IP Law Daily Copyright Act preempts singer Toni Basil’s state law claims
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Monday, August 31, 2020

Copyright Act preempts singer Toni Basil’s state law claims

By Cheryl Beise, J.D.

All of the singer’s claims depended on the defendants’ malfeasance in licensing rights to the singer’s 1980s song Mickey.

Toni Basil, a performer who claimed to have exclusive rights to the 1980s hit song Mickey, could not pursue state law claims for intentional interference with a prospective economic advantage, elder abuse, and unfair business practice against a group of related companies that had licensed the song to third parties, a California appeals court has ruled, because each of the claims was preempted by the Copyright Act. The defendants’ licensing of the song and music video for Mickey fell within the subject matter of copyright and none of Basil’s claims added an "extra element" that would precluded preemption. The trial court’s grant of judgment on the pleadings to the defendants was affirmed (Basil v. New Razor & Tie Enterprises, LLC, August 27, 2020, Hoffstadt, B.).

Toni Basil (aka Antonia Basilotta) was known for performing the 1980s hit Mickey, which continues to be a "cheerleading anthem" to this day. In 1979 and 1982, Basil signed contracts with Radialchoice to serve as her record label. The contracts provided that Radialchoice could license Basil’s "master recordings" to third parties only with her written consent. In 1985, Radialchoice was "involuntarily forced into liquidation." The company was "officially dissolved" in 1988.

In 1994 and 1997, a group of related companies all with the words "Razor & Tie" in their name ("Defendants"), purported to purchase the rights to license Mickey from a Panama-based company called Odel Finance Corporation. In 1998, Defendants signed a "letter [agreement]" regarding the right to license Mickey with a company called Twist & Shout, the "purported successor in interest" to Radialchoice. Defendants then licensed use of Mickey to third parties (including to the TV show South Park) and collected the revenue stream from those licenses without remitting any money to Basil.

In October 2017, Basil filed the operative first amended complaint against Defendants, asserting claims under California Law for (1) intentional interference with a prospective economic advantage (intentional interference), (2) elder abuse, and (3) unfair business practice. Defendants moved for judgment on the pleadings on the ground that Basil’s claims were preempted by the Copyright Act. The trial court granted the motion, but gave Basil leave to amend her unfair competition claim. Basil elected not to amend and appealed.

Copyright Act preemption. On appeal, Basil argued that the trial court erred in granting judgment on the pleadings based on Copyright Act preemption. A state law claim is preempted by the Copyright Act if (1) the claim falls within the subject matter of copyright, and (2) the right asserted through the claim is "equivalent to the exclusive rights contained in" the Copyright Act.

The appeals court first found that the song and music video for Mickey fell within the subject matter of the Act because they constituted a "musical work," an "audiovisual work," and a "sound recording" under 17 U.S.C., § 102(a). In her complaint, Basil alleged that her "brand and identity"—that is, her persona and any implied endorsements—"[are] intertwined with her iconic song Mickey." Having satisfied the first element for preemption, the court next examined whether Basil’s claims protected rights equivalent to those protected by the Copyright Act.

In her claim for intentional interference, Basil alleged that Defendants’ conduct in licensing Mickey and Basil’s publicity rights to third parties interfered with her prospective right to do so, and consequently interfered with her right to collect the revenue stream from the third parties’ use of her copyrighted work. The Copyright Act grants copyright holders the right to license a copyrighted work to third parties. Accordingly, the rights Basil was asserting in her intentional interference claim were "equivalent" to the "exclusive rights of copyright holders" under the Act and thus preempted.

Basil’s elder abuse claim was based upon the same allegations as her intentional interference claim with one added element—the allegation that Basil was 65 years or older. This claim also was preempted, according to the court. "The elder abuse claim applies only to persons aged 65 and over does not alter the qualitative nature of those rights; it only narrows the universe of persons who may sue for their violation as elder abuse," the court said.

The court also affirmed the trial court’s determination that the unfair competition claim was preempted. The court explained that because Basil opted not to take the trial court up on its grant of leave to amend, the only portions of her unfair competition claim at issue were the ones the trial court found to be derivative of her intentional interference and elder abuse claims.

Other arguments. Additional arguments raised by Basil were unpersuasive. Basil argued that the trial court erred in ignoring that her state law claims "sound[ed] in fraud, misrepresentation and taking of monies due." The appeals court found this argument "flatly inconsistent with the pertinent test that requires courts to adjudge the ‘nature’ of each state claim notwithstanding the form of that claim." Basil contended that none of her claims required proof of copyright infringement, but this was the incorrect standard for preemption. Basil argued for the first time in her reply brief that the court was confined to the "face of the complaint" in granting a motion on the pleadings. This argument was not only waived, but it was frivolous in that it relied on cases addressing removal jurisdiction.

Basil also challenged the lower court’s finding that her claims protected rights equivalent to copyright. Basil said her claims did not rest upon the "reproduction, performance, distribution or display of Mickey," but instead depended on Defendants’ acts in (1) "falsely claiming" to be her agent, (2) "collecting money" from licensing Mickey to third parties (and the related acts of "funneling" that money "to offshore entities" as well as "retaining" that money "for legal fees neither awarded nor contractually agreed to be paid by" Basil), and (3) coopting Basil’s contractual rights.

The first two allegations involved the same as the right to license a copyrighted work to third parties, the court noted. The third allegation did not actually rest upon any violation of contract rights because Basis had no contract with Defendants or Defendants’ licensees. Lastly, the court rejected Basil’s contention that her claims had an "extra element" that would preclude preemption. None of the alleged "extra elements"—such as Basil’s advanced age or Defendants’ "misrepresentation" in licensing rights to her song—"changes the nature of the action so that it is qualitatively different from a copyright infringement claim," the court said.

The case is No. B299985.

Attorneys: F. Edie Mermelstein (Fem Law Group) for Toni Basil. Robert S. Besser (Law Offices of Robert S. Besser) for New Razor & Tie Enterprises, LLC, Razor & Tie Direct, LLC, Razor & Tie Entertainment, LLC, Razor & Tie Music, L.P., Razor & Tie Music Corp., and Razor & Tie Recordings, LLC.

Companies: New Razor & Tie Enterprises, LLC; Razor & Tie Direct, LLC; Razor & Tie Entertainment, LLC; Razor & Tie Music, L.P.; Razor & Tie Music Corp.; Razor & Tie Recordings, LLC

MainStory: TopStory Copyright CaliforniaNews GCNNews

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