Bucciarelli-Tieger v. Victory Records, Inc.

488 F. Supp. 2d 702, 2007 U.S. Dist. LEXIS 15153, 2007 WL 684047
CourtDistrict Court, N.D. Illinois
DecidedMarch 1, 2007
Docket06 C 4258
StatusPublished
Cited by8 cases

This text of 488 F. Supp. 2d 702 (Bucciarelli-Tieger v. Victory Records, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bucciarelli-Tieger v. Victory Records, Inc., 488 F. Supp. 2d 702, 2007 U.S. Dist. LEXIS 15153, 2007 WL 684047 (N.D. Ill. 2007).

Opinion

MEMORANDUM OPINION AND ORDER

MORAN, Senior District Judge.

Plaintiffs, individually and collectively, as Hawthorne Heights (“HH”), a musical group, filed this action on August 7, 2006, against defendants, Victory Records, a record company, its CEO, Anthony Brummel, and the company’s publishing arm, Another Victory, alleging willful copyright and trademark violations; unfair competition, in violation of the Lanham Act; and several state law claims. The complaint also seeks a declaratory judgment as to the nature of the agreement between plaintiffs and defendants. On August 28, 2006, plaintiffs filed a motion pursuant to Federal Rule of Civil Procedure 42(b), to bifurcate the declaratory judgment claim from the others, and for expedited discovery as to that claim. Defendants filed their answer on September 8, 2006, along with several counterclaims. On September 22, 2006, defendants filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(c). Preliminary determinations were made on this motion by Judge Shadur sitting in our stead on October 18, 2006 (see def. mo. for ruling, exh. B) On January 10, 2007, we offered further guidance, without ruling (docket no. 55). Today we rule in full on defendants’ motion, granting it in part and denying it in part.

BACKGROUND

The following facts are taken generally from the pleadings. Where the facts are contested, we draw, where possible, from the exhibits accompanying the pleadings. Plaintiffs are all residents of Ohio and comprise a musical band called Hawthorne Heights. On or about December 11, 2008, HH entered into an agreement with defendants — which was amended on or about April 29, 2004 (collectively referred to as “the agreement”) — for a four-album deal, with irrevocable consecutive options granted to defendants for the second, third and fourth albums. Plaintiffs were to be paid royalties corresponding to album sales, and the agreement included a number of other terms, including territory, publishing, recording advances, recoupable costs, merchandising, touring, and accounting procedures. Pursuant to the agreement, HH delivered both audio and visual records to defendants for two albums which were released on June 8, 2004, and February 28, 2006, respectively. A DVD was released in or about January 2006.

Prior to the release of the second album in February 2006, a member of defendants’ staff sent an e-mail to the street team for plaintiffs’ album. 1 This e-mail encouraged the team members to move plaintiffs’ album to more prominent locations in record stores, and to move a competing artist’s album to less prominent locations — or hid *706 ing copies of such album. On March 1, 2006, the staff member sent another e-mail to the street team telling them the previous e-mail had been a joke.

On August 3, 2006, plaintiffs sent a letter to defendants, purporting to terminate the agreement, including the purported termination of any licenses defendants possessed for plaintiffs’ recordings. In plaintiffs’ letter, they alleged that they were permitted to terminate the agreement and the licenses because defendants had (1) failed to account for certain royalties under the agreement, applied wrong percentages to royalty rates and mis-charged advertising costs; (2) engaged in outrageous conduct by way of the street team e-mail; (3) drafted a “Manifesto” which was falsely attributed to the band, portraying it as in a war with artists in other genres; (4) physically threatened professional music industry figures, as well as HH’s personal manager; (5) damaged HH’s relationship with producers and other industry professionals by failing to account for or pay royalties under the agreement; and (5) intentionally interfered with HH’s relationship with retailers with respect to HH merchandise. Plaintiffs’ letter purported to rescind the agreement. Subsequent to receipt of this letter, defendants continued to manufacture and market plaintiffs’ albums. On August 7, 2006, plaintiff filed the instant action.

Plaintiffs’ complaint alleges that the agreement between plaintiffs and defendants was a non-exclusive agreement for performance, granting defendants a nonexclusive implied license to manufacture and market plaintiffs’ albums, and the use of plaintiffs’ name. Plaintiffs allege that the duty to perform, and the license, were nullified when plaintiffs sent their letter of termination because the agreement and the license were terminable at-will. Alternatively, plaintiffs allege that the agreement and license were non-exclusive, making the license terminable at the will of the licensor. Plaintiffs seek a declaratory judgment with regards to the characterization of the agreement and any licenses found therein. Plaintiffs allege that since the license was terminated, defendants infringed plaintiffs’ copyright and trademark when they continued to market plaintiffs’ albums and use plaintiffs’ name in violation of 17 U.S.C. § 501 et seq. and 15 U.S.C. § 1125(a). Plaintiffs further allege defendants engaged in unfair competition through these same actions, in violation of the Lanham Act. 15 U.S.C. § 1125(a). Plaintiffs also allege a number of state law claims arising out of defendants’ conduct, including the tort of false light, fraud, interference with business relations, rescission and unjust enrichment.

On August 28, 2006, plaintiffs filed a motion to bifurcate claims and expedite discovery with regard to the declaratory judgment claim. Defendants filed their answer and counterclaims on September 8, 2006, and filed their motion to dismiss pursuant to Rule 12(c) on September 22, 2006. Because plaintiffs sought expedited ruling on the declaratory judgment, the motion to dismiss was set before Judge Shadur, sitting in this court’s stead, on October 18, 2006. Judge Shadur orally dismissed Count IX for declaratory judgment to the extent that it was premised upon the agreement being terminable at-will (def. mo. for ruling, exh. B) — he held that a reading of the agreement negated such a finding. He dismissed Counts I and II for copyright and trademark infringement to the extent that they, too, were based on the agreement being terminable at-will. Plaintiffs then filed a motion for reconsideration or clarification on October 31, 2006. On November 7, 2006, Judge Shadur orally clarified his order, stating that he had not dismissed Counts I, II and IX in their entirety, just to the *707 extent they relied on the agreement being terminable at-will (def. mo. to rule, exh. C). He clarified that he was not ruling as to the exclusivity of the agreement or on a termination-for-cause theory.

On January 10, 2007, knowing we would be absent from court during the month of January, we offered guidance to the parties regarding the motion to dismiss, but did not make any substantive rulings (docket no. 55). We did, however, deny plaintiffs’ motion to bifurcate claims and expedite discovery. Id.

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Bluebook (online)
488 F. Supp. 2d 702, 2007 U.S. Dist. LEXIS 15153, 2007 WL 684047, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bucciarelli-tieger-v-victory-records-inc-ilnd-2007.