Rupa Marya v. Warner Chappell Music Inc

Filing 258

NOTICE OF MOTION AND MOTION to AMEND Amended Complaint, #95 Notice of Motion and Motion for Leave to Amend and File Fifth Amended Complaint filed by Plaintiffs Good Morning to You Productions Corp, Majar Productions LLC, Rupa Marya, Robert Siegel. Motion set for hearing on 11/30/2015 at 09:30 AM before Judge George H. King. (Attachments: #1 Proposed Order) (Manifold, Betsy)

1 FRANCIS M. GREGOREK (144785)
[e-mail]
2 BETSY C. MANIFOLD (182450)
[e-mail]
3 RACHELE R. RICKERT (190634)
[e-mail]
4 MARISA C. LIVESAY (223247)
[e-mail]
5 WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
6 750 B Street, Suite 2770
San Diego, CA 92101
7 Telephone: [phone]
Facsimile: 619/234-4599
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Interim Class Counsel for Plaintiff and the Proposed Class
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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WESTERN DIVISION
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) Case No. CV 13-04460-GHK (MRWx)
13 GOOD MORNING TO YOU
)
PRODUCTIONS CORP., et al.,
) NOTICE OF MOTION AND MOTION
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) FOR LEAVE TO AMEND AND FILE
Plaintiffs,
) FIFTH AMENDED COMPLAINT
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)
v.
) Date:
November 30, 2015
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) Time:
9:30 a.m.
) Judge:
Hon. George H. King,
17 WARNER/CHAPPELL MUSIC,
)
Chief Judge
INC., et al.
) Room:
650
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Defendants.
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TO THE COURT, ALL PARTIES, AND THEIR RESPECTIVE

2 ATTORNEYS OF RECORD:
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PLEASE TAKE NOTICE that on November 30, 2015, at 9:30 a.m., or as

4 soon thereafter as this matter may be heard before the Honorable George H. King
5 in Courtroom 650 at the Edward R. Roybal Federal Building, 225 E. Temple
6 Street, Los Angeles, California 90012, plaintiffs Good Morning To You
7 Productions Corp., Robert Siegel, Rupa Marya d/b/a Rupa & The April Fishes, and
8 Majar Productions, LLC (“Plaintiffs”), will, and hereby do, move this Court
9 pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ. P.”) 15(a)(2) and Local
10 Rule (“L.R.”) 15-1 for an order granting leave to amend the operative Fourth
11 Amended Complaint. See Dkt. 95. Plaintiffs seek to: (i) expand the class definition
12 based on discovery obtained from Defendants in the initial (Claim One) phase of
13 this litigation; (ii) provide detailed allegations regarding delayed discovery,
14 equitable tolling and concealment of the truth of Defendants’ (and their
15 predecessors–in-interest) limited copyright of Happy Birthday based on this same
16 evidence; and (iii) allege a 1922 publication of Happy Birthday without a
17 copyright notice based on evidence only recently discovered by Plaintiffs because
18 Defendants “mistakenly” withheld evidence during discovery in Phase One.
19 Amendment is necessary (and not futile) prior to Defendants’ anticipated motion to
20 dismiss under Fed. R. Civ. P. 12 and Plaintiffs’ class certification motion. The
21 proposed amendments are made in good faith, are not unfairly prejudicial to
22 Defendants (as the facts were not publicly disclosed by Defendants or their
23 predecessors until this litigation), and will not cause undue delay (a stay of the
24 remaining claims, statute of limitations, and class certification was only lifted on
25 October 19, 2015).
26

This Motion is based upon this notice of motion, the accompanying

27 memorandum of points and authorities, the Declaration of Betsy C. Manifold in
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1 Support of Plaintiffs’ Motion, the attached proposed amended pleading as required
2 under L.R. 15-1 and 15-2, all pleadings, discovery, memorandum of points and
3 authorities, supplemental memoranda of law, oral or documentary evidence
4 proffered in support thereof, arguments of counsel, and any other matters as the
5 Court deems proper.
6

This Motion is made following the conference of counsel pursuant to L.R. 7-

7 3 which took place on October 14, 16, and 23, 2015.
8 Dated: October 29, 2015
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WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
By:

/s/ Betsy C. Manifold
BETSY C. MANIFOLD
FRANCIS M. GREGOREK
[e-mail]
BETSY C. MANIFOLD
[e-mail]
RACHELE R. RICKERT
[e-mail]
MARISA C. LIVESAY
[e-mail]
BRITTANY N. DEJONG
[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]
270 Madison Avenue
New York, NY 10016
Telephone: [phone]
Facsimile: 212-545-4753

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Interim Lead Counsel for Plaintiffs

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RANDALL S. NEWMAN PC
RANDALL S. NEWMAN (190547)
[e-mail]
37 Wall Street, Penthouse D
New York, NY 10005

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Telephone: [phone]

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HUNT ORTMANN PALFFY NIEVES
DARLING & MAH, INC.
ALISON C. GIBBS (257526)
[e-mail]
OMEL A. NIEVES (134444)
[e-mail]
KATHLYNN E. SMITH (234541)
[e-mail]
301 North Lake Avenue, 7th Floor
Pasadena, CA 91101
Telephone: [phone]
Facsimile: 626/796-0107
DONAHUE GALLAGHER
WOODS 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 PRONGAY & MURRAY
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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TABLE OF CONTENTS

1
2

Page

3
4 I.  INTRODUCTION

.......................................................................................... 1

5 II. 
6

PROCEDURAL BACKGROUND .................................................................. 2

7

A.

Bifurcation of Proceedings into Two Phases ........................................ 2

8

B.

March 24, 2014 Scheduling Conference re: Phase One ....................... 2

C.

Parties’ Discussions Re: Amendment Prior to

9
10
11

Status Conference ................................................................................. 3
D.

October 19, 2015 Status Conference .................................................... 3

E.

Failure of the Parties to Agree on Amendment by

12
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October 26, 2015 Necessitating Motion ............................................... 4

14

15 III.  SUMMARY OF AND BASIS FOR PLAINTIFFS’
16
AMENDMENTS IN THE FIFTH AMENDED COMPLAINT ...................... 5
17
18

A.

Expansion of Class Definition Based on Delayed
Discovery, Concealment of the Truth of Limited

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Copyright and Equitable Tolling .......................................................... 5

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B.

Tolling and Fraudulent Concealment ................................................... 7

22
23

C.

Newly Discovered Evidence re 1922 Publication
of Happy Birthday............................................................................... 11

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Plaintiffs’ Detailed Allegations Relating to Equitable

IV.  ARGUMENT

........................................................................................ 12

26
27

A.

Standard of Review ............................................................................. 12

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1

B.

2

Defendants Will Not Be Unfairly Prejudiced
by Amendment of the Complaint........................................................ 13

3
4
5

C.

Plaintiffs Do Not Seek Amendment in Bad Faith .............................. 14

D.

Plaintiffs’ Amendment is Not Futile ................................................... 14

E.

There is No Undue Delay ................................................................... 15

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7
8 V.

CONCLUSION

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

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1

TABLE OF AUTHORITIES

2
3

Page
Cases

4
5

Acri v. Int’l Ass’n of Machinists & Aerospace Workers,
781 F.2d 1393 (9th Cir. 1986).............................................................................. 15

6
7

AmerisourceBergen Corp. v. Dialysist West, Inc.,
465 F.3d 946 (9th Cir. 2006) ................................................................................ 15

8
Bernhardt v. County of L.A.,
No. CV 99-10121-GHK,
10
2009 U.S. Dist. LEXIS 23115 (C.D. Cal. Mar. 19, 2009) ................................... 12
9

11

Brown v. Napa Valley Sch. Dist.,
12
No. C-11-5673 JCS,
2012 U.S. Dist. LEXIS 69943 (N.D. Cal. May 18, 2012) ................................... 13
13
14 Clemens v. DaimlerChrysler Corp.,
534 F.3d 1017 (9th Cir. 2008)................................................................................ 6
15
16 DCD Programs, Ltd. v. Leighton,
833 F.2d 183 (9th Cir. 1987) .............................................................. 12, 13, 14, 15
17
18 Foman v. Davis,
371 U.S. 178 (1962) ............................................................................................. 12
19
20 Griggs v. Pace Am. Group, Inc.,
170 F.3d 877 (9th Cir. 1999) ................................................................................ 13
21
22 Howey v. United States,
481 F.2d 1187 (9th Cir. 1973).............................................................................. 13
23
24 In re Circuit Breaker Litig.,
175 F.R.D. 547 (C.D. Cal. 1997) ......................................................................... 15
25
26 Jackson v. Bank of Hawaii,
902 F.2d at 1385 (9th Cir. 1990) .................................................................... 14, 15
27
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1 Kamar v. Krolcyzk,
No. 1:07-CV-0340 AWI,
2
2008 U.S. Dist. LEXIS 55975 (E.D. Cal. July 16, 2008) .................................... 13
3
4
5
6
7
8
9
10

Kanawi v. Bechtel Corp.,
254 F.R.D. 102 (N.D. Cal. 2008) ........................................................................... 7
Lopez v. Smith,
203 F.3d 1122 (9th Cir. 2000) ............................................................................. 13
Miller v. Rykoff-Sexton, Inc.,
845 F.2d 209 (9th Cir. 1988) ................................................................................ 14
Norgart v. Upjohn Co.,
21 Cal. 4th 383 (1999) ........................................................................................... 6

11

Ortega v. Natural Balance Inc.,
No. CV 13-05942 ABC (Ex),
2013 U.S. Dist. LEXIS 176437, (C.D. Cal. Dec. 16, 2013) ................................. 7
13
12

14 Owens v. Kaiser Foundation Health Plan, Inc.,
244 F.3d 708 (9th Cir. 2001) .......................................................................... 12, 13
15
16 Ramos v. Chase Home Fin.,
810 F. Supp. 2d 1125 (D. Haw. 2011) ................................................................. 13
17
18 Richardson v. United States,
841 F.2d 993 (9th Cir. 1988) ................................................................................ 13
19
20 Schramm v. JPMorgan Chase Bank, N.A.,
No. LA CV09-09442 JAK (FFMx),
21
2011 U.S. Dist. LEXIS 122440 (C.D. Cal. Oct. 19, 2011) .................................... 7
22
23 Sonoma Cnty. Ass’n of Retired Employees v. Sonoma Cnty.,
708 F.3d 1109 (9th Cir. 2013)........................................................................ 12, 13
24
25 Sorosky v. Burroughs Corp.,
826 F.2d 794 (9th Cir. 1987) ................................................................................ 14
26
27 Steckman v. Hart Brewing, Inc.,
143 F.3d 1293 (9th Cir. 1998).............................................................................. 14
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1

Tibble v. Edison Int’l,
No. CV 07-5359 SVW (AGRx),
2009 U.S. Dist. LEXIS 120939 (C.D. Cal. June 30, 2009) ................................... 7
3
2

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5
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Statutes
17 U.S.C.
§ 101 ....................................................................................................................... 6

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Rules

9 Fed. R. Civ. P.
15(a)................................................................................................................ 12, 14
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Local Civil Rules
6-1 ........................................................................................................................... 4

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15-1 ......................................................................................................................... 1

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MEMORANDUM OF POINTS & AUTHORITIES

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2 I.
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INTRODUCTION
Plaintiffs respectfully request leave to file a Fifth Amended Complaint.1 See

Manifold Decl., Ex. A. Based on evidence discovered during Phase One of this
litigation (and unknown to Plaintiffs prior to this litigation), the proposed
amendments fall into three categories: (i) expansion of the class period based on
equitable tolling; (ii) detailed allegations regarding delayed discovery, concealment
of the truth regarding Defendants’ (and their predecessors-in-interest) limited
copyright in Happy Birthday and equitable tolling; and (iii) the 1922 publication of
the Happy Birthday song by The Cable Car Company. Amendment is necessary
(and not futile) prior to Defendants’ anticipated Rule 12 motion and Plaintiffs’
class certification motion (now due January 18, 2016). The proposed amendments
are made in good faith, are not unfairly prejudicial to Defendants (as the facts were
not publicly disclosed by Defendants or their predecessors until this litigation and
Defendants have benefitted from the concealment of the truth for decades), and
will not cause undue delay (the stay relating to the remaining claims, statute of
limitations, and class certification was only lifted on October 19, 2015).

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Plaintiffs’ Motion should be granted and the Fifth Amended Complaint (Ex.

19 A) filed immediately.
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A redlined copy of Plaintiffs’ [Proposed] Fifth Amended Complaint is
25 attached to the Declaration of Betsy C. Manifold in Support of this Motion
26 (“Manifold Decl.”) as Exhibit (“Ex.”) B in addition to the clean copy attached as
Ex. A pursuant to Local Rule (“L.R.”) 15-1, so the Court can easily view all of the
27 amendments and additions given the limited changes Plaintiffs seek to make by
28 this amendment.
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1 II.

PROCEDURAL BACKGROUND

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A.

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Bifurcation of Proceedings into Two Phases

At the hearing on Defendants’ motion to dismiss on October 7, 2013, “the

4 Parties agreed that the most efficient way to proceed in this case would be to
5 bifurcate Claim One from the six other claims for the purposes of discovery and
6 summary judgment.” Dkt. 71 at 3. On October 16, 2013, the Court issued an
7 Order re: Defendants’ Motion to Dismiss Second Amended Consolidated Class
8 Action Complaint and/or Motion to Strike Plaintiffs’ Proposed Class Definition
9 (Dkt. 52), which granted in part and denied in part Defendants’ motions. See Dkt.
10 71. The October 16, 2013 Order bifurcated Claim One from all other claims
11 through Summary Judgment as Phase One and stayed all other claims “including
12 discovery specific to such claims,” as Phase Two. Dkt. 71 at 3. Plaintiffs also
13 were granted leave to re-plead their “two-step theory for declaratory judgment” in
14 an amended complaint. Dkt. 71 at 3-4.
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On November 6, 2013, Plaintiffs filed a Third Amended Complaint (Dkt.
75), which Defendants answered on December 11, 2013 as to Claim One only
(Dkt. 79). Thereafter, based on the Parties’ Joint Stipulation (Dkt. 94), on April
29, 2014, the Court granted Plaintiffs leave to file a Fourth Amended Complaint
(Dkt. 95). See Dkt. 96. On May 6, 2014, Defendants answered the Fourth
Amended Complaint as to Claim One only (Dkt. 99).
B.

March 24, 2014 Scheduling Conference re: Phase One

After the parties’ March 24, 2014, Scheduling Conference, the Court filed an

22 Order Entering Schedule Dates. Dkt. 92. The Court agreed “to defer consideration
23 of the statute of limitations defenses and class certification at this time;” set
24 scheduling dates for summary judgment motions on Claim One; and stated that,
25 “[i]f the summary judgment motions do not dispose of this first phase of this
26 action, we will set further scheduling dates as needed.” Dkt. 92 at 1.
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On September 22, 2015, the Court issued its Memorandum and Order Re:

2 (1) Cross-Motions for Summary Judgment (Dkt. 179); (2) Defendants’ Motion for
3 Leave to File Supplemental Evidence (Dkt. 223); and (3) Plaintiffs’ Ex Parte
4 Application to Supplement the Record (Dkt. 224) (“Summary Judgment Order”)
5 which denied Defendants’ Motion For Summary Judgment and granted in part
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Plaintiffs’ Motion for Summary Judgment. See Dkt. 244. The Summary Judgment
Order determined that Defendants do not own a copyright to the Happy Birthday
lyrics. The Summary Judgment Order determined there are triable issues of fact on
Plaintiffs’ demand for a declaratory judgment that the Happy Birthday lyrics are in
the public domain. A bench trial of the remaining factual issues in Phase One is
set for December 15, 2015. See Dkt. 248.
C.

Parties’ Discussions Re: Amendment Prior to Status Conference

12
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On October 8, 2015, Plaintiffs provided Defendants with a draft Fifth

14 Amended Complaint and asked Defendants to stipulate to its filing without
prejudice to Defendants’ right to file a Rule 12 motion. See Manifold Decl., ¶ 3.
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Plaintiffs followed up with a revised draft on October 14, 2015 adding additional
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detail. Id. On October 16, 2015, Defendants responded that they were inclined to
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agree with Plaintiffs’ request to stipulate but required a discovery stay for any
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responsive documents prior to 2009 pending the Court’s resolution of any Rule 12
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motion. Plaintiffs did not accept this offer. Id. at ¶ 4.
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D.
October 19, 2015 Status Conference
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At the October 19, 2015 Status Conference (Dkt. 248), the Court advised the
22 parties that the Court wants this litigation “to move ahead,” “the case has been
23 around for long enough” and the parties “should be able to move ahead much more
24 quickly.” 10/19/15 Hearing Transcript at 10:16-21. The Court denied Defendants’
25 request for a stay of discovery pending their Motion for Reconsideration (Dkt. 247)
26 (scheduled to be heard on November 16, 2015) and lifted the stay as to the
27 remaining six claims, class certification and the statute of limitations. Dkt. 248. In
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1 addition to the December 15, 2015 bench trial to complete Phase One (Claim One),
2 the Court set deadlines for Phase Two including Defendants’ Rule 12 motion (30
3 days to file), Plaintiffs’ class certification motion (January 18, 2016), and expert
4 designation (March 1, 2016) with a drop dead discovery cut-off of April 19, 2016.
5 Id. A bench trial of the remaining claims is scheduled for May 31, 2016. Id.
E.

6

Failure of the Parties to Agree on Amendment by October 26,
2015 Necessitating Motion

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At the October 19, 2015, Status Conference, the Court directed the parties to
stipulate and lodge the proposed Fifth Amended Complaint on or before October
26, 2015 if an agreement could be reached. See Dkt. 248. On October 23, 2015,
Defendants provided a draft stipulation which again requested a discovery stay for
any responsive documents prior to 2009 pending the Court’s resolution of

12 Defendants’ Rule 12 motion, despite the short timeline for completing this case set
13 by the Court at the Status Conference on October 19, 2015. Manifold Decl., ¶ 5.
14 In light of the Court’s directives at the October 19, 2015 Status Conference to
15 move this case quickly, Plaintiffs could not agree to Defendants’ proposed stay of
16 discovery. The timing requested by Defendants was impossible under the Court’s
17 Phase Two Scheduling Order. The earliest hearing date for Defendants’ Rule 12
18 motion is January 4, 2016.2 Staying any discovery pending the Court’s decision
19 on such a motion would put Defendants’ proposed discovery stay out to the
20 January 18, 2016, deadline for Plaintiffs’ class certification motion. Defendants
21 declined to stipulate to the filing of the proposed Fifth Amended Complaint absent
22 a discovery stay, and Plaintiffs could not agree to any stay.
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With 30 days to respond to Plaintiffs’ Fifth Amendment Complaint (to be
lodged by October 26, 2015), Defendants’ Rule 12 Motion would be filed on or
26 before November 25, 2015. The first available hearing on the Court’s motion
27 calendar under L.R. 6-1 is January 4, 2016. December 28, 2015, the earliest notice
date, is a closed hearing date.
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Absent agreement of the parties, the Court directed Plaintiffs to file their

1

2 motion for leave to amend within twenty-one (21) days or on or before November
3 16, 2015. Dkt. 248. Plaintiffs are filing their motion now and, because of the need
4 to move the litigation forward, concurrently file with their motion a joint
5 stipulation to shorten the briefing and hearing schedule by approximately two
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weeks to permit the Court to hear and decide this motion on November 16, 2015.
III.

8

SUMMARY OF AND BASIS FOR PLAINTIFFS’ AMENDMENTS IN
THE FIFTH AMENDED COMPLAINT
A.

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Expansion of Class Definition Based on Delayed Discovery,
Concealment of the Truth of Limited Copyright and Equitable
Tolling

Based on new evidence demonstrating Defendants (and their predecessors)

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12 concealed the truth regarding their limited copyright to Happy Birthday, Plaintiffs
13 now seek to amend the class definition as follows:
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All persons or entities (excluding Defendants’ directors,

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officers, employees, and affiliates) who entered into a license

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with Defendants or their predecessors-in-interest, or paid

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Defendants or their predecessors-in-interest, directly or

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indirectly, a licensing fee for the song Happy Birthday to You

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at any time since at least September 3, 1949 (the latest date
on which the copyright to Good Morning to All expired), until

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Defendants’ conduct as alleged herein has ceased.3

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Plaintiffs also added the following common questions of law and fact
regarding delayed discovery, equitable tolling and concealment of the truth in
support of their class allegations: (i) whether Defendants (and their predecessors)
knew or should have known that the 1935 copyrights did not cover the popular
Happy Birthday lyrics; (ii) whether Defendants (and their predecessors)
misrepresented that the 1935 copyrights covered the familiar Happy Birthday
lyrics or concealed the fact that the 1935 copyrights covered only the piano
arrangements composed by Summy Co.’s employees-for-hire, not the familiar
Happy Birthday lyrics; (iii) whether, in the exercise of reasonable care, Plaintiffs
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1 See Manifold Decl., Ex. B, ¶ 164. In substance, the proposed change extends the
2 class definition back to 1949 as a result of the discovery of facts supporting
3 equitable tolling, delayed discovery, and concealment of the truth, which also
4 necessitated adding a reference to payments to Defendants’ predecessors-in5 interest, such as the Clayton F. Summy Co., before Defendants purchased the stock
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of Birch Tree Group Ltd. in 1988 because Defendants acquired the liabilities of
Birch Tree Group Ltd. in that stock purchase.
As alleged in Plaintiffs’ Fourth Amended Complaint, “it was common
knowledge within the entertainment industry that Warner/Chappell widely claimed
exclusive copyright ownership of the Song.” “Warner/Chappell held itself out as
the exclusive owner of the copyright in the Song;” and thus, Plaintiffs “did not
question and had no reason to question Warner/Chappell’s claim of copyright
ownership.”4 See Dkt. 95 at ¶¶ 134(c)-(d). A potential licensee faced a “statutory

13 penalty of $150,000 under the Copyright Act, 17 U.S.C. § 101 et seq., if it used the
14 Song without Warner/Chappell’s permission and Warner/Chappell, in fact, owned
15 the copyright that it claimed.” Id. at ¶ 134(e). See also id. at ¶¶ 121, 128.
16
However, Plaintiffs learned during discovery in Phase One that Defendants
17 and their predecessors concealed evidence as well as the truth that they had no
18 claim to a copyright in the Happy Birthday lyrics. See Manifold Decl., Ex. A at ¶¶
19 142-162. Based on this newly discovered evidence (unknown to Plaintiffs prior to
20 this litigation and previously concealed by Defendants), Plaintiffs seek to amend
21 the class definition to sufficiently plead delayed discovery, concealment of the
22 _________________________________________
and the Class knew or could have known that Defendants did not own any
23
copyright to the familiar Happy Birthday lyrics; and (iv) whether the
24 commencement of any applicable statute of limitations was tolled and, if so, for
how long. See Manifold Decl., Ex. A, ¶ 166(c)-(g).
25 4
In California, the discovery rule postpones accrual of a claim until “the
26 plaintiff discovers, or has reason to discover, the cause of action.” Clemens v.
27 DaimlerChrysler Corp., 534 F.3d 1017, 1024 (9th Cir. 2008) (citing Norgart v.
Upjohn Co., 21 Cal. 4th 383, 397 (1999)) (emphasis added).
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1 truth regarding Defendants’ limited copyright and equitable tolling prior to
2 Defendants’ anticipated Rule 12 motion and Plaintiffs’ class certification
3 motion. See Ortega v. Natural Balance Inc., No. CV 13-05942 ABC (Ex), 2013
4 U.S. Dist. LEXIS 176437, at *12 (C.D. Cal. Dec. 16, 2013) (denying defendant’s
5 motion to dismiss class claims as time-barred and finding that plaintiffs sufficiently
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pled delayed discovery as to their own claims and sufficiently pled “generalized
allegations consistent with the elements of the delayed discovery rule” as to
unknown class members, the court held: “Whether delayed discovery can be
applied as a practical matter can be addressed at the class certification
stage.”); Schramm v. JPMorgan Chase Bank, N.A., No. LA CV09-09442 JAK
(FFMx), 2011 U.S. Dist. LEXIS 122440, at *28-31 (C.D. Cal. Oct. 19, 2011)
(granting class certification, in part, and holding that plaintiffs carried their burden
of demonstrating predominance where: (1) the question of inquiry notice is based

13 on a reasonable person standard, and thus, there were no significant individual
14 issues related to when members should have known of their claim; and (2)
15 defendants presented no evidence that any potential member had actual notice of
16 the potential claim outside of the statutory period.).
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B.
Plaintiffs’ Detailed Allegations Relating to Equitable Tolling and
Fraudulent Concealment
18
The proposed amendment includes the new evidence obtained in Phase One

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20 in 28 highly detailed paragraphs alleging delayed discovery, concealment of the
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21 truth regarding Defendants’ limited copyright and equitable tolling. See Manifold
22 Decl., Ex. A, ¶¶ 135-162. A summary of these amendments is set forth below:
23
5

These concealment and fraud allegations should be considered as part of
Plaintiffs’ class certification motion. See Kanawi v. Bechtel Corp., 254 F.R.D.
25 102, 112 (N.D. Cal. 2008) (granting plaintiffs’ renewed motion for class
certification and holding that it was premature to make a determination on the
26
merits of plaintiffs’ fraud and concealment tolling claim); Tibble v. Edison Int’l,
27 No. CV 07-5359 SVW (AGRx), 2009 U.S. Dist. LEXIS 120939, at *28 (C.D. Cal.
June 30, 2009) (granting plaintiffs’ motion for class certification and holding that
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 Before licensing Happy Birthday from Defendants and paying a

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synchronization or mechanical license fee to Defendants, Plaintiffs

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did not know, and in the exercise of reasonable care, could not have

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known, that Defendants’ copyrights, in fact, did not cover the Song’s

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familiar lyrics. See Manifold Decl., Ex. A, ¶¶ 135(a)-(b), 136(a)-(b),

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137(a)-(b), 138(a)-(b).


Defendants (and their predecessors) consistently and uniformly
demanded that all would-be users of Happy Birthday obtain licenses
or permission from them to use, perform, or publish the Song and
demanded payment for the right to use, perform, or publish Happy
Birthday from all would-be users of the Song under and by virtue of
their claim of copyright ownership. Id. at ¶¶ 139-141.

12

 Undisclosed prior to this litigation, Defendants (or their predecessors)

13

have been in possession of, or have known the terms of: (a) the early

14

1890s assignment from Patty Hill and Mildred Hill to Summy Co.,

15

which related only to Good Morning to All; (b) the 1934 and 1935

16

assignment from Jessica Hill to Summy Co. of only the rights to

17

various piano arrangements to the musical composition Good

18

Morning to All; and (c) the 1944 assignment from Patty Hill and

19

Jessica Hill via the Hill Foundation to Summy Co. Those assignments

20

allowed Defendants (and their predecessors) to know that they did not

21

acquire any rights to the Happy Birthday lyrics from Patty Hill,

22

Jessica Hill, or the Hill Foundation. Id. at ¶ 142.

23
24

 Summy

Co.

commenced

three

lawsuits

alleging

copyright

infringement related to Happy Birthday after acquiring whatever

25 _________________________________________
“because the statute of limitations is an affirmative defense, and at the class
26
certification stage the Court must focus on the allegations [of fraud and
27 concealment] in the complaint, a determination on the statute of limitations is
premature at this point in the litigation.”).
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1

limited rights it ever obtained from the Hill sisters and the Hill

2

Foundation, it did not even mention either of the 1935 copyrights. Id.

3

at ¶¶ 143, 144 (describes limited rights).

4

 Undisclosed prior to this litigation, Defendants’ predecessor-in-

5

interest received an inter-office communication from Universal City

6
7
8
9
10
11
12

Studios on or about July 1, 1964, stating that the copyright asserted
and relied upon by Defendants and their predecessors “covers only the
particular [piano] arrangement” and that “no one could claim
copyright in the new [Happy Birthday] lyrics.” Id. at ¶ 147.
 Unknown prior to this litigation, beginning in 1963, in meetings with
Harry Fox Agency (“Fox”), as agent for Defendants’ predecessor-ininterest Summy Co., Walt Disney Productions (“Disney”) disputed the
scope and ownership of the copyright to Happy Birthday to You. In an

13

October 18, 1963, letter to Fox, Disney detailed their copyright

14

research of Happy Birthday, beginning with Mildred and Patty Hill’s

15

publication of Good Morning to All in Song Stories for the

16

Kindergarten, and noted that “no one knows who first changed the

17

words “good morning” to happy birthday.’” Disney concluded that

18

“the song together with the lyrics are now in the public domain.”

19

Again, in a May 12, 1964 letter to the Fox, Disney asserted that

20

“‘HAPPY BIRTHDAY TO YOU’ is definitely in the public domain.”

21

Id. at ¶¶ 148-150.

22

 Unknown prior to this litigation, in a November 6, 1964 letter to

23

counsel for Defendants’ predecessor Summy Co., Disney offered

24

$1,000 for five uses of Happy Birthday “not in acknowledgment that

25
26
27
28

there is a protected right in [the Song] but to pass over that question
and get a whitewash from your client.” Again, in a December 13,
1971 letter, Disney’s counsel wrote to Fox, and reiterated its prior
offer to pay $250 as a “tribute” for each use of Happy Birthday for
-9-

1

“the simple reason that although we firmly believe that we would

2

prevail in any litigation” that “business practices dictates that a small

3

payment is better than expensive litigation.” Disney’s counsel also

4

noted that having “recontacted various copyright experts,” Disney was

5

“willing once and for all to fight this matter in the event you are

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7
8
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10
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12

asking an amount greater than previously paid by us.” Id. at ¶¶ 151,
152
 Unknown prior to this litigation, a May 11, 1983 letter to Fox and
Defendants’ predecessor-in-interest Summy-Birchard Music from
Disney responded to a request from Fox, on behalf of SummyBirchard Music, for a $5,000 fee for a ten-year license of Happy
Birthday for an exhibit at the Horizons Pavilion at EPCOT by offering
a “tribute payment” of just $250 to use the Song for a decade. Disney

13

stated that the original song Good Morning to All and the “alleged

14

adaptation,” i.e., Happy Birthday to You, “are both in the public

15

domain around the world,” but offered the nominal sum “only to

16

avoid litigation to prove that they are free to use.” Id. at ¶ 153.

17

 At various times relevant hereto, Defendants (and their predecessors)

18

claimed that Summy Co.’s employee Orem may have written the

19

familiar Happy Birthday lyrics, claimed that Mildred Hill wrote the

20

familiar Happy Birthday lyrics and concealed the fact that Summy

21

Co.’s employees, Forman and Orem, did not write the familiar Happy

22

Birthday lyrics, either alone, together, or with Mildred or Patty Hill.

23

Id. at ¶¶ 154-156.

24
25
26
27

 Defendants (and their predecessors) concealed the fact that the 1935
copyrights covered only the piano arrangements composed by Summy
Co.’s employees-for-hire and did not cover the Happy Birthday
lyrics. Id. at ¶¶ 158, 159.

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1

 In part as a result of the actions of Defendants (and their

2

predecessors), Plaintiffs and all other users of Happy Birthday did not

3

know, had no reason to know, and in the exercise or reasonable care

4

based on the complexity of the historical record could not know that

5

Defendants did not own a copyright to the Song itself, but rather only

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8
9
10
11

to two piano arrangements composed by Summy Co.’s employees for
hire. Id. at ¶¶ 160-162.
C.

Newly Discovered Evidence re 1922 Publication of Happy

Birthday
The proposed amendment also includes a new paragraph setting forth the
newly discovered evidence by the Plaintiffs which was submitted via an ex parte
application (Dkt. Nos. 224, 225, 232, 233) as part of the summary judgment record

12 in Phase One, to which Defendants had no objection (Dkt. 226 at 1).
13
On July 13, 2015, Defendants gave Plaintiffs access to a database of
14 approximately 500 pages of documents, including approximately 200 pages of
15 documents they claim were “mistakenly” not produced during discovery, which
16 ended on July 11, 2014, more than one year earlier. See Dkt. 225 at ¶¶ 5,8, 9. One
17 of those documents – a 1927 publication of the Happy Birthday song that was
18 expressly authorized by defendants’ predecessor the Clayton F. Summy Co. – was
19 a proverbial smoking-gun. It and earlier versions of the song that Plaintiffs
20 subsequently located through their own investigative efforts conclusively prove
21 that any copyright that may have existed for the song itself (i.e., the setting of the
22 Happy Birthday lyrics to the melody of Good Morning) expired decades ago.
23
24
25
26
27

This allegation in the Fifth Amended Complaint is as follows:
On information and belief, in or before 1922, pursuant to
authority granted to it by Patty or Jessica Hill, Summy Co. authorized
The Cable Company (Chicago) (“Cable Co.”) to publish the music
and lyrics to Happy Birthday to You. In 1922, pursuant to that
authority, Cable Co. published the revised fourth edition of The

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1

Everyday Song Book with the music and lyrics to Happy Birthday to

2

You, including the following note: “Special permission through

3

courtesy of The Clayton F. Summy Co.” The Cable Company

4

registered a copyright for the fourth edition of The Everyday Song

5

Book in 1921, which it did not renew.

Everyday Song Book in 1922 was without a copyright notice.

6
7

Manifold Decl., Ex. A, ¶ 54.
This allegation based on newly-discovered evidence by Plaintiffs is provided

8
9
10
11
12

The publication of The

in good faith. This allegation proves conclusively that the song is in the public
domain and addresses the issue of whether Patty Hill abandoned any copyright she
may have had to the lyrics. Because of the importance of this newly discovered
evidence to the record, amendment is not futile. Plaintiffs are not at fault in the
need for amendment, any prejudice to Defendants was created by their own

13 conduct in “mistakenly” withholding evidence and good cause exists for
14 amendment.
15 IV.
16
17
18
19
20
21

ARGUMENT
A.

Standard of Review

Rule 15(a) allows amendment to a complaint “when justice so requires.” In
the Ninth Circuit, the policy favoring leave to amend is such that “a court should
liberally allow a party to amend its pleading.” Sonoma Cnty. Ass’n of Retired
Employees v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013) (citing Owens v.
Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (finding

22 the policy favoring amendment freely “is to be applied with extreme liberality.”)).
23 See also Bernhardt v. County of L.A., No. CV 99-10121-GHK, 2009 U.S. Dist.
24 LEXIS 23115, at *2 (C.D. Cal. Mar. 19, 2009). “Leave to amend lies within the
25 sound discretion of the trial court.” DCD Programs, Ltd. v. Leighton, 833 F.2d
26 183, 185-86 (9th Cir. 1987) (internal quotations and citation omitted). “The
27 underlying purpose of Rule 15 . . . [is] to facilitate decision on the merits, rather
28
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1 than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th
2 Cir. 2000) (en banc).
The Supreme Court has held that motions to amend may be denied for the
3
4 following reasons: (1) undue delay; (2) bad faith or dilatory motives on the part of
5 the movant; (3) repeated failure to cure deficiencies by previous amendments; (4)
6
7
8
9
10
11
12

undue prejudice to the opposing party; or (5) futility of the proposed amendment.
Foman v. Davis, 371 U.S. 178, 182, (1962). See also Sonoma County, 708 F.3d at
1117; Owens, 244 F.3d at 712. None of those reasons is present here.
In analyzing these factors, the Court should generally make “all inferences
in favor of granting the motion.” Griggs v. Pace Am. Group, Inc., 170 F.3d 877,
880 (9th Cir. 1999) (citing DCD Programs, 833 F.2d at 186). Furthermore, “[t]he
party opposing amendment bears the burden of showing prejudice,” futility, or one
of the other permissible reasons for denying a motion to amend. DCD Programs,

13 833 F.2d at 187. See also Richardson v. United States, 841 F.2d 993, 999 (9th Cir.
14 1988) (leave to amend should be freely given unless opposing party makes “an
15 affirmative showing of either prejudice or bad faith”). The possibility of delay
16 alone cannot justify denial of a motion to amend. See DCD Programs, 833 F.2d at
17 186 (citing cases).
18

Additionally, courts regularly grant motions for leave to amend to include

19 allegations to support equitable tolling. See e.g. Brown v. Napa Valley Sch. Dist.,
20 No. C-11-5673 JCS, 2012 U.S. Dist. LEXIS 69943, at *31-32 (N.D. Cal. May 18,
21 2012); Ramos v. Chase Home Fin., 810 F. Supp. 2d 1125, 1139 (D. Haw. 2011);
22 Kamar v. Krolcyzk, No. 1:07-CV-0340 AWI, 2008 U.S. Dist. LEXIS 55975, at *2
23 (E.D. Cal. July 16, 2008).
24

B.

Defendants Will Not Be Unfairly Prejudiced by Amendment of
the Complaint

25
26
27

The addition of new facts based on evidence obtained from Defendants in
Phase One of this litigation creates no unfair prejudice to Defendants, especially
when the facts were exclusively in the Defendants’ possession and unavailable to

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1 Plaintiffs prior to this litigation – some of which were “mistakenly” concealed by
2 Defendants. Defendants have no conceivable claim of unfair prejudice here.
The Ninth Circuit has held that “[p]rejudice to the opposing party is the most
3
4 important factor” in deciding a motion for leave to amend under Rule 15. Jackson
5 v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990) (internal citation omitted).
6
7
8
9
10
11
12
13
14
15
16
17

See also Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). The party
opposing the amendment bears the burden of proving that unfair prejudice will
result from the amendment. DCD Programs, 833 F.2d at 187. Defendants will not
suffer any unfair prejudice if the Court allows Plaintiffs to amend.
C.

Plaintiffs Do Not Seek Amendment in Bad Faith

An additional factor to consider in amending the complaint is whether
Plaintiffs’ motives are dilatory or otherwise in bad faith. Foman, 371 U.S. at 182.
Again, the nonmoving party bears the burden of proving dilatory motive (DCD
Programs, 833 F.2d at 187), which Defendants cannot do here.
Under Rule 15(a), bad faith includes an amendment to destroy diversity (see,
e.g., Sorosky v. Burroughs Corp., 826 F.2d 794 (9th Cir. 1987)) or the addition of
new but baseless legal theories for the sole purpose of prolonging the litigation
(Steckman v. Hart Brewing, Inc., 143 F.3d 1293 (9th Cir. 1998)). Neither of those

18 goals, or anything remotely like them, motivates Plaintiffs here. Rather, Plaintiffs
19 move this Court for leave to amend the Complaint in order to better protect the
20 interests of the class. Because new evidence now clarifies Plaintiffs’ claims,
21 Plaintiffs are duty-bound to amend. By this amendment, Plaintiffs are striving to
22 maintain adequate representation for the proposed class they represent. Defendants
23 cannot find bad faith in such a motive.
Plaintiffs’ Amendment is Not Futile

24

D.

25

A proposed amended pleading adding new claims is futile only if “it appears

26 beyond doubt” that the claims sought to be added would be dismissed for failure to
27
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1 state a claim. DCD Programs, 833 F.2d at 188 (internal citations omitted); see
2 also Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988).
Allowing Plaintiffs to amend their complaint to add pertinent substantive
3
4 allegations (set forth in § III above) to support their claims could not be futile
5 under this liberal pleading standard. First, the expanded class definition is
6
7
8
9
10
11

properly addressed at the class certification stage, not at dismissal for failure to
state a claim. Second, the detailed allegations regarding delayed discovery and
concealment of the truth about Defendants’ limited copyright in Happy Birthday
are sufficient on their face to provide a basis for equitable tolling and are not futile.
Third, the 1922 publication of Happy Birthday by The Cable Company without a
copyright notice is a critical fact in proving that the Song is in the public domain.
E.

There is No Undue Delay

12
13
14
15
16
17

Whether a Plaintiff has unduly delayed filing a motion for leave to amend
turns on whether the moving party knew or should have known the facts and
theories raised by the amendment in the original pleading. AmerisourceBergen
Corp. v. Dialysist West, Inc., 465 F.3d 946, 954 (9th Cir. 2006); Jackson, 902 F.2d
at 1388. “[L]ate amendments to assert new theories are not reviewed favorably
when the facts and theory have been known to the party seeking amendment since

18 the inception of the cause of action.” Acri v. Int’l Ass’n of Machinists & Aerospace
19 Workers, 781 F.2d 1393, 1398 (9th Cir. 1986) (internal citations omitted). See also
20 In re Circuit Breaker Litig., 175 F.R.D. 547, 550 (C.D. Cal. 1997).
21
As discussed above, Plaintiffs only had access to the evidence and facts,
22 which provide the substance of their proposed amendments, during the course of
23 discovery in Phase One. Plaintiffs could not have known these facts prior to the
24 inception of the litigation. Moreover, these facts (other than the 1922 publication
25 of Happy Birthday by The Cable Company which was discussed in the course of
26 the Summary Judgment proceedings) have become relevant to the litigation only
27 now that the stay was lifted on October 19, 2015, and the case has moved to Phase
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1 Two addressing the remaining claims, class certification, and the statute of
2 limitations. As to the 1922 publication of Happy Birthday, any delay in raising
3 this fact is attributed to Defendants “mistakenly” not producing the later edition of
4 this publication during discovery (which ended on July 11, 2014) but instead
5 delaying the production until July 13, 2015. See Dkt. 225 at ¶¶ 5, 8, 9.
6 V.

CONCLUSION

7

For the reasons stated above, the three groups of proposed amendments

8 (expanded class definition; allegations re: delayed discovery, concealment and
9 equitable tolling; and a 1922 publication of Happy Birthday) based on new
10 evidence discovered prior to the commencement of Phase Two are not futile but
critical to class certification (and other substantive) issues. Amendment will not
11
unduly delay the litigation as the stay on the remaining claims, class certification
12
and the statute of limitations was only lifted ten (10) days ago. The only prejudice
13
is to Plaintiffs, not Defendants, as this evidence was unknown to Plaintiffs prior to
14
this litigation.
15
For the reasons stated above, Plaintiffs respectfully request the Court grant
16
leave to file the Fifth Amended Complaint (Ex. A) immediately.
17
18 Dated: October 29, 2015
19
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27

WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
By:

/s/ Betsy C. Manifold
BETSY C. MANIFOLD
FRANCIS M. GREGOREK
[e-mail]
BETSY C. MANIFOLD
[e-mail]
RACHELE R. RICKERT
[e-mail]
MARISA C. LIVESAY
[e-mail]
BRITTANY N. DEJONG
[e-mail]
750 B Street, Suite 2770
San Diego, CA 92101
Telephone: [phone]

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6

Facsimile: 619/234-4599
WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
MARK C. RIFKIN (pro hac vice)
[e-mail]
JANINE POLLACK (pro hac vice)
[e-mail]
270 Madison Avenue
New York, NY 10016
Telephone: [phone]
Facsimile: 212-545-4753

7

Interim Lead Counsel for Plaintiffs

8

RANDALL S. NEWMAN PC
RANDALL S. NEWMAN (190547)
[e-mail]

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37 Wall Street, Penthouse D
New York, NY 10005
Telephone: [phone]
HUNT ORTMANN PALFFY NIEVES
DARLING & MAH, INC.
ALISON C. GIBBS (257526)
[e-mail]
OMEL A. NIEVES (134444)
[e-mail]
KATHLYNN E. SMITH (234541)
[e-mail]
301 North Lake Avenue, 7th Floor
Pasadena, CA 91101
Telephone: [phone]
Facsimile: 626/796-0107
DONAHUE GALLAGHER
WOODS 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
GLANCY PRONGAY & MURRAY
LLP
LIONEL Z. GLANCY (134180)
[e-mail]
MARC L. GODINO (188669)
[e-mail]

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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:22343

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