---------------------------------------------------------------------------------------------------------------------23 June 2011: This educational site, updated periodically, contains both published material and information included in the public court records of the legal proceedings.
Plaintiffs Wayne and Margaret Saadi Kramer's alleged copyright infringement suit went to trial in Santa Ana, California on October 3, 2006. The case was heard by the Honorable Judge Andrew J. Guilford in United States District Court, Central Division of California, Southern Division.
This is a transcript of the closing argument delivered on October 6, 2006 by Vincent Cox of the Leopold, Petrich and Smith law firm, representing defendants David Thomas, Laurel Legler and Future/Now Films.
THE COURT: Mr. Cox.
MR. COX: Good afternoon, Your Honor. And I share my adversary's gratitude for the court's attention. My clients have observed the court's careful attention to the matter and we greatly appreciate it. This is an important function, an important public service.
Let me respond, first of all, to the curve balls. With respect to the claim that "Gotta Keep Movin" is at issue in this case, there are several impediments to that claim.
First, it is not mentioned in the complaint. Second, it is not mentioned in the draft -- it is not mentioned in the pretrial order. Third, it is not mentioned in the assignment of rights from Warner Chappell. Fourth, there is no registration certificate for that song in evidence. Fifth, there is no evidence of what the content of that song is from which anybody could make any kind of comparison to determine whether or not the actual material used in the film actually is that song. That was registered --
THE COURT: First few points were good, but didn't Mr. Thomas authenticate his cue sheet with it on there?
MR. COX: He did. And the point that I'm making is that sometimes the matter that is registered varies from the matter that is -- that is being released by the record company.
THE COURT: I understand.
MR. COX: The second curve ball is answered because this -- this nonexclusive license is dated June 6th of 2006. It releases past uses; that is, uses prior to June 6, 2006. It -- and paragraph 8 includes any other uses that resulted from permissions granted by the licensees before March 1, 2004. The only evidence of uses after March 1, 2004, are uses that resulted from the Avatar document that was dated February 15, 2004. Therefore, such uses are clearly within the scope of this nonexclusive license. So there we can -- those curve balls are well outside the strike zone.
In any case, I happened this week -- when I got up, I happened to see in a Web blog an aphorism that I thought was perfect for this case. It's a German philosopher who said, "From the crooked timber of man no straight thing was ever made." And, really, this case demonstrates in its substance and in its disputation the crooked timber of man, and no straight thing has resulted.
We have a set of circumstances in which a young couple tried to make a documentary. They tried to create something that would add to the reservoir of our country's culture, and they a assiduously sought to comply with the law. At every turn they sought to comply with securities laws. They sought to comply with copyright law. They struggled in every way, shape, and form to make their work something that would be permanent, something that would do honor to themselves.
What they didn't reckon on was almost a clash of cultures. The plaintiffs are Los Angeles entertainment industry people, savvy people with a highly developed sense of self-interest. In the plaintiffs' world the notion of a friction lock makes perfect sense. What they did to the defendants was put them in a friction lock. They put them in a situation in which vague claims of uncertain obligation were being asserted, and they created an environment in which the demands kept shifting, evolving. You never knew what you had to do to make them happy.
It was a struggle for them, particularly in light of the fact that the defendants were represented by Midwestern securities lawyers, smart guys, completely unfamiliar with the dialect of the friction lock. They just looked at this claim and said, "Hey, you were just asking for best efforts. That's all you were saying. Now you say exclusivity? This is insane. This can't be the way the world works." They didn't understand that in the world of the friction lock, you need to cultivate the relationship of somebody regardless of whether you have that right. You need to -- when somebody gets you into the position that Wayne Kramer got the plaintiffs with -- on their back, with his foot on their Adam's apples, what they needed to do was reach for their wallet and get him off their throat.
Now, you can blame the defendants for not being clever enough to figure that one out, but here's where I have to blame Wayne Kramer. Because the whole ethic of the friction lock is that you create friction, and then at the right moment you release it. You create as much friction as you can and then you release it. You tell them, "Here's what you need to do. Give me a Cadillac. Give me what I want."
One of the most revealing pieces of evidence, as far as we're concerned, came in the deposition testimony of Wayne Kramer in which when he was asked, "Well, when was it that you learned that Warner Chappell was willing to withhold the -- a license based upon opposition of a songwriter?"
Instead of giving me a date, he proceeded to blurt out an anecdote about a Cadillac and how a songwriter -- he'd heard that a songwriter could get a Cadillac from a filmmaker just by objecting to the music publisher's release or license of a film.
Well, this is something that is foreign to the world of Midwestern securities lawyers, foreign to my clients, and, you know, as I look at it, it's something that happens much more frequently. It is kind of a dirty little secret of music publishing that music publishers, because they have some discretion as to the exercise of synchronization rights, they can use all sorts of tools to control the issuance of a license.
And one of the things that we're trying to do here is to point out to the court that that amounts -- in this instance, it amounts to a misuse of copyright. Because what happened here was that the use of the discretion of Warner Chappell became part of a conspiracy to destroy the film.
While the other MC5 members were telling the defendants that they were fine with the release of the film, they were happy to do it -- Dennis Thompson appeared at the Detroit Institute of Arts in October. You had Angela Davis sending e-mails saying "The eagle has landed. It's great we're going to be seeing this film at the Detroit Institute of Arts." And unknown to my clients, two months earlier, she had sent a letter to Brad Rosenberger saying, "Do not, do not issue the -- the commercial use license." This was just a classic mousetrap.
But the last thing that my clients wanted to do was cheat Wayne Kramer. The last thing that they wanted to do was use material without a license.
Looking back on the evidence here, you start with the meeting at -- in March of 1996 at a Chinese restaurant. There's no talk of contracts. There's just a sense, let's go forward. Next, in June of 1996, at the Detroit river front, you have a meeting, and because the defendants are documentary filmmakers who might want to use voiceover material from the -- a former MC5 band member, they tape the conversation so that when -- later on in this case, when Mr. Kramer asserts that there was a contract that was formed at that -- at that meeting, he can be impeached by the fact that "Here we have a tape. Here we have a transcript of the tape", Exhibit 470. There was no contract. That's nonsense.
Now, on August the 25th of 1996, the day of the Lincoln Park shoot, there is discussion about giving a back-end of the film in exchange for his cooperation and consent going forward. That -- that was the oral contract that was made between the parties, and it's reflected in the fact that there is absolutely no documentary evidence, absolutely none, of any promise or claim of a promise to give a music producer credit or a music producer function to Mr. Kramer until seven years after the alleged promise has been made on August 6th, 2003, after the matter has been through the mill. The same applies to the claim of an exclusive soundtrack right.
THE COURT: May I just ask: Would it be the defense's position, then, that the contract was formed in Chicago, Illinois?
MR. COX: The contract that we allege happened -- that we allege, the one that the court has found cannot be enforced because of the California statute of limitations, that contract was formed in Chicago, Illinois, under the testimony as put forth by Margaret Saadi. Things had to be made explicit and things had to be formalized. And as the plaintiffs allege it, the contract was formed in November of 1997 in California at a Thai restaurant on La Brea.
But that November 1997 dinner, which the plaintiff, Margaret Saadi Kramer, alleges was a -- had a purpose of creating a framework to formalize the agreement with written contracts, well, strangely enough, despite the fact that Margaret Saadi Kramer's job as a manager is to negotiate contracts and document agreements, there is no documentation. There's nothing. You don't find out that there's a claim of an exclusive soundtrack album right until August 6 of 2003; six years later.
That -- that lapse of time certainly creates a huge credibility problem. Add to that the fact that there are multiple e-mails -- April 15, 2006; April 16, 2006 -- I mean, April 15, 2002; April 16, 2002 -- as well as e-mails from Mr. Wykoff, their attorney, all of which talk about discussions between the parties about using best efforts to give them an opportunity to produce the film.
THE COURT: Now, I want you to continue in just a moment, but I have a few questions that may seem trivial: Was the Thai restaurant sometimes called a Chinese restaurant?
MR. COX: Yes, Your Honor, it was.
THE COURT: And I understand what you're saying about the statute-of-limitations defense granted against you. Part of the court's problem was there was not opposition lain out, which you've just laid out here. But with that, continue.
MR. COX: Yes, Your Honor. We were asserting judicial estoppel based upon their claim that it's barred by the California statute of limitations. We say that they are estopped, and now assert a different statute of limitations.
THE COURT: I understand. I didn't mean to disrupt. Go ahead.
MR. COX: That's all right, Your Honor.
THE COURT: You're on a roll.
MR. COX: The way things go, there was amazing testimony about 14 to 15 offers that were generated for the soundtrack album in 1998 and 1999. What is astonishing about these offers is that so few of them are in evidence.
There is some sort of reference in which Ms. Saadi confirms what appears to be an offer, but what's remarkable about that document is that there's no "cc" to my clients. There was no communication to my clients about any such thing during that time frame. It was all going on in a separate realm of the plaintiffs who had an interest in developing their own careers, quite rightly. They were meeting with music -- with record companies; not to pursue the interests of the documentary filmmakers. They were meeting to pursue their own interests in the record business.
So the music producer deal, the exclusive soundtrack deal, and -- as stated in our in limine motion, Your Honor, the exclusive soundtrack deal collapses because of the Konigsburg case. It is purportedly an oral transfer of a copyright. Konigsburg says you can't do that. And on that basis, it would be dismissed, in any event. Now --
THE COURT: Well, was that a copyright -- was that a license or a promise to license, and is there a difference?
MR. COX: There is not a difference, Your Honor, because otherwise there would be a gaping loophole a mile wide.
THE COURT: You're absolutely correct. I understand. That's a good point.
MR. COX: The--
THE COURT: Also you have 15 more minutes. I hope in that time you'll address the defenses you have for the copyright, such as estoppel, maybe laches, inequitable conduct.
MR. COX: Yes, Your Honor. First of all, I did want to talk about the ownership issue. The plaintiff has submitted a chain of title and it has a -- the Cotillion Music Records, our Exhibit 11, when you look at Exhibit 11, Your Honor, you will see that there are no documents -- although there are documents that would show that Cotillion transferred its ownership interest to Warner Chappell, there are no documents that show that Cotillion ever acquired any ownership interest in the song "Poison."
It also -- the evidence also shows that Motor City Music was a co-owner of the song "Poison," as reflected in the copyright registration certificate and as reflected in the Exhibits 471 and 472, the BMI documents' files, which show that -- not only that songs solely authored by Wayne Kramer are owned by Motor City Music but also that songs solely authored by Robert Derminer and Fred Smith are owned by Motor City Music which demonstrates that this was not some sort of scheme to take away a benefit from Wayne Kramer. It was a mutual sharing among the members of the band.
We've had testimony that -- from two of the former members of the band that those signatures are forged. It's incredible that after 36 years and after Mr. Kramer is shown in Exhibit 471 to be corresponding with BMI regarding his affiliate relationship with Motor City Music that he claims the relation is a product of a forgery. It so dovetails with his personal interests and is contradicted by the testimony of Rebecca Derminer who identified her own husband's signature and authenticated that signature within that file.
And, by the way, some of those signatures, I believe, for instance at page 20 of Exhibit 471, were notarized. So a notarized signature of Wayne Kramer is purportedly a forgery. It just beggers the imagination that anyone would come up with a scheme to do this. It just makes no sense. So because that ownership interest and because it was held by Mr. Derminer, his successors in interest are in a position to license the use of "Poison."
Now -- and also, as we've just argued, there is no direct ownership of the song "Poison" by Mr. Kramer both because there is no copyright registration certificate which reflects such ownership and because there is the bankruptcy which transferred any ownership that he had to the bankruptcy trustee.
THE COURT: Let me ask you about that. Was the document which purported to give Mr. Kramer the right to bring this lawsuit dated after that bankruptcy schedule?
MR. COX: Yes, Your Honor. It's dated March 1, 2004.
THE COURT: Then isn't there the argument that he received that asset after he did that schedule of assets?
MR. COX: Oh, yes, Your Honor. Please don't misunderstand my argument.
THE COURT: Yes, that's why --
MR. COX: The rights of Warner Chappell were not impaired by the transfer of -- by his bankruptcy. Warner Chappell is entitled to transfer something on March 1, 2004. It's just that Warner Chappell only gets its rights from Cotillion, and Cotillion has no record that it ever acquired the renewal copyright interest in the song "Poison." And it's the renewal copyright that is the copyright that's being enforced here.
THE COURT: Does that not make your bankruptcy defense here relevant?
MR. COX: It makes it an alternative argument. It makes it a supplemental argument. Yes, Your Honor, it does.
THE COURT: And it's a supplemental argument that is weakened somewhat by the fact that the Warner Chappell transfer took place after that schedule?
MR. COX: Well, Warner Chappell acquired whatever rights it had in the compositions that were the subject via -- on a parallel track.
THE COURT: Now I understand. I understand. Thank you.
MR. COX: Now, with respect to the affirmative defenses, I can't give you a comprehensive listing here. There will be no curve balls, I believe. The -- what we have here -- I mean, the -- is a situation in which my clients believed that they were proceeding toward the release of a film that was going to, wonder of wonders, actually manage to be a documentary that makes money. They had a film that had been favorably reviewed in Variety, The Hollywood Reporter, The New York Times, The Boston Globe. They had themselves a winner.
THE COURT: Early on, didn't Mr. Kramer say that it wouldn't make money and there would be no back-end?
MR. COX: That's right. He thought it was pie in the sky, by and by, compared to what he could make from going to Image Entertainment and putting out his own DVD.
THE COURT: Understood. Go ahead.
MR. COX: By the way, so long as we're on it, so what he did was allow the buzz to build for the film, allow there to be a sense that there's an MC5 DVD that's going to come out that's really good, and then see to it that this film -- that my clients' film was crushed so that several months later he could release his own MC5 DVD into the marketplace, presumably with some kind of marketing benefit that flowed from that.
The -- insofar as estoppel is concerned, the court is familiar with the elements of that affirmative defense. Warner Chappell told my clients that it was perfectly fine for them to go forward and make the distribution deals, and that when they came back, they would negotiate in good faith for the commercial use license. When my clients did that and came back, money in hand to negotiate a license, having committed themselves by incurring a liability of $115,000, Warner Chappell suddenly announced, "Say, we're not going to issue this license. And by the way, you have to get Wayne Kramer's permission."
The problem, of course, is that Wayne Kramer never told them after that date what it was he wanted, and that is the area in which Mr. Kramer failed to obey the rules of the friction lock. Because the rules of the friction lock is once you have them down on the ground with your foot on their Adam's apple, you don't crush the trachea. You don't kill them. And that's what he did to this film and that's what he did to the plaintiffs. He destroyed this project.
This project had one chance to get out the door. BMG was going to release it. It had a carefully built publicity campaign. It was maybe going to actually make some money. It had that one little window to get through, and this little Piper cub, trying to make it through the cyclone, gets shot down by Mr. Kramer, gets shot down by Warner Chappell; a total indifference to the consequences of their action.
There's been no hint here that any of the plaintiffs, anyone at Warner Chappell, had the slightest sense of what they were doing to the plaintiffs (sic). It's disgraceful conduct. It is the kind of thing that is -- that estoppel is designed to punish, and punish insufficiently, I should add, because here we are with a product that should have been in the marketplace, that should have been returning value to their investors, their friends, the people that trusted them most in the world, and instead has put them out of the film business, destroyed their emotional stability for a time, and moved them to a situation where the mantra for them is "Life is unfair. Get over it."
Because -- and what happens here is that we've gone from the biggest debacle of their life to plaintiffs' attempt in this lawsuit to supersize it by getting an award that would bankrupt them, by just doing even more damage to them.
THE COURT: Is there any way to resurrect the film? You said it's dead.
MR. COX: Well, Your Honor, there are -- there are hurdles. The fact that this lawsuit has been ongoing does not mean that there have not been some settlement discussions, some attempts at reconciliation on both sides, so I don't want to -- but the -- it's not impossible. It's not impossible. It's never impossible.
In any event, the -- one of the other points that I wanted to mention, that I will bring into -- I don't think it's a curve ball. There's a case called Quinn v. City of Detroit that the court cited in its summary judgment motion -- and I actually picked it up and read it. I had not read it before. But what it -- one of the things that it does is it talks about a situation in which a party is going forward based upon an implied license, and the licensor then says, "Stop," and the -- the defendant is unable to stop immediately because of all the things that they did when they had the implied license. And the court says, "Well, that is a situation in which the law will imply a license, and the fact pattern applies to this situation."
There was no -- from the time of the cease-and-desist letter, there was no -- there was no evidence that the defendants did anything other than try to stop this film from getting out. As painful, as agonizing as that was for them, they did it because they respected the law. They did it knowing that it was going to cause them to incur significant liability to BMG. They did it knowing that their only chance was now being squished.
Thank you, Your Honor.
THE COURT: Thank you very much, Mr. Cox.