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

Background

Shauna McKenzie-Morris sued V.P. Records Retail Outlet, Inc., V.P. Music Group, Inc., V.P. Record Distributors, LLC, V.P. Records of Brooklyn, LLC, Greensleeves Publishing, Ltd., and STB Music Inc. She alleged breaches of three agreements: a 2007 recording agreement, a 2007 songwriter agreement, and a 2014 co-publishing and administration agreement. Her allegations included unpaid royalties, improper inclusion of recordings on albums, and improper registration of musical compositions. Earlier in the case, the court had dismissed her copyright and fraud claims but allowed her breach-of-contract claims to continue.

While discovery was ongoing, the defendants moved for partial summary judgment. Summary judgment is a decision without a trial when the record shows no genuine dispute about a fact that could affect the result. The defendants argued that contractual objection deadlines and statutes of limitations barred parts of McKenzie-Morris’s claims.

Contractual Objection Deadlines

The 2007 recording agreement required McKenzie-Morris to make a specific written objection to a royalty statement within two years of its due date and to file a lawsuit within that same period. The court held that the first cause of action was barred to the extent it concerned royalty statements that McKenzie-Morris did not timely challenge and claims for which she did not timely file suit. The court also held that amounts carried forward from earlier, unchallenged royalty statements could not be revived merely because they appeared in later statements.

The court rejected arguments that the contractual deadline did not apply because the statements allegedly contained false expenses or because McKenzie-Morris did not receive statements through a portal. It also did not decide whether several communications made within two years of filing the case qualified as specific written objections; the court said that issue could be decided by a jury.

The 2014 co-publishing agreement also required specific written objections within two years, but did not include the same requirement that a lawsuit be filed within that period. The court found a genuine dispute about whether various letters and emails—including communications concerning royalty discrepancies, cross-collateralization, and allegedly incorrect statements—qualified as specific written objections. It therefore denied the defendants’ motion as to the third cause of action.

The 2007 songwriter agreement required written objections within three years and selected English law. The defendants had not adequately briefed whether English law applied to the relevant issue or, if it did, whether English law would enforce the contractual deadline. The court therefore denied without prejudice the defendants’ motion for summary judgment concerning the second cause of action.

Claims About Recordings and Musical Compositions

The court held that the claim concerning recordings allegedly included on The Strong One and Free Expressions was time-barred under New York’s six-year limit for breach-of-contract claims. The court stated that the relevant deadlines had passed before this action was filed and dismissed that portion of the first cause of action.

The opinion contains conflicting statements about the claim that musical compositions were improperly registered. Its conclusion says the defendants’ motion was granted as to that claim because it was time-barred. However, Section III says that the defendants’ motion concerning the 2007 songwriter agreement and the second cause of action was denied without prejudice because the English-law issue was not briefed, and says that the second cause of action remained in full.

Requests to Amend and Expert Evidence

The court denied the defendants’ request to amend their answer to add counterclaims under the Digital Millennium Copyright Act. The proposed counterclaims concerned alleged improper takedown notices sent to Spotify. The court found that adding them at that stage would prejudice McKenzie-Morris, require additional discovery, and delay the case. The court noted that the defendants were not prevented from filing a separate action.

McKenzie-Morris’s request to amend her Third Amended Complaint was contingent on the defendants receiving permission to add counterclaims. The court denied her request as moot.

The court denied the defendants’ motion to strike McKenzie-Morris’s May 23, 2024 letter and denied the motion to exclude her expert handwriting report. The body of the opinion describes the expert-report ruling as denied without prejudice and allowed the defendants to serve a rebuttal report by October 18, 2024. The conclusion states that the motion to exclude was denied and that the motion to file a rebuttal report was granted. Expert discovery was extended to November 8, 2024.

Disposition

The conclusion states that the defendants’ motion for partial summary judgment was GRANTED in part and DENIED in part. It grants the motion as to the time-barred portions of the first cause of action and the claim about recordings on albums released in 2008 and 2011; denies it as to the third cause of action; and denies it without prejudice as to the second cause of action because potentially applicable English law was not briefed. The court also denied the defendants’ motion to add counterclaims, denied as moot McKenzie-Morris’s motion to amend, denied the motion concerning her expert report, and granted the defendants’ request to file a rebuttal report. The case was not fully resolved by this opinion.