author: CALEB M. WRIGHT, Senior District Judge.

text:
    BLENDINGWELL MUSIC, INC., et al., Plaintiffs, v. MOOR-LAW, INC. and Robert C. Moor, Jr., Defendants.
    Civ. A. No. 82-739 CMW.
    United States District Court, D. Delaware.
    Feb. 1, 1985.

      Jane R. Roth, of Richards, Layton & Finger, Wilmington, Del., for plaintiffs; Ross J. Charap, New York City, of counsel. Robert C. Moor, Jr., pro se.
   MEMORANDUM OPINION

CALEB M. WRIGHT, Senior District Judge.

Plaintiffs have moved for summary judgment in their action for copyright infringement. The action alleges that the defendants acquiesced in, assisted in, and benefited from the unauthorized public performance of copyrighted musical compositions. The plaintiffs are music publishers and members of the American Society of Composers, Authors and Publishers (hereinafter “ASCAP”). ASCAP itself, however, is not a party to this lawsuit, although it took fundamental responsibility for gathering the evidence for plaintiffs’ action. Defendant Moor-Law, Inc. (hereinafter “Moor-Law”) was the proprietor of the Triple Nickel Saloon (hereinafter “Triple Nickel”), the location of the alleged unauthorized public performances. The other defendant, Robert C. Moor, Jr. (hereinafter “Moor”), was the sole stockholder and sole corporate officer of Moor-Law at the time of the alleged infringements.

FACTS

The Court derives the facts in this action from the record as it stands. The plaintiffs have submitted voluminous evidentiary material to accompany their Motion for Summary Judgment. See Plaintiffs’ Opening Brief. The evidentiary material consists of five exhibits (each exhibit is divided into three parts, containing an affidavit and supporting material) and an appendix in six sections (only three of the six sections purport to augment the factual record in this case).

Defendants have not submitted any evidentiary material for the record. In fact, the only response to plaintiffs’ motion by defendants was a three page document submitted by defendant Moor and captioned “Defendants [sic] Argument to Plaintiffs [sic] Motion and Alternative Motion for Dismissal” (hereinafter “Moor’s Answering Brief”). At best, Moor’s Answering Brief could be considered an unsworn statement by Moor.

In addition, the Court has been able to glean additional information from two documents in the Court’s file: Moor’s deposition (hereinafter “Moor Dep.”) and Plaintiffs’ Answers and Objections to Interrogatories (hereinafter “Plaintiffs’ Answers”).

Moor-Law was incorporated in 1974. Moor Dep. p. 2. At the time of its incorporation, it had only two stockholders, Moor and Teddy Lawson. Within six months all shares had been transferred to Moor. Moor Dep. p. 6. Moor was the only corporate officer after this time, serving in the capacity of President of Moor-Law.

Originally Moor-Law operated an establishment known as “The Club” on the premises that the Triple Nickel came to occupy. Sometime in 1976, The Club went out of business and was replaced by the Triple Nickel, another establishment owned and occupied by Moor-Law.

The Triple Nickel was a bar and restaurant that provided music for the entertainment of its patrons. Moor Dep. p. 15. An outdoor sign prominently displayed that the establishment featured live country music. Moor Dep. p. 20. Occasionally, the bar advertised its featured artist in local media when the artist was of national repute. Moor Dep. p. 21.

The Triple Nickel at the time of each of the alleged infringements had a manager. The manager oversaw the general operations, which included booking local groups to provide music, Moor Dep. p. 26, negotiating artists’ fees of less than two or three hundred dollars a night, and making occasional disbursements out of petty cash. Moor Dep. p. 12.

Moor, however, maintained an active role in supervising the Triple Nickel’s operations. He hired the managers, Moor Dep. p. 13, and on one occasion was forced to fire a manager. Moor Dep. p. 13. He made clear to each of his managers that only country and western music was to be played. Moor Dep. p. 23. Moor made the decision when to charge an admission fee for certain performers. Moor Dep. pp. 16, 25. Along with his manager, he scouted local bands to determine whether they were suitable for performing at the Triple Nickel. Moor Dep. pp. 32-33.

Moor was the only individual with authority to sign checks during the period in question. Moor Dep. pp. 8, 11. Perhaps his most significant duty was scheduling the appearance of and negotiating the fee for artists of national stature. Moor Dep. pp. 26-27. His daily attendance at the business varied; sometimes he was there nightly for a month, followed by periods of absence. Moor Dep. p. 28.

Moor has never procured a license to perform copyrighted materials from either ASCAP or members of ASCAP with regard to material for which ASCAP holds a nonexclusive license. ASCAP has always believed that unauthorized public performance, either from live performances or from a jukebox, have taken place, first at The Club, and then at the Triple Nickel. ASCAP has repeatedly encouraged Moor to obtain a license with them as evidenced by correspondence and business records detailing telephone conversation as well as personal visits to his establishment. See Exhibit 1.

Failing in its efforts to get Moor to take a license, ASCAP hired independent agents, each of whom had had musical training, to determine whether copyrighted material for which ASCAP held a non-exclusive license was being performed either live or on a jukebox. On two consecutive evenings, November 16 and 17, 1979, Dawn S. & Donald H. Hood went to the Triple Nickel as paid listeners for ASCAP. See Exhibits 3 and 4. Like the other patrons, they were required to pay an admission fee. They witnessed the performance of twelve compositions that the plaintiffs contend were copyrighted and played without authorization.

On the evenings of January 9 and 17, 1981, D.W. Hart went to the Triple Nickel as a paid listener of ASCAP. See Exhibit 2. He paid an admission charge each evening. He witnessed the performance of six compositions that the plaintiffs contend were copyrighted and played without authorization.

On the evening of June 6 and through the early morning of June 7, 1982, D.W. Hart accompanied by Michael Bailey were in attendance at the Triple Nickel. See Exhibits 2 and 5. Each paid an admission charge. The two witnessed the performance of three compositions that the plaintiffs contend were copyrighted and played without authorization.

The plaintiffs have provided the Court with copyright certificates of registration of each of the twenty-one compositions that they allege were played without authorization. See Appendix Tab F.

THE STANDARD FOR REVIEW

On a motion for summary judgment, the Court must initially determine whether a genuine issue of material fact exists. Fed. R.Civ.Proc. 56(c); Peterson v. Lehigh Valley District Council, United Brotherhood of Carpenters and Joiners, 676 F.2d 81, 84 (3d Cir.1982). No issue of material fact exists, if after drawing all inferences from the existing record in a light most favorable to the non-moving party, the moving party is entitled to judgment as a matter of law. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977).

These well-established principles apply equally to situations in which the parties contest every fact alleged in a case and to situations, as here, in which the non-moving party has failed to offer any evidence in support of his defenses or counterclaims. This case resembles the latter situation, and thus, the primary issue for the Court is whether there are sufficient facts in the record to support a finding of copyright infringement.

To withstand summary judgment, the non-moving party bears the burden of producing evidence in support of his allegations and denials when the record is devoid of such evidence if his allegations or denials are to be resolved in his favor. Fed.R. Civ.Proc. 56(e). This burden of production, however, can be satisfied by evidence introduced by either party which tends to corroborate the non-moving party’s allegations or denials. In spite of the risk of an adverse judgment to a non-moving party in failing to offer any evidence, the moving party retains the burden of initially demonstrating the absence of any genuine issue of material fact, see Adickes v. S.H. Kress & Co., 398 U.S. 144, 159, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970); Spirides v. Reinhardt, 613 F.2d 826 (D.C.Cir.1979), and only then is the non-moving parties’ burden of production relevant.

THE COPYRIGHT INFRINGEMENT CLAIM

A copyright confers on its owner exclusive right, subject to express limitations, to perform or to authorize performance of copyrighted works. 17 U.S.C. §§ 106 et seq. A violation of the copyright owner’s exclusive right over copyrighted materials constitutes infringement for which the copyright owner is entitled to seek legal and statutory remedies against the infringer. 17 U.S.C. §§ 501 et seq.

The plaintiffs allege that the unauthorized performance of the twenty-one compositions either by live bands or on the Triple Nickel’s jukebox infringed their copyrights and that Moor-Law and Moor should be liable for these acts of infringement. Plaintiffs are entitled to summary judgment only if they can demonstrate the absence of any disputed facts with respect to the five requisite elements for copyright infringement:

1. the originality and authorship of the songs allegedly infringed;
2. compliance with the formalities of the Copyright Act;
3-. that plaintiffs are the proprietors of the copyrights;
4. the compositions were performed publicly as alleged and for profit; and
5. that such performance was without proper authorization.

E.g., Shapiro, Bernstein & Co. v. Log Cabin Club Association, 365 F.Supp. 325, 328 n. 4 (N.D.W.Ya.1973) (discussing essential elements of contributory infringement prior to recodification of Copyright Act in 1976); Broadcast Music, Inc. v. Moor-Law, Inc., 484 F.Supp. 357, 362 (D.Del.1980) (Moor-Law I). See generally 3 M. Nimmer, Nimmer on Copyright § 12.11 (rev. perm. ed. 1984).

Because registration certificates of copyright constitute prima facie evidence of originality, authorship, and compliance with statutory formalities, 17 U.S.C. § 410(c); Moor-Law I, supra, 484 F.Supp. at 362, plaintiffs’ uncontested submission of copies of the copyright certificates of the twenty-one compositions in question is sufficient to establish the first two elements. See Appendix Tab F.

The third element requiring proof of proprietorship of the copyright is sometimes referred to as chain of title. Chain of title is no more difficult to establish than the first two elements whenever the plaintiff is the author of the copyrighted composition or whenever plaintiff was the original claimant to the copyright; in either case, the certificates of copyright are sufficient to shift the burden of proof to the defendant to disprove proprietorship. Nimmer, supra, at § 12.11[c]. For slightly less than half of the compositions in question, plaintiffs’ certificates alone provide adequate proof of proprietorship. In the remaining cases, which involve plaintiffs who are the assignees of a previously registered copyright, plaintiffs have satisfied their burden by producing copies of assignments between the original claimant and the plaintiff to establish the existence of a chain of title showing proprietorship.

In two cases, plaintiffs have failed to carry their burden of establishing proprietorship. With respect to the composition entitled, “Little Things Mean A Lot,” the plaintiff, Robbins Music Corp., is not the original claimant on the registration certificate. Consequently, Robbins is required to submit documentary evidence of its chain of title which it has failed to do. In addition, T.B. Harms Co., another plaintiff, has failed to provide any documentary evidence of its relationship to Bibo Music Publishers, the claimant on the certificate of registration to the composition, “Tulsa Time.” Because the owners of “Tulsa Time” and “Little Things Mean A Lot” have failed to make a prima facie showing of proprietorship, as to these works that were allegedly infringed, they are not entitled to summary judgment on their infringement claims.

The fourth element to an infringement claim requires proof of a performance of the copyrighted work, which if unauthorized, would violate the exclusive right of the copyright owner. In all but one of the alleged acts of infringement, ASCAP’s agents have presented uncontroverted evidence that the compositions were performed at the Triple Nickel on the specific dates alleged. Moreover, the music performed was an integral aspect of the Triple Nickel’s business operations. Music, as Moor pointed out, was provided for the entertainment of customers. Admission charges were levied on each of the evenings that ASCAP’s agents gathered evidence of infringement.

Some question might be raised whether the performance of copyrighted material on the Triple Nickel’s jukebox gives rise to an action for infringement in light of the limitations on the copyright owners exclusive right contained in 17 U.S.C. § 116. The Triple Nickel, however, by charging an admission fee is excluded from the terms of that limitation. 17 U.S.C. § 116(e)(1)(B). The fact that the admission fee was meant as a charge for the live music rather than as a charge to use the jukebox is immaterial to the liability of the establishment’s owner in which the jukebox was located. See Stewart v. Southern Music Distributing Co., 503 F.Supp. 258, 259 (M.D.Fla.1980) (holding lounge owner liable for contributory infringement when jukeboxes were the source of infringing performances in a lounge that charged a fee); Quackenbush Music, Ltd. v. Wood, 381 F.Supp. 904, 905 (M.D.Tenn.1974).

The final element for infringement is beyond dispute in this case. Plaintiffs allege that they never authorized performances of the works. William Fielder, an employee of ASCAP, has submitted an affidavit that Moor and Moor-Law refused to purchase a license from ASCAP. Moreover, Moor appears to concede that he needed a license. Moor Answering Brief at I. The Court feels that once a lawful proprietor of a copyright alleges that a performance of a copyrighted work was unauthorized, the burden shifts to the defendants to show a genuine issue of fact exists that the performance was authorized. In this particular case, plaintiffs have gone further, they have established a strong evidentiary basis for concluding that the defendants actually refused licenses. Thus, in eighteen of their claims, the Court finds plaintiffs have demonstrated that copyright infringements occurred.

There can be no issue as to Moor-Law’s liability as a direct or contributory infringer. Moor-Law, as proprietor of the Triple Nickel, hired live bands and operated the jukeboxes. Thus, Moor-Law is responsible under the normal agency rule of respondeat superior. Famous Music Corp. v. Bay State Harness Horse Racing & Breeding Association, 554 F.2d 1213, 1214-15 (1st Cir.1977) (rejecting defendant’s claim that it should not be held responsible for infringing acts of musicians it hired who were independent contractors); Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir.1963); accord, KECA, Music, Inc. v. Dingus McGee’s Co., 432 F.Supp. 72, 74-75 (W.D.Mo.1977) (holding defendant liable for infringing acts of musicians who had been instructed to perform only original compositions); see also Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 157, 95 S.Ct. 2040, 2044, 45 L.Ed.2d 84 (1975) (“The enterpreneur who sponsors such a public performance [live musicial performances] for profit is also an infringer.”) (dictum).

PERSONAL LIABILITY OF MOOR

Plaintiffs also contend that Moor himself is liable to them for copyright infringement. Defendant Moor disavows any liability on his part. He characterizes his participation as “vicarious” at best. Moor Answering Brief at 1. Although this characterization of his participation is surely a sufficient basis for affixing liability, see Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307, 309 (2d Cir.1963) (imposing “vicarious” liability for infringement on corporate entity for acts of its franchisee), the Court must independently review the facts in the record which would provide a basis for the imposition of vicarious liability.

As discussed earlier, Moor may not have been present at the Triple Nickel at the time of the acts of infringement, and thus, this Court must assume for purposes of summary judgment that he was not. Moreover, Moor’s deposition clearly indicates that he delegated some authority with respect to the selection of bands to his general manager. Finally, Moor contends that he was frequently hospitalized for alcoholism during the period in question.

While these factors bear on whether liability should be imposed on Moor, they do not preclude as a matter of law a finding of vicarious liability against Moor. Vicarious liability may be predicated on the right and ability of an individual to supervise activities that may lead to infringement coupled with that individual’s direct financial interest in those activities. See Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir.1963). In addition, “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory infringer.’ ” Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir.1971) (footnotes omitted). In Gershwin Publishing, the Second Circuit affirmed the liability of a concert artist’s manager for copyright infringement because he arranged concerts for artists knowing they might give unauthorized performances of copyrighted material.

Corporate officers have been held liable for the copyright infringement committed by their corporate entity in a variety of situations. See Lottie Joplin Thomas Trust v. Grown Publishers, Inc., 456 F.Supp. 531, 537 (S.D.N.Y.1977) (holding officer that negotiated with parties to produce infringing records, oversaw all operations, and had a substantial financial stake in success of infringing venture liable for contributory infringement), aff'd., 592 F.2d 651 (2d Cir.1978); Boz Scaggs Music v. KND Corp., 491 F.Supp. 908, 913 (D.Conn.1980) (holding corporate vice-president, who was also general manager of radio station, liable for infringing conduct of radio station in view of his responsibility to oversee operations, his direct financial interest in the station, and his failure to take any precautions or to police against infringement); Warner Bros., Inc. v. O’Keefe, 468 F.Supp. 16, 19 (S.D.Iowa 1977) (holding sole stockholder, officer and employee of corporation, that operated a bar featuring live and jukebox performances of copyrighted material that were unauthorized, personally liable for copyright infringement).

The facts in this case will not admit to a finding other than that Moor was directly or contributorily liable for copyright infringement. He was the sole stockholder in Moor-Law. Although he did not necessarily oversee operations daily, he nevertheless was aware of the kind of music that was performed and was frequently on the premises. Although he seldom actually hired the local groups that performed at the Triple Nickel, he did scout out such groups. He hired and fired managers to whom the responsibility of negotiating and hiring local groups was delegated. Through repeated complaints from ASCAP, he was aware that copyright infringement was occurring and that he needed a license or licenses as authorization for performance of copyrighted compositions.

Although the exact degree of Moor’s control over operations at the Triple Nickel cannot be ascertained on this Motion for Summary Judgment, such a determination is not required in this case. The undisputed facts in the record provide a sufficient basis for finding that Moor was in a position to police activities at the Triple Nickel and failed to do so. Moor’s contentions in his unsworn statement go only to the issue of the precise degree of control exercised by Moor but do not rebut the basic finding that Moor exercised more than the minimal degree of control necessary to make him vicariously liable.

LACHES

Moor and Moor-Law raise the defense of laches in their Answer. The basis for the defense is the longstanding nature of the dispute between defendants and ASCAP, an organization to which all the plaintiffs belong. Although some of the infringed actions occurred more than two years before the filing of the Complaint, the statute of limitations on actions for infringement is three years. 17 U.S.C. § 507(b).

Defendants’ attempt to invoke laches is ultimately deficient because it has failed to carry its burden of producing evidence that suggests that plaintiffs’ conduct was unreasonable or that it has suffered prejudice as a result of plaintiffs’ unreasonable delay in bringing an action. See Lottie Joplin Thomas Trust v. Crown Publishers, 592 F.2d 651, 655 n. 4 (2d Cir.1978). Indeed, in view of the high costs of litigation, procuring the voluntary compliance of restaurant and bar owners is far superior to bringing a lawsuit. Given ASCAP’s repeated notices of copyright infringement and attempts to have the defendants obtain a license from ASCAP, it is difficult to understand how the defendants could ever have reasonably believed that they were authorized to perform the works in question or that the plaintiffs had somehow abandoned their copyrights. The Court, having ad-duced no evidence in the record to support the defendants’ assertion of laches, must render summary judgment in favor of plaintiffs on this affirmative defense.

ANTITRUST AND COPYRIGHT MISUSE

Count I of defendants’ self-styled Counterclaims allege that ASCAP’s refusal to license on terms other than blanket licenses, or to provide a retroactive license, and its failure to give defendants a list of ASCAP songs constitute copyright misuse on the part of the plaintiffs. At first glance, this claim is rather surprising in that ASCAP is not a plaintiff in this action. Thus, even if ASCAP has misused its non-exclusive license from copyright owners, it is not clear why plaintiffs who are members of ASCAP cannot enforce their exclusive rights to their copyright. The defendants have not alleged that any of the individual plaintiffs refused their request for a license and even if they had, it is hard to see how a unilateral refusal to license a copyright could constitute misuse; a copyright entails the right to refuse to license. Without even considering the substantive merits of defendants’ claim, the Court dismisses this count for failure to state a claim.

Count III, which incorporates the allegations of Count I of defendants’ counterclaims, remedies the inherent pleading defect in Count I: ¶ 9 alleges concerted action among the plaintiffs and plaintiffs’ agents which apparently is meant to include ASCAP. The absence of ASCAP as a party does not facially preclude a finding of civil liability against some of the participants in an antitrust conspiracy, based on acts of participants who have not been made a party to the lawsuit. In the absence of any antitrust violation, however, there is no basis for defendants’ allegation of copyright misuse. Thus, the Court turns its attention to the antitrust allegations.

The blanket licenses of ASCAP and Broadcast Music, Inc. (“BMI”) have been the subject of repeated lawsuits brought under the antitrust laws. Three decisions since the Supreme Court’s determination that ASCAP’s and BMI’s blanket licenses to a television network were not per se violations of section 1 of the Sherman Act, BMI, Inc. v. Columbia Broadcasting Systems, Inc., 441 U.S. 1, 99 S.Ct. 1551, 60 L.Ed.2d 1 (1979) (the “CBS Case”), have held that blanket licenses did not violate section 1 under a “rule of reason” analysis. Columbia Broadcasting System, Inc. v. ASCAP, 620 F.2d 930 (2d Cir.1980) (“CBS-remand”) (blanket license to television network), cert. denied, 450 U.S. 970, 101 S.Ct. 1491, 67 L.Ed.2d 621 (1981); Buffalo Broadcasting Co. v. ASCAP, 744 F.2d 917 (2d Cir.1984) (blanket license to independent television stations); BMI v. Moor-Law, Inc., 527 F.Supp. 758 (D.Del.1981) (Moor-Law II) (blanket license to nightclubs and bars), aff'd. mem., 691 F.2d 490 (3d Cir.1982). These decisions are themselves only the most recent round of antitrust litigation in which the major copyright pools have been involved. It is, however, unnecessary to recount that history today.

Plaintiffs have denied each of the defendants’ allegations and claim that the defendants are collaterally estopped from raising any antitrust claims. Plaintiffs contend that the defendants’ antitrust challenge to BMI’s blanket license in a separate lawsuit precludes a reconsideration of the merits of blanket licenses under the principles of Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). To understand why defensive issue preclusion is unavailable to plaintiffs in this action, it is necessary to review the issues that must be analyzed in evaluating the legality of a blanket license in the wake of the Supreme Court’s decision in the CBS Case and the issues that were actually decided in Moor-Law II.

The CBS Case determined merely that the blanket license issued by ASCAP and BMI were not per se unlawful. Although clearly indicating its belief that the blanket license should be scrutinized under the Rule of Reason, the Court did not address the specific areas of inquiry that should be undertaken by the trial court. The Second Circuit has interpreted the CBS Case as requiring a two-pronged analysis into first, whether the blanket license is in fact a restraint of trade and secondly, assuming the blanket license is a restraint of trade, whether the net effect of the blanket license is anticompetitive. Buffalo Broadcasting Co. v. ASCAP, 744 F.2d 917, 925 (2d Cir.1984). Judge Stapleton’s opinion in Moor-Law II focused on the second prong, either assuming arguendo that the blanket license was a restraint or implicitly holding that the blanket license was in fact a restraint. Moor-Law II, supra, 527 F.Supp. at 767-72. In so doing, Judge Stapleton resolved the lawsuit on factual issues that are not common to the present action, namely, BMI and ASCAP employ different formulas for determining fees under their respective blanket licenses and BMI and ASCAP are different-sized competitors in the song market. The reasonability of ASCAP’s license could only be determined after a comprehensive Rule of Reason analysis.

Although defensive issue preclusion is not available as a defense to plaintiffs, the Court nevertheless has determined that plaintiffs are entitled to summary judgment on defendants’ antitrust claim. Defendants have offered only conclusory allegations of conspiracy on the part of the plaintiffs to deny defendants’ licenses. The mere fact that ASCAP holds non-exclusive copyright licenses from the plaintiffs is insufficient to infer that a conspiracy exists.

While Poller v. Columbia Broadcasting, System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), made clear that district courts should grant summary judgment in antitrust actions only sparingly, the Supreme Court has deemed summary judgment appropriate when a party’s conclusory allegations of conspiracy remain unsupported after a reasonable opportunity at discovery. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). Put simply, there is no rule against summary judgment in antitrust cases. In re Municipal Bond Reporting Antitrust Litigation, 672 F.2d 436, 440 (5th Cir.1982); Lupia v. Stella D’Oro Biscuit Co., 586 F.2d 1163, 1167 (7th Cir.1978), cert. denied, 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979).

The Court feels that the facts in this case more closely resemble First National Bank of Arizona than Poller. The case began over two years ago. Since that time both sides have had ample opportunity to take discovery. Defendants’ sole discovery request is six pages of interrogatories of which only two and one-half pages contained questions. In response to plaintiffs’ summary judgment motion, defendant Moor filed a three-page unsworn statement repeating in part the same conclusory allegations contained in the defendants’ Answer. Defendant Moor made no effort to file a Rule 56(f) affidavit requesting additional discovery to forestall summary judgment. Nor did he mention any lack of opportunity to engage in discovery. Accordingly, the Court holds that the defendants have failed to meet their burden under Rule 56(e) which requires them to set forth specific facts showing that there is a genuine issue for trial once a motion for summary judgment has been filed and the record contains evidence that raises doubts as to the veracity of the non-moving parties allegations.

RELIEF

Having prevailed on the greater portion of their Motion for Summary Judgment, plaintiffs may be entitled to injunctive relief, statutory damages, costs and reasonable attorneys’ fees. See 17 U.S.C. § 502(a) (court may “grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of copyright.”); 17 U.S.C. § 504(c) (plaintiffs may elect to recover statutory damages in lieu of actual damages and profits; statutory damages to range, in the court's discretion, from $250 to $10,000, and up to $50,000 if infringement is wilful); 17 U.S.C. § 505 (court, in its discretion, may award attorneys’ fees and costs to the prevailing party). In this case, plaintiffs have elected to recover statutory damages and have suggested that $1000 for each of the eighteen infringing performances is an appropriate amount of statutory damages. See Plaintiffs’ Opening Brief at 20. Defendants suggest that, if they are liable, and in light of their current financial distress, only the statutory minimum of $250 should be awarded.

In determining statutory damages under 17 U.S.C. § 504(c)(1), courts have wide discretion to set damages within the statutory limits and awards of damages for more than the statutory minimum are frequent. See, e.g., Milene Music, Inc. v. Gotauco, 551 F.Supp. 1288 (D.R.I.1982) ($625 per infringement plus costs and attorneys’ fees); Broadcast Music, Inc. v. Tadych, 203 U.S.P.Q. 506 (E.D.Wis.1979) ($1000 per infringement), aff'd., 676 F.2d 697 (7th Cir.1982); Jerry DeNicola, Inc. v. Genesco, Pakula & Co., 188 U.S.P.Q. 306 (S.D.N.Y.1975) ($5000 per infringement). Two factors often considered by courts in determining an amount appropriate to vindicate statutory policy are the award’s deterrent value and the wilful nature of defendants’ infringement. See, e.g., Milene Music, Inc. v. Gotauco, supra, at 1296-97. In this ease, the evidence shows that defendants have knowingly permitted violations of the copyright laws for a substantial period of time despite ASCAP’s persistent attempts to induce defendants to acquire and maintain a license and despite defendants’ previous incidents of liability for copyright infringement. See Exhibit 1 (Affidavit of William Fielder). Because the evidence indicates that defendants knowingly violated the copyright laws, (indeed two of the infringing acts followed a defeat in another copyright infringement action against the defendants), and he has not been deterred by imposition of liability in previous cases, the Court finds that an award of $500 for each of the eighteen infringing performances is appropriate. The Court will issue an injunction prohibiting defendants from any further unlawful infringement of the musical compositions that the Court has determined were infringed.

ATTORNEYS’ FEES

Plaintiffs’ counsel also seeks attorneys’ fees and expenses in the amount of $3,782.98. The Court will award plaintiffs’ costs and reasonable attorneys’ fees. see, e.g., Milene Music, Inc. v. Gotauco, supra, at 1297-98 (costs routinely awarded to victor in copyright cases and attorneys’ fees particularly appropriate in case of knowing infringement), M.S.R. Imports, Inc. v. R.E. Greenspan Co., 574 F.Supp. 31 (E.D.Pa.1983). Under Lindy I and Lindy II, a district court must first consider the reasonableness of the number of hours spent and the hourly rate charged by counsel. By multiplying the number of hours reasonably spent times a reasonably hourly rate, the Court arrives at a “lodestar” figure. That “lodestar” figure can then be altered to reflect two other factors: the contingent nature of success and the quality of the attorneys’ work. After considering these two other factors, the Court can reach a final determination on the reasonableness of counsel’s fee request.

In this case, the Affidavit of plaintiffs’ counsel, Jane R. Roth, indicates that Mrs. Roth spent 21.10 hours on the case and another attorney, Robert J. Katzenstein spent .9 hours. The Court feels that the number of hours is an accurate reflection of the plaintiffs’ counsel efficient use of time commensurate with the supervising attorney’s experience in the copyright area. The Court, however, has two reservations in the hours presented by Mrs. Roth. First, plaintiffs did not prevail on three of their twenty-one claims of infringement. Thus, the Court feels that it should reduce the number of hours by .7 hours (a reduction by %ith of Mrs. Roth’s total time would overstate the time spent on the individual claims because of the significant economies of scale in bringing an action for twenty-one acts of infringement). Secondly, the briefs were not as helpful to the Court as they might have been because the lengthy appendix (over 350 pages) was not paginated. The Court was required to sift through numerous unnumbered pages of appendix containing the registration certificates to ascertain whether adequate documentation existed to show chain of title. Any difficulties in presentation are readily understandable because of Mrs. Roth’s best efforts to minimize the attorney time spent on the case and because of the absence of an opposing attorney with whom to focus the issues in this case. The Court has decided, however, that the 1.4 hours spent in preparation of Plaintiffs’ Reply Brief should be denied. The brief added nothing to plaintiffs’ presentation. It does not contain anything that was not contained in the Plaintiffs’ Opening Brief. The argument was stated in a mere three partially-filled pages. Thus, the Court reduces the number of hours reasonably spent on this case to 19 hours for Mrs. Roth and still credits Mr. Katzenstein with .9 hours.

The Court considers the hourly rate charged by Mrs. Roth reasonable: her rate of approximately $140 is a fair value for her services in relation to the prevailing market rate for a partner’s time in this area. Mrs. Roth’s affidavit fails to provide any information about Mr. Katzenstein other than his hourly rate is in excess of $100 per hour. Because the Court knows nothing about Mr. Katzenstein, it will assume that he was a junior associate. A reasonable charge for his services should not exceed $70.00 per hour. Accordingly, the Court finds that $2,602.05 is a reasonable fee for Mrs. Roth’s services and $63.00 is a reasonable fee for Mr. Katzenstein’s services so that the total “lodestar” figures come to $2,665.05.

The Court does not believe that this “lodestar” figure should be altered in this case since this was not a particularly difficult case and the quality of the attorneys’ work was fairly typical. Under Lindy II, in considering the “contingent nature of success,” the Court should evaluate the complexity of the case, the probability of defendants’ liability, the difficulty of proving damages, the various risk assumed in developing the case, and the delay in receipt of payment for services rendered. Id. at 117. Since this was a fairly straightforward copyright infringement action in which there was little doubt as to defendants’ liability and few risks assumed in developing the case, the Court does not believe that the “contingent nature of success” justifies an increase in the “lodestar” figure.

Nor does the Court believe that the “quality of the attorneys’ work” justifies an increase or a decrease in the “lodestar” figure. Under Lindy II, an increase or decrease in the “lodestar” figure because of the quality of the attorneys’ work is to be awarded only when “the lawyer discharged the professional burden undertaken with a degree of skill above or below that expected for lawyers of the caliber reflected in the hourly rates.” Id. at 118. Since the attorneys’ work was acceptable and plaintiffs’ attorney has obtained a favorable result through the expenditure of a minimum amount of attorney time, there is no justification for increasing or decreasing the “lodestar” figure.

The plaintiffs’ attorney has also requested costs in the amount of $807.16 incurred in connection with the representation of this matter. Although the Court thinks these expenses are high, it nevertheless considers them reasonable in light of all the circumstances. The largest expense was for photocopying: $529.05. At $.15 a page, that comes to over 3500 pages of photocopies. Plaintiffs’ .Opening Brief, however, was 407 pages long (40 pages devoted to argument and the rest devoted to appendices). The per page price is entirely reasonable, and the number of pages was necessitated by the length of the briefs. The Court does wish to point out that lawyers should exercise special care to guard against excessive photocopying as these expenses have come to represent a significant fraction of the cost of litigation.

The award of attorneys’ fees in this matter is entirely provisional. If defendants object to the fee award, then the Court will reconsider the matter of fees de novo. Moreover, the Court cannot permit an interim award of attorneys’ fees. Thus, plaintiffs cannot collect any fees until the Court has disposed of the remaining three claims and the Court has been satisfactorily apprised of whether the plaintiffs wish to bring this matter to trial for a determination of “wilfulness.”

      . Docket No. 21.

      . Citations to these exhibits will be designated as "Exhibit__"

      . Citations to the various sections of the appendix will be designated as "Appendix Tab__”

      . Docket No. 22.

      . Docket No. 18.

      . Docket No. 15.

      . The twelve compositions and the dates of the alleged infringements are as follows: November 16, 1979—Hound Dog (L), Just When I Needed You Most (L), Slow Dancing (A/K/A Slow Dancer) (L), Little Things Mean A Lot (L), Play That Funky Music (L), Tulsa Time (J), You Decorated My Life (L), and He’s So Fine (L); November 17, 1979—Orange Blossom Special (J), She Believes In Me (A/K/A While She Lays) (L), Color My World (L), and You Never Even Call Me By My Name (J). "(L)” denotes a live performance and "(J)” denotes a jukebox performance.

      . The six compositions and the dates of the alleged infringements are: January 9, 1981— Bad, Bad Leroy Brown (L), Blue Eyes Crying In The Rain (L), My Girl (L); January 17, 1981— Jailhouse Rock (L), Lookin' For Love (L), Lady (L).

      . The three compositions are: Third Rate Romance (L), Tight Fittin' Jeans (J), and Wasn’t That A Party (L). The Court notes, however, that Third Rate Romance was not correctly identified in the reports of either party. Instead, it was referred to as “Low Rent Rendezuous,” a phrase from the song. Mr. Bailey’s report has Third Rate Romance written in a different penmansship next to Low Rent Rendezvous. Both parties contend in their affidavits that they actually heard Third Rate Romance.

      . The one instance in which some question of proof of performance exists is the reports of Hart and Bailey originally identified Third Rate Romance as Low Rent Rendezvous. Although the latter is a phrase in the song, the misidentification of the title raises some question as to the party's familiarity with the composition. Therefore, the Court finds that even with defendants’ silence, summary judgment should not be granted on the alleged infringement of Third Rate Romance.

      . Moor also contends that since Moor-Law is now bankrupt the whole action should be dismissed as moot. Even if the judgment of this Court did not provide the plaintiffs with rights against the debtor's estate, the action is nevertheless not moot. If Moor is also liable for copyright infringement, he will be jointly and severally liable for the acts of the other infringer, Moor-Law. Chappell & Co. v. Middleton Farmers Market & Auction Co., 334 F.2d 303 (3d Cir.1964).

      . The assertion of this affirmative defense is couched in what defendants have called Count II of their Counterclaims. See Answer of Defendants Moor-Law, Inc. and Robert C. Moor, Counter Claim [sic]. Docket No. 6.

      . It is important to emphasize that the individual copyright owner’s right to refuse to license may not be free from scrutiny once the exclusive rights of a particular copyright owner are pooled with other copyright owners.

      . Buffalo Broadcasting, supra, 744 F.2d at 922-24 and Moor-Law I, supra, 484 F.Supp. at 361— 62 (D.Del.1980) contain excellent summaries of the prior antitrust actions involving the two major copyright pools. As a result of this prior litigation, the consent decree entered into by ASCAP forbids certain practices of which the most important is a prohibition on obtaining exclusive licenses. See United States v. ASCAP, 1950-51 Trade Cas. ¶ 62,595 (S.D.N.Y.1950) (Amended Final Judgment). The decree does not require ASCAP to issue a per piece license or to provide prospective licensees with a list of aHits compositions. Section XIV of the Amended Final Judgment provides, however, that upon written request, ASCAP must inform prospective users whether any compositions specified in such request are in the ASCAP repertory. The defendants have not claimed that the alleged conspiracy violated any of the prohibitions of the Amended Final Judgment. Nor does the Court’s inspection of that decree suggest otherwise. Absent allegations of specific violations of the consent decree, the Court will treat allegations alleging antitrust violation as raising issues for de novo consideration.
      The defendants also allege that the defendants requested a song list from ASCAP and had been refused. No such list existed and the defendants were so advised. Under the Amended Final Judgment in United States v. ASCAP, supra, ASCAP is required to make known to prospective users, whether any compositions specified by the user are in the ASCAP repertory. The defendants were advised of this “editing” service. Exhibit 1 (Fielder affidavit and letters dated March 7, 1975, March 19, 1975, January 31, 1979, March 14, 1979).

      . The Court expresses no opinion on whether the first prong of the analysis is called for when the product does not possess unique attributes, nor does it express any opinion on the correctness of their analysis.

      . Piad Judge Stapleton found, instead, that the first prong had not been satisfied, i.e., the blanket license was not a restraint, then the Court may have held that defendants were precluded from raising their antitrust allegations.

      . Plaintiffs have shown that defendants infringed plaintiffs’ copyright in eighteen instances. The three remaining instances—with Third Rate Romance, Tulsa Time, and Little Things Mean A Lot—cannot be resolved on plaintiffs’ motion.

      . The plaintiffs have asked the Court to find that Moor wilfully infringed other copyrights. The Court believes that a finding of wilfulness requires something more than mere knowledge of infringement. In this particular case, Moor alleges that he thought the plaintiffs had violated the antitrust laws. Although this does not excuse Moor from liability for copyright infringement, it raises a disputed issue regarding wilfulness that can only be resolved at trial. If the defendants decide to prove wilfulness at a trial, the Court will reconsider its damage award.

      . Defendants have not as yet been given an opportunity to dispute the reasonableness of the fee award requested. The Court’s inquiry today is entirely preliminary. Should defendants’ dispute the provisional fee award in this Opinion, the Court shall hold a hearing and reconsider the matter as provided in the Order filed with this Opinion. The Court sees nothing inconsistent with a preliminary review of the reasonableness of a request for attorneys’ fees and the Third Circuit’s holdings in Lindy Bros. Builders, Inc. v. Am. Radiator, etc., 487 F.2d 161 (3d Cir.1973) (hereinafter "Lindy I”) and Lindy Bros. Builders, Inc. v. Am. Radiator, etc., 540 F.2d 102 (3d Cir.1976) (hereinafter "Lindy II").


source: Caselaw Access Project

author: NEALON, Chief Judge.

license: Public Domain

text:
    Sandra SCHELTS, Plaintiff, v. William MAXIAN and Robert Wartel, Defendants.
    Civ. No. 84-0346.
    United States District Court, M.D. Pennsylvania.
    Feb. 13, 1985.
    Samuel H. Paavola, Jonathan A. Hodgson, Annapolis, Md., and John J. McLane, Scranton, Pa., for plaintiff.
    Cody H. Brooks and Lucille Marsh, Scranton, Pa., for William Maxian.
   NEALON, Chief Judge.

MEMORANDUM AND ORDER

This diversity action was transferred to the United States District Court for the Middle District of Pennsylvania by Order dated March 9, 1984. Plaintiff, a Maryland resident, brought action against defendant, then a New York resident, for injuries sustained in an automobile accident. Trial began October 29, 1984 concluding in a jury verdict for the plaintiff. Judgment for the plaintiff was entered October 31, 1984, in the sum of $15,000.00. Plaintiff filed a Motion to Mold the Verdict to Include Delay Damages and brief in support thereof dated November 9, 1984. An opposing brief was filed November 15, 1984 to which plaintiff replied November 20, 1984. By Order dated November 29, 1984, the court required the parties to file supplemental briefs. Defendant’s Supplemental Brief was filed December 7, 1984 and plaintiff’s was filed December 12, 1984.

The court specifically requested the parties to address, in their supplemental briefs, two issues: first, whether the court in fact determined that Pennsylvania’s substantive law was applicable to the action in the first instance and as a result of that determination, Pennsylvania law [40 Pa. StatAnn. § 1009.110(c)(2) ] directed the application of Maryland substantive law; second, assuming Pennsylvania law did not apply, whether Rule 238 was a procedural or substantive rule for the purpose of a conflicts of law analysis.

Defendant and plaintiff submitted their briefs to the court December 7, 1984 and December 10, 1984, respectively. Thus, the motion is ripe for disposition. For the reasons set forth below, the court will grant plaintiffs Motion to Mold the Verdict to Include Delay Damages but only from the date of the transfer to this district from the District of Maryland, viz., March 9, 1984.

Rule 238 of the Pennsylvania Rules of Civil Procedure provides for delay damages in those cases in which the defendant has not made a written settlement offer prior to trial or where the offer made by the defendant is 25% less than the amount of the jury verdict. This rule, effective April 15, 1979, was promulgated by the Pennsylvania Supreme Court pursuant to its constitutional rule-making authority. See Laudenberger v. Port Auth. of Allegheny, 496 Pa. 52, 55, 436 A.2d 147 (1981). The constitutionality of Rule 238 was challenged and upheld in Laudenberger, supra. The Pennsylvania Supreme Court stated: “Clearly, Rule 238, when viewed from the perspective of its purpose and goal, contributes to the orderly and efficient administration of justice in Pennsylvania, must stand.” Id. at 67, 436 A.2d 147. Thus, the court concluded that Rule 238 was within its procedural rule-making authority.

The application of Rule 238 in diversity cases in federal courts sitting in Pennsylvania was challenged in Jarvis v. Johnson, 668 F.2d 740 (3d Cir.1982). The trial court, relying upon the Pennsylvania Supreme Court’s determination that the rule was procedural, found Rule 238 to be without application in federal court. Id. at 741. In reversing, our Court of Appeals, stated that Rule 238’s applicability in federal court depended upon an analysis of the policies underlying Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Jarvis, supra, at 745. Concluding that Rule 238 was substantive for purposes of applicability in federal diversity actions, the Third Circuit reasoned that its holding was not inconsistent with the Pennsylvania decision in Laudenberger, supra.

A particular issue may be classified as substantive or procedural in determining whether it is within the scope of a court’s rulemaking power, or in resolving questions of conflicts of laws, or in determining whether to apply state law or federal law. These are three very different kinds of problems. Factors that are of decisive importance in making the classification for one purpose may be irrelevant for another. To use the same name for all three purposes is an invitation to a barren and misleading conceptualism by which a decision holding that a particular issue is substantive for one of three purposes would be thought controlling authority when classification for a different purpose is involved.

Jarvis, supra at 747 (quoting C. Wright, Handbook of the Law of Federal Courts, § 59 at 272 (3d ed. 1972)).

As the inquiries that the Pennsylvania Supreme Court pursued in reaching its conclusion that Rule 238 was procedural differed from those that the Third Circuit pursued in reaching its holding that Rule 238 was substantive for purposes of the Erie doctrine, so do this court’s inquiries differ in analyzing whether Rule 238 should be applied in a conflict of law context.

Thus, the issue presented in the instant case is whether Rule 238 applies in a diversity action in a federal court sitting in Pennsylvania when Maryland substantive law was applied. The research effort of this court reveals that this precise issue is one of first impression. Thus, the court must decide the resolution of this issue with caution and approach it as would the Pennsylvania Supreme Court. See Barris v. Bob’s Drag Chutes & Safety Equipment, 717 F.2d 52, 56 (3d Cir.1983). Additionally, the court notes that Pennsylvania follows the view of the Restatement 2d in conflict of laws problems. See Knauer v. Knauer, 470 A.2d 553, 557 (Pa.Super.1983).

The traditional approach, in a situation as is presented here, was to decide whether the issue was procedural or substantive. Busik v. Levine, 63 N.J. 351, 307 A.2d 571, 578 (1973). The Restatement, however, rejects this approach and directs that attention be focused upon the issue of whether the law of the forum should be applied with respect to each particular subject. Id.

The courts have traditionally approached issues falling within the scope of the rule of this Section by determining whether the particular issue was “procedural” and therefore to be decided in accordance with the forum’s local law rule, or “substantive” and therefore to be decided by reference to the otherwise applicable law. These characterizations, while harmless in themselves, have led some courts into unthinking adherence to precedents that have classified a given issue as “procedural” or “substantive,” regardless of what purposes were involved in the earlier classifications. Thus, for example, a decision classifying burden of proof as “procedural” for local law purposes, such as in determining the constitutionality of a statute that retroactively shifted the burden, might mistakenly be held controlling on the question whether burden of proof is “procedural” for choice of law purposes. To avoid encouraging errors of that sort, the rules stated in this chapter do not attempt to classify issues as “procedural” or “substantive.” Instead they face directly the question whether the forum’s rule should be applied.

Busik, supra, 307 A.2d at 578 n. 4 (emphasis in original) (quoting Restatement 2d of Conflict of Laws, comment b to § 122, at 352 (1971)).

Thus, the court must address directly the question of whether Rule 238 should be applied. The Restatement, with regard to the issue of interest, states: “[t]he law selected by application of the rule of § 145 determines whether the plaintiff can recover interest____” Restatement supra at § 171, at 512. Section 145(1) provides that the “rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence of the parties under the principles stated in § 6.” Id. at 414. Section 6, in turn, states that in the absence of a statutory directive on the issue, that the court take into account a number of relevant factors. Most applicable to the factual situation presented here are the relevant policies of the forum, the relevant policies of other interested states and the relevant interests of those states in the determination of the particular issue, and the ease in the determination and application of the law to be applied. Restatement, supra at § 6, at 10.

The relevant policies of the forum are clear in this issue. As the Pennsylvania Court explained in Laudenberger, the basic aim of Rule 238 is to alleviate docket congestion and delay in disposition of cases in Pennsylvania by encouraging early settlement. Laudenberger, supra at 59, 436 A.2d 147. Thus, the interest of the forum, here, is significant. Examining the interests of Maryland, the court notes that while Maryland does not have a similar delay damage rule, Maryland’s interest in whether this rule is applied is nominal. The purpose for which the rule was enacted cannot be of interest to the other state.

The ease in determination of application of the law to be applied is clear. Rule 238 provides for clerical, mathematical computation in instances in which it applies.

The above discussion leads this court to conclude that Pennsylvania’s interest and policies will be furthered in holding that Rule 238 is applicable in the instant case. It is unnecessary to label the rule as “procedural” or “substantive.” The analysis of the Restatement’s approach in a situation such as the one presented here, indicates that the basic purpose of Rule 238 is furthered in applying the rule in an action tried in Pennsylvania.

The remaining issue is from what date the delay damages should be calculated. Again, this precise issue has not been determined by another court. This court is guided, however, by our Court of Appeals’ decision in Barris, supra. There, it was held that delay damages should not be applied during an interim in which a prevailing defendant is waiting for the outcome of a plaintiff’s appeal. In Barris, plaintiff was successful on appeal, the case remanded, and the plaintiff ultimately prevailed. Because a defendant would rightly refrain from initiating settlement when a plaintiff is perfecting an appeal, the operation of Rule 238 would no longer serve its purpose and thus should not be applied during the appeal interim. Id. at 57.

Rule 238 was designed to lessen docket congestion and encourage early settlement in Pennsylvania courts. Thus, the operation of the Rule would not serve its purpose if it were applied in this action before the action was transferred from the district court in Maryland to our district in Pennsylvania. While the action was pending in Maryland, defendant would not be confronted with the issue of delay damages. Moreover, the case was transferred here on plaintiff's motion.

In conclusion, delay damages will be applied in this action calculating from March 9, 1984 the date of transfer to October 31, 1984, the date of the plaintiff’s judgment of $15,000.00.

Counsel for the parties are ordered to meet and submit an Order to this court in conformity with this Memorandum.

      . Rule 238 reads, in pertinent part, as follows: (a) Except as provided in subdivision (e), in an action seeking monetary relief for bodily injury, death or property damage or any combination thereof, the court ... shall
      (1) add to the amount of compensatory damages ... in the verdict of a jury, or in the court’s decision in a nonjury trial, damages for delay at ten (10) percent per annum, not compounded, which shall become part of the ... verdict or decision;
      (2) compute the damages for delay from the date the plaintiff filed the initial complaint in the action or from a date one year after the accrual of the cause of action, whichever is later, up to the date of the ... verdict or decision.
      (e) If a defendant at any time prior to trial makes a written offer of settlement in a specified sum with prompt cash payment to the plaintiff, and continues that offer in effect until commencement of trial, but the offer is not accepted and the plaintiff does not recover by ... verdict or decision, exclusive of damages for delay, more than 125 percent of the offer, the court ... shall not award damages for delay for the period after the date the offer was made.

      . The court ruled pursuant to § 110(c)(2) [Pennsylvania No Fault Law] and Toter v. Knight, 278 Pa.Super. 547, 420 A.2d 676 (1980) that plaintiffs right to sue in tort was governed by Maryland substantive law, i.e., the law of the plaintiffs domicile. Application of the choice of law provision set forth in § 110(c)(2) has been interpreted to mean application of the whole law of the state chosen. See Schrager, The Pennsylvania No-Fault Motor Vehicle Insurance Act (Supp.1983) (citing Toter, supra.).

      . The $15,000.00 award comprised $5,000.00 for pain and suffering and $10,000.00 for medical expenses, past and future. The court is not convinced that only damages awarded for pain and suffering should be computed as defendant argues. After transfer, defendant would be expected to be aware of the application of Maryland substantive law under the Pennsylvania statute and that medical expenses would be recoverable.


author: BATTIN, Chief Judge.

text:
    Donald SADLER, d/b/a D & H Inc., a/k/a D & H Vacuum, Plaintiff, v. REXAIR, INC. a Subsidiary of Kidde, Inc. and Kidde, Inc. Defendants.
    No. CV-84-117-BLG.
    United States District Court, D. Montana, Billings Division.
    March 25, 1985.

      Jerome J. Cate, Cate Law Firm, Billings, Mont., for plaintiff.
    Stephen H. Foster and Brian C. Donovan, Holland & Hart, Billings, Mont., and Roy L. Shults, Mitchell Silberberg & Knupp, Los Angeles, Cal., for defendants.
   MEMORANDUM OPINION

BATTIN, Chief Judge.

This case is before the Court on defendants’ motion to dismiss Counts Two, Three, and Four of plaintiff’s amended complaint. For the reasons stated below, the defendants’ motion is granted.

Facts and Procedure

On March 5, 1981, the plaintiff and defendant Rexair entered into a contract in which defendant agreed to supply Rainbow Vacuum Cleaners to plaintiff for resale. On January 20, 1984, the defendant Rexair cancelled the contract. •

Plaintiff brought this action in four counts. On November 27, 1984, this Court dismissed Count One (seeking specific performance) and Count Three (seeking punitive damages). The plaintiff filed a more definite statement of Count Four, and the defendants moved to dismiss Count Four. The plaintiff then filed an amended complaint. The defendants have now moved to dismiss Counts Two, Three and Four of the amended complaint.

Count One of the amended complaint alleges a breach of contract. Count Two alleges that the cancellation of the contract was done in an attempt to restrain trade in violation of 15 U.S.C. § 1. Count Three alleges an attempt to monopolize in violation of 15 U.S.C. § 2. Count Four alleges an unlawful restraint of trade in violation of Mont.Code Ann. § 30-14-205(1), (2)(c), (d), (g) (1983).

Discussion Federal Claims Count Two

Although “summary procedures should be used sparingly in complex antitrust litigation,” Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), “sparingly” is not synonymous with “not at all,” and the party claiming an antitrust violation must still allege, in order to survive a motion to dismiss, sufficient facts to state each element of an antitrust offense. See Gilbuilt Homes, Inc. v. Continental Homes of New England, 667 F.2d 209 (1st Cir.1981); Americana Industries, Inc. v. Wometco de Puerto Rico, 556 F.2d 625 (1st Cir.1977); Knickerbocker Toy Co., Inc. v. Winterbrook Corp., 554 F.Supp. 1309 (D.N.H.1982). Conclusory allegations of a violation of the Sherman Antitrust Act will not survive a motion to dismiss if not supported by facts constituting a legitimate claim for relief. Lombards, Inc. v. Prince Mfg., 753 F.2d 974, 975 (11th Cir.1985); Quality Foods v. Latin American Agribusiness Corp., 711 F.2d 989, 995 (11th Cir.1983).

The Federal Rules of Civil Procedure require a plaintiff to disclose adequate information as to the basis of his claim for relief as distinguished from a bare averment that he wants relief and is entitled to it. It is true that in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), the Supreme Court referred to “simplified notice pleading” but in context it is plain that the Court’s statement was one of aim rather than definition. Only two sentences before the phrase, the Court had emphasized that the rules require the complaint to give the defendant “fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Thus, the Court recognized that the rules do contemplate the statement of circumstances, occurrences, and events in support of the claim presented, even though they permit the circumstances to be stated with great generality. See Wright, Law of Federal Courts § 68 (4th Ed.1983), p. 443.

In the instant case, the plaintiff has failed to allege sufficient facts to state an antitrust offense. The Sherman Antitrust Act addresses and proscribes unreasonable anticompetitive behaviour. The Act does not prevent a private manufacturer from deciding independently with whom it will deal. United States v. Colgate & Co., 250 U.S. 300, 307, 39 S.Ct. 465, 468, 63 L.Ed. 992 (1919); Gilbuilt Homes, Inc. v. Continental Homes of New England, 667 F.2d 209 (1st Cir.1981).

The Sherman Antitrust Act, § 1, 15 U.S.C. § 1, prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States____” The present claim states only a conclusory allegation that there was a conspiracy in violation of 15 U.S.C. § 1. Count Two of the complaint states that there was a “conspiracy between the defendants and other debtors.” The plaintiff cannot base its claim upon a conspiracy between the two defendants, Rexair, Inc., and Kidde, Inc., because Rexair is a subsidiary of Kidde. The Supreme Court has made it unequivocally clear that 15 U.S.C. § 1 relates only to concerted acts between two or more separate and independent entities. Copperweld Corp. v. Independence Tube Corp., — U.S. -, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984). Nor can the plaintiff salvage its complaint by adding unidentified participants, i.e., “other debtors.” Such pleading is inadequate to give the defendants fair notice of plaintiffs claim. Lombards, Inc. v. Prince Mfg., Inc., 753 F.2d 974, 975 (11th Cir.1985). A conclusory allegation of a conspiracy to restrain trade will not survive a motion to dismiss. City of Gainesville v. Florida Power & Light Co., 488 F.Supp. 1258, 1263 (S.D.Fla.1980).

It is settled law that a manufacturer has the right to select its customers and may refuse to sell its goods to anyone for reasons sufficient to itself. United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919); Burdette Sound, Inc. v. Altec Corp., 515 F.2d 1245 (5th Cir.1975). It is not an antitrust violation for a manufacturer to change distributors even if the affect is to seriously damage the former distributor’s business. Bushie v. Stenocord Corp., 460 F.2d 116 (9th Cir.1972); Burdette Sound, 515 F.2d at 1249.

Plaintiff also fails to state a claim for relief under 15 U.S.C. § 2. Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, provides sanctions for “[e]very person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of [interstate] trade or commerce____” There are two ways in which 15 U.S.C. § 2 may be violated: (1) achievement of a monopoly or an attempt to do so, and (2) conspiracy to monopolize. Any allegation plaintiff may have as to a conspiracy to monopolize must fail for the same reasons as set forth in the discussion of 15 U.S.C. § 1 above. Therefore, for that portion of plaintiff’s complaint alleging a violation of 15 U.S.C. § 2 to survive a motion to dismiss it must allege that the defendants achieved a monopoly or attempted to do so. Plaintiff alleges, in substance, that the exclusive control which defendants Rexair and Kidde have over the sale of Rainbow vacuum cleaners, as a result of the termination of his dealership, constitutes a monopoly or an attempt to monopolize proscribed by 15 U.S.C. § 2. However, the law is to the contrary.

A manufacturer has a natural monopoly over its own products, especially when the products are sold under a trademark. Industrial Building Materials, Inc. v. Interchemical Corp., 437 F.2d 1336, 1344 (9th Cir.1970). See also United States v. E.I. DuPont, 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264 (1956). Plaintiff’s complaint does not allege an attempt to monopolize the vacuum cleaner market, but rather the market for “Rainbow” brand vacuum cleaners. A “brand” monopoly over the manufacturer’s own product (as opposed to a total market monopoly) is not a violation of 15 U.S.C. § 2. Bushie v. Stenocord Corp., 460 F.2d 116, 120 (9th Cir.1972).

Plaintiff cannot convert the losses it may have sustained as a result of alleged breaches of contract into an antitrust claim, without demonstrating the type of injury against which the antitrust laws were intended to protect. Gianna Enterprises v. Miss World LTD, 551 F.Supp. 1348, 1355 (S.D.N.Y.1982). Plaintiffs federal antitrust claims will be dismissed for the reasons stated.

State Law Claims

Plaintiff also contends that the cancellation of the contract by defendant Rexair was an attempt to restrain trade in violation of Mont.Code Ann. § 30-14-205(1), (2)(c), (d), (g) (1983). Section 30-14-205 provides as follows:

It is unlawful for a person or a group of persons, directly or indirectly:
(1) to enter an agreement for the purpose of fixing the price or regulating the production of an article of commerce;
(2) for the purpose of creating or carrying out any restriction in trade, to:
(a) ...
(b) ...
(c) prevent competition in the distribution or sale of merchandise or commodities;
(d) fix a standard or figure whereby the price of an article of commerce intended for sale, use, or consumption will be in any way controlled;
(e) • • •
(f) ...
(g) create a monopoly in the manufacture, sale, or transportation of an article of commerce.

There are only two cases interpreting Mont.Code Ann. § 30-14-205 (1983), and neither is relevant to the instant case. MontCode Ann. § 30-14-201 (1983) states as follows:

Purpose. The legislature declares that the purpose of this part [Mont.Code Ann. §§ 30-14-201 to 30-14-224] is to safeguard the public against the creation or perpetuation of monopolies and foster and encourage competition by prohibiting unfair and discriminatory practices by which fair and honest competition is destroyed or prevented. This part shall be literally construed so that its beneficial purposes may be subserved.

The purpose of §§ 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2, is to protect the public against the evils of monopolies, Kansas City Star v. United States, 240 F.2d 643 (8th Cir.1957), and to promote free competition, Northwestern Oil Co. v. Socony-Vacuum Oil Co., 138 F.2d 967 (7th Cir.1943), which means prohibiting unreasonable or undue restraints which hinder or retard competition. Hiland Dairy, Inc. v. Kroger Company, 402 F.2d 968 (8th Cir.1968). With such similar purposes behind the federal and Montana statutes and with the absence of Montana case law interpreting the Montana statutes, the Court will follow the federal precedent in determining what is necessary to state a claim under Mont.Code Ann. § 30-14-205 (1983). Therefore, for the same reasons as stated above in the discussion concerning the federal claims, the allegations in Count Four of the amended complaint are insufficient to state a claim.

The Court will issue an order in conformity with this Memorandum Opinion.