Rupa Marya v. Warner Chappell Music Inc

Filing 160

REPLY IN FURTHER SUPPORT OF AND IN RESPONSE TO DEFENDANTS' OPPOSITION MOTION for Review of [REDACTED] MOTION FOR REVIEW OF MAGISTRATE JUDGE WILNERS ORDER RE: DISCOVERY MOTION DENYING PLAINTIFFS MOTION TO OVERRULE DEFENDANTS CLAIM OF ATTORNEY-CLIENT PRIVILEGE [FED. R. CIV. P. 72(a); L.R. 72-2.1] 145 , MOTION for Review 153 filed by Plaintiffs Good Morning to You Productions Corp, Majar Productions LLC, Rupa Marya, Robert Siegel. (Manifold, Betsy)

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FRANCIS M. GREGOREK (144785)
[e-mail]
BETSY C. MANIFOLD (182450)
[e-mail]
RACHELE R. RICKERT (190634)
[e-mail]
MARISA C. LIVESAY (223247)
[e-mail]
WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
750 B Street, Suite 2770
San Diego, CA 92101
Telephone: [phone]
Facsimile: 619/234-4599

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Interim Class Counsel for Plaintiffs and the [Proposed] Class

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[Additional Counsel Appear on Signature Page]

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

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GOOD MORNING TO YOU
PRODUCTIONS CORP., et al.,

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Plaintiffs,

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v.

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WARNER/CHAPPELL MUSIC,
INC., et al.,

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Defendants.

) Case No. CV 13-04460-GHK (MRWx)
)
) REPLY MEMORANDUM OF POINTS
) AND AUTHORITIES IN FURTHER
) SUPPORT OF AND RESPONSE TO
) DEFENDANTS’ OPPOSITION TO
) PLAINTIFFS’ MOTION FOR REVIEW
) OF MAGISTRATE JUDGE WILNER’S
) ORDER RE: DISCOVERY MOTION
) [FED. R. CIV. P. 72(a); L.R. 72-2.1]
) DENYING PLAINTIFFS’ MOTION TO
) OVERRULE DEFENDANTS’ CLAIM OF
) ATTORNEY-CLIENT PRIVILEGE
) Date:
September 15, 2014
) Time:
9:30 A.M.
) Judge:
Hon. George H. King
) Room:
650
) Disc. Cutoff: July 11, 2014
) Pretrial Conf.:
N/A
) Trial Date:
N/A
) L/D File Jt. MSJ: 11/14/14
)

TABLE OF CONTENTS

1
2 I.
3
II.
4
5
6 III.
7
8

INTRODUCTION ....................................................................................... 1
THE RECORD DOES NOT SUPPORT THE MAGISTRATE
JUDGE’S DETERMINATION THAT MRS. SENGSTACK
SOUGHT LEGAL ADVICE FROM “BERNIE” .......................................... 2
THE MAGISTRATE JUDGE DID NOT FIND THAT MRS.
SENGSTACK’S LETTER WAS SENT IN FURTHERANCE
OF A COMMON LEGAL EFFORT REGARDING ANY
ACTUAL OR POTENTIAL LITIGATION ................................................. 6

9
10

A.

Magistrate Judge Wilner Did Not Find
Any Actual or Anticipated Litigation ................................................. 6

B.

The Record Proves That Litigation Was Not Pending,
Anticipated, or Even Possible ............................................................ 9

C.

As Only A Licensing And Collection Agent For
Thousands Of Members, ASCAP Undertook No
Common Legal Effort With Summy .................................................10

11
12
13
14
15
16 IV.
17

ASCAP AND SUMMY SHARED BUSINESS INTERESTS,
NOT LEGAL INTERESTS .........................................................................13

18 V.
19

CONCLUSION

......................................................................................16

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-i-

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2

TABLE OF AUTHORITIES
Cases

3 Bank of Am. v. Terra Nova Ins. Co., LLT,
211 F. Supp. 2d 493 (S.D.N.Y. 2002) ................................................................14
4
5 Broadcast Music, Inc. v. Columbia Broadcasting System,
441 U.S. 1 (1979) ........................................................................................ 12, 13
6
7 Columbia Broadcasting System, Inc. v. ASCAP,
400 F. Supp. 737 (S.D.N.Y. 1975) .....................................................................12
8
9 Doors Music Co. v. Meadowbrook Inn Corp.,
No. 90-134-D, 1990 U.S. Dist. LEXIS
10
13935 (D.N.H. July 20, 1990)...................................................................... 15, 16
11
12 FSP Stallion 1, LLC v. Luce,
No. 08-cv-01155-PMP-PAL, 2010 U.S. Dist. LEXIS
13
110617 (D. Nev. Sept. 30, 2010) .......................................................................14
14
Hewlett-Packard Co. v. Baush & Lomb, Inc.,
15
115 F.R.D. 308 (N.D. Cal. 1987) ................................................................passim
16
In re Fresh and Process Potatoes Antitrust Litig.,
17
No. MD 10-2186 BLW CWD, 2014 U.S. Dist. LEXIS
74936 (D. Id. May 30, 2014) .............................................................................. 6
18
19 In re Grand Jury Investigation,
974 F.2d 1068 (9th Cir. 1992) ............................................................................ 3
20
21 In re Grand Jury Subpoenas,
902 F.2d 244 (4th Cir. 1990) .............................................................................14
22
23

In re Regents of the Univ. of California,
101 F.3d 1386 (Fed. Cir. 1996).....................................................................9, 14
24
25

In Value Prop. Trust v. Zim,
212 B.R. 649 (Bankr. C.D. Cal 1997) ................................................................. 8
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27
28
- ii -

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2
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Lenz v. Universal Music Corp.,
C 07-3783 JF (RS), 2009 U.S. Dist. LEXIS
105180 (N.D. Cal. Oct. 29, 2009) ......................................................................13

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5
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Love v. The Permanente Medical Group,
No. C-12-05679 DMR, 2014 U.S. Dist. LEXIS
22243 (N.D. Cal. Feb. 19, 2014) ......................................................................... 8
Ocasek v. Heggland,
673 F. Supp. 1084 (D. Wyo. 1987) .............................................................. 15, 16
Schwartz v. Broadcast Music, Inc.,
16 F.R.D. 31 (S.D.N.Y. 1954) ............................................................................ 6

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12
13
14
15

Thought v. Oracle Corp.,
No. 12-cv-05601-WHO (MEJ), 2014 U.S. Dist. LEXIS
111642 (N.D. Cal. Aug. 11, 2014) ...................................................................... 7
U.S. v. Gonzalez,
669 F.3d 974 (9th Cir. 2012) .............................................................................. 8

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U.S. v. ASCAP,
129 F. Supp. 2d 327 (S.D.N.Y. 2001) .................................................... 2, 3, 5, 13

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19

United States v. BDO Seidman, LLP,
492 F.3d 806 (7th Cir. 2007) .............................................................................. 9

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21
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United States v. Hinkson,
585 F.3d 1247 (9th Cir. 2009) ............................................................................ 1
United States v. Zolin,
809 F.2d 411 (9th Cir. 1987) ...................................................................................... 3, 8

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- iii -

1 I.

INTRODUCTION

2

Based on the admittedly “thin” factual record before the Magistrate Judge,

3 Defendants have failed to meet their burden of proving that Mrs. Sengstack’s casual
4 note (signed “A”) to “Bernie” at ASCAP was a privileged communication.
5 Defendants also failed to meet their burden of proving that they did not waive the
privilege when Mrs. Sengstack sent the Coudert Letters to a third party.
6
First, Defendants have failed to identify any evidence that Mrs. Sengstack
7
sought legal advice when she wrote to Mr. Korman in 1979. The only evidence on
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this issue was Mrs. Sengstack’s letter itself and the fact that Summy was a member
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of ASCAP. Mrs. Sengstack’s “Dear Bernie” letter neither sought nor prompted
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advice from Mr. Korman.
11
In the absence of any evidence in the record that Mrs. Sengstack sought legal
12
advice, the Magistrate Judge merely assumed from dicta in a few unrelated antitrust
13 cases and ASCAP’s role as a collection agent for Summy (and thousands of other
14 ASCAP members) that ASCAP “needed or requested” the Coudert letters “in
15 advance of some dispute.” Of course, there is no evidence in the record that
16 ASCAP needed the Coudert Letters, that it ever requested them from Mrs.
17 Sengstack, or that it ever used them in any way. The Magistrate Judge’s hypothesis
18 is clearly erroneous because it is “illogical” and “implausible” based on the record
19 and has no support in any “inferences that may be drawn from facts in the record.”
20 United States v. Hinkson, 585 F.3d 1247, 1260 (9th Cir. 2009); Defendants’
21 Memorandum of Points and Authorities in Support of Defendants’ Opposition to
22 Plaintiffs’ Motion for Review of Magistrate Judge Wilner’s Order Re: Discovery
23 Motion Denying Plaintiffs’ Motion to Overrule Defendants’ Claim of Attorney24
25

Client Privilege (Dkt. 157) (“Opp.”) at 9:1-3; Order at 6 (attached to Dkt. 145 as
“Addendum A,” referred to hereafter as “Order”).

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Based on evidence before the court (Mrs. Sengstack’s letter and the ASCAP

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agreement), as discussed below, Defendants did not meet their burden of proving

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that Ms. Sengstack’s letter was a privileged communication.

4

Second, despite correctly stating the law, the Magistrate Judge failed to find

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or identify any common legal effort regarding any actual or potential litigation in

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applying the narrow common interest doctrine. Instead, Magistrate Judge Wilner

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applied a different standard, basing his decision on the mere possibility of “future

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conceivable litigation.” Order at 8 (emphasis added). Virtually every business

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relationship and context presents the possibility of “future conceivable litigation.”

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The standard that Magistrate Judge Wilner applied eviscerates the requirement that

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the communication in question must be in furtherance of a joint legal strategy

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relating to actual or anticipated litigation, and makes the narrow common interest

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doctrine practically limitless. The Magistrate Judge’s legal analysis was contrary to

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applicable Ninth Circuit authority and should be withdrawn.

15

Finally, if Summy and ASCAP shared any common interest in the Happy

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Birthday copyright, it was a business interest, not a legal one. The common interest

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doctrine does not protect communications about a joint business strategy even if it

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happens to include a concern about litigation. There is no evidence in the record

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that ASCAP engaged in or even contemplated any infringement litigation on behalf

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of Summy.

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Magistrate Judge Wilner’s findings and conclusions are not supported by the

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record, are clearly erroneous and contrary to law, and should be withdrawn.

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II.

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THE RECORD DOES NOT SUPPORT THE MAGISTRATE JUDGE’S
DETERMINATION THAT MRS. SENGSTACK SOUGHT LEGAL
ADVICE FROM “BERNIE”
Magistrate Judge Wilner correctly determined that the communication

between Mrs. Sengstack and Mr. Korman would be privileged only if she wrote to
“Bernie” to obtain legal advice. Order at 4 (quoting U.S. v. ASCAP, 129 F. Supp.
2d 327, 338 (S.D.N.Y. 2001) (“ASCAP”).
-2-

The “thin” factual record – which

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consisted only of Mrs. Sengstack’s letter to Bernie and the fact that Summy was a

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member of ASCAP – contains no evidence that she wrote to him seeking legal

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advice. See Order at 5 (evidence is “rather thin on both sides of the courtroom”).

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This thin record comes nowhere near meeting Defendants’ heavy burden to prove

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that the Coudert Letters remained privileged after Mrs. Sengstack sent them to

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Bernie.1

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Despite Defendants’ disingenuous claim to the contrary, the factual record is

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neither “voluminous” nor “undisputed.” Opp. at 6:6. There is absolutely no direct

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evidence that Mrs. Sengstack sought legal advice from Mr. Korman. The entire

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record on that consists only of Mrs. Sengstack’s “Dear Bernie” letter and the

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Coudert Letters themselves. Declaration of Mark C. Rifkin, Exs. C, D, and E (Dkt.

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154 filed under seal). Mrs. Sengstack’s extremely informal letter was signed only

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with an “A” (for Arlene Sengstack) and was addressed simply to “Bernie” – Mr.

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Korman was not identified or addressed as ASCAP’s General Counsel, or even as

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an attorney for that matter. Plainly, Mrs. Sengstack’s letter to “Bernie” was a

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communication between friends rather than between attorney and client.

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The Magistrate Judge cited only the “fact that one of Summy’s principals

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sent the Coudert materials directly to the general counsel of a major rights

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enforcement agency” to support its obviously hypothetical finding that “[i]f

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ASCAP’s general counsel acted as Summy’s lawyer to obtain material relevant to

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preparing future copyright infringement actions (even if such actions didn’t come to

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As Defendants concede, the attorney-client “privilege is narrowly construed
and it is the burden of the party asserting the privilege to establish the privilege
exists.” Opp. at 14:15-17. The party asserting the privilege must affirmatively
demonstrate non-waiver. United States v. Zolin, 809 F.2d 411, 1414 (9th Cir. 1987);
Opp. at 15, 18. Whether the delivery of documents to a third party is protected by
the attorney-client privilege is a mixed question of fact and law subject to de novo
review. See Zolin, 809 F.2d at 1415; In re Grand Jury Investigation, 974 F.2d
1068, 1070 (9th Cir. 1992).

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pass), then the client’s action in conveying privileged materials did not cause a

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waiver of the privilege.” Order at 7 (emphasis added). It does not come close to

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doing so.2

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That “thin” record does not come close to proving that Mrs. Sengstack sought

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legal advice from Bernie or ASCAP. The “Dear Bernie” letter certainly did not do

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so. There were no prior or subsequent communications relating to the issue.

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Summy never relied upon ASCAP for legal advice – it was, after all, represented by

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Coudert Brothers.

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Coudert Letters or solicited Mrs. Sengstack’s letter for any purpose. There is no

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evidence that Mr. Korman or ASCAP made any legal analysis of the Coudert

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Letters.

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Sengstack’s informal correspondence. There is no evidence that Mr. Korman or

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anyone at ASCAP took any action (or refrained from taking any action) based upon

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the Coudert Letters.

Nothing in the record suggests that ASCAP asked for the

There is no evidence that Bernie or ASCAP ever responded to Mrs.

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Likewise, the record does not support the Magistrate Judge’s finding “that

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ASCAP needed or requested this information to properly represent Summy in

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exploiting its song rights.” Order at 6. First, there is absolutely no evidence that

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ASCAP “requested” the information at all.

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ASCAP used the information to “represent” Summy or in any other way. ASCAP

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never analyzed the Coudert Letters, never quoted or paraphrased them, never

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followed up on them, and never took any action on them, either for Summy or for

Second, there is no evidence that

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Magistrate Judge Wilner’s believed “[p]roof that Summy owned a legitimate
copyright was fundamental to allowing the association to provide a fundamental
service – enforcing and patrolling its members’ legal interest.” Order at 7. That
misunderstanding of what ASCAP required to issue and enforce blanket licenses,
based solely on ASCAP’s role as a licensing agent, is unsupported by the record. In
fact, the complete absence of evidence that ASCAP ever evaluated the validity of a
single copyright supports the opposite conclusion that ASCAP did not (or even
want) such proof.

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itself. Moreover, ASCAP apparently had no problem pursuing its business for the

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entire 44-year period between when the purported Happy Birthday copyrights were

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registered, much less the three years between when Coudert Brothers prepared its

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detailed analysis and when Mrs. Sengstack forwarded it to “Bernie.”

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The only “other” evidence offered by Defendants as the “context” for the

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communication was Summy’s agreement as a member of ASCAP. That form

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membership agreement was the “considerable evidence” offered by Defendants

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(Opp. at 7:11). Absent evidence of any actual request for legal advice, either in the

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transmittal letter itself or in any other relevant factual context, the Magistrate Judge,

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using “core logic,” simply hypothesized that the communication must have been

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privileged because of “the relationship” between ASCAP and Summy. Order at 6.

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Plainly, not all communications between an agent (whether a collection agent or a

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licensing agent) and its principal are privileged, and ASCAP is no exception.

14

That was the district court’s holding in ASCAP, 129 F. Supp. 2d at 327, a

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case on which the Magistrate Judge relied. Order at 4. In that case, an ASCAP

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member who sought an advance on future royalty payments claimed his

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communications with ASCAP’s attorneys were privileged. ASCAP conceded it “is

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the attorney for each of [its] members . . . where a member has requested

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association-related legal advice,” but disputed the member’s claim because he had

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not sought legal advice from ASCAP. Id. at 338-39 (emphasis added). The district

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court ruled against the member (who, like Mrs. Sengstack, never asked or relied

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upon ASCAP for legal advice), finding that it would “defy common sense to

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believe that the attorneys for ASCAP also represent every one” of its more than one

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hundred thousand members. Id. at 339. There is no basis for a different conclusion

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here.

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Magistrate Judge Wilner’s conclusion that Mrs. Sengstack was seeking legal

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advice when she sent her “Dear Bernie” letter was not the result of any “core logic”

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drawn from the fact that Summy was one of thousands of ASCAP members.
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Rather, as explained in ASCAP, that conclusion defies common sense. For that

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same reason, that conclusion is inconsistent with Schwartz v. Broadcast Music, Inc.,

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16 F.R.D. 31, 32 (S.D.N.Y. 1954), also cited by the Magistrate Judge. Order at 7.

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In that case, the district court held that the attorney-client privilege applies to a

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member’s communications with ASCAP’s General Counsel only if the member was

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seeking “legal advice and if the communications were confidential.” Id. at 33

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(citation omitted).

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communications privileged, there would be no need for those added limitations:

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they would all be privileged. That is not the law.

If membership in ASCAP alone rendered a member’s

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The Magistrate Judge’s determination that Mrs. Sengstack sent her “Dear

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Bernie” letter to obtain legal advice was not supported by the “thin” record. The

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determination was clearly erroneous and contrary to law and should be withdrawn.

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III.

15

THE MAGISTRATE JUDGE DID NOT FIND THAT MRS.
SENGSTACK’S LETTER WAS SENT IN FURTHERANCE OF A
COMMON LEGAL EFFORT REGARDING ANY ACTUAL OR
POTENTIAL LITIGATION

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The common interest doctrine is very narrow. As Magistrate Judge Wilner

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correctly held, for the doctrine to apply, there must be: (i) a common legal effort;

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(ii) related to actual or anticipated litigation; and (iii) a communication in

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furtherance of that common legal effort. See Order at 5 (quoting In re Fresh and

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Process Potatoes Antitrust Litig., No. MD 10-2186 BLW CWD, 2014 U.S. Dist.

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LEXIS 74936, at *30 (D. Id. May 30, 2014) (“Potatoes”). See also Hewlett-

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Packard Co. v. Baush & Lomb, Inc., 115 F.R.D. 308, 309-310 (N.D. Cal. 1987)

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(parties negotiating sale of business had common interest in patent because

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purchaser and seller “would end up defending the same patent in one lawsuit that

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plaintiff could be expected to bring” against both parties).

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A.

Magistrate Judge Wilner Did Not Find Any Actual or
Anticipated Litigation

In the Ninth Circuit, as Magistrate Judge Wilner stated, to preserve the
-6-

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privilege, the communication in question must be in furtherance of a common legal

2

effort related to actual or anticipated litigation. See Potatoes, 2014 U.S. Dist.

3

LEXIS 74936, at *30. Most recently, in Thought v. Oracle Corp., No. 12-cv-

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05601-WHO (MEJ), 2014 U.S. Dist. LEXIS 111642, at *8 (N.D. Cal. Aug. 11,

5

2014), the court reviewed claims of privilege over communications between parties

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whose business was to acquire and license patents.

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correspondence concerning the validity of the patents in suit. Id. at *5. Carefully

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applying Ninth Circuit law, the court held that the common interest doctrine applies

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“where allied lawyers and clients work together in prosecuting or defending a

10

lawsuit so that they may exchange information among themselves without waiving

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the privilege,” adding that “it may, in rare cases, be extended to situations where

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there is anticipated joint litigation, but nothing pending immediately.” Id. at *8

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(emphasis added and citations omitted). However, the court held that the doctrine

14

“does not extend to communications about a joint business strategy that happens to

15

include a concern about litigation.” Id. (citations omitted).

Oracle sought all

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After correctly stating the law, the Magistrate Judge did not find any actual or

17

anticipated litigation, nor could any be found on this record. Instead of making the

18

requisite finding under the correct legal standard, Magistrate Judge Wilner applied a

19

different standard, improperly expanding the very narrow common interest doctrine

20

to protect “communications in advance of future conceivable litigation.” Order at

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8 (emphasis added); Opp. at 19:11-12. It goes nearly without saying that litigation

22

is conceivable in every business transaction and context. That overbroad standard

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is no standard at all. It nullifies the requirement of actual or anticipated litigation,

24

and protects virtually all business communications. The Magistrate Judge applied

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the wrong legal standard instead of finding that Summy and ASCAP were engaged

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in a common legal effort in furtherance of actual or anticipated litigation. For that

27

reason, the Order was contrary to law and should be withdrawn for that reason.

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To defend Magistrate Judge Wilner’s decision, Defendants were forced to

2

disagree with the Magistrate Judge’s interpretation of the law (Opp. at 15, 23, 24).

3

However, their own Ninth Circuit authorities do not support Defendants’ argument

4

that litigation need not be actual or anticipated, but merely conceivable. See Love v.

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The Permanente Medical Group, No. C-12-05679 DMR, 2014 U.S. Dist. LEXIS

6

22243, at *8 (N.D. Cal. Feb. 19, 2014) (privilege may extend to attorney’s

7

communications with employees of two Kaiser entities “by virtue of [their]

8

common legal interest in defending against anticipated litigation against all three

9

entities by Plaintiff”) (emphasis added); In Value Prop. Trust v. Zim, 212 B.R. 649

10

(Bankr. C.D. Cal 1997) (privilege applies when lawsuit is foreseeable) (Opp. at 15).

11

The Ninth Circuit’s decision in Zolin, 809 F.2d at 1417, upon which

12

Defendants rely to justify the Magistrate Judge’s decision (Opp. at 23:18), did not

13

extend the common interest doctrine to communications where future litigation is

14

merely conceivable. In Zolin, the government was investigating L.R. Hubbard of

15

the Church of Scientology, for criminal tax fraud.

16

between Mr. Hubbard, his attorneys, and non-lawyer third parties who were all

17

members of the Church and therefore had a common interest in sorting out the

18

Church’s affairs during an ongoing criminal investigation of tax fraud. Zolin, 809

19

F.2d at 1417. Under those circumstances, litigation was surely anticipated, not

20

merely conceivable.

The communications were

21

Similarly, in U.S. v. Gonzalez, 669 F.3d 974, 978 (9th Cir. 2012), the Ninth

22

Circuit held that the “common interest” doctrine allowed persons who share a

23

common interest in civil or criminal litigation “to communicate with their

24

respective attorneys and with each other to more effectively prosecute their claims”

25

or defenses. As in Zolin, the defendants in Gonzalez were in the midst of actual

26
27
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-8-

1

litigation, (a criminal prosecution for an insurance scam) and the issue concerned

2

the husband’s testimony at his wife’s trial.3

3

Absent the necessary finding that Mrs. Sengstack sent the Coudert Letters to

4

Mr. Korman in furtherance of a common legal effort as part of anticipated or actual

5

litigation – which cannot be made on this thin record – the common interest

6

doctrine does not apply. For that reason, Magistrate Judge Wilner’s decision was

7

contrary to law and should be withdrawn.

8

B.

9

During the hearing on July 25, 2014, Plaintiffs informed Magistrate Judge

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11
12
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14
15

The Record Proves That Litigation Was Not Pending,
Anticipated, or Even Possible

Wilner that no infringement litigation was commenced by Summy or ASCAP to
enforce any Happy Birthday copyright in the 44 years between 1935, when the two
copyrights (Reg. Nos. E51988 and E51990) were registered, and 1979, when Mrs.
Sengstack wrote to Mr. Korman.

Rifkin Decl., Ex. J (Hr’g Tr. At 38).

Significantly, four infringement cases filed after those copyrights were registered

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3

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Defendants also rely upon two cases from outside the Ninth Circuit, United
States v. BDO Seidman, LLP, 492 F.3d 806, 816 n.6 (7th Cir. 2007) and In re
Regents of the Univ. of California (“Regents”), 101 F.3d 1386, 1390 (Fed. Cir.
1996). Opp. at 23. Those cases are non-binding and non-persuasive. However, it
is noteworthy that in BDO Seidman, the doctrine was invoked during an IRS
investigation when lawyers shared a legal memorandum to coordinate a common
legal strategy for their respective clients. Id. The court found the communication
privileged because there was a “shared legal interest to seek legal assistance in
order to meet legal requirements,” such as defending tax shelters against IRS
enforcement actions. BDO Seidman, 492 F.3d at 816 n.6.
Regents is not even remotely applicable. In that case, Eli Lilly and the
university jointly developed a patent and frequently consulted together with their
counsel regarding the patent. Summy and ASCAP had an entirely different
relationship here. Significantly, the court noted that “a patentee and a nonexclusive licensee do not share identical legal interests.” Id. at 1390 (emphasis
added). ASCAP is a non-exclusive licensee of its members.

-9-

1

alleged that unauthorized performances of Happy Birthday infringed other

2

copyrights. Id. at 38-39 (emphases added). Plaintiffs also informed Magistrate

3

Judge Wilner that there has been no infringement litigation to enforce any Happy

4

Birthday copyright in the 35 years since Mrs. Sengstack wrote to Mr. Korman. Id.

5

at 38. Defendants never have denied any of those facts.

6

As Plaintiffs explained to Magistrate Judge Wilner, the record is thus fully

7

consistent with Defendants’ practice to avoid litigation in light of the dubious

8

ownership and limited scope of their Happy Birthday copyrights. Id. at 38-39.

9

Therefore, the record does not even support a finding that infringement litigation

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was conceivable.
C.

As Only A Licensing And Collection Agent For Thousands
Of Members, ASCAP Undertook No Common Legal Effort
With Summy

As discussed above, to find that Mrs. Sengstack did not waive Summy’s
privilege when she disclosed the Coudert Letters to Mr. Korman, the Magistrate
Judge had to find that the communication was in furtherance of a common legal
effort. See Potatoes, 2014 U.S. Dist. LEXIS 74936, at *30. The record does not
support such a finding, and for that additional reason the Magistrate Judge’s
decision should be withdrawn.
Echoing their argument that the 1935 copyrights for Happy Birthday must
have pertained to the musical arrangements as well as the song’s popular lyrics,
absent any evidence of the reason why Mrs. Sengstack wrote to Mr. Korman,
Defendants argue that her letter must have related to a possible infringement action
since ASCAP licensed public performance rights in its entire repertoire and
“detect[ed] unlicensed uses, institute[d] infringement actions, collect[ed] revenues
from licenses, and distribut[ed] royalties” from the entire repertoire. Opp. at 6:1417. Conceding that no enforcement litigation has ever been brought under the
Happy Birthday copyrights, Defendants also argue that the common legal effort

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1

could have been a cease and desist letter or some other enforcement action that

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ASCAP was authorized to bring on Summy’s behalf.

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While it may be that Summy’s or Warner/Chappell’s membership agreement

4

could have authorized ASCAP to do something to enforce a Happy Birthday

5

copyright, ASCAP never did anything to enforce any such copyright, making the

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Magistrate Judge’s decision (and Defendants’ argument in defense of it) purely

7

speculative.

8

As discussed above, there is no dispute that ASCAP and Summy never sued

9

anyone for infringing a Happy Birthday copyright. In addition, ASCAP’s records

10

(which it produced from as far back as the 1940s) contain no instance when ASCAP

11

did anything else to enforce any copyright to the song. There is no evidence of

12

ASCAP ever writing a single cease and desist letter, ever offering to write one, or

13

ever being asked to do so. There is no evidence of ASCAP ever investigating any

14

unauthorized use or performance of Happy Birthday, ever being asked to do an

15

investigation, or ever offering to do one. There is no evidence of ASCAP collecting

16

or distributing any royalties or revenues for Happy Birthday, ever offering to collect

17

or distribute Happy Birthday royalties, or ever being asked to do so. And, of

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course, there is no evidence of Summy and ASCAP ever working together on any

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common legal effort regarding enforcement, investigation, collection, or payment.

20

The entire factual record on this purported common legal effort consists of mere

21

speculation as to what ASCAP could have done – apparently on its own without

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Summy’s involvement.

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Instead, the Magistrate Judge’s decision (and Defendants’ defense of it)

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mistakenly relies upon two antitrust cases challenging ASCAP’s system of issuing

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blanket licenses as evidence of what ASCAP “could do” on behalf of all its

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members. Neither case identifies any action by ASCAP – whether a copyright

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infringement lawsuit, a cease and desist letter, or anything else – to enforce any

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member’s copyrights much less an action by ASCAP as part of a common legal
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effort with Summy. Those cases described ASCAP’s “clearing-house” business

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model to facilitate the granting of licenses for the vast collection of music in its

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repertoire. Broadcast Music, Inc. v. Columbia Broadcasting System, 441 U.S. 1, 5

4

(1979); Columbia Broadcasting System, Inc. v. ASCAP, 400 F. Supp. 737, 741

5

(S.D.N.Y. 1975).

6

Before ASCAP was formed in 1914, “there was no effective method by

7

which composers or publishers of music could secure payment for the performance

8

for profit of their copyrighted works.” CBS, 400 F. Supp. at 741. “ASCAP was

9

organized as a ‘clearing-house’ for copyright owners to solve these problems.” Id.

10

Defendants quote out of context a snippet from a footnote discussing whether

11

ASCAP’s blanket license was a per se violation of the Sherman Act as evidence

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that ASCAP’s activities include “policing the market and suing infringers.” Opp. at

13

12:25-26.4 That in no way supports the Magistrate Judge’s finding that Summy and

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ASCAP acted together in furtherance of a common legal effort.

15

In CBS, the Supreme Court described ASCAP’s operations in 1979 as

16

follows: “As ASCAP operates today, its 22,000 members grant nonexclusive rights

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to license nondramatic performance of their works and ASCAP issues licenses and

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distribute royalties to copyright owners in accordance with a schedule reflecting the

19

nature and amount of the use of their music and other factors.” Broadcast Music,

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441 U.S. at 5. In that case, the Department of Justice described ASCAP’s business

21

as a “kind of central licensing agency by which copyright users may offer their

22

works in a common pool to all who wish to use them.” Id. at 14. Defendants rely

23

upon the district court’s finding in that case that ASCAP has “the nonexclusive

24
25
26
27
28

4

The entire quote is “Surely, if ASCAP abandoned the issuance of all licenses
and confined its activities to policing the market and suing infringers, it could
hardly be said that member copyright owners would be in violation of the antitrust
laws by not having a common agent issue per-use licenses.” Broadcast Music, 441
U.S. at 18 n. 28.

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right to license users to perform compositions” owned by its members and provides

2

“a wide variety of services” including “a surveillance system of radio and television

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broadcasts to detect unlicensed uses, institute infringement actions, collect revenues

4

from licenses and distribute royalties to copyright owners in accordance with a

5

schedule” relating to nature and amount of the music’s use. 400 F. Supp. at 742;

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Opp. at 12:21-25. Again, that passing comment falls far short of proving that

7

Summy and ASCAP worked together in furtherance of a common legal effort

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regarding Happy Birthday.

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IV.

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Even if the Court were to conclude, unlike Magistrate Judge Wilner, that no

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15
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21
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ASCAP AND SUMMY SHARED BUSINESS INTERESTS, NOT
LEGAL INTERESTS

actual or anticipated litigation is required for the common interest doctrine to apply,
the facts still do not support the Magistrate Judge’s decision to apply the doctrine
here. The common interest doctrine “does not protect communications made in
furtherance only of a common business interest.” Lenz v. Universal Music Corp., C
07-3783 JF (RS), 2009 U.S. Dist. LEXIS 105180, at *4 (N.D. Cal. Oct. 29, 2009)
(citations omitted) (emphasis original). To show a common legal interest, “the
parties must demonstrate cooperation in formulating a common legal strategy. . . .
And, even if the parties do share a common legal interest, for the privilege to apply,
the communication at issue must be designed to further that legal effort.” Potatoes,
2014 U.S. Dist. LEXIS 74936, at *30 (internal citations omitted and emphasis
added).5 As the district court explained in Potatoes, “[t]he fact that the parties may

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24
25
26
27
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5

Relying upon Ninth Circuit and Northern District of California precedent, the
district court explained:
“The fact that the parties may have been developing a business deal
that included a desire to avoid litigation ‘does not transform their
interest and enterprise into a legal, as opposed to a commercial
matter.’” Id. (quoting Bank of Am. v. Terra Nova Ins. Co., LLT, 211 F.
(continued…)

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1

have been developing a business deal that included a desire to avoid litigation ‘does

2

not transform their interest and enterprise into a legal, as opposed to a commercial

3

matter.’” Id. at *31 (quoting FSP Stallion 1, LLC v. Luce, No. 08-cv-01155-PMP-

4

PAL, 2010 U.S. Dist. LEXIS 110617, at *18 (D. Nev. Sept. 30, 2010) (internal

5

citations omitted)).

6

Defendants have pointed to nothing in the record to support a finding that

7

Summy shared the Coudert Letters with ASCAP in furtherance of a common legal

8

effort regarding a shared legal interest. They never disputed ASCAP’s admission

9

that it does not own an interest in any Happy Birthday copyright, in the song itself,6

10

or in royalties derived from it, and the Magistrate Judge never found otherwise.

11

These undisputed facts prove that ASCAP did not share any common legal interest

12

with Summy in Happy Birthday. The hypothetical common interests identified by

13

Magistrate Judge Wilner were not legal interests. At most, they were common

14

business interests, such as possibly sending cease-and-desist letters and demanding

15

licensing fees from the licensees of the blanket licenses issued by ASCAP. See

16

Order at 6.

17

Even if Mrs. Sengstack wrote to ASCAP to protect Summy’s intellectual

18

property, as a non-exclusive licenses, ASCAP does not share a common legal

19

interest in that intellectual property. See Regents, 101 F.3d at 1390 (“Lilly was

20

more than non-exclusive licensee and shared the interest that UC would obtain valid

21
22

________________________
(…continued)

Supp. 2d 493, 497 (S.D.N.Y. 2002)). In re Grand Jury Subpoenas,
902 F.2d 244, 249 (4th Cir. 1990).

23
24
25
26
27
28

Id. at *28-31 (emphasis added).
6

As Mr. Reimer stated, “ASCAP does not have any ownership interest in any
of the musical works it licenses on behalf of its members” and it does not “have any
interest in the fees or royalties it collects on behalf of its members.” Rifkin Decl.,
Ex. K (Reimer Decl. at ¶ 5) (Dkt. 146).

- 14 -

1

and enforceable in the jointly developed patents” (cited in Opp. at 23). That case

2

illustrates the kind of common legal interest that is needed to support application of

3

the common interest privilege.

4

exploit the patent in question, and they frequently met with their counsel together to

5

discuss protection of the patent. There are no facts even remotely like that in this

6

case.

Lilly and UC worked together to develop and

7

Finally, Defendants have continued to misconstrue the decisions in opinions

8

in Doors Music Co. v. Meadowbrook Inn Corp., No. 90-134-D, 1990 U.S. Dist.

9

LEXIS 13935 (D.N.H. July 20, 1990), and Ocasek v. Heggland, 673 F. Supp. 1084

10

(D. Wyo. 1987). In the Doors case, ASCAP moved to be dismissed as a third-party

11

in an infringement case involving one of its members. The Court concluded that it

12

found no theory of liability on which ASCAP could be liable to the defendant bar

13

owner for all or part of its members’ claims against the bar. Doors, 1990 U.S. Dist.

14

LEXIS 13935, at *5. ASCAP’s motion to be dismissed as a third-party was granted

15

on that basis. Id. Similarly, in Ocasek, ASCAP moved to be dismissed from

16

another infringement action involving a different ASCAP member, again claiming

17

that it was neither a necessary nor even a proper party to an infringement action.

18

Ocasek, 673 F. Supp. at 1087. The Ocasek court explained its decision as follows:

19

“ASCAP is a non-exclusive licensee of Plaintiff’s copyrights. As such, it has been

20

viewed as neither a necessary nor even a proper party to an infringement suit . . . .

21

Consequently, should the patent or copyright be infringed, the nonexclusive

22

licensee theoretically has suffered no legal injury that justifies his participation in

23

the action.” Id. at 1087. And as in Doors, ASCAP’s motion to be dismissed was

24

again granted on that basis. Id.

25

Defendants and the Magistrate Judge misconstrue the importance of those

26

two cases.

27

ASCAP’s denial of any legal interest in those infringement actions should have led

28

Magistrate Judge Wilner to conclude that it likewise has no legal interest here. The

ASCAP denied having any interest in those infringement actions.

- 15 -

1

Magistrate Judge dismissed the importance of ASCAP’s denial, minimizing the

2

holdings in both cases and ignoring ASCAP’s factual admission.

3

superficial discussion of Doors and Ocasek cannot diminish the obvious conflict

4

between ASCAP’s admission in those cases that it has no legal interest in

5

infringement actions and the Magistrate Judge’s hypothetical finding here that it

6

shared such a legal interest with Summy.

Defendants’

7

There are no facts in the record to support a finding that Mrs. Sengstack and

8

Mr. Korman were cooperating in formulating or furthering a common “legal”

9

strategy.

Magistrate Judge Wilner’s decision that Summy and ASCAP had a

10

common legal interest in the copyright to Happy Birthday was clearly erroneous,

11

contrary to law and should be withdrawn.

12

V.

CONCLUSION

13

For the foregoing reasons, Plaintiffs respectfully request that the Court

14

withdraw Magistrate Judge Wilner’s Order and overrule Defendants’ claim of

15

attorney-client privilege in the Coudert Letters.

16

Dated: August 29, 2014

WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP

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By:

/s/ Betsy C. Manifold
BETSY C. MANIFOLD

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FRANCIS M. GREGOREK
[e-mail]
BETSY C. MANIFOLD
[e-mail]
RACHELE R. RICKERT
[e-mail]
MARISA C. LIVESAY
[e-mail]
750 B Street, Suite 2770
San Diego, CA 92101
Telephone: [phone]
Facsimile: 619/234-4599
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WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
MARK C. RIFKIN (pro hac vice)
[e-mail]
JANINE POLLACK (pro hac vice)
[e-mail]
BETH A. LANDES (pro hac vice)
[e-mail]
270 Madison Avenue
New York, NY 10016
Telephone: [phone]
Facsimile: 212/545-4753
Interim Class Counsel for Plaintiffs and the
[Proposed] Class
RANDALL S. NEWMAN PC
RANDALL S. NEWMAN (190547)
[e-mail]
37 Wall Street, Penthouse D
New York, NY 10005
Telephone: [phone]
HUNT ORTMANN PALFFY NIEVES
DARLING & MAH, INC.
OMEL A. NIEVES (134444)
[e-mail]
KATHLYNN E. SMITH (234541)
[e-mail]
ALISON C. GIBBS (257526)
[e-mail]
301 North Lake Avenue, 7th Floor
Pasadena, CA 91101
Telephone: [phone]
Facsimile: 626/796-0107

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DONAHUE GALLAGHER
FITZGERALD LLP
WILLIAM R. HILL (114954)
[e-mail]
ANDREW S. MACKAY (197074)
[e-mail]
DANIEL J. SCHACHT (259717)
[e-mail]
1999 Harrison Street, 25th Floor
Oakland, CA 94612-3520
Telephone: [phone]
Facsimile: 510/832-1486

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GLANCY BINKOW & GOLDBERG
LLP
LIONEL Z. GLANCY (134180)
[e-mail]
MARC L. GODINO (188669)
[e-mail]
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Telephone: [phone]
Facsimile: 310/201-9160

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Attorneys for Plaintiffs

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WARNERCHAPPELL:21119.reply.motion.review

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