Regisford v. Lockamy

Background

Timmy Ricardo Regisford sued Lynn Lockamy seeking a declaration about ownership of the musical composition “At the Club.” Lockamy later asserted counterclaims concerning ownership of “At the Club,” “In the Club,” and “Make Me Feel Good.”

Broadcast Music, Inc. (BMI), an organization that licenses public-performance rights and collects and distributes royalties, had collected more than $145,000 related to the compositions. BMI was holding the royalties after receiving inconsistent demands and competing claims from Regisford and Lockamy. BMI intervened in the case and filed an interpleader complaint.

Interpleader and Deposit of Funds

Interpleader is a procedure that allows a stakeholder facing competing claims to place disputed property with the court and seek protection from multiple liability. The court held that BMI’s interpleader action was proper under Federal Rule of Civil Procedure 22 because the case involved federal-question jurisdiction and Regisford and Lockamy asserted competing claims to the same royalties.

The court granted BMI’s motion to deposit the entirety of the disputed royalties with the Clerk of Court, including additional royalties that become payable while the case is pending. It rejected Lockamy’s proposal that BMI deposit only half and pay the other half to her because all of the withheld royalties were disputed. The court explained that, at this stage, neither BMI nor the court needed to decide which claimant had the stronger ownership claim. Those competing claims would be adjudicated after the funds were deposited.

BMI’s Liability and Removal from the Case

The court granted BMI’s request to be discharged from further liability and dismissed BMI from the action with prejudice. The opinion describes the interpleader process as having an initial stage involving the deposit of funds and protection of the stakeholder, followed by a later stage in which the adverse claims are resolved.

Costs and Attorney’s Fees

The court denied, at this time, BMI’s request to deduct costs and attorney’s fees from the disputed royalties. The court noted that fee awards in interpleader cases are discretionary and reasoned that royalty disputes may be part of BMI’s ordinary business because BMI collects royalties and ensures their proper distribution. The court also considered Lockamy’s assertion that her contract with BMI did not address whether BMI could recover legal fees in this situation.

Disposition

The court granted BMI’s motion to deposit the disputed royalties, discharge BMI from further liability, and dismiss BMI from the action with prejudice. The court denied, at this time, BMI’s request for costs and attorney’s fees from those royalties. BMI was ordered to file a proposed order within 14 days, and the Clerk was directed to terminate the motion docket entry.