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Artists Rights Enforcement Corp. v. Estate of Robinson

United States District Court, S.D. New York

March 29, 2018

ARTISTS RIGHTS ENFORCEMENT CORP., Plaintiff,
v.
THE ESTATE OF JOSEPH ROBINSON, JR., LELAND ROBINSON, SUGARHILL MUSIC PUBLISHING INC., a/k/a SUGAR HILL MUSIC PUBLISHING, INC., and SUGAR HILL RECORDS INC., Defendants.

          OPINION AND ORDER

          Edgardo Ramos, U.S.D.J.

         Artists Rights Enforcement Corp. (“AREC” or “Plaintiff”) brings this action against the Estate of Joseph Robinson Jr., Leland Robinson, Sugarhill Music Publishing Inc., a/k/a Sugar Hill Music Publishing Inc. (“SMP”) and Sugar Hill Records Inc. (together, the “Defendants”). See Compl. (Doc. 1). On March 8, 2017, the Court partially granted Defendants' motion to dismiss and gave AREC leave to file an amended complaint. See Order dated March 8, 2017 (Doc. 33). AREC filed its First Amended Complaint (“FAC”) on March 28, 2017 (Doc. 34).

         Before this Court is the Defendants' motion to dismiss the FAC on the grounds that: (1) Plaintiff does not have standing to assert its declaratory judgment claim, and (2) Plaintiff did not adequately state a claim for tortious interference with contract.

         For the following reasons, Defendants' motion is GRANTED in part and DENIED in part.

         I. Background [1]

         The Court assumes familiarity with the record and its prior opinion, which details the facts and procedural history of this case, and discusses here only those facts necessary for its disposition of the instant motion. See Order dated March 8, 2017 (Doc. 33).

         Between July 17, 1980 and January 28, 1981, several songwriters, artists and music publishers (the “Songwriters”) entered into Exclusive Songwriters Agreements with SMP. FAC ¶ 13.[2] The Exclusive Songwriters Agreements gave SMP control over the Songwriters' music catalogues and in return, required it to make royalty payments and provide semi-annual royalty reports. Id. at ¶¶ 13, 16. However, Defendants have not fulfilled their royalty payment and notice obligations. Id. at ¶ 17.

         Between April 15, 1999 and April 23, 2003, the Songwriters each signed letter agreements with AREC, retaining AREC to investigate and recover royalties. Id. at ¶ 18; see also Declaration of James P. Cinque in Support of Defendants' Motion to Dismiss Counts II and II (“Cinque Decl.”) (Doc. 47) Ex. B.[3] In exchange, AREC became entitled to 50% of the royalties owing to the Songwriters. FAC ¶ 19.

         Beginning in 1999, AREC has been engaged in litigation with Defendants over Defendants' delinquent royalty payments. Id. ¶ 21. Litigation filed in this District in 1999 ended in a 2002 settlement agreement; however, Defendants refused to execute the agreement. Id. ¶¶ 23, 25. In response, presiding Judge Richard Berman entered an order on March 12, 2003 mandating that the Defendants “deal directly and solely with AREC” and requiring the parties to sign a rider to the 2002 settlement agreement. Id. ¶¶ 25-26 (emphasis added).

         Defendants neither executed the rider nor abided by the terms of the 2002 settlement agreement. Id. ¶ 27.[4] The parties appeared before Judge Berman again on April 15, 2003 regarding conduct taken by Defendants allegedly on behalf of Songwriters Nathaniel Glover Jr. and Eddie Morris. Id. ¶¶ 28-29. After this conference, Judge Berman entered another order in which Glover and Morris reaffirmed that AREC was their “irrevocably appointed agent for . . . the receipt of royalty reports and royalty income.” Id. ¶ 31.

         AREC filed a new action in New York state court against Defendants (excluding Leland Robinson) on May 12, 2003, alleging breach of contract, tortious interference with contract, tortious interference with prospective economic advantage, and breach of third party beneficiary contracts. Id. ¶¶ 34-35. On July 14, 2004, the parties met at AREC's offices and agreed to a settlement that would extend the deadline for Defendants' payment and reporting obligations (the “2004 rider”). Id. ¶ 37. Although Defendants signed the 2004 rider, they did not abide by its terms. Id. ¶¶ 38-39. The parties thereafter moved to trial in July 2007, but settled once more on the third day of trial. Id. ¶ 43. Under that settlement (the “2007 settlement agreement”), the parties reaffirmed the 2002 settlement agreement and the 2004 rider. The 2007 settlement agreement required Defendants to: (1) make twelve payments to AREC; (2) provide AREC with copies of all licenses for Songwriters Glover and Morris; and (3) pay AREC directly for any royalties owed to AREC's clients (including a 20% “bonus” if Defendants received a license request, or a license payment, and did not inform AREC within fifteen days). Id. ¶¶ 43-44.

         Responding to what it described as “multiple breaches of the 2002 and 2007 settlement agreements and 2004 rider, ” AREC brought suit on behalf of Songwriters Morris and Glover against Defendant Joseph Robinson, Jr. on July 25, 2012 in New York state court. Id. ¶ 52. AREC also sent Defendants notices of default and demand letters on April 1, 2015. Id. ¶ 53. After receiving what it believed to be unsatisfactory responses, AREC sent Defendants an email on May 4, 2015, informing Defendants that it was terminating the Exclusive Songwriters Agreements. Id. ¶ 57.

         AREC filed this action on December 18, 2015, alleging breach of contract and seeking a declaratory judgment that its termination of the Exclusive Songwriters Agreements was valid. See Compl. (Doc. 1). Subsequently, Defendant Leland Robinson contacted several Songwriters “to pressure them into terminating their relationship with AREC.” FAC ¶ 65. In June 2016, Robinson participated in a conference call with Guy Todd Williams, in which Robinson told Williams that Bravo TV was interested in producing a television show about Robinson and Williams putting on a reunion tour. Id. ¶ 69. On June 28, 2016, Robinson called Williams and told him that he wanted to deal with Williams directly and did not want to pay AREC. Id. In response to this conduct, the Court held a conference on August 17, 2016 and entered a stipulation and order on August 22, 2016, stating that:

For the duration of this action, Robinson on the one hand and each of any one or more of [the Songwriters] on the other hand . . . shall not contact or cause anyone else to contact the other either in person, telephonically or electronically without counsel for Plaintiff . . . and counsel for Defendants.

See Id. ¶ 72; Doc. 29. Despite this Order, in March 2017, Defendant Robinson contacted Songwriters Williams and Payne. FAC ¶ 73. Robinson offered Williams $15, 000 to settle his claims, and on March 24, 2017, Williams advised AREC that he would ...


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