Cor aH een 10 u 12 B 14 15 16 18 19 20 21 23 25 26 The Honorable Steven Gonzalez Noted for Hearing: Friday, May 30, 2008, 10:00 a.m. With Oral Argument Defendants’ Papers in Opposition SUPERIOR COURT OF WASHINGTON IN AND FOR KING COUNTY CHRIS CORNELL, Plaintiff, No. 06-2-24639-0SEA GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIEF’S VOLDAL WARTELLE & CO.,P.S.,a MOTION RE FEDERAL COPYRIGHT ) ) ) ) ve ) ; Washington Professional Service Corporation; } PREEEMPTION 2 ) 2 ) ) LEE E. JOHNSON; JANET A. GEORGE; and JANET A. GEORGE INC. P.S., a Washington Professional Service Corporation, Defendants. I RELIEF REQUESTED Defendants Janet George and Janet A. George Ine. P'S. (collectively “George”) oppose plaintiff Chris Cornell’s Motion for Partial Summary Judgment Regarding Federal Copyright Preemption and respectfully submit that it must be denied. In George’s Motion for Partial Summary Judgment Re Song Catalog Claim (“Song Catalog Motion”), George has already argued at length the reasons why Comell’s federal copyright preemption theory fails generally, and in particular under the facts of this case. To avoid repetition, George will not repeat those arguments here, but incorporates the Song, Catalog Motion by reference, As set forth in George’s Song Catalog Motion, and as further discussed below, Comell’s preemption theory fails as a matter of law on numerous grounds. In addition and in any event, issues of fact prevent entry of summary judgment. GEORGE DEFENDANTS’ OFPOSITION TO PLAINTIFFS Byars & KELLER MOTION RE FEDERAL COPYRIGHT PREEMPTION - 1 1000 Secon AVENOE ORIGINAL ===Cer aueon 10 li 12 1B 4 45 16 17 18 19 20 a 2 23 24 25 26 IL STATEMENT OF FACTS ‘The relevant background facts are set forth in detail in George’s Song Catalog Motion, which is hereby incorporated by reference.' For purposes of context, George summarizes briefly only a few relevant facts documented in that motion: * To induce Silver to settle their dissolution proceeding by the March 1 deadline that Cornell insisted upon, Cornell repeatedly told George that he wanted to offer Silver a settlement under which she received two houses that the couple ‘owned, Comell received a cabin on the Kitsap Peninsula, and “everything else that is cash or asset or investment” would be “split 50/50” and “that means everything up io the date J filed for divorce.”” © Comell wrote or co-wrote a number of songs during his marriage with Silver and, to a lesser extent, prior to his marriage. In response to her inquiry, Comell expressly directed George: “There are no songs that will be exemt [sic] from the 50/50 deal.”? © Inthe Property Settlement Agreement (“PSA”) that was agreed to at a March 1, 2004, mediation, with regard to the song catalog Silver would agree only to a basic agreement that was consistent with the terms of Comell’s offer and her community property interest in the catalog, but which expressly left the details and mechanics of the division of the catalog to subsequent negotiation and further agreement.’ * After post-divorce negotiations, Silver and Comell subsequently entered into a Co-Publishing Agreement pursuant to which the song copyrights and publishers revenue therefrom were divided. Under the agreement, Comell retained “the sole and exclusive right to publish, sell and/or exploit” the musical compositions that made up the catalog and, in the event Comell predeceased Silver, Silver had an inchoate, prospective, contingent right to co- administer, together with Comell’s heirs or assigns, a limited subset of the compositions that made up the song catalog.” * It is undisputed that George represented Comell only with regard to the PSA. and did not represent Cornell with regard to the division of the catalog that was ultimately reached in the Co-Publishing Agreement. ' Soe George’s Song Catalog Motion (previously filed at Dkt. No. 170). * See Decl. of Susan Silver (“Silver Decl.”) at $f 3-4, 12 (previously filed on May 2, 2008). # See Decl. of Joftey M. MeWilliam (“MeWilliam Deci.”), Ex. 3, Feb. 18, 2004, email (previously filed at Dkt. No. 171). “ See Silver Decl, at $9 8-12. 5 See McWilliam Decl., Ex. 10 at 12. GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S eed MOTION RE FEDERAL COPYRIGHT PREEEMPTION - 2 1000 Secon AVENUE “sears, Wasner0w 98105 206) 622.2000Sec wraane enn 12 13 4 15 16 7 18 19 20 a 2 23 24 25 26 WI. STATEMENT OF ISSUES Whether the federal Copyright Act preempted Silver's community property ownership interest in the copyrights to the song catalog such that, but for page 7A of the PSA, Silver would not have been able to claim a potential right of co-administration with Cornell’s heirs in the event Cornell pre-deceased her. IV. EVIDENCE RELIED UPON its thereto (previously filed at Dkt. No. Declaration of Jofrey McWilliam and ext 171), Declaration of Susan Silver (previously filed on May 2, 2008), the Declaration of Mika L. Kitamura in Support of Opposition to Motion for Partial Summary Judgment Re Federal Copyright Preemption Law, and pleadings, papers and other material on file in this matter. ve (ORITY Cornell asserts that while Silver “was undeniably entitled to 50% of the stream of income from the [song catalog] compositions, she would never have been entitled to claim, ownership because Federal copyright law preempts Washington State community property Jaw and ownership remains with the creating spouse.”” Of course, this ignores Silver’s Declaration that she was not willing to settle on terms where she shared only revenue because she believed the copyrights Were community property and that, in any event, Comell chose to offer her half of “everything” to induce her to agree to a quick divorce. Thus, when Cornell argues that Silver could never claim an ownership interest in his songs, that is demonstrably wrong. She did, in fact, make such a claim. In fact, she apparently would have made such a claim regardless of community property laws given his repeated offer to share “everything” with her if she would give him a quick divorce. What Comell thus presumably means is that had he refused to settle with Silver, a divorce court in a trial in Washington would not have given her any type of ownership interest in a divorce trial. Talking about what would have happened absent a settlement of course brings up the issue of what else a divorce court might * Declaration of Mika L. Kitamura in Support of Opposition to Motion for Partial Summary Judgment Re Federal Copyright Preemption Law; George’s Song Catalog Motion. 7 See Comell’s Preemption Mot. at 3 (emphasis added). (GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S ene ere MOTION RE FEDERAL COPYRIGHT PREEMPTION - 3 1000 SucosD AVESUE seaztise Wasnrvorow 98104Sew wn ane une 12 1B 14 15 16 7 18 19 20 2 22 23 24 25 26 have done that is different than the PSA and whether, on a net basis, Comell would be better or worse off if he had proceeded to try his divorce.* However, putting aside these broader issues, Comell apparently claims that, but for page 7A of the PSA, Silver would have been entitled to receive only revenue in a divorce and would get no ownership interest in the copyrights to the song catalog and, therefore, would not have been able to claim any contingent future right of co-administration.” Cornell’s theory fails as a matter of law on numerous grounds. In addition and in any event, issues of fact prevent entry of summary judgment. A. Cornell’s Preemption Theory Fails As a Matter of Law on Numerous Grounds. Comell’s federal preemption theory fails as a matter of law on numerous grounds. First, there is no authority that supports Comell’s position. Indeed, all of the authority is to the contrary. The only two cases that have specifically addressed the issue, Worth and Rodrigue, do not support Comell’s argument, Comell’s theory is also contrary to every legal principle that applies under the circumstances. Moreover, itis possible, indeed quite easy, to reconcile and vindicate any potential federal policy under existing principles of Washington community property law without adopting Cornell’s overly broad and indiscriminate theory of preemption, Second, Cornell’s damages theory does not rely on a loss of ownership per se, but rather on a loss of “control” to manage or administer the copyrights he claims he was entitled to own. Comell’s argument improperly conflates “ownership” and “management.” The two are distinct concepts. The Rodrigue case cited by Comell addresses management, not ownership. In contrast, the PSA said Comell and Silver would both own copyrights authored by Comell but said nothing about who would in practice manage such rights. Management, 5 As for whether Comell would be better off trying his divorce after all issues are netted out, his family attomeys subsequent to George warned him that there was a “high” risk that he would come out less favorably in a trial than under the PSA. E.g., McWilliam Deel., Ex. 14, Dep. Ebberson at 72, 74; id. at Ex. 12, ° See Compl. at 4,23. GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S, ean MOTION RE FEDERAL COPYRIGHT PREEMPTION - 4 2000 Secon Avenue sSuarri, WanitiwoTox 98206 ‘@om 622.2000Sec mrxr sw eon 1 12 1B 14 16 17 18 19 20 2 22 23 24 26 like virtually every other particular, was left for later negotiation. ‘Thus, even if Rodrigue is construed to provide for a limited preemption of Washington law to the extent that management of a copyright is at issue, it does not help Comell. All the PSA did was acknowledge the parties’ respective community property ownership interests in the catalog. The PSA did not divide or allocate management rights, but expressly left division of the catalog for another day. ‘Third, and perhaps most importantly, Cornell ignores the fact that under the Co- Publishing Agreement exclusive management rights were allocated to him for so long as he lives. All that was allocated to Silver was an inchoate, potential future right to share ‘management (in a limited subset of compositions) with Comell’s heirs in the event Cornell pre-deceased Silver. There is absolutely no authority, nor any federal policy, that would elevate a second wife’s rights under state death-transfer laws to preempt a first wife's ri ‘under community property laws. Finally, section 301 of the Copyright Act does not apply and is irrelevant to the analysis here. 1. Cornell’s Argument Is Unsupported by Any Authori ‘ontrary to Controlling Princiy ‘Law, and in Any Event, Any Potential Federal Policy Can Be Reconciled and Vindicated Under Existing Principles of ‘Washington Community Property Law Without Adopting Cornell’s Overly Broad and Indiscriminate Theory of Preemption. On the theory that federal copyright law preempts Washington community property law, Cornell asserts that “ownership” of the copyrights in the song catalog was his separate property even though it was acquired during his marriage to Silver. As discussed in George’s Song Catalog Motion, there are only two cases that have specifically addressed the application of community property law to copyrights acquired during marriage, See Inre ‘Marriage of Worth, 195 Cal. App. 3d 768, 241 Cal. Rptr. 135 (1987); Rodrigue v, Rodrigue, 218 F.3d 432 (2000). Neither Worth nor Rodrigue supports Cornell’s position. George will not repeat here the analysis of Worth and Rodrigue, which is set forth in GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S eee MOTION RE FEDERAL COPYRIGHT PREEMPTION - $ 1000 Seco AVES seartes, Washinovon 98104eer AH eon 10 ul 12 13, 14 15 16 7 18 19 20 2a 22 23 24 25 26 George’s Song Catalog Motion at pages 10-16. Suffice it to say for purposes of this, discussion that Worth holds that copyrights acquired during marriage are owned jointly by both spouses as tenants in common." Rodrigue likewise holds that a copyright acquired during marriage is community property. ‘The Rodrigue court held that the non-author spouse had a community property interest in all the revenues generated by the copyrights. With regard to management, the court applied a provision of the Louisiana Code under which certain movable assets owned by the marital community could nevertheless be disposed of by one spouse acting alone.'’ Applying this provision of the Louisiana Code, the court merely held that management of the community asset should be allocated to the author-spouse.’* ‘Thus, Cornell's theory is simply not supported by any authority—not even the authority he relies upon. In addition, Comell’s theory is inconsistent with every other applicable legal principle—principles that Cornell simply ignores without discussion. For example, itis the rule in Washington, as well as in other community property jurisdictions, that the revenue generated by an asset is characterized the same as the asset that generated it. See RCW 26.16.010 (cents, issues, and profits of separate property are also separate property); In re Witte’s Estate, 21 Wn.2d 112, 124, 150 P.2d 595 (1944) (property and “pecuniary rights” that are owned separately, including “rents, issues, and profits thereof” retain the separate character of property that produced them); Worth, 195 Cal. App. 3d at 774 (“Under the ‘community property doctrine, rents, issues, and profits have the same character as the property source itself”). As Comell himself acknowledges, a non-author spouse is indisputably entitled to share equally in the revenue generated by a copyright acquired during mauriage. Because non-author spouses indisputably have community property rights to share 1 See George’s Song Catalog Motion at 11 (discussing Worth). " See id, at 11-12, ” See id. GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S BYRNES & BEELER ur MOTION RE FEDERAL COPYRIGHT PREEEMPTION - 6 1000 SrcoND AvENUE ‘Searrun. WasswoToR 98104 ‘081 622.9000Ce aan kw ve 10 ul 12 1B 14 15 16 Wa 18 19 20 21 22 23 24 25 equally in the revenue, by definition the copyrights that produced the revenue are also community property. See id. Comell also ignores the rule that under Washington law, all assets acquired during marriage are presumptively community property. The presumption is Cornell’s burden to overcome, and all doubts regarding the characterization of property are resolved in favor of characterizing it as community property. See Chase v. Chase, 74 Wn.2d 253, 257, 444 P.2d 145 (1968) (The law resolves doubts in characterization “in favor of a community status.”). Similarly, Washington’s community property laws will not be preempted absent a showing that a compelling federal interest would be substantially injured by application of Washington law. See In re Marriage of Geigle, 83 Wn. App. 23, 28-29, 920 P.2d 251 (1996). Because the Copyright Act expressly subjects transfer of ownership of copyright to state law, see 17 U.S.C. § 201(@)(1), Worth, 195 Cal. App. 3d at 774, and because the Rodrigue court itself acknowledged that the “transfer approach” adopted by the Worth court is not necessarily inconsistent with federal policies, sce Rodrigue, 218 F.3d at 438 n.26, Comell simply fails to rebut the presumption because he has failed to demonstrate why any particular approach, including the transfer approach adopted by Worth, would result in substantial injury to a compelling federal policy. Even assuming, however, that a compelling federal policy required management of copyrights to remain with the author during his lifetime (because copyrights are expressly subject to state death-transfer laws, it is undisputed that no federal policy requires ‘management to remain with the author’s estate after death), it is not necessary to adopt Comell’s ownership preemption theory to reconcile any perceived federal policy. What Rodrigue demonstrates (and what the legal principles applicable to preemption require) is that where the application of state community property law can be reconciled with federal policy, state community property law will not be preempted. Here, Washington community property law can be harmonized with any perceived federal policy without preemption. Itis a fundamental tenet of Washington community property law that all property, regardless of its GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S eee eee re MOTION RE FEDERAL COPYRIGHT PREEMPTION - 7 s000'Sucor Aveoa) 10 u 12 13 14 15 16 17 18 19 20 21 22 23 25 26 character, is before the court for division.’ Thus, for example, a Washington dissolution court would be free to allocate the song catalog in its entirety to the author spouse while compensating the non-author spouse for its value. This, in fact, is what the family law attomeys who replaced George told Comell probably would happen when he was contemplating a motion to set aside the PSA: A. _ I can’t imagine anybody would award those property rights to Ms. Silver. Imean, it’s possible but I can’t imagine it happening. Q And then the valuation of the song catalog would reflect that the court could give Ms. Silver an offsetting award of other assets? A. Ofcourse. Q And you wanted to make sure he understood that? A. Absolutely.!* The point is that Comell was not entitled to keep ownership without compensating Silver for it. Indeed, this is precisely what Comell’s own expert testified to: Q nother words, a competent lawyer advising Mr. Comell at the mediation would say, there is no way that you are entitled to keep the ownership aspects of your song in a divorce without in some fashion accounting for it? MR. JOHNSON: Going to object to the form of the question. A. It would be, in my opinion, pretty unlikely that an asset of that nature would be going to the husband, if it was a community asset, without some offset or some way of financially accounting to the wife."* All separate and community property of the parties over which the court has jurisdiction is before the court for disposition in a dissolution action. Webster v. Webster, 2 Wash. 417, 420, 26 P. 864 (1891). Although the characterization of property as either separate or community does not control its disposition, Worthington v. Worthington, 73 Wn.2d 759, 440 P.2d 478 (1968), the trial court must have characterizations “in mind” or itis reversible error. Blood v. Blood, 69 Wn.2d 680, 682, 419 P.2¢ 1006 (1966). ‘The character of each item of property need not be “specifically designated or labeled.” Peterson v. Peterson, 3 Wn. App. 374, 475 P.2d 576 (1970). The trial court is not required to make a specific finding on the character of each item of property. In re Marriage of Melville, 11 Wn. App. 879, 526 P.2d 1228 (1974). ‘Tl Washington Community Property Deskbook § 32.3(2), at 32-15 (Wash. State Bar Ass'n 3d ed, 2006). “Kitamura Decl, Ex, 1, Dep. Skone at 47:12-21. "Jd, at Ex, 2, Schmidt Dep. at 123-24. Paying Silver for her interest in the song catalog was not necessarily attractive to Comell because the catalog in its entirety might be so valuable that Cornell GEORGE DEFENDANTS’ OPPOSITION TO PLAINTIFF'S BYRNES & ELLER cor MOTION RE FEDERAL COPYRIGHT PREEMPTION - 8 1000 Scorn AVENUE 1206)622-2000