Bray v. Purple Eagle Entertainment, Inc. et al

Filing 47

MEMORANDUM DECISION AND ORDER adopting 44 Report and Recommendations re: 21 Motion to Dismiss; 23 Motion to Strike: Plaintiff's objections are overruled, and the Report is ADOPTED in full. Defendants' motion to dismiss for failure to state a claim, (ECF No. 21), is GRANTED. Defendants' motion to strike, (ECF No. 23), is GRANTED in part and DENIED in part. (Signed by Judge George B. Daniels on 2/11/2019) (jwh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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DAVID BRAY,
Plaintiff,

MEMORANDUM DECISION
AND ORDER

-against18 Civ. 5205 (GBD) (HBP)
PURPLE EAGLE ENTERTAINMENT, INC. and
RICHARD MRGDECHIAN,
Defendants.
------------------------------------- X

GEORGE B. DANIELS, United States District Judge:
Plaintiff David Bray brings this action against Defendant Purple Eagle Entertainment, Inc.
("Purple Eagle") and its principal, Defendant Robert Mrgdechian, asserting state and federal
claims stemming from Defendants' alleged infringement of Plaintiff's copyrights to several songs
that Plaintiff wrote while employed by Purple Eagle as a member of the band Madison Rising.

(See Am. Compl., ECF No. 19.) Defendants move to dismiss Plaintiff's state law claims for lack
of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure
and to dismiss all of Plaintiff's claims for failure to state a claim pursuant to Rule 12(b)( 6). 1 (ECF
No. 21.) In the alternative, Defendants seek to convert their motion to dismiss into one for partial
summary judgment on Plaintiff's copyright infringement claim pursuant to Rule 12(d). (Id.)
Defendants separately move to strike certain allegations in the amended complaint pursuant to
Rule 12(f). (ECF No. 23.) Defendants also seek to recover attorneys' fees and costs incurred in
connection with both motions. (See ECF Nos. 21, 23.)

1 Defendants

previously filed similar motions to dismiss and strike allegations from the original complaint.
(See ECF Nos. 10, 12.) By Order dated October 16, 2018, this Court adopted Magistrate Judge Pitman's
September 27, 2018 Report and Recommendation, which recommended that both motions be denied as
moot in light of Plaintiffs filing of the amended complaint. (See Memorandum Decision and Order, ECF
No. 41.)

Before this Court is Magistrate Judge Henry B. Pitman's January 18, 2019 Report and
Recommendation, (the "Report," ECF No. 44), recommending that Defendants' motion to dismiss
for failure to state a claim be granted with leave to replead, that Defendants' motion for partial
summary judgment be denied, and that Defendants' motion to strike be granted in part and denied
in part. (Id. at 29.) In his Report, Magistrate Judge Pitman advised the parties that failure to file
timely objections to the Report would constitute a waiver of those objections on appeal. (Id. at
30.) Plaintiff filed timely objections. (Objs., ECF No. 46.)
Plaintiff's objections are overruled, and the Report is ADOPTED in full.

I.

LEGAL ST AND ARDS

A court "may accept, reject, or modify, in whole or m part, the findings or
recommendations" set forth within a magistrate judge's report. 28 U.S.C. § 636(b)(l)(C). The
court must review de nova the portions of a magistrate judge's report to which a party properly
objects. Id. Portions of a magistrate judge's report to which no or "merely perfunctory" objections
are made are reviewed for clear error. See Edwards v. Fischer, 414 F. Supp. 2d 342, 346-47
(S.D.N. Y. 2006) (citation omitted).

The clear error standard also applies when a party's

"objections are improper-because they are 'conclusory,' 'general,' or 'simply rehash or reiterate
the original briefs to the magistrate judge."' Stone v. Comm 'r of Soc. Sec., No. 17 Civ. 569 (RJS)
(KNF), 2018 WL 1581993, at *3 (S.D.N.Y. Mar. 27, 2018) (quoting Rodriguez v. Colvin, No. 12
Civ. 3931 (RJS) (RLE), 2014 WL 5038410, at *3 (S.D.N.Y. Sept. 29, 2014)). Clear error is present
when "upon review of the entire record, [the court is] left with the definite and firm conviction that

2

a mistake has been committed." United States v. Snow, 462 F.3d 55, 72 (2d Cir. 2006) (citation
omitted).

II.

PLAINTIFF HAS FAILED TO ST ATE A CLAIM

Magistrate Judge Pitman correctly found that Plaintiff's federal copyright infringement
claim should be dismissed for failure to state a claim because it does not allege any infringing
conduct.

(Report at 18.)

As explained in the Report, the amended complaint alleges that

"[t]hrough [its] conduct averred herein, Defendant Purple Eagle has infringed Plaintiff['s]
copyright," but the preceding paragraphs of the amended complaint do not allege "reproduction,
distribution, public performance or preparation of derivative works." (Id. at 19-20 (quoting Am.
Compl.

~

129)); see also Latin Am. Music Co. v. Spanish Broad. Sys., Inc., 254 F. Supp. 3d 584,

590 (S.D.N.Y.2017) (noting that a copyright infringement claim requires allegations of "copying,"
which is "shorthand for the infringing of any of the copyright owner's five exclusive rights ... ,
namely, to 'reproduce, perform publicly, display publicly, prepare derivative works of, and
distribute copies of, his copyrighted work"') (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110,
117 (2d Cir. 2010)).
Magistrate Judge Pitman further correctly found that this Court has diversity jurisdiction
over Plaintiff's state law claims, because Defendants have "failed to establish to a legal certainty
that [P] laintiff's claims do not satisfy the amount in controversy requirement. " 2 (Report at 18; see
also id at 9 ("[T]he sum claimed by the plaintiff controls, if the claim is apparently made in good

faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional
amount to justify dismissal.") (quoting St. Paul Mercury lndem. Co. v. Red Cab Co., 303 U.S. 283,

2

As Magistrate Judge Pitman notes, because this Court has diversity jurisdiction over Plaintiffs state law
claims, it need not consider whether the exercise of supplemental jurisdiction would otherwise be
appropriate. (Report at 18 n.3 .)

3

288 (1938)).) Nonetheless, Magistrate Judge Pitman also found that the state law claims should
be dismissed because they are "based on [P]laintiff's copyright claim" and "seek different
remedies for the same alleged wrong." 3 (Report at 21-22.)
Plaintiff does not object to Magistrate Judge Pitman's findings as to jurisdiction and the
dismissal of his claims for copyright infringement, declaratory relief, an accounting, or unjust
enrichment. (See Objs. at 1.) However, Plaintiff does object to the dismissal of his constructive
trust claim. Plaintiff asserts that his constructive trust claim is not "an 'alternative remedy to
[P]laintiff's copyright infringement claim,"' (id. (quoting Report at 27)), because it seeks to
preserve the equity interest in Purple Eagle that Mrgdechian promised Plaintiff in return for his
"significant effort ... to turn the band into a profitable endeavor," which went "well beyond his
songwriting and performing." (Id. at 3.) Plaintiff made a substantially similar argument before
Magistrate Judge Pitman. (See Mern. in Opp'n to Mot. to Dismiss, ECF No. 28, at 13) ("Plaintiffs
constructive trust cause of action ... is based on the fact that ... Mr. Mrgdechian offered Plaintiff
a partnership in Purple Eagle" and "Plaintiff put a tremendous amount of effort into making Purple
Eagle successful.") Thus, this Court need only review Magistrate Judge Pitman's finding for clear
error. Stone, 2018 WL 1581993, at *3. However, even upon de nova review, Plaintiffs objection
is without merit.
Plaintiffs constructive trust claim alleges that "[i]n addition to his creative and branding
contributions, Plaintiff also filled a vital public relations/damage control role." (Arn. Cornpl.
~

149.) But this allegation does not meaningfully distinguish his constructive trust claim from his

copyright claim, because Plaintiff has not alleged that the band had any means of deriving value

3

Because Magistrate Judge Pitman found that Plaintiffs claims are subject to dismissal under Rule
12(b)(6), his Report did not address the issue of whether those claims are also preempted by the Copyright
Act, 17 U .S.C. § 101 et. seq. (Report at 22 n.4.)

4

from its public relations other than by performing and selling recordings of the material that he
claims is subject to copyright. Similarly, although Plaintiff alleges that a constructive trust is
necessary to protect his interest in "the company, the band" and "goodwill and customers" in
addition to "intellectual property," Plaintiff does not allege that the company or band had any
assets other than the alleged copyrighted material. (Id.

,r 151.)

Nor does Plaintiff allege that the

company or band had any means of deriving value from goodwill and relations with customers
other than making use of the alleged copyrighted material. Thus, because Plaintiff's constructive
trust claim would, in effect, serve to compensate him for the use of the same material that is the
subject of his copyright claim (and his other state law claims), it is dismissed as duplicative.

III.

DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT IS DENIED
As an alternative to their motion to dismiss, Defendants request that this Court convert

their motion to one for partial summary judgment pursuant to Rule 12(d) by considering a Band
Member Agreement that is outside of the pleadings. 4 (See Mem. in Supp. of Mot. to Dismiss, ECF
No. 22, at 23 (citing id., Ex. B, ECF No. 22-2 (Band Member Agreement).) Magistrate Judge
Pitman correctly found that Defendants' motion should be denied because material issues of fact
will remain even if the Band Member Agreement is considered. (Report at 22.) As further
discussed in the Report, there are issues of fact as to when the works were created and as to whether
those works were created while the Band Member Agreement was in effect. (Id. at 23.) Plaintiff
does not object to Magistrate Judge Pitman's denial of Defendant's partial summary judgment
motion.

4

Rule 12(d) provides, in pertinent part, that "[i]f, on a motion under Rule 12(b)(6) ... , matters outside the
pleadings are presented to and not excluded by the court, the motion must be treated as one for summary
judgment under Rule 56. Fed. R. Civ. P. 12(d).

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IV.

DEFENDANTS' MOTION TO STRIKE IS GRANTED IN PART

Defendants move to strike several allegations from the Amended Complaint pursuant to
Rule 12(f). 5 (See ECF No. 23.) Under that rule, "[a]llegations may be stricken where they have
no bearing on the parties' claims or defenses, will likely be prejudicial, or where they have criminal
overtones." Hunter v. Palisades Acquisition.XVI, LLC, No. 16 Civ. 8779 (ER), 2017 WL 5513636,
at *9 (S.D.N.Y. Nov. 16, 2017) (internal quotation marks and citation omitted); see also Eaton v.

Am. Media Operations, No. 96 Civ. 6158 (MBM), 1997 WL 7670, at *5 (S.D.N.Y. Jan. 9, 1997)
("Arguably relevant material may ... be stricken ... where it might prejudice the moving party.").
Accordingly, as the Report notes, "[ c ]ourts in this district have stricken various categories of
allegations based on their irrelevance and prejudicial effect." (Report at 16) ( collecting cases).
Here, Magistrate Judge Pitman found that Defendant's motion to strike should be granted
as to the entirety of paragraphs 27-29, 72-88 and 91 and as to portions of paragraphs 4, 26, 30,
31, 3 5, 44, 50, and 63 and denied in all other respects. 6 (Report at 25-26.) While Plaintiff does
not identify any specific language that he believes should not be stricken, he objects generally that
"the sections which the Magistrate has recommended to be stricken describe how Plaintiff had to
put in significant time and effort to combat Defendant Mrgdechian's actions and behaviors, which
threatened to destroy the profitability of the band" and "outline Plaintiffs time and effort expended
to turn the band from a politically divisive tool into a patriotic and popular product." (Id.) Plaintiff
raised a substantially similar argument before Magistrate Judge Pitman. (Mem. of Law in Opp'n

5

Rule 12(t) provides, in pertinent part, that "[t]he court may strike from a pleading ... any redundant,
immaterial, impertinent, or scandalous matter" on "motion made by a party ... before responding to the
pleading." Fed. R. Civ. P. 12(f).
Plaintiff does not object to Magistrate Judge Pitman's finding that paragraphs 47--49, 51, 89, 94, 97, 100-03, and
I 05-08 should not be stricken. (Report at 26.) As discussed in greater detail in the Report, Magistrate Judge Pitman
correctly found that the allegations in those paragraphs are not prejudicial and are relevant to band marketing,
business and decision-making, Plaintiff's departure from the band and its aftermath, and Plaintiff's authorship of a
particular work. (id. at 26-27 .)

6

6

to Mot. to Strike, ECF No. 29, at 5-6 (asserting that the challenged paragraphs "outline[] much of
the efforts that Mr. Bray undertook ... to turn the band into a profitable enterprise," which
included "protecting the band from being damaged by Mr. Mgrdechian's activities").)
Accordingly, this Court need only review this aspect of the Report for clear error. Stone, 2018
WL 1581993, at *3. But even on de novo review, Plaintiffs objection has no merit.
As to the allegations concerning Mrgdechian' s political beliefs, the three paragraphs that
Magistrate Judge Pitman found should be stricken in their entirety describe books authored by
Mrgdechian and do not mention Plaintiff. (See Am. Compl. ,1,127-29.) Likewise, the portions of
several paragraphs that Magistrate Judge Pitman found should be partially stricken are those that
use "terms like 'divisive,' 'hateful,' 'alt-right,' 'extremist,' and similar language to refer to
Mrgdechian and his political beliefs." (Report at 25 (citing Am. Compl. ,1,14, 26, 30, 31, 35, 44,

50, & 63) (emphasis added).) The paragraph discussing other litigation that Magistrate Judge
Pitman found should be stricken also contains no mention of Plaintiff. (See Am. Compl. ,191.)
Because these allegations "have no bearing on the parties' claims or defenses" and "will likely be
prejudicial," they are stricken. Hunter, 2017 WL 5513636, at *9.
Several of the paragraphs discussing alleged sexual misbehavior and drug use, like the
other categories of paragraphs discussed above, refer only to Mrgdechian. (Am. Comp 1. ,1,1 72,
76, 78-80, 86, 88.) Other paragraphs mention Plaintiff, but do not refer to any actions that Plaintiff
took in response to Mr. Mrgdechian's alleged behaviors. (Id. ,1,177, 81-82, 84-85.) To the extent
that some paragraphs do mention actions that Plaintiff took, their descriptions of the impact that
Plaintiffs actions had on the reputation or profitability of the band are vague and general. (See,
e.g., id. ,1 73 ("Mr. Bray was constantly doing damage control to counteract Mr. Mrgedian' s

outrageous behavior."); see also id. ,1,174-75, 83, 87.) Even if these paragraphs are "[a]rguably

7

relevant," their potential for prejudice warrants granting the motion to strike. Eaton, 1997 WL
7670, at *5.

V.

DEFENDANTS' REQUEST FOR ATTORNEYS' FEES IS DENIED

In connection with both the motion to strike and the motion to dismiss, Defendants seek an
award of attorneys' fees and costs. (See Report at 27.) Magistrate Judge Pitman correctly found
that Defendants' request for attorneys' fees and costs with respect to the motion to dismiss should
be denied as premature, because dismissal of the amended complaint with leave to amend does not
qualify Defendants as "prevailing parties" for purposes of the Copyright Act. 7 (See Report at 28
(citations omitted)); see also Ritani, LLC v. Ag~jayan, 970 F. Supp. 2d 232, 265-66 (S.D.N.Y.
2013) (noting that defendants are not "prevailing parties" when "a plaintiff remains free to pursue
his claims ... because it remains to be seen which party will, in fact, prevail on the merits")
(quoting Dattner v. Conagra Foods, Inc., 458 F.3d 98, 103 (2d Cir. 2006)).
Magistrate Judge Pitman also correctly found that an award of attorneys' fees and costs is
not warranted with respect to the motion to strike. (Id at 29.) As explained in the Report,
Defendants' allegations do not contain facts characterized by the requisite "high degree of
specificity" necessary to establish bad faith, and Defendants' motion was only partially successful.

(Id at 28-29 (quoting Miltex Indus. Corp. v. Jacquard Lace Co., 55 F.3d 34, 38 (2d Cir. 1995).)
Plaintiff does not object to Magistrate Judge Pitman's findings regarding attorneys' fees.

7

The pertinent provision of the Copyright Act states, in part, that "[i]n any civil action under this title, the
court in its discretion may allow the recovery of full costs by or against any party" and "may also award a
reasonable attorney's fee to the prevailing party as part of the costs." 17 U .S.C. § 505.

8

VI.

CONCLUSION

Plaintiffs objections are overruled, and the Report is ADOPTED in full. Defendants'
motion to dismiss for failure to state a claim, (ECF No. 21), is GRANTED. 8 Defendants' motion
to strike, (ECF No. 23), is GRANTED in part and DENIED in part.

Dated: New York, New York
February 11, 2019

SO ORDERED.

8

Plaintiff may seek leave to file an amended pleading by letter application with a proposed amended
complaint within thirty days, if such amendment would not be futile.
9