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Plaintiff,
v.
Defendant.
ORDER
This case comes before the Court on Defendant Curtom Classics, LLC's
Abstention Or Forum Non Conveniens [16] and Motion to Dismiss [17]. After
due consideration, and with the benefit of oral argument, the Court enters the
following Order:
I. BACKGROUND1
and selling musical works in physical and digital formats through various
1 Unless otherwise indicated, the facts relied upon in this Order are taken from
the Complaint [1] and are construed in the light most favorable to Plaintiff as the
non-moving party.
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 2 of 16
licensing agreement (the "Agreement") with Curtom Classics, Inc. ("CCI"). The
Agreement granted Plaintiff exclusive rights to use all master recordings owned
sell, and lease records in Thailand, Brazil, and India. The Agreement also gave
Plaintiff non-exclusive rights to use the Master Recordings in Europe and Japan.
The Master Recordings identified in the Agreement include music from a variety
substantial royalties to CCI for many years. Plaintiff now claims that it has
"discovered facts that raise serious issues" concerning the chain of title to the
Master Recordings. Plaintiff explains that, to date, multiple parties have claimed
Mayfield Family Trust, the Curtis Mayfield Estate, Curtom Records Company,
Curtom Classics, Inc., and Curtom Classics, LLC. Plaintiff alleges that CCI, with
2 The Court may consider the Agreement without converting Defendant's motions
to dismiss into motions for summary judgment because the Agreement is both
central to Plaintiffs claims and its authenticity has not been challenged. See
Atlantic Specialty Ins. Co. v. City of College Park, Ga., 319 F. Supp. 3d 1287, 1292
(N.D. Ga. 2018) ("[W]here the pleadings are supplemented with documents that
are central to the plaintiffs claim and their authenticity is not challenged, the
court may consider the documents without converting the motion to one for
summary judgment.") (citing Speaker v. U.S. Dep't of Health & Human Servs.
Ctrs. for Disease Ctrl. & Prevention, 623 F.3d 1371, 1379 (nth Cir. 2010)).
2
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whom it executed the Agreement, was dissolved in 2002. And, Plaintiff also
questions how the artist Curtis Mayfield could have assigned, in the first instance,
the rights of the other artists' whose works are included in the Master
Recordings. Due to the alleged uncertainty with regards to the ownership of the
does, however, assert that it remains ready, willing, and able to pay royalties to
Defendant currently maintains that it is the true owner of the Master Recordings
and thereby entitled to all royalties payable to CCI pursuant to the Agreement.
Defendant believes that because the Agreement has expired, Plaintiffs continued
In its briefing, Defendant explains that it first sent a cease and desist email
October 19, 2016, Plaintiffs solicitor in the United Kingdom responded to the
cease and desist email with a demand that Defendant produce proof of chain of
title. See id. Defendant contends that over the course of several months,
Defendant provided Plaintiffs solicitor with both assurances of chain of title and
with an offer to indemnify Plaintiff in the event Defendant did not own chain of
title outside North America. See id. Defendant sent another cease and desist
3
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 4 of 16
Turning to the present action, Plaintiff contends that the sole basis of
corrective assignment" from CCI to Defendant, executed on April 25, 2017 under
PLC ("Snapper") to stop conducting business with and seek indemnity assurances
from Plaintiff.
Based on these allegations, Plaintiff (1) seeks a declaration that it has not
to 28 U.S.C. § 2201;3 and (2) brings a claim for tortious interference with
3 Plaintiff acknowledges that the Declaratory Judgment Act does not provide an
independent basis for federal jurisdiction. Dkt. No. [28] at 5 n.2 (citing Provident
Life & Acc. Ins. Co. v. Transamerica-Occidental Life Ins. Co., 850 F.2d 1489, 1491
(nth Cir. 1988)). The Court remains concerned that Plaintiff has failed to present
a controversy that is "definite and concrete, touching on the legal relations of the
parties having adverse legal interests," as required to claim relief under 28 U.S.C.
4
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(nth Cir. 2007) (citing Williamson v. Tucker, 645F.2d 404, 412 (5th Cir.
May
1981)). A facial attack "requires the court merely to look and see if the plaintiff
has sufficiently alleged a basis of subject matter jurisdiction," and for purposes of
(11th Cir. 1990)) (alterations omitted). To the contrary, a factual attack challenges
and matters outside the pleadings, such as testimony and affidavits are
"short and plain statement of the claim showing that the pleader is entitled to
§ 2201. Aetna Life Ins. Co. of Harford, Conn. v. Haworth, 300 U.S. 227, 240-41
(1937). Plaintiff asks the Court to declare that it has "not infringed any copyright
of Curtom Classics." Dkt. No. [1] i-I 43. But Plaintiff also repeatedly states that its
request for a declaratory judgment "has nothing to do with the U.S. Copyright
Act" or "extraterritorial infringement." Dkt. No. [28] at 6. Instead, Plaintiff insists
that its declaratory judgment action only concerns the ownership of the Master
Recordings and the terms of the Agreement. Id. Without an underlying copyright
or breach of contract dispute, the Court is hard pressed to find a non-hypothetical
controversy "appropriate for judicial determination." Aetna, 300 U.S. at 240; see
also Provident Life, 850 F.2d at 1491 ("Courts have found the case or controversy
requirement lacking when . . . no conflict exists in the case"). Nevertheless, as
Defendant has not raised this issue, the Court declines to address it further.
5
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"detailed factual allegations," the Supreme Court has held that "labels and
not do." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
plausible on its face."' Id. (quoting Twombly, 550 U.S. at 570). A complaint is
plausible on its face when the plaintiff pleads factual content necessary for the
court to draw the reasonable inference that the defendant is liable for the conduct
At the motion to dismiss stage, "all well-pleaded facts are accepted as true,
and the reasonable inferences therefrom are construed in the light most favorable
to the plaintiff." FindWhat Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th
Cir. 2011) (quoting Garfield v. NDC Health Corp., 466 F.3d 1255, 1261 (nth Cir.
2006)). However, this principle does not apply to legal conclusions set forth in
III. DISCUSSION
Defendant first argues that this Court should refuse to exercise jurisdiction
in the IPEC on June 1, 2018-ten days after Plaintiff filed its complaint in this
Court. See Dkt. No. [16] at 7. Because the Court finds the international abstention
6
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doctrine is applicable and counsels in favor of a stay, the Court will not address
A. International Abstention
the jurisdiction conferred upon them." Colorado River Water Conser. Dist. v.
United States, 424 U.S. Boo, 817 (1976). However, "in some private international
disputes the prudent and just action for a federal court is to abstain from the
exercise of jurisdiction." Turner Entm't Co. v. Degeto Film GmbH, 25 F.3d 1512,
considerations, the Court must consider three factors (1) international comity; (2)
1. International Comity
nations." Belize Telecom, Ltd. v. Gov't of Belize, 528 F.3d 1298, 1305 (11th Cir.
2008). The Eleventh Circuit has identified three primary concerns in the context
of international comity (1) whether the judgment was rendered via fraud; (2)
consistent with civilized jurisprudence; and, (3) whether the foreign judgment is
at 1519.
7
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international comity are the relative strengths of the American and [United
Circuit's seminal decision in Turner, the court held that international comity
over the terms of the contract in federal court in the Northern District of Georgia;
action seeking support for their interpretation of the contract in German court.
Id. at 1514, 1516. Although the contract at issue had an American entity as a party,
was written in English, and included a choice of law and forum selection
provision designating the Northern District of Georgia as the proper court, the
Eleventh Circuit determined that the German interest in the case was much more
significant because the contract called for performance primarily in Germany. Id.
at 1521. Indeed, the court explained "the public interest in the litigation is more
conspicuous in Germany, because the German parties include the German state
broadcasters, and the salient issues in the case are of great moment to the state of
8
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 9 of 16
"most sensible venue to determine a just result." Id. The court acknow
ledged that
the federal court "was capable of rendering a just result," but found no "clear
federal interest" in the case given the centrality of the complex international
issues surrounding the dispute. Id. Thus, based on the lack of a comparably
strong federal interest in the case, the court concluded that international comity
Here, Plaintiff is not an American company. See Dkt. No. [1] � 4. While the
[1] � 4; [21-1] at 1, 11. More importantly, Plaintiff does not claim that it was ever
records in the United States. Id.�� 13-14. The Agreement only impacts music
distribution rights outside the United States; as such, this Court's ruling will have
for performance outside the United States, the United Kingdom's interest in
Plaintiffs case is "much more significant" than the American interest because the
Agreement involves distribution rights outside the United States. 25 F.3d at 1521;
see also Belize, 528 F.3d at 1306 ("In this case it is clear that the interests of
9
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 10 of 16
Belize far outweigh the American interests .... [T]o the extent that the litigation
might have any effect on the delivery of telecommunications services, the effect
governed by state law." Dkt. No. [27] at 5. But both of Plaintiffs claims turn on
supra, the Declaratory Judgment Act does not provide an independent cause of
action. See Provident Life, 850 F.2d at 1491.And, Plaintiff adamantly asserts that
its declaratory judgment action does not implicate the U.S. Copyright Act.4 See
Dkt. No. [28] at 5-6.As such, to find a non-hypothetical controversy ripe for
review and grant Plaintiffs request for a declaration that it has "not infringed on
any copyright," this Court would need to-at a minimum-wade into the thicket
Georgia law, a plaintiff must first establish that the defendant "acted improperly
and without privilege." Cook Pecan Co., Inc. v.McDaniel, 344 Ga. App.370, 374
(2018). Here, to show that Defendant lacked privilege in its correspondence with
4 At oral argument Plaintiff, for the first time, argued that the chain-of-title
dispute implicates U.S. copyright law to the extent it governs Curtis Mayfield's
ability to initially assign the rights of the other artists identified in the Master
Recordings. Plaintiff did, however, maintain its position that the U.S. Copyright
Act has nothing to do with any alleged infringement.
10
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 11 of 16
Defendant holds a United States copyright to the Master Recordings, the Court
determine privilege. See Dkt. No. [1] ,-r 30. While, as in Turner, this Court might
be capable of rendering a just result, the IPEC-a court that exclusively handles
determine a just result in this case." 25 F.3d at 1521. In light of the foregoing,
2. Fairness
There are three relevant considerations with respect to the fairness factor
(1) the order in which the suits were filed; (2) the more convenient forum; (3) the
1308.
Although Plaintiff filed suit in this Court ten days before Defendant filed
suit in the IPEC, the Eleventh Circuit has repeatedly recognized that the location
of the first-filed suit is not dispositive. Id.; see also Turner, 25 F.3d at 1522
give priority solely on the basis of first-filing in a case where the suits were filed
so closely together."). Moreover, while the order in which suits were filed
11
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more convenient than the American forum. See Belize, 528 F.3d at 1308.
Next,
turning to the final consideration in the fairness analysis, the Court must "be
satisfied that its decision will not result in prejudice to the party opposing the
"focuses on whether the party opposing deference to the foreign forum will
receive a fair and impartial trial in the foreign forum." Belize, 528 F.3d at 1298.
because the IPEC lacks expertise on the Georgia state law issues surrounding the
Agreement. Dkt. No. [27] at 7. But Plaintiff has not pointed to any concrete
reason why the IPEC-a court that specializes in the resolution of international
Accordingly, the three considerations under the fairness factor weigh in favor of
3. Judicial Efficiency
resources, a court must consider (1) the inconvenience of the federal forum; (2)
12
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 13 of 16
As noted above, the IPEC is the more convenient of the two forums based
on the comparable interests of America and the United Kingdom in this dispute.
Regarding the desire to avoid piecemeal litigation, as Defendant notes, its IPEC
complaint in this Court. See Dkt. No. [16] at 17. However, Defendant's
counterclaims involve more foreign parties, over whom this Court may not have
personal jurisdiction. See id. at 18. These potential jurisdictional issues only
proceedings. See, e.g., Turner, 25 F.3d at 1520 ("If both proceedings continued,
the courts' calendars would have to be synchronized and the litigation would have
to move back and forth across the Atlantic."). Deference to the IPEC proceedings
does not argue that the IPEC is unable to render a competent and efficient
Plaintiff argues that the IPEC action does not involve "substantially the same
issues and parties" as the matter before this Court. See Dkt. No. [27] at 9.
Plaintiff contends that the IPEC action only relates to Curtis Mayfield's portion of
the Master Recordings, while the present action concerns to the entire catalog of
13
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 14 of 16
the Master Recordings. Id. Plaintiff also explains that the IPEC action involves
eight defendants and that any facts related to those parties reach beyond the
scope of the present litigation. Id. Finally, Plaintiff argues that its claim for
tortious interference against Defendant is not before the IPEC court. Id.
which the court found that the defendants failed to establish that American and
Austrian lawsuits involved substantially the same issues. 150 F. Supp. 3d 1297,
1302-03 (N.D. Ga. 2015). There, the Austrian lawsuits concerned the plaintiffs
Parent Company. Id. at 1302. By contrast, in the United States, the plaintiff
action alleging a scheme to depress the value of certain assets held by the Parent
Company. Id. at 1300. The federal court refused to abstain because the Austrian
lawsuits did not involve the same central issues as the American litigation
indeed, the Court concluded that "resolution of the Austrian litigation will not
Unlike in Glock, the case before this Court and the IPEC involve the same
central issues: ownership of and the ability to license the Master Recordings.
While Plaintiff argues that the present case involves less defendants and more
recordings than the IPEC litigation, abstention does not require strict
identicality. See Glock, 150 F. Supp. 3d. at 1302 ("Generally, the parties must be
14
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'litigating substantially the same issues in both actions."') (quoting Royal & Sun
Alliance, Ins. Co. of Canada v. Century Int'l Arms, Inc., 466 F.3d 88, 94 (2d Cir.
2006) (emphasis added)); see also Belize, 528 F.3d at 1308 (finding actions had
common parties and issues "although the American litigation included some
additional claims as well."). Because the resolution of the IPEC litigation will
resolve most of the material issues in this litigation, the two cases necessarily
have "significantly common issues and parties." Posner v. Essex Ins. Co., Ltd.,
mandate dismissal in cases of parallel foreign proceedings. See Posner, 178 F.3d
at 1224. Accordingly, the Court will stay Plaintiffs claims pending the resolution
IV. CONCLUSION
permitted to refile its Motion to Dismiss after the conclusion of the IPEC
15
Case 1:18-cv-02354-LMM Document 39 Filed 11/14/18 Page 16 of 16
the resolution of the IPEC proceedings.s The parties are ORDERED to notify the
Court within 14 days of the resolution of the IPEC proceeding with a status report
s Administrative closure of a case does not prejudice the rights of the parties to
litigation in any manner. The parties may move to re-open an administratively
closed case at any time.
16
From: ganddb_efile_notice@gand.uscourts.gov
To: CourtMail@gand.uscourts.gov
Subject: Activity in Case 1:18-cv-02354-LMM Charly Holdings, Inc. v. Curtom Classics, LLC Order on Motion to Dismiss
Date: Wednesday, November 14, 2018 7:46:19 AM
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The following transaction was entered on 11/14/2018 at 10:45 AM EST and filed on
11/14/2018
Case Name: Charly Holdings, Inc. v. Curtom Classics, LLC
Case Number: 1:18-cv-02354-LMM
Filer:
Document Number: 39
Docket Text:
ORDER: Defendant's Motion to Dismiss, or in the Alternative to Stay, on the
Grounds of International Abstention Or Forum Non Conveniens [16] is
GRANTED in part, as to the request for a stay, and DENIED in part, as to
dismissal. Defendant's Motion to Dismiss for Failure to State a Claim [17] is
likewise DENIED without prejudice. Defendant shall be permitted to refile its
Motion to Dismiss after the conclusion of the IPEC litigation. Accordingly, this
case is ADMINISTRATIVELY CLOSED pending the resolution of the IPEC
proceedings. The parties are ORDERED to notify the Court within 14 days of the
resolution of the IPEC proceeding with a status report on what remains in this
case. Signed by Judge Leigh Martin May on 11/14/2018. (btql)