Supreme Court, New York County, New York. Tony SILVESTER, Lester Chambers, Carl Gardner, Bill Pinkney, Individually and on Behalf of all oth-
ers similarly situated, Plaintiffs, v.
TIME WARNER, INC., Universal Music Group, Inc., Sony Music Entertainment, Inc., BMG Enter-
tainment, Inc., Defendants. June 20, 2003.
Class of individual recording artists brought action against recording companies and their predecessors for breach of recording contracts by the companies’ digitalization of the recordings without protecting the artists’ rights to royalties and licensing fees and for copyright infringement. Recording companies moved to dismiss. The Supreme Court, New York County, Helen E. Freedman, J., held that: (1) con- tracts between artists and companies were not breached by the companies’ digitalization of the artists’ recordings; (2) cause of action for breach of fiduciary duty accrued when digital audio files of the artists’ recordings on compact discs were first released and sold; (3) artists failed to state a claim for breach of covenant of good faith and fair deal- ing; (4) cause of action for negligence accrued when compact discs containing the digital audio files were first created or distributed; and (5) artists were precluded from bringing copyright claim in state court.
Motion granted.
West Headnotes
[1] Pretrial Procedure 307A 681
307A Pretrial Procedure 307AIII Dismissal
307AIII(B) Involuntary Dismissal 307AIII(B)6 Proceedings and Effect
307Ak681 k. Matters Considered in General. Most Cited Cases
Pretrial Procedure 307A 682.1
307A Pretrial Procedure 307AIII Dismissal
307AIII(B) Involuntary Dismissal 307AIII(B)6 Proceedings and Effect
307Ak682 Evidence 307Ak682.1 k. In General. Most
Cited Cases In determining a motion to dismiss, the court’s role is ordinarily limited to determining whether or not the complaint states a cause of action; however, where documentary evidence and undisputed facts negate or dispose of the claims in the complaint or conclusively establish a defense, dismissal may be granted on ground of defense founded upon docu- mentary evidence. McKinney’s CPLR 3211(a), par. 1.
[2] Copyrights and Intellectual Property 99 107
99 Copyrights and Intellectual Property 99II Intellectual Property
99k107 k. Contracts. Most Cited Cases Contracts between recording artists and recording companies which provided that the companies would have unrestricted right to manufacture, use, distribute, and sell recordings “by any method now known, or hereafter to become known,” clearly an- ticipated the development of new technologies and were not breached by the companies’ digitalization of the artists’ analog recordings.
[3] Copyrights and Intellectual Property 99 107
99 Copyrights and Intellectual Property 99II Intellectual Property
99k107 k. Contracts. Most Cited Cases Agreements between recording artists’ union and recording companies, which governed the minimum wage and fee compensation terms for artists, had no affect on contracts conveying artists’ property rights
95II(A) General Rules of Construction 95k168 k. Terms Implied as Part of Con-
tract. Most Cited Cases Every contract contains an implied covenant of good faith and fair dealing; however, such covenant does not impose any obligation upon a party to the contract beyond what the explicit terms of the con- tract provide.
[8] Contracts 95 312(1)
95 Contracts 95V Performance or Breach
95k312 Acts or Omissions Constituting Breach in General
95k312(1) k. In General. Most Cited Cases Where no party has acted in a way to prevent the performance of or the rights under the contract, a claim for breach of covenant of good faith and fair dealing must fail.
[9] Limitation of Actions 241 21(1)
241 Limitation of Actions 241I Statutes of Limitation
241I(B) Limitations Applicable to Particular Actions
241k21 Contracts in General 241k21(1) k. In General. Most Cited
Cases Breach of implied covenants of good faith and fair dealing are subject to a six year statute of limita- tion. McKinney’s CPLR 213.
[10] Copyrights and Intellectual Property 99 107ailed to state a claim for breach of covenant of good faith and fair dealing against recording companies related to companies’ digital- ization of the artists’ analog recordings, where artists did not allege that the companies intention- ally interfered with their rights to obtain royalties under the contracts.
[11] Torts 379 114
379 Torts 379I In General
379k110 Contracts in Relation to Torts 379k114 k. Duty, Breach, or Wrong Inde-
pendent of Contract. Most Cited Cases (Formerly 379k12)
A simple breach of contract is not to be considered a tort unless a legal duty independent of the con- tract itself has been violated.
[12] Limitation of Actions 241 55(5)
241 Limitation of Actions 241II Computation of Period of Limitation
241II(A) Accrual of Right of Action or De- fense
241k55 Torts 241k55(5) k. Injuries to Property in
General. Most Cited Cases Recording artists’ cause of action for negligence against recording companies for the creation of di- gital audio files accrued, and three-year statute of limitations period began to run, when compact discs containing the digital audio files were first created or distributed, not when production of digit- al audio files permitted piracy to occur in the first instance. McKinney’s CPLR 214, subd. 6.
[13] Courts 106 489(3)
106 Courts 106VII Concurrent and Conflicting Jurisdiction
106VII(B) State Courts and United States
Courts 106k489 Exclusive or Concurrent Juris-
diction 106k489(3) k. Suits Relating to Inven-
tions or Patent Rights. Most Cited Cases Recording artists could not enforce their rights un- der copyright laws against recording companies in state court; rights under copyright laws could only be enforced in federal courts. 17 U.S.C.A. § 501(b); 28 U.S.C.A. § 1338(a). **913 Cravath, Swaine & Moore, New York City ( Katherine B. Forrest of counsel), for Time Warner, Inc., defendant.
Pryor Cashman Sherman & Flynn, New York City ( Andrew H. Bart and Suzan Arden of counsel), and Mitchell, Silberberg & Knupp, Los Angeles, Cali- fornia (Russell J. Frackman and Jeffrey D. Gold- man of counsel), for Universal Music Group, Inc., defendant.
Paul, Weiss, Rifkind, Wharton & Garrison, New York City (Jay Cohen of counsel), for Sony Music Entertainment, Inc., defendant.
Proskauer Rose LLP, New York City (Charles B. Ortner of counsel), for BMG Entertainment, Inc., defendant.
Wolf Haldenstein Adler Freeman & Herz LLP, New York City (Mark Rifkin and Fred Isquith of counsel), and Feldman **914 & Rifkin, LLP, Jenk- intown, Pennsylvania (Mark C. Rifkin of counsel), for plaintiffs.
HELEN E. FREEDMAN, J.
*252 This is a motion pursuant to CPLR 3211 (a)(1),(a)(2) and (a)(7) to dismiss the Complaint and the claims set forth therein based on document- ary evidence and on jurisdictional and statutory grounds, including time limitations. As class rep- resentatives, plaintiffs seek to recover a share of the proceeds of defendants’ successful prosecution of the RIAA v. MP3.com litigation in the United States District Court for the Southern District of New