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McGregor v. VP Records

United States District Court, E.D. New York

June 29, 2017

KEMAR MCGREGOR, Plaintiff,
v.
VP RECORDS, et al., Defendant.

          ORDER ON MOTION TO DISMISS

          BETH BLOOM UNITED STATES DISTRICT JUDGE

         THIS CAUSE is before the Court upon Defendants, VP Records, Greensleeves Records Ltd., STB Music, Inc., Greensleeves Publishing Ltd., ADA Music, and Warner Music, Inc. (collectively “Defendants”) Joint Motion to Transfer and to Dismiss Plaintiff's Complaint, ECF No. [38] (the “Motion”). The Court has carefully reviewed the Motion, the parties' briefs, the applicable law and is otherwise fully advised. For the reasons that follow, the Motion is granted.

         I. BACKGROUND

         Plaintiff, Kemar McGregor (“Plaintiff”), is a musical producer who alleges he has an ownership interest in hundreds of musical compositions listed in the Schedules A and B, attached to his Complaint. See ECF No. [1] at 1. Defendants VP Records, STB Music, Greensleeves Records, Ltd., Greensleeves Publishing Ltd., Warner Music Inc., ADA Music, and Royalty Network, Inc. are independent record labels, entertainment distribution corporations, or music publishing corporations alleged to be organized under the laws of New York with their principal place of business in New York. Id. at 4-6. As to the musical compositions identified in Schedule A, Plaintiff alleges that he maintains an ownership interest in the rights and title to the copyrights as the author and sole owner of Kingston Song Edition, a publishing entity. Id. at 6. As to the musical compositions identified in Schedule B, Plaintiff alleges that he inherited the interest and rights in those compositions. Id. at 6.

         Plaintiff alleges that, in 2005, he signed a management contract and recording agreement with artist Windell Edwards a/k/a Gyptian (“Gyptian”) whereby Gyptian granted 20 percent ownership in all of his copyrights created from 2005 to 2010 to Kingston Songs (“2005 contract”). Id. at 7. After this contract was executed, Plaintiff entered into several licensing agreements with Defendants involving compositions owned by Plaintiff and his former partner, Ingo Kleinhammer, now deceased, . Id. In 2006, VP Records, Plaintiff and Mr. Kleinhammer entered into a three-way licensing and publishing agreement for two albums with artist Gyptian (“2006 contract”). Id. Thereafter, in 2008, Gyptian and VP records signed a recording agreement for the creation of several albums, despite a clause in the 2006 contract prohibiting Gyptian from signing overlapping recording agreements, and another publishing agreement with VP Records involving the same copyrights bound by the 2005 and 2006 contracts. Id. at 8.

         According to Plaintiff, Defendants[1] continue to claim sole ownership and publishing rights to the compositions identified in the Complaint without Plaintiff's authorization and despite Plaintiff's repeated requests to discontinue the alleged infringement. Id. at 1, 10. More specifically, Plaintiff alleges that in 2014, Defendants began infringing on a large assortment of his copyrights in connection with those compositions he inherited in 2013 when Mr. Kleinhammer passed away. Id. at 10. Further, Defendants continue to collect revenue in connection with sound recordings and compositions that Plaintiff solely owns despite his demands to cease collecting such revenue. Id. at 11. Plaintiff also alleges that ADA Music and Warner Music are infringing upon Plaintiff's rights and collecting revenue relating to certain music videos on YouTube that he wholly owns.[2] Id. at 11.

         Count I of the Complaint alleges claims against all Defendants for copyright infringement in violation of 17 U.S.C. §§ 106 and 501. Id. at 12-14. In Count II, Plaintiff seeks an accounting from Defendants for allegedly failing to credit and account on co-owned musical compositions and sound recordings identified on Schedule B. Id. at 14. In the last count, Count III, Plaintiff sues all Defendants for contractual interference as it relates to Plaintiff's 2005 contract with artist Gyptian. Id. at 15. Throughout the Complaint, Plaintiff also seeks injunctive relief against the Defendants, preventing them from exploiting his musical compositions without his authorization and from collecting profits from performance revenues. Id. at 1, 11, 12, 16.

         In the Motion, Defendants seek to transfer this case to the District Court for the Eastern District of New York or, alternatively, to dismiss the Complaint for failure to state a claim. See ECF No. [38]. Specifically, Defendants seek to enforce a forum-selection clause contained within a Release and Settlement Agreement (“Settlement Agreement”) signed by several of the Defendants and Plaintiff in a prior lawsuit captioned VP Music Group, Inc., et. al. v. Kemar McGregor, et. al., Case No. 1:11-cv-02619-JBW-MDG, litigated in the Eastern District of New York (“the New York lawsuit”). Id. Defendants argue that Plaintiff's claims here arise in connection with or are related to the matters resolved in the Settlement Agreement, requiring the transfer of this lawsuit to that venue pursuant to the mandatory language of the forum-selection clause. Id. Alternatively, Defendants seek to dismiss the Complaint for failure to state a claim. Id. Plaintiff's Response in opposition and Defendants' Reply timely followed. See ECF Nos. [47] and [48]. Concurrent with their Motion, Defendants also filed a Request for Judicial Notice in support of the Motion to Transfer and/or Dismiss, asking the Court to take judicial notice of the docket and a stipulation filed in the New York lawsuit. See ECF No. [39]. Although the Court required that Plaintiff provide a response to this Motion by May 5, 2017, see ECF No. [43], Plaintiff has not responded or otherwise objected to this request.[3]

         II. LEGAL STANDARD

         “[T]he appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens.” Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S.Ct. 568, 580 (2013). As the Supreme Court explained, 28 U.S.C. § 1404(a) “is merely a codification of the doctrine of forum non conveniens for the subset of cases in which the transferee forum is within the federal court system.... For the remaining set of cases calling for a nonfederal forum, § 1404(a) has no application, but the residual doctrine of forum non conveniens has continuing application.” Id. Generally, “[t]o obtain dismissal for forum non conveniens, ‘the moving party must demonstrate that (1) an adequate alternative forum is available, (2) the public and private factors weigh in favor of dismissal, and (3) the plaintiff can reinstate his suit in the alternative forum without undue inconvenience or prejudice.'” GDG Acquisitions, LLC v. Gov't of Belize, 749 F.3d 1024, 1028 (11th Cir. 2014) (quoting Leon v. Millon Air, Inc., 251 F.3d 1305, 1310-11 (11th Cir. 2001)). In addition, the Supreme Court has held that the existence of a forum-selection clause is essentially case-dispositive of the section 1404(a) or forum non conveniens analysis. See Atlantic Marine, 134 S.Ct. at 581; see also GDG Acquisitions, 749 F.3d at 1028 (“an enforceable forum-selection clause carries near-determinative weight” in the forum non conveniens analysis). “When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause. Only under extraordinary circumstances unrelated to the convenience of the parties should a § 1404(a) motion be denied.” Atlantic Marine, 134 S.Ct. at 581.

         This determination stems, in part, from the recognition that a valid forum-selection clause represents the parties' ab initio agreement as to the most proper forum. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 (1988); Atlantic Marine, 134 S.Ct. at 581-82 (“When parties agree to a forum-selection clause, they waive the right to challenge a preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation.”); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 16-17 (1972) (“[W]here it can be said with reasonable assurance that at the time they entered the contract, the parties to a freely negotiated private commercial agreement contemplated the claimed inconvenience, it is difficult to see why any such claim of inconvenience should be heard to render the forum clause unenforceable.”). Ordinarily, while the “burden of demonstrating that an appropriate alternative forum exists is not a heavy one, ” it does lie squarely “with the party seeking dismissal.” Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 136 F.Supp.2d 1271, 1276 (S.D. Fla. 2001). Once established, the existence of a valid forum-selection clause governing the claims at issue shifts the burden to the non-movant to establish that dismissal is improper. See Espie v. Washington Nat. Ins. Co., No. 2:14cv6-MHT, 2014 WL 2921022, at *10 (M.D. Ala. June 27, 2014). Indeed, the party seeking to avoid the forum-selection clause bears a “heavy burden of proof” that the clause should be set aside. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991).

         In considering a motion to dismiss for forum non conveniens, as with a motion to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3), a court must accept the facts in a plaintiff's complaint as true. See, e.g., Matuszevoska v. Princess Cruise Lines, Ltd., No. 06-21975-CIV, 2007 WL 7728281, at *2 (S.D. Fla. Feb. 12, 2007). A court may “consider matters outside the pleadings if presented in proper form by the parties” in ruling on a motion to dismiss for forum non conveniens. MGC Commc'ns, Inc. v. BellSouth Telecomms., Inc., 146 F.Supp.2d 1344, 1349 (S.D. Fla. 2001); see also Grp. CG Builders & Contractors v. Cahaba Disaster Recovery, LLC, 534 F.App'x 826, 829-30 (11th Cir. 2013) (affidavit in support of motion to dismiss for forum non conveniens properly considered); Webb v. Ginn Fin. Servs., 500 F.App'x 851, 854 (11th Cir. 2012) (consideration of evidence outside the pleadings was appropriate on Rule 12(b)(3) motion). However, “[w]here conflicts exist between allegations in the complaint and evidence outside the pleadings, the court must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff.” Malik v. Hood, No. 11-81090-CIV, 2012 WL 1906306, at *1 (S.D. Fla. May 25, 2012); see also Belik v. Carlson Travel Grp., Inc., 26 F.Supp.3d 1258, 1263 (S.D. Fla. 2012) (considering motion to dismiss for forum non conveniens, court “must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff”).

         While the Atlantic Marine analysis presupposes a valid forum-selection clause, “forum-selection clauses are presumptively valid and enforceable [absent] a ‘strong showing' that enforcement would be unfair or unreasonable under the circumstances.” Krenkel v. Kerzner Int'l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009) (citing Carnival Cruise Lines, 499 U.S. at 593-95); see also Bremen, 407 U.S. at 10 (forum-selection clauses prima facie valid and enforceable as a matter of federal law). “A forum-selection clause can only be invalidated on a showing of a ‘bad faith motive' where the forum was chosen ‘as a means of discouraging [parties] from pursuing legitimate claims.'” Segal v. Amazon.com, Inc., 763 F.Supp.2d 1367, 1369 (S.D. Fla. 2011) (quoting Carnival Cruise Lines, 499 U.S. at 595). Furthermore, “a forum selection clause operates as a separate contract that is severable from the agreement in which it is contained and is enforceable, as long as the forum selection clause itself was not included in the contract because of fraud.” Sachs v. Bankers Life & Cas. Co., No. 11-81344-CIV, 2012 WL 1900033, at *2 (S.D. Fla. May 24, 2012) (citing Rucker v. Oasis Legal Finance LLC, 632 F.3d 1231 (11th Cir. 2011) (“A forum selection clause is viewed as a separate contract that is severable from the agreement in which it is contained.”)). That is, a forum selection clause is unenforceable only if “the inclusion of that clause in the contract was the product of fraud or coercion.” Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285, 1296 (11th Cir. 1998). “Choice clauses will be found unreasonable under the circumstances and thus unenforceable only when: (1) their formation was induced by fraud or overreaching; (2) the plaintiff effectively would be deprived of its day in court because of the inconvenience or unfairness of the chosen forum; (3) the fundamental unfairness of the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of such provisions would contravene a strong public policy.” Lipcon, 148 F.3d at 1296 (citing Carnival Cruise Lines, 499 U.S. at 594-95; Bremen, 407 U.S. at 15-18).

         Beyond validity, in analyzing the application of a forum-selection clause, a court must determine whether the claim or relationship at issue falls within the scope of the clause-by looking to the language of the clause itself-and whether the clause is mandatory or permissive. See Bahamas Sales Assoc., LLC v. Byers,701 F.3d 1335, 1340 (11th Cir. 2012) (“To determine if a claim falls within the scope of a clause, we look to the language of the clause.”); Fla. Polk Cty. v. ...


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