Luar Music Corp. v. Universal Music Grp., Inc.

861 F.Supp.2d 30

LUAR MUSIC CORP, Plaintiff,

v.UNIVERSAL MUSIC GROUP, INC and UMG Recordings, Inc., Defendants.

Civil No. 09–2263(DRD).

United States District Court, D. Puerto Rico.

May 22, 2012.

Carlos G. Dalmau–Ramirez, Carlos Dalmau Law Offices, Christina M. Beauchamp–Richards, Guaynabo, PR, Roberto Sueiro–Del–Valle, Roberto Sueiro Del Valle LLM, Freddie O. Torres–Gomez, San Juan, PR, Juan C. Bigas–Valedon, Juan C. Bigas Valedon, Ponce, PR, for Plaintiff.

Roberto C. Quinones–Rivera, Isabel Torres–Sastre, McConnell Valdes, San Juan, PR, for Defendants.

OPINION AND ORDER

DANIEL R. DOMÍNGUEZ, District Judge.

This copyright infringement action brought under the Copyright Act of 1976, 17 U.S.C. § 101 et seq., (the “Copyright Act”) arises from the alleged unlawful reproduction, distribution and adaptation of the song and sound recording “Dale Don Dale” (the “Copyrighted Work”). (Docket No. 1, ¶¶ 1, 30–32, 39, 42–46, 55–75). Plaintiff Luar Music Corp., (“Plaintiff” or “Luar”) alleges that Defendants Universal Music Group (“Universal Music”) and UMG Recordings (“UMG Recordings”)(collectively, “Defendants”) violated its rights when Defendants included the Copyrighted Work as part of the phonorecord Don Omar Da Hitman Presents Reggaeton Latino (“Reggaeton Latino”) and a remixed version of the Copyrighted Work (the “Copyrighted Work Remix”) as part of the phonorecord Fiebre de Reggaeton. (Docket No. 1, ¶¶ 31–32, 42–46).

Before the Court is Plaintiff's motion for summary judgment and Defendants' cross-motion for summary judgment. (Docket Nos. 104, 119). For the reasons set forth below, Plaintiff's motion for summary judgment is hereby DENIED and Defendants' cross-motion for summary judgment is hereby DENIED in part and GRANTED in part.

BACKGROUND

I. Procedural Background

Plaintiff commenced this action on December 18, 2009. (Docket No. 1). In an Opinion and Order dated July 29, 2011, this Court granted Defendants' motion to dismiss Plaintiff's claims relating to the electronic exploitation of the Copyrighted Work. (Docket Nos. 62, 107). Subsequently, in an Opinion and Order dated March 6, 2012, this Court granted in part and denied in part Defendants' motion to dismiss, granted Defendants' cross-motion for partial summary judgment, and denied Plaintiff's converted motion for summary judgment. (Docket No. 155); Luar Music Corp. v. Universal Music Group, Inc., 847 F.Supp.2d 299 (D.P.R.2012)(“Luar Music I”). Therein, the Court held that Plaintiff's action for damages from alleged copyright infringement occurring more than three (3) years prior to commencing the action was timebarred by the Copyright Act's statute of limitations, whereas Plaintiff's action for damages from alleged copyright infringement occurring within the three (3) years prior to filing suit was timely. Id. at 306–16.

On July 22, 2011, Plaintiff filed the instant motion for summary judgment. (Docket No. 104). Defendants opposed and cross-moved for summary judgment on September 12, 2011. (Docket No. 119). On October 12, 2011, Plaintiff replied to Defendants' opposition and opposed Defendants' cross-motion for summary judgment. (Docket No. 129).

II. Factual Background

When analyzing a motion for summary judgment, the Court must view the facts in the light most favorable to the non-moving party. See Vera v. McHugh, 622 F.3d 17, 26 (1st Cir.2010); see also Agusty–Reyes v. Dep't of Educ. Of P.R., 601 F.3d 45, 48 (1st Cir.2010); Cadle Co. v. Hayes, 116 F.3d 957, 959–60 (1st Cir.1997). “Where, as here, a district court rules simultaneously on crossmotions for summary judgment, it must view each motion, separately, through this prism.” Estate of Hevia v. Portrio Corp., 602 F.3d 34, 40 (1st Cir.2010)(citing Houlton Citizens' Coal. v. Town of Houlton, 175 F.3d 178, 183–84 (1st Cir.1999)). However, while the Court “draw[s] all reasonable inferences in the light most favorable to [the non-moving party] ... we will not draw unreasonable inferences or credit bald assertion, empty conclusions or rank conjecture.” Vera, 622 F.3d at 26 (internal quotations and citations omitted) (emphasis in original); see also Ayala–Gerena v. Bristol Myers–Squibb Co., 95 F.3d 86, 95 (1st Cir.1996). Further, the Court will not consider hearsay statements nor other allegations presented by parties that do not properly provide specific references to the record. See D.P.R. Civ. R. 56(e)(“The [C]ourt shall have no independent duty to search or consider any part of the record not specifically referenced.”); see also Morales v. A.C. Orssleff's EFTF, 246 F.3d 32, 33 (1st Cir.2001)(finding that, where a party fails to buttress factual issues with proper record citations, judgment against that party may be appropriate); Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)(“Hearsay evidence, inadmissible at trial, cannot be considered on a motion for summary judgment.”).

Plaintiff, an entity that manages music projects, including licensing songs, is the owner of the Copyrighted Work.¹ (Docket No. 105, ¶¶ 2–3; Docket No. 128–1, ¶ 3). Plaintiff alleges that Defendants unlawfully included the Copyrighted Work as part of two phonorecords: Reggaeton Latino and Fiebre de Reggaeton. The Court discusses the relevant factual circumstances surrounding the distribution of each phonorecord in turn.

A. Reggaeton Latino's Distribution

On October 21, 2005, Gustavo Lopez (“Gustavo”), the president of a division of Defendant UMG Recordings, emailed Raul Lopez (“Raul”), Plaintiff's president, the Copyrighted Work Remix.² (Docket No. 120, ¶ 1). Gustavo told Raul to “listen and call me.” (Docket No. 120–1). According to Gustavo's unsworn statement under penalty of perjury, “upon hearing the remix, Mr. [Raul] Lopez expressly gave me his consent to use and distribute the record.” (Docket No. 120, ¶ 1; 120–2, ¶ 8).

On October 26, 2005, Jeffery Koenig (“Koenig”), Defendants' in-house counsel, sent Gustavo and Raul a draft contract entitled Re–Mixer Agreement (the “Re–Mixer Agreement”). (Docket No. 120–3). The Re–Mixer Agreement provided that Plaintiff would grant Defendants the right to, inter alia, remix the Copyrighted Work and include the Remixed Copyrighted Work as part of Reggaeton Latino. (Docket No. 120–3, ¶ 1). Koenig asked for Plaintiff's authorized signatory to sign the document. (Docket No. 120, ¶ 4; Docket No. 120–3).

On November 15, 2005, Koenig emailed Patricia MacMurray (“MacMurray”), Plaintiff's attorney, a revised version of the ReMixer Agreement (the “Revised Re–Mixer Agreement”). (Docket No. 120, ¶ 5; Docket No. 120–4). Koenig asked MacMurray to print five (5) copies of the Revised Re–Mixer Agreement and have Plaintiff's authorized signatory sign the documents. (Docket No. 120, ¶ 5; Docket No. 120–4). MacMurray responded to Koenig noting that she sent the Revised Re–Mixer Agreement for “Luar's signature.” (Docket No. 120–5). On November 22, 2005 and again on November 27, 2005, Koenig asked MacMurray if she received the signed documents from Raul. (Docket No. 120–5). MacMurray told Koenig on November 28, 2005, that she sent the documents to Raul to sign, but that he is out of the office and would not return until the following Friday. (Docket No. 120, ¶ 8; Docket No. 120–5). Koenig responded by email on the same day as follows:

Until we receive the signed paperwork, for the avoidance of doubt, this e-mail shall confirm that Luar Music approved of Universal's re-mix of “Dale Don Dale” and granted Universal the right to exploit this re-mix in the manner described in the re-mixer agreement (and that Universal is proceeding in reliance herein).

(Docket No. 120–5). MacMurray responded “OK.” ( Id.; Docket No. 120, ¶ 9). The Revised Re–Mixer agreement was never signed. ( Id.) Nevertheless, Defendants distributed Copyrighted Work Remix in the United States as part of Reggaeton Latino. (Docket No. 120, ¶ 8).

B. Fiebre de Reggaeton's Release and Distribution

The Copyrighted Work was included as part of Fiebre de Reggaeton, which was distributed in Mexico. (Docket No. 120, ¶ 11; Docket No. 105–4). The parties dispute Defendants involvement in Fiebre de Reggaeton's distribution. According to Gustavo, Fiebre de Reggaeton was distributed independently by non-party Universal Music Mexico. ( Id.). According to Raul, Gustavo and Walter Kolm, UMG's President, admitted to him that they provided the Copyrighted Work “masters” to non-party Universal Mexico. (Docket No. 128, ¶ 11; Docket No. 127–34, ¶ 10; Docket No. 128, ¶ 15). In any event, Defendant Universal Music Group's logo appears on Fiebre de Reggaeton's cover artwork. (Docket No. 105, ¶ 5; Docket No. 105–4).

SUMMARY JUDGMENT STANDARD

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment should be entered where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 324–25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Pursuant to the clear language of the rule, the moving party bears a two-fold burden: it must show that there is “ ‘no genuine issue as to any material facts,’ as well as that it is entitled to judgment as a matter of law.” Vega–Rodriguez v. Puerto Rico, 110 F.3d 174, 179 (1st Cir.1997). A fact is “material” where it has the potential to change the outcome of the suit under governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is “genuine” where a reasonable jury could return a verdict for the nonmoving party based on the evidence. Id. Thus, it is well settled that “the mere existence of a scintilla of evidence” is sufficient to defeat a properly supported motion for summary judgment. Id.

After the moving party meets this burden, the onus shifts to the non-moving party to show that there still...