This is an appeal from the United States District Court for the Central District of California to the Court of Appeals for the
Plaintiffs were Range Road Music, Inc, Sony/ATV Harmony, Wiliamson Music Company, et al. (the “Music Companies) and the Defendants were East Coast Foods, Inc. (“East Coast Foods”) and Herbert Hudson ( “Hudson”) East Coast and Hudson are sometimes collectively referred to the “Defendants”)
Music Companies sued East Coast Foods and Hudson for copyright infringement and sought to impose “vicarious liability on the Defendants.
Facts
East Coast Foods owned and operated a chain of Roscoe’s House of Chicken and Waffles in 5 locations in Southern California, including one in Long Beach, the Long Beach Roscoe’s Chicken and Waffles (the “Long Beach”). Hudson was the sole officer and director of East Coast. Long Beach opened in 2001. Attached to the restaurant is the “Sea Bird Jazz Lounge” where live musical performances were held.
The American Society of Composers, Authors and Publishers (“ASCAP”). ASCAP is a non-profit organization that licenses the music of its members. ASCAP offered Long Beach a license to perform music by ASCAP members, but Long Beach refused.
Between 2001 and 2007 ASCAP demanded the Long Beach pay licensing fees because it had live performances of music which was licensed to ASCAP member. In 2008, Plaintiff Music Companies engaged Scott Greene, an independent investigator to go to Long Beach, take notes on music that was being performed there and submit an investigative report to Plaintiffs.
Plaintiffs reviewed Greene’s report, determined that Long Beach was engaging in copyright infringement in that its live performances consisted of eight songs for which ASCAP members had validly registered copyrights and filed a lawsuit in Federal District Court against Defendants, alleging 8 counts of copyright infringement.
Plaintiffs moved for summary judgment and Defendants cross-moved for summary judgment. The District Court granted Plaintiffs’ motion for summary judgment in the amount of $36,000 for 8 copyright infringements and awarded attorneys’ fees and costs of $162,728 against Defendants.
Defendants appealed to the Court of Appeals for the 9th Circuit alleging:
1. District Court Committed error in granting Plaintiff’s Motion for summary judgment
2. District Court abused its discretion in awarding attorneys’ fees and costs;
3. District Court abused its discretion in finding vicarious infringement by Defendants;
4. Defendants were not the proper parties and Shoreline Foods should have been named as the Defendant.
Issues
1. Was motion for summary judgment in favor of Plaintiffs proper
2. Did District Court Abuse its discretion in awarding attorneys’ fees and costs to Plaintiffs
3. Did Defendants engage in vicarious infringement if others were performing licensed music
4. Were the named Defendants the proper parties
Decision and Arguments
The District Court’s decision was Affirmed
1. Summary judgment is properly granted when, “viewing the evidence in the light most favorable to the non-moving party and drawing all reasonable inferences in favor of that party, no genuine issue of material fact exists and the moving party is entitled to summary judgment.
Court of Appeals found that Plaintiffs established a prima facie case of copyright infringement by:
A. Showing ownership of a validly registered copyright; and
B. Copying of a constituent element of the original work had occurred when copyrighted work was performed and when CDs were used.
Defendants objected to Greene’s testimony, alleging that it wasbeing offered as expert testimony and Greene was a layman and his testimony should have been excluded. The Court of Appeals dismissed the Defendants’ argument, finding that “identifying popular songs does not require any scientific, technical, or specialized knowledge…” and accepted Greene’s investigative report and testimony. .
2. The District Court did not abuse its discretion in awarding attorneys’ fees because the Copyright Act provided that a Judge may award attorneys’ fees in copyright infringement actions.
3. Court of Appeals found that East Coast Foods and Hudson vicariously engaged in copyright infringement. One can impute vicarious liability on a party even though they did not engage in any act of infringement when it is found that:
A. A party had control of the direct “infringer” and could have stopped the infringement at any time, but did nothing to stop it; and
B. A party derives financial benefit or gain from the direct infringement
Court of Appeals found that there was overwhelming evidence showing that East Coast and Hudson exercised control over both the Long Beach Roscoe’s and the Sea Bird Jazz Lounge, and derived a financial benefit from the musical performances in the lounge. Therefore, the Defendants were properly found jointly and severally liable for copyright infringement.
4. East Coast Foods and Hudson were properly named as Defendants. Hudson was in full control, was the sole officer of East Coast Foods and its sole director. In addition, Hudson had applied for and signed the Application for a liquor license for Long Beach Roscoe’s and the Sea Bird Jazz Lounge