The Ray Charles Foundation v. Raenee Robinson, et al., US Dist. Ct., C.D. California (January 25, 2013).

This case involves copyright termination of transfer of some of Ray Charles’ songs, such as “Blackjack,” “Come Back Baby,” “Fool for You,” “Hallelujah I Love Her So,” “I Got a Sweetie,” “I’ve Got a Woman,” “Mary Ann” and “This Little Girl of Mine.”

On March 30, 2010, Ray Charles’ children (the “Defendants”) served notices of termination on the owners of songs that Ray Charles wrote or co-wrote (including publisher Warner-Chappell), with termination to be effective in 2015.  The Ray Charles Foundation (the “Foundation”) received royalties from exploitation of the songs by Warner-Chappell.  The Foundation sued the Defendants, seeking among other things a declaration that the termination notices were ineffective and untimely for various reasons, including that the songs at issue were excluded from the termination provisions because they were works made for hire.  The Foundation also claimed that the serving of numerous termination of transfer notices were claims against Charles’ estate, in violation of agreements signed by the Defendants.

In the 1950s, Ray Charles signed recording agreements that stated that Charles was hired as an employee to record songs for Atlantic Records, and was employed by a related company (Progressive Music Publishing Company) to write songs which were then owned by Progressive.  In 1980, Charles allegedly renegotiated the terms of his agreement with Progressive’s successor.  In 2002, Charles entered into an agreement with each of his twelve (12)(!!!) children, seven (7) of whom were defendants in this case.  Under the 2002 agreements, Charles was to set up an irrevocable trust for each child, to be funded with $500,000.  In exchange, the children agreed to “waive any right to make a claim against” their father’s estate.  The Defendants served notices under both 17 U.S.C. §§ 203 and 304(c) because all of the same songs subject to termination notices were encompassed in both the original 1950s agreements and the 1980 agreement.

This decision was on the Defendants’ motion to strike the Foundation’s state law causes of action pursuant to California’s Anti-SLAPP law, and motion to dismiss the Foundation’s complaint.  The Foundation also sued for breach of contract and breach of the covenant of good faith and fair dealing.

Generally, California’s anti-SLAPP statute allows a defendant to bring a special motion to strike any state-law claim that arises from any act of that person in furtherance of a person’s right of petition or free speech under the United States Constitution or California’s Constitution in connection with a public issue (similar laws are enacted in other jurisdictions in the country).  The Court determined that the termination notices filed at the Copyright Office and served on Warner-Chappell constituted protected acts falling under the anti-SLAPP statute.  As apparently the first case to come to this conclusion, it is of interest to copyright practitioners.  The termination notices could not be considered “claims against” Charles’ estate because his estate went through probate and was closed in 2006, long before the Defendants sent the termination notices in 2010.  Further, the 2002 agreements cannot limit the Defendants’ statutory termination rights, because they are “agreements to the contrary” of the termination provisions and unenforceable to that extent.  Because the Defendants prevailed on their anti-SLAPP motion, attorneys’ fees were mandatory and the Court awarded them to the Defendants.  It is interesting to note that the attorney representing the Defendants in this case is Marc Toberoff, the attorney connected to the Shuster heirs in the Superman copyright termination cases.

In challenging the validity of the termination notices, the Foundation argued that it was asserting standing based on its own rights because its receipt of royalties from Warner-Chappell rendered it a “beneficial owner” with standing under the Copyright Act—if the songs were works made for hire and, alternatively, if they were not.  The Court distinguished between standing to sue for copyright infringement (17 U.S.C. § 501(b)) and standing to challenge the validity of termination notices under Sections 304(c) and 203.  Sections 304(c) and 203 only contemplate that certain parties will be involved in the termination process: on one side, the author (and statutory heirs); and on the other side, the grantees of transfers and their successors.  Since the Foundation is not a grantee of the rights to be terminated or its successor, Congress did not even require statutory heirs to provide it with statutory notice of termination, let alone give it a seat at the table during the termination process.  Accordingly, the Foundation lacks standing to challenge the validity of the termination notices.