Paisley Park Enterprises, Inc. v. Boxill

In suit brought by representatives of estate of Prince against pop star’s former sound engineer and others involved in posthumous release of Prince recordings, district court grants plaintiffs’ motion to dismiss counterclaim alleging tortious interference with contracts, finding defendants failed to identify actual contracts with business partners, but denies motion to dismiss counterclaim for tortious interference with prospective economic advantage, finding that defendants adequately identified business partners and plead independently tortious acts by plaintiffs.

Plaintiffs Paisley Park Enterprises and Comerica Bank & Trust, as personal representatives of the Estate of Prince Rogers Nelson, the artist known as Prince, filed suit against defendants, including Prince’s former sound engineer, George Boxill, alleging that defendants’ posthumous release of Prince recordings on an album titled “Deliverance” violated the late pop star’s intellectual property rights and violated a confidentiality agreement that Boxill had signed. Defendants counterclaimed that plaintiffs engaged in tortious interference with contracts and prospective economic advantage by sending cease and desist letters to entities that distributed the recordings. 

In addition to Boxill, plaintiffs included as defendants a variety of individuals and entities who were involved in the marketing and release of the album, including Brown & Rosen, a Massachusetts law firm that provided legal advice to defendants regarding the legal status of the Prince recordings. Specifically, Brown & Rosen provided an opinion letter asserting that the Prince recordings were a joint work by Prince and Boxill, and that both had rights to the recordings. In response, plaintiffs sent Brown & Rosen a copy of the confidentiality agreement Boxill had signed in order to support their position that the recordings were not joint works. Plaintiffs alleged that Brown & Rosen allowed defendants to circulate their opinion letter to third parties even after being put on notice of the confidentiality agreement, and that defendants used the letter to convince third parties to distribute and advertise the recordings. 

In their counterclaims, defendants alleged that plaintiffs had engaged in tortious interference with contract by misrepresenting to defendants’ business partners both the scope of the confidentiality agreement and an April 2017 temporary restraining order that had been issued against defendants, and by improperly threatening to pursue legal action against any of the business partners that continued distribution of the album. 

The court observed that, to adequately state a claim for tortious interference with contract under Minnesota law, a party must allege (1) the existence of a contract, (2) the accused’s knowledge of the contract, (3) intentional procurement, (4) the absence of justification and (5) damages. The court concluded that defendants failed to state a cognizable claim because there was no allegation of the existence of an actual contract. Although defendants identified various business partners with whom they had negotiated for the Prince recordings to be promoted and advertised, they failed to identify any agreement with business partners that constitutes an actual contract. Accordingly, the court granted plaintiffs’ motion to dismiss defendants’ counterclaim for tortious interference with contracts, and dismissed that claim without prejudice. 
The court denied plaintiffs’ motion to dismiss defendants’ claim for tortious interference with prospective economic advantage. To state this claim under Minnesota law, a defendant must allege (1) the existence of a reasonable expectation of economic advantage, (2) plaintiffs’ knowledge of that expectation, (3) plaintiffs’ intentional interference with defendants’ expectation, such that the interference was either independently tortious or in violation of a state or federal statute or regulation, (4) a reasonable probability that defendants would have realized the economic advantage or benefit in the absence of plaintiffs’ wrongful act, and (5) damages. 

The court rejected plaintiffs’ argument that defendants had failed to state a claim because they did not identify a specific business partner or customer with which they expected any future economic advantage. Noting that it was not clear that identification of a specific person or customer was required to survive a motion to dismiss, the court pointed out that defendants had nevertheless identified Apple and Amazon as specific business partners with which they expected to have an ongoing relationship. Plaintiffs also argued that defendants failed to allege an independently tortious act. The court disagreed, pointing to defendants’ allegations that plaintiffs intentionally misrepresented the nature of the confidentiality agreement and TRO, and in doing so knowingly made unfounded threats to take legal actions against entities that distributed the Prince recordings. 

Additionally, the court granted Brown & Rosen’s motion to dismiss, finding that the firm’s emails, phone calls and opinion letter were not so purposefully directed at Minnesota to justify the court’s exercise of personal jurisdiction. The court explained that because Brown & Rosen did not directly sell the music in the forum state, and is not a Minnesota law firm nor were its clients in this matter Minnesota residents, the nature and quality of the asserted contacts weighed strongly against the court’s exercise of personal jurisdiction. The court was also not persuaded by plaintiffs’ assertion that Brown & Rosen committed intentional torts directed at Minnesota, and therefore dismissed the law firm from the action. 

Summary prepared by Tal Dickstein and Mariah Volk.