Tuesday, December 26, 2006

Copyright Licensing Litigation - Motion in Limine and Summary Judgment (Ch 7,8, 14)

In Command Cinema Corp. v. VCA Labs, --- F. Supp.2d ----, 2006 WL 3357257 (S.D.N.Y.) 11/17/2006, a producer of adult films sued a film laboratory over loss of masters. Defendant VCA's motion to dismiss claims for conversion, breach of express contract and breach of implied contract was met with a cross-motion by Command Cinema for summary judgment on conversion. Simultaneously, VCA moved in limine to exclude evidence of Command's lost profits as a measure of damages and to preclude Command's claim for punitive damages. In a conference call, the court advised the parties that it was considering summary judgment on more claims than Command had requested and invited the parties to make additional submissions.

The court granted summary judgment on the breach of contract claims and dismissed claims that were duplicative or inconsistent with successful breach of contract claims (conversion, breach of implied contract). Simultaneously, the court granted in part and denied in part the Defendant's motion in limine. For one film, the court excluded evidence of lost asset value as a measure of damages, for another the court reserved the issue for trial but noted that the type of calculation - a comparison with comparable films - was "capable of determining damages with reasonable certainty." For both films, the court granted the motion in limine to the extent of precluding a request for punitive damages.

The action involves no claims under or citations to the Copyright Act. Command is a New York corporation and VCA is California-based, so the presumed subject matter jurisdiction would be diversity jurisdiction, but the opinion, which is supplemented by 105 endnotes, is silent on the jurisdictional question. Generally speaking, contracts involving copyrighted works do not belong in federal court unless they raise issues "arising under" the Copyright Act, or unless there is an independent ground for subject matter jurisdiction, such another federal question (28 U.S.C. Sec. 1331) or diversity jurisdiction (28 U.S.C. Sec. 1332).

Plaintiff copyright owner entrusted, pursuant to written contracts, Defendant laboratory with masters which were to be upgraded, duplicated as sub-masters and the original masters were to be returned to Plaintiff. Defendant returned the masters, which Plaintiff then destroyed. Following that, Defendant lost or misdelivered the sub-masters.

Applicable Rules of Procedure. Defendant's motion to dismiss was brought under Rule 12(b) of the Federal Rules of Civil Procedure. The cross-motion for summary judgment was brought under Rule 56. Motions in limine may be brought any time including during trial, usually under procedures governed by local rules or a judge's individual rules.

Practice Tip for Lawyers. Both parties wisely focused on the relevant issues: breach of contract and the scope of damages. Apparently after being warned by the judge of a possible grant of summary judgment, Defendant's lawyer made a motion in limine that reduced Defendants' potential liability and increased the chances for settlement. A motion in limine is a powerful tool to preclude or get evidence admitted prior to trial that should be seriously considered at the early stages of litigation.

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