Baker et al v. Warner/Chappell Music, Inc. et al
Filing
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ORDER on 243 Colorado River Abstention Motion. This case is stayed pending resolution of the state court action titled Pandisc Music Corp., et al. v. Butler, et al., Case No. 06-07709, filed in the Eleventh Judicial Circuit in and for Miami-Dade County, Florida. Signed by Magistrate Judge Jonathan Goodman on 3/29/2018. (jdo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 14-22403-CIV-GOODMAN
[CONSENT]
GARFIELD BAKER, et al.,
Plaintiffs,
v.
WARNER/CHAPPELL MUSIC, INC., et al.,
Defendants.
________________________________________/
ORDER ON COLORADO RIVER ABSTENTION MOTION
Defendants Robert Crane, Pandisc Music Corp., and Whooping Crane Music,
Inc., referred to here as the “Crane Defendants,” move to stay this action pending the
resolution of a state court action. [ECF No. 243]. The Crane Defendants invoke the socalled Colorado River 1 abstention doctrine and this Court’s inherent authority. 2 Plaintiffs
Garfield Baker and Byron Smith and Intervenor Plaintiffs Music Specialists, Inc. and
Sherman Nealy filed an omnibus opposition response. [ECF No. 252]. The Crane
Defendants filed a reply. [ECF No. 262].
For the reasons outlined below, the Court grants the abstention motion. This case
is stayed pending resolution of the state court action titled Pandisc Music Corp., et al. v.
1
Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).
2
Given the Court’s abstention, I need not discuss my inherent power to stay cases.
Butler, et al., Case No. 06-07709, filed in the Eleventh Judicial Circuit in and for MiamiDade County, Florida.
I.
Background
This lawsuit is but one of several concerning the rights to certain musical works.
The prior lawsuits include: (1) Pandisc Music Corp., et al. v. Butler, et al., Case No. 0607709, in the Eleventh Judicial Circuit in and for Miami Dade County; (2) Pandisc Music
Corp., et al., v. Warner/Chappell, et al., No. 09-CV-20505, in the U.S. District Court for the
Southern District of Florida; (3) Pandisc Music Corp., et al., v. Tony Butler, et al., Case No.
10-59481, in the Eleventh Judicial Circuit in and for Miami Dade County; and (4) Garfield
Baker, et al., v. Warner/Chappell, et al., Case No. 14-019088 in the Eleventh Circuit in and
for Miami-Dade County. 3 The following is a brief history of the parties, their disputes,
and the lawsuits they spawned:
In 1983, Nealy founded Music Specialists, a company that engaged several music
artists, including Baker and Smith, who performed under the stage name “Freestyle,”
and Defendant Robert Butler, 4 whose stage name was “Pretty Tony.” Between 1984 and
Baker and Smith filed this later state court case, alleging many of the same
allegations they brought in this case. The Crane Defendants advise that the state court
case has since been stayed pending the resolution of this case. The 2014 state court case
will, therefore, not be discussed further.
3
The Court entered a default against Butler and his company, Defendant 321
Music LLC, but held off on entering a final judgment until the claims against the other
Defendants were resolved. [ECF No. 170].
4
2
1987, Baker, Smith, Butler, and Nealy authored or co-authored some or all of the 14
musical works at issue in this case. Music Specialists claims that it was the first party to
record, publish, and distribute those works. And in fact, Music Specialists filed the
original copyright registrations for many of the songs.
Music Specialists was administratively dissolved in 1986. Around the same time,
Music Specialists’ founder, Nealy, was incarcerated, and he remained so until 2008.
Between 1989 and 1992, the Crane Defendants entered into several licensing agreements
with Butler and two of his companies: Captain Productions, Inc. and C-Tan Music.
According to the Crane Defendants, the agreements granted Pandisc and Whooping
Crane exclusive licensing rights to a plethora of musical works, including the 14 works
implicated in this case. The Crane Defendants claim that, before entering into those
agreements, Butler had represented that he had acquired all rights to the songs from
Music Specialists.
At some point, the Crane Defendants became convinced that Butler, Captain
Productions, and C-Tan Music were telling third parties that Pandisc and Whooping
Crane did not have any licensing rights to the subject works. The Crane Defendants
believed these statements to be false and sought to enjoin them. So in 2006, the Crane
Defendants sued Butler, Captain Productions, and C-Tan Music in Florida state court,
under the lawsuit titled Pandisc Music Corp., et al. v. Butler, et al., Case No. 06-07709. This
is the pending state court case for which the Crane Defendants seek an abstention order.
3
In 2008, Butler, through a newly-created company named 321 Music, entered into
a different licensing agreement with Defendants Artist Publishing Group, LLC or
Warner/Chappell Music, Inc., or both. The Crane Defendants claim that the 2008
agreement purports to license the same songs that Pandisc and Whooping Crane have
exclusive rights over under their earlier agreements with Butler, Captain Productions,
and C-Tan. So in 2009, Pandisc and Whooping Crane sued 321 Music, Warner/Chappell
Music, Artist Publishing Group, and Atlantic Recording Corporation in federal court,
under the case titled Pandisc Music Corp., et al., v. Warner/Chappell, et al., No. 09-CV20505. Smith and Baker intervened in that case, claiming to be the rightful owners of the
musical works’ copyrights.
The parties to the 2009 federal case entered into a mediated settlement
agreement. The agreement covered, among other things, what royalties Baker and
Smith would each receive for the musical works. United States District Judge Federico
Moreno dismissed the 2009 federal case with prejudice, agreeing to retain jurisdiction to
enforce the agreement if the parties filed the agreement of record by a certain time. The
parties did not do so, but nonetheless later moved to compel enforcement of the
settlement agreement.
All parties, except Baker and Smith, would come to withdraw their motions to
compel after entering into an amendment to the settlement agreement. Baker and Smith
were not signatories to the amendment, a situation which has since grown into a hot4
button issue. Judge Moreno ultimately denied all motions to enforce, finding that he
lacked subject matter jurisdiction to resolve the post-settlement contractual disputes.
After that, the Crane Defendants supposedly learned that Butler had committed
fraud concerning the mediated settlement agreement. So in 2010, Pandisc and
Whooping Crane sued Butler and 321 Music for fraud in Florida state court, under the
lawsuit titled Pandisc Music Corp., et al., v. Tony Butler, et al., Case No. 10-59481. Pandisc
and Whooping Crane obtained judgments in that case against Butler and 321 Music,
and the judgments were affirmed on appeal.
In 2014, Baker and Smith, acting pro se, filed this action, raising several copyright
infringement claims, among others. [ECF No. 1]. Judge Lenard dismissed the original
complaint and the amended complaint due to several pleading deficiencies. [ECF Nos.
89; 119]. After that, the parties consented to full magistrate-judge jurisdiction, and Judge
Lenard referred the case to me. [ECF Nos. 135; 140–41]. Following Plaintiffs’ second
amended complaint, the Court dismissed with prejudice the four non-copyright
infringement counts and dismissed without prejudice the copyright infringement
counts. [ECF No. 175].
In November 2016, Plaintiffs, still acting pro se, filed the currently-operative third
amended complaint. In the third amended complaint, Plaintiffs allege that they are the
“copyright owners” or “co-owners” of the works at issue. [ECF No. 182, ¶¶ 1, 4, 18, 26,
30, 52, 58]. But in response to the dismissal motions that followed, Plaintiffs, now with
5
the benefit of counsel, clarified that they are the “beneficial owners” of the works at issue
and “assigned their rights to Music Specialist[s] in exchange for royalties.” [ECF
No. 197, pp. 4–5 (emphasis added)].
In June 2017, Nealy and Music Specialists moved to intervene in this case. [ECF
No. 212]. Nealy claimed that he is the sole owner of Music Specialists, which, together
with another affiliated company, “have been the owner, exclusive publisher and
administrator of copyrights” for the works at issue. [ECF No. 212-1, pp. 2–3]. Nealy also
claimed that his companies never assigned the rights to those works.
The Crane Defendants, as well as Warner/Chappell Music and Artist Publishing
Group, who are both referred to here as the “Warner Defendants,” moved to dismiss the
third amended complaint. [ECF Nos. 188–89]. In September 2017, the Court largely
denied the motions to dismiss, and the Crane Defendants and the Warner Defendants
have since filed their answers. [ECF Nos. 230; 241–42]. The Court also granted Music
Specialists and Nealy leave to intervene. [ECF No. 234].
II.
Standard
“Generally, as between state and federal courts, the rule is that the pendency of
an action in the state court is no bar to proceedings concerning the same matter in the
[f]ederal court having jurisdiction.” Willson v. Bank of Am., N.A., 684 F. App’x 897, 899
(11th Cir. 2017) (quoting Colorado River, 424 U.S. at 817). Federal courts have a “virtually
unflagging” obligation to exercise the jurisdiction given to them. Id. (quoting
6
Colorado River, supra). So “Colorado River abstention is particularly rare” and only proper
“when the circumstances are exceptional.” Willson, 684 F. App’x at 899–90 (quoting
Jackson-Platts v. Gen. Elec. Capital Corp., 727 F.3d 1127, 1140 (11th Cir. 2013) and Noonan
S., Inc. v. Cty. of Volusia, 841 F.2d 380, 382 (11th Cir. 1988)).
Still, the principles behind Colorado River abstention “rest on considerations of
wise judicial administration, giving regard to conservation of judicial resources and
comprehensive disposition of litigation.” Willson, 684 F. App’x at 899 (quoting Moorer v.
Demopolis Waterworks & Sewer Bd., 374 F.3d 994, 997 (11th Cir. 2004)). And the decision to
abstain from a case under Colorado River rests on the court’s discretion. Willson, 684 F.
App’x at 899.
For abstention to apply, one threshold condition must first be met: that the
“federal and state proceedings involve substantially the same parties and substantially
the same issues.” Id. at 900 (quoting Ambrosia Coal & Const. Co. v. Pages Morales, 368 F.3d
1320, 1330 (11th Cir. 2004). Then, courts must weigh six factors: (1) what court has
assumed jurisdiction over property, (2) the inconvenience of the federal forum, (3) the
potential for piecemeal litigation, (4) what court obtained jurisdiction first, (5) whether
state or federal law will be applied, and (6) the state court’s adequacy in protecting the
parties’ rights. Jackson-Platts, 727 F.3d at 1141. 5 Courts should “apply these factors
One recent, unpublished Eleventh Circuit case states that there are two other
factors: (7) the vexatious or reactive nature of either the federal or the state litigation
and (8) whether there is a federal statute that evinces a policy favoring abstention.
5
7
flexibly and pragmatically, not mechanically.” Id.
III.
Analysis
A.
The Threshold Condition of Parallel Proceedings
For there to be parallel proceedings under Colorado River, “[e]xact identity
between parties and issues is not required.” Flowers v. Fulton Cty. Sch. Sys., 654 F. App’x
396, 399 (11th Cir. 2016); see Ambrosia Coal, 368 F.3d at 1329–30 (rejecting argument that
“Colorado River abstention is permissible only when the relevant federal and state cases
share identical parties, issues, and requests for relief” as too formalistic and as “fly[ing]
in the face of the Supreme Court’s clear efforts to fashion a flexible and holistic test for
applying for the Colorado River abstention principle.”). Rather, federal and state actions
may be “inextricably intertwined” where they stem from the same conduct. See Fed USA
Franchising, Inc. v. Merille, Inc., No. 812CV02416SCBTGW, 2013 WL 12155944, at *3
(M.D. Fla. Feb. 21, 2013) (finding parallel state and federal actions that stemmed from
the same conduct, even though they concerned different claims and a different party
was added to the federal case).
The Court finds that this case and the 2006 state court litigation are substantively
similar. At bottom, both cases address the same core problem -- i.e., the disputed
ownership and licensing rights over certain musical works -- and arose from the same
Willson, 684 F. App’x at 900. The parties, however, did not brief those factors, so the
Court will not add them to the analysis. It should be noted, though, that Baker and
Smiths’ pro se filing of this lawsuit at the heel of their unsuccessful attempt to enforce a
settlement agreement is arguably reactive.
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common nucleus of fact. Stated simply, in the early 80s, Baker, Smith, and Nealy
authored or co-authored some songs that Music Specialists and/or its affiliates
published and distributed. In the mid-80s, Music Specialists was dissolved, and Nealy
went to prison. What happened to the songs and their copyrights then is hotly contested
in both suits.
In the late 80s and early 90s, Pandisc and Whooping Crane entered into licensing
deals concerning the songs with Butler and two of his companies, who had allegedly
obtained the rights to the works from Music Specialists. The Butler parties then
supposedly breached those deals, which led to the state court action. Butler also,
through a different company, entered into a supposedly competing licensing deal with
Warner/Chappell and/or Artist Publishing, leading to the first federal court action, in
which Baker and Smith also asserted their rights. The parties settled that case.
Butler and 321 Music then supposedly committed fraud concerning the
settlement agreement, leading to a second state court action. Baker and Smith also had
their qualms with the settlement agreement and the use of the works in general, and so
they filed the present lawsuit, claiming that they own the works and that they never
gave up ownership to Pandisc, Whooping Crane, Butler, 321 Music, or anyone else. That
position changed when Music Specialists, reinstated by the now-freed Nealy,
intervened in this lawsuit and alleged that they are the legal owners of the subject
copyrights and that the Crane/Butler licensing deals of the late 80s and early 90s were
9
fraudulent. Baker and Smith now claim to be the beneficial owners of the copyrights,
having transferred them to Music Specialists back in the day.
As it is plain to see, the same core issue is in both cases: the ownership over the
musical works. And both cases arose from the same set of circumstances. This lawsuit
and the state court lawsuit are like different species that evolved from one common
ancestor. Like different species, they have differing characteristics. For instance, this
lawsuit involves copyright infringement claims, while the state court action involves
contract claims. And some of the parties in this case are not parties in the state court
action. But lawsuits may still be substantially similar under Colorado River even if the
claims and parties do not match exactly. See, e.g., Flowers, 654 F. App’x at 399.
Therefore, the Court finds that the threshold Colorado River condition of parallel
lawsuits is met here.
B.
The First Factor: Jurisdiction over Property
The Eleventh Circuit has stated that where “the relevant cases are not
proceedings in rem, neither court has jurisdiction over property, and the first Colorado
River factor does not favor abstention.” Ambrosia Coal, 368 F.3d at 1332. The case here is
not an in rem proceeding, but one for copyright infringement. Therefore, this factor does
not weigh in favor of abstention. Although Plaintiffs and Intervenor Plaintiffs suggest
that the copyrights in this case may be considered rem, they cite no authority for that
proposition, and independent research revealed none.
10
As such, the first Colorado River factor does not favor abstention.
C.
The Second Factor: Inconvenience of the Federal Forum
The second Colorado River factor also does not favor abstention. The Crane
Defendants concede that this forum is no less convenient than the state court forum,
located but a few blocks away.
D.
The Third Factor: Avoidance of Piecemeal Litigation
“The single most important factor” in the Colorado River analysis is the avoidance
of piecemeal litigation. Ambrosia Coal, 368 F.3d at 1329; see also Moses, 460 U.S. at 16
(explaining that this factor was “[b]y far the most important factor” in deciding Colorado
River). But not all duplication of effort or threats of inconsistent determinations
warrants abstention. Rather, “as it is properly understood, Colorado River’s factor
concerning the avoidance of piecemeal litigation does not favor abstention unless the
circumstances enveloping those cases will likely lead to piecemeal litigation that is
abnormally excessive or deleterious.” Ambrosia Coal, 368 F.3d at 1333.
The Court finds that this paramount factor weighs in favor of abstention. At
bottom, Plaintiffs and Intervenor Plaintiffs allege that they, as beneficial owners and
legal owners, respectively, never gave up their rights to the musical works to Butler or
321 Music, both of whom, therefore, could not have lawfully entered into any licensing
deals with the Crane Defendants or the Warner Defendants. As shown in the motion for
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partial summary judgment pending in the 2006 state court case [ECF No. 263–2], 6 the
state court judge will decide the core issue of Butler and 321 Music’s ability to enter into
licensing deals for the subject works. The state court will also decide whether Music
Specialists has rights to those works. And the state court will likewise decide the
implication of the fraud judgment against Butler and 321 Music, which concerned their
conduct relative to the mediated settlement agreement in the case involving the Warner
Defendants.
All of these issues are deeply entrenched in this lawsuit. The possibility that this
Court and the state court may come to different conclusions on whether the licensing
agreements are lawful will create “piecemeal litigation that is abnormally excessive or
deleterious.” Ambrosia Coal, 368 F.3d at 1333. Indeed, the parties’ dispute has already led
to many lawsuits in federal and state court.
In sum, the Court finds that the third Colorado River factor, which is the most
important factor to consider, weighs in favor of abstention.
E.
The Fourth Factor: The Order of Jurisdiction
The fourth Colorado River factor does not depend on which lawsuit was filed first.
Rather, “despite [the] somewhat misleading phrasing in Colorado River, this factor
‘should not be measured exclusively by which complaint was filed first, but rather in
terms of how much progress has been made in the two actions.’” Ambrosia Coal, 368 F.3d
The Court takes judicial notice of this state court filing and the others filed of
record in this case. [ECF No. 263].
6
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at 1333 (quoting Moses, 460 U.S. at 21).
In this case, the 2006 state court case was filed first and has progressed the
farthest. Even though the present lawsuit was filed in 2014, it has not advanced much
past the pleading stage given Plaintiffs’ multiple pleading deficiencies. Moreover, Music
Specialists and Nealy intervened in this case only recently, and Defendants have not
answered that complaint yet. Therefore, this case is not even at issue. By contrast, the
parties have exchanged discovery in the state court case, and there is a pending motion
for partial summary judgment.
Thus, the Court finds that the fourth Colorado River factor weighs in favor of
abstention.
F.
The Fifth Factor: Whether State or Federal Law Applies
For the fifth Colorado River factor to favor abstention, it is not enough for a district
court to conclude that state law applies. Jackson-Platts, 727 F.3d at 1143. Rather, “this
factor favors abstention only where the applicable state law is particularly complex or
best left for state courts to resolve.” Id.; see also Noonan, 841 F.2d at 382 (same).
Here, although the interpretation of the licensing agreements at issue involves
state law, they involve breach of contract claims. Federal courts are well equipped to
apply breach of contract principles under state law, and they routinely do so.
Therefore, the Court finds that the fifth Colorado River factor does not favor
abstention.
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G.
The Sixth Factor: Whether the State Court can Protect the Parties’ Rights
Under the sixth Colorado River factor, “[t]he fact that both forums are adequate to
protect the parties’ rights merely renders this factor neutral.” Jackson-Platts, 727 F.3d at
1143 (quoting Noonan, 841 F. 2d at 383). Thus, “[t]his factor will only weigh in favor or
against abstention when one of the fora is inadequate to protect a party’s rights.” Id.
(quoting Ambrosia Coal, 368 F.3d at 1334).
Here, the Court finds that the sixth Colorado River doctrine is neutral. Plaintiffs
and Intervenor Plaintiffs fail to articulate a persuasive reason why the state court could
not adequately protect their interests. Many of their arguments concern whether the
state court case and the federal case are parallel, which the Court has addressed
already. And although Plaintiffs maintain that they have independent standing to sue
for copyright infringement as beneficial owners, they do not explain how that renders
the state court forum inadequate to protect their rights.
In short, the Court finds that the sixth and final Colorado River doctrine is neutral.
IV.
Conclusion
After carefully balancing the Colorado River factors, the Court finds that
abstention is appropriate. See CCB, LLC v. BankTrust, 438 F. App’x 833, 835 (11th Cir.
2011) (“The district court evaluated the factors identified in Colorado River and
reasonably determined that the progress of the proceedings in state court, the
predominance of state law issues, and the likelihood of piecemeal litigation weighed in
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favor of abstaining until the earlier action filed by BankTrust is resolved in state
court.”). “[A] stay, not a dismissal, is the proper procedural mechanism for a district
court to employ when deferring to a parallel state-court proceeding under
the Colorado River doctrine.” Moorer, 374 F.3d at 998 (internal quotations omitted).
Therefore, this case is stayed pending resolution of the state court action titled
Pandisc Music Corp., et al. v. Butler, et al., Case No. 06-07709, filed in the Eleventh Judicial
Circuit in and for Miami-Dade County, Florida.
DONE and ORDERED in Chambers, in Miami, Florida, on March 29, 2018.
Copies furnished to:
All counsel of record
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