Broadcast Music Inc et al v. Z's Club LLC et al

Filing 20

ORDER denying defendant Vinson's 16 motion to dismiss...see order for specifics. Signed by Honorable Joe Heaton on 4/25/2016. (cla)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
BROADCAST MUSIC, INC., et al.,
Plaintiffs,
vs.
Z’S CLUB, LLC d/b/a/ Z’S CLUB, et al.
Defendants.

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NO. CIV-16-0116-HE

ORDER
The plaintiffs in this action have sued defendants for copyright infringement.
Broadcast Music, Inc. (“BMI”) owns the right to license the public performance rights to
certain copyrighted musical compositions. The rest of the plaintiffs are the owners of the
copyrighted songs, which they claim were publicly performed without authorization at Z’s
Club (the “Club”), an establishment owned by defendant Z’s Club, LLC. In addition to Z’s
Club, LLC, plaintiffs have sued its present or past owners, Anthony Paul Vinson and Travis
Reed. Defendant Vinson has filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).
When considering whether a plaintiff’s claim should be dismissed under Rule
12(b)(6), the court accepts all well-pleaded factual allegations as true and views them in the
light most favorable to the plaintiff as the nonmoving party. S.E.C. v. Shields, 744 F.3d 633,
640 (10th Cir. 2014). All that is required is “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The complaint must, though,
contain “enough facts to state a claim to relief that is plausible on its face” and “raise a right
to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 555

(2007). “‘A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.’” Shields, 744 F.3d at 640 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Considering the complaint under this standard, the court concludes that defendant Vinson’s
motion should be denied.
Plaintiffs allege in the amended complaint that Z’s Club publicly performs their
copyrighted musical compositions without a license. They claim the club has continued the
infringement even though BMI allegedly has repeatedly contacted defendants since January
2012, “in an effort to educate Defendants as to their obligations under the Copyright Act with
respect to the necessity of purchasing a license for the public performance of musical
compositions in the BMI repertoire.” Doc. #6, p. 4. Plaintiffs allege that defendant Vinson
at all relevant times owned Z’s Club, LLC, had the right and ability to supervise the activities
of the limited liability company, and had a direct financial interest in, and was responsible
for the operation and management of, both the limited liability company and the Club.
Vinson claims those allegations are insufficient to hold him individually liable for the
activities of Z’s Club, LLC because of its corporation-like status under Oklahoma law. He
admits that he owns Z’s Club, LLC, having purchased it with his wife from Travis Reed and
Ronald Herring on September 5, 2012. However, he asserts that under 18 Okla. Stat. §
2022, “[a] person who is a member or manager, or both, of a limited liability company is not
liable for the obligations of a limited liability company solely by reason of being such
member or manager or both.” He also claims that under 18 Okla. Stat. § 2016(4) he is
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shielded by the “business judgment rule” from personal liability for any action or inaction
while acting as a manager of Z’s Club.
Plaintiffs allegations, though sparse, are sufficient to state a claim against defendant
Vinson for vicarious copyright infringement. They allege that copyrighted musical
compositions were publicly performed at Z’s Club and “pleaded specific facts to raise a
plausible inference that [Vinson] exercised control over and financially benefitted from the
performance venue.” Range Rd. Music, Inc. v. E. Coast Foods, Inc., 668 F.3d 1148, 1153
(9th Cir. 2012). As the court explained in Broadcast Music, Inc. v. Meadowlake, Ltd., 754
F.3d 353 (6th Cir. 2014), “[i]n interpreting the Copyright Act against its common law
background, . . . courts have developed a handful of doctrines that make people liable for
copyright infringement committed by others.” Id. at 354. A defendant becomes liable under
one of these doctrines “‘by profiting from [the] infringement while declining to exercise a
right to stop or limit it.’” (quoting Metro–Goldwyn–Mayer Studios, Inc. v. Grokster, 545
U.S. 913, 930,(2005)). The fact that Vinson owns Z’s Club through a limited liability
company may make a difference, as it “may affect whether [he] satisfies the test for vicarious
liability in the first place.” Id. at 355. However, “the classification of his business does not
(at least in general) exempt him from liability.” Id. “[I]t does not . . . matter whether
[Oklahoma’s] laws on limited liability companies would make Roy personally liable for
wrongs committed by or at his [club].” Id.
Whether Vinson is shielded by the business judgment rule from personal liability for
copyright infringement presents a factual dispute that cannot be resolved on a motion to
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dismiss. Under the facts pleaded in the complaint, he would not be entitled to claim that the
infringement resulted from an honest error in judgment when BMI, since January 2012,
repeatedly warned defendants about the alleged infringement. Doc. #6, p. 4.
Plaintiffs have sufficiently pleaded a claim against defendant Vinson for copyright
infringement based on vicarious liability. Accordingly, defendant Vinson’s motion to
dismiss [Doc. #16] is DENIED.
IT IS SO ORDERED.
Dated this 25th day of April, 2016.

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