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Latin America Music Co. v. Spanish Broadcasting System, Inc.
Citations: 254 F. Supp. 3d 584; 2017 WL 2210864; 2017 U.S. Dist. LEXIS 76696Docket: No. 13-cv-1526 (RJS)
Court: District Court, S.D. New York; May 19, 2017; Federal District Court
Plaintiffs Latin American Music Company, Inc. (LAMCO) and Asociación de Compositores y Editores Música Latinoamericana de Puerto Rico, Inc. (ACEMLA) sued Spanish Broadcasting System, Inc. (SBS) for copyright infringement, alleging unauthorized broadcasts of thirteen songs. After a bench trial overseen by Judge Richard J. Sullivan, the Court found that the Plaintiffs failed to meet their burden of proof on all claims, resulting in a judgment for the Defendant. The Court acknowledged the background of the case, including the filing of the complaint on March 7, 2013, and the denial of SBS's motion for partial summary judgment on September 23, 2015, due to genuine issues of material fact regarding license validity. The Court later partially granted SBS's second summary judgment motion, recognizing factual disputes about six specific songs. A trial was set for April 17, 2017, but Plaintiffs sought to adjourn it due to bankruptcy filings on March 24, 2017, a request the Court denied, citing applicable bankruptcy law. The bench trial proceeded, with both parties submitting affidavits and evidence. After the Plaintiffs rested their case following the testimony of their sole witness, the Court granted SBS's motion for judgment on partial findings. To succeed, the Plaintiffs were required to substantiate their claims with evidence proving their allegations by a preponderance of the evidence. The Court, acting as the finder of fact, has the authority to assess witness credibility and draw reasonable inferences from evidence. Under Rule 52(c) of the Federal Rules of Civil Procedure, during a bench trial, a court can enter judgment against a party if that party has been fully heard on an issue that is essential for maintaining or defeating a claim. This rule applies particularly when a defendant contends that the plaintiff has not demonstrated a right to relief based on facts and law. A defendant's motion under Rule 52(c) may be granted if the plaintiff fails to establish a prima facie case or if the evidence preponderates against the plaintiff's claim. The court evaluates the evidence independently rather than favoring the non-moving party. To succeed in a copyright infringement action, plaintiffs must prove ownership of a valid copyright and unauthorized copying of original elements. In this case, LAMCO, a New York music publisher, and ACEMLA, a Puerto Rican licensing society, are involved, with both entities managed by Luis Raul Bernard. Although Bernard claimed LAMCO owned the copyright registrations for certain songs, he later admitted that neither LAMCO nor ACEMLA actually held ownership of the rights to the disputed songs. The defendant presented evidence indicating that rights had not been owned by LAMCO or ACEMLA since June 2003, and that rights were instead controlled through a sub-publishing agreement. Bernard also confirmed that his sister-in-law, Dolores Vera, is the actual rights holder, supported by documentation he authenticated during cross-examination. LAMCO transferred its rights to all musical compositions and copyrights to Ms. Vera on July 7, 2002, as confirmed by Bernard's testimony. LAMCO's bankruptcy filings from March 2014, which Bernard authenticated, indicate that LAMCO owned no intellectual property other than its logo, valued at $1.00. The Sub-Publishing Agreement permits LAMCO to enforce Ms. Vera's rights to the songs but includes a clause stating that the agreement terminates if LAMCO becomes insolvent, which occurred during its bankruptcy that lasted nearly a year. This suggests LAMCO did not own the copyrights post-2014. In regards to alleged copyright infringement, Bernard stated he personally heard specific songs played on various radio stations, providing detailed accounts of the songs, dates, and times. He recorded instances of infringement from unlicensed radio stations using a portable audio recorder. However, during cross-examination, discrepancies arose concerning the dates he reported hearing "Vaso en Colores," with the operative complaint listing a different date than his affidavit. Bernard showed uncertainty about the exact circumstances of the infringements, suggesting he could have heard the song on both dates he mentioned but could not distinctly recall either. Plaintiffs' counsel admitted uncertainty regarding the specific dates and times of the songs' recordings. Witness Bernard demonstrated significant inconsistencies in his recollection of details, including the days he heard the songs, the versions he listened to, and even the gender of the performing artist. He was unsure if he heard full songs or only snippets. His testimony contradicted his earlier sworn affidavit and exhibited evasiveness during cross-examination, leading the Court to conclude that his testimony lacked credibility and was fabricated. The Court established jurisdiction under 28 U.S.C. §§ 1331 and 1338(a) and confirmed proper venue in the Southern District of New York under 28 U.S.C. § 1391. The Copyright Act of 1976 protects original works, and to prove copyright infringement, plaintiffs must establish ownership of a valid copyright and demonstrate copying of original elements. Ownership is critical for a valid infringement claim and necessary for standing to sue, with only copyright owners or exclusive licensees having the right to initiate such actions. The term "copying" encompasses infringement of the copyright owner's exclusive rights, including reproduction, public performance, display, derivative works, and distribution. A copyright plaintiff is responsible for proving infringement, a burden that remains with them even when a valid certificate of registration is presented. In this case, the plaintiffs failed to demonstrate, by a preponderance of the evidence, two essential elements of copyright infringement: 1) valid ownership or exclusive licensing of the copyrights to the Songs, and 2) evidence that the Defendant's radio stations played the Songs on the specified dates. The only evidence provided by the plaintiffs came from Bernard, who claimed LAMCO owned the copyright registrations but offered only conclusory statements. During cross-examination, Bernard admitted that his sister-in-law owns the rights to the songs, which were transferred to her in 2002. Although the plaintiffs argued that a Sub-Publishing Agreement restored certain rights to LAMCO, including the right to sue, they did not prove this right equated to ownership or exclusive licensing. Furthermore, they failed to counter the assertion that the Sub-Publishing Agreement terminated when LAMCO entered bankruptcy in 2014. Regarding evidence of infringement, Bernard's testimony was deemed incredible and self-contradictory, failing to meet the preponderance of the evidence standard. Consequently, the Court granted the Defendant's motion for judgment on partial findings under Rule 52(c), ruling in favor of Defendant Spanish Broadcasting System, Inc., and ordering the case closed. The Court noted that the recordings Bernard claimed to have made of the alleged infringement were not produced during discovery and were stated to be nonexistent or destroyed prior to the trial. It was only shortly before the trial that plaintiffs' counsel indicated Bernard had retained copies of the recordings, which the Court subsequently excluded from evidence. The factual findings were based on stipulations, trial transcripts, witness affidavits, and defendant's exhibits. Any findings that reflect legal conclusions were deemed conclusions of law, and vice versa.