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Nichols v. Club for Growth Action

United States District Court, District of Columbia

October 25, 2017

ROGER NICHOLS, et al., Plaintiffs,
v.
CLUB FOR GROWTH ACTION, Defendant.

          MEMORANDUM OPINION

          ROSEMARY M. COLLYER UNITED STATES DISTRICT JUDGE

         Roger Nichols, an individual, and Three Eagles Music, said to be a division of Roger Nichols Music, Inc., sued Club for Growth Action, alleging that the Club's advertisement violated copyrights held by Three Eagles Music and Mr. Nichols' personal rights under trademark law. The Court granted in part and denied in part Club for Growth Action's Motion to Dismiss and dismissed Mr. Nichols' trademark claim. Before completing discovery, Club for Growth Action chose to move for summary judgment arguing that Three Eagles Music does not own the copyright at issue. Plaintiffs responded by requesting leave to file a second amended complaint to clarify the ownership of the relevant copyright. The motion for summary judgment will be denied and the motion for leave to amend will be granted.

         I. FACTS

         Mr. Nichols composed both the lyrics and music of the song Times of Your Life. Times of Your Life was first recorded in 1975 by Paul Anka. The Complaint alleges that Three Eagles Music (TEM) is a division of Roger Nichols Music, Inc. (RNMI) and the owner of the copyrights to both the musical composition and lyrics of Times of Your Life. The registration numbers of the two copyrights are EU529514 and EU599114.

         Club for Growth Action (Club for Growth) is a conservative political action organization that raises funds and creates advertisements to promote candidates for public office. In 2015, Club for Growth created two 30-second commercials focused on challenging former Wisconsin Senator Russ Feingold's attempt to regain his Senate seat. One commercial featured Times of Your Life (the Ad). The Ad altered a majority of the lyrics, but did not alter any of the musical composition for the portion of the song used in the commercial. The commercial was available on the Internet and aired on television in Wisconsin. “At no time has the Club obtained, or attempted to obtain, a license, authorization, or other permission from Three Eagles Music to use or exploit Times of Your Life . . . . Nor did [Mr.] Nichols consent to allow it to capitalize on his reputation as a songwriter for the purpose of promoting its political agenda.” First Am. Compl. (FAC) [Dkt. 9] ¶ 22.

         Plaintiffs first filed suit in federal court in California. Because Plaintiffs are Oregon residents, Club for Growth resides in Washington, D.C., and the Ad was aimed at a Wisconsin political campaign, Club for Growth moved to dismiss for lack of personal jurisdiction and other pleading failures. Plaintiffs took a voluntary dismissal of their California complaint and filed a similar complaint in the District Court for the District of Columbia. See Compl. [Dkt. 1]. Club for Growth moved to dismiss and Plaintiffs filed an Amended Complaint on April 29, 2016. See FAC.

         Club for Growth again moved to dismiss for failure to state a claim and because Plaintiffs' First Amended Complaint alleged facts demonstrating that the Ad was fair use. See Mot. to Dismiss [Dkt. 10]. The Court granted the motion in part, dismissing the trademark claim. See Mem. Op. [Dkt. 23]; Order [Dkt. 24]. Thereafter, the parties entered discovery and almost immediately Club for Growth filed its motion for summary dismissal arguing that the infringement claim by TEM should be dismissed because TEM lacks standing to sue. See Mot. for Summ. Dismissal of Copyright Claim and Entry of Final J. Against Pls. (Mot.) [Dkt. 33].[1]Club for Growth had researched the corporate structure of RNMI and TEM and discovered that TEM is not an incorporated division of RNMI as described by the Plaintiffs in all previous versions of the Complaint. See FAC ¶ 7.

         Plaintiffs responded with a joint opposition and motion for leave to file a second amended complaint, which would ostensibly correct the facts about TEM's ability to sue. Pls.' Opp'n to Def.'s Mot. for Summ. Dismissal of Pls.' Copyright Claim and Entry of Final J. Against Pls., or in the Alt., for Leave to Amend the First Am. Compl. (Opp'n) [Dkt. 35]. On June 27, 2017, before this filing, Plaintiffs updated the State of Oregon corporation information for RNMI, indicating that TEM is an assumed business name for RNMI. See Declaration of Roger Nichols (Nichols Decl.), Ex. B [Dkt. 35-3]. Club for Growth filed a joint reply and opposition to the motion to amend. Consol. Reply to Opp'n to Summ. Dismissal and Opp'n to Cross Mot. to Amend (Club Reply) [Dkt. 38]; see also Declaration of Lincoln D. Bandlow, Ex. C, Second Amended Complaint (SAC) [Dkt. 35-2]. Plaintiffs filed a reply in support of the motion to amend. Pls.' Reply Brief in Supp. of Their Cross-Mot. for Leave to Amend the First Am. Compl. (Pls.' Reply) [Dkt. 40]. The motions are ripe.

         II. LEGAL STANDARD

         A. Leave to Amend a Complaint - Fed.R.Civ.P. 15

         Rule 15 of the Federal Rules of Civil Procedure governs the filing of amended pleadings, such as a complaint, after a responsive pleading has been filed. See Answer [Dkt. 25]. As relevant here, it specifies that “a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). The grant or denial of leave lies in the sound discretion of the district court. See Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996). A court may deny leave to amend with sufficient reason, such as futility of amendment, undue delay, bad faith, dilatory motive, undue prejudice, or repeated failure to cure deficiencies by previous amendments. See Foman v. Davis, 371 U.S. 178, 182 (1962).

         B. Motion for Summary Judgment - Fed.R.Civ.P. 56

         Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment shall be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Moreover, summary judgment is properly granted against a party who, “after adequate time for discovery and upon motion, . . . fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In ruling on a motion for summary judgment, the court must draw all justifiable inferences in the nonmoving party's favor and accept the nonmoving party's evidence as true. Anderson, 477 U.S. at 255. A nonmoving party, however, must establish more than “[t]he mere existence of a scintilla of evidence” in support of its position. Id. at 252. In addition, the nonmoving party may not rely solely on allegations or conclusory statements. Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999). Rather, the nonmoving party must present specific facts that would enable a reasonable jury to find in its favor. Id. If the evidence “is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50 (citations omitted). On summary judgment, the district judge must decide “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251-52.

         III. ...


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