Reach Music Publishing, Inc et al v. Warner/Chappell Music, Inc. et al
Filing
95
MEMORANDUM AND OPINION AND ORDER: For the foregoing reasons, Counterclaim Defendants' motion to dismiss the Amended Counterclaims is denied in part and granted in part. The motion to dismiss is denied as to the First Counterclaim against Reeves insofar as it asserts breach of the covenant not to sue in the Songwriter Agreements; the motion is granted with regard to the breach of contract allegations based on Reeves' entry into the 2007 Agreement. The motion to dismiss is granted as to the Second Counterclaim, for slander of title. The Third Counterclaim is dismissed insofar as it asserts tortious interference on the part of the Run-D.M.C.-related entities; it is denied as to the tortious interference claim against the Reach Partie s in connection with the Songwriter Agreements. The motion to strike is denied in its entirety. This Memorandum Opinion and Order resolves docket entry nos. 75 and 78. The parties are directed to meet with Magistrate Judge Gorenstein promptly for settlement purposes and to address any outstanding pretrial issues. (Signed by Judge Laura Taylor Swain on 9/7/2011) (js)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
REACH MUSIC PUBLISHING, INC. et.&,
Plaintiffs,
-v-
No. 09 Civ. 5580 (LTS)(GWG)
WARNERJCHAPPELL MUSIC, INC. et al.,
Defendants.
-------------------------------------------------------x
PROTOONS, INC.,
Counterclaim Plaintiff,
-v-
REACH MUSIC PUBLISHING, INC. et aL,
Counterclaim Defendants,
-andREACH GLOBAL, INC. et aL,
Additional Counterclaim
Defendants.
-------------------------------------------------------x
LAURA TAYLOR SWAIN, UNITED STATES DISTRICT JUDGE:
MEMORANDUM OPINION AND ORDER
Protoons, Inc. ("Protoons"), has interposed Amended Counterclaims against David
Reeves, Reach Music Publishing, Inc. ("Reach Music"), Reach Global, Inc. ("Reach Global"), and
Michael Closter (collectively "Counterclaim Defendants") asserting causes of action for breach of
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contract, tortious interference with contract, and slander of title. The Counterclaim Defendants
now move to dismiss the Amended Counterclaims pursuant to Federal Rule of Civil Procedure
12(b)(6) and to strike certain portions of the Amended Counterclaims pursuant to Federal Rule of
Civil Procedure 12(f).
The Court has jurisdiction of the counterclaims pursuant to 28 U.S.c. § 1332. For
the following reasons, Counterclaim Defendants' motions to dismiss and strike certain portions of
the Amended Counterclaims are granted in part and denied in part.
BACKGROU~D
Familiarity with the procedural history of this case is presumed. Briefly, David
Reeves and Reach Music ("Plaintiffs") initially brought this action against Protoons and
Warner/Chappell Music, Inc., alleging violations ofthe Copyright Act of 1976, 17 U.S.c. § 201
(the "Copyright Act"). On May 7, 2010, Plaintiffs moved to amend the complaint to withdraw the
Copyright Act claims and their claims against Warner/Chappell Music, Inc., and to introduce two
new claims for breach of contract against Pretoons. On August 3, 2010, the Court denied
Plaintiffs' motion to amend the complaint based principally upon procedural defects in the motion
for leave to amend the complaint. (Mem. Op., Dkt. No. 60.) Because of Plaintiffs' concession that
their Copyright Act claims were not viable, the Court directed Plaintiffs to show cause by written
submission filed by August 10, 2010, why their complaint should not be dismissed with prejudice.
Plaintiffs failed to file a responsive submission. Accordingly, the Court dismissed Plaintiffs'
complaint in its entirety, with prejudice. (Order, Dkt. No. 61.) Protoons' Amended Counterclaims
are the only claims remaining in this action.
The following facts, alleged in the Amended Counterclaims, are taken as true for the
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purposes of this motion. See Blue Tree Hotels Inv. (Canada), Ltd. v. Starwood Hotels & Resorts
Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). Protoons is a music publisher in the business
of licensing and exploiting musical compositions. (Am. Counterclaims ~ 1.) Reach Global, Reach
Music, and Michael Closter (collectively the "Reach Parties") are also in the music publishing
business. (Id.
~~
2-4.) David Reeves is a songwriter who co-authored certain musical compositions
for the group known as Run-D.M.C. (the "Compositions"). (Id.
~~
5, 13.)
In or about 1983, Run-D.M.C. signed an exclusive recording and publishing
agreement with Rush Productions, Inc. ("Rush Productions"), and its affiliated music publishing
entity, Rush Grove Music ("Rush Groove," collectively the "Rush Parties"). (Am. Counterclaims
~
11.) The Rush Parties entered into an agreement with Protoons' affiliated record label, Profile
Records, pursuant to which Profile Records obtained the exclusive recording services of RunD.M.C., along with copyright and administrative rights in the Compositions.
iliU
The Amended
Counterclaims arise out of a series of contracts executed by David Reeves in the 1980s, pursuant to
which he assigned to Rush Groove his interest in the Compositions (the "Songwriter Agreements").
Each writer who worked on a Run-D.M.C. composition signed a songwriter agreement transferring
his interest to Rush Groove. (Id.
~
13.) The Songwriter Agreements contained identical language,
and are at the center of the instant dispute. I Protoons eventually acquired a 100% copyright interest
The Amended Counterclaims reference all the Songwriter Agreements and allege that
each agreement contains the same provisions and language. (Am. Counterclaims
'1 17.) The Counterclaim Defendants have proffered a complete copy of the agreement
executed by David Reeves on May 1, 1988, which assigned his entire copyright
interest in the composition titled "Run's House" to Rush Groove. (Decl. of Lisa M.
Buckley in Supp. of Counterclaim Defs.' Mot. to Dismiss the Am. Counterclaims
("Buckley Decl.") Ex. 2.) The Court refers to this agreement in evaluating the
Amended Counterclaims and assumes, as alleged in the Amended Counterclaims, that
each of the Songwriter Agreements contains identical provisions.
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in Run-D.M.C. 's musical compositions. (Id.
~
12.)
The Songwriter Agreements acknowledge that each musical composition was a
"work made for hire" as defined in the Copyright Act.
M
~113.)
The Songwriter Agreements
provide that each writer "sells, assigns and transfers and sets over to [Rush Groove], its successors
and assigns, for the world," the musical compositions. (Id.) Therefore, as Reeves acknowledged,
he did not have a cognizable claim under the Copyright Act.
The Songwriter Agreements expressly contemplate the prospective assignment of
Rush Groove's interest in the Compositions to Protoons. (ld.
~l
17.) The Songwriter Agreements
provide, however, that, if Rush Groove assigns the contracts 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 hereunder." (ld.) The Songwriter Agreements also include a covenant not
to sue Protoons regarding the Compositions, and Reeve's release ofProtoons "from all actions,
suits, debts ... claims and demands whatsoever ... from the beginning of the world and continuing
in perpetuity relating to the copyrights and all other rights in and to the Composition[s]." iliL
~~
19-20.)
On October 17, 1998, Protoons, the Rush Parties, individual members of Run
D.M.C. and other third parties entered into an agreement that altered the relationship between
Protoons and the Rush Parties (the "1998 Agreement"). (Id.
~
18.) Reeves was not a party to this
agreement. In the 1998 Agreement, Protoons assumed the Rush Parties' obligations under the
Songwriter Agreements: "Protoons hereby agrees to assume Artist's obligations (as assignee of
Rush Groove pursuant to paragraph 6(b) of the Settlement Agreement) to account and pay royalties
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to the writers and composers of the Compositions arising from sales of phonograph records and
other uses and/or exploitations of the Compositions occurring after December 31, 1998, pursuant to
the temlS set forth in the Songwriter Agreements."2 (Buckley Decl.
1 'l5(c).) Moreover, the
1998 Agreement further provides that "[ t ]he parties hereto agree that in the event of any
inconsistency in the terms or conditions of the Songwriter Agreements, the Settlement Agreement
and/or this agreement, the terms of this agreement shall control." (Id.
~
7 (emphasis supplied).)
On or about July 19, 2007, Reeves assigned to Reach Global a 50% interest "in all
worldwide right, title, interest, and ownership of every nature, kind and description in and to the
[Compositions] ..." (the "2007 Agreement"). (Id.
~
36.) In approximately May 2009, Closter
created Reach Music, which was to receive the interest in the Compositions from Reach GlobaL
Counterclaim Defendants allege that, prior to July 19,2007, Closter and the Reach Parties were
aware of the Songwriter Agreements and that they were aware that Reeves did not have a copyright
interest in the Compositions. (Id.
~~
37-48.)
The Amended Counterclaims allege that the Reach Parties have fi1ed three separate
actions against Protoons. (Id.
2008. (Id.
~
~
~~
59-60.) The first action was filed in federal court on September 3,
59.) The second action was fi1ed in New York state eourt on October 2,2008. (Id.
60.) The third case, which is the one before this Court, was fi1ed on June 17,2009. (Id.
~
61.)
The 1998 Agreement defines "Artist" as the individual members of Run-D.M.C.:
Darryl McDaniels, Joseph Simmons and Jason Mizell. For purposes of the 1998
Agreement, they are 'jointly and severally" referred to as the "Artist." (Buekley
Decl. Ex. 1 ~ iii.) "Settlement Agreement" is defined as "the settlement agreement
dated as of December 28, 1995, effective as of June 30, 1995, by and among Profi1e
Records, Inc., the Protoons Parties, The Rush Parties and Artist ..." (Id ~ 1.) The
Settlement Agreement was not submitted to the Court in connection with this
motion practice.
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DlSCUSSION
In deciding a motion to dismiss a complaint for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6), the Court accepts as true the non-conclusory factual
allegations in the complaint, and draws all reasonable inferences in plaintiffs favor. Roth v.
Jennings, 489 F.3d 499,501 (2d Cir. 2007); see also Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949
(2009). To survive a motion to dismiss, a complaint must plead "enough facts to state a claim to
relief that is plausible on its face." Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007). This
plausibility standard governs pleadings in all civil actions. Iqbal, 129 S.Ct. at 1953. It is thus
applicable to the instant motion to dismiss the Amended Counterclaims.
When deciding a motion to dismiss, the Court "may consider any written instrument
attached to the complaint, statements or documents incorporated into the complaint by
reference, ... and documents possessed by or known to the plaintiff and upon which it relied in
bringing the suit." ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In
evaluating the sufficiency of the Amended Counterclaims, the Court has also considered Reeves'
1988 Songwriter Agreement and the 1998 Agreement.
Breach of Contract
The Amended Counterclaims set forth two independent claims for breach of
contract. First, Protoons asserts that Reeves breached the Songwriter Agreements when he
purported to grant and transfer a copyright interest in the Compositions to Reach Global via the
2007 Agreement. (Am. Counterclaims ~ 50.) Second, Protoons asserts that Reeves violated the
express covenant not to sue contained in the Songwriter Agreements when, on three separate
occasions, he filed lawsuits against Protoons. (Id.
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51.)
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"To establish a prima facie case for breach of contract, a plaintiff must plead and
prove: (l) the existence of a contract; (2) a breach of that contract; and (3) damages resulting from
the breach." Nat'l Market Share, Inc. v. Sterling Nat'! Bank, 392 FJd 520, 525 (2d Cif. 2004).
"Under New York law, a plaintiff must allege the specific provisions within a contract upon which
the breach of contract claim is based." Boehner v. Heise, 734 F. Supp. 2d 389, 408 (S.D.N.V.
2010) (citing Sheridan v. Trustees of Columbia Univ. in City of N.Y., 296 A.D.2d 314,315 (N.Y.
Sup. Ct. 2002); Matter of Sud v. Sud, 211 A.D.2d 423,424 (N.V. Sup. Ct. 1995»).
Protoons first claim is unsupported by the pleadings. The Amended Counterclaims
fail to point to any provision of the Songwriter Agreements that was violated when Reeves
executed the 2007 Agreement with Reach Global. See, e.g., Boehner, 734 F. Supp. at 408
(dismissing breach of contract claim where plaintiff failed to cite a specific provision within the
agreement that was allegedly breached). Protoons merely alleges a general harm to its copyright
interest in the Compositions. To the extent Protoons' breach claim is premised on the
inconsistency between the transfer of Reeves' copyrights in the Songwriters Agreements, on the
one hand, and his purported transfer of such rights to Reach in the 2007 Agreement, Protoons fails
to state a breach of contract claim because no provision of the contract addresses such subsequent
conduct.
In its second set of breach of contract allegations, Protoons adequately pleads that
Reeves breached the express covenant not to sue provision ofthe Songwriter Agreements. The
Amended Counterclaims allege that Reeves executed the Songwriter Agreements and that Reeves
breached the anti-suit provision when he sued Protoons. Protoons alleges that it has suffered
damages as a result including, inter alia, litigation costs spent defending against the lawsuits. The
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clear and unambiguous terms of the Songwriter Agreements prohibit Reeves from seeking to
recover royalties from Protoons. The agreement provides in pertinent part:
Writer [Reeves] shall look solely to Publisher [Rush Groove] for any
and aU payments due in connection with the use, reproduction and
other exploitation of the Composition and in connection with the
enforcement of any rights or remedies which Writer may have
hereunder, even if Profile or Protoons suspend their obligations to
account andJor pay royalties or other sums to Publisher. Under no
circumstances shall Writer look to Profile or Protoons for any
payments in connection with the use, reproduction or other
exploitation of the Composition. ... Without limitation of the
foregoing, in the event that Profile or Protoons elects to suspend its
or their obligations to Publisher, neither Profile nor Protoons shall
have any obligation to Writer and no such suspension shall affect the
validity or enforceability of this agreement.
(Buckley Decl. Ex. 2 ~ 14.)
Counterclaim Defendants assert, however, that the 1998 Agreement between the
Rush Parties and Protoons precludes the claim of breach by rendering inoperative the anti-suit
provision of Reeves' Songwriter Agreements. The Counterclaim Defendants rely upon paragraph 7
of the 1998 Agreement, which provides: "[t]he parties hereto agree that in the event of any
inconsistency in the terms of conditions of the Songwriter Agreements, the Settlement Agreement
and/or this agreement, the terms of this agreement shall control." (Buckley Decl. Ex. 1 ~ 7.) The
Counterclaim Defendants assert that the anti-suit covenant in the Songwriter Agreements is
inconsistent with the provisions in the 1998 Agreement pursuant to which Protoons assumes Rush
Groove's obligations under the Songwriter Agreements and thus is superseded by the 1998
Agreement's provisions for royalty payments by Protoons. Counterclaim Defendants' reliance on
the 1998 Agreement fails, however, for the simple reason that Reeves was not a party to the 1998
Agreement. Paragraph 7 of the 1998 Agreement by its terms is a covenant among the parties to
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agreement. Nothing in it purports to alter the rights or remedies of non-parties. Indeed, the 1988
Songwriter Agreement provided that Reeves "is not and shall not be deemed to be a third party
beneficiary of any agreement or understanding between [Rush Groove] and Protoons Inc."
(Buckley Oed. Ex. 2 ~ 9.)
Protoons' counterclaim for breach of the Songwriter Agreements' covenant not to
sue provision is, accordingly, plausibly pleaded and Counterclaim Defendants' motion to dismiss
that counterclaim will be denied.
Furthermore, to the extent Counterclaim Defendants argue that the Amended
Counterclaims are insufficient because Protoons fails to allege damages for breach of contract, their
position is unavailing. Protoons alleges that, as a result of the lawsuits filed by Counterclaim
Defendants, it has suffered damages including "costs and attorneys' fees related to defending itself
and its licensees and assigns in the three actions." (Id.
~
14.) This damages allegation is pertinent,
and sufficient, with respect to the claim of breach of the covenant not to sue.
Tortious Interference with Contract
The Amended Counterclaims allege that the Reach Parties induced Reeves to breach
the Songwriter Agreements by (1) entering into the 2007 Agreement purporting to transfer his
copyright interest, and (2) by suing Protoons. (Am. Counterclaims ~~ 58-63.) Protoons further
claims that "the willingness of Reach Global, Reach Music, Michael Closter and David Reeves to
wrongly assert copyright interests in Run-D.M.C. Compositions ... induced the members of Run
D.M.C., Russell Simmons and/or Rush Groove Music to breach the various warranties,
representations and obligations undertaken by them to Protoons, including but not limited to their
obligations under the 1998 Agreement." (Am. Counterclaims,r 65.) Counterclaim Defendants
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argue that the Amended Counterclaims are insufficient because Protoons fails to allege that (1) the
Reach Parties had actual knowledge of the Songwriter Agreements, and (2) the Reach Parties'
conduct was the "but for" cause of Reeve's alleged breach. They further assert that the Reach
Parties were acting in their own economic interest, which is a defense to a tortious interference with
contract claim. As to the claim regarding inducement of the Run-D.M.C.-related parties to breach
their agreements, Counterclaim Defendants assert that the counterclaim must fail because none of
those persons or entities is a party to this action. The Court finds each of these arguments to be
unavailing, although the counterclaim will be dismissed as insufficiently pleaded to the extent it
relates to the Reeves/Reach 2007 Agreement and alleged breaches by the Run-D.M.C.-related
parties.
To establish tortious interference with an existing contract under New York law,
Protoons must plead "( I) the existence of a valid contract between the plaintiff and a third party;
(2) the defendant's knowledge of the contract; (3) the defendant's intentional procurement of the
third-party's breach of the contract without justification; (4) actual breach of the contract; and (5)
damages resulting therefrom." Kirch v. Liberty Media Corp., 449 F.3d 388, 401-02 (2d Cir. 2006)
(quoting Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 424 (1996) (internal quotation
marks omitted»; see also Foster v. Churchill, 87 N.Y.2d 744 (1996).
To the extent the Amended Counterclaim asserts a tortious interference claim
premised on the execution of the 2007 Agreement as a breach of the Songwriter Agreements'
copyright transfer provisions, it fails to state a claim because, as explained above, Protoons has
failed to identify any provision of the Songwriter Agreements that was breached by Reeves'
assertion of a subsisting right in the Compositions. Because no actual breach of the Songwriter
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Agreements has been pleaded in this regard, the claim fails. See Museum Boutique
Intercontinental, Ltd. v. Picasso, 886 F. Supp. 1155, 1161 (S.D.N.Y. 1995) (holding that under
New York law to plead a claim for tortious interference with contract a pleader is required to show
a breach of the underlying contract). The tortious interference with contract counterclaim is
similarly insufficient insofar as it is premised on alleged breaches by the Run-D.M.C.-related
entities and individuals. The Amended Counterclaims identify no specific provision of any
contract that was allegedly breached. Protoons' brief cites paragraphs 6(a) and (b) of the 1998
Agreement. Those subdivisions consist solely, however, of representations by the Run-D.M.C.
related entities and individuals that they were authorized to enter into and perform the 1998
Agreement and the Settlement Agreement referred to therein. Nothing on the face of that document
or in the Amended Counterclaims identifies any possible breach of those 1998 representations by
reason of actions allegedly prompted by Counterclaim Defendants' assertions of copyright interests
in the Compositions several years later. Nor is intentional conduct by the Counterclaim Defendants
alleged in this regard - the Amended Counterclaims merely assert that the "willingness" of the
Counterclaim Defendants to assert copyright interests "induced" the Run-D.M.C.-related
individuals and entities to breach unspecified warranties, representation and obligations. (Am.
Counterclaims ~ 65.)
The Amended Counterclaims are, however, sufficient to plead a tortious interference
claim with regard to Protoons' allegations that the Reach Parties induced Reeves to breach the anti
suit provision in the Songwriter Agreements. The Amended Counterclaims sufficiently allege that
the Reach Parties knew about the existence of the Songwriter Agreements prior to September 3,
2008, when Reeves and Reach Global filed their first action against Protoons.
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11
Counterclaims ~ 59.) The Amended Counterclaims allege that, sometime in 2006,
Warner/Chappel, a Protoons licensee, informed Reeves' counsel that it had acquired rights to
exploit "Run's House," one of the Compositions, from Protoons. (ld.
~
39.) Protoons alleges that,
in 2007, Closter met with Reeves' then-counsel to obtain the file on the dispute over the "Run's
House" song and that, as a result, Closter became aware that Protoons claimed rights to the
Compositions. (ld.
~
40.) The Amended Counterclaims also allege that, prior to 2007, Closter was
in contact with the individual members ofRun-D.M.C. and at some point obtained from them the
1998 Agreement, which expressly references the Songwriter Agreements and Protoons' rights
therein. (Id.
~~
43-44.) Furthermore, the Amended Counterclaims allege that Protoons' counsel,
on June 2,2008, expressly infornled the Reach Parties ofProtoons' rights in the Compositions
pursuant to the Songwriter Agreements. (rd. ~ 48.) Reeves and the Reach Parties filed the first
lawsuit against Protoons on September 3,2008. (Id. ~ 59.) The Amended Counterclaims
sufficiently allege knowledge on the part of the Reach Parties. The Amended Counterclaims also
adequately plead that the Reach Parties induced Reeves to participate in all three actions against
Protoons and that, but for their involvement, Reeves would not have breached the Songwriter
Agreements. (rd. ~~ 62-64.)
The Reach Parties also argue that they were motivated by their own economic
interest in the Compositions, which is a defense to a claim for tortious interference with contract.
Under New York law, "economic interest is a defense to an action for tortious interference with a
contract unless there is a showing of malice or illegality." Foster, 87 N.Y.2d at 750; accord Don
King Prods., Inc. v. Smith, 47 F. App'x 12, 15 (2d Cif. 2002). It is improper for the Court to make
a determination at this juncture as to the economic interest defense. A motion pursuant to Rule
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12(b)( 6) addresses the sufficiency of the pleadings; the facts upon which the Reach Parties premise
this defense are not developed in the pleadings. Matters extraneous to the pleadings are generally
inappropriate for consideration on a motion to dismiss a claim.
Slander of Title
Protoons' cause of action for slander oftitle against Reeves is untimely. Under New
York law, slander of title claims are subject to a one-year statute oflimitations, which begins to run
on the date the allegedly slanderous statements are uttered. N.Y. c.P.L.R. § 215(3) (McKinney
2006);
Karam v. First Am. Bank ofN.Y., 593 N.Y.S.2d 640,642 (App. Div. 1993); Friedman
v. JP Morgan Chase Manhattan Bank, No. 102788/08,2008 WL 2891302, at *3 (N.Y. Sup. Ct. July
11,2008); accord Smith v. Soros, No. 02 Civ.4229, 2003 WL 22097990, at *7 (S.D.N.Y. Sept. 5,
2003).
Protoons asserts that the statute of limitations for its slander claim began to run on
June 17,2009, the date upon which Reeves filed his latest lawsuit. Protoons' counterclaim for
slander of title was filed on November 20,2009, approximately five months later, which Protoons
argues is within the one-year period. However, "communications made by individuals participating
in a public function, such as executive, legislative, judicial or quasi-judicial proceedings" are
absolutely privileged. Rosenberg v. MetLife, Inc., 8 N.y'3d 359, 365 (2007); cf. Kelly v. Albarino,
485 F.3d 664, 665-66 (2d Cir. 2007) (applying New York's absolute privilege with respect to
affidavit filed with court); Singh v. HSBC Bank USA, 200 F. Supp. 2d 338, 340 (S.D.N.Y. 2002)
(holding that under New York law, statements by parties and their attorney in the context of a legal
proceeding are absolutely privileged). Therefore, Protoons may not rely upon Reeves' allegations
in any of his filed complaints to satisfy the statute of limitations. The only other false utterance
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alleged in the Amended Counterclaims is that, in or about 2006, Reeves falsely communicated to
several third parties that he had not entered into any previous agreements assigning his copyright
interest in the Compositions. (Am. Counterclaims ~ 38.) Because Protoons' counterclaim for
slander was not filed until November 20,2009, approximately three years later, it is clearly
untimely and will therefore be dismissed.
Counterclaim Defendants' Motion to Strike
Counterclaim Defendants also move to strike five paragraphs from the Amended
Counterclaims. Federal Rule of Civil Procedure 12(f) authorizes motions to strike from pleadings
insufficient defenses "or any redundant, immaterial, impertinent or scandalous matter." "Motions
to strike are generally disfavored and will be denied unless the matter asserted clearly has no
bearing on the dispute or the matter is significantly prejudicial to one of the parties." Citigroup,
Inc. v. Wachovia Corp., 613 F. Supp. 2d 485, 489 (S.D.N.Y. 2009). "It is settled in this Circuit that
the motion will be denied 'unless it can be shown that no evidence in support of the allegation
would be admissible.'" Kehr ex reL Kehr v. Yamaha Motor Corp., U.S.A., 596 F. Supp. 2d 821,
829 (S.D.N.Y. 2008) (quoting Lipsky v. Commonwealth United Corp., 551 F.2d 887,893 (2d Cif.
1976)). Accordingly, courts should avoid tampering with the pleadings under Rule 12(f) absent a
compelling reason.
S.E.C. v. Treadway, No. 11 Civ. 1534,2011 WL 2623469, at *1 (S.D.N.Y.
June 29, 2011).
Counterclaim Defendants fail to show how the facts alleged in paragraphs 30-35 are
"redundant, immaterial, impertinent, or scandalous." The paragraphs discuss the allegedly
acrimonious relationship among Protoons, Run-D.M.C. and Rush Groove and relate to the genesis
of the 1998 Agreement that is the subject of arguments in connection with the counterclaims and
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anticipated defenses thereto. They are not completely irrelevant or duplicative, and Counterclaim
Defendants' claim of prejudice consists only of conclusory assertions that the paragraphs are
misleading. Therefore, the motion to strike is denied.
CONCLUSION
For the foregoing reasons, Counterclaim Defendants' motion to dismiss the
Amended Counterclaims is denied in part and granted in part. The motion to dismiss is denied as
to the First Counterclaim against Reeves insofar as it asserts breach of the covenant not to sue in
the Songwriter Agreements; the motion is granted with regard to the breach of contract allegations
based on Reeves' entry into the 2007 Agreement. The motion to dismiss is granted as to the
Second Counterclaim, for slander of title. The Third Counterclaim is dismissed insofar as it asserts
tortious interference on the part of the Run-D.M.C.-related entities; it is denied as to the tortious
interference claim against the Reach Parties in connection with the Songwriter Agreements. The
motion to strike is denied in its entirety.
This Memorandum Opinion and Order resolves docket entry nos. 75 and 78. The
parties are directed to meet with Magistrate Judge Gorenstein promptly for settlement purposes and
to address any outstanding pretrial issues.
SO ORDERED.
Dated: New York, New York
September 7, 2011
~ORSWAIN
United States District Judge
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