Case 1:19-cv-01091-LAK Document 89 Filed 08/10/20 Page 1 of 24 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------x JOHN WAITE, etc., et al., Plaintiffs, -against- 19-cv- l 091 (LAK) UMG RECORDINGS, INC., etc., et al., Defendants. ---------------------------------------x MEMORANDUM OPINION Appearances: Ryan E. Cronin Roy W. Arnold David M. Perry Gregory M. Bordo BLANK ROME LLP Evan S. Cohen Maryann R. Marzano COHEN MUSIC LAW Attorneys for Plaintiffs Stev en M. Bierman Melanie Berdecia Rollin A. Ransom Lisa M. Gilford Lauren De Lilly SIDLEY AUSTIN LLP Richard S. Mandel Thomas Kjellberg COWAN, LIEBOWITZ & LATMAN, P.C. Attorneys for Defendant UMG Recordings, Inc. Case 1:19-cv-01091-LAK Document 89 Filed 08/10/20 Page 2 of 24 2 LEWIS A. KAPLAN, District Judge. In the music recording industry, artists commonly sign agreements with record labels in which the artists agree that the companies will own the copyright to sound recordings made pursuant to those agreements. These grants allow the companies to distribute and sell the artists' sound recordings. Section 203 of the Copyright Act of 1976 provides an author a right to terminate such a grant of copyright thirty-five years after the grant's execution, or forty years thereafter if the grant covers the right ofpublication, if certain conditions are met. 1 As the Court has explained previously, "[t]ermination is not automatic. The earlier grant will remain in effect absent a termination notice . . . . Upon the effective date of termination [listed in the notice], the grant is terminated and the copyright reverts to the author." 2 Plaintiffs allege that defendant has ignored their valid termination notices and has continued to market and sell plaintiffs' sound recordings following the effective dates of termination, thereby infringing upon their copyrights. In a prior opinion, familiarly with which is assumed, the Court granted in part and denied in part defendant's motion to dismiss the First Amended Complaint ("FAC").3 Plaintiffs now move to amend their complaint in order to add additional parties, assert infringement claims with respect to the sound recordings identified previously in the FAC for which the effective dates of termination now have passed, "streamline 17 ยง U.S.C. 203. 2 Waitev. UMG Recordings, Inc., No. 19-cv-1091(LAK), 2020 WL 1530794, at*2(S.D.N.Y. Mar, 31, 2020) (citation omitted). Id. at*10. Case Document 89 Filed 08/10/20 Page 3 of 24 3 and re?ne? their class allegations, and cure the de?ciencies identi?ed in the Court?s ruling on the motion to dismiss. Defendant objects to the following aspects of the Proposed Second Amended Complaint (1) joinder of three additional named plaintiffs, (2) joinder of Capitol Records, LLC (?Capitol?), a UMG af?liate, as a defendant, (3) allegations that plaintiffs John Waite and Joe Ely made certain grants directly, rather than through or by third parties, (4) allegations concerning Ely?s 1976 agreement, known as a ?gap grant,? and (5) clari?cation of the alleged need for declaratory relief. 1. Legal Standards When, as here, a party is not entitled to amend its complaint as a matter of course, it may do so ?only with the opposing party?s written consent or the court?s leave?? Under Rule 15(a), leave to amend should be ?freely The Second Circuit has instructed that a motion to amend ?should be denied only for such reasons as undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party.?6 Undue delay may be an appropriate basis to deny an amendment where ?the motion is made after an inordinate delay, no satisfactory explanation is offered for the delay, and the FED. R. Cw. P. Id. Aez'na Gas. and Sur. C0.v. Aniem Concrete Co., Inc., 404 F.3d 566, 603 (2d Cir. 2005) (citation omitted). 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