McKenzie-Morris v. V.P. Records Retail Outlet, Inc.

District Court, S.D. New York·Decided August 13, 2023·No. 1:22-cv-01138·Unknown

Opinion

USDC SDNY DOCUMENT UNITED STATES DISTRICT COURT ELECTRONICALLY FILED SOUTHERN DISTRICT OF NEW YORK DOC #: _________________ ------------------------------------------------------------------X DATE FILED: 8/13/2023 SHAUNA MCKENZIE-MORRIS, : : Plaintiff, : : 1:22-cv-1138-GHW -against- : : MEMORANDUM OPINION V.P. RECORDS RETAIL OUTLET, INC., et al., : AND ORDER : Defendants. : : ---------------------------------------------------------------- X GREGORY H. WOODS, United States District Judge: I. INTRODUCTION This order and opinion resolves a second partial motion to dismiss filed by Defendants— various entities related to VP Records and Greensleeves Publishing, Ltd.—seeking to narrow a case brought by Plaintiff Shauna McKenzie-Morris, a singer-songwriter better known by her performing name “Etana.” Plaintiff, now proceeding pro se, brings contract-based, copyright, fraud, and accounting causes of action. As they did in their prior motion, Defendants move to dismiss all of Plaintiff’s non-contract claims; they also now move to dismiss part of a contract-based cause of action that they contend represents a new claim. Because—construing Plaintiff’s active complaint liberally in line with her pro se status—her new contract-breach allegations constitute part of a claim rather than a standalone claim, the Court will not dismiss those allegations. But because Plaintiff’s copyright and fraud claims are time-barred, and her accounting claim is preempted, those claims will be dismissed. Defendants’ motion to dismiss is thus GRANTED IN PART. II. BACKGROUND1 a. Facts Plaintiff Shauna McKenzie-Morris, professionally known as Etana, is a Jamaican reggae artist. Dkt. No. 103 (Third Amended Complaint, or “TAC”) ¶ 1. Since her first commercial release in 2006, she has sold millions of records worldwide. Id. ¶ 2. She has had a song “certified gold,” is the first female artist to receive two Grammy nominations in the Reggae album category, and two of

her albums have topped the Billboard Reggae charts. Id.; see also id. ¶¶ 27–31 (further describing McKenzie-Morris’s background and success). Defendant VP Records—the collective name for defendants VP Records Retail Outlet, V.P. Music Group, V.P. Record Distributors, VP Records of Brooklyn, and STB Music—is the largest reggae label, distributor, and publisher in the world. Id. ¶ 47. Defendant Greensleeves Publishing, Ltd. (“GPL” or “Greensleeves,” and together with VP Records, “Defendants”), formerly a British record label known as Greensleeves Records, was acquired and renamed by VP Records in February 2008. Id. ¶¶ 48–49. From 2007–2014, Plaintiff entered into several contracts with Defendants that form the foundation of this litigation. Id. ¶ 2. The parties’ formal relationship began in May 2007, when Plaintiff signed an exclusive recording agreement with VP Records for the delivery of four albums. Id. ¶ 55; see id. Ex. G (the “2007 Recording Agreement”). Under that agreement, VP Records had the responsibility to both

account for and pay royalties to McKenzie-Morris for sales of the albums delivered under the contract. See id. ¶¶ 56–57 (setting out the contract’s terms in detail). The agreement was structured

1 The facts are drawn from Plaintiff’s third amended complaint. Dkt. No. 103 (“TAC”). For this motion, the Court must accept as true the facts alleged in the amended complaint. See, e.g., Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). But “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In addition, because Plaintiff is proceeding pro se, the Court “may consider” facts “taken from [Plaintiff’s] pro se opposition to the motion to dismiss,” and has done so in certain instances. Williams v. Corr. Officer Priatno, 829 F.3d 118, 120 n.1 (2d Cir. 2016). Finally, motions filed by pro se litigants are liberally construed and interpreted “to raise the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006). so that VP Records was required to pay Plaintiff royalties at agreed-upon rates in excess of (1) what VP Records initially provided Plaintiff as an advance on royalties, and (2) any other costs or expenses incurred by VP Records in connection with the albums. See id. ¶¶ 59, 71; see also, e.g., id. Ex. G § 6.1 (noting that advances are “charged against and recoupable from any or all royalties accruing to Artist”); id. § 6.2(b)(v) (noting that tour expenses paid by the company “shall constitute Advances recoupable by Company from any and all royalty under this or any other agreement”); id. § 7.6 (“The

terms ‘net receipts’ and ‘net amount received’ and similar terms” in the royalty section of the contract are calculated “after deduction of any costs or expenses or amounts which [VP Records is] obligated to pay to third parties.”); id. § 15.1 (“‘Advance’ shall mean a prepayment of royalties, and shall be charged against and recoupable from any and all record royalties accruing hereunder.”). Between June 2008 and October 2014, Plaintiff delivered the four albums under the 2007 Recording Agreement. Id. ¶¶ 58–68. The albums were successful, with the fourth album—entitled “I Rise”— reaching the top spot on the Billboard Reggae Charts. See id. Upon the delivery of the fourth album, Plaintiff had fully performed under the Agreement, which was then concluded. Id. ¶ 68. Plaintiff alleges, however, that despite her performance and VP Records having recouped its advance and any expenses associated with the albums, VP Records has failed to pay royalties in connection with the albums since March 31, 2020. Id. ¶¶ 71–72. After the release of her first album (entitled “The Strong One”) in June 2008, Plaintiff

entered into a short form “deal memo” with GPL (the “GPL Deal Memo”) roughly a month later. Id. ¶¶ 58, 74; see id. Ex. D. That agreement was then formalized through an agreement (the “GPL Songwriter Agreement”). Id. ¶¶ 76–77; see id. Ex. E. Under the GPL Songwriter Agreement, GPL was given rights and interests in Plaintiff’s musical compositions that she had previously written or that she wrote during the five-year term of the agreement. See id. Ex. E § 3.1. Similar to VP Records’ responsibilities under the VP Recording Agreement, under the GPL Songwriter Agreement, GPL had the responsibility to account for and pay royalties to Plaintiff. Id. ¶¶ 78–80. And like the VP Recording Agreement, the GPL Songwriter Agreement was structured so that once GPL recouped the money that it had paid as an advance on royalties and any expenses incurred in executing the agreement, Plaintiff was entitled to royalty payments. Id. ¶¶ 84, 87–88; see id. Ex. E § 8 (noting that royalties should be paid “after deducting any and all unrecouped advances and chargeable costs”). Plaintiff alleges, however, that despite her performance and the fact that GPL

recouped all of its expenses, GPL has failed to fully pay her royalties under the Songwriter Agreement. Id. ¶¶ 87, 91. Plaintiff also raises several other issues with this contract, the first of which relates to the relationship between VP Records and GPL. Plaintiff alleges that, at the time she negotiated the GPL Deal Memo and Songwriter Agreement, she was “unwilling[ ] to have [another] Recording and Publishing agreement with” VP Records. Id. ¶ 73; see also id. (noting that she turned down a publishing agreement with VP Records’ affiliate STB Music in May 2008, and arguing that this demonstrates her unwillingness to resign with VP Records). While GPL was acquired by VP Records in February 2008, id.

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