Artists Rights Enforcement Corp. v. The Estate of Joseph Robinson, Jr. et al

Filing 33

OPINION AND ORDER. For the reasons stated in this Opinion and Order, Defendants' motion to dismiss is GRANTED in part and DENIED in part. Specifically, the motion to dismiss is granted without prejudice as to Plaintiff's declaratory judgmen t claim. The motion to dismiss is otherwise denied on the basis of abstention or failure to join a necessary party. Plaintiff's breach of contract and accounting claims thus survive. If Plaintiff chooses to file an Amended Complaint to re-assert its declaratory judgment claim, it must do so by March 28, 2017. If Plaintiff chooses not to file an Amended Complaint, the parties are directed to appear for a conference on April 20, 2017 at 11:00 a.m. The clerk of the Court is respectfully direct ed to terminate the motion, Doc. 18. It is SO ORDERED. re: 18 MOTION to Dismiss Complaint filed by Sugar Hill Records, Inc., Leland Robinson, Sugarhill Music Publishing Inc., The Estate of Joseph Robinson, Jr. (Amended Pleadings due by 3/28/2017.) (Status Conference set for 4/20/2017 at 11:00 AM before Judge Edgardo Ramos.) (Signed by Judge Edgardo Ramos on 3/7/2017) (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

ARTISTS RIGHTS ENFORCEMENT
CORP.,
Plaintiff,
OPINION AND ORDER
– against –
THE ESTATE OF JOSEPH ROBINSON,
JR., LELAND ROBINSON, SUGARHILL
MUSIC PUBLISHING INC., a/k/a
SUGAR HILL MUSIC PUBLISHING,
INC., SUGAR HILL RECORDS INC.,

15 Civ. 9878 (ER)

Defendants.

Ramos, D.J.:
Artists Rights Enforcement Corp. (“AREC” or “Plaintiff”) brings this action against
Defendants The Estate of Joseph Robinson Jr., Leland Robinson, Sugarhill Music Publishing
Inc., a/k/a Sugar Hill Music Publishing Inc. (“SMP”) and Sugar Hill Records Inc. (together, the
“Defendants”). Before this Court is the Defendants’ motion to dismiss on the grounds that: (1)
Plaintiff does not have standing to assert its declaratory judgment claim, (2) this Court should
abstain from exercising jurisdiction as there is a parallel pending state court action, and (3)
Plaintiff has failed to join a necessary party whose joinder would destroy diversity.
For the following reasons, Defendants’ motion is GRANTED in part and DENIED in
part.

I.

Background 1
Between July 17, 1980 and January 28, 1981, the following songwriters, artists and music

publishers entered into five separate Exclusive Songwriters Agreements with SMP: Melvin
Glover, Eddie Morris, Nathaniel Glover Jr., Guy Todd Williams, The Estate of Robert Keith
Wiggins, Sharon Green Jackson, Keith Caesar, Kevin Smith, Rodney Stone and Reginald A.
Payne (together, the “Songwriters”). Compl. at ¶ 12. The Exclusive Songwriters Agreements,
which were signed by Joseph Robinson Jr. on behalf of SMP, gave SMP 2 control over the
Songwriters’ creative works and required SMP to, inter alia, make royalty payments and provide
semi-annual royalty reports on February 15 and August 15 of each year. Id. at ¶¶ 12, 14, 15.
However, Defendants failed to perform these obligations for two decades. Id. at ¶ 17.
Accordingly, between April 15, 1999 and April 23, 2003, the Songwriters each signed
letter agreements with AREC, an entity specializing in the collection of royalties and other fees
due songwriters and music publishers from their artistic material or musical performances. Id. at
¶¶ 11, 17. AREC was retained to collect any and all royalties and other assets owed to them, and
to obtain an accounting for such royalties. Id. at ¶ 17. Despite AREC’s retention, Defendants
continued to refuse to perform their obligations, which has led to multiple lawsuits in both state
and federal courts, two of which have ended in settlement agreements.
A. Prior Litigation and Settlement Agreements
In 2001, these same Songwriters filed an action against Joseph Robinson Jr., Leland
Robinson, the Sugarhill entities, other members of the Robinson family and other entities owned

1
The following facts are drawn from allegations contained in the Complaint (Doc. 1), which the Court accepts as
true for purposes of the instant motion. See Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 134 (2d Cir. 1998).
2

SMP was incorporated on December 31, 1981. Compl. at ¶ 14. Thus, it was an unincorporated entity when the
Exclusive Songwriters Agreements were executed. Id.

2

or controlled by the Robinsons (together, the “Robinson Defendants”) in the United States
District Court for the Southern District of New York, entitled Caesar v. Sugarhill (“Prior Federal
Action”) to recover royalties and other fees. Id. at ¶ 19. AREC was not a party to that action.
Complaint, Caesar v. Sugarhill, No. 01 Civ. 6180 (RMB) (S.D.N.Y. July 9, 2001).
The Prior Federal Action settled on June 14, 2002. Compl. at ¶ 20. Pursuant to the
settlement, the Robinson Defendants were court-ordered to pay AREC, on behalf of the
Songwriters, $225,000 in nine separate installments of $25,000 each, and to enter into a written
Settlement Agreement (“2002 Settlement Agreement”). Id. at ¶ 21. The 2002 Settlement
Agreement obligated the Robinson Defendants to, inter alia, give AREC copies of all relevant
licenses from 1997, direct third parties to pay royalties directly to AREC, provide an accounting
of the royalties due, and pay AREC the Songwriters’ royalties. Id.
The Songwriters’ troubles did not end with this settlement. The Robinson Defendants
only paid the first installment payment and refused to execute the 2002 Settlement Agreement.
Id. at ¶ 22. This caused the parties to appear before Judge Berman on March 12, 2003 during
which the parties agreed to a rider to be signed within ten days, and to execute the 2002
Settlement Agreement as drafted by the Songwriters’ counsel. Id. However, the Robinson
Defendants again refused to execute the 2002 Settlement Agreement, or to abide by its terms or
the terms of the rider. Id. at ¶ 23.
The Robinson Defendants also allegedly retained an attorney to write a letter to AREC,
purportedly on behalf of Melvin Glover and Eddie Morris, stating that the two songwriters
wished to withdraw from the yet unexecuted settlement. Id. at ¶ 24. This led to another
conference before Judge Berman on April 15, 2003. Id. at ¶¶ 24-25. The Songwriters’ counsel
proffered declarations signed by Melvin Glover and Eddie Morris specifically disclaiming that
3

they had retained separate counsel and affirming that they did not wish to withdraw from the
2002 Settlement Agreement. Id. at ¶ 26. Melvin Glover and Eddie Morris also reaffirmed that
AREC was their appointed agent. Id. Judge Berman so ordered this appointment and directed
the Robinson Defendants to comply with the 2002 Settlement Agreement and its rider, which
obligated the Robinson Defendants to deal directly and solely with AREC. Id. at ¶¶ 26-27.
Despite this order, the Robinson Defendants persisted in refusing to sign the 2002 Settlement
Agreement or comply with its terms. Id. at ¶ 28.
On May 12, 2003, AREC filed a state action in the New York County Supreme Court
entitled Artists Rights Enforcement Corp. v. Joseph Robinson, et al., Index No. 601495/03 (“First
State Action”) as a third party beneficiary under the court orders, the 2002 Settlement Agreement
and rider against the Robinson Defendants with the exception of Leland Robinson. Id., Cinque
Decl. (Doc. 19) Exhibit B at ¶ 57. AREC sought compensatory and punitive damages for breach
of contract, tortious interference with contractual relations, tortious interference with prospective
economic advantage, breach of third party beneficiary contracts and declaratory relief. Compl. at
¶ 28.
The Robinson Defendants executed the 2002 Settlement Agreement on June 13, 2003,
during the pendency of the First State Action. Id. at ¶ 29. However, the Robinson Defendants
refused to sign the agreed upon rider and instead signed a unilaterally modified rider which was
rejected by the Songwriters. Id. Furthermore, the Robinson Defendants only paid the first three
of the nine required payments. Id. at ¶ 30. Thus, on August 12, 2004, AREC and the Robinson
Defendants executed a rider extending the Robinson Defendants’ reporting and payment
deadlines. Id. at ¶¶ 30-31. The Robinson Defendants again failed to comply with those terms,

4

only providing AREC $3,892.92 on November 5, 2004 without indication as to the source of the
payment or an accounting. Id. at ¶¶ 32, 35.
Moreover, the Robinson Defendants allegedly hired an attorney for a second time who
purported to represent Melvin Glover. Id. at ¶ 34. The attorney allegedly sent a letter to the
Robinson Defendants on September 21, 2004 which stated that Melvin Glover wished to
withdraw from the settlement. Id. The Robinson Defendants drafted another letter, purportedly
signed by Eddie Morris, which also stated that Eddie Morris wanted to withdraw from the
settlement. Id. AREC was not provided with copies of these letters though they would alter
AREC’s rights. Id.
On July 17, 2007, the parties agreed to another settlement agreement ending the First
State Action (“2007 Settlement Agreement”). Id. at ¶ 36. The 2007 Settlement Agreement
reaffirmed the 2002 Settlement Agreement as modified by the rider. Id. The Robinson
Defendants agreed to make 12 semi-annual settlement payments totaling $268,000 over six years
directly to AREC, provide copies of all licenses directly and only to AREC, and directly pay
AREC any amounts due and owing to the Songwriters. Id. The 2007 Settlement Agreement also
provided that if either party receives a license request or a payment for a license from a third
party, and does not inform the other party within fifteen days, the party who received payment
shall owe the other the payment due, as well as a bonus in the amount of twenty percent of the
amount otherwise owed. Id. at ¶ 37.
Even though the Robinson Defendants had entered into two settlement agreements, they
continued to fail to fully abide by their obligations. At the end of 2010 and beginning of 2011,
yet another attorney who purported to represent Melvin Glover and Eddie Morris demanded that
the record companies and Defendants make the royalty payments to the two songwriters instead
5

of AREC. Id. at ¶¶ 38-39, 42. On August 1, 2011, Defendants sent a letter to AREC, notifying
AREC of this demand. Id. at ¶ 42. Furthermore, AREC has not received any royalty statements
or payments for the Songwriters from the Defendants since 2010 even though certain of the
Songwriters’ works have been licensed repeatedly after 2010. Id. at ¶¶ 16, 43.
In response, AREC brought another action in the New York County Supreme Court
entitled Artists Rights Enforcement Corp. v. Joseph Robinson, et al., Index No. 652582/2012 on
July 25, 2012 (“Second State Action”), which is currently pending. Id. at ¶ 45. This time,
AREC brought the action on behalf of Melvin Glover and Eddie Morris against Joseph
Robinson, Jr. and other Robinson-controlled entities seeking breach of contract damages and
declaratory judgment. Id.
B. Notice of Default and Demand to Cure
On April 1, 2015, AREC also sent Notice of Default and Demand to Cure letters to
Defendants on behalf of all of the Songwriters. Id. at ¶ 46. The letters demanded full and
complete payment of all royalties and delivery of the royalty statements not previously provided
from January 1, 2007. Id. at ¶ 47. The letters further stated that Defendants’ failure to do so
would be a material breach of the Exclusive Songwriters Agreements, and that the right to
terminate the agreements might be exercised. Id. at ¶ 48.
Defendants responded to AREC’s letters on April 29, 2015 stating that (1) the Defendants
had accounted and made payments to AREC up until 2010, at which point they were notified by
Melvin Glover and Eddie Morris that the two songwriters’ agency relationship with AREC was
terminated, and (2) that the Second State Action will decide who is entitled to royalties and in
what amount. Id. at ¶ 49. On May 4, 2015, AREC’s counsel sent an email to Defendants’

6

counsel advising that the Defendants’ failure to cure led to the termination of the Exclusive
Songwriters Agreements. Id. at ¶ 50.
C. Procedural History
On December 18, 2015, Plaintiff filed the instant action bringing claims for breach of
contract, accounting, and a declaratory judgment that the termination of the Exclusive
Songwriters Agreements is valid and effective. (Doc. 1) On April 29, 2016, Defendants filed
the instant motion to dismiss. (Doc. 18) Defendants assert that Plaintiff does not have standing
to bring its declaratory judgment claim, Plaintiff is improperly splitting the action, and Sugar Hill
Music Publishing Ltd. is a required party to the instant litigation whose joinder would destroy
diversity. On May 27, 2016, Plaintiff filed its opposition to the motion that, among other things,
suggests that Defendants perhaps intended to request abstention as opposed to arguing that
Plaintiff has improperly split the action. 3 (Doc. 21) On June 10, 2016, Defendants submitted a
reply which appeared to abandon the allegation of improper claim splitting and, following
Plaintiff’s suggestion, requested that the Court abstain from adjudicating the instant action.
(Doc. 22)
II.

Legal Standards
A. Rule 12(b)(1)
Federal Rule of Civil Procedure Rule 12(b)(1) is the proper procedural vehicle for a

motion to dismiss for lack of Article III standing rather than Rule 12(b)(6) because it concerns
“the authority of a federal court to exercise jurisdiction.” All. for Envtl. Renewal, Inc. v. Pyramid

3
The claim splitting doctrine requires a plaintiff to present all of his theories and evidence relating to a transaction
in one action as opposed to bringing overlapping or repetitive actions in different courts or at different times. LG
Elecs., Inc. v. Wi-Lan USA, Inc., 623 F. App’x 568, 570 (2d Cir. 2015). However, claim splitting does not apply if
the contemporaneous exercise of concurrent jurisdictions is between a state court and federal court. Kanciper v.
Suffolk Cty. Soc. for the Prevention of Cruelty to Animals, Inc., 722 F.3d 88, 93 (2d Cir. 2013).

7

Crossgates Co., 436 F.3d 82, 88 n. 6 (2d Cir. 2006). A motion to dismiss based on the
abstention doctrine is also properly construed as a motion to dismiss for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1). Henvill v. Metro. Transp. Auth., No. 13 Civ. 7501 (GBD),
2016 WL 519039, at *2 (S.D.N.Y. Feb. 5, 2016). Thus, the Court will construe the Defendants’
motion to dismiss for lack of standing and abstention under Rule 12(b)(1).
“Dismissal for lack of subject matter jurisdiction is proper when the district court lacks
the statutory or constitutional power to adjudicate a case.” Sokolowski v. Metro. Transp. Auth.,
723 F.3d 187, 190 (2d Cir. 2013) (citation and internal quotation marks omitted). In resolving a
12(b)(1) motion, a court may refer to evidence outside the pleadings such as affidavits. Zappia
Middle E. Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000); Kamen v. Am.
Tel. & Tel. Co., 791 F.2d 1006, 1010–11 (2d Cir. 1986).
B. Rule 12(b)(7)
Under Rule 12(b)(7), an action must be dismissed for failure to join a party under Rule 19
if the absent party is (1) necessary but joinder is not feasible, and (2) indispensable to the action.
See Viacom Int’l, Inc. v. Kearney, 212 F.3d 721, 724-25 (2d Cir. 2000). In determining a Rule
12(b)(7) motion, a court may accept all factual allegations in the complaint as true and draw
inferences in favor of the plaintiff. Am. Trucking Ass’n, Inc. v. N.Y. State Thruway Auth., 795
F.3d 351, 354 (2d Cir. 2015). Furthermore, a court can consider matters outside of the pleadings,
such as affidavits, in deciding a 12(b)(7) motion. Holland v. Fahnestock & Co., Inc., 210 F.R.D.
487, 495 (S.D.N.Y. 2002).

8

III.

Discussion
A. Article III Standing
“Article III, § 2, of the Constitution restricts the federal ‘judicial Power’ to the resolution

of ‘Cases’ and ‘Controversies.’ That case-or-controversy requirement is satisfied only where a
plaintiff has standing.” Sprint Commc’ns Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 273
(2008) (citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006)). “[I]n order to have Article
III standing, a plaintiff must adequately establish: (1) an injury in fact (i.e., a concrete and
particularized invasion of a legally protected interest); (2) causation (i.e., a fairly traceable
connection between the alleged injury in fact and the alleged conduct of the defendant); and (3)
redressability (i.e., it is likely and not merely speculative that the plaintiff’s injury will be
remedied by the relief plaintiff seeks in bringing suit).” Id. at 273-74 (internal quotation marks
and alterations omitted) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).
If a party lacks Article III standing, a court has no subject matter jurisdiction to hear its claims.
Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C.,
433 F.3d 181, 198 (2d Cir. 2005). Thus, the question of standing must be resolved prior to
deciding a case on the merits. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101
(1998).
The party seeking declaratory judgment bears the burden to demonstrate standing, Rojas
v. Don King Prods., Inc., No. 11 Civ. 8468 (KBF), 2012 WL 760336, at *6 (S.D.N.Y. Mar. 6,
2012), and the Court must “accept as true all material allegations of the complaint, and must
construe the complaint in favor of the complaining party,” Thompson v. Cty. of Franklin, 15 F.3d
245, 249 (2d Cir. 1994) (citation omitted). Further, once Defendants’ motion to dismiss has put
Plaintiff’s Article III standing at issue, the Court has discretion to determine the appropriate
9

procedure. All. For Envtl. Renewal, Inc., 436 F.3d at 87-88. For example, the Court may allow
Plaintiff to conduct limited discovery with respect to standing before a resolution on motion
supported by affidavits, conduct a hearing limited to Article III standing, proceed to trial and
make a jurisdictional ruling at the close of evidence if the evidence regarding standing overlaps
with evidence for factual issues, or make a preliminary finding subject to revision later in the
proceedings or at trial. Id. (citations omitted).
Defendants argue that AREC does not have standing to seek a declaratory judgment that
the termination of the Exclusive Songwriters Agreements was valid and effective because AREC
is only an agent of the Songwriters. Defendants are correct that a mere agent of a principal does
not have standing. W.R. Huff Asset Mgmt. Co., LLC v. Deloitte & Touche LLP, 549 F.3d 100,
108 (2d Cir. 2008) (“[A] mere power-of-attorney—i.e., an instrument that authorizes the grantee
to act as an agent or an attorney-in-fact for the grantor—does not confer standing to sue in the
holder’s own right because a power-of-attorney does not confer an ownership interest in the
claim”) (citation omitted). “It is the principal who is entitled to any advantage flowing from the
agent’s authorized acts.” Colonial Sec., Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 461
F. Supp. 1159, 1165 (S.D.N.Y. 1978). However, an agent can maintain an action in his own
name on behalf of the principal if the agent is either a party to the contract, a transferee, or a
holder of an interest in the contract. Id. (citing Restatement (Second) of Agency §§ 363, 372
(1958)). Defendants argue that AREC failed to allege any of the above.
AREC responds that it has standing because an agent who has acted as an agent during
the course of a transaction involved in the litigation can sue for damages suffered by the
principal. Pl.’s Opp. at 12-13. Specifically, AREC alleges that it has standing because it had
been dealing with the Defendants for over 15 years regarding Defendants’ failure to abide by the
10

Exclusive Songwriters Agreements, it had negotiated settlements with the Defendants
concerning those agreements, Defendants made promises to AREC directly, and AREC had been
court-ordered to be the irrevocably appointed agent for the Songwriters for the receipt of royalty
reports and royalty income. Id. at 13; Compl. at ¶ 26. However, each of the cases on which
AREC relies involve agents that held an independent interest in the contract or were parties to
the contract, and thus had independent standing. For example, in Leber Assocs., LLC v. Entm’t
Grp. Fund, Inc., No. 00 Civ. 3759 (LTS MHD), 2003 WL 21750211, at *12 (S.D.N.Y. July 29,
2003), the contracts at issue provided that the agents had an independent right to one million
dollars of the amount guaranteed to the principal. Similarly, in Bache & Co. v. Int’l Controls
Corp., 324 F. Supp. 998, 1004-05 (S.D.N.Y. 1971), the agent was held to have standing because
he had contracted in his own name, and thus, was an actual party to the contract. 4
Although at the pleading stage, “standing allegations need not be crafted with precise
detail,” Baur v. Veneman, 352 F.3d 625, 631 (2d Cir. 2003), AREC does not provide the Court
with any of the Exclusive Songwriters Agreements, the only contracts as to which it seeks
declaratory judgment, and does not allege that it is a party to the Exclusive Songwriters
Agreements, a transferee, or a holder of beneficial interest in those agreements. In fact, the
Complaint alleges that the Songwriters and SMP are the only parties to the Exclusive

4

The two out-of-Circuit cases Plaintiff cites were also decided on similar facts. In Global Aerospace, Inc. v.
Platinum Jet Mgmt., LLC, 488 F. App’x 338, 340 (11th Cir. 2012), the agent was authorized by its principal to issue
contracts, sign documents, handle claims, receive funds, and litigate. Notably, the agent issued the contract at issue
in its own name, and the contract could not be amended without the agent’s consent. Id. at 340-341. Accordingly,
the Eleventh Circuit held that the agent standing. Id. In Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630
F.2d 250, 258-59 (5th Cir. 1980), the agents could sue in their own name because they either had a beneficial
interest or were party promisees in the contract as “agents to whom performance was due.”

11

Songwriters Agreements, Compl. at ¶¶ 12-14, and AREC was retained by the Songwriters
approximately two decades after those agreements were executed, Id. at ¶ 17. 5
AREC also does not assert that it is a transferee of any of the Songwriters’ interests. An
assignee for the sole purpose of collection has standing since the assignee holds legal title to the
debt, even when the assignee has agreed to remit the proceeds to the assignor. Sprint Commc’ns
Co., 554 U.S. at 284–85. While AREC states that the Songwriters retained AREC through letter
agreements to collect and receive an accounting for the royalties, AREC fails to allege whether it
was an assignee of those claims rather than, as Defendants’ argue, a mere agent for collection
without any legal title to the debt. Compl. at ¶ 17. Furthermore, since the Court has not been
provided with those letter agreements, it cannot ascertain the full scope of the relationship
between AREC and the Songwriters. Without any additional allegations the Court cannot find
that AREC is a transferee of any of the Songwriters’ interests.
Finally, AREC does not sufficiently allege that it has any independent beneficial interest
in the Exclusive Songwriter Agreements at issue. It is not sufficient that AREC has a beneficial
interest in the settlement agreements because the Complaint does not bring an action based on
those settlement agreements. For AREC to show that it has an interest in the Exclusive
Songwriters Agreements, it must allege that the Exclusive Songwriters Agreements provided an
independent interest to the Songwriters’ agent, or the letter agreements demonstrate that AREC
has an independent interest in the Exclusive Songwriters Agreements. AREC does not allege or

5

It is possible that AREC is a party to the settlement agreements, and that those settlement agreements have
amended the Exclusive Songwriters Agreements and stand in their place. However, AREC has not alleged this. The
2007 Settlement Agreement does require Defendants to pay AREC an additional twenty percent of the amounts due
if Defendants fail to properly remit payments on any license required to be sent to AREC. Compl. at ¶ 37; Pl.’s
Opp. at 13. Plaintiff claims that this additional twenty percent is “a remedy that flows solely to AREC.” Pl.’s Opp.
at 13. The Court therefore notes without deciding that AREC arguably has standing to seek enforcement of the 2007
Settlement Agreement. However, AREC seeks a declaratory judgment regarding the Exclusive Songwriters
Agreements, not the settlement agreements.

12

provide evidence of any of the above. Consequently, the Court grants the Defendants’ motion to
dismiss Plaintiff’s declaratory judgment claim without prejudice.
B. Abstention
For the first time on reply, Defendants argue that the Court should abstain from
adjudicating this case because there is a pending parallel state action. A court has discretion to
consider an argument made for the first time in a reply brief, though it is not required to do so.
Ruggiero v. Warner-Lambert Co., 424 F.3d 249, 252 (2d Cir. 2005). After considering the
Defendants’ argument, the Court finds that it need not abstain from adjudicating this action.
“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.’” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800,
817 (1976) (quoting McClellan v. Carland, 217 U.S. 268, 282 (1910)). However, the Supreme
Court has recognized several categories of circumstances in which abstention may be
appropriate. See, e.g., id. at 814; Younger v. Harris, 401 U.S. 37, 43-44 (1971); Burford v. Sun
Oil Co., 319 U.S. 315, 332 (1943); R.R. Comm’n of Tex. v. Pullman Co., 312 U.S. 496, 498
(1941). These abstention doctrines pose “extraordinary and narrow exception[s]” to “the
virtually unflagging obligation of the federal courts to exercise the jurisdiction given them.”
Colorado River, 424 U.S. at 813, 814, 817 (citations omitted).
In Colorado River, the court held that “in situations involving the contemporaneous
exercise of concurrent jurisdiction,” a federal court, in “exceptional” circumstances, may abstain
from exercising jurisdiction if parallel state-court litigation might result in “comprehensive
disposition of litigation” and abstention would conserve judicial resources. Id. at 813, 817-18
(internal brackets and quotation marks omitted). To determine whether Colorado River

13

abstention is appropriate, the court considers six factors, “with the balance heavily weighted in
favor of the exercise of jurisdiction,” Niagara Mohawk Power Corp. v. Hudson River-Black
River Regulating Dist., 673 F.3d 84, 100 (2d Cir. 2012) (quoting Moses H. Cone Mem’l Hosp. v.
Mercury Const. Corp., 460 U.S. 1, 16 (U.S. 1983)):
(1) whether the controversy involves a res over which one of the courts has assumed
jurisdiction; (2) whether the federal forum is less inconvenient than the other for
the parties; (3) whether staying or dismissing the federal action will avoid
piecemeal litigation; (4) the order in which the actions were filed, and whether
proceedings have advanced more in one forum than in the other; (5) whether federal
law provides the rule of decision; and (6) whether the state procedures are adequate
to protect the plaintiff’s federal rights.
Woodford v. Cmty. Action Agency of Greene Cty., Inc., 239 F.3d 517, 522 (2d Cir. 2001)
(citations omitted). No one factor is decisive; instead, a court must engage in a “carefully
considered judgment[,] taking into account both the obligation to exercise jurisdiction and the
combination of factors counselling against that exercise.” Colorado River, 424 U.S. at 818
(citation omitted); see also Moses H. Cone, 460 U.S. at 16 (explaining that the “weight to be
given to any one factor may vary greatly from case to case, depending on the particular setting of
the case”). Moreover, the facial neutrality of a factor “is a basis for retaining jurisdiction, not for
yielding it.” Woodford, 239 F.3d at 522. Before engaging in the six-factor analysis, however, a
court must make a threshold determination that the federal and state court cases are “parallel.”
Dittmer v. County of Suffolk, 146 F.3d 113, 117-18 (2d Cir. 1998).
1.

The instant action is not parallel to the pending state action

The Court finds that the instant case and the Second State Action are not parallel.
Federal and state proceedings are “parallel” for abstention purposes when the two proceedings
“are essentially the same,” meaning that “there is an identity of parties, and the issues and relief
sought are the same.” Shields v. Murdoch, 891 F. Supp. 2d 567, 577 (S.D.N.Y. 2012) (internal
quotation marks and citation omitted). Nevertheless, “[p]erfect symmetry of parties and issues is
14

not required. Rather, parallelism is achieved where there is a substantial likelihood that the state
litigation will dispose of all claims presented in the federal case.” Id. (quoting In re Comverse
Tech., Inc., No. 06 Civ. 1849 (NGG) (RER), 2006 WL 3193709, at *2 (E.D.N.Y. Nov. 2, 2006))
(emphasis in original) (internal quotation marks omitted). Yet if the court has “[a]ny doubt”
regarding the parallel nature of the two actions, the outcome should be resolved in favor of
exercising federal jurisdiction. Id.
Though both the Second State Action and the instant action are based on much of the
same history recounted above, the two actions concern different parties and claims. While both
actions assert breach of contract claims, in the present action, the breach of contract claim is
brought by AREC on behalf of all of the Songwriters except for Melvin Glover and Eddie Morris
whereas the Second State Action only brings a breach of contract claim on behalf of Melvin
Glover and Eddie Morris. Compl. at ¶¶ 54-61; Cinque Decl. Exhibit C at ¶¶ 36-44. The two
cases are also asserted against slightly different groups of defendants. 6
Furthermore, the Second State Action primarily involves breach of the settlement
agreements and related court orders, and does not pertain to events related to the purported
termination of the Exclusive Songwriters Agreements. Cinque Decl. Exhibit C at ¶¶ 36-48. In
contrast, the instant action brings claims exclusively regarding the Exclusive Songwriters
Agreements, including events related to their purported termination, that post-date the filing of
the Second State Action. Compl. at ¶¶ 62-64. Thus, the two actions are not parallel.

6

While both cases are brought against Joseph Robinson Jr., the instant action is also brought against Leland
Robinson while the Second State Action is not. The two cases are also brought against different corporate entities.
The instant action is brought against Sugarhill Music Publishing Inc., a/k/a Sugar Hill Music Publishing Inc., and
Sugar Hill Records Inc., but the Second State Action is brought against Sugar Hill Records Ltd., Sugarhill Music
Publishing, Ltd., Twenty Nine Black Music and Gambi Music, Inc.

15

2.

Even if the actions were parallel, Defendants have not demonstrated that
abstention is appropriate

Because the two actions are not parallel, the Court need not conduct an analysis of the six
Colorado River abstention factors. However, abstention would not be appropriate even if the
actions were parallel because Defendants fail to demonstrate that the Colorado River abstention
factors weigh in favor of abstention. The moving party bears a heavy burden to prevail on a
motion to dismiss under the Colorado River abstention doctrine. Radioactive, J.V. v. Manson,
153 F. Supp. 2d 462, 474 (S.D.N.Y. 2001) (citations omitted). Here, Defendants do not even
mention the six Colorado River abstention factors, and merely assert that Plaintiff should not be
permitted to seek different remedies in federal court for the alleged failure to pay royalties.
Defs.’ Reply at 4.
C. Failure to Join a Party Under Rule 19
Defendants also request the Court to dismiss the Complaint under Rule 12(b)(7), which is
a motion to dismiss for “failure to join a party under Rule 19.” Fed. R. Civ. P. 12(b)(7). Rule 19
establishes a two-step test for determining whether an action must be dismissed for failure to join
an indispensable party. See Viacom Int’l, 212 F.3d at 724. First, the Court must determine
whether an absent party belongs in the suit, and thus, is “necessary” under Rule 19(a). Id. Under
Rule 19(a)(1), an absent party is “required” if:
(A) in the person’s absence complete relief cannot be accorded among those
already parties, or (B) the person claims an interest relating to the subject of the
action and is so situated that the disposition of the action in the person’s absence
may (i) as a practical matter impair or impede the person’s ability to protect that
interest or (ii) leave any of the persons already parties subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent obligations by reason of
the claimed interest.
Fed. R. Civ. P. 19(a)(1). If the absent party is not necessary, then the Court need not go on to the
next step. Viacom Int’l, 212 F.3d at 724. If the absent party is necessary but joinder is not
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feasible (for example, for jurisdictional reasons), then the Court must determine whether the
absent party is indispensable under Rule 19(b). Id. at 725. If the absent party is indispensable,
then the Court should dismiss the action. Id. Rule 19(b) instructs the Court to consider the
following factors to determine whether an absent party is indispensable:
(1) to what extent a judgment rendered in the person’s absence might prejudice
that person or the existing parties; (2) the extent to which any prejudice could be
lessened or avoided by: (A) protective provisions in the judgment; (B) shaping the
relief; or (C) other measures; (3) whether a judgment rendered in the person’s
absence would be adequate; and (4) whether the plaintiff would have an adequate
remedy if the action were dismissed for non-joinder.
Fed. R. Civ. P. 19(b).
Defendants argue that Sugar Hill Music Publishing, Ltd. is an absent but necessary party
because its interests would be impaired by this litigation. Defendants contend that if the Court
declares that the Exclusive Songwriters Agreements were properly terminated, the absentee’s
copyright ownership interests in the Songwriters’ works would be terminated. The Court finds
that Sugar Hill Publishing Ltd. is not a necessary party under Rule 19(a). The Second Circuit
requires the absentee to assert its own interest relating to the subject of the action in order to
satisfy Rule 19(a)(1)(B). It is not sufficient that an existing party attempts to assert the
absentee’s interest on its behalf. Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 49 (2d Cir. 1996)
(holding that defendant’s attempt to assert the absentee’s interest on its behalf falls outside of
Rule 19(a)). Accordingly, even if it were true that Sugar Hill Publishing Ltd. has an interest in
the present litigation, the fact that it is not asserting its own interest causes the Defendants’
argument to fail.
Moreover, the Court does not find that Sugar Hill Publishing Ltd.’s absence would
impede or impair its ability to protect its interest. As Plaintiffs argues, “prejudice to absent
parties approaches the vanishing point when the remaining parties are represented by the same
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counsel, and when the absent and remaining parties’ interests are aligned in all respects.” Am.
Trucking Ass’n, Inc., 795 F.3d at 360 (citation and quotations omitted); see also Bank of Am.
Corp. v. Lemgruber, 385 F. Supp. 2d 200, 232–33 (S.D.N.Y. 2005) (holding that the absentee is
not necessary because its interest will be adequately protected by existing parties in the litigation
who have invoked the same rights that the absentee would invoke). Here, both the Defendants
and Sugar Hill Publishing Ltd. have the same interest in preserving the Exclusive Songwriters
Agreements. The absent party also has the same counsel as the Defendants, and has retained that
same counsel for over a decade. Indeed, Defendants’ counsel has represented the absent party in
the Prior Federal Action and the First State Action, and currently represents it in the pending
Second State Action. Pl.’s Opp. at 16. Therefore, this Court does not find that Sugar Hill
Publishing Ltd. is a necessary party under Rule 19(a).
Since this Court concludes that the absentee is not a necessary party under Rule 19(a), it
need not consider whether the absentee is an indispensable party under Rule 19(b). Am.
Trucking Ass’n, Inc., 795 F.3d at 361. Accordingly the motion to dismiss for failure to join a
party pursuant to Rule 19 is denied.
IV.

CONCLUSION
For the reasons stated above, Defendants’ motion to dismiss is GRANTED in part and

DENIED in part. Specifically, the motion to dismiss is granted without prejudice as to Plaintiff’s
declaratory judgment claim. The motion to dismiss is otherwise denied on the basis of
abstention or failure to join a necessary party. Plaintiff’s breach of contract and accounting
claims thus survive.

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