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Gervasi v. Warner/Chappell Music, Inc.

United States District Court, M.D. Tennessee, Nashville Division

February 5, 2018

DEBORAH BUSH GERVASI, Individually and on behalf of the ESTATE OF RICHARD A. WHITING, Plaintiffs,



         Warner/Chappel Music, Inc. (“WCM”) has filed a Motion to Dismiss for Lack of Jurisdiction (Docket No. 84), to which Deborah Bush Gervasi has filed a Response (Docket No. 87), and WCM has filed a Reply (Docket No. 89). Ms. Gervasi then filed a Motion for Leave to File Surreply and to File a Third Amended Complaint (Docket No. 91), to which WCM has filed a Response (Docket No. 94), and Ms. Gervasi has filed a Reply (Docket No. 97). For the reasons set out herein, Ms. Gervasi's motion will be granted in part and denied in part, and WCM's motion will be denied as moot.


         Richard A. Whiting was an early 20th-century songwriter, known for such compositions as “Oh the Good Ship Lollipop” and “Hooray for Hollywood.” (Docket No. 97-1 ¶ 7.) In 1936, Mr. Whiting entered into a music publishing agreement with Warner Bros. Pictures. (Id. ¶ 11.) In 1938, Mr. Whiting died, leaving his intellectual property to his wife, Eleanore, and his daughters, Barbara and Margaret. (Id. ¶ 12.) In 1943, Eleanore Whiting entered into an agreement with Music Publishers Holding Corporation (“MPHC”), whereby she transferred her interest in the renewal copyrights of some of Mr. Whiting's compositions to the company in exchange for 50% of the domestic licensing receipts for the compositions. (Id. ¶¶ 13-14.) Shortly thereafter, the parties amended the agreement to grant Ms. Whiting a share of international licensing at the same rates as those for domestic licensing under Mr. Whiting's original publishing contracts, including the 1936 agreement. (Id. ¶ 15.) In 1953, the parties amended the agreement again, to increase Ms. Whiting's international licensing share to 50%. (Id. ¶ 16.) Eleanore Whiting died in 1981, leaving her rights to Margaret; Margaret died in 2011, leaving her rights to her daughter, Ms. Gervasi. (Id. ¶ 30.) Ms. Gervasi lived in Tennessee when this case was initiated and now lives in New York, and probate documents state that her mother Margaret was living in New York at the time of her death. (Id. ¶ 1; Docket No. 91-3 at 102.) WCM, which is the successor-in-interest of MPHC and Warner Bros. Pictures, is based in California. (Docket No. 97-1 ¶ 2.)

         In December 2006, Ms. Gervasi, while caring for her ailing mother, reviewed the records of licensing payments that her mother had received from WCM and noticed payment variations that she was unable to explain. (Id. ¶¶ 18-19.) Ms. Gervasi and her mother, after researching the matter, came to believe that WCM had been underpaying the royalties. They informed WCM that they believed it was underpaying them, but they mostly received either silence or resistance to their complaints. After her mother's death, Ms. Gervasi, as the heir to her mother's royalty rights, continued correspondence with WCM in an attempt to recoup the underpayments, but WCM took the position that the royalties had been calculated correctly because the relevant compositions were governed by the 1936 agreement, not any subsequent agreements. (Id. ¶¶ 23- 34.)

         On June 20, 2012, Ms. Gervasi filed her Complaint in this case. (Docket No. 1.) She filed a First Amended Complaint two days later. (Docket No. 4.) The First Amended Complaint's caption indicated that Ms. Gervasi was suing “individually and on behalf of the estate of Richard A. Whiting.” (Id. at 1.) The Complaint referred to Ms. Gervasi as “the legal representative of the estate of Richard A. Whiting” and asserted that, in her capacity as representative of the estate, Ms. Gervasi was “obligated to account to and pay Plaintiff royalties due to the estate of Richard A. Whiting.” (Id. ¶ 36.) The Complaint, which pleaded claims for breach of contract, breach of the duty of good faith and fair dealing, accounting, and declaratory judgment, cited only one basis for this court's subject matter jurisdiction-diversity of the parties under 28 U.S.C. § 1332. (Id. ¶¶ 3, 34-57.)

         On December 3, 2012, WCM filed a Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6). (Docket No. 13.) Among the arguments made by WCM was that Ms. Gervasi cannot assert claims for damages related to royalties due prior to her inheritance of her mother's royalty rights on March 28, 2011. (Docket No. 14 at 8.) Ms. Gervasi responded that the date of her personal inheritance did not limit her period of recovery because her “claims [were] brought on behalf of both herself and the estate and therefore have no such time limitation.” (Docket No. 17 at 9 n.2.) On January 30, 2014, Judge John T. Nixon granted the Motion to Dismiss in part and denied it in part.[2] (Docket No. 35.) Specifically, Judge Nixon dismissed Ms. Gervasi's good faith and fair dealing and accounting claims without prejudice but left her other claims intact. (Id. at 14.) Regarding Ms. Gervasi's claims for damages incurred prior to her mother's death, the court wrote: “[A]s Gervasi filed this suit on behalf of both herself and the Whiting estate, she is not estopped from alleging injuries suffered by her predecessors in interest occurring prior to when her interest in the estate vested on March 28, 2011.” (Id. at 9.)

         Litigation continued, and, on April 11, 2016, Ms. Gervasi filed a Motion for Leave to Amend the First Amended Complaint. (Docket No. 61.) Specifically, Ms. Gervasi sought to include additional facts unearthed in discovery, to reframe some of the facts related to her initial uncovering of the alleged underpayments, and to recast her claims as governed by California, rather than Tennessee, law. (Docket No. 62 at 1-2.) Her proposed Second Amended Complaint still purported to be filed by Ms. Gervasi both in her individual capacity and on behalf of Richard A. Whiting's estate. (Docket No. 61-1 at 1, ¶¶ 28, 49.) On January 30, 2017, this court granted Ms. Gervasi leave to amend in part, holding that some of her claims for damages prior to either June 20, 2008 or April 11, 2012, depending on the composition, were time-barred. (Docket No. 70 at 14.)

         Again, litigation continued. On October 16, 2017, WCM filed a Motion to Dismiss for Lack of Subject-Matter Jurisdiction. (Docket No. 84.) For the first time, WCM noted that, at the time of his death, Richard A. Whiting was, like WCM, a citizen of California for jurisdictional purposes. (Id. at 1.) Pursuant to 28 U.S.C. § 1332(c)(2), “the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent.” A federal court can exercise diversity jurisdiction “only if each of the plaintiffs comes from a different State from each of the defendants.” Evanston Ins. Co. v. Hous. Auth. of Somerset, 867 F.3d 653, 656 (6th Cir. 2017) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553-54 (2005); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806)). WCM's hypothetical diversity of citizenship with Ms. Gervasi as an individual, therefore, cannot remedy its lack of diversity with Ms. Gervasi as the representative of a California estate.

         In Response, Ms. Gervasi argued that, despite her several prior statements to the contrary, she is not the representative of Richard A. Whiting's estate in any formal sense, but only in the sense that she is suing to vindicate the rights of his heirs:

Mr. Whiting's estate was closed decades ago when his wife and children inherited the copyrights at issue in this case. Ms. Gervasi, who was not even born when her grandfather died, was never the legal representative of his estate and never intended to sue in that capacity, which she obviously could not have done. Her intent in referring to her grandfather's estate was to identify the source of her copyrights and the fact that she was suing not only individually, as one of her grandfather's heirs, but also on behalf of her cousin-her grandfather's other heir and co-owner of the copyrights.

(Docket No. 87 at 1-2.) While WCM's Motion to Dismiss was pending, Ms. Gervasi filed a Motion for Leave to File Surreply and to File a Third Amended Complaint, in which she seeks leave to amend her complaint to clarify that she is not seeking to assert any claims as a formal legal representative of the Whiting estate. (Docket No. 91.) Ms. Gervasi also seeks, for the first time, to assert federal question jurisdiction. (Docket No. 91-4 ¶ 4.)


         Rule 15(a)(2) of the Federal Rules of Civil Procedure states that leave to amend should be freely given “when justice so requires.” In deciding whether to grant a motion to amend, courts should consider undue delay in filing, lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party, and futility of amendment. Brumbalough v. Camelot Care Ctrs., Inc., 427 F.3d 996, 1001 (6th Cir. 2005). ÔÇťAmendment of a complaint is futile when the proposed amendment would not permit the complaint to survive a motion to ...

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