The Ray Charles Foundation v. Raenee Robinson et al

Filing 1

COMPLAINT against Defendants Reatha Butler, Robyn Moffett, David Robinson, Raenee Robinson, Ray Charles Robinson, Jr, Robert F Robinson, Sheila Robinson. Case assigned to Judge Audrey B. Collins for all further proceedings. Discovery referred to Magistrate Judge Frederick F. Mumm. (Filing fee $ 350 PAID.), filed by Plaintiff Ray Charles Foundation.(et) (Additional attachment(s) added on 3/30/2012: # 1 Ntc of Asgmt, # 2 Summons, # 3 Civil Cover Sheet) (mg).

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1 2 3 4 ROBINS, KAPLAN, MILLER & CIRESI L.L.P. Yakub Hazzard (Bar No. 150242) YHazzard@rkmc.com RexD.Glensy(BarNo. 198909) RDGlensy@rkmc.com 2049 Century Park East, Suite 3400 Los Angeles, CA 90067-3208 Telephone: 310-552-0130 Facsirmle: 310-229-5800 cs Attorneys for Plaintiff THE RAY CHARLES FOUNDATION UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA C!) 1I 11 .Q < g- 12 THE RAY CHARLES FOTJNDATION, a California Corporation, p (Js O. L A U are. ( PTS( (Thu - 13 Plaintiff, COMPLAINT FOR: v. RAENEE ROBINSON, an individual; RAY CHARLES ROBINSON JR., an individual; SHEILA ROBINSON, an individual; DAVID ROBINSON an individual; ROBERT F. ROBINON, an individual; REATHA BUTLERS an individual; and ROBYN MOFFETt an individual, 1 2 3 Declaratory and Injunctive Relief; Breach of Contract; Breach of the Inplied Covenant of Good Faith and Fair Dealing. Defendants. Plaintiff The Ray Charles Foundation (“Plaintiff’ or “The Foundation”), a California Non-Profit Corporation, hereby alleges and avers based on knowledge as to its acts, and information and belief as to the acts of others, as follows: NATURE OF THE ACTION 1. This suit seeks to avoid the consequences of actions perpetrated by seven adult children (collectively, the “Defendants”) of the world-famous and renowned singer-songwriter Ray Charles Robinson, p/k/a Ray Charles (“Ray 60575062A COMPLAINT 1 2 in December 2002, Ray Charles gathered most of his twelve children (five of the 3 seven defendants (two were then incarcerated) and five others who are not part of 4 this action) in Los Angeles, California, to advise them of what he intended to 5 provide to each of them. Specifically, Ray Charles advised his children that, 6 expressly conditioned upon their agreement as indicated below, he intended to fund 7 separate irrevocable trusts for the benefit of each of them in the amount of $500,000 8 j Charles”) who passed away in June 2004. Less than two years prior to his passing, (and he would take care of all the associated taxes), and that the children would 9 have no further interests in his estate. In express consideration for said trusts, each 10 of the children who were over the age of eighteen at the time (including all of the 11 seven defendants in this case) entered into a written agreement whereby each 12 acknowledged and agreed that the said $500,000 irrevocable trust would be the 13 entirety of their inheritance from their father, that each would receive no further 14 inheritance from their father, and that each relinquished and waived any further 15 claims to their father’s estate. In complete disregard of the confidence, trust, and 16 belief in his own children that their father reposed in them, by undertaking the 17 actions described below in this Complaint, Defendants have reneged on and are in 18 breach or other violation of this agreement. 2. 19 To better explain the import of Defendants’ improper acts, some 20 background context is necessary. The Copyright Act permits authors and specified 21 parties to terminate copyright transfers and recapture those interests back from the 22 original transferee or a current grantee under certain narrowly defined 23 circumstances. The stated policy behind these particular provisions of the 24 Copyright Act is to give the original transferor of the copyright the opportunity to 25 renegotiate for himself a better deal once the copyrighted assets at issue have 26 acquired a significantly higher market value than they had when the original 27 transfer took place. These termination of transfer provisions of the Copyright Act 28 do not apply to works that were created as works made for hire. Purporting to act 60575062.1 - 2 - COMPLAiNT 1 2 whom by that time had received the entirety of his or her $500,000 described 3 above, served copyright termination of transfer notices on the publishers of 4 approximately fifty-one individual musical compositions authored in whole or in 5 part by Ray Charles. The notices suffer from various defects discussed below, 6 separate and apart from constituting a breach of the Defendants’ said agreements 7 with their father. Should these improper notices be allowed to effectuate the 8 j under these provisions of the Copyright Act, in March 2010, Defendants, each of termination of the underlying copyright transfers, the copyrights in these musical 9 compositions, along with some of the income derived from the exploitation of these 10 cJ Jj ii children on a staggered basis beginning on April 1, 2012, and continuing until 12 September 28, 2019, depending either on the date the song first received federal 13 0 compositions in the United States, would be recaptured by Ray Charles’s adult copyright protection or on the date the grant was effectuated. (A chart listing the 14 songs and the purported effective date of the termination of transfer for each is 15 attached as Exhibit A). This result is contrary to copyright law, as well as being a 16 breach of Defendants’ said agreements with their father. 17 3. The musical compositions listed on Exhibit A were originally written 18 and composed in whole or in part by Ray Charles pursuant to an employment 19 relationship while he was under an exclusive employment recording contract with 20 his record label. As part of this employment relationship, a music publishing 21 company affiliated with that record label owned the musical compositions that Ray 22 Charles wrote. This publishing company registered the copyrights at issue in this 23 action listing itself as the owner of these musical compositions. 24 4. In September 1980, Ray Charles renegotiated with the original music 25 publishing company’s successors-in-interest his payment terms for the songs that 26 are at issue in this action. Ray Charles received further consideration in return for 27 this renegotiation. If the musical compositions at issue in this action are not 28 deemed to be works made for hire as alleged above, then according to copyright 60575062.1 - 3 - COMPLAINT 1 2 Copyright Act’s promise and intent to give Ray Charles the ability to renegotiate his 3 original deal to be able to take advantage of the increase in value of the copyrighted 4 works. Therefore, the copyright transfer of those musical compositions that are 5 subject to the renegotiated agreement are not subject to termination as a matter of 6 law. Consequently, all of the tennination of transfer notices served by Defendants 7 pertaining to those musical compositions for which the 1980 agreement serves as a 8 j law, the September 1980 agreement is the fulfillment and satisfaction of the renegotiation are invalid. 9 5. The Foundation, which is a non-profit corporation, was created by Ray 10 U Charles during his lifetime (it was originally called The Robinson Foundation for 11 Hearing Disorders, Inc., and later legally changed its name to The Ray Charles 12 Foundation), and owns the rights, title, and interest in the intellectual property and 13 contract rights of the late Ray Charles. The Foundation’s purpose has been to 14 administer funds for scientific, educational and chantable purposes, to encourage, 15 promote and educate, through grants to institutions and organizations, as to the 16 causes and cures for diseases and disabilities of the hearing impaired and to assist 17 organizations and institutions in their social, educational, and academic 18 advancement of programs for the youth, and carry on other charitable and 19 educational activities associated with these goals as allowed by law. The 20 Foundation has provided substantial financial donations to various institutions 21 involved with areas of hearing diseases and cures, as well as other educational 22 resources for the needy. The Foundation depends upon the income received from 23 the said intellectual property and contract rights to continue the wishes of Ray 24 Charles and The Foundation’s purpose. The self-serving attempts on the part of the 25 Defendants to deprive The Foundation of its said intellectual property and contract 26 rights not only is contrary to the express wishes of their father and in breach of the 27 agreement they signed and promises that they made, but is contrary to the best 28 interests of those innocent parties who would be benefited by the grants made by 60575062.1 - 4 - COMPLAINT 1 2 royalty payments from the exploitation of musical compositions written by Ray 3 Charles during his lifetime, including those that are the subject of this action. As a 4 result, if given effect, the termination of copyright transfer notices served by 5 Defendants will adversely affect these royalty payments thus injuring The 6 Foundation, and giving The Foundation standing to bring this action. This injury 7 will be impossible to overcome given that The Foundation is precluded from 8 j The Foundation. Among the rights held by The Foundation is the right to receive soliciting and accepting any private donation. 9 6. Given that the notices are invalid pursuant to applicable copyright law, 10 11 entered into with their father, a judicial declaration as to the validity of the notices 12 4 _f and that the service of all of the notices constitute a breach of the agreements they of termination of transfers is necessary. This is especially important given that, as 13 noted above, the effective date of the earliest of these copynght terminations is 14 soon approaching, as it is purported to be April 1, 2012. .- 15 7. Thus, to protect The Foundation’s rights under copyright law, and to 16 enforce Ray Charles’s respective agreements with the Defendants, The Foundation 17 brings this action for declaratory and other relief as set forth in detail below. JURISDICTION AND VENUE 18 19 8. The Court has subj c-ct matter jurisdiction over the claims set forth 20 herein pursuant to 28 U.S.C. 21 jurisdiction over The Foundation’s claims arising under the copyright laws of the 22 United States, 17 U.S.C. 23 U.S.C. 24 § § 1331, 1338, and 1367. The Court has original 101 et seq., and the Declaratory Judgment Act, 28 § 2201(a), and supplemental jurisdiction over its related state law claims. 9. The Court has personal jurisdiction over all Defendants because a 25 substantial part of the events giving rise to the claims set forth herein occurred in 26 the State of California and the Defendants have extensive contacts with the State. 27 28 10. Venue is proper in this District pursuant to 28 U.S.C. § 139 1(b) because all Defendants are subject to the personal jurisdiction of this Court, and a 60575062.1 - 5 - COMPLAiNT 1 substantial part of the events giving rise to the claims set forth herein occurred 2 within this District. 3 THE PARTIES 4 11. Plaintiff is and at all times mentioned herein was a California 5 6 Hearing Disorders, Inc., (the “Robinson Foundation”) during his lifetime. The 8 name of the Robinson Foundation was later changed to The Ray Charles 9 Foundation. The Foundation owns all rights in and to the intellectual property and 10 0 County of Los Angeles. Ray Charles established The Robinson Foundation for 7 j Corporation with its principal place of business in the State of California, in the contract rights of the late Ray Charles, including the right to receive royalties and 11 other income from the exploitation of the musical compositions, the terminations of 12 which are at issue in this action. 13 12. Upon information and belief, Defendant RAENEE ROBiNSON is and 14 at all times mentioned herein was an individual residing in the County of Los 15 Angeles in the State of California and a daughter of Ray Charles. 16 13. Upon information and belief, Defendant RAY CHARLES 17 ROBINSON, JR. is and at all times mentioned herein was an individual residing in 18 the County of Los Angeles in the State of California and the oldest son of Ray 19 Charles. 20 14. Upon information and belief, Defendant SHEILA ROBINSON is and 21 at all times mentioned herein was an individual residing in the City of Minneapolis, 22 County of Hennepin in the State of Minnesota and a daughter of Ray Charles. 23 15. Upon information and belief, Defendant DAVID ROBINSON is and at 24 all times mentioned herein was an individual residing in the County of San Diego in 25 the State of California and a son of Ray Charles. 16. 26 Upon information and belief, Defendant ROBERT F. ROBINSON is 27 and at all times mentioned herein was an individual residing in the County of Los 28 Angeles in the State of California and a son of Ray Charles. 60575062A - 6 - COMPLAINT 1 17. Upon information and belief, Defendant REATHA BUTLER is and at 2 all times mentioned herein was an individual residing in the City of Denver, County 3 of Denver in the State of Colorado and a daughter of Ray Charles. 4 18. Upon information and belief, Defendant ROBYN MOFFETT is and at 5 all times mentioned herein was an individual residing in the City of Detroit, County 6 of Wayne in the State of Michigan and a daughter of Ray Charles. 7 FACTUAL ALLEGATIONS 8 Termination Provisions Under the 1976 Copyright Act 9 19. In 1976, Congress passed a completely new Copyright Act (the “1976 10 U Copyright Act.”) The 1976 Copyright Act reformed numerous aspects of the 11 previous Copyright Act passed in 1909 (the “1909 Copyright Act.”) In particular, 12 and most relevant to this action, the 1976 Copyright Act changed the way in which 13 federal copyright protection would begin, the methodology for calculating the 14 duration of copyright protection, and the length of such copyright protection. 15 20. The 1909 Copyright Act had a complicated system for determining the 16 commencement of federal copyright protection. In short, some form of publication 17 of the work with notice, or registration of the work with notice, was required before 18 a copyright owner could benefit from federal protection of his work. As such, the 19 mere completion of a copyrightable work did not automatically trigger federal 20 copyright protections. The 1976 Copyright Act eliminated the prior formalities in 21 order to acquire copyright protection, and shifted to a system where federal 22 copyright protection attached automatically upon the fixation of a work in tangible 23 form. 21. 24 The change in the way federal copyright protection attached to works 25 from the publicatiorilregistration system to the fixation system also necessitated a 26 change in the methodology for determining the length of copyright protection. 27 Under the 1909 Copyright Act, copyright owners were granted a 28-year term of 28 federal copyright protection that would begin at the date of publication and/or 60575062.1 - 7 - COMPLAINT 1 2 the copyright term for a further 28-year term. The stated reason to have two 28- 4 year terms was to give the original author of the copyrighted work (who would 5 have often had to sell his rights during the first term at a low price) a second chance 6 to capitalize on the worth of his work if the copyrighted assets at issue became 7 more valuable in the intervening years. The 1976 Copyright Act changed the 8 methodology to determine the date of commencement of federal copyright 9 protection to a system where copyright protection begins from the date the work 10 0 certain formalities were adhered to, the author of the copyrighted work could renew 3 j registration with the Copyright Office. At the end of that 28-year term, so long as was fixed in a tangible medium, and lasts the length of the lifetime of the author 11 plus 50 years (later amended to 70 years) following the author’s death. In other 12 words, the duration of copyright protection methodology changed from a renewable 13 fixed term of years to a vanable unitary term. 14 22. The change from the renewable fixed term of years to a variable 15 unitary term would have resulted in removing the author’s ability to recapture a 16 transferred copyright roughly half way through the term and renegotiate its transfer 17 on better terms (should the pertinent asset have increased in value in the intervening 18 time). To avoid this result, and preserve the author’s ability to renegotiate the terms 19 of copyright transfer following an increase in value of the copyrighted asset, 20 Congress enacted a new system which it termed “termination of transfers.” 21 23. The termination of transfers provisions of the 1976 Copyright Act (17 § 203 and 3 04(c)) allow, under a narrow set of statutorily defined 22 U.S.C. 23 circumstances, the original grantor (or a majority of those persons identified in the 24 statute in the event the author is deceased) to recapture the copyright from the 25 original grantee for works that entered into federal copyright protection under both 26 the 1909 Copyright Act and the 1976 Copyright Act. These termination of transfer 27 provisions do not apply to works that were created as works made for hire. As to 28 works that entered into federal copyright protection under the 1909 Copyright Act 60575062.1 - 8 - COMPLAINT 1 2 set of circumstance delineated in the statute apply, the termination of transfers 3 provisions allow, in relevant part, for the original grantor (or a majority of those 4 persons identified in the statute in the event the author is deceased)to serve valid 5 termination notices upon the current holders of the copyright during a specified 6 window so that termination can be effectuated between the date the original 7 copyright was going to expire at the end of the renewed 28-year term (i.e., 56 years 8 j and whose transfer occurred prior to January 1, 1978, should the narrowly defined after the work acquired federal copyright protection) and five years following such 9 date (17 U.S.C. §304(c)). As to works that entered into federal copyright protection 10 U under the 1976 Copyright Act and whose transfer therefore occurred after January 11 1, 1978, should the narrowly defined set of circumstance delineated in the statute 12 apply, the rules governing the termination of copyright transfer depend on whether 13 a work was already published at the time of the transfer. For those works that were 14 published as of the date of the transfer, the termination of transfers provisions 15 allow, in relevant part, for the original grantor (or a majority of those persons 16 identified in the statute in the event the author is deceased) to serve valid 17 termination notices upon the current holders of the copyright during a specified 18 window so that termination can be effectuated between thirty-five and forty years 19 from the date of the transfer. As to works that were unpublished at the time of the 20 transfer, the scheme is exactly the same as for similarly-situated published works 21 except that the termination can only be effectuated by valid notice between forty 22 and forty-five years from the date of the transfer (unless the works are then 23 subsequently published within the first five years of the transfer in which case the 24 termination can be effectuated by valid notice between thirty-five and forty years 25 from the date of such publication) (17 U.S.C. 26 27 28 § 203). Oriina1 Ownership of the Songs 24. Ray Charles was a world-renowned singer and songwriter who, according to many, changed the world of music. As an artist who was versatile and 60575062.1 - 9 - COMPLAINT 1 at ease in a wide variety of musical genres including rhythm and blues, soul, jazz, 2 country, rock and roll, pop, and gospel, Ray Charles inspired and entertained a 3 legion of millions of fans. During his career Ray Charles wrote or co-wrote 4 numerous musical compositions which he and others recorded. This action 5 involves only those musical compositions that Ray Charles wrote, either alone, or 6 with a co-author or co-authors. 25. 7 During the 1 950s, Ray Charles signed several successive Musicians 8 j Services Agreements (the “Musicians Agreements”) covering different periods in 9 time with Atlantic Records (“Atlantic”), a record label that specialized at the time in 10 rhythm and blues music. As part of these Musicians Agreements, Atlantic 11 employed Ray Charles as a performer for the purpose of recording songs that would 12 then be released under the Atlantic label. These Musicians Agreements, among 13 other things, stated that Ray Charles was hired as an employee and that he and 14 Atlantic would mutually decide on which songs to record, that the recordings would 15 be subject to Atlantic’s approval, that Atlantic would have complete control over 16 Ray Charles’s and other musicians’ services, that the records made and the 17 performances embodied within them would be the property of Atlantic, and that 18 Ray Charles would render his services as a recording artist exclusively to Atlantic. 19 In return for his services, Ray Charles received an advance payment based on the 20 number of songs he would record, as well as a royalty based on the number of 21 records sold. 26. 22 At the same time that Ray Charles was under contract as a recording 23 artist with Atlantic, as an integral part of that employment relationship, he was also 24 engaged as a songwriter by Progressive Music Publishing Co., (“Progressive”) 25 which, as illustrated by the Verified Complaint in a lawsuit filed by Ray Charles in 26 New York Supreme Court on February 23, 1962, and the subsequent settlement 27 thereof dated March 16, 1962, was a wholly-owned and controlled company of 28 Atlantic with interlocking ownership, directors, and officers. Moreover, upon 60575062.1 - 10 - COMPLAINT 1 2 the same address and office space. As was customary in the music industry at the 3 time, when an artist/songwriter, like Ray Charles, composed a musical composition 4 that the artist/songwriter and the record company decided to record, a music 5 publishing company that was owned by or affiliated with the record label would 6 often own (and in this instance, did own) the copyright in the underlying musical 7 composition. In accordance with this industry-wide custom and practice, when Ray 8 j information and belief, The Foundation alleges that Atlantic and Progressive shared Charles and Atlantic decided to record a musical composition that Ray Charles had 9 written, Atlantic’s affiliated music publishing company Progressive owned the 10 copyright in that musical composition. As such, said musical compositions were 11 composed as an employee of Progressive and thus are not subject to termination. 12 27. Sometimes, without affecting the arrangement outlined in the 13 preceding paragraph, Progressive would memorialize its ownership in a musical 14 composition written by Ray Charles, such as “I Got A Woman,” in a so-called 15 single songwriter agreement entitled “Standard Uniform Songwriters Contract” (the 16 “Songwriters Contract.”) Under the terms of the Songwriters Contract for “I Got A 17 Woman,” Progressive was deemed the owner of the copyright the song. According 18 to the Songwriters Contract, Ray Charles received: (1) a very small advance (such 19 as one dollar) on his royalty payments; (2) a royalty for every sale of sheet music of 20 the song in the United States and Canada; (3) a royalty for every sale of an 21 arrangement of the song in the United States and Canada; and (4) a royalty for 22 every sale of the associated rights of the song in the United States and Canada, 23 (such as mechanical rights (the right to record the song) and motion picture 24 synchronization and television rights (the right to use the song in a movie or a 25 television production)). (Items (2)-(4) above shall be referred to as the “Domestic 26 Royalties.”) In addition to these Domestic Royalties, still pursuant to the same 27 Songwriters Contract, Ray Charles also received a royalty for every sale of the song 28 outside of the United States and Canada (the “Foreign Royalties.”) 60575062.1 - 11 - COMPLAINT ( 1 28. After Ray Charles composed a song under his employment agreement 2 with Atlantic, Progressive would register the copyright in said song indicating itself 3 as the owner in the registration filed with the Copyright Office. This registration 4 sometimes occurred several years after Ray Charles had delivered the song to 5 Progressive and Atlantic as a result of his employment obligations. All the songs at 6 issue in this action, regardless of their dates of copyright registration, were written 7 while Ray Charles was employed by Atlantic and Progressive, and all those that 8 were recorded and released, were embodied on various albums on the Atlantic 9 label. 10 0 The 1980 Agreement 11 29. In 1980, Rightsong Music, Inc., (“Rightsong”) the apparent successor 12 13 Jj in-interest of Progressive at the time, entered into an agreement with Ray Charles pertaining to two distinct categories of songs (the “1980 Agreement”): (a) musical 14 compositions that Ray Charles had already assigned to Progressive/Rightsong 15 (collectively referred to as the “Assigned Compositions,” and identified as Exhibit 16 B to this Complaint); and (b) published and unpublished musical compositions that 17 Ray Charles had not previously assigned to any publisher (collectively referred to 18 as the “Unassigned Compositions,” and identified as Exhibit C to this Complaint). 19 30. Pursuant to the terms of the 1980 Agreement, in addition to continuing 20 to receive the royalties, Ray Charles received a significant cash payment in “further 21 consideration for the grants [relating to the Unassigned Compositions], 22 acknowledgements and confirmations [relating to the Assigned Compositions.]” The Agreement Between Ray Charles and His Adult Children 23 24 31. In late 2002, Ray Charles sought to revise his comprehensive estate 25 plan to include providing for each of his twelve children (the seven defendants in 26 this action and five others). Pursuant to this plan, provided expressly that his 27 children agreed as indicated herein, Ray Charles intended to fund separate 28 irrevocable trusts for the benefit of each of his children in the amount of $500,000 60575062.1 - 12 - COMPLAINT 1 and to pay all the associated taxes that stemmed from such transaction. It was 2 explained to his children that the $500,000 trusts were all that each of them would 3 receive from Ray Charles’s estate. 4 32. In express consideration for Ray Charles’s funding of this irrevocable 5 6 waiving any right to make a claim against his estate.” It was further explained to 11 the children present (and later, upon their release, to the two Defendants who were 12 incarcerated at the time) that should they refuse to sign the Statement, they would 13 , that I will not inherit anything further under my father’s estate plan and that I am 10 . z trust was his or her “entire inheritance from him [Ray Charles] and I understand 9 Z < “Statements”) where they acknowledged, declared, and agreed that the $500,000 8 0 includes all seven Defendants in this action) signed identical Statements (the 7 j trust, each of his children who had attained the age of majority at the time (which receive nothing from Ray Charles, i.e., he would not fund the irrevocable trust in 14 their name nor otherwise provide for them. All seven Defendants signed such 15 Statement and subsequently all received the full amount of the trust. . 16 33. Ray Charles died in June 2004, only eighteen months after most of the 17 Defendants had signed the Statements (one Defendant signed the Statement in 18 August 2003) agreeing that they would not inherit anything more from their father, 19 other than the irrevocable trust, and that they would waive all rights to make a 20 claim against their father’s estate. Pursuant to his estate plan, Ray Charles left all of: 21 his rights in his works and rights under contracts, including the compositions that 22 are the subject of this action, to The Foundation. The Improper and Invalid Copyright Termination Notices 23 34. 24 In defiance of the trust and confidence reposed in them by their father, 25 and in complete breach of the Statement that each of them signed, on March 30, 26 2010, purporting to act under the termination of transfers provisions of the 1976 27 Copyright Act, Defendants served thirty-nine copyright termination notices on a 28 whole host of entities, including, but not limited to, Progressive’s successor-in60575062.1 - 13 - COMPLAINT 1 interest, Wamer/Chappell Music, of approximately fifty-one individual musical 2 compositions written or co-written by Ray Charles. Copies of such notices were 3 also served on other parties including but not limited to Broadcast Music, Inc. 4 35. All of the musical compositions to which the termination notices 5 6 such terminations cannot be less than two years or more than ten years from the 8 date the notices are served. Thus, the earliest date for termination chosen by 9 Defendants is April 1, 2012, being two years from the serving of the notices. 10 Because the time for the effective dates of termination is dictated by the 1976 11 Copyright Act according to either the date of the grant or the date of publication of 12 the composition, the effective dates of termination of the fifty-one individual 13 composition titles that are at issue in this action are staggered, commencing, as 14 noted, on April 1, 2012, and ending on September 28, 2019. (See Exhibit A to the 15 O Compositions. According to the 1976 Copyright Act, the effective date chosen for 7 j pertain are encompassed by the 1980 Agreement as either Assigned or Unassigned Complaint). 16 36. It appears that, for the Assigned Compositions, Defendants scoured the 17 o copyright registrations for the individual titles and based their effective dates of 18 termination on the date indicated therein that said title onginally secured its 19 copyright. Because some of these Assigned Compositions have more than one 20 copyright registration and Defendants elected to serve termination notices on all 21 registrations that they could find pertaining to these compositions, some of the 22 Assigned Compositions have more than one termination notice pertaining to them. 23 37. In addition, and rather confusingly, Defendants are also attempting to 24 terminate the transfers of both the Assigned and Unassigned Compositions that 25 were the subject of the 1980 Agreement. Thus, as it pertains to the Assigned 26 Compositions, Defendants have, for some compositions, served no less than three 27 different termination notices. The situation of the Ray Charles song “Mary Ann,” is 28 illustrative: Defendants have served a purported termination for a supposed January 60575062.1 - 14 - COMPLAINT 1 23, 1955, transfer (supposedly to take effect on April 1, 2012), another purported 2 termination for a supposed May 2, 1963, transfer (supposedly to take effect on May 3 3, 2019), and, because “Mary Ann” is an Assigned Composition under the 1980 4 Agreement, a third termination for a supposed transfer contained in this September 5 23, 1980, agreement (supposedly to take effect on November 15, 2015). Even if 6 some of the terminations were deemed valid, it is still extremely difficult, if not 7 impossible to determine when the copyright of the Assigned Compositions will 8 change hands. 9 38. As for the Unassigned Compositions, some of which had not yet been 10 0 published at the time of the execution of the 1980 Agreement, Defendants have ii chosen an effective date of termination that is thirty-five years from the date of 12 transfer, of the copyright. As to the unpublished musical compositions that form a 13 part of the Unassigned Compositions, this is contrary to the 1976 Copyright Act 14 that provides that such copyright cannot be terminated until the earlier of forty 15 years from the date of transfer or thirty-five years from the date of publication 16 following transfer, which for these Unassigned Compositions would mean no 17 earlier than the year 2020. Thus, the notices that pertain to the unpublished 18 Unassigned Compositions, which purport to terminate the copyright transfer in 19 2015, are defective and invalid. 20 39. The situation left by Defendants’ improper actions has created an 21 enormous cloud over the future copyright ownership of the approximately fifty-one 22 musical compositions that are at issue in this action. First, because the musical 23 compositions were created as an integral part of Ray Charles’s employment with 24 Atlantic/Progressive, they are all to be construed as works made for hire and, as 25 such, are not subject to termination; therefore all rights associated thereto should 26 remain as is. Second, assuming that the musical compositions are not deemed to be 27 works made for hire, because the 1980 Agreement constituted a renegotiation of the 28 transfer of most of the songs contained therein, the purported terminations 60575062.1 -. 15 - COMPLAINT 1 2 as to. these compositions, should continue to rest with Wamer/Chappell Music. 3 Third, because the 1980 Agreement was the original instrument of transfer of the 4 unpublished Unassigned Compositions and thus included the right of publication 5 which was not exercised within five years of such transfer, then the effective date of 6 termination noted in the notices pertaining to the unpublished Unassigned 7 Compositions is erroneous—consequently these notices should be declared invalid. 8 j pertaining thereto are null and void; consequently, the proper copyright ownership, Fourth, assuming that the 1980 Agreement is not deemed to satisfy the 1976 9 Copyright Act’s stated policy of allowing one further chance to renegotiate the 10 U terms of an original copyright transfer, the transfer terms of the Assigned 11 Compositions, then, at a minimum, constitute a new and original transfer from 12 which the new termination dates should be calculated. Fifth, regardless of the prior 13 four points, what The Foundation is being presented with are multiple notices of 14 termination pertaining to the same compositions, not all of which can possibly be 15 valid. This scenario, which is entirely of Defendants’ own making, beginning on 16 April 1, 2012, will make it very difficult, if not impossible, to exploit the valuable 17 copyrighted assets at issue because would-be third party licensees would have valid 18 doubts as to who is the proper copyright holder of these compositions. Thus, there 19 is an extreme likelihood that the value of these copyrighted assets will be 20 permanently damaged. 40. 21 Moreover, because the royalty payments due to The Foundation as the 22 sole beneficiary of Ray Charles’s estate, The Foundation will stand to be 23 substantially injured should these improper terminations be allowed to take effect. 24 FIRST CAUSE OF ACTION 25 (Declaratory and Injunctive Relief Against All Defendants) 41. 26 The Foundation re-alleges and incorporates by reference each and 27 every allegation contained in paragraphs 1 through 40 of this Complaint as though 28 fully set forth herein. 60575062. - 16 - COMPLAiNT 1 42. An actual controversy has arisen, and now exists, between The 2 Foundation and Defendants concerning the validity and effectiveness of the 3 purported terminations of transfer under the 1976 Copyright Act. 4 43. For the foregoing reasons, The Foundation seeks the following 5 declaration from the Court: 6 (a) Defendants have breached these Statements; 7 8 j (b) That the copyright termination of transfers served by the Defendants are not terminable because the musical compositions 9 10 were created as works made for hire; 11 I:iTh _ 4 _f That the Statements are valid and enforceable contracts, and that (c) That, in alternative to (b) above, the copyright terminations of 12 transfer served by the Defendants are invalid because they 13 attempt to nullify a renegotiation entered into in good faith by 14 Ray Charles and his publisher at the time as evidenced in the 15 1980 Agreement, in violation of the 1976 Copyright Act; 16 (d) That, in alternative to (b) and (c) above, that the operative 17 transfers for the Assigned Compositions are those contained in 18 the 1980 Agreement and that therefore the effective date of 19 termination must be computed from the 1980 Agreement; 20 (e) That the copyright terminations of transfer served by the 21 Defendants as to the unpublished Unassigned Compositions are 22 invalid because the effective date of termination chosen by 23 Defendants is incorrect given that the transfer contained in the 24 1980 Agreement of the unpublished Unassigned Compositions 25 included the publication right which was not exercised within 26 five years from such transfer; and (f) 27 That the Court determine which of the multiple terminations pertaining to each individual musical composition is the 28 60575062.1 - 17 - COMPLAINT I operative one, if any. 2 The Foundation is informed and believes, and based thereon alleges 44. 3 that Defendants, and each of them, dispute each of The Foundation’s contentions 4 hereinabove. 5 45. The Foundation desires a judicial determination of the validity and 6 7 Statement and the 1976 Copyright Act. Such a declaration is necessary so that The 8 j effectiveness of the termination notices and its rights and obligations under both the Foundation may ascertain its rights and obligations thereunder, to prevent further 9 breaches of the Statement, and to ensure that any clouds on the chain of title of the 10 copyrights at issue in this action be removed. 11 46. The actions of Defendants alleged have caused, and continue to cause, 12 13 Zv < great and irreparable harm to The Foundation which cannot be adequately measured by money damages alone. 14 47. For the foregoing reasons, The Foundation also requests that an 15 injunction be entered whereby Defendants are enjoined from: (a) representing, or 16 allowing others either acting on their behalf or to whom they might have already 17 agreed to transfer the copyrights at issue in this action to represent to anyone that 18 Defendants, parties acting on behalf of Defendants, or parties to whom Defendants 19 might have already agreed to transfer the copyrights at issue in this action, are to 20 become, or have become, the rightful owners of the copyrights or interests in the 21 copyrights in the compositions at issue in this action following the various 22 purportedly effective dates of termination outlined in Exhibit A to this Complaint; 23 (b) entering into, or allowing others either acting on their behalf or to whom they 24 might have already agreed to transfer the copyrights at issue in this action to enter 25 into, any licensing agreements or any other arrangement that purports to transfer the 26 copyrights or interests in the copyrights in the compositions at issue in this action, 27 to any third parties (i.e.,. parties that, as of the date of this Complaint, do not already 28 own the copyright in these songs) following the various purportedly effective dates 60575062J - 18 - COMPLAINT 1 of termination outlined in Exhibit A to this Complaint; and (c) using, or allowing 2 others either acting on their behalf or to whom they might have already agreed to 3 transfer the copyrights at issue in this action to use, the compositions at issue in this 4 action in any way (such as, but not limited to, reproduction, public performance, 5 and distribution), that is not consistent with the uses that would be permitted to any 6 non-copyright owner under the 1976 Copyright Act. 7 SECOND CAUSE OF ACTION 8 (Breach of Contract Against All Defendants) 48. 9 The Foundation re-alleges and incorporates by reference each and 10 U every allegation contained in paragraphs 1 through 47 of this Complaint as though 11 fully set forth herein. 12 49. The Foundation as the successor to Ray Charles and beneficiary of his 13 estate has materially performed the terms and conditions of the Statement in the 14 manner specified therein, except for those obligations, if any, that have been 15 waived, excused, or prevented by Defendants, and each of them. 16 50. Defendants, and each of them, have failed and refused, and continue to 17 fail and refuse, to tender their performance as required by the Statement. 18 Defendants have been in material breach and continue in material breach of the 19 following obligations, among others: 20 (a) By serving numerous termination of transfer notices which, if 21 allowed to take effect, will result in a monetary loss to The 22 Foundation as the beneficiary of Ray Charles’s estate, thus 23 resulting in a claim against this estate in violation of their 24 agreement to waive any right to make a claim against Ray 25 Charles’s estate; and (b) 26 By serving numerous termination of transfer notices which, if 27 allowed to take effect, will produce an income stream to the 28 Defendants at the expense of The Foundation in violation of 60575062.1 - 19 - COMPLAiNT 1 their agreement that they will not inherit anything other than the 2 irrevocable trust under Ray Charles’s estate plan which 3 stipulates that such income streams are to go to The Foundation. 4 51. As a direct and proximate result of the foregoing material breaches of 5 6 least $500,000 per defendant (thus totaling at least $3,500,000). The Foundation 7 will seek leave of this Court to amend this Complaint to reflect any further amounts 8 j the Statement, The Foundation has been, and will be, damaged in an amount of at of damages once these have been ascertained. THIRD CAUSE OF ACTION 10 0 9 (Breach of the Implied Covenant of Good Faith and ii Fair Dealing Against All Defendants) 12 52. The Foundation re-alleges and incorporates by reference each and 13 every allegation contained in paragraphs 1 through 51 of this Complaint as though 14 fully set forth herein. 15 53. The Statement contains a covenant implied by law that Defendants, 16 and each of them, will act toward The Foundation (as successor-in-interest of Ray 17 Charles) in good faith and with fair dealing. 18 54. The implied covenant of good faith and fair dealing imposes upon 19 Defendants, and each of them, the duty not to take any action with the motive to 20 frustrate The Foundation’s exercise of its rights under the Statement. The 21 Foundation alleges that Defendants, and each of them, in doing the acts alleged 22 herein, have breached the covenant of good faith and fair dealing implied in the 23 Statement in that they, in bad faith and with a motive to intentionally frustrate The 24 Foundation’s exercise of its rights under the Statement, have perpetrated the above 25 described acts and omissions; and through their willful acts of serving the 26 aforementioned copyright termination of transfer notices, have prevented The 27 Foundation from gaining the benefit of its bargain. 28 60575062.1 -20 - COMPLAINT 1 55. As a direct and proximate result of the above-described acts of 2 Defendants, and each of them, The Foundation has been damaged in an amount to 3 be established at trial. 4 5 WHEREFORE, The Foundation respectfully prays for judgmentas follows: 6 1. 7 the 1976 Copyright Act as alleged hereinabove; 8 j 9 10 C For a declaration of The Foundation’s rights under the Statement and 2. For actual and compensatory damages in an amount to be determined at the trial of this action, but no less than $500,000 per defendant for a total of at least $3,500,000; 11 3. For the imposition of a constructive trust for the benefit of The 12 Foundation upon all funds, assets, revenues and profits that Defendants, or each or 13 any of them, or parties acting on their behalf, or parties to whom Defendants might 14 have already agreed to transfer the copyrights at issue in this action, have received 15 or may receive from the future licensing or other exploitation of the musical 16 compositions at issue and listed in Exhibit A to this Complaint; 17 o 4. For an injunction against Defendants, and each of them, enjoining 18 them or any parties acting on their behalf, or parties to whom they might have 19 already agreed to transfer the copyrights at issue in this action from: 20 (a) Representing to anyone that they are to become, or have 21 become, the rightful owners of the copyrights in the songs at issue in this action 22 following the various purportedly effective dates of termination outlined in Exhibit 23 A to this Complaint; 24 (b) Entering into any licensing agreements, or any other 25 arrangement that purports to transfer the copyrights or any rights in the copyrights 26 in the songs at issue in this action, to any third parties (i.e., parties that, as of the 27 date of this Complaint, do not already own the copyright in these songs) following 28 the various purportedly effective dates of termination outlined in Exhibit A to this 60575062.1 - 21 - COMPLAINT 1 Complaint; and 2 (c) Using the songs at issue in this action in any way (such as, but 3 not limited to, reproduction, public performance, and distribution), that is not 4 consistent with the uses that would be permitted to any non-copyright owner under 5 the 1976 Copyright Act. 6 5. For costs of suit herein incurred; 7 6. For reasonable attorneys’ fees; 8 7. For interest on any monetary award to The Foundation; 9 8. For any other orders necessary to accomplish complete justice between 10 the parties; and ii 9. j O 4: 12 For such other and further relief as this Court may deem just and proper. 13 I : 16 DATED: March -S ,2012 ROBINS, KAPLAN, MILLER& CIRESI LLP 17 o 18 19 20 21 22 23 By:__________________ Ylub Hazzard PkxD.7i1ensy 2049 Cèntury(Park East Suite 3400 Los Angeles, CA 90067-3 208 310-552-0130 ATTORNEYS FOR PLAINTIFF THE RAY CHARLES FOUNDATION 24 25 26 27 28 -22- COMPLAINT EXHIBIT A ( ( Date of Termination Name of Song Date of Putative Grant 4/1/2012 IGotaWoman 3/8/63 12/20/54 +56 4/1/2012 I Got a Sweetie 3/8/63 2/28/55 +56 4/1/2012 Come Back Baby 12/31/62 12/20/54 +56 4/1/2012 MaryAnn 3/22/63 1/23/56 +56 4/1/2012 Blackjack 12/31/62 9/9/55 +56 4/1/2012 This Little Girl of Mine 6/5/63 6/1/55 +56 4/1/2012 AFoolforYou 2/15/62 6/1/55 +56 5/4//2012 Don’t Deceive Me 11/30/55 5/31/56 +56 5/4/2012 Hallelujah, I Love Her So 2/15/63 5/3/56 +56 9/11/2012 Leave My Woman Alone 10/3/63 9/10/56 +56 1/19/2013 Ain’t That Love 12/3/62 1/18/57 +56 1/19/2013 IWant to Know 3/8/63 1/18/57 +56 5/21/2013 It’s All Right 3/8/63 5/20/57 +56 1/9/2014 What Kind of Man are You 6/5/63 1/8/58 +56 2/20/2014 This Little Girl of Mine 6/5/63 2/19/58 +56 7/25/20 14 You Be My Baby 6/5/63 7/24/5 8 +56 7/26/20 14 I Got a Sweetie 3/8/63 7/25/5 8 +56 11/4/2014 Blues Waltz 2/9/68 11/13/58 +56 11/7/2014 Rockhouse(Partl) 4/1/63 11/6/58+56 11/7/2014 Rockhouse (Part 2) 4/1/63 11/6/58 +56 11/14/2014 HotRod 9/23/80 11/13/58+56 6/18/2015 Hallelujah, I Love Her So 2/15/63 6/17/59 +56 7/2/2015 Fathead 9/23/80 7/1/59 +56 11/15/2015 [Assigned and Unassigned Compositions] 9/23/80 9/23/80 +35 2/23/20 17 Leave My Woman Alone 10/3/63 2/22/6 1 +56 9/8/2017 Hard Times 2/15/62 8/18/61 +56 9/12/2018 Blackjack 12/31/62 9/11/62 +56 9/12/20 18 A Fool for You 2/15/62 9/11/62 +56 9/12/2018 Come Back Baby 12/31/62 9/11/62 +56 1/29/2019 Hard Times 2/15/62 1/28/63 +56 3/12/2019 Rockhouse 4/1/63 3/11/63 +56 4/20/2019 I Want to Know 3/8/63 4/19/63 +56 Date of Calculation —1— 60573737.1 EXHBrr&_ PAGE ( Date of Termination Name of Song Date of Putative Grant 4/23/20 19 It’s All Right 3/8/63 4/22/63 +56 5/3/2019 MaryAnn 3/22/63 5/2/63 +56 5/28/20 19 Leave My Woman Alone 10/3/63 5/27/63 +56 6/7/20 19 Hot Rod 9/23/80 6/6/63 +56 7/26/2019 Fathead 9/23/80 7/25/63 +56 9/28/2019 Tell Me How Do You Feel 10/3/63 9/27/62 +56 9/28/20 19 What Kind of Man are You 6/5/63 9/27/62 +56 Date of Calculation -260573737.1 EXHSTA. PAGEL EXHIBIT B IL) lii Iii I I) C’ Li C)) 0’. ‘—4 C) C) C) O Z uJC, I—Lfl 1—4 c.i: C) i; C—.) -- Z er I u_I LU Z LU CC c.5 c.f) t iii .1 0 0 F-- cC hi >_J CC Lii C) (I) C)-’ ci) C; C U) C-) I—’ ci) CL U) ci. I.’ ‘sOOO 0000000 ,-I-—4.———4,-—-I.——-)--I.--—I (DDC)C)000 0 0 .——),—--$ DC) 00 ,O-p, ——I -----S C)000.UCDOC)O0 00C)tD0DO0tIiC —-l,——),—.i.—--I,-I.——I,-.i,-.-4 iD C1 CL rtc1 iJ IL C):.CCCCCCCCCCCCLcC IX CL Lii LiC ()CiUOL)UL)UU>- ? C) .-i C) -.% C’e i•i’-.r •S% Dir)L.-) ‘:---c’-c I I 0 Li) Z U) CL IL) C,.) zJU)J Cr .J Ci CY I) ii IIJtl - v C) r IL ‘Ci JID. Ci CC I - 0 —i C’) iC)UiL Li_i .Y — —i CD ‘ I.i.> :D -- i-— C): (‘Hi_i —-- •—‘ Cr li_i J r 011 LU i_U ii.) 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F--SU) i--ti_i Ii) :CrF—CDZ LU •-xzx n: .j — (ihJUJ— .LJ_iCrC)Ci 0L’t(J)>)—’icS.ii!L1) F—C) ci C) Ci (2 Ci I i,] —I U C) C) — I.i (I) C’ CC C C) C.) EXHIBIT C SCHEDULE B. TO AGREEMENT DATED RAY CHARLES nd RIGHTSONG MUSIC, Cornostion BIT OF SOUL, A BLUE FUNK BLUE GENIUS CHARLESVLLE COSM:c RAY DAWN RAY DON T VO1J <ND: FUNNY BUT I STILL LOVE YOU GENIUS AFTER HCURS, THE HORNFUL SOUL I BELIEVE TO ‘Y S!DUL I HAD A DREAM I WONDER. HD COY RIDE 3UMPIN N THE MORNING LOVE ON. MY MIND MR. CHARLES BLuES MY BONNIE NOBODY CcRES RAY’S BLUES SOME DAY EASY SWANEE RIVER R0C< S?4EET SIXTEEN BARS TELL ALL THE WORLD ABOUT YOU TA<IN’ BOUT YOU THAT’S ENOUGH WHAT WOULD : WITHOUT ‘(lu MHAT’D I CAY X-RAY BLUES , 19e0 BETWEEN INC. 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