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

Background

Shauna McKenzie-Morris, who was proceeding without a lawyer, 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 agreement. Her allegations included unpaid royalties, improper inclusion of recordings on albums, and improper registration or failure to register musical compositions.

Earlier in the case, the court dismissed McKenzie-Morris’s copyright and fraud claims and allowed her breach-of-contract claims to proceed. The defendants then renewed a motion for partial summary judgment concerning the 2007 songwriter agreement. The motion addressed whether English law applied, whether the agreement’s three-year deadline for written objections to royalty statements was enforceable, whether McKenzie-Morris’s royalty claims were time-barred, and whether her composition-registration claim was time-barred. McKenzie-Morris separately moved for sanctions, disqualification of the defendants’ attorneys, declaratory judgment, and a permanent injunction.

Choice of Law and Incontestability Clause

The 2007 songwriter agreement states that it is governed by English law. The court held that English law substantively governed the agreement. Applying English law, the court found enforceable the agreement’s provision stating that a royalty statement became binding unless McKenzie-Morris sent a specific written objection within three years after the statement was submitted.

The court explained that English law generally allows commercial parties to shorten the statutory six-year limitations period for contract actions. It therefore concluded that McKenzie-Morris could not challenge royalty statements submitted before January 7, 2019, unless she made specific written objections within the required period.

Royalty Claims

The court granted the defendants’ motion in part as to royalty claims based on statements before the second-half 2018 statement. The court found that McKenzie-Morris had not identified communications from the relevant three-year period that could be treated as specific objections to those earlier royalty statements.

The court did not dismiss the claim based on the first-half 2018 statement. McKenzie-Morris identified emails from 2012 and 2015 and an August 2019 email from her manager, Andre Morris. The court held that whether those communications were specific written objections depended on what the communications said, whether they existed in the relevant form, and what the author intended. Because those issues involved genuine disputes about material facts, a jury would decide them. The court also noted that the defendants could argue that an objection to a later statement could not challenge a balance carried forward from an earlier statement that McKenzie-Morris had not specifically disputed.

Composition-Registration Claim

The court granted summary judgment to the defendants on the timeliness of McKenzie-Morris’s claim under section 23 of the 2007 songwriter agreement, which concerned registration of musical compositions. Under English law, the applicable limitations period was six years. The court dismissed the claim as time-barred to the extent it concerned conduct occurring on or before January 7, 2016.

McKenzie-Morris argued that the limitations period should be extended because defendants concealed licensing agreements and because copyright certificates produced in discovery showed improper registration. The court concluded that the licensing agreements were not relevant to the composition-registration claim. It also found that copyright registrations were public and that the record did not show deliberate concealment or a duty by defendants to disclose the certificates before the litigation. The court therefore found no basis to extend the six-year period.

Other Motions

The court denied McKenzie-Morris’s motion for sanctions under Rule 11. It found that the renewed summary judgment motion was permitted and that using excerpts or unofficial versions of deposition transcripts did not establish bad faith or misconduct.

The court denied the motion to disqualify Fox Rothschild LLP, the defendants’ law firm. McKenzie-Morris argued that the firm and certain related individuals faced conflicts because of another lawsuit. The court found no specific showing supporting the alleged professional-conduct violations and concluded that the circumstances did not warrant disqualification.

The court also denied the motion for declaratory judgment and a permanent injunction. It explained that declaratory relief ordinarily requires an action seeking that relief rather than a motion, and that McKenzie-Morris had not shown the requirements for a permanent injunction, including actual success on the merits, no adequate legal remedy, and irreparable harm.

Disposition

The court granted in part and denied in part the defendants’ motion for partial summary judgment. The royalty claims were allowed to proceed to the extent they depended on whether certain communications were specific objections, while claims based on earlier unobjected-to royalty statements were dismissed under the contract’s deadline. The composition-registration claim was dismissed as time-barred to the extent it concerned conduct on or before January 7, 2016. McKenzie-Morris’s motions for sanctions, disqualification, and declaratory relief were denied. The court stated that the parties would be referred to Magistrate Judge Ricardo for a settlement conference by separate order.