Reach Music Publishing, Inc et al v. Warner/Chappell Music, Inc. et al

Filing 142

MEMORANDUM ORDER re: 111 MOTION to Strike Document No. 107 , filed by Protoons Inc.: For the reasons set forth in this Memorandum and Order, Counterclaim Defendants' Amended Answer (docket entry no. 116) is accepted. Protoons' motion to strike the original affirmative defenses is denied as moot, without prejudice to renewal against the amended affirmative defenses. Any motion to strike the amended affirmative defenses in whole or in part must be filed by September 4, 2012. This Memorandum Order resolves docket entry number 111. (Signed by Judge Laura Taylor Swain on 7/31/2012) (ja)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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REACH MUSIC PUBLISHING, INC. and
DA VID REEVES,
Plaintiffs,
No. 09 Civ. 5580 (L TS)

-v-

W ARNERICHAPPELL MUSIC, INC. and
PROTOONS, INC.,
Defendants.

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PROTOONS, INC.,

Counterclaim Plaintiff,
- v-

REACH MUSIC PUBLISHING, INC. and
DAVID REEVES,
Counterclaim Defendants,
- andREACH GLOBAL, INC. and MICHAEL
CLOSTER,
Additional Counterclaim
Defendants.

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MEMORANDUM ORDER

Protoons, Inc. ("Protoons"), has interposed Amended Counterclaims against David
Reeves, Reach Music Publishing, Inc. ("Reach Music"), Reach Global, Inc. ("Reach Global"),
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and Michael Closter (collectively "Counterclaim Defendants"), asserting causes of action for
breach of contract and tortious interference with contract.
Currently before the Court are two applications. Protoons has moved to strike
certain of the Counterclaim Defendants' affinnative defenses. Counterclaim Defendants, while
opposing Protoon' s motion, have also attempted to file an amended Answer with proposed
amended affinnative defenses. For the following reasons, the proposed Amended Answer with
defenses will be accepted and the motion to strike the originally filed affinnative defenses will be
denied as moot, without prejUdice to renewal against the amended affinnative defenses.
Background
Familiarity with the procedural history of this case is presumed. The following
facts are taken from the Counterclaim Defendants' amended Answer with amended affinnative
defenses ("Amended Answer," docket entry no. 116) or from materials integral to the Amended
Answer.
David Reeves is a songwriter who co-authored certain musical compositions for
the group known as Run-D.M.C. In the late 1980s, Reeves signed a series of contracts (the
"Songwriter Agreements"), in which he assigned his interest in those compositions to an entity
named Rush Groove. Reeves contends that he signed the Songwriter Agreements without reading
them and without legal representation.
The Songwriter Agreements expressly contemplate the prospective assignment of
Rush Groove's interest in the Reeves' composition to Protoons and provide that, if Rush Groove
assigns the contract to Protoons, Rush Groove shall not "be deemed to have delegated to Protoons
... [, nor shall Protoons] be deemed to have assumed, any of[Rush Groove's] warranties,
representations, authorizations, duties, obligations, promises, agreements, or liabilities
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thereunder." 1 (May 1, 1998 Songwriter Agreement.) The Songwriter Agreements also include a
release and covenant not to sue, which provides:
[David Reeves] hereby releases ... Protoons ... from all actions,
suits, ... contracts, ... damages, judgments, executions, claims and
demands whatsoever ... [that] [Reeves] ever had, now has, or
hereafter can, shal1 or may, have ... from the beginning of the world
and continuing in perpetuity ... .
(May 1,1988 Songwriter Agreement, p. 5.)
Counterclaim Defendants allege that, some time after Reeves executed the
Songwriter Agreements, Protoons "induced" Rush Groove to assign all of the rights and payment
obligations regarding the Reeves' compositions to Protoons. (Am. Answer ~ 72.) Rush Groove
then went out of business. Protoons continues to profit from the Reeves' compositions, while
Reeves receives "effectively ... no income from the Compositions." (rd.)
In 2007, Reeves assigned to Reach Global a 50% interest in the compositions and
a 100% interest in the exclusive administration rights to the Compositions.
Reeves and the other Counterclaim Defendants commenced the instant action,
asserting copyright claims against Protoons, and Protoons filed certain counterclaims. The Court
dismissed the Counterclaim Defendants' claims, after having denied their motion to amend their
claims. The Court also dismissed some of Protoon's counterclaims. The only remaining claims

The Amended Answer references all of the Songwriter Agreements and suggests
that they contain materially identical language. (Am. Answer with Prop. Am. Aff.
Def. ~~ 68-84, docket entry no. 116.) The Counterclaim Defendants proffered a
complete copy of an agreement, which was executed by David Reeves on May 1,
1988, and which assigned Reeves' entire copyright interest in the composition titled
"Run's House" to Rush Groove. (May 1, 1988, Songwriter Agreement ("May 1,
1998 Agreement"), Ex. 2, Decl. of Lisa M. Buckley in Supp. of Counterclaim
Defs.' Mot. to Dismiss the Am. Counterclaims, docket entry no. 76.) The Court has
considered the May 1, 1988, agreement for the purposes of the instant applications,
as it is integral to the parties' counterclaims and defenses.
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in this action are Protoons' counterclaims for breach of contract, asserted against Reeves, for
breach of the Songwriter Agreements' covenant not to sue, and for tortious interference, asserted
against Reach Music, Reach Global and Michael Closter, for inducement of Reeves to assign to
Reach Global an interest in the compositions and their administration.
In their original Answer to Protoons' Counterclaims, the Counterclaim Defendants
asserted 19 affirmative defenses, 15 of which Protoons has moved to strike as futile.
Counterclaim Defendants filed a memorandum oflaw in opposition to Protoons' motion and, on
the same day, filed the Amended Answer, including a proposed amended set of affirmative
defenses. The proposed amended affirmative defenses allege, inter alia, that "Protoons
deliberately contemplated the unconscionable arrangement [whereby Reeves would lose all
remedy for royalties withheld from him]," "Reeves ... was pressured into signing the onerous
Songwriter Agreements ... without benefit of counsel," and "[Protoons] induce[ d] ... Rush
Groove ... to wrongfully assign [its] rights to Protoons." (Am.

Answer~~

97, 99.)

Analysis
Protoons argues that the Court should decline to accept Counterclaim Defendants'
proposed amended affirmative defenses because the proposed amendments would be futile, and
that the Court should strike the majority of the Counterclaim Defendants' original affirmative
defenses because they, too, are futile.
Legal Standard for Allowing Amendments to Pleadings
Leave to amend pleadings "shall be freely given when justice so requires." Fed. R.
Civ. P. 15(a)(2). Leave to amend may be denied where there is "undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of allowance of the
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amendment, futility of amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962). "The party
opposing a motion to amend bears the burden of establishing that an amendment would be futile,"
and "[a] proposed amendment to a pleading would be futile if it could not withstand a motion to
dismiss pursuant to Rule 12(b)(6)" ofthe Federal Rules of Civil Procedure. Ballard v. Parkstone
Energy, LLC, 06 Civ. 13099,2008 WL 4298572, *3 (S.D.N.Y. Sept. 19,2008) (citations and
some internal punctuation omitted).
Legal Standard for Evaluating a Motion to Strike
"The court may strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "Motions to strike are
generally disfavored and will not be granted 'unless it appears to a certainty that plaintiffs would
succeed despite any state of the facts which could be proved in support of the defense. '" Coach,
Inc. v. Kmart Corporations, 756 F. Supp. 2d 421, 425 (S.D.N.Y. 2010) (citation omitted). "In
order for a court to strike a defense as insufficient: "(1) there must be no question of fact that
might allow the defense to succeed; (2) there must be no substantial question oflaw that might
allow the defense to succeed; and (3) the plaintiff must be prejudiced by the inclusion of the
defense." Id. (citation omitted). "In considering the sufficiency of a defense under the first two
prongs ofthe analysis, courts apply the same standard applicable to a motion to dismiss pursuant
to Rule 12(b)(6) ofthe Federal Rules of Civil Procedure." Id. (citation omitted).
Because the standard for allowing amended affinnative defenses and the standard
for striking affinnative defenses overlap substantially-both looking to Rule 12(b)(6)-, justice
and efficiency are served by accepting Counterclaim Defendants' Amended Answer as the
definitive iteration of their affinnative defenses, and allowing defendants to brief any application

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to strike those defenses, before the Court evaluates whether the defenses satisfy the applicable
standard.
Conclusion
For the foregoing reasons, Counterclaim Defendants' Amended Answer (docket
entry no. 116) is accepted. Protoons' motion to strike the original affirmative defenses is denied
as moot, without prejudice to renewal against the amended affirmative defenses. Any motion to
strike the amended affirmative defenses in whole or in part must be filed by September 4, 2012.
This Memorandum Order resolves docket entry number 111.
SO ORDERED.
Dated: New York, New Yark

July 31,2012

United States District Judge

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