Opinion
No. 97 Civ. 7700 (RWS)
December 4, 2000
COBRIN GITTES, Attorney for Plaintiff, 750 Lexington Avenue New York, N.Y. 10022, By, PETER T. COBRIN, ESQ., OREN J. WARSHAVSKY, ESQ., Of Counsel
SYLVIA ROBINSON, On Behalf of Pro Se Defendants, 443 Liberty Road, Englewood, N.J. 07631
OPINION
Pro se defendants Sugar Hill Music Publishing, Inc., Sugar Hill Records, Ltd., Sugar Hill Records, Inc., Sugar Hill Music, Inc., Sugar Hill Music Publishing, Ltd., Twenty-Nine Black Music, and Joseph Robinson, Sr. (collectively "defendants"), have moved, apparently pursuant to Rule 59(e) or Rule 60(b), Fed.R.Civ.P., to alter or amend this Court's $2 million judgment in favor of plaintiff Tuff-N-Rumble, d/b/a Tuff City Records ("Tuff"). Defendants were granted leave to file the instant motion solely to submit documentary evidence for a more accurate determination of damages. See Tuff-n-Rumble Management, Inc. v. Sugarhill Music Publ's Inc., No. 97 Civ. 7700, 99 F. Supp.2d 450, 458 (S.D.N.Y. 2000) ("Tuff-n-Rumble V"). Also pending is Tuff's motion to strike the defendants' September 26, 2000 submission filed in support of their motion. For the reasons set forth below, the motion to strike is denied, and the judgment will be amended to reflect a total of $1,991,921.70 in infringement damages, plus attorneys' fees and costs.
Defendant Joseph Robinson, Sr. passed away during the pendency of this motion.
Prior Proceedings
The facts and prior proceedings in this copyright infringement action have been set forth in five decisions of this Court, familiarity with which is assumed. See Tuff-n-Rumble V; Tuff-n-Rumble Management, Inc. v. Sugarhill Music Publ'g Inc., No. 97 Civ. 7700, 2000 WL 274192 (S.D.N Y March 13, 2000) ("Tuff-n-Rumble IV"); Tuff-n-Rumble Management, Inc. v. Sugarhill Music Publ'g Inc., 75 F. Supp.2d 242 (S.D.N.Y. 1999) ("Tuff-n-Rumble III"); Tuff-n-Rumble Management, Inc. v. Sugarhill Music Publ'g Inc., 49 F. Supp.2d 673 (S.D.N.Y. 1999) ("Tuff-n-Rumble II"); Tuff-n-Rumble Management, Inc. v. Sugarhill Music Publ'g Inc., 8 F. Supp.2d 357 (S.D.N.Y. 1998) ("Tuff-n-Rumble I). Facts and proceedings relevant to the instant motion are set forth below.
Judgment for Tuff was entered on March 29, 2000, including a damages award totaling $2,008,914.64, after Tuff's motions for summary judgment on the remaining causes of action, and for a determination of damages based on defendants' complete failure to comply with Tuff's discovery requests, were granted. For reasons unknown to the Court, those motions were unopposed by defendants. See Tuff-n-Rumble IV, 2000 WL 274192.
After the decision was issued, defendants substituted counsel. Defendants' new counsel, by order to show cause, sought a temporary stay of enforcement of the judgment pending the resolution of a motion to dismiss for lack of subject matter jurisdiction. Enforcement of the judgment was stayed pending the outcome of that motion, which was denied on June 13, 2000, see Tuff-n-Rumble V, 2000 WL 274192. However, because the $2 million award had been based solely upon material submitted by the plaintiff, the defendants not having filed any opposition to the summary judgment motion, the June 13, 2000 opinion granted plaintiffs leave to move for a more accurate determination of damages within twenty days.
By letter of June 20, 2000, Tuff requested that in submitting evidence in support of their motion to reconsider, defendants be compelled to file evidence pertaining to any and all income generated by them from the copyrighted song, "Spoonin' Rap."
On June 22, 2000, Sylvia Robinson, president of Twenty-Nine Black Music and Joseph Robinson, Sr.'s ex-wife, moved pro se on behalf of Twenty-Nine Black Music for reconsideration of the judgment holding TNBM liable due to lack of notice of the pendency of the suit. Tuff opposed the motion by memorandum of July 10, 2000. On July 14, 2000, the Court approved Robinson's request for an extension of time until July 28, 2000 to file documentation in support of the motion to amend the judgment.
Robinson filed a pro se "motion to reconsider" on behalf of all defendants and attaching twenty-seven exhibits on July 26, 2000. Tuff opposed the motion by memorandum of August 17, 2000 and numerous declarations attaching seventy-two exhibits filed on September 20, 2000.
Robinson filed an additional declaration on behalf of the defendants on September 28, 2000, in which she alleged that, inter alia, plaintiff and plaintiff's counsel had requested that Gabriel Jackson ("Jackson") p/k/a Spoonie Gee, the performer of the copyrighted song at issue, "backdate" agreements submitted to the court and paid him to make perjurious statements.
By motion of October 16, 2000, Tuff moved for sanctions and to strike the allegedly fraudulent and slanderous sections of Robinson's September 28, 2000 submission as well as the supporting declaration of witness Kenneth Downing. Tuff's motion attached, inter alia, a sworn affidavit from Jackson refuting Robinson's claims. Defendants filed a memorandum and numerous exhibits in opposition on November 13, 2000.
Despite the November 15, 2000 return date on the motion to strike, defendants submitted "additional motion documents" on November 17, 2000. This submission is untimely and will not be considered.
Both the motion to reconsider and the motion to strike are fully submitted.
Discussion
I. Motion to Strike
This action has been ongoing for over three years. The parties to this dispute are highly litigious, as evidenced by the five prior opinions in this case. Both sides have submitted questionable, if not outright fraudulent materials, in support of their positions, a phenomenon which has been discussed in prior opinions and will not be detailed again here. See Tuff-N-Rumble V, 2000 WL 274192 at *1.
Rule 12(f) grants courts discretion to strike a pleading or any portion thereof that raises "any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ. p. 12(f). However, motions to strike are generally disfavored. See Burger v. Health Ins. Plan of Greater New York, 684 F. Supp. 46. 52-53 (S.D.N.Y 1988) (citation omitted). A motion to strike will not be granted on the ground of immateriality and impertinence "unless it can be shown that no evidence in support of the allegation would be admissible" Lipsky v. Commonwealth United Corp., 551 F.2d 887, 893 (2d Cir. 1976); Spirit Partners, L.P. v. Audiohighway.com, No. 99 Civ. 9020, 2000 WL 1593385, at *11 (S.D.N Y Oct. 25, 2000)
Given that defendants' submission was filed without benefit of counsel, and the pattern of questionable submissions by both parties, the motion to strike is denied. However, only nonhearsay evidence proffered in the November 28, 2000 that is substantiated and relevant to the sole remaining issue of calculating damages will be considered. No part of the submission that attempts to relitigate factual questions previously decided or to raise defenses that were previously waived or denied is relevant to that determination. II. Reconsideration of Damage Award
Although the possibility of a factual hearing regarding damages was considered, this opinion is issued without a hearing both due to the unlikeliness that a hearing would crystallize the facts given that defendants are pro se, and so as not to delay further an overdue resolution of this matter.
In the September 28, 2000 declaration, defendants (1) allege that they did not have notice of the Tuff's opposition to their motion because the supporting materials were served upon prior counsel and Sugar Hill rather than to TNBM's place of business, Rob. Decl. at 1-3, 12-14, 17; and that (2) Jackson signed agreements that had been backdated by Tuff and also received "cash payments" in exchange for offering perjured testimony, id. at 3-6, Ex. C; and (3) calculate damages, id. at 10-12, Exs D-F; (4) argue that the corporate veil should not have been pierced,id. at 14-15; (5) submit unsworn letters from industry executives regarding industry practice and the use of samples, id. at Exs. H, I. Although the notice and service arguments have been waived, it should be noted that many of Robinson's letters have been sent on the letterhead of Sugar Hill Music, Inc., at 96 West St. in Englewood, NJ, despite her claim not to be professionally involved in that corporation or to have received service at that location, Moreover, as stated in a prior opinion, each of the corporate defendants is a mere alter ego of the other with the same principals, and they all shared common counsel. The allegations raised regarding Jackson are not relevant to the issue of damages, and defendants also reassert various allegations regarding ownership agreements signed by Jackson and Tuff for the master of "Spoonin' Rap" that this Court has previously found to be without merit,see Tuff-N-Rumble v, a ruling which there is no cause to reconsider. Finally, the prior opinion determined that the corporate veil will be pierced because the corporations are mere alter egos of the individual defendants. See Tuff-N-Rumble IV, 2000 WL 274192, at *4-5.
Courts have discretion to amend or alter a judgment pursuant to Rule 59 (e), or to grant a party relief from a final judgment pursuant to Rule 60 (b). In a Rule 60(b) motion, the moving party must introduce material facts pertaining to the damage award that were not previously raised, subject to the limitation that the motion "cannot serve as an attempt to relitigate the merits" of the judgment. Fleming v. New York University, 865 F.2d 478, 484 (2d Cir. 1989); see Schwartz v. Capital Liquidators, Inc., 984 F.2d 53, 54 (2d Cir. 1993) (per curiam); United States v. Potamkin Cadillac Corp., 697 F.2d 491, 493 (2d Cir.), cert. denied, 462 U.S. 1144, 103 S.Ct. 3128, 77 L.Ed.2d 1379 (1983). Because the defendants are proceeding pro se, this motion will be considered within the lenient standard of Rule 60(b)(6), which allows a court to reconsider the amount of a judgment when presented with "any other reason justifying relief."
The Copyright Act entitles owners whose copyrights have been infringed to actual damages plus the infringer's profits. See 17 U.S.C. § 504 (a)(1), (b). Tuff argues that it should receive what is in effect a double award in the amount of its damages plus the equal amount of the defendants' profit. However, Tuff cites no authority for this proposition which, in fact, misconstrues the Copyright Act. Section 504(b) provides that in addition to damages, a successful plaintiff may also receive "any profits of the infringer that are attributable to the infringement and arenot taken into account in computing the actual damages." (Emphasis added.) See Hamil America v. GFI, 193 F.3d 92, 108 n. 7 (2d Cir. 1999) (""[a] plaintiff may not recover its full lost profits plus all of the defendant's profits, for this would constitute a forbidden double recovery.?) (citation omitted), cert. denied, 120 S.Ct. 1171 (2000). As Tuff concedes that defendants' profit equals Tuff's damages, the award will be limited to damages as calculated below.
A. Prior Award
In brief, the prior opinion awarded damages based upon Tuff's unrebutted estimates of its actual damages pursuant to 17 U.S.C. § 504 (b). As none of the records containing either the song "Spoonin' Rap" or a sample thereof "went gold," or sold 500,000 copies or more in the United States, according to the Record Industry Association of America ("RIAA"), damages were calculated based upon estimated sales of 499,999 records for each adjudged infringement.
Tuff presented evidence that the industry practice is to provide song owners with a statutory royalty rate of 7.1 cents per song composition,see 37 C.F.R. § 255, plus a negotiated royalty for the use of the master, which is generally between 10 and 12 cents per unit sold. In addition, Tuff's evidence showed that the standard industry licensing rate for the use of a master on an album is 3 to 8 cents per unit sold, and 6 to 16 cents for the use in a single. In order to compensate for the high non-gold sales estimate, the Court used the low end of the standard industry fluctuation in licensing and royalty rates as submitted by Tuff to calculate the $489,748.98 award for adjudged infringements.Tuff-N-Rumble IV, 2000 WL 274192, at *3. This award covered infringements from the use of "Spoonin' Rap" (1) on the soundtrack of the movie "Fresh;" (2) in the Monifa song, "I Miss You (Come Back Home);" and (3) in two licenses to the company CEMA. Id.
Additional damages were awarded for the losses suffered when, due to defendants' insistence that they, rather than Tuff, owned the rights to "Spoonin' Rap," Zomba Records ("Zomba") opted not to include the R. Kelly song, "It's All Good," which made derivative use of ("sampled") "Spoonin' Rap," in the album "R." Although Tuff eventually entered into a contract with Zomba for the creation of "It's All Good," the prior opinion held that Tuff would have earned at least $402,500 if the song had been included in the album, "R.", which had sold over five million units. Finally, the Court adopted the low estimate provided by Tuff's expert, who assessed the damage to the value of Tuff-n-Rumble's catalogue (i.e. the damage to the value of the "Spoonin' Rap" rights) from the song not being included in "R." at $1,116,666.62.
Adding these three awards, the total summary judgment award for Tuff was $2,008,914.64 plus costs and disbursements. See Tuff-N-Rumble IV, 2000 WL 274192, at *5.
B. Defendants' Proposed Damages Calculations 1. Royalty Rates and Licensing Fees
Defendants first take issue with Tuff's assertions regarding standard royalty rates for the use of masters. Tuff presented evidence that the standard royalty rate for the use of a master was between 10 and 12 cents per unit sold, see Doc. #106, Gandel Decl. at ¶ 5. Citing a letter from Howard Sadowsky, who previously "held various positions" in a record company, see Doc. #156, Def.2d Recon. Mtn Ex. B, defendants suggest that the rate is instead much lower. However, the exact amount defendants claim to be standard is unclear. See Def.2d Recon. Mtn (July 21, 2000) at 3. Robinson alleges that Sugar Hill has never received a royalty rate of over 5 cents per sample usage, but introduces no evidence to support that claim. The only document submitted in support of defendants' position on royalty and licensing fees is the Sadowsky letter, which is unsworn and has no other indicia of reliability. Because it is an out-of-court statement offered for the truth of the matter asserted to which no hearsay exception applies, the Sadowsky letter will not be considered.
As such, defendants have submitted no credible evidence rebutting Tuff's claim that its estimates of standard industry practice with regard to royalty rates and licensing fees should be applied to this case. Because defendants have persisted in disregarding numerous orders to document their claims, the highest industry standard rates will be used to calculate damages, except that the actual negotiated royalty rate as reflected in artist contracts will be used for songs covered by agreements that have been submitted pursuant to this motion.
2. Determination of Units Sold
Next, the defendants submit evidence, regarding a service named SoundScan, which records sales figures for records sold, and which defendants allege is a more accurate means of determining the sales of infringing materials than Tuff's method of estimating sales based on whether the album has been certified platinum by the RIAA, which assesses sales by subtracting albums returned from the total albums shipped. See RIAA website, http://www.riaa.com/Gold-Cert-1.cfm (also addressing differences between RIAA certification and SoundScan tracking systems). This Court noted in the summary judgment opinion that the RIAA estimates manifestly favored Tuff, see Tuff-N-Rumble IV, 2000 WL 274192, at *3.
Although defendants have submitted only color copies of SoundScan reports in support of its preferred method of calculation, the Court takes judicial notice that SoundScan is a service for recording sales of barcoded albums in the United States that is recognized as reliable by both the music industry and courts AM Records, Inc. v. Napster, Inc., Nos. C9905183MHP, C000074MHP 2000 WL 1170106, *5 (N.D. Cal. Aug. 10, 2000) ("Soundscan is widely used in the recording industry to track music sales."); Cherry River Music Co. v. Sitmar Entertainment, Inc., 38 F. Supp.2d 310, 315 n. 45 (S.D.N.Y. 1999) (relying on SoundScan sales reports in musical copyright infringement case); Taylor v. Polygram Records, No. 94 Civ. 7689 (CSH), 1999 WL 124456, *6 (S.D.N.Y. March 8, 1999) (noting that SoundScan is "an industry report that discloses the retail sales of music releases based on bar code data."); EMI, Inc. v. Isbell, No. 95 Civ. 5182 (HB) (DFE), 1998 WL 314722, *3 (S.D.N.Y. June 15, 1998) (finding SoundScan report reliable); Independent National Distributors, Inc. v. Black Rain Communications, Inc., No. 94 Civ. 8464 (JFK), 1996 WL 238401, *3 (S.D.N.Y. April 4, 1996) (same)
However, because not every location that sells an album is equipped to scan barcode numbers, SoundScan does not record every retail sale. See B.J. Thomas v. Lytle, 104 F. Supp.2d 906, 915 (M.D. Tenn. 2000) (relying on SoundScan reports to assess lost music royalties although SoundScan tracks only those albums sold in stores that can scan barcodes); Tsiolis v. Interscope Records, Inc., 946 F. Supp. 1344, 1346 (N.D. Ill. 1996) (same). Robinson alleges, without evidentiary support, that SoundScan represents 70-80% of all United States sales. Tuff has submitted a sworn affidavit from Daniel Rubin, an executive with Sample Clearance, Ltd., who states that his company "assumes that SoundScan takes into account roughly sixty-five percent (65%) of gross sales in the United States." Rubin Aff. at ¶ 6. In addition, Rubin asserts that SoundScan tracks the "clean" and "dirty" versions of hip-hop albums separately, so that total sales of both versions would have to be considered to reach an accurate total. Id. at ¶ 7.
By affidavit, Tuff's in-house counsel, Jeffrey Gandel, suggests that the 65% figure is high for albums that are movie soundtracks or compilations, and for rap albums meeting these criteria in particular, because such albums often sell through record clubs or specialty vendors rather than retail stores with scanners. Aug. 31, 2000 Gandel Decl. ¶ 7.
C. Analysis
Despite being granted additional time in which to submit documentation of their actual infringement profits and numerous specific discovery requests from Tuff, defendants have refused to provide evidence of their actual earnings from each infringement, in willful and contemptuous violation of several prior orders. Therefore, the damages will be modified only to the extent that the SoundScan reports will serve as the basis for the calculation of the number of units sold. As has been previously recognized, the calculation of the number of actual infringements will be only an approximation at best. Because SoundScan does not cover sales of albums in locations without barcode scanners such as non-retail record clubs, specialty vendors and mail order houses, or foreign sales, the SoundScan reports will be deemed to reflect 65% of total sales (the "adjusted SoundScan figure"). Damages will be assessed accordingly.
1. Zomba Records and The R. Kelly Album "R."
Defendants have submitted three unsworn letters from individuals suggesting that Zomba Records' decision not to include the song "It's All Good" on the Album, "R.", was due to the weakness of the song rather than the disputed ownership of "Spoonin' Rap," which the song sampled. As a result, defendants argue, they should not be held liable for the damages caused by "It's All Good" not being included on the record. However, aside from the fact that this evidence is inadmissible hearsay, this argument is an improper attempt to relitigate liability rather than to ascertain the amount of damages and therefore will not be considered.
a. Damages to Tuff i. Sales of "Clean" and "Dirty" Versions
With reference to the SoundScan report attached as Exhibit F to Robinson's Sept. 28, 2000 declaration, defendants contend that the R. Kelly album, "R.", had sold only 2,296,934 units as of June 18, 2000. Tuff, however, notes that this figure reflects only sales of the "clean" version of the album, referenced by catalogue number 41625, Warsh. Decl. Ex. 13 at 2, and do not reflect sales of the "dirty" version, which is referenced by catalogue number 41661, id. Ex. 14 at 2. Tuff argues that because "dirty" versions often outsell "clean" versions of albums, the figure submitted by the defendants constitutes only 65% of half of the total United States sales of the "R." album. In support, Tuff submits evidence that the RIAA has certified that the album "R." has sold a total — "clean" and "dirty" — of at least 6 million units in the United States. Id. at Ex. 15. Neither party has submitted a Soundscan report for the "dirty" version of "R."
Rather than simply double the "clean" sales in order to arrive at a total figure for all sales of "R." albums, the Court will refer to the RIAA figure, which encompasses both "clean" and dirty" versions. In addition, instead of assuming that the most units that could have been sold without the album reaching the next certification level (i.e. 6,500,000), as in the prior opinion, the 6 million figure is deemed more accurate, and therefore will be adopted.
It should be noted that doubling the adjusted SoundScan figure for "clean" sales to reflect sales of "dirty" albums, as Tuff suggests, would result in a total sale figure of (3,533,741 x 2) or 7,067,482 albums. Although the RIAA figure is lower, it is better substantiated.
ii. Damages for "R." Albums Sold
The Zomba contract provided for (1) a royalty of $0.0355, half the statutory rate, per unit sold for licensing the composition component of "Spoonin' Rap"; and (2) a royalty of $0.045 per unit sold for licensing the master component of "Spoonin' Rap." Warsh. Decl. Ex. 3 at pp. 36-7, Ex. 16 (the Zomba Contract). Therefore, had the song, "It's All Good" been included in the album, "R.", Tuff would have received a total of $0.0805 ($0.0355 + $0.045) per unit sold. Multiplying this figure by the 6 million units sold, Tuff's damages are $483,000.
b. Damage to Tuff City's Catalogue
The damages assessed for the reduced value of "Spoonin' Rap" in the Tuff City catalogue, which were based upon the report of Tuff's expert, Gary Cohen, see Tuff-N-Rumble IV, 2000 WL 274192, at *4, will also be amended according to the certified sales figures for the "R." album.
i. Master Component
Cohen stated that the value of a master component is four times its average annual net income over a three-year period. Warsh. Decl. Ex. 18 at 6. Defendants have submitted an unsworn "report" from a purported expert, music producer George Kerr, which suggests that "the average multiple in the music industry for a company to purchase a master is approximately [five to ten] times the annual net income" over a three-year period. Def. Ex. M at 6. However, because this submission lacks indicia of reliability, it will not be considered.
Moreover, defendants claim that no expert could accurately assess the value of a master recording without referring to the licensing agreement regarding the use of the master. While this may be so, it is defendants who have violated repeated orders to produce this documentation, and they have introduced no credible evidence rebutting Cohen's report.
Thus, using the Cohen figures that were adopted in the prior opinion, but adjusting them to reflect the updated sales figures, damage to the master component is as follows: The income produced by the master component was ($0.045 per unit X 6,000,000 units sold), or $270,000.00. Over three years, the average sales were $90,000.00. Therefore, according to Cohen's method, the master component of "Spoonin' Rap" would be worth ($90,000.00 x 4), or $360,000.00 more today if it had been included on the album, "R.".
ii. Composition Component
Cohen's report states that the value of the publishing, or composition, component of a "Spoonin' Rap" is 14 to 15 times the amount of annual net publisher income averaged over a three-year period. Warsh. Decl. Ex. 18 at 9. Defendants have not introduced any evidence to rebut this assessment of the appropriate multiple used to evaluate the damage to the composition component. As in the prior opinion, the lower multiple of 14 will be used.
Adjusting Cohen's assessment of the damage to the composition component of "Spoonin' Rap," and thus to the Tuff City catalogue, to account for the total sales, the damages are calculated as follows: Had the song, "It's All Good" been included on the "clean" version of "R.", the composition component of "Spoonin' Rap" would have generated ($0.0355 per unit X 6,000,000 units sold), or $213,000.00, which would have added ($213,000.00 divided by 3), or $71,000.00, to Tuff's average yearly income over the last three years. Therefore, if the song had been included in "R.", the composition component of "Spoonin' Rap" would be worth ($71,000.00 X 14), or $994,000.00, more than it is worth today.
Therefore, the total damage to the value of "Spoonin' Rap" in Tuff City's catalogue for the failure to include "It's All Good" on the album "R." is ($360,000.00 + $994,000.00), or $1,354,000.00, and defendants' total liability for all damages resulting from the non-use of "It's All Good" on the album "R." is $1,837,000.
2. Soundtrack of the Movie, "Fresh"
Defendants have submitted a SoundScan report of the sales of the soundtrack to the movie "Fresh." The report indicates that the album sold 33,121 units, which is 65% of the total of 50,955 units sold. Defendants have submitted only an unsigned contract in support of their claims that they received a royalty rate of $.05 per unit for the composition component, and $0.04 per unit for the master component, which will not be considered. As it has previously been established that the highest standard industry royalty rate for the master component of a song is $.12 per unit, this figure will be employed. When added to the statutory composition rate of $0.0741, damages will be assessed at $0.1941 per unit.
Therefore, Tuff suffered damages of ($0.1941 X 50,955), or $9,890.37 for the defendants' infringement in regard to the "Fresh" soundtrack.
3. Damage for the Craig Mack Song, "Style"
Defendants have submitted a SoundScan report reflecting that the Craig Mack song, "Style," sold 114,580 units by December 8, 1999. This represents 65% of the total of 176,276.92 units sold. In addition, defendants have submitted a signed co-publishing agreement that assigns them 50% of all rights in the song, "Style." Rob. Decl. Ex. P(2) at 1. Tuff apparently accepts defendants' calculation of earnings with the exception of number of units sold. Therefore, Tuff was damaged in the amount of defendants' share of the royalty rate ($0.1135 per unit) multiplied by total sales of 176,276.92, for a total of $20,007.41.
Defendants' total liability for infringing on Tuff's copyright in "Spoonin' Rap" as sampled in the song, "Style," is therefore $20,007.41.
4. Damages for the Monifah Song, "I Miss You (Come Back Home)"
Defendants have submitted unsworn faxed memoranda from an employee of the record company that licensed the Monifah Song, "I Miss You (Come Back Home)," which sampled "Spoonin' Rap," stating that defendants possessed a 25% publishing share in the song and that their total income therefrom was $8,735.76.00 based upon sales of 96,581 units. Rob. Decl. Ex. Q. However, the SoundScan report also submitted by defendants states that 220,363 units were sold, which represents 65% of the total of 339,019 units sold. The more reliable adjusted SoundScan figure, rather than the unsubstantiated figure in Exhibit Q, will be adopted. As the defendants have failed to introduce any reliable measure of their income, such as a signed contract, royalty checks, or an accounting, the highest industry standard rates will be employed.
a. Single Sales
Employing the $0.0174 per-unit statutory royalty rate for use of a composition, plus the highest standard royalty rate for the use of the master in a single, $0.16 per unit, Tuff was damaged in the amount of ($0.0174 + $0.16) multiplied by 339,019 units sold.
Therefore, Tuff's total damages for the infringement represented by the sale of the single, "I Miss You (Come Back Home)," is $60,141.97.
b. "New York Undercover" Soundtrack Album
The only evidence presented reflecting sales of the "dirty" version of the "New York Undercover" soundtrack album or the "Moods . . . Moments" album, is in Exhibit Q, the unsworn fax that, as shown above, vastly underestimates the actual album sales. Because there is no reliable indicator of actual sales, and no evidence at all of sales of the "clean" version of the "New York Undercover" soundtrack, the damages arising therefrom cannot be assessed at this time.
The parties are granted leave to file SoundScan reports reflecting sales of both the "clean" and "dirty" versions of the "New York Undercover" soundtrack album and "Moods . . . Moments" album, and proposed calculations of damages in accordance with this opinion, within 20 days of the filing of this opinion.
c. "New York Undercover" Television Show
Defendants' Exhibit R shows that defendants received $8,000 for the use of the song, "I Miss You (Come Back Home)" on the television show, "New York Undercover." Tuff accepts this amount as the total defendants received for this infringing use of the song.
Defendants are therefore liable for $8,000 arising from the use of "I Miss You (Come Back Home)" in the television show, "New York Undercover."
5. Licenses to CEMA
Defendants issued two licenses to CEMA for the use of the song, "Spoonin' Rap" in the compilation albums, "O1' Skool Butta" Volumes I and II. The SoundScan report reflects that as of December 5, 1999, 2,954 units of Volume II had been sold, which is 65% of the total of 4545 albums sold. Calculating damages based upon the highest standard industry royalty rates rather than on the contract, which defendants were "unable to find," damages were ($0.0741 + $0.12) multiplied by the number of albums sold. Total damages would are $882.18, plus the sum due for the sales of the Volume I album.
Tuff, however, argues that the actual sale figures are not the relevant sums, but that typical industry practice is to grant an advance on fees for anywhere from the first 50,000 to 200,000 units sold. See Rubin Dec. ¶ 5; Gandel Dec. ¶ 9. However, there is no documentation that defendants received any such advance for "O1' Skool Butta," or whether, if received, the money was retained when album sales vastly underperformed the advance. As a result, the damages ascertained by reference to the SoundScan report will be used.
The parties are granted leave to submit a SoundScan report reflecting sales of the other "O1' Skool Butta" compilation volume that includes the copyrighted song pursuant to the license with Tuff, as well as proposed damage calculations in accordance with this opinion, within 20 days of the filing of this opinion.
6. Other Infringements
Since the judgment was issued, Tuff has discovered evidence of a multitude of other infringing uses of the song, "Spoonin' Rap", as well as derivative uses in the song, "I Miss You (Come Back Home)." Defendants have submitted no evidence to rebut the inference that they, as the party claiming ownership of "Spoonin' Rap," received compensation for these infringements. In a letter of June 20, 2000, Tuff set forth a list of ten third-party re-releases of "Spoonin' Rap," as well as twenty-two "examples" of third-party licenses to create derivative works ("sampling") from the song, "Spoonin' Rap." See Rob. Decl. Ex. V.
To date, the infringing derivative uses of the song, "I Miss You (Come Back Home)," allegedly include uses on:
1. The album, "Love Soul" (Warsh. Decl. Ex. 19);
2. The album "Slow Jams Vol. 2" (id. at Ex. 20);
3. The television series, "B A P S" (id. At Ex. 21);
4. The television series, "All That" (id.)
5. The television series, "B.E.T. Sound Stage" (id.)
6. One or more movies on the cable television channel, Encore (id. At Ex. 22);
7. At least one television show on the cable television channel, Nickelodeon (id.);
8. One or more movies on the cable television channel Starz (id.); and
9. The cable television channel, BET (id. At Ex. 23)
Tuff Opp. Mem. at 25.
Defendants have failed to introduce any evidence of income derived from any of these infringements, or of any others that have not yet been discovered by the plaintiffs. The parties are granted leave to submit SoundScan reports of album sales for both "clean" and "dirty" versions, if applicable, of the albums, "Love Soul" and "Slow Jams Vol. 2," as well as any other albums containing the infringing works as cited in Tuff's June 20, 2000 letter, in addition to proposed damages calculations in accordance with this opinion, within twenty days of the date the opinion is filed.
Every attempt has been made to ascertain a fair and accurate rate of damages, balancing the defendants' continued disregard of prior orders with the fact that they are unassisted by counsel. However, there is now significant evidence before the Court of continuing infringements. Although there is no evidence of actual profits, it is reasonable to assess damages equal to the $8,000.00 defendants earned for the infringing use of the song on the television show, "New York Undercover," for each of the seven additionally cited television uses.
Defendants are therefore liable for damages of $56,000.00 for the infringing television uses, cited as numbers 3-9 above.
D. Summary of Damages Caused by Defendants' Infringement
In sum, damages will be awarded as follows, to be supplemented by additional damages based upon forthcoming SoundScan reports should they be timely submitted:
$483,000.00 Damages for failure to include song on the "R." album;
$360,000.00 Damage to value of "Spoonin' Rap," Master Component from "R." omission;
$994,000.00 Damage to value of "Spoonin' Rap," Composition Component from "R." omission;
$ 9,890.37 Use of song on "Fresh" soundtrack;
$ 20,007.41 Use of sample on Craig Mack song, "Style";
$ 60,141.97 Use of sample in Monifah single, "I Miss You (Come Back Home)";
$ 8,000.00 Use of song in "New York Undercover" television show;
$ 882.18 CEMA License for "01' Skool Butta Vol. 2" album;
$ 56,000.00 Seven additional television uses
$1,991,921.70 Total Infringement Damages
Conclusion
For the aforementioned reasons, the motion to strike is denied, and the judgment against defendants will be amended to reflect total infringement damages of $1,991,921.70, plus attorneys' fees and costs. The parties are granted leave to submit additional SoundScan reports for infringing materials not included in this award within twenty (20) days, in accordance with this Opinion.
Settle judgment on notice.
It is so ordered.