Champlin v. Music Sales Corporation

Background

William B. Champlin, a songwriter and performer, co-wrote “After the Love Has Gone” with David Foster and Jay Graydon in 1978. Champlin alleged that each songwriter initially held a one-third interest. He further alleged that he separately transferred his one-third interest to Bobette Music, while Foster and Graydon separately transferred their interests to other music publishers.

Over time, part of Champlin’s interest was transferred to Wise Music, Noted for the Record, and New Music. Wise Music allegedly held 20.67% of the Song, while Noted held 7.49% and New Music held 5.17%. Champlin served his own termination notice on Wise Music, New Music, and Noted in 2016, identifying August 15, 2022, as the effective termination date. The notice was recorded with the Copyright Office. New Music and Noted returned their interests to Champlin, but Wise Music allegedly refused to return its interest and continued collecting royalties on the 20.67% interest and the 5.17% interest formerly held by New Music.

Foster and Graydon also served termination notices in 2016 on Sony and EMI, which later returned their combined 45% interest to Foster and Graydon. Champlin sued under section 203 of the Copyright Act and under New York conversion law. The defendants moved to dismiss under Rule 12(b)(6), which asks whether the complaint states a legally sufficient claim, and argued that the conversion claim was preempted by federal copyright law.

Champlin’s Termination Notice

Section 203 allows authors to terminate certain copyright grants made on or after January 1, 1978. If one author made the grant, that author may terminate it alone; if two or more authors made a joint grant, a majority of those authors must sign the termination notice. The defendants argued that the three songwriters had made one indivisible grant in 1978, so Champlin’s notice was ineffective because he signed it alone.

The defendants relied on a Standard Songwriter Agreement attached to their motion. Champlin argued that the 1978 grant also involved a separate Co-Administration Agreement and that the court could not determine from the pleadings which documents together constituted the grant. The court agreed that this issue could not be resolved at the motion-to-dismiss stage. It therefore did not consider those outside documents as establishing the terms of the 1978 grant.

Based on the amended complaint and the materials properly considered at this stage, the court held that Champlin plausibly alleged that he had made a separate grant of his one-third interest to Bobette Music. On that allegation, he had the capacity to terminate that grant alone, and his notice was legally effective as to Wise Music’s interest derived from Bobette Music.

The court also held, alternatively, that Champlin plausibly alleged that the absence of another songwriter’s signature was harmless under the Copyright Office’s regulation. The court noted that Foster and Graydon had already executed and recorded their own termination notices before Champlin served his notice. That circumstance plausibly gave Wise Music reasonable notice that all three songwriters intended to terminate the 1978 grants. Whether the omission was actually harmless and made in good faith required discovery and could not be finally decided on a motion to dismiss.

Foster and Graydon’s Notices

The defendants separately argued that Foster and Graydon’s notices did not affect Wise Music because those notices were not served on the defendants and did not identify them. Because the court found that Champlin adequately pleaded that his own notice terminated the defendants’ rights, it did not decide the legal effect of Foster and Graydon’s notices. The court stated that the parties could renew that dispute after discovery.

Conversion and Copyright Preemption

The court exercised supplemental jurisdiction over Champlin’s conversion claim because it arose from the same facts as his federal copyright claim. Federal copyright law preempts a state-law claim when the work falls within copyright protection and the state-law right is equivalent to a copyright owner’s exclusive rights.

The court held that the conversion claim was preempted to the extent it concerned Wise Music’s distribution, publishing, or reproduction of the 20.67% interest that Wise Music held when Champlin served his notice. That portion of the claim involved the same conduct as the copyright claim and added no separate legal right.

The court reached a different conclusion for the 5.17% interest that New Music had relinquished to Champlin. The amended complaint did not allege copyright infringement concerning that interest; instead, it alleged that Wise Music continued collecting royalties after New Music returned the interest to Champlin. The court therefore held that this portion of the conversion claim was not preempted.

Disposition

The court granted in part and denied in part Wise Music and Wise Music Group’s motion to dismiss. The copyright claims based on Champlin’s termination notice were not dismissed. The conversion claim was dismissed as to the 20.67% interest held by Wise Music, but the motion was denied as to the 5.17% interest relinquished by New Music. The court did not resolve the separate challenge to Foster and Graydon’s notices.