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Artists Rights Enforcement Corp. v. Estate of King

United States District Court, S.D. New York

May 15, 2017

ARTISTS RIGHTS ENFORCEMENT CORP., Plaintiff,
v.
THE ESTATE OF BENJAMIN E. KING p/k/a BEN E. KING, by its duly appointed administrator TERRIS CANNON, et al., Defendants.

          OPINION AND ORDER

          J. PAULOETKEN United States District Judge.

         Plaintiff Artists Rights Enforcement Corp. (“AREC”) brought this suit against the Estate of Benjamin E. King (“Ben E. King”) by its administrator Terris Cannon (the “Estate”), as well as Betty King, Terris Cannon (in his personal capacity), Benjamin E. King, and Angela Matos (collectively “Defendants), seeking to enforce two contracts between AREC and the deceased, Ben E. King.

         This Court granted in part and denied in part a motion to dismiss, and AREC now moves for reconsideration and modification of that Opinion and Order. (See Dkt. No. 28; Dkt. No. 30.) AREC also seeks leave to file an amended complaint. (See Dkt. No. 43.) For the reasons that follow, the motion for reconsideration is denied, and the motion to amend is granted.

         I. Motion for Reconsideration

         In its earlier ruling, this Court dismissed AREC's claim relating to its Sale Agreement with deceased singer/songwriter Ben E. King. See Artists Rights Enf't Corp. v. Estate of King, No. 16 Civ. 1121, 2016 WL 7192093, at *4 (S.D.N.Y. Dec. 12, 2016). AREC now asks the Court to reconsider this holding on the ground that its right of administration, as set forth in the Sale Agreement, did not constitute an interest in the copyrights of the songs at issue in the contract (the “King Songs”).[1] (See Dkt. No. 31.)

         A. Legal Standard

         “A motion for reconsideration is ‘an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources . . . .'” Drapkin v. Mafco Consol. Grp., Inc., 818 F.Supp.2d 678, 695 (S.D.N.Y. 2011) (quoting In re Initial Public Offering Sec. Litig., 399 F.Supp.2d 298, 300 (S.D.N.Y. 2005)). To prevail, the movant must demonstrate: “(1) an intervening change in controlling law; (2) the availability of new evidence or (3) a need to correct a clear error or prevent manifest injustice.” Jacob v. Duane Reade, Inc., 293 F.R.D. 578, 580-81 (S.D.N.Y. 2013) (quoting Drapkin, 818 F.Supp.2d at 696). Ordinarily, the third showing-advanced by AREC here-requires the movant to demonstrate that the Court overlooked a key fact in the record or a controlling point of law. See Cioce v. Cty. of Westchester, 128 F. App'x 181, 185 (2d Cir. 2005).

         B. Discussion

         AREC asks the Court to reverse its earlier Opinion and Order in one respect: to hold that the administration right set forth in the Sale Agreement, considered in isolation from other terms in the Agreement, did not convey to AREC any interest in the King Songs' copyrights, or any right under a (soon-to-be) terminated grant, and therefore is not void as a matter of law under the Copyright Act. (Dkt. No. 31 at 4.)

         As an initial matter, AREC admits that “[t]he parties did not brief extensively whether the right of administration, ” a right putatively conveyed to AREC under the Sale Agreement, “was an interest in copyright.” (Id. at 2.) Rather, it represents that Defendants “implicitly conceded the validity of AREC's position” (id.), and subsequently appears to admit the novelty of the argument in this litigation (see Dkt. No. 39 at 1). AREC's failure to put this argument “before [the Court] on the underlying motion, ” is reason enough to deny the motion-AREC has waived the argument and cannot seek to litigate the issue for the first time on a motion to reconsider. See Range Rd. Music, Inc. v. Music Sales Corp., 90 F.Supp.2d 390, 392 (S.D.N.Y. 2000) (emphasis omitted) (quoting Yurman Design Inc. v. Chaindom Enterp., Inc., No. 99 Civ. 9307, 2000 WL 217480, at *1 (S.D.N.Y. Feb. 22, 2000)).

         AREC further fails to point to controlling law or key facts that the Court overlooked in its previous ruling. To support its legal claim, AREC cites two treatises and several district court opinions (primarily discussing royalties) (Dkt. No. 31 at 2), which do not constitute “controlling decisions” for the purposes of a motion for reconsideration. See Cobalt Multifamily Investors I, LLC v. Shapiro, 06 Civ. 6468, 2009 WL 4408207, at *2 (S.D.N.Y. Dec. 1, 2009) (“Controlling decisions include decisions from the United States Court of Appeals for the Second Circuit; they do not include decisions from other circuits or district courts, even courts in the Southern District of New York.” (quoting Langsam v. Vallarta Gardens, No. 08 Civ. 2222, 2009 WL 2252612, at *2 (S.D.N.Y. July 28, 2009))). Nor does AREC point to key facts that the Court missed, instead alluding to its intention to file a motion for leave to amend its complaint. (Dkt. No. 39 at 3-4.) AREC's motion therefore fails to make the threshold showing warranting reconsideration. See Cioce, 128 F. App'x at 185.

         Moreover, AREC's new argument-even if credited-does not address the fact that, here, the promise of any administration rights set out in the Sale Agreement was bound up with the transfer of “ten percent (10%) of [King's] ownership share” in the King Songs (or else ten percent of the proceeds of any sale of ownership). (Dkt. No. 20-3 at 2.) The Copyright Act invalidates not only the transfer of any ownership or other direct interest in a copyright-such as the ten percent promised to AREC in the Sale Agreement-but also the “further grant . . . of any right covered by a terminated grant” made prior to the effective date of termination. 17 U.S.C. § 304(c)(6)(D) (emphasis added). AREC does not clarify how the transfer of administration rights in connection with the transfer of a partial ownership interest (as described in the Sale Agreement), or in light of the scope of the original grant to Sony/ATV (Dkt. No. 20-3 at 2-3), falls outside the ambit of “any right covered by a terminated grant.” 17 U.S.C. §304(c)(6)(D) (emphasis added). (See Dkt. No. 39 at 2.) As a result, AREC's argument about the nature of administration rights would not alter the Court's prior conclusion.

         II. Motion ...


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