CBS, INC. v. GARROD No. 83-988 Civ-T-10.
622 F.Supp. 532 (1985)
CBS, INC., Plaintiff, v. Charles GARROD, et al., Defendants.
United States District Court, M.D. Florida, Tampa Division.
September 19, 1985.
David L. Partlow, Tampa, Fla., for defendants.
ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
HODGES, Chief Judge.
This is a diversity action in which Plaintiff, CBS, Inc. (hereinafter "CBS"), alleges that Defendants, Charles Garrod, et al. (hereinafter "Garrod"), engaged in unfair competition, conversion and statutory theft. Each cause of action alleges that Garrod engaged in record piracy by duplicating the impulses of certain master recordings belonging to CBS, and then transferring the duplicated impulses into "bootleg" phonographic records and tapes which were subsequently sold in competition with CBS. Plaintiff seeks both damages and injunctive relief.
By Order dated January 16, 1985, the Court bifurcated the damages issues from the liability and injunctive relief issues pursuant to Rule 42(b), F.R.Civ.P. Presently before the Court are the parties' cross motions for summary judgment and joint stipulation of facts on the issue of liability. Also to be considered is CBS' Motion to Strike Defendants' Third Affirmative Defense.
Under Rule 56(c), F.R.Civ.P., the question is whether, on the facts stipulated, either party is entitled to judgment as a matter of law. In a diversity case, the substantive law applicable is that of the forum, which in this case is Florida. Impossible Electronics Techniques, Inc. v. Wackenhut Protective Systems, Inc.,
The claims alleged by CBS — conversion, unfair competition and statutory theft — are all predicated on CBS having some protectible property interest. Defendants argue that CBS had no property interest in the records which Defendants copied. More specifically, Garrod argues that CBS either had no common law copyright in the records, or if it had, that the right was lost upon CBS' "publication" of the records through duplication and commercial sale.
I. Common Law Copyright
The issue of common law copyright was previously raised in Defendants' Motion to Dismiss. It is also central to Defendants' Third Affirmative Defense which Plaintiff seeks to strike. Defendants claim that Fla. Stat. § 543.02 abolished all common law copyrights in Florida. However, this statute was repealed effective July 1, 1977. Laws of Florida, 1977, c. 77-440, § 1. Thus, the Court concluded in its Order of January 16, 1984 that § 543.02 "cannot now preclude this action."
Defendants' only new argument cites 73 Am.Jur.2d, Statutes, §§ 384-85, which provides in pertinent part:
Id. at § 385 (emphasis added). The Court agrees that repeal of a statute does not divest one of a defense which arose under the former statute. Thus, arguably, anyone who relied on § 543.02, Fla.Stat., to protect against a claim of common law copyright prior to July 1, 1977 may be protected.
However, since this is an action seeking damages and injunctive relief for future wrongdoings, Defendants have failed to state a reason why this Court should reverse its prior ruling that § 543.02 cannot preclude this action.
Defendants argue in the alternative that CBS lost its common law copyright by reason of publication. Defendants cite DeSilva Construction Corp. v. Herrald,
Since there is no Florida law to point to the question of what constitutes publication of records, the Court finds persuasive the reasoning in A & M Records, Inc. v. M.V.C. Distributing Corp.,
Adopting Defendant Garrod's argument that distribution of records constitutes publication would lead to inequitable results. No record producer would distribute a record until enough copies were made to sell to the entire market. Otherwise, a limited release of a record to a small market would be at great risk. If the record turns out to be a smash hit, anyone who could buy a copy could then mass-produce more copies and undersell the original producer (who, in addition to the expenses of copying, must also bear the costs of "enterprise, organization, skill, labor and money" of getting the musicians, music and recording time, International News Service, 39
II. Other Property Interests of CBS
Although the Court has ruled that Plaintiff did not lose its common law copyright interest in the records reproduced by Defendant, either through Fla.Stat. § 543.02 or through publication, there is an additional ground for finding in favor of Plaintiff's having a protectible property interest. Specifically, Mercury Record Productions, Inc. v. Economic Consultants, Inc.,
The Court in Mercury Record went on to hold that such a property interest is protectible under state law against "unfair competition ... appropriation, ... (and) larceny." Id. Thus, independent of its common law copyright, CBS also has a protectible property interest in the professional expertise invested in the recordings at issue in this case.
Having disposed of Defendants' Affirmative Defenses, the next question is whether Plaintiff has established Defendants' liability.
III. Unfair Competition
By its decision in Goldstein v. California,
Both parties agree that Florida recognizes the tort of unfair competition. B.H. Bunn Co., Inc. v. AAA Replacement Parts Co., Inc.,
451 F.2d at 1264; see also Boston Professional Hockey Association Inc. v. Dallas Cap & Emblem Mfg., Inc.,
Plaintiff urges a more liberal view of unfair competition as applied to unauthorized reproductions of phono-records. Although there is no Florida decision directly on point, the Bunn court recognized that Florida courts seek to apply the generally prevailing view of unfair competition. Bunn, 451 F.2d at 1262 n. 3. Thus, this Court adopts the prevailing view that the tort of unfair competition involving record piracy requires proof of three elements: (1) time, labor, and money expended by the plaintiff, (2) competition, and (3) commercial damage. Mercury Record, 218 N.W.2d at 709, citing International News Service, 39 S.Ct. 68.
Clearly all three elements are present in the instant case. CBS expended time, labor and money in making the records copied by Garrod. Stipulation at paragraph 18. Garrod did directly copy and sell records produced by CBS which CBS is either presently selling or seeking to sell in the future. Stipulation at paragraphs 18 and 25. And, "the damage to CBS from Defendants' Activities is irreparable and cannot be adequately measured or compensated by monetary damages." Stipulation at paragraph 29. Thus, based upon the law as stated above and the facts as set forth in the Stipulation, Plaintiff's Motion for Partial Summary Judgment on the claim of unfair competition, Count I of the Complaint, is hereby GRANTED.
In Florida, an action for conversion will lie for a "wrongful taking of intangible interests in a business venture." In re Estate of Corbin,
V. Statutory Theft
Plaintiff relies on Fla.Stat. § 812.014(1) which provides in pertinent part that one is liable for theft if one "knowingly ... uses the property of another with intent to ... appropriate the property to his own use." Without re-examining all of the above discussion, the Court finds that Defendants' actions fall squarely within the confines of the Florida Statute defining theft. See e.g., Sections I-III, supra, and paragraphs 10, 23 and 24 of the Stipulation. Thus, Plaintiff's Motion for Partial Summary Judgment on the claim of statutory theft, Count III of the Complaint, is hereby GRANTED.
Consistent with the above rulings, the Court takes the following actions:
1. CBS' Motion for Partial Summary Judgment on Counts I-III of the Complaint is hereby GRANTED.
2. Defendants' Motion for Partial Summary Judgment is hereby DENIED.
IT IS SO ORDERED.
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