Cortés-Ramos v. Martin-Morales

First Circuit vacates summary judgment for Ricky Martin and district court’s invalidation of plaintiff’s copyright registration, holding that although there was no reversible jurisdictional error, district court abused its discretion by granting summary judgment before plaintiff had an opportunity to conduct discovery.

This appeal marked the “fifth appeal in 12 years across three cases arising from the same core facts” in plaintiff Luis Adrián Cortés-Ramos’ ongoing copyright dispute with pop star Ricky Martin and Sony alleging that Martin’s song and music video “Vida” were substantially similar to the original song and music video that Cortés submitted to the 2014 SuperSong contest. The contest, co-sponsored by Sony and Martin, invited entrants to compose, record and submit an original musical composition and accompanying music video. The winning composition could potentially be included on the 2014 FIFA World Cup Official Album. Cortés entered the contest by uploading a song and accompanying music video before the submission deadline. He was later notified that he had been selected as one of 20 finalists, and received an email from a contest co-sponsor requesting that he sign and return several documents to Sony. Cortés signed the documents before a notary public and returned them. Another entrant was announced as the winner, and Martin later released “Vida” on or about April 22, 2014. Cortés alleged that “Vida” was similar to the music video he had submitted for the contest.      

The First Circuit described the present appeal as another chapter in Cortés’ “perpetual quest” for copyright relief against Martin. Earlier appeals arose both from litigation involving Martin and from litigation involving Sony, all arising from the same core contest-related facts. (Read our summaries of the prior First Circuit ruling here, the subsequent First Circuit ruling here and the later district court decision here.) In the prior Martin case, the First Circuit affirmed dismissal of Cortés’ state-law claims but partially vacated and remanded to allow the district court to decide whether to dismiss the federal copyright claim without prejudice or allow Cortés to supplement his complaint to allege copyright registration. On remand, Cortés repeatedly sought to amend his complaint to add details about his copyright registration, while Martin opposed amendment on grounds including futility and lack of personal jurisdiction. The district court dismissed the remaining copyright claim without prejudice after concluding that Cortés could not cure the defect by amending because his registration was effective only after the complaint had been filed.

Cortés then filed the present lawsuit, again alleging that Martin infringed his federal copyright by producing, distributing and displaying a substantially similar song and video, and also alleging fraudulent inducement. Martin answered, asserted counterclaims seeking to invalidate Cortés’ registration and moved for judgment on the pleadings, arguing that documents incorporated by the pleadings showed that Cortés had assigned all rights in the video to Sony. The district court dismissed the fraudulent inducement claim but allowed the copyright claim to proceed, reasoning that Martin had not adequately developed his assignment argument and that Cortés’ allegation that he never received the contest rules gave the court “pause.” Martin moved for reconsideration, which the district court denied; but it ordered summary judgment briefing on the issue “[t]o avoid discovery and unnecessary litigation” and set the summary judgment motion filing deadline for just over a month later. On the same day, the district court denied Cortés’ motion for an initial scheduling conference, and Cortés immediately sought reconsideration, arguing that initial disclosures had not occurred and that Martin controlled the evidence.

Martin then filed for summary judgment. The magistrate judge first rejected Cortés’ argument that summary judgment was premature because “no discovery has been conducted, not even initial disclosures.” The magistrate judge reasoned that Cortés’ complaint about the absence of discovery rang hollow because the federal rules required mutual initial disclosures “without awaiting a discovery request” and Cortés had not alleged that he had fulfilled his own obligations under the federal rules. The magistrate judge also rejected Cortés’ arbitration-based jurisdictional argument. Cortés argued that the court lacked “jurisdiction to make any rulings regarding the Contest Documents” because that question was reserved for arbitration proceedings he planned to file against Sony. The magistrate disposed of this argument, noting that no arbitration had been filed, and noting First Circuit authority that “[a]n agreement to arbitrate does not divest a court of its jurisdiction.” On the merits, the magistrate judge concluded that the contest rules contained “broad, all-encompassing language” that assigned Cortés copyrights to Sony, that Cortés had accepted the contest rules and that he therefore could not establish ownership of a valid copyright as required for infringement.

Cortés objected to the magistrate judge’s report, arguing among other things that he had repeatedly sought discovery and that the relevant evidence was controlled by Martin. Cortés also objected to the magistrate judge’s treatment of the arbitration issue, the finding that the contest rules assigned copyrights, and the determination that he had assented to the contest rules.

The district court adopted the magistrate’s report in full. On discovery, the district court gave four principal reasons: Cortés had not alleged that he invited Martin to confer or made his own initial disclosures; Sony’s possession of documents did not excuse Cortés’ failure to use subpoena power; Cortés did not file a proper Rule 56(d) motion requesting additional time to conduct discovery; and the dispositive question was a “strictly legal issue” concerning whether the contest documents formed a contract precluding the copyright claim. The district court also rejected Cortés’ arbitration argument as “murky,” reasoning that his arbitration agreement with Sony created no jurisdictional defect in the case against Martin and that there was no basis to abstain. After granting summary judgment, the district court held that Cortés had assigned any rights in the submission materials to Sony and therefore “had no rights to register with the Copyright Office in 2017,” so it declared his Certificate of Registration invalid.

After Cortés appealed, the First Circuit reversed the grant of summary judgment.

The First Circuit also rejected Cortés’ arbitration and jurisdiction arguments. Cortés argued that any controversy between him and Sony “had to be adjudicated by an arbiter” and that the district court therefore lacked jurisdiction to resolve issues relating to the contest rules in the case against Martin. The First Circuit held that its precedent foreclosed that argument because “[a]n agreement to arbitrate does not divest a court of its jurisdiction.” The court also rejected any suggestion that the Sony arbitration clause required arbitration with Martin because a necessary condition to compelling arbitration is “that the other party is bound by” the arbitration clause, and Cortés did not show that Martin was bound by the Sony arbitration agreement. Finally, the court saw no reason to abstain from adjudicating this case, especially because Cortés “not only properly invoked the district court’s jurisdiction” by suing there but then “embraced it when favorable to him.” The First Circuit therefore concluded that there was “no reversible error on jurisdictional and/or arbitration-related grounds.”

The court then turned to discovery, specifically Rule 56(d), which it found to be the dispositive issue. The majority understood Cortés’ grievance to be that the district court granted summary judgment before any discovery occurred. Although Cortés “never actually invoked Rule 56(d) by name,” the court held that his motion to reconsider could “be reasonably understood as an initial Rule 56(d)-style plea for relief,” especially because he continued to press the discovery issue throughout the case. In that motion, Cortés had argued that “[t]o allow the filing of summary judgment without any discovery is contrary to . . . Rule 56 and only benefits [Martin,] who exercises control[] over all the records and the evidence.” The court explained that Rule 56(d) should be applied “liberally” and that courts should hold parties to the rule’s “spirit rather than its letter.”

Applying the First Circuit’s five Rule 56(d) factors—authoritativeness, timeliness, good cause, utility and materiality—the majority held that Cortés’ showing was sufficient under the unusual circumstances. On authoritativeness, the court acknowledged that Cortés did not attach a separate affidavit or declaration, but held that the formality could be relaxed because Cortés had acted diligently. On timeliness, the court gave Cortés “credit,” noting that he moved for reconsideration the same day the district court denied his request for an initial scheduling conference. The court emphasized that Rule 56(d) is “designed to minister to the vigilant” and found “due diligence both in pursuing discovery before the summary judgment initiative surface[d]” and in pursuing relief afterward.

On good cause, the court held that Cortés had not had a full and fair opportunity to conduct discovery. The court distinguished this case from the typical Rule 56(d) case, explaining that this was not a matter of incomplete discovery but rather a case involving “no discovery.” The court stressed that the district court moved directly from judgment-on-the-pleadings practice to summary judgment specifically “[t]o avoid discovery.” At the same time, Martin supported his summary judgment motion with affidavits from Sony employees and documents that Cortés did not have a chance to test through depositions or review through discovery. The majority criticized that posture sharply, stating that “Martin might as well have said, ‘Trust me, there’s nothing else to see.’” The court added that formal discovery exists so a party can “trust, but verify,” and that modern discovery rules are intended to make litigation less “a game of blind man’s buff” and more “a fair contest with the basic issues and facts disclosed to the fullest practicable extent.”

The First Circuit also emphasized that when evidence is largely or solely within the defendant’s control, that factor “weighs heavily in favor of relief under” Rule 56(d). The court found that this principle applied even though Sony, rather than Martin, appeared to hold the contest documents, because Martin was able to use his prior business relationship and former co-defendant relationship with Sony to gather documents for summary judgment while opposing Cortés’ ability to probe for more. The court further noted that “typically, when the parties have no opportunity for discovery, denying the Rule 56([d]) motion and ruling on a summary judgment motion is likely to be an abuse of discretion.” The majority rejected the district court’s reliance on Cortés’ failure to make initial disclosures, explaining that if Martin and Sony held all the facts, it was unclear what Cortés could have disclosed and that initial disclosures would not have changed the court’s decision to fast-track the case to avoid discovery. The court likewise rejected the district court’s view that Cortés could have subpoenaed Sony, reasoning that the district court’s refusal to hold a scheduling conference and its decision to proceed to summary judgment left no reasonable discovery window.

Although the court acknowledged that Cortés’ briefing “was hardly a model of clarity,” it found that his arguments were “lucid enough to convey the gist” and excused the shortcomings under Rule 56(d)’s flexible standard. The court also excused Cortés’ less-than-specific showings on utility and materiality because discovery had not begun, he consistently asserted that he lacked the documents, and the threshold for materiality is low where the significance of unknown facts cannot yet be assessed. In synthesizing the point, the court held that Cortés did not get a “full and fair opportunity” to pursue discovery and that this, combined with his diligence, constituted reversible error. The court cautioned that while discovery can be expensive and burdensome, district courts must fairly balance the parties’ interests, “particularly when one party has access to/control over all the documents and the other has no more than a vague memory of what documents were exchanged many years ago.” On remand, the district court was directed to clarify the parties’ discovery obligations and permit Cortés to conduct discovery related to the key issues.

The First Circuit therefore vacated both the summary judgment order and the order invalidating Cortés’ copyright registration. The court expressly declined to reach the merits of the district court’s assignment and assent rulings, holding that summary judgment should come only after Cortés has had a “full and fair opportunity” to pursue discovery.

Chief Judge Barron partially dissented, agreeing that the district court had jurisdiction notwithstanding the arbitration clause between Cortés and Sony, but dissenting from the majority’s Rule 56(d) ruling. In the dissent’s view, Cortés did not make the Rule 56(d) arguments that the majority credited him with making. The dissent emphasized the district court’s findings that Cortés did not claim he had “ever invited Martin to confer regarding discovery,” that Martin rejected such an invitation, that Cortés made the required initial disclosures, or that the case was exempt from initial disclosures. The dissent further pointed to the district court’s conclusion that, even if Cortés’ opposition were construed as a Rule 56(d) motion, Cortés “failed to meet the requirements” of the rule because he failed “to even vaguely describe what facts he could counter with discovery.” According to the dissent, Cortés’ appellate argument did little more than assert that he wanted discovery, told the district court he wanted discovery, and did not get discovery.