Broadcast Music, Inc. et al v. JJ Squared Corp. et al
Filing
43
ORDER granting 32 Motion for Summary Judgment. For the reasons set forth herein, plaintiffs motion for summary judgment is granted in part and denied in part, and defendants cross-motion for summary judgment is denied in its entirety. Specifically , the Court holds that JJ Squared and Sheehan are jointly and severally liable for copyright infringement. However, genuine disputes of material fact preclude summary judgment with respect to Ramas liability and the requested relief. Plaintiffs may renew their application for relief and for attorneys fees and costs after the resolution of the aforementioned factual issues. SO ORDERED. Ordered by Judge Joseph F. Bianco on 12/26/2013. (Chipev, George)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 11-CV-5140 (JFB)(AKT)
_____________________
BROADCAST MUSIC, INC.; FOX-GIMBEL PRODUCTIONS, INC.; ROADALI MUSIC;
COMBINE MUSIC CORP.; SCREEN GEMS-EMI MUSIC, INC.; ADULT MUSIC;
UNIVERSAL–SONGS OF POLYGRAM INTERNATIONAL, INC.; FUEL PUBLISHING, INC.
D/B/A PENER PIG PUBLISHING; SONY/ATV SONGS LLC; AND FALLOUT BOY, INC.
D/B/A CHICAGO X SOFTCORE SONGS
Plaintiffs,
VERSUS
JJ SQUARED CORP., D/B/A K.J. FARRELL’S BAR & GRILL; KEVIN SHEEHAN; AND
JOSEPH RAMA,
Defendants.
___________________
MEMORANDUM AND ORDER
December 26, 2013
___________________
JOSEPH F. BIANCO, District Judge:
Plaintiff Broadcast Music, Inc. (“BMI”)
brings this copyright infringement action
against defendants JJ Squared Corporation,
d/b/a K.J. Farrell’s Bar & Grill (“JJ
Squared”); Kevin Sheehan (“Sheehan”); and
Joseph Rama (“Rama”) (collectively,
“defendants”) pursuant to the United States
Copyright Act of 1976 (the “Copyright
Act”), 17 U.S.C. §§ 101 et seq. BMI has the
authority to license the public performance
rights of approximately 6.5 million
copyrighted musical compositions. The
other plaintiffs—Fox-Gimbel Productions,
Inc.; Roadali Music; Combine Music Corp.;
Screen Gems-EMI Music, Inc.; Adult
Music; Universal–Songs of Polygram
International, Inc.; Fuel Publishing, Inc.
d/b/a Pener Pig Publishing; Sony/ATV
Songs LLC; and Fallout Boy, Inc. d/b/a
Chicago X Softcore Songs—own the
copyrights to the musical compositions that
allegedly were publicly performed without
authorization from BMI at K.J. Farrell’s Bar
& Grill (“the Establishment”).
The parties cross-move for summary
judgment pursuant to Federal Rule of Civil
Procedure 56. For the following reasons, the
Court (1) grants plaintiffs’ motion as to JJ
Squared and Sheehan as to liability, but
denies the motion as to damages; and (2)
denies the motion as to defendant Rama.
The Court denies defendants’ motion in its
entirety.
I.
A.
BACKGROUND
Correspondence, Stevens Decl. Ex. B.)
Licensing personnel also telephone and visit
potential licensees. (Stevens Decl. ¶ 7.)
Factual Background1
BMI enters into agreements with the
copyright owners of musical compositions
to acquire non-exclusive public performance
rights. (Lloyd Decl. ¶ 2.) BMI has the
performance rights for the works at issue:
“Hemorrhage,” “Killing Me Softly With His
Song,” “Me and Bobby McGee,” “Sugar
We’re Going Down,” and “Surrender”2
(collectively, “the Works”). (Id. ¶¶ 2, 4–5;
see Copyright Documentation, Lloyd Decl.
Ex. A.) BMI, in turn, licenses the right to
perform publicly such compositions through
“blanket license agreements.” (Lloyd Decl.
¶¶ 2, 3.) According to BMI’s Assistant Vice
President of General Licensing, BMI
routinely mails license agreements and
information about copyright laws to
establishments where music is performed.
(Stevens Decl. ¶ 2; see generally
JJ Squared operates, maintains, and
controls the Establishment, which regularly
hosts live music and karaoke, and has a
jukebox. (Answer ¶ 2; Response to Request
for Admissions (“RRA”) ¶¶ 2–3; Sheehan
Dep. at 42–50.) The Establishment has a
licensing agreement with ASCAP. (Rama
Dep. at 42:3–17.) Sheehan, the president of
JJ Squared, has “the right and ability to
supervise the activities of” JJ Squared and a
“direct financial interest” in the corporation.
(Answer ¶ 2; RRA ¶ 5; Shareholders
Agreement, Clayton Decl. Ex. C, at 1;
Sheehan Dep. at 10.) He has operated and
managed the Establishment since at least
early 2011. (See Answer ¶ 2; Sheehan Dep.
at 10, 20–22.) According to the Shareholders
Agreement, Rama is an officer of record of
JJ Squared, and he operated and managed
the Establishment until early 2011. (See
Shareholders Agreement; Rama Dep. at 17,
29–34, 56–59; Sheehan Dep. at 20–22).
According to Sheehan, however, Rama was
only a manager because he never paid the
$40,000 capital contribution that was a
prerequisite to the ownership interest. (RRA
¶¶ 8, 11; Sheehan Dep. at 10, 23.) Plaintiffs
concede there is a fact dispute regarding
Rama’s financial interest. (Pl. Reply, at 7.)
1
The Court takes the following facts from the
parties’ affidavits, declarations, and exhibits attached
thereto. Unless otherwise noted, each fact is
undisputed or the opposing party has not pointed to
any contradictory evidence in the record. As to each
cross-motion, the Court construes the facts in the
light most favorable to the non-moving party. See
Capobianco v. City of New York, 422 F.3d 47, 50 (2d
Cir. 2005). The Court notes that plaintiffs present
their Rule 56.1 Statement of Facts in their brief and
incorporate the declarations of Catherine Clayton
(“Clayton), Hope Lloyd (“Lloyd”), and Lawrence
Stevens (“Stevens”). Defendants did not submit a
brief in opposition to summary judgment and in
support of their cross-motion for summary judgment;
instead, they submit defense counsel’s “Affirmation
in Opposition to Motion for Summary Judgment and
in Support of Cross Motion for Summary Judgment”
(“Def. Affirmation”) (Docket No. 33). In its
discretion, the Court will take into account all factual
assertions supported by evidence in the record. The
parties shall ensure compliance with the Local Rules
in the future.
BMI first contacted Rama and the
Establishment on January 6, 2010, after
learning that it did not have the requisite
license.3 (Stevens Decl. ¶ 3.) The January 6
Letter explained the restrictions on public
performances of copyrighted music,
provided information about BMI’s business,
3
Except for the performances on June 9, 2011, there
is no evidence in the record about which copyrighted
works were played, when they were played, who
played them, or how frequently they were played.
2
The Court has reviewed the registration certificates
and documents relating to the chain of ownership.
Defendants do not dispute the certificates, chains of
ownership, or BMI’s authority to license these works.
2
provide you with the necessary permission
to perform copyright controlled music in
your business” and it included a copy of the
December 2010 notice. (March 11 Letter, at
BMI 00124.) The letter was delivered on
March 15. (March 15 Proof of Delivery, at
BMI 00125.) According to Stevens,
licensing personnel called the Establishment
on sixty-three occasions. (Id. ¶ 8.)
and enclosed a license agreement. (January
6 Letter, at BMI 00105.) BMI sent
additional letters to Rama—none of which
were responded to—on February 12, March
15, April 1, April 13, June 8, July 14,
August 18, September 27, October 6,
October 28, November 17, and December
20,
2010.
(Stevens
Decl.
¶
5;
Correspondence List, Stevens Decl. Ex. B,
at BMI 00104.) The April 1 Letter indicated
that Rama had spoken with a BMI
representative regarding licensing and
requested proof of BMI’s authority to act on
behalf of songwriters and composers. (April
1 Letter, at BMI 00108.) The June 8 Letter
again referenced the “numerous attempts to
contact [Rama] concerning [his] rights and
[responsibilities] as someone who plays
BMI copyrighted music in a business.”
(June 8 Letter, at BMI 00110.) The
November 17 Letter from Stevens
emphasized that BMI had been attempting to
contact Rama “for some time regarding the
necessity of signing a BMI Music License
for” the Establishment; that BMI’s attempts
have been unsuccessful; that the music
usage fee for 2010 is $1,303.50; and that
“[c]opyright infringement is a serious
offense.” (November 17 Letter, at BMI
00119.) The December 20 Letter, sent via
FedEx by an attorney, gave notice that if a
license was not completed the Establishment
must discontinue the public performance of
any BMI-licensed music or risk damages.
(December 20 Letter, at BMI 00120.) On
January 10, 2011, Stevens sent Rama a letter
via FedEx instructing the Establishment to
cease performing BMI-licensed music.
(Stevens Decl. ¶ 6; January 10 Letter, at
BMI 00122.) The package was delivered on
January 13. (January 19 Proof of Delivery,
at BMI 00123.) BMI sent additional letters
on March 11, March 22, and May 23, 2011.
(Stevens Decl. ¶ 6.) The March 11 Letter to
Sheehan stated that “BMI has been
contacting your business in an attempt to
The Establishment never responded to
BMI, and it has no license from BMI.
(Stevens Decl. ¶ 4.) Sheehan and Rama
claim
they
never
received
any
correspondence from BMI and never heard
of BMI before the lawsuit. (Rama Decl. ¶¶
7, 9; Sheehan Decl. ¶ 7.) According to
Rama, he would open bills from the
Establishment’s vendors, “but with the
volume of junk mail . . . daily [he] would
not simply open every piece of mail that
came regardless to whom it was addressed.”
(Rama Decl. ¶ 8.)
On June 9, 2011, a BMI representative,
Nathan Donchez, visited the Establishment.
(Stevens Decl. ¶ 11.) Donchez’s Certified
Infringement Report detailed the venue,
stated that music was played from an iPod
and by a band, and documented the songs
played. (Certified Infringement Report,
Stevens Decl. Ex. A, at BMI 00141–46.)
There was no admission charge. (Id. at BMI
00141.) Donchez also digitally recorded the
music and submitted it to BMI’s General
Licensing Department. (Certification of
Nathan Donchez, Stevens Decl. Ex. A, at
BMI 00147.) BMI authorized Performance
Identification Employee Lisa Brammer to
review the report and identify the recorded
musical works. (Stevens Decl. ¶ 12;
Brammer Decl., Stevens Decl. Ex. A, at
BMI 00148.) Brammer identified the Works.
(Stevens Decl. ¶ 12; Identified Songs,
Stevens Decl. Ex. A, at BMI 00150–51.) On
June 10, 2011, BMI sent the Establishment a
letter advising it of the investigation. (Id. ¶
3
13; June 10 Letter, at BMI 00128.) BMI
never received a response. (Stevens Decl. ¶
13.) On June 20, 2011, BMI advised
Sheehan that the matter was referred to
attorneys, but BMI received no response.
(June 20 Letter, at BMI 00130.)
admissions, interrogatory answers, or other
materials; or (B) showing that the materials
cited do not establish the absence or
presence of a genuine dispute, or that an
adverse party cannot produce admissible
evidence to support the fact.” Fed. R. Civ. P.
56(c)(1). The court “is not to weigh the
evidence but is instead required to view the
evidence in the light most favorable to the
party opposing summary judgment, to draw
all reasonable inferences in favor of that
party,
and
to
eschew
credibility
assessments.” Amnesty Am. v. Town of W.
Hartford, 361 F.3d 113, 122 (2d Cir. 2004)
(quoting Weyant v. Okst, 101 F.3d 845, 854
(2d Cir. 1996)); see Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)
(summary judgment is unwarranted if “the
evidence is such that a reasonable jury could
return a verdict for the nonmoving party”).
Sheehan and Rama do not dispute that
BMI-controlled music was performed on
June 9, 2011. They contend, however, that
they never pay the bands and never profit
from the performances because “[a]ny cover
would go directly to [the bands].” (Sheehan
Decl. ¶ 8.) Sheehan also claims that they
never tell bands what to play. (Id. ¶ 9.)
B.
Procedural Background
Plaintiffs filed the complaint on October
21, 2011. Defendants answered on April 13,
2012. Plaintiffs moved for summary
judgment on March 5, 2013. Defendants
opposed and cross-moved for summary
judgment on April 3, 2013. Plaintiffs
opposed and replied on May 3, 2013.
Defendants replied on May 16, 2013. The
Court held oral argument on June 5, 2013.
II.
Once the moving party has met its
burden, the opposing party “must do more
than simply show that there is some
metaphysical doubt as to the material
facts. . . . [T]he nonmoving party must come
forward with specific facts showing that
there is a genuine issue for trial.” Caldarola
v. Calabrese, 298 F.3d 156, 160 (2d Cir.
2002) (quoting Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586–87
(1986)). As the Supreme Court stated in
Anderson, “[i]f the evidence is merely
colorable, or is not significantly probative,
summary judgment may be granted.” 477
U.S. at 249–50 (citations omitted). Indeed,
“the mere existence of some alleged factual
dispute between the parties” alone will not
defeat a properly supported motion for
summary judgment. Id. at 247–48. Thus, the
nonmoving party may not rest upon mere
conclusory allegations or denials but must
set forth “‘concrete particulars’” showing
that a trial is needed. R.G. Grp., Inc. v. Horn
& Hardart Co., 751 F.2d 69, 77 (2d Cir.
1984) (quoting SEC v. Research Automation
Corp., 585 F.2d 31, 33 (2d Cir. 1978)).
STANDARD OF REVIEW
Pursuant to Federal Rule of Civil
Procedure 56(a), a court may only grant a
motion for summary judgment if “the
movant shows that there is no genuine
dispute as to any material fact and the
movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). The moving
party bears the burden of showing that he or
she is entitled to summary judgment.
Huminski v. Corsones, 396 F.3d 53, 69 (2d
Cir. 2005). “A party asserting that a fact
cannot be or is genuinely disputed must
support the assertion by: (A) citing to
particular parts of materials in the record,
including
depositions,
documents,
electronically stored information, affidavits
or declarations, stipulations (including those
made for purposes of the motion only),
4
Accordingly, it is insufficient for a party
opposing summary judgment “merely to
assert a conclusion without supplying
supporting arguments or facts.” BellSouth
Telecomms., Inc. v. W.R. Grace & Co., 77
F.3d 603, 615 (2d Cir. 1996) (quoting
Research Automation Corp., 585 F.2d at
33).
III.
A.
(W.D.N.Y. Mar. 14, 1995) [hereinafter
Shapiro II] (citations omitted).
Defendants offer no evidence to place in
dispute that plaintiffs have satisfied the first,
second, third, and fifth elements. The
declaration of BMI’s Assistant Vice
President, Hope Lloyd, and the attached
documents,
establish
originally
and
authorship, compliance with the formalities
of the Copyright Act, ownership, and BMI’s
right to license the works.4 It also is
undisputed that the Establishment had no
permission to perform BMI-controlled
music in 2010–2012. Further, Donchez’s
report and Brammer’s review—certified
under 28 U.S.C. § 1746—establish that the
five songs were publicly performed at K.J.
Farrell’s on June 9, 2011. See, e.g., Broad.
Music, Inc. v. Haibo, Inc., No. 10-CV-240S,
2012 WL 843424, at *2 (W.D.N.Y. Mar. 12,
2012) [hereinafter Haibo] (relying on
certifications
to
establish
public
performance element). Thus, defendants’
uncontroverted evidence clearly satisfies
those elements. The only remaining
questions, therefore, are whether the
performance was “for profit” and whether
the defendants are jointly and severally
liable for copyright infringement.
DISCUSSION
Copyright Infringement
Plaintiffs
allege
that
defendants
infringed plaintiffs’ copyrights by allowing
the public performance of the Works at the
Establishment without authorization. The
owner of a copyright has the exclusive right
to perform, or to authorize others to
perform, the copyrighted work. 17 U.S.C. §
106(4). Any person who violates this
exclusive right is an infringer. Id. § 501(a);
see Broad. Music, Inc. v. R Bar of
Manhattan, Inc., 919 F. Supp. 656, 659
(S.D.N.Y. 1996) [hereinafter R Bar] (citing
Shapiro, Bernstein & Co. v. H.L. Green Co.,
316 F.2d 304, 307 (2d Cir. 1963)
[hereinafter Shapiro I]) (“[P]erformances,
made without a license or authorization from
the copyright owners, constitute copyright
infringements in the works.”). To prove a
copyright infringement claim based on an
unauthorized public performance, the
plaintiff must establish (1) originality and
authorship of the copyrighted work; (2)
compliance with the formalities of the
Copyright Act; (3) ownership of the
copyrights involved; (4) the defendant’s
public performance of the composition for
profit; and (5) lack of authorization for the
public performance. Broad. Music, Inc. v.
315 West 44th St. Rest. Corp., 93 Civ. 8082
(MBM), 1995 WL 408399, at *2 (S.D.N.Y.
July 11, 1995) [hereinafter 315 West 44th
St.] (citations omitted); Shapiro, Bernstein
& Co., Inc. v. Club Lorelei, Inc., No. 93–
CV–0439E(M), 1995 WL 129011, at *2
1.
JJ Squared’s and Sheehan’s Liability
It is well-settled that “[a]ll corporations
and persons who ‘participate in, exercise
control over, or benefit from’ a copyright
infringement are jointly and severally liable
as copyright infringers.” 315 West 44th St.,
1995 WL 408399, at *4 (quoting Sygma
Photo News, Inc. v. High Soc’y Magazine,
Inc., 778 F.2d 89, 92 (2d Cir. 1985); Shapiro
I, 316 F.2d at 308–09); see also Broad.
4
A copyright registration “shall constitute prima
facie evidence of the validity of the copyright and of
the facts stated in the certificate.” 17 U.S.C. § 410(c);
see also Gund, Inc. v. Applause, Inc., 809 F. Supp.
304, 307 (S.D.N.Y. 1993) (citations omitted).
5
Music, Inc. v. DFK Entm’t, LLC, No. 1:10cv-1393 (GLS/DRH), 2012 WL 893470, at
*3 (N.D.N.Y. Mar. 15, 2012) [hereinafter
DFK Entm’t] (citing cases). Specifically, an
individual who knows or has “reason to
know of the direct infringement,” and
“engages in ‘personal conduct that
encourages or assists the infringement,’”
will be liable for contributory infringement.
Arista Records, LLC v. Doe 3, 604 F.3d 110,
118 (2d Cir. 2010) (citing A & M Records,
Inc. v. Napster, Inc., 239 F.3d 1004, 1019–
20 (9th Cir. 2001)) (internal quotation marks
omitted). Vicarious infringement, on the
other hand, does not require proof of
knowledge. Gershwin Pub. Corp. v.
Columbia Artists Mgmt., Inc., 443 F.2d
1159, 1162 (2d Cir. 1971). Instead, an
individual is jointly and severally liable as a
vicarious infringer “if he has the right and
ability to supervise the infringing activity
and also has a direct financial interest in
such activities.” Id. Thus, “[a] proprietor is
liable under the Copyright Act for the
copyright infringement of musicians whom
the proprietor allows to perform in his
establishment, even if the proprietor tells the
musicians not to play protected works, or is
unaware that the songs performed were
copyrighted.” 315 West 44th St., 1995 WL
408399, at *4 (citations omitted).
15.) The Court disagrees. First, despite the
lack of a cover charge, no reasonable
factfinder could conclude that the band
performed “with no expectation of profit.”
In re Cellco P’ship, 663 F. Supp. 2d 363,
375 (S.D.N.Y. 2009) (discussing § 110(4)
exemption). Second, “[a]s long as [JJ
Squared] was established as a profit-making
enterprise, and some nexus may be found
between the performances and the general
business of [JJ Squared], the ‘for profit’
requirement is satisfied.” 315 West 44th St.,
1995 WL 408399, at *3 (citing Herbert v.
Shanley Co., 242 U.S. 591, 595 (1917));
accord Herbert, 242 U.S. at 595 (“Whether .
. . [music] pays or not the purpose of
employing it is profit and that is enough.”);
Shapiro I, 316 F.2d at 307 (“[T]he cases are
legion which hold the dance hall proprietor
liable for the infringement of copyright
resulting from the performance of a musical
composition by a band or orchestra whose
activities provide the proprietor with a
source of customers and enhanced
income.”); Major Bob Music v. Stubbs, 851
F. Supp. 475, 579–80 (S.D. Ga. 1994)
(rejecting bar’s § 110(4) defense because bar
was “profit-making enterprise” that could
control performance of music at bar). It is
apparent that JJ Squared is a profit-making
exercise and that it financially benefited
from these performances, which “furthered
[its]
general
business
to
provide
entertainment and refreshments to the
public.” 315 West 44th St., 1995 WL
408399, at *3. Therefore, the “for profit”
element is met.
As a threshold matter, defendants
contend that the “for profit” requirement
cannot be met and they should be exempt
from liability pursuant to 17 U.S.C. § 110(4)
because the band received no remuneration
on June 9, 2011.5 (Def. Affirmation ¶¶ 13–
Thus, because JJ Squared is a profitmaking enterprise, owns and operates the
Establishment, has the right and ability to
control the Establishment’s activities, and
has a direct financial interest in these
activities (see, e.g., Answer ¶2; RRA ¶¶ 2–
3), the Court concludes that JJ Squared is
jointly and severally liable for the copyright
infringement on June 9, 2011. Indeed, to
5
17 U.S.C. § 110(4) provides that there is no
copyright infringement for, inter alia, “performance
of a nondramatic literary or musical work otherwise
than in a transmission to the public, without any
purpose of direct or indirect commercial advantage
and without payment of any fee or other
compensation for the performance to any of its
performers, promoters, or organizers, if -- (A) there is
no direct or indirect admission charge.”
6
hold otherwise would encourage entities to
“creat[e] a buffer against liability while
reaping the proceeds of infringement.”
Shapiro I, 316 F.2d at 309; DFK Entm’t,
2012 WL 893470, at *3 (holding corporate
defendant contributorily liable because it
owned and operated establishment, and
profited from and had right to control club’s
activities). Sheehan is individually liable
because he is an officer of JJ Squared, has
the right and ability to supervise the
Establishment’s activities, and has a direct
financial interest in those activities. See 315
West 44th St., 1995 WL 408399, at *4;
Capitol Records, Inc. v. Wings Digital
Corp., 218 F. Supp. 2d 280, 285 (E.D.N.Y.
2002) (finding that defendant could be
vicariously liable where he “was the sole
shareholder who managed and financially
benefitted from the production and sale of
the acts of copyright infringements”).
Accordingly, the Court grants plaintiffs’
motion for summary judgment as to JJ
Squared and Sheehan. For the same reasons,
defendants’ cross-motion is denied. 6
2.
A party is liable for contributory
infringement if, “with knowledge of the
infringing activity,” it “induces, causes, or
materially contributes to the infringing
conduct of another.” Gershwin, 443 F.2d at
1162. “The requisite knowledge for
contributory infringement liability may be
actual or constructive.” Arista Records LLC
v. Usenet.com, Inc., 633 F. Supp. 2d 124,
154 (S.D.N.Y. 2009) (citations omitted).
Thus, reckless disregard or “[t]urning a
‘blind eye’ to infringement” may constitute
knowledge and may be inferred from the
defendant’s conduct. Id.; see Knitwaves, Inc.
v. Lollytogs, Ltd., Inc., 71 F.3d 996, 1010
(2d Cir. 1995) (stating that constructive
knowledge or reckless disregard is sufficient
and may be inferred from defendant’s
conduct). With respect to the “material
contribution”
prong,
“the
alleged
contributory infringer must have made more
than a mere quantitative contribution to the
primary infringement: in other words, the
participation or contribution must be
substantial.” Arista Records, 633 F. Supp.
2d at 155 (quoting Faulkner v. Nat’l
Geographic Soc’y, 211 F. Supp. 2d 450, 473
(S.D.N.Y. 2002), aff’d sub nom. Faulkner v.
Nat’l Geographic Enters., 409 F.3d 26 (2d
Cir. 2005)). “This requirement has been
found to be met where a defendant provides
the site and facilities or the environment and
market for infringing activity.” Id. (internal
quotation marks and citations omitted).
Rama’s Liability
Although plaintiffs concede there are
genuine disputes of material fact as to
Rama’s vicarious liability, they argue that
Rama is liable for contributory infringement
because he was willfully blind to BMI’s
correspondence and “put the infringement in
motion by establishing K.J. Farrell’s
infringing
practices
of
performing
unauthorized and infringing music, and
those practices were kept in place after he
left the business.” (Pl. Reply, at 8.)
Plaintiffs may be correct that Rama was
willfully blind to the need for a license and
the potential for infringement. However, in
2010, BMI never notified the Establishment
that it actually infringed any copyrights.
Instead, BMI encouraged the Establishment
to procure a license to avoid the potential for
infringement. Plaintiffs proffer no evidence
of infringement other than on June 9,
2011—approximately six months after
Rama left the Establishment. Thus, although
Rama may have been on notice about the
6
Because the Court holds that JJ Squared and
Sheehan are vicariously liable, there is no need to
consider whether these defendants are contributory
infringers based on a “willful blindness” theory.
7
benefits of a BMI license, a reasonable
factfinder could conclude that Rama is not
contributorily liable because BMI sent the
2010 letters as part of its routine practice,
and that there was no direct infringement
until June 2011. Plaintiffs cite to no
authority that compels the conclusion that
Rama is liable for the events that occurred
months after he left JJ Squared. In short,
there are disputed issues of fact as to the
extent of Rama’s involvement with JJ
Squared at the time of the infringement that
preclude summary judgment on plaintiffs’
infringement claim as to Rama. Similarly,
although Rama moves for summary
judgment because it is undisputed that he
was not employed by JJ Squared at the time
of the infringement, plaintiffs have put forth
evidence that raises a material issue of fact
as to whether his involvement with JJ
Squared makes him liable for contributory
infringement notwithstanding such lack of
employment at the time of the infringement.
Accordingly, the Court denies the crossmotions for summary judgment as to Rama.
B.
less than $750 or more than $30,000” per
infringement. 17 U.S.C. § 504(c)(1). If the
infringement was willful, the court may
enhance the statutory damages award to as
much as $150,000 per infringed work. Id. §
504(c)(2). Willfulness can be established
through proof that the infringer “had
knowledge that its conduct represented
infringement
or
perhaps
recklessly
disregarded the possibility.” Twin Peaks
Prods., Inc. v. Publ’n Int’l, Ltd., 996 F.2d
1366, 1382 (2d Cir. 1993); see Island
Software & Computer Serv., Inc. v.
Microsoft Corp., 413 F.3d 257, 263–64 (2d
Cir. 2005) (willful blindness to copyright
holder’s rights sufficient to prove
willfulness). Damages may be as low as
$200 per infringement if the infringement
was “innocent.” 17 U.S.C. § 504(c)(2).
Within these limits, the Copyright Act
affords courts “wide discretion.” Fitzgerald
Pub. Co. v. Baylor Pub. Co., 807 F.2d 1110,
1116 (2d Cir. 1986). In exercising their
discretion in awarding statutory damages for
the infringing conduct, court may consider
“(1) the infringer’s state of mind; (2) the
expenses saved, and profits earned, by the
infringer; (3) the revenue lost by the
copyright holder; (4) the deterrent effect on
the infringer and third parties; (5) the
infringer’s cooperation in providing
evidence concerning the value of the
infringing material; and (6) the conduct and
attitude of the parties.” Bryant v. Media
Right Prods., Inc., 603 F.3d 135, 144 (2d
Cir. 2010).
Relief Requested
To remedy the infringement, BMI seeks
$25,000 in statutory damages ($5,000 for
each act of infringement), injunctive relief,
and attorneys’ fees and costs. As set forth
below, the Court concludes that there are
disputed issues of fact as to willfulness with
respect to JJ Squared and Sheehan that
preclude summary judgment with respect to
the issues of statutory damages and
injunctive relief. The Court also denies
plaintiff’s request for attorneys’ fees and
costs without prejudice to renewing that
application once the remaining legal issues
in the case are resolved.
1.
BMI seeks $5,000 per infringement.
Defendants argue that the Court should
award a maximum of $750 per violation
because they were not aware of any
infringement or of BMI itself.
Damages
On the issue of willfulness, plaintiffs
have provided evidence that they sent the
Establishment, Rama, and Sheehan several
letters through mid-2011, made numerous
In lieu of actual damages under the
Copyright Act, a plaintiff may receive an
award of statutory damages “in a sum of not
8
sound incredulous but the bar
business is so hectic that you busy
yourself with items that need your
immediate attention such as,
ordering liquor, food, staffing and
paying bills. You knew who your
vendors were so you opened their
bills but with the volume of junk
mail a business gets daily I would
not simply open every piece of mail
that came regardless to whom it was
addressed. I don’t want to tell BMI
how to conduct their business but an
in person visit say in the late
afternoon would have accomplished
what all those alleged telephone calls
and letters did not, that is, to speak to
someone in charge about their
licensing agreement. This is what
their competitor ASCAP did and we
signed an agreement with them. To
tell you the truth I never heard of
BMI before this lawsuit was
commenced.
telephone calls, and visited in person in
order to execute a license agreement and
avoid copyright infringement. JJ Squared
and Sheehan, however, never responded to
BMI’s correspondence. Plaintiffs also point
to the Establishment’s agreement with
ASCAP to demonstrate its awareness of
licensing requirements and copyright law.
Defendants, however, contest plaintiff’s
argument that the copyright violations were
willful, and defendants have provided sworn
statements to support their position. In
particular, Sheehan submitted an affidavit in
which he states, among other things, the
following on the issue of intent:
Frankly I never heard of BMI until
this lawsuit was commenced. The
bar through Mr. Rama signed an
agreement with ASCAP for live
performances. We would have done
so with BMI is [sic] we knew of their
existence. As difficult [sic] it is to
believe I never received either
written or verbal correspondence
from their representatives. I never
spoke to anyone from BMI and
certainly never met with anyone
from BMI. A license to play live
music from them would cost roughly
$1,900.00 certainly a lot less than
what this lawsuit is costing me.
(Rama Aff. ¶¶ 7–9.)
These sworn statements from the
individual defendants are more than
sufficient to raise a disputed issue of fact as
to willfulness in this particular case that
precludes summary judgment on the issues
of damages. Plaintiffs seek to avoid this
factual dispute by having the Court conclude
that, at a minimum, defendants were
willfully blind as to the copyright violation.
As a threshold matter, the Court notes that
the evidence of infringement in this case
relates to only one night—namely, June 9,
2011. Moreover, as to plaintiffs’ summary
judgment, the Court must view the evidence
in the light most favorable to defendants
(including all reasonable inferences to be
drawn from the evidence). Under the
applicable standard, these issues of intent,
including the issue of willful blindness,
(Sheehan Aff. ¶ 7.) Sheehan also states that
he “relied totally on Mr. Rama to run the
place in its entirety.” (Id. ¶ 5.)
Similarly, Rama submitted an affidavit
in which he states, among other things, the
following on the issue of intent:
As I stated in my deposition, I don’t
recall receiving any mail or
telephone calls from BMI. I did
receive a visit from someone from
ASCAP and we signed a licensing
agreement with that company. It may
9
unwarranted. Id. at 264 (“Thus, even in a
case like the one before us, where the nonmoving party does not traverse the evidence
suggesting constructive knowledge of
infringement, but only disputes the
inferences to be drawn from that evidence,
our standard of review requires that we
decide in favor of the non-moving party.”).
Finally, the court noted that, even though the
award was within the amount authorized by
the statutory scheme even without a finding
of willfulness, the case should be remanded
because the willfulness issue could have
impacted the court’s exercise of its
discretion within the statutory range. Id. at
264–65.
cannot be resolved on summary judgment in
this case.
This Court’s conclusion is consistent
with the guidance from the Second Circuit
in this context. For example, in Island
Software & Computer, Inc. v. Microsoft
Corp., 413 F.3d 257 (2d Cir. 2005), the
Second Circuit rejected Microsoft’s effort to
have the “willful blindness” issue resolved
as a matter of summary judgment in that
case:
Microsoft asserts that, taken
together, this evidence constitutes
conclusive proof that, as a matter of
law, [defendant] acted with “reckless
disregard”
for,
and
“willfull
blindness” to, Microsoft’s rights. We
do not disagree with Microsoft that
some of [defendant’s] statements
suggest that [the defendant company]
failed to take reasonable steps to
prevent the distribution of counterfeit
software. But at this stage of the
proceedings, where we must draw all
inferences in favor of the nonmoving party, we cannot say that, as
a matter of law, [the defendant
company] on the question of
willfulness.
In sum, although plaintiffs have
proffered substantial circumstantial proof on
the issue of willfulness, that issue cannot be
resolved on summary judgment in light of
defendants’ sworn statements and other
evidence in the record, including the fact
that the evidence of infringement relates to
one day and the fact that defendants had an
agreement with ASCAP. Thus, the disputed
issues of fact on willfulness preclude
summary judgment on the issue of monetary
relief.7 Accordingly, the cross-motions for
summary judgment on the issue of damages
are denied.8
A jury could, without doubt,
conclude that defendant’s statements
reveal willful blindness, or establish
a pattern of conduct so unreasonable
as to constitute reckless disregard.
Still, it is not beyond peradventure
that a reasonable jury would
conclude otherwise. And that is
enough to make summary judgment
on the issue of willfulness
inappropriate.
7
The Court recognizes that the finding of willfulness
is not always dispositive as to the relief the Court is
awarding and, thus, summary judgment could be
appropriate in certain cases even where that issue is
unresolved. See Island Software, 413 F.3d at 265 (“In
vacating this portion of the district court’s judgment,
we emphasize, however, that the court’s reliance on a
finding of willfulness was unnecessary to the relief it
awarded.”). However, given the substantial damages
being sought in this case by plaintiffs, the issue of
willfulness is certainly material to the Court’s
exercise of its discretion as to the amount of damages
that should be awarded in this case.
Id. at 263–64. The court further noted that,
although the circumstantial evidence of
willfulness
was
“strong,”
summary
judgment on that issue was still
8
Given that the disputed issues of fact on willfulness
could impact the request for a permanent injunction,
the Court also declines to award that relief as a matter
10
IV.
CONCLUSION
For the foregoing reasons, plaintiffs’
motion for summary judgment is granted in
part and denied in part, and defendants’
cross-motion for summary judgment is
denied in its entirety. Specifically, the Court
holds that JJ Squared and Sheehan are
jointly and severally liable for copyright
infringement. However, genuine disputes of
material fact preclude summary judgment
with respect to Rama’s liability and the
requested relief. Plaintiffs may renew their
application for relief and for attorneys’ fees
and costs after the resolution of the
aforementioned factual issues.
SO ORDERED.
_____________________
JOSEPH F. BIANCO
United States District Judge
Dated: December 26, 2013
Central Islip, NY
***
Plaintiffs are represented by Catherine M.
Clayton of Gibbons P.C., One Penn Plaza,
37th Floor, New York, NY, 10119.
Defendants are represented by Robert Giusti
of Robert Giusti, Esq. & Associates, PLLC,
42-40 Bell Blvd., Suite 601, Bayside, New
York 11361.
of summary judgment. Similarly, because the case is
proceeding, the request for attorney’s fees and costs
is denied without prejudice to renewal once the
remainder of the case has been resolved.
11
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