754 F.3d 353
6th Cir.2014Background
- Roy Barr (75% of Meadowlake) and Philip (5%) own Rafters Bar and Grill; Roy is the ultimate decisionmaker.
- Rafters repeatedly hosted live and recorded music without permission, infringing the copyright owners’ right to perform publicly.
- BMI sued Roy (and Meadowlake and Philip) for copyright infringement; Meadowlake and Philip later declared bankruptcy and were dismissed.
- District court granted summary judgment for BMI on vicarious liability theory based on Roy’s right to supervise and financial interest in the infringing performances.
- Roy did not personally perform the copyrighted music; the infringement was by bands and recording players at Rafters.
- Court analyzes vicarious liability doctrines, focusing on the defendant’s right to supervise the infringement and financial interest, not actual supervision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Barr is vicariously liable for Rafters’ infringements | BMI: Roy had right and ability to supervise and financial interest. | Barr: his day-to-day management was by Philip; no direct supervision by Roy. | Barr is vicariously liable. |
| Does Philip’s day-to-day management defeat liability | Right and ability to supervise rests with Roy, not Philip. | Management by Philip means Roy lacked day-to-day control. | Control need not be exercised; Roy’s authority suffices for liability. |
| Does corporate form (LLC) shield Barr from liability | Form should not excuse liability when control and financial interest exist. | Entity form could limit liability for owners. | Form does not shield; Roy remains vicariously liable. |
Key Cases Cited
- Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, 545 U.S. 913 (U.S. 2005) (establishes vicarious liability concepts for contributors to infringement)
- Gordon v. Nextel Commc’ns, 345 F.3d 922 (6th Cir. 2003) (right and ability to supervise; financial interest test)
- Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (U.S. 1984) (illustrates vicarious liability in a performance setting)
- Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir. 1963) (policy rationale for shifting enforcement costs)
- Brunswick Beacon, Inc. v. Schock-Hopchas Pub. Co., 810 F.2d 410 (4th Cir. 1987) (recognizes exceptions where owner has nominal authority)
- Pinkham v. Sara Lee Corp., 983 F.2d 824 (8th Cir. 1992) (forms of business do not automatically shield liability)