Harmon v. Mosley

• Court: District Court, S.D. New York
• Decided: November 21, 2024
• Docket: 1:23-cv-04225
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Leslie Jerome Harmon, et al., 23-CV-04225 (JHR) (RFT) PlainAffs, -against- ORDER REGARDING MOTION FOR RECONSIDERATION

Timothy Zachary (Zedd) Mosley, et al., Defendants.

ROBYN F. TARNOFSKY, United States Magistrate Judge:

Pending before me is PlainAffs’ moAon for reconsideraAon of my order of September 11, 2024, which granted Defendants’ and Relief Defendants’ moAon for a protecAve order (ECF64) and denied PlainAff’s cross-moAon to compel discovery (ECF 71).1 (See ECF 86, Recons. Mot.; ECF 87, Memo. in Supp. of Recons. Mot.; ECF 90, Am. Memo. in Supp. of Recons. Mot.) I have carefully considered PlainAffs’ submissions as well as Defendants’ and Relief Defendants’ opposiAon (ECF 96, Memo. in Opp’n to Recons. Mot.), and for the reasons set forth below, the reconsideraAon moAon is DENIED. BACKGROUND I. The Complaint On May 22, 2023, PlainAffs filed their complaint against Defendants (the “Complaint”), alleging claims for breach of contract, unjust enrichment, conversion, breach of the implied

1 PlainAffs name as Defendants Timothy Zachary (“Zedd”) Mosley, Timbaland ProducAons, Inc., Timbaland ProducAons, Mosley Music Group, and Mono Music Group. The Complaint also discusses “Relief Defendants,” which consist of Hipgnosis Songs Fund Ltd., Hipgnosis Songs Group, Hipgnosis Songs Group, LLC, and Hipgnosis Funds. covenant of good faith and fair dealing, and breach of fiduciary duty, and seeking a declaratory judgment that Defendants breached contracts between them and PlainAffs, an injuncAon prevenAng Relief Defendants from distribuAng any royalAes unAl the obligaAons owed to

PlainAffs have been met, imposiAon of a construcAve trust on property in Relief Defendants’ possession that is traceable to Defendants’ wrongful acts, and an accounAng. (See generally ECF 1, Compl.) The claims arise out of (1) a contract between PlainAffs and Defendants that was amended by wrifen agreement on April 11, 2013 (the “Mosley-Harmon Contract”), and (2) a seflement agreement from August 2020 between PlainAffs and Defendants (the “Seflement Agreement”), which parAally resolved a dispute over Defendants’ failure to account and pay

royalAes to PlainAffs for musical services performed by PlainAffs for Defendants on certain musical recordings beginning in 2007 (the “Recordings”), as required by the Mosley-Harmon Contract. (See id. ¶¶ 35-39.) Defendants transferred their interests in the Recordings, as well as in other recordings, to a corporate affiliate of Relief Defendants in or around 2019 (the “Transfer”). (See ECF 66, Memo. in Supp. of Mot. for ProtecAve Order at 2.) II. The MoFon for a ProtecFve Order and Cross-MoFon To Compel

On August 16, 2024, Defendants and Relief Defendants filed a moAon for a protecAve order, seeking to prevent PlainAffs from obtaining discovery about the Transfer. (See ECF 64, Mot. for ProtecAve Order; ECF 65, Decl. in Supp. of Mot. for ProtecAve Order; ECF 66, Memo. in Supp. of Mot. for ProtecAve Order.) Defendants and Relief Defendants argued that the “sole issue in the acAon is whether PlainAffs are currently due and owed any royalAes under the

Seflement Agreement, and if so, how much,” which can be resolved only “by obtaining and analyzing royalty statements created and maintained by third-party record labels.” (ECF 66, Memo. in Supp. of Mot. for ProtecAve Order at 1-2.) Defendants and Relief Defendants took the posiAon that the documents about the Transfer are irrelevant to the claims in the Complaint, parAcularly because the Mosley-Harmon Contract provides that Defendants may sell their

interests in the Recordings at their sole discreAon. (See id. at 5.) Defendants and Relief Defendants concluded that requiring them to produce documents relaAng to the Transfer would be disproporAonate to the needs of the case. (See id. at 2-3.) On August 23, 2024, PlainAffs filed a memorandum of law in opposiAon to the moAon for a protecAve order (ECF 68), supported by two declaraAons (ECF 69, 70), as well as a cross moAon to compel the discovery at issue in the moAon for a protecAve order (ECF 71); PlainAffs’

cross-moAon was supported by two declaraAons (ECF 73, 74), as well as a memorandum of law (ECF 72). PlainAffs argued that they are “owed semi-annual royalty accounAng statements and payment of any royalAes due,” and that “[i]t appears from the facts of the Hipgnosis sale that Timbaland has torAously converted J-ROC’s royalAes and assets, without noAce or granAng J- ROC the opportunity to protect his royalty stream . . . by virtue of Timbaland’s sale of the enAre

royalty stream and all afendant administraAon rights to Hipgnosis.” (ECF 68, Memo. of Law in Opp’n to Mot. for ProtecAve Order at 6-7.) PlainAffs contended that the sale to Hipgnosis deprived them of their right to receive accounAngs, their right to receive payment, and their right to sell their porAon of the royalty stream to a third party. (See id. at 7.) PlainAffs also took the posiAon that, in light of Defendants’ asserAon that they could not obtain the record company royalty statements needed to determine the amounts, if any, owed to PlainAffs, the

only way to assess those amounts owed would be through an analysis of the price paid by Hipgnosis for Defendants’ interests in the Recordings and “Hipgnosis’ almost certain detailed pre-sale valuaAon of the songs.” (Id.) I held a conference on September 11, 2024, at which the parAes addressed this

discovery dispute as well as other discovery-related mafers. The conference lasted approximately 53 minutes, and PlainAffs had ample opportunity, aner I indicated an intenAon to grant the protecAve order, to make their arguments why I should not do so and why I should instead grant their cross-moAon to compel discovery. Aner the parAes made their arguments, I ruled that the extremely broad discovery being sought by PlainAffs was not relevant to the claims in the Complaint and was not proporAonal to the needs of the case. (See ECF 92, Tr. at

25:11-17.) My text order stated, in relevant part, “[f]or the reasons stated on the record and set forth in Defendants’ papers in support of their moAon for a protecAve order (ECF 64), the moAon for a protecAve order is GRANTED.” III. The MoFons for ReconsideraFon and To Vacate On September 25, 2024, PlainAffs filed a moAon for reconsideraAon (ECF 86) of my

September 11 order, supported by a memorandum of law (ECF 87). On the same day, PlainAffs filed a moAon to vacate (ECF 88) my September 11 order, supported by a memorandum of law (ECF 89), as well as amended memoranda of law in support of the moAon for reconsideraAon (ECF 90) and to vacate (ECF 91). In support of their reconsideraAon moAon, PlainAffs argue that my September 11 order is “clearly erroneous or contrary to law.” (ECF 90, Am. Memo. in Supp. of Recons. Mot. at 7-8.)

They contend that discovery concerning the Transfer is relevant to the following quesAons: 1. Did Mosley disclose to Hipgnosis his accounAng and payment obligaAons to PlainAff Harmon and if so, did Hipgnosis assume those obligaAons; 2. What were the representaAons and warranAes Mosley made to Hipgnosis in the wrifen document and how do they affect Harmon’s rights? 3. Did Mosley retain the obligaAon to account and then pay Harmon and if so on what basis? 4. Did Hipgnosis assume the duty to account and then pay Harmon? 5. What porAon of his producer income stream did Mosley sell to Hipgnosis, and did it include all of Harmon’s share; 6. How much did Mosley get from Hipgnosis and how was it allocated among the songs Harmon co-produced and ones he had no part in? 7. Did Hipgnosis do any due diligence as to Mosley’s obligaAons to Harmon and if so, what was the intenAon between Mosley and Hipgnosis in that regard? 8. Did the agreement between Hipgnosis and Mosley provide for a manner for Mosley to have informaAon necessary to account to Harmon going forward and if now [sic] why not? (Id. at 2.) PlainAffs insist that the sale contract itself, as well as correspondence about the sale, would shed light on these quesAons, and that the discovery sought would also be relevant to the valuaAon of Harmon’s royalty interests. (See id.) PlainAffs go on to argue that I misapprehended the burden of proof in connecAon with determining the royalty amounts owed to them, which they contend led to errors in my analysis of the moAon for a protecAve order and the cross-moAon to compel (see id. at 8-9); that Defendants’ counsel opened the door to discovery through his declaraAon in support of the protecAve order (see id. at 9); and that Defendants and Relief Defendants failed to demonstrate that the materials sought were either confidenAal or would be burdensome to produce (see id. at 10). On October 2, 2024, Defendants and Relief Defendants filed a memorandum of law in opposiAon to the moAon for reconsideraAon (ECF 96) and a memorandum of law in opposiAon to the moAon to vacate (ECF 97). Defendants and Relief Defendants argue that, while moAons for reconsideraAon may be granted when the court overlooked a controlling decision or other informaAon, such moAons should not be granted when the movants seek to reliAgate an issue that was previously decided – which, Defendants and Relief Defendants contend, is what

PlainAffs here seek to do. (See ECF 96, Memo. in Opp’n to Recons. Mot. at 7-8.) Defendants and Relief Defendants then explain why they believe the discovery sought by PlainAffs is not relevant to this case. They assert that the Harmon-Mosley Contract makes clear that PlainAffs may be enAtled to certain royalty payments based on a formula, but that PlainAffs have no interest in the underlying Recordings. (See id. at 8-9.) They respond PlainAffs’ arguments about why the discovery sought is relevant, poinAng out that they do not dispute

that Defendants are obligated to make all royalty payments due under the formula. (See id. at 10-12.) They point out that I did not misapprehend which parAes bear the burden of demonstraAng an enAtlement to royalAes when I declined to extend the discovery deadline to the extent requested by PlainAffs in light of PlainAffs’ decision not to seek producAon of royalty statements from third parAes unAl a month before the discovery deadline. (See id. at 12-13.)

And they explain that they had no obligaAon to demonstrate that complying with PlainAffs’ discovery requests would be burdensome, because PlainAffs failed to show that the discovery sought was relevant. (See id. at 13-14.) On November 12, 2024, PlainAffs requested that the moAon to vacate be stayed or held in abeyance pending my determinaAon of their reconsideraAon moAon. (See ECF 121, 122.) LEGAL STANDARD FOR A RECONSIDERATION MOTION

Rules 59(e) and 60(b) of the Federal Rules of Civil Procedure and Local Rule 6.3 govern reconsideration motions. Reconsideration is “an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources.” In re Health Mgmt. Sys., Inc. Sec. Litig., 113 F. Supp. 2d 613, 614 (S.D.N.Y. 2000).2 These rules aim to prevent a losing party from “plugging the gaps of a lost motion with additional maters.” S.E.C. v.

Ashbury Cap. Partners, L.P., No. 00-CV-7898 (RCC), 2001 WL 604044, at *1 (S.D.N.Y. May 31, 2001). Courts must “narrowly construe and strictly apply Local Rule 6.3, so as to avoid duplicative rulings on previously considered issues, and to prevent the rule from being used as a substitute for appealing a final judgment.” Schoolcraft v. City of New York, 298 F.R.D. 134, 137 (S.D.N.Y. 2014). The Second Circuit has therefore held that the standard for granting a reconsideration

motion “is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked – matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). Reconsideration is justified where the moving party demonstrates “an intervening change of controlling law, the availability of new evidence, or the

need to correct a clear error or prevent manifest injustice.” Henderson v. Metro. Bank & Tr. Co., 502 F. Supp. 2d 372, 376 (S.D.N.Y. 2007). A motion for reconsideration should be denied “where the moving party seeks solely to relitigate an issue already decided.” Shrader, 70 F.3d at 257; see also Delgado v. Donald J. Trump for President, Inc., No. 19-CV-11764 (AT) (KHP), 2024 WL 2882095, at *1 (S.D.N.Y. June 7, 2024) (denying motion for reconsideration of discovery order).

2 Unless indicated otherwise, internal quotaAon marks and citaAons are omifed. DISCUSSION Plaintiffs’ reconsideration motion rehashes matters that I considered and ruled on in

connection with the motion for a protective order and cross-motion to compel. In deciding those motions, I concluded that Plaintiffs had not shown that the extremely broad discovery sought by Plaintiffs about the Transfer was relevant to their claims in this case. Plaintiffs’ recycled arguments do not convince me that my relevance assessment was contrary to law. While “[t]he scope of relevance under Rule 26 is broader than under the Federal Rules of Evidence,” such that “parties can obtain information in discovery that is not necessarily

admissible at trial,” the scope is not unlimited. Kaiser Aluminum Warrick, LLC v. U.S Magnesium, LLC., No. 22-CV-3105 (JGK) (KHP), 2023 WL 2024620, at *1 (S.D.N.Y. Feb. 15, 2023) (denying discovery of the defendant’s financial condition in a breach of contract case in which the defendant interposed a force majeure defense because “financial difficulties do not typically justify invocation of force majeure”). Moreover, “[t]he party seeking discovery bears the burden of initially showing relevance.” Mandell v. The Maxon Co., Inc., No. 06-CV-0460 (RWS),

2007 WL 3022552, at *1 (S.D.N.Y. Oct. 16, 2007). The core question in this lawsuit is whether and if so to what extent Defendants owe royalty payments to Plaintiffs. Information about the Transfer is not relevant to that question, because the Transfer does not affect Plaintiffs’ entitlement to any such payments and Defendants’ obligation to make any such payments. Plaintiffs’ list of questions intended to

demonstrate how the Transfer could be relevant to the issues in this case is unavailing. The questions are largely premised on counsel’s speculation about possible bad acts by Defendants, which does not support a conclusion that the requested discovery is relevant. See, e.g., MG Freesites Ltd. v. Scorpcast, LLC, No. 22-MC-361 (PAE), 2023 WL 2822272, at *5 (S.D.N.Y. Apr. 7, 2023) (declining to order discovery when the movant postulated that “there might be some alternative explanation” for the terminated business relationship that could be relevant to the

litigation, finding that the argument was “entirely speculative” and therefore provided “no concrete basis on which to find such discovery [was] relevant to any claim or defense”); In re Al- Attabi, No. 21-MC-207 (VSB) (RWL), 2022 WL 229784, at *10 (S.D.N.Y. Jan. 26, 2022) (declining to require production of communications where the movant suggested that the communications might be relevant because they could reflect interference with the movant’s discovery efforts, finding that the discovery request was “speculative and the type of fishing

expedition that U.S. discovery rules do not condone”), appeal dismissed sub nom. Al-Attabi v. Bank Audi S.A.L., No. 22-524, 2022 WL 2116043 (2d Cir. May 9, 2022). Additionally, even if Plaintiffs’ speculation were to be borne out, discovery about the Transfer would still not be relevant to the claims in this matter. Plaintiffs suggest that Defendants may not have disclosed to Relief Defendants the accounAng and payment

obligaAons owed by Defendants to PlainAffs, may not have retained those obligaAons, may not have ensured a way for Defendants to meet those obligaAons, may have sold the producer income streams from which the royalty payments are derived, and may have made representaAons and warranAes to Relief Defendants about PlainAffs’ rights, and that Relief Defendants may not have done due diligence on Defendants’ obligaAons to PlainAffs. However, Defendants have never disputed their obligaAons to account and pay royalAes to PlainAffs. In

the absence of any argument by Defendants that they need not meet their accounAng and payment obligaAons to PlainAffs, the quesAons whether Defendants disclosed those obligaAons to Relief Defendants and whether Relief Defendants performed due diligence on those obligaAons are not relevant to PlainAffs’ claims. Similarly, Defendants will have to find a way to meet their obligaAons or compensate PlainAffs for any failure to do so, notwithstanding the sale

of the producer income streams, and so discovery into the procedures Defendants may have put in place to meet those obligaAons is not relevant to PlainAffs’ claims. PlainAffs’ contenAon that informaAon about the purchase price in connecAon with the Transfer is relevant due to Defendants’ and Relief Defendants’ failures to produce the necessary royalty statements also falls short of showing the relevance to the amount of royalAes owed to PlainAffs of the amount of compensaAon Defendants received in connecAon with the Transfer.

Aner the filing of the moAon and cross-moAon, third parAes produced the relevant royalty statements, which will allow the parAes to compute the royalAes, if any, owed to PlainAffs. The compensaAon paid in connecAon with the Transfer included recordings other than the Recordings, and PlainAffs have provided no factual basis for their asserAon that there must have been a recording-by-recording valuaAon of the Recordings in connecAon with the Transfer (see

ECF 68, Memo. of Law in Opp’n to Mot. for ProtecAve Order at 7.) As such, PlainAffs have not established that the purchase price in connecAon with the Transfer is relevant to their claims or damages. Plaintiffs’ other arguments are similarly unpersuasive. My conclusion that the materials sought are irrelevant to Plaintiffs’ claims was not based on a misapprehension about the burden of proof at trial. I made that determination based on the nature of Plaintiffs’ claims and

the discovery sought. To support their argument that I misunderstood the burden, which led me to incorrectly decide the relevance question, Plaintiffs take out of context my explanation why I declined to grant a long extension of the discovery deadlines. (See ECF 90, Memo. in Supp. of Recons. Mot. at 7-8.) In declining to grant the full requested extension, I pointed out that Plaintiffs’ position that they needed the additional time because of third parties’

production delays was a problem of Plaintiffs’ own making, because Plaintiffs had waited to seek royalty statements from third parties until a month before the original discovery deadline. (See ECF 92, Tr. at 30:19-31:1.) Plaintiffs responded that it was Defendants’ obligation to make the royalty statements available. (See id. at 31:3-9.) I explained that Plaintiffs still should have sought the production sooner: notwithstanding Defendants’ obligation to provide those materials, given Defendants’ failure to meet that responsibility, Plaintiffs could not simply sit on

their hands and then expect me to grant a significant extension of the discovery schedule. (See id. at 32:2-7.) And Plaintiffs’ insistence that there was insufficient good cause to issue a protective order, because Defendants and Relief Defendants had failed to demonstrate that the discovery sought was confidential and that production would cause a clearly defined and serious injury

ignores that “the party seeking discovery bears the burden of initially showing relevance.” Mandell, 2007 WL 3022552, at *1. Plaintiffs here did not meet that initial burden, and so Defendants and Relief Defendants had no obligation to make the demonstration demanded by Plaintiffs. CONCLUSION

For the foregoing reasons, Plaintiffs have not met the high bar for granting the extraordinary remedy of reconsideration. Plaintiffs’ request for reconsideration is DENIED. The Clerk of Court is respectfully requested to terminate ECF 86.

DATED: November 21, 2024 New York, NY uy ROBYN F. TARNOFSKY United States Magistrate Judge