Latin American Music Co. v. American Society of Composers Authors & Publishers

593 F.3d 95, 93 U.S.P.Q. 2d (BNA) 1599, 2010 U.S. App. LEXIS 2054, 2010 WL 324526
CourtCourt of Appeals for the First Circuit
DecidedJanuary 29, 2010
DocketNo. 08-1498
StatusPublished
Cited by14 cases

This text of 593 F.3d 95 (Latin American Music Co. v. American Society of Composers Authors & Publishers) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Latin American Music Co. v. American Society of Composers Authors & Publishers, 593 F.3d 95, 93 U.S.P.Q. 2d (BNA) 1599, 2010 U.S. App. LEXIS 2054, 2010 WL 324526 (1st Cir. 2010).

Opinion

HOWARD, Circuit Judge.

This dispute involves rights to a single song, “Caballo Viejo.”1 The appellants are the Latin American Music Company (“LAMCO”) and the Asociación de Compositores y Editores de Música Latino Americana (“ACEMLA”).2 The appellee is the American Society of Composers, Authors, and Publishers (“ASCAP”). After a trial, a jury found that the rights belonged to ASCAP. This determination turned on an implicit finding that ASCAP’s predecessor in interest West Side Music Publishing, Inc. (“West Side”), lawfully terminated a 1982 contract that had previously transferred West Side’s rights in Caballo Viejo to the appellants.

The appellants’ primary argument is that the jury was improperly instructed about the manner in which the 1982 contract could be terminated. The appellants also take issue with an additional jury instruction, with the verdict form, and with comments made by ASCAP’s attorney during closing argument.3 We affirm.

[98]*98I. Facts

We provide only the essential facts here.4 In September 1981, Simón Díaz, the composer of Caballo Viejo, granted rights to the song to a predecessor of West Side. West Side, in turn, through a 1982 contract “transferred and ceded” an exclusive license to ACEMLA, LAMCO’s predecessor in interest. The 1982 contract between West Side and ACEMLA, which was formed in New York, was silent with respect to termination. It did not specify a termination date, the conditions under which the exclusive license could be terminated, or the manner in which the license could be terminated.

In 1996, this lack of clarity became a sticking point, as a dispute arose over the copyright. LAMCO filed an action in federal court claiming, among other things, that it owned a copyright in Caballo Viejo under the 1982 contract. ASCAP, which was eventually brought into the case as a defendant, demurred and claimed that it held the copyright, because its predecessor in interest West Side5 had lawfully terminated the 1982 contract. After a remand from this court, see Latin Am. Music Co., 499 F.3d at 38-40, the case proceeded to trial.

At trial, the only evidence that was presented about termination was the videotaped deposition of West Side’s president, Hector Varona. In his deposition, Varona testified that he had verbally terminated the 1982 agreement with ACEMLA. He testified that the verbal termination occurred during a conversation that he had with the president of ACEMLA, Raul Bernard.6

At the close of the evidence, the parties disagreed over whether the court should instruct the jury that Varona’s purported termination of the 1982 contract had to be in writing. LAMCO argued that the federal Copyright Act governed termination of the agreement and that any notice of termination therefore had to be in writing. It further argued that, even if New York state law rather than the Copyright Act governed the termination, the notice of termination still had to be in writing. For its part, ASCAP argued that New York law governed termination and that, under New York law, a contract of an unspecified duration could be terminated upon reasonable notice. In ASCAP’s view, whether Varona’s verbal communication constituted “reasonable notice” was a question for the jury.

The district court ultimately agreed with ASCAP, instructing the jury as follows:

In order for ASCAP to prevail on its declaration of legal rights claim, ASCAP must prove by a preponderance of the evidence that the agreements between West Side Music and LAMCO parties had either expired by their own terms or were terminated by Hector Varona before January 1st, 1992, so that ASCAP and not LAMCO had the rights to license public performances of Caballo Viejo after January the 1st, 1993. And that’s where the dispute is. That’s what you have to look into.
And how is it that you look into those things? You know, a licensing agree[99]*99ment without a specific term may be ended by one party after a reasonable duration and after reasonable notice is given to the other party.

And there are many things you can consider. Obviously one thing that you can consider is whether the development of the transaction, as such, was made in writing or not. You can also consider what kind of letters the parties exchanged as these things developed to figure out what was the intention of them.

You can also consider the written words of the contracts that they signed. You may also consider the conduct of the parties to ascertain if the actions of one party or the other was consistent with the positions they assumed in reference to the termination of the contract at issue here.

Had it been totally black and white, we probably would not be here obviously. It may be better to make it in black and white, but I don’t think that the law requires in the case of a termination of an agreement that it be only in black and white. Better, yes, but not only. And that’s why I say that you have to

look at the whole scenario. You have to look at what was it that the parties did, how was it that they reacted to it, what was it that they—how was it that they conducted themselves in reference to this? And then, out of that, out of that circumstantial evidence, perhaps you can figure out whether indeed it is ASCAP, or it’s the other party, the one entitled to the rights of this song Caballo Viejo.

(emphasis added).

When the court finished instructing the jury, LAMCO again objected to the court’s termination instruction. Again, LAMCO argued that any notice of termination had to be in writing. The court did not budge and the case went to the jury. The jury found in favor of ASCAP. This appeal ensued.

II. Discussion

A. Jury Instructions

LAMCO objects to two instructions given by the district court. We examine each instruction in turn.

1. Termination instruction

a. Which law governs termination?

LAMCO first argues that the district court erred when it applied New York law, rather than the Copyright Act, when instructing the jury on whether there had been an effective termination of the 1982 contract. We review this claim of instructional error de novo. SEC v. Happ, 392 F.3d 12, 28 (1st Cir.2004). A jury instruction is erroneous if it is misleading, confusing, or incorrect as a matter of law. Davignon v. Clemmey, 322 F.3d 1, 9 (1st Cir.2003).

Ordinarily, unless a contract provides otherwise, it is governed by the law of the state in which it was formed. See U.S. Trust Co. v. New Jersey, 431 U.S. 1, 19 n. 17, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977); see also Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass’n, 499 U.S. 117, 130, 111 S.Ct. 1156, 113 L.Ed.2d 95 (1991).

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593 F.3d 95, 93 U.S.P.Q. 2d (BNA) 1599, 2010 U.S. App. LEXIS 2054, 2010 WL 324526, Counsel Stack Legal Research, https://law.counselstack.com/opinion/latin-american-music-co-v-american-society-of-composers-authors-ca1-2010.