In putative class action challenging copyright in musical composition for American folk song “This Land Is Your Land,” district court denies motion to dismiss for lack of standing, finding that plaintiffs who secured compulsory mechanical license for use of composition to protect against litigation by defendants could continue to seek declaratory judgment that song is in public domain.
Plaintiffs James Saint-Amour and Alena Ivleva, members of the Brooklyn-based band Satorii, filed a putative class action against The Richmond Organization Inc. and its subsidiary Ludlow Music Inc., challenging defendants’ claim to the copyright in and to the musical composition “This Land Is Your Land,” the American folk song written by Woody Guthrie in the 1940s. Plaintiffs sought declaratory judgment that the song is in the public domain or, alternatively, that defendants own copyrights in only certain guitar and piano arrangements and alternate verses from the song; injunctive relief preventing defendants from claiming ownership of the copyright in the entire composition; and restitution of licensing fees. Plaintiffs also asserted state-law claims for breach of contract, recession, money had and received, and violation of New York General Business Law § 349.
Plaintiffs alleged that in February 2016, they provided defendants with a Notice of Intention to Obtain a Compulsory License and paid defendants $45.50 for a mechanical license to produce and distribute a cover of the song. Plaintiffs claimed that they paid the sum “involuntarily” and did so only because defendants had previously threatened to sue others who used the composition. Plaintiffs further alleged that they recorded a second version of the song that used the same lyrics and a different melody, but had not yet released it. According to plaintiffs, they believed that this second version did not require a compulsory license but, in light of defendants’ previous assertion of copyright ownership, feared that defendants would file a lawsuit against them if they did not first obtain a license to create a derivative work. Plaintiffs alleged that they also intend to produce and release a music video to accompany their second version of the song, but fear that without first obtaining a synchronization license from defendants they would similarly expose themselves to a substantial litigation risk.
Defendants moved to dismiss plaintiffs’ complaint for lack of subject matter jurisdiction, arguing that plaintiffs had not alleged an adequate basis for standing. Defendants also moved to dismiss plaintiff’s state-law claims on the alternative basis that they were pre-empted by the Copyright Act. The court granted the motion in part and dismissed it in part.
The court rejected defendants’ standing argument and permitted plaintiffs to continue litigating their declaratory judgment claim. In doing so, the court analogized to the United States Supreme Court’s 2007 decision in MedImmune, Inc. v. Genentech, Inc., in which the petitioner claimed it was not required to make licensing payments on a patent that it claimed was invalid but continued to make payments under protest so as to avoid the threat of paying treble damages and attorneys’ fees, and having its sales enjoined. In that case, the Supreme Court found that an actual controversy existed, holding that the “case or controversy” requirement is met where “payment of a claim is demanded as of right and where payment is made,” but where the involuntary or coercive nature of the exaction is such that it preserves the right to recover the sums paid or to challenge the legality of the claim. The court concluded that, like in MedImmune, it was plaintiffs’ own conduct — its “involuntary” payment to defendants for a compulsory mechanical license — that eliminated the imminent threat of litigation and that, notwithstanding the absence of such imminent threat, the parties’ dispute was sufficiency immediate and real to warrant declaratory judgment. Moreover, the court held, “litigation over the Song is likely to commence if and when [p]laintiffs release Version 2 [of the song] or their Music Video without obtaining a license to the disputed copyright” from defendants.
The district court agreed with defendants, however, that all of plaintiffs’ state-law claims were pre-empted by the Copyright Act and dismissed them with prejudice. As the court noted, Section 301 of the Copyright Act pre-empts a state-law claim if “(i) the work at issue comes within the subject matter of copyright and (ii) the right being asserted is equivalent to any of the exclusive rights within the general scope of copyright.” The court concluded that the first prong was satisfied because the disputed musical composition is a “paradigmatic work protected by the Copyright Act.” It then proceeded to consider the second prong as to each of plaintiffs’ state-law claims.
As to the breach of contract claim, the court held that plaintiffs “allege nothing more than that the defendants breached their contracts with the plaintiffs because the defendants ‘implicitly represented and warranted that they own the copyrights to the Song as licensed therein.’” Therefore, the court concluded, plaintiffs’ allegations that there was a failure of consideration and a breach of a promise “both rely on the alleged misrepresentation that the [d]efendants have a copyright.” The court deemed plaintiff’s claim for rescission pre-empted on the same basis — namely, that the claim was “based entirely on the allegation that there was a failure of consideration because the defendants have no valid copyright to the Song.”
In their claim for deceptive acts and practices in violation of N.Y. General Business Law § 349, plaintiffs challenged defendants’ ability to restrict the performance and distribution of “This Land Is Your Land.” Accordingly, the court concluded, “the right being challenged through [plaintiffs’] claim [was] the very right protected by the Copyright Act,” and, as such, this claim was pre-empted as well.
Finally, the court determined that plaintiffs’ claim for “money had and received” was pre-empted because the acts through which defendants obtained a compulsory mechanical license fee from plaintiffs “are only unjust if the defendants do not own the relevant portions of a copyright.”
Summary prepared by Frank D’Angelo and Lyndsi Allsop