Ole Media Management v. EMI April Music

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Contracts

, New York Law Journal

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Judge Paul Engelmayer

Music publisher Ole is comprised of Canadian entities. Under certain "Administration Agreements," the New York-based EMI defendants collected Ole's royalties. Two "Asset Purchase Agreements" with an EMI affiliate transferred compositions to Ole. Invoking the "prior action pending" doctrine EMI sought to dismiss, or stay, Ole's 2012 suit over the Administration Agreements' breach. It argued the dispute centered on Ole's mistaken belief that it was owed royalties on compositions not bought under the Asset Purchase Agreements. Thus, issues in Ole's June 2011 Canadian lawsuit to reform the Asset Purchase Agreements were foundational to claims in Ole's allegedly duplicative New York suit. Balancing the factors in Royal & Sun Alliance Ins. of Canada v. Century Int'l Arms, the court stayed Ole's breach action. While not identical, the parties in both cases were substantially similar, and their issues overlapped. Determination, in the Canadian suit, about which compositions Ole bought under the Asset Purchase Agreements will bear, and res judicata effect, on the dispute over the Administration Agreements. The sole issue in the Canadian action is a key issue likely to significantly affect resolution of Ole's contract breach action.

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