Paisley Park Enters., Inc. v. George Ian Boxill, Rogue Music Alliance, LLC

253 F.Supp.3d 1037

PAISLEY PARK ENTERPRISES, INC., and Comerica Bank & Trust, N.A., as Personal Representative of the Estate of Prince Rogers Nelson, Plaintiffs,

v.George Ian BOXILL, Rogue Music Alliance, LLC, and Deliverance, LLC, Defendants.

Case No. 17-cv-1212 (WMW/TNL).

United States District Court, D. Minnesota.

Signed May 22, 2017

Christopher D. Pham, Grant D. Fairbairn, Joseph J. Cassioppi, Lora Mitchell Friedemann, Fredrikson & Byron, PA, Minneapolis, MN, for Plaintiffs.

Anthony R. Zeuli, Brent E. Routman, Paige S. Stradley, Merchant & Gould PC, Minneapolis, MN, Christopher L. Brown, Brown & Rosen LLC, Boston, MA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION

Wilhelmina M. Wright, United States District Judge

This lawsuit involves a dispute over the ownership of previously unreleased recordings of five songs by the internationally known recording artist Prince Rogers Nelson (Prince). Defendant George Ian Boxill is a sound engineer who worked with Prince during Prince's lifetime to record and edit the five songs at issue. After Prince's death in 2016, Boxill worked with Defendants Rogue Music Alliance, LLC, and Deliverance, LLC, on a commercial release of the disputed Prince recordings in Boxill's possession. Plaintiffs Paisley Park Enterprises, Inc., and Comerica Bank & Trust, N.A., as Personal Representative of the Estate of Prince Rogers Nelson, initiated this lawsuit to enjoin Defendants from promoting and distributing the disputed recordings and to secure the return of those recordings to Prince's estate.

Plaintiffs moved for a temporary restraining order, which the Court issued on April 19, 2017. (Dkts. 30, 34.) Thereafter, Defendants filed a motion to modify the temporary restraining order and for early discovery. Plaintiffs also filed a motion for a preliminary injunction. The Court extended the temporary restraining order in a May 3, 2017 Order, which effectively granted some of the relief sought by Defendants' motion to modify the temporary restraining order. For the reasons addressed below, the Court grants Plaintiffs' motion for a preliminary injunction and denies as moot Defendants' motion to modify the temporary restraining order and for early discovery.

BACKGROUND

Boxill is a sound engineer who worked with Prince on several music recordings between 2004 and 2008. Plaintiff Paisley Park Enterprises, Inc., is a Minnesota corporation that Prince owned during his lifetime and is now owned by his estate. Plaintiff Comerica Bank & Trust, N.A., is the personal representative of Prince's estate.

In early 2004, Boxill was engaged as a consultant to assist in selecting and testing recording equipment for the recording studios at Prince's residence in Chanhassen, Minnesota, known as Paisley Park. Boxill executed a Confidentiality Agreement with Paisley Park Enterprises in March 2004. That Confidentiality Agreement provides that recordings and other physical materials that resulted from Boxill's work with Prince "shall remain Paisley's sole and exclusive property, shall not be used by [Boxill] in any way whatsoever, and shall be returned to Paisley immediately upon request."¹

Boxill began recording music with Prince in 2004 and is credited as a sound engineer on Prince's album titled 3121 , which was released in 2006. In 2006, Boxill worked with Prince to record the five songs at issue in this lawsuit: "Deliverance," "No One Else," "I Am," "Touch Me," and "Sunrise Sunset." Between 2006 and 2008, Boxill edited these five recordings and communicated with Prince regarding their progress. These recordings were not released during Prince's lifetime. Boxill and Prince stopped working together regularly in December 2008.

After Prince's death in April 2016, and ten years after Boxill worked with Prince to record the songs, Boxill mixed and edited "Deliverance," "No One Else," "I Am," "Touch Me," and "Sunrise Sunset." Boxill negotiated with representatives of Prince's estate regarding the release of these songs, but Boxill and the estate were unable to reach an agreement. In September 2016, attorneys for Boxill and for Prince's estate also jointly attempted to reach a negotiated agreement with Atlantic Records to include "Deliverance" on the movie soundtrack for Birth of a Nation. But the parties also were unable to reach an agreement on that contract.

In March 2017, representatives of Prince's estate learned that Boxill was planning an independent release of "Deliverance" and demanded the immediate return of any recordings of Prince in Boxill's possession. Boxill refused. Plaintiffs subsequently initiated this lawsuit in Minnesota state court, seeking possession of the disputed recordings. Plaintiffs filed a motion for a temporary restraining order in the state-court proceeding on April 14, 2017.

On April 18, 2017, Rogue Music Alliance, LLC, issued a press release announcing the April 21, 2017 nationwide release of an EP² titled DELIVERANCE that includes six previously unreleased songs featuring Prince—the five songs described above plus an extended version of the song titled "I Am." At the time of the press release, DELIVERANCE was available for pre-order through several online retailers, and the song "Deliverance" was available for purchase in advance of DELIVERANCE 's release.

Also on April 18, 2017, Boxill removed the state-court action to this Court. The next day, Plaintiffs again filed a motion for a temporary restraining order to prevent the release of DELIVERANCE and to secure possession of the masters and all copies of any unreleased recordings. The Court held a hearing and issued a temporary restraining order the same day. The temporary restraining order permitted Boxill and others acting in concert with him to continue distributing the song "Deliverance" but enjoined the release of the remaining songs on the DELIVERANCE EP, citing the Confidentiality Agreement between Boxill and Paisley Park Enterprises. The temporary restraining order also required Boxill to deliver all of the Prince recordings in his possession to Plaintiffs.

Boxill moved to modify the temporary restraining order and for expedited discovery. Plaintiffs filed an amended complaint, which added two defendants—Rogue Music Alliance, LLC, and Deliverance, LLC—and a variety of claims, including copyright and trademark violations. Plaintiffs also moved for a preliminary injunction to enjoin Defendants from selling or promoting any of the songs on the DELIVERANCE EP.

The Court held a consolidated hearing on the parties' pending motions. After the hearing, the Court extended the duration of the temporary restraining order, modified the temporary restraining order to require the disputed recordings to be retained by counsel for each party for use only in this litigation, and ordered Plaintiffs to post a bond.

ANALYSIS

I. Plaintiffs' Motion for Preliminary Injunction

A. Legal Standard

When determining whether a preliminary injunction is warranted, a district court considers four factors: (1) the probability that the movant will succeed on the merits, (2) the threat of irreparable harm to the movant, (3) the balance between this harm and the injury that the injunction will inflict on other parties, and (4) the public interest. Dataphase Sys., Inc. v. C L Sys., Inc. , 640 F.2d 109, 114 (8th Cir. 1981) (en banc). "While the absence of a likelihood of success on the merits strongly suggests that preliminary injunctive relief should be denied, a finding of a likelihood of success on the merits only justifies preliminary relief if there is a risk of irreparable harm and the balance of the factors support an injunction." CDI Energy Servs., Inc. v. W. River Pumps, Inc. , 567 F.3d 398, 402 (8th Cir. 2009). The burden to establish the propriety of injunctive relief rests with the movant. Watkins Inc. v. Lewis , 346 F.3d 841, 844 (8th Cir. 2003). The purpose of a preliminary injunction is to "preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Texas v. Camenisch , 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981).

1. Likelihood of Success on the Merits

The Court first considers the probability that Plaintiffs will succeed on the merits of their claims. See Dataphase , 640 F.2d at 114. To demonstrate that a preliminary injunction is warranted, Plaintiffs "need only show a reasonable probability of success, that is, a fair chance of prevailing" on the merits. Kroupa v. Nielsen , 731 F.3d 813, 818 (8th Cir. 2013) (emphasis added) (internal quotation marks omitted); see also Planned Parenthood Minn., N.D., S.D. v. Rounds , 530 F.3d 724, 732 (8th Cir. 2008) (en banc) ("[W]e emphasize that district courts should still apply the familiar ‘fair chance of prevailing’ test where a preliminary injunction is sought to enjoin something other than government action based on presumptively reasoned democratic processes."). This factor does not require a party seeking preliminary injunctive relief to prove a greater than fifty percent chance that the party will prevail on the merits. Dataphase , 640 F.2d at 113. Although no single Dataphase factor is determinative, "the probability of success factor is the most significant." Home Instead, Inc. v. Florance , 721 F.3d 494, 497 (8th Cir. 2013).

In support of their motion for a preliminary injunction, Plaintiffs assert that they are likely to succeed on the merits of five of their legal claims—breach of contract, conversion, misappropriation of trade secrets, copyright infringement, and trademark infringement. The Court addresses Plaintiffs' likelihood of success as to each of these claims.

a. Breach of Contract

As to the breach-of-contract claim, Plaintiffs contend that Boxill breached the Confidentiality Agreement by retaining recordings, refusing to return those recordings to Paisley Park Enterprises on demand, and attempting to exploit those recordings for his own gain at the expense of Prince's estate. Boxill counters that Plaintiffs...