Alvertis Isbell v. DM Records, Incorporated, 774 F.3d 859

Background

In 1993 Tag Team (Cecil Glenn & Steven James) wrote and recorded the song Whoomp! (There It Is). Tag Team signed a Recording Agreement with Bellmark Records that included Exhibit B titled “Assignment of Compositions and Rights to Copyright.”
Exhibit B contained transfer language conveying “fifty percent (50%) of the entire rights” to “Bellmark’s affiliated designee publisher,” and other paragraphs referencing 50% transfers and a Memorandum Agreement; parties disputed whether these provisions conveyed a single 50% interest to Alvert Music (Bell’s publisher) or two separate 50% assignments (one to Alvert Music and one to Bellmark).
Bell (Alvert Music) sued DM Records in 2002 asserting he owned the composition copyright and that DM infringed; after protracted litigation the district court (after an 11-day trial) ruled, as a matter of law under California law, that Alvert Music owned a 50% interest and DM infringed; a jury awarded over $2.1 million in actual damages.
DM renewed JMOL (Rule 50(b)) arguing for the first time that the Recording Agreement assigned the other 50% to Bellmark (i.e., two separate 50% assignments); the district court denied relief as waived. DM also moved under Rule 60(b) alleging Bell withheld a 2006 Security Agreement that would defeat Bell’s standing; the court denied relief.
On appeal the Fifth Circuit affirmed: (1) contract interpretation was a question of law because extrinsic evidence did not present conflicting credibility issues requiring a jury; (2) DM waived its two-assignments theory by failing to raise it at trial; (3) the allegedly withheld Security Agreement would not defeat standing at the time the suit was filed; and (4) no reversible error in damages instruction or denial of new trial based on Bell’s closing argument.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Recording Agreement’s meaning was for the court or the jury	Garcia/Alvert: court should resolve interpretation as a matter of law because extrinsic evidence was undisputed or did not present conflicting credibility issues	DM: extrinsic evidence created triable factual disputes that required jury resolution	Court: interpretation under California law is a question of law unless credibility of conflicting extrinsic evidence is at issue; no such conflict here — court properly decided as matter of law
Whether DM could raise a new theory in its Rule 50(b) JMOL that the Agreement made two separate 50% assignments	Alvert: DM waived new theory by not raising it in pre-verdict Rule 50(a) and even disclaimed it at trial	DM: the two-assignments reading is plausible and should be considered post-verdict	Held: DM waived the argument; Rule 50(b) cannot assert grounds not presented in Rule 50(a); denial affirmed
Whether DM is entitled to Rule 60(b) relief based on an allegedly withheld 2006 Security Agreement that transfers Bell’s rights	Alvert: even if Security Agreement existed, standing is determined at filing (2002) and the document would not negate standing then	DM: the withheld Security Agreement (and a 2000 exhibit) show Bell lacked ownership/standing and were fraudulently concealed	Held: Denial affirmed — Security Agreement (if any) would not affect standing at suit commencement; DM failed to show prejudice or extraordinary circumstances for Rule 60(b) relief
Whether damages award/instructions and Bell’s closing argument require a new trial or reduction because Bell owned only 50%	Alvert: jury could find Bell administered 100% of royalties and then account to Tag Team; closing arguments were supported by record	DM: jury should have been limited to awarding Bell only his 50% share; closing remarks accusing DM of theft were abusive and prejudicial	Held: No plain error — jury instructions were legally correct in context; factual record supported awarding Bell royalties as administrator; closing argument had evidentiary basis and did not warrant new trial

Key Cases Cited

Lloyds of London v. Transcontinental Gas Pipe Line Corp., 101 F.3d 425 (5th Cir.) (choice-of-law and de novo review principles)
Garcia v. Truck Ins. Exch., 682 P.2d 1100 (Cal. 1984) (California parol evidence and extrinsic evidence rules for contract interpretation)
Pac. Gas & Elec. Co. v. G.W. Thomas Drayage & Rigging Co., 442 P.2d 641 (Cal. 1968) (extrinsic evidence admissible to show meaning reasonably susceptible under contract language)
Mozingo v. Correct Mfg. Corp., 752 F.2d 168 (5th Cir.) (Rule 50(b) cannot raise grounds not in Rule 50(a))
Scottish Heritable Trust, PLC v. Peat Marwick Main & Co., 81 F.3d 606 (5th Cir.) (purpose of Rule 50(b) and avoiding ambush)
Kitty Hawk Aircargo, Inc. v. Chao, 418 F.3d 453 (5th Cir.) (standing determined at commencement of suit)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing principles)
Edward B. Marks Music Corp. v. Jerry Vogel Music Co., 140 F.2d 268 (2d Cir.) (co-owner recoveries limited to proper share — discussed as contrasting precedent)
Duvall v. Dallas Cnty., Tex., 631 F.3d 203 (5th Cir.) (standard of review for jury instructions)