Opinion
96 C 3985
February 9, 2000
MEMORANDUM OPINION
This matter is before the Court on Plaintiffs' motion to file an amended complaint. For the reasons set forth below, Plaintiffs' motion is denied.
BACKGROUND
Plaintiffs Zappa Family Trust by Gail Zappa, Trustee, and Gail Zappa ("Plaintiffs"), seek the Court's leave to amend their complaint to add a count for breach of implied license. This suit was recently transferred to this Court from Judge Williams, who previously set forth an exhaustive rendition of the facts underlying this action in two prior opinions. See Glovarama, Inc. v. Maljack Prods., Inc., 1998 WL 102742 (N.D. Ill. Feb. 26, 1998); Glovarama, Inc. v. Maljack Prods., Inc., 71 F. Supp.2d 846 (N.D. Ill. 1999). Thus, we will concentrate our analysis only on those facts necessary for deciding the narrow issue at bar.
The genesis of the dispute are the actions of Defendant Maljack Productions Corporation ("Maljack) in producing and distributing six videos of renowned rock singer Frank Zappa ("Zappa") under the registered trademark of "Honker Home Video" pursuant to an oral agreement it entered into with Plaintiff Gail Zappa, Frank Zappa's widow ("Mrs. Zappa"). The deal was struck in Zappa's driveway in December 1987. Plaintiffs claim Maljack has underpaid on royalties and continued to distribute its existing stock of the six videos after Plaintiffs' counsel demanded Maljack cease such activities on May 9, 1994. The parties agree Maljack did not continue producing new videos after this date.
Zappa died on December 4, 1993.
Plaintiffs filed suit against Maljack in 1996. In their second amended complaint Plaintiffs asserted six counts: breach of an oral joint-venture agreement (Count I); breach of fiduciary duty (Count II); misappropriation of Frank Zappa' s name, voice, photograph or likeness (Count III); copyright violations (Count IV); trademark violations (Count V); and Count VI sought an accounting. On February 26, 1998, Judge Williams dismissed Counts I, II, and III, and sustained Counts IV and V of the second amended complaint. See Glovarama, 1998 WL 102742 at *1. Judge Williams dismissed the breach of contract claim in Count I because the contract seeking to transfer the exclusive right to distribute the copyrighted works was not in writing. See id. at *3. However, because a writing is not required for a copyright violation claim, Judge Williams upheld Count IV. See id. at *6-7.
Glovaroma, Inc. was also a co-plaintiff.
Count VI remained at this point because Maljack did not challenged it in its motion to dismiss.
The parties subsequently cross-moved for summary judgment. On September 23, 1999, Judge Williams ruled that Frank Zappa owned, or jointly owned, the copyrights for the videos at issue, and properly transferred his interest in them to the Zappa Family Trust on April 9, 1993. See Glovaroma, 71 F. Supp.2d at 854. Judge Williams also found that an implied nonexclusive license existed between Plaintiffs and Maljack up until May 9, 1994, but held that a jury issue existed as to whether Maljack infringed Plaintiffs copyright by selling off its remaining inventory after May 9, 1994. See id. at 856. Accordingly, Judge Williams denied both parties' summary judgment motions as to Count IV, but granted summary judgment for Counts V and VI.
In so doing, Judge Williams also found that Glovaroma was not entitled to enforce the copyright. Because the copyright count is the sole remaining basis of Maljack's potential liability, Glovaroma is no longer part of the case.
Plaintiffs thereafter filed a motion for reconsideration, arguing inter alia that the Court's opinion had the effect of striking their copyright claim. On October 13, 1999, Judge Williams denied the motion. In her order, Judge Williams reiterated that the copyright infringement claim remained in contention, but should be left to a jury.
DISCUSSION
Plaintiffs request leave to add a count to their complaint seeking relief for breach of an implied nonexclusive license between the parties. Defendants oppose the motion, essentially claiming it is untimely. Plaintiffs claim they are merely seeking to bring their complaint into compliance with the state of the case following the summary judgment ruling of September 23, 1999, and thus the amendment is timely. We conclude that prior to September of 1999, Plaintiffs were aware, or should have been aware, of the need to amend their complaint and thus we deny the motion for leave to amend.
Federal Rule of Civil Procedure 15(a) provides that a party must obtain leave of court or written consent of the opposing party to amend a pleading. See Garner v. Kinnear Mfg. Co., 37 F.3d 263, 269 (7th Cir. 1994) (citing Perrian v. O'Grady, 958 F.2d 192, 194 (7th Cir. 1992)). Under Rule 15(a) of the Federal Rules of Civil Procedure, district courts may grant leave to amend pleadings and such leave "shall be freely given when justice so requires," so long as there is no harm to the other party. Fed.R.Civ.Proc. 15(a). Leave to amend is "inappropriate where there is undue delay, bad faith, dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment or futility of the amendment." Perrian, 958 F.2d at 194; see also General Electric Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1085 (7th Cir. 1997) (citing inter alia Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227 (1962)); Orix Credit Alliance, Inc. v. Taylor Mach. Works, Inc., 125 F.3d 468, 480 (7th Cir. 1997) (citing Ferguson v. Roberts, 11 F.3d 696, 706 (7th Cir. 1993)).
Plaintiffs argue that they did not unduly delay seeking leave to amend their complaint because on September 23, 1999, Judge Williams alerted them for the first time of their potential implied license claim. This argument, however; flies in the face of the procedural background of this case.
Judge Williams' opinion on Maljack's motion to dismiss clearly gave Plaintiffs notice of an implied nonexclusive license claim. In striking their oral contract claim because the transfer of exclusive rights in a copyright may not be made without a writing, Judge Williams explicitly noted that "the writing requirement for a `transfer of copyright ownership' does not apply to a nonexclusive license." Glovarama, 1998 WL 102742 at *2.
When Plaintiffs and their counsel read the opinion, and especially the above-quoted passage, they should have recognized that the only remaining potential basis of the relationship between Maljack and Plaintiffs was an implied nonexclusive license. This awareness should have triggered a realization of the need to plead a breach of licensed claim, if they so desired.
This case was filed in 1996. Judge Williams issued her opinion on February 26, 1998, and Plaintiffs filed their motion seeking leave to amend on November 3, 1999. Having waited twenty months to seek court permission to assert this claim, we conclude this constitutes an undue delay by Plaintiffs which prejudices Maljack. Any amendment at this late date may well serve to cause a reopening of discovery and cause additional expense, as Maljack contends. It will also inevitably delay the completion of this aged case in the district court.
CONCLUSION
For the foregoing reasons, Plaintiffs' motion for leave to amend their complaint is denied.