir. 2014). Still, it need not give "effect to
legal conclusions couched as factual allegations."
Port Dock & Stone Corp. v. Oldcastle Northeast,
Inc., 507 F.3d 117, 121 (2d Cir. 2007). Generally, a
court "must limit its analysis to the four corners of
the complaint." Vassilatos v. Ceram Tech. Int'l
Ltd., 92-cv-4574, 1993 WL 177780, at *5 (S.D.N.Y. May
19, 1993) (citing Kopec v. Coughlin, 922 F.2d 152,
154-55 (2d Cir. 1991)). It may, however, "consider
'documents attached to the complaint as an exhibit or
incorporated in it by reference, matters of which judicial
notice may be taken, or documents either in plaintiffs'
possession or of which plaintiffs had knowledge and relied on
in bringing suit.'" Chambers v. Time Warner,
Inc., 282 F.3d 147, 153 (2d Cir. 2002) (internal
alterations omitted) (quoting Brass v. Am. Film Techs.,
Inc., 987 F.2d 142, 150 (2d Cir. 1993)).
SAC Fails to Plausibly Allege an Enforceable Implied Contract
parties devote much of their briefing on Plaintiffs'
implied contract claim to disputing whether the EMI
Administration Agreement remains in force (and thus governs
the subject matter of this lawsuit), and, relatedly, whether
Plaintiffs have effectively pled themselves out of court by
making inconsistent allegations on that point across their
serial pleadings. In the Court's view, it is unnecessary
to resolve these questions because the operative implied
contract claim fails for a more fundamental reason, also
invoked by Defendants: even taking all allegations in the ...