Rupa Marya v. Warner Chappell Music Inc

Filing 132

MINUTES OF Motion Hearing held before Magistrate Judge Michael R. Wilner. (See Minute Order for further details) denying #123 Motion for Order Court Recorder: CS 7/25/2014. (vm)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Good Morning You Prod. v. Warner/Chappell Music

Present: The
Honorable

Date

July 25, 2014

Michael R. Wilner
Veronica McKamie
Deputy Clerk

CS 7/25/2014
Court Reporter / Recorder

Attorneys Present for Plaintiff:

Attorneys Present for Defendant:

Mark C. Rifkin
Betsy C. Manifold

Melinda E. LeMoine
Adam I. Kaplan

Proceedings:

ORDER RE: DISCOVERY MOTION

This is a discovery motion in a copyright action. Plaintiffs moved to overrule a claim of
attorney-client privilege that Defendant asserted as to materials obtained from a third party.1
(Docket # 123.)
After consulting with Chief Judge King, the Court (Magistrate Judge Wilner) briefly
extended the discovery cutoff and agreed to hear the motion on an expedited basis. The Court
considered the parties’ hefty joint filings, supplemental submissions, and arguments at the
motion hearing and previous telephone conferences. (Docket # 124-31.) The Court adopts its
tentative decision as explained to the parties at the hearing today, and augments it with this
written decision. The motion to overrule the privilege claim is DENIED.
Facts
At issue in the litigation is the ownership of the song “Happy Birthday to You.”
Defendant Warner/Chappell Music (Warner) contends that it is the current owner of one or more
valid copyrights regarding the song. Warner is the successor-in-interest of a previous
rightsholder, Summy-Birchard Music (Summy).

1

The motion originally sought to compel additional discovery and relief from the
discovery cutoff in the action. At oral argument, Plaintiffs acknowledged that these ancillary requests
are now moot.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

The present discovery dispute involves materials that Summy sent to ASCAP, a collective
music rights management association, in 1979. Specifically, Summy received two letters from
its attorney at the Coudert Brothers law firm in 1976 and 1978. (Docket # 124 (Rifkin Decl.
at Ex. B and C).)2 The letters may broadly be described as relating to the history and status of
the “Happy Birthday” copyrights. The parties agree that the letters were protected by the
attorney-client privilege when sent from Coudert Brothers to Summy, as they clearly were
confidential communications intended to provide legal advice from a lawyer to a client.
In 1979, Summy provided the Coudert letters to the general counsel of ASCAP. (Docket
# 124 (Rifkin Decl. at Ex. D).) Without disclosing the text of the terse transmittal letter,
Summy’s vice president (Arlene Sengstack) indicated that she and the ASCAP lawyer had
previously discussed the Coudert analysis regarding Summy’s copyright claim to “Happy
Birthday,” and that Summy wished to provide that analysis to ASCAP. It is this transmittal –
Summy sending previously-privileged communications from its outside lawyer to a third party –
that triggered the current discovery dispute.3

2

The Court typically refers to filed materials by their CM/ECF document number.
However, because of the expedited timing of the motion and hearing, some of the materials submitted to
the Court under seal may not have been docketed yet. For this reason, the Court will refer to the docket
number associated with the Notice of Manual Filing and give a brief textual identification to facilitate
later review of this decision.
3

Plaintiffs originally suggested that any privilege was waived when ASCAP turned over
the Coudert letters to Plaintiffs in the course of this litigation. However, because the privilege belongs
to Defendant Warner, the inadvertent third party production cannot serve a knowing waiver of Warner’s
right. Moreover, the Court concludes that Warner acted reasonably promptly under Federal Rule of
Civil Procedure 26(b)(5) and Federal Rule of Evidence 502 to “clawback” the production of the letters
and to assert its privilege after learning of the production. In turn, the Court finds that Plaintiffs
substantially complied with Rule 26(b)(5)’s sequestration provisions and its requirement to present the
dispute to a court for adjudication.
At oral argument, Plaintiffs suggested that the Court could take into consideration the
fact that ASCAP’s lawyer did not believe that the Summy - Coudert materials were privileged or
confidential at the time of their production. The Court declines to do so, particularly because the
ASCAP lawyer has made conflicting statements regarding whether the organization engages in
confidential discussions with members regarding copyright issues, and may have reconsidered the
specific issue of the Summy materials. See Docket 128 (LeMoine Decl. at Ex. A (Reimer Deposition at
69-70 (“Q. Do you have any reason to doubt as you sit here today that the communication between
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

ASCAP’s role in the music industry, in turn, presents a central consideration in the
dispute. According to a declaration from an ASCAP lawyer, ASCAP is a “voluntary
membership association” that represents songwriters and music rightsholders. (Docket # 123-10
at 2, Ex. 9 (Reimer Decl.).) Summy and Warner were among thousands of member-owners of
the non-profit organization. ASCAP licenses the public performance rights of its members’
musical works. In doing so, ASCAP may collect license fees from parties who perform its
members’ songs. ASCAP may also sue alleged infringers on behalf of those members. (Id;
Docket 124 (Klaus Decl. at Ex. B (Blietz Deposition at 163-68); Ex. C and D (Agreement
between Summy / Warner and ASCAP at ¶¶ 1(a), 4)); Docket 128 (LeMoine Decl. at Ex. A
(Reimer Deposition at 68)).) ASCAP does not own its members’ copyrights. It also does not
retain royalties or fees it receives for the services it provides to its members. Rather, pursuant to
the parties’ agreement, ASCAP is paid a sum for its expenses in administering and policing its
members musical copyrights. (Reimer Decl. at ¶ 5.)
Relevant Law
In a federal civil action, the assertion of the attorney-client privilege is governed by
federal common law. Gomez v. Vernon, 255 F.3d 1118, 1131 (9th Cir. 2001) (“Federal common
law recognizes a privilege for communications between client and attorney for the purpose of
obtaining legal advice.”). The party asserting the privilege bears the burden of proving that the
privilege applies. In re Grand Jury Investigation, 974 F.2d 1068, 1070 (9th Cir. 1992). A
federal court may engage in the “the well established practice of conducting in camera review to
prevent abuses of the attorney-client privilege.” Id. at 1073. Further, the privilege must be
“strictly construed” to avoid impeding discovery unnecessarily. United States v. Graf, 610 F.3d
1148, 1156 (9th Cir. 2010).
The following elements are necessary for the attorney-client privilege to exist:
(1) legal advice of any kind is sought (2) from a professional legal adviser
in his capacity as such, (3) the communications relating to that purpose,
(4) made in confidence (5) by the client, (6) are at his instance permanently

Summy-Birchard and ASCAP concerning the validity of the copyright for Happy Birthday to You [was]
intended to be confidential and privileged? A. No.”)).)
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

protected (7) from disclosure by himself or by the legal adviser, (8) unless
the protection be waived.
United States v. Richey, 632 F.3d 559, 566 (9th Cir. 2011).
A specific body of law has developed concerning ASCAP that is of relevance to this
issue. ASCAP is an unincorporated association comprised of numerous members. The federal
district court in the Southern District of New York (the primary situs of litigation involving
ASCAP, according to Defendant (Docket # 124 at 48 n.14)) has held that the attorney-client
privilege may directly apply to communications between an ASCAP member and the
organization’s lawyers:
For the purposes of determining the existence of an attorney-client
privilege, several district courts have held that “[e]ach individual
member of the [unincorporated] association is a client of the
association’s lawyer.” Schwartz v. Broadcast Music, 16 F.R.D. 31,
32 (S.D.N.Y. 1954); see Connelly v. Dun & Bradstreet, Inc., 96
F.R.D. 339, 341 (D. Mass. 1982); Philadelphia Housing Auth. v.
American Radiator & Standard Sanitary Corp., 294 F. Supp. 1148,
1149–50 (E.D. Pa.1969); United States v. American Radiator &
Standard Sanitary Corp., 278 F. Supp. 608, 614 (W.D. Pa. 1967); see
also Halverson v. Convenient Food Mart, Inc., 458 F.2d 927, 930
(7th Cir. 1972) (“Because the lawyer in effect had represented and
benefitted every [one of the unincorporated association’s] franchisee,
he could reasonably believe each one of them was his client.”)
United States v. ASCAP, 129 F. Supp. 2d 327, 337 (S.D.N.Y. 2001) (brackets in original). The
“mere status of being a member of an unincorporated association” is insufficient to establish a
privileged attorney-client relationship, though; the member must establish that it contacted the
association’s attorney “for the purposes of seeking legal assistance.” Id. at 337-38.
The attorney-client privilege is ordinarily waived or vitiated by disclosure of the
communication to a third party who is outside of the privileged relationship. However, as an
exception to this rule, a third party who has a “common interest” with the holder of the privilege
may receive information without constituting a waiver of the privilege. A party relying on the
common interest exception to an apparent waiver of privilege bears the burden of establishing
that: “(1) the communication is made by separate parties in the course of a matter of common
[legal] interest; (2) the communication is designed to further that effort; and (3) the privilege has
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

not been waived” otherwise. Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575, 578 (N.D.
Cal. 2007).
The common interest doctrine “is not limited to situations in which litigation has
commenced or is in progress[; however], there must be some common legal effort in furtherance
of anticipated litigation.” In re Fresh and Process Potatoes Antitrust Litigation, No. MD 102186 BLW CWD, 2014 WL 2435581 at *6-7 (D. Id. 2014) (Potatoes). Moreover, “the
communication at issue must be designed to further that legal effort.” Id. (collecting cases). The
“mere fact” that the parties have a common “commercial goal cannot by itself result in an
identity of interest between the parties.” Bank of America, N.A. v. Terra Nova Ins. Co, Ltd.,
211 F. Supp. 2d 493, 497 (S.D.N.Y. 2002) (common interest doctrine inapplicable to
relationship between bank issuing letter of credit and its debtor in which “each party had an
interest in making the terms of the transaction as favorable as possible to itself”).
Analysis
The Court concludes that the 1979 transmittal of the Coudert letters from Summy to
ASCAP did not waive the attorney-client privilege applicable to those materials. A fair reading
of (a) the evidence that Defendant Warner submitted regarding the relationship between the
entities and (b) the circumstances of the transmittal is sufficient to establish that there was no
waiver.
To be sure, the evidence presented on this issue is rather thin on both sides of the
courtroom. The parties ask the Court to divine the intent of a company that was the predecessor
of Defendant – and is not a participant in the current action – based on a three-sentence note
written by a non-lawyer over 30 years ago. Neither the sender nor the recipient of
Ms. Sengstack’s letter is available to explain its purpose or otherwise illuminate the issue.
Yet the backdrop of the Sengstack letter is of undeniable importance in this
determination. At the time that Summy gave the Coudert materials to ASCAP’s lawyer via the
Sengstack letter, ASCAP was responsible for licensing and collecting royalties for Summy
regarding its copyrighted musical works. The parties acknowledge that “Happy Birthday” was
one of the works within the ambit of ASCAP’s registration. As a result, ASCAP was required to
assert Summy’s rights – including its right to sue for copyright infringement – on behalf of this
member.
Plaintiffs explain (without contradiction from Warner) that ASCAP had not sued any user
of the “Happy Birthday” work for infringement by the time of the 1979 transmittal. There is
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

also no basis to conclude that any party had pursued a claim of copyright invalidity against
Summy’s ownership in the “Happy Birthday” copyrights.
However, the nature of the underlying Coudert letters – and the heart of the present action
– demonstrate that there were issues regarding the validity of the “Happy Birthday” copyrights
that merited considerable thought and raised colorable legal questions. Indeed, those questions
apparently caused Summy to retain a major Wall Street law firm in the mid-1970s to investigate
and opine upon the provenance of those copyrights.
The Sengstack letter is silent as to the specific reason why Summy provided materials
from its outside lawyer to the association’s lawyer regarding the validity. However, the only
sensible conclusion that the Court can draw – that is, based on the evidence presented, it is more
likely than not – is that ASCAP needed or requested this information to properly represent
Summy in exploiting its song rights. ASCAP would only have been able to sue an infringer if it
could demonstrate that its principal (Summy) owned a valid copyright. See, e.g., Range Road
Music, Inc. v. East Coast Foods, Inc., 68 F.3d 1148, 1153 (9th Cir. 2012) (“To establish a prima
facie case of copyright infringement, a plaintiff must demonstrate (1) ownership of a valid
copyright, and (2) copying of constituent elements of the work that are original.”) (quotation
omitted).
The Coudert letters speak directly to the validity of the copyrights. That would have been
a necessary precursor to any action – be it a cease-and-desist letter, a demand for a licensing fee,
or the commencement of a civil infringement lawsuit – that ASCAP could have taken on behalf
of Summy. Given the significance of the “Happy Birthday” song and its somewhat convoluted
copyright history, the only plausible reason that the Court can discern as to why Summy
divulged this information to ASCAP was to give the association “comfort” that Summy’s rights
(and, by agency exercise, ASCAP’s) were solid.
Plaintiffs argue that it is equally as plausible that Summy gave this information to
ASCAP’s general counsel for other reasons, such as to advance an informal discussion about an
issue of interest to the music rights community: whether “Happy Birthday” actually remained
protected by copyright. The Court readily acknowledges that there are aspects of the Sengstack
letter – its casual tone, the informal salutation (“Dear Bernie”) and signature (“A”), and the lack
of lawyerly statements preserving the sender’s confidentiality or expressly stating the legal
purpose for sending the materials to ASCAP – that certainly weigh against concluding that
Summy’s letter constituted a serious request for legal assistance. So too is the apparent lack of
correspondence before or after the Sengstack letter regarding copyright validity issues.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

However, the Court is persuaded by other circumstantial components and clues in the
letter that there was no “gratutitous” disclosure of this information as Plaintiff asserts. The
Sengstack letter was typed by a secretary (referenced by the notation “AMS:njr”) on corporate
stationery, was sent the general counsel of a major national organization at his office, and
indicates Ms. Sengstack’s business title. The letter expressly referenced a previous discussion
on the topic of Summy’s copyright claim to “Happy Birthday,” which establishes that there had
been an ongoing discussion between the parties on the issue. Ms. Sengstack clearly understood
that she was conveying information received from her lawyer regarding the copyright question –
the letter identifies the lawyer and his analysis of the “claim” directly. These observations
strongly suggest that the parties were dealing with a serious issue of interest to the corporation.
Moreover, the Coudert material itself constituted thoughtful, high-level, and presumably
costly legal advice regarding Summy’s valuable intellectual property. Summy’s vice president
(who apparently was married to the company’s president) personally sent the information to the
top lawyer at a major rights agency regarding a significant and widely-known song. Given the
Court’s understanding that the validity of the “Happy Birthday” rights may have been of “bet the
company” value to Summy, proof that the Coudert advice was sent to the legal chief at ASCAP
is inconsistent with Plaintiffs’ suggestion that it was the continuation of, say, a cocktail party
discussion about the song’s history.
The text of the transmittal letter, the relationship between the parties, and core logic
regarding management of copyright issues therefore lead the Court to conclude that no waiver of
the attorney-client privilege occurred. The Court finds sufficient evidence to support Warner’s
argument that Summy gave the Coudert materials to ASCAP’s lawyer for the purpose of
obtaining legal advice. ASCAP, 129 F. Supp. 2d at 338. Proof that Summy owned a legitimate
copyright was fundamental to allowing the association to provide a fundamental service –
enforcing and patrolling its members legal interest. The fact that one of Summy’s principals sent
the Coudert materials directly to the general counsel of a major rights enforcement agency fits
well within the established perspective that “[e]ach individual member of the [unincorporated]
association is a client of the association’s lawyer.” Schwartz, 16 F.R.D. at 32. If ASCAP’s
general counsel acted as Summy’s lawyer to obtain material relevant to preparing future
copyright infringement actions (even if such actions didn’t come to pass), then the client’s action
in conveying privileged materials did not cause a waiver of the privilege.
The Court also finds the evidence sufficient to establish that Summy and ASCAP
engaged in communication in furtherance of a common interest. As Summy’s agent, ASCAP
was contractually obliged to sue copyright infringers on behalf of Summy. The transmission of
material central to an infringement action enabled the rights holder and its agent to pursue their
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Title

Date

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

common interest in halting such infringement. Nidec, 249 F.R.D. at 578. Plaintiff correctly
notes that ASCAP did not stand to benefit directly from a successful copyright infringement
action, as the association did not own the song’s copyright or share meaningfully in royalties
derived from its public performances. Yet, this merely establishes that ASCAP did not have a
joint commercial goal with Summy, which would be a factor against finding a commonality of
interest here. Terra Nova, 211 F. Supp. 2d at 497. Rather, the rights owner and the non-profit
association were unified in asserting Summy’s copyrights for Summy’s benefit as a result of the
agency relationship. Potatoes, 2014 WL 2435581 at *6-7. That common interest is adequate to
warrant protecting privileged communications in advance of future conceivable litigation.4
Conclusion
When Summy provided ASCAP’s general counsel with the legal advice it obtained from
another lawyer, that did not cause a waiver of the attorney-client privilege. ASCAP stood to
potentially assert Summy’s rights as the owner of the song’s copyrights. That allowed Summy
to convey the Coudert copyright information to ASCAP in a protected manner. As Summy’s
successor, Defendant Warner properly asserted its predecessor’s privilege to prevent disclosure
of the underlying Coudert letters to Plaintiffs. Plaintiff’s challenge to that assertion is DENIED.
cc: Chief U.S. District Judge George H. King

4

The Court finds minimal support for Plaintiffs’ claims in the decisions cited in the
supplemental brief and as discussed at oral argument. Those cases are fairly read to establish the
unsurprising (and unrelated) proposition that ASCAP need not participate in every copyright action
involving one of its members and a party accused of infringing a work subject to an ASCAP license.
Doors Music Co. v. Meadowbrook Inn Corp., No. Civ. 89-134-D, 1990 WL 180286 (D.N.H. 1990)
(ASCAP not potentially liable to business establishment that improperly used infringing music; joinder
of ASCAP in action improper because association did not have “any interest in this suit that requires its
presence”); Ocasek v. Hegglund, 673 F. Supp, 108, 1087 (D. Wyo. 1987) (ASCAP not an “indispensible
party” in direct copyright action between artists and infringer; “plaintiff is the principal and ASCAP is
the agent so that under elementary principles, in an action against a stranger, the principal is the proper
party plaintiff”).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-4460 GHK (MRWx)

Date

Title

July 25, 2014

Good Morning You Prod. v. Warner/Chappell Music

1
Initials of Preparer

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