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Alvertis Isbell v. DM Records, Incorporated, 14-40545 (2014)

Court: Court of Appeals for the Fifth Circuit Number: 14-40545 Visitors: 47
Filed: Dec. 18, 2014
Latest Update: Mar. 02, 2020
Summary: Case: 13-40878 Document: 00512875149 Page: 1 Date Filed: 12/18/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 13-40878 United States Court of Appeals Fifth Circuit FILED Consolidated with 14-40545 December 18, 2014 Lyle W. Cayce In the Matter of: ISBELL RECORDS, INCORPORATED, Clerk Debtor - ALVERTIS ISBELL, doing business as Alvert Music, Plaintiff - Appellee v. DM RECORDS, INCORPORATED, Defendant - Appellant Appeals from the United States District Court for the Eastern Dis
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      Case: 13-40878             Document: 00512875149   Page: 1   Date Filed: 12/18/2014




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT


                                          No. 13-40878                   United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
Consolidated with 14-40545                                              December 18, 2014
                                                                           Lyle W. Cayce
In the Matter of: ISBELL RECORDS, INCORPORATED,                                 Clerk

                 Debtor

------------------------------

ALVERTIS ISBELL, doing business as Alvert Music,

                 Plaintiff - Appellee

v.

DM RECORDS, INCORPORATED,

                 Defendant - Appellant




                     Appeals from the United States District Court
                           for the Eastern District of Texas


Before HIGGINBOTHAM, CLEMENT, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
        The popular song Whoomp! (There It Is) 1 was released in 1993. For more
than half of the song’s existence—since 2002—the parties to this action have


        The song’s title apparently refers to a chant commonly uttered when women disrobed
        1

in South Florida strip clubs in the early 1990s. See Robert Sanchez, Whoomp! (There It Was),
5280 MAGAZINE, (June 2013), http://www.5280.com/magazine/2013/06/whoomp-there-it-was.
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                             No. 13-40878 c/w 14-40545
been litigating the question of who owns the composition copyright to the song.
After an eleven-day trial, the district court ruled that, as a matter of law,
Plaintiff-Appellee Alvertis Isbell owned the copyright and Defendant-
Appellant DM Records, Inc. was liable for copyright infringement. The jury
awarded over $2 million in damages. DM Records appeals these and several
other district court decisions. We AFFIRM the district court in all respects.
                          FACTS AND PROCEEDINGS
      In 1993, Cecil Glenn and Steven James (collectively, “Tag Team”) wrote
and produced the song Whoomp! (There It Is) (“Whoomp!”). Tag Team entered
into an Exclusive Producers Agreement (“Recording Agreement”) with
Bellmark Records (“Bellmark”) that governed the relationship between Tag
Team and Bellmark.         The Recording Agreement discussed, inter alia, the
ownership of the sound recordings and the payment of royalties. Exhibit B to
the Recording Agreement, titled “Assignment of Compositions and Rights to
Copyright” addressed Whoomp!’s composition copyright. The first paragraph
stated:
      [F]or good and valuable consideration, receipt of which is hereby
      acknowledged, the undersigned Assignors do hereby sell, assign,
      transfer and set over unto Bellmark’s affiliated designee publisher,
      its successors and assigns, fifty percent (50%) of the entire rights,
      title and interests throughout the world and universe, including,
      without limitation, the copyrights and any registration and
      copyright applications relating thereto . . . .
(emphasis added). The second paragraph stated:
      and fifty percent (50%) of the right, title and interest of the
      undersigned Assignors, vested and contingent therein and thereto,
      subject to the terms and conditions of the Memorandum
      Agreement between Assignors and Assignee dated effective March



The word “Whoomp!” appears to be a neologism, perhaps a variant of “Whoop!,” as in a cry of
excitement.
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                            No. 13-40878 c/w 14-40545
        30, 1993 and for the term of the copyrights and all renewals and
        extensions thereof.
The third paragraph stated:
        Assignors agrees that the Assignee(s) has the sole, exclusive
        worldwide and universal right to administer and exploit the
        copyrights and musical composition, to print, sell, dramatize, use
        and license any and all uses of the copyrights and compositions, to
        execute in Assignee(s) own name any and all licenses and
        agreements whatsoever affecting or respecting the compositions
        and copyrights . . . . This statement of exclusive rights is only in
        clarification and amplification of the rights of Assignee(s) and not
        in limitation thereof.
        Alvertis Isbell (“Bell”) was the president of Bellmark, which was in the
business of owning sound recordings. In 1977, Bell formed his own music
publishing company, Alvert Music.
        In 1997, Bellmark filed for bankruptcy in the Eastern District of Texas.
Alvert Music did not file for bankruptcy. The bankruptcy court converted the
Chapter 11 proceeding to a liquidation case under Chapter 7.             In 1999,
following bankruptcy court approval, DM Records, Inc. (“DM”) purchased
Bellmark’s assets for $166,000. The assets subject to the sale were not defined,
but rather included “all property of the company.” The order approving the
sale provided: “the sale of purchased assets is made as is, where is, without
any representations or warranties concerning the estate’s right, title or
interest, if any, in such assets.” Bellmark’s bankruptcy case was closed in
2001.    After purchasing Bellmark’s assets, DM exploited the composition
copyright of Whoomp!.
        In 2002, Bell (doing business as Alvert Music) filed this copyright
infringement action against DM in the Northern District of Texas seeking a
declaratory judgment that Alvert Music—not DM, as purchaser of Bellmark’s




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                               No. 13-40878 c/w 14-40545
assets—is the rightful owner of the composition copyright for Whoomp!. 2 Bell
also sought damages for the alleged infringement. The action bounced around
several courts before landing in the Eastern District of Texas in 2007. 3
       In 2008, the district court granted DM’s motion to dismiss the complaint
for lack of standing, finding that, in 2004, Bell had assigned to Bridgeport
Music half of his interest in the composition copyrights at issue and all of his
interest in copyright infringement actions. Bell appealed the dismissal and
this court reversed and remanded to the district court.
       Finally, in 2012, the case went to trial. At trial, the parties each elicited
testimony about the Recording Agreement and the parties’ subsequent actions
that they claimed proved that either Bellmark or Alvert Music was assigned
the composition copyright. After the close of evidence at trial, both Bell and
DM moved for judgment as a matter of law pursuant to Federal Rule of Civil
Procedure 50(a). Bell asked the district court to rule, as a matter of law, that
the Recording Agreement and events surrounding the Recording Agreement
showed that Tag Team transferred fifty percent of the Whoomp! composition
copyright to Alvert Music. DM asked the district court to rule that Bell could
not show that he was intended to be a third party beneficiary to the Recording
Agreement and that Bellmark was the only assignee. After hearing extensive
oral argument on the motions, the district court granted Bell’s motion and



       2  Bell also brought suit claiming copyright infringement of a second song, “Dazzey
Duks,” which was governed by a different agreement. The district court found DM liable as
a matter of law for infringement of Dazzey Duks, and Bell elected statutory damages for the
violation. DM appeals the judgment only as it pertains to Whoomp!.
        3 In 2004, the district court for the Northern District of Texas transferred the case to

the Eastern District of Texas—the site of Bellmark’s bankruptcy proceedings—pursuant to
28 U.S.C. § 1404(a). No. 3:02-cv-1408-G (ECF # 49). The district court for the Eastern
District of Texas accepted the transfer (No. 4:04-cv-190) and referred the case to the
bankruptcy court (No. 04-04242). In 2007, the bankruptcy court ruled that the case’s
relationship with Bellmark’s bankruptcy proceeding was tenuous and withdrew reference,
sending the case back to the district court, where it proceeded.
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                             No. 13-40878 c/w 14-40545
denied DM’s motion. Specifically, the court found that: 1) the interpretation of
the Recording Agreement was a question of law under California law; 2)
Bellmark is a separate entity from its affiliated designee publisher; and 3)
Bellmark’s affiliated designee publisher was Alvert Music. Thus, Alvert Music
was the owner of Whoomp! and DM was liable for copyright infringement.
          After ruling on the ownership of the composition copyright as a matter
of law, the district court submitted the question of damages to the jury. Bell’s
counsel made a closing statement focused largely on DM’s willfulness in
infringing the copyright (including calling DM a thief), to which DM did not
object. DM’s counsel also gave a closing statement, in which he rebutted Bell’s
characterization of willfulness and argued that the infringement was
unintentional. The jury found actual damages of $2,131,482.28 and statutory
damages of $132,500 for DM’s willful infringement of the Whoomp!
composition copyright.       Bell elected to recover actual damages for DM’s
infringement of Whoomp!, and the district court entered a judgment to that
effect.
          After trial, DM filed a renewed motion for judgment as a matter of law
under Federal Rule of Civil Procedure 50(b) and/or a motion for a new trial
under Rule 59. In its motion, DM argued for the first time that, even if the
district court correctly found Alvert Music to be the assignee of fifty percent of
the rights to the composition copyright, the court erred in not reading the
Recording Agreement to have assigned the other fifty percent interest to
Bellmark. DM also urged the district court to find that the damages proofs
were rendered erroneous by the court’s ruling on ownership, and that Bell’s
“abusive” closing argument deprived DM of a fair trial. The district court
denied DM’s Rule 50(b) motion. The court found that DM had waived its “two
assignments” argument because it raised this new interpretation of the
Recording Agreement for the first time in its Rule 50(b) motion. The court also
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                          No. 13-40878 c/w 14-40545
considered DM’s argument illogical because it would leave Tag Team with no
ownership interest in the copyright.       The court ruled that Bell’s closing
statement did not prejudice the jury. DM timely appealed the denial of its
original and renewed motions for judgment as a matter of law and the final
judgment.
      After appealing the denials of its Rule 50 motions, DM moved in the
district court for relief from the final judgment pursuant to Federal Rule of
Civil Procedure 60(b).    DM claimed that Bell withheld a 2006 Security
Agreement (“Security Agreement”), which allegedly assigned copyright
infringement claims for Whoomp! to another party. DM argued that Bell
fraudulently withheld this document from DM and that the document showed
that Bell lacked standing to pursue copyright infringement claims. A panel of
this court remanded this case for the limited purpose of asking the district
court to state, in writing, whether it was inclined to deny or grant the Rule
60(b) motion. The district court wrote that it was inclined to deny DM’s Rule
60(b) motion because production of the Security Agreement was not clearly
called for by DM’s discovery requests, DM had not shown that failure to obtain
the document prevented it from fully and fairly presenting its case, and lack of
standing is not an independent basis for relief under Rule 60(b). DM appealed
the denial of its Rule 60 motion. This court consolidated the appeals.
                                DISCUSSION
                             I. Rule 50 Motions
      DM raises two issues regarding the district court’s interpretation of the
Recording Agreement as assigning a single fifty percent interest to Alvert
Music.
                                      A.
      First, DM contends that the district court erred by interpreting the
Recording Agreement as a matter of law, as opposed to allowing the jury to
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                          No. 13-40878 c/w 14-40545
interpret the Recording Agreement. A choice of law clause in the Recording
Agreement makes this a question of California law. Whether California law
requires contract interpretation to be determined by a jury is a question of law,
which is reviewed de novo. See Lloyds of London v. Transcontinental Gas Pipe
Line Corp., 
101 F.3d 425
, 429 (5th Cir. 1996).
      California employs a liberal parol evidence rule to determine the intent
of the contracting parties.
      [California] precludes evidence of a prior agreement or of a
      contemporaneous oral agreement to contradict terms included in a
      written instrument which the parties intend as the final
      expression of their agreement, but it does not exclude other
      evidence of the circumstances under which the agreement was
      made or to which it relates . . . or to explain an extrinsic ambiguity
      or otherwise interpret the terms of the agreement.
Garcia v. Truck Ins. Exch., 
682 P.2d 1100
, 1104 (Cal. 1984) (alteration in
original) (internal quotation marks and citation omitted); see also Cal. Civ.
Proc. Code § 1856. Moreover, even if the agreement appears unambiguous on
its face, extrinsic evidence may be offered if “relevant to prove a meaning to
which the language of the instrument is reasonably susceptible.” Pac. Gas &
Elec. Co. v. G.W. Thomas Drayage & Rigging Co., 
442 P.2d 641
, 644 (Cal. 1968).
“Indeed, it is reversible error for a trial court to refuse to consider such
extrinsic evidence on the basis of the trial court’s own conclusion that the
language of the contract appears to be clear and unambiguous on its face.”
Morey v. Vannucci, 
75 Cal. Rptr. 2d 573
, 578 (Cal. Ct. App. 1998).
      Even if the court admits extrinsic evidence, the interpretation of a
contract is still a question of law for the court unless there is conflicting
extrinsic evidence that requires a credibility determination. See 
Garcia, 682 P.2d at 1106
(“It is solely a judicial function to interpret a written contract
unless the interpretation turns upon the credibility of extrinsic evidence, even
when conflicting inferences may be drawn from uncontroverted evidence.”);
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                          No. 13-40878 c/w 14-40545
Parsons v. Bristol Dev. Co., 
402 P.2d 839
, 842 (Cal. 1965) (same). “Where the
evidentiary facts are undisputed, and only the inferences to be drawn
therefrom are disputed,” interpretation is a question of law. Winet v. Price, 
6 Cal. Rptr. 2d 554
, 557 n.3 (Cal. Ct. App. 1992).
      The district court did not err in interpreting the Recording Agreement
without asking the jury to make any findings on the extrinsic evidence.
Extrinsic evidence was properly offered by both parties in support of the
parties’ arguments that the provisions of the Recording Agreement regarding
assignment of the composition copyright were ambiguous and that the
Recording Agreement was reasonably susceptible to their preferred meaning.
See Pac. 
Gas, 442 P.2d at 644
. But none of the many pieces of extrinsic
evidence offered by the parties was conflicting to the extent that the jury was
needed to make a credibility determination.          A credibility question that
requires jury resolution arises when there are directly conflicting witness
accounts. See City of Hope Nat’l Med. Ctr. v. Genentech, Inc., 
181 P.3d 142
, 156
(Cal. 2008) (“Deciding which of these two witnesses to believe was a credibility
determination for the jury.”); 
Morey, 75 Cal. Rptr. 2d at 580
(“The resolution of
this conflicting evidence depended entirely on an assessment of the credibility
of the opposing witnesses. This determination was properly made by the jury
as trier of fact.”); Chevron U.S.A., Inc. v. Bragg Crane & Rigging Co., 225 Cal.
Rptr. 742, 744 n.3 (Cal. Ct. App. 1986) (holding that the appellate court should
undertake de novo review of a contract’s interpretation, even when there was
conflicting testimony about the parties’ intent, because there was no conflict
over “foundational extrinsic evidence”) (internal quotation marks and citation
omitted). At trial, only one person—Bell—testified about the parties’ intent at




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                                No. 13-40878 c/w 14-40545
the time of contracting. DM did not present any witness who provided a
conflicting account. 4
       DM misunderstands the standard for when extrinsic evidence must be
submitted to a jury. DM claims that there were triable issues of fact “because
there were many facts which were in conflict with Bell’s ownership of the
composition copyright.” That there were pieces of undisputed evidence that
supported a finding other than that which the court ultimately decided does
not create an issue of fact. Under California law, the court need only involve
a jury when “the interpretation of contractual language turns on a question of
the credibility of conflicting extrinsic evidence.” 
Morey, 75 Cal. Rptr. 2d at 579
.
If, as here, there are pieces of evidence which, while each undisputed, raise
differing inferences, it is within the province of the court to draw inferences
based on the evidence. In fact, at trial and in their arguments, the parties
attacked the inferences that should be made from the evidence, but did not
attack the evidence as untrue or not credible.
       None of the pieces of allegedly conflicting evidence cited by DM presents
a factual issue.       Bell does not contest the facts that Bell did not receive
mechanical royalties from Bellmark, that Bellmark alone prepared royalty
statements and submitted them to Tag Team, that Bell responded to requests
for information about composition copyright ownership in separate litigation
by directing its opponent to Bellmark’s records, or that Fox testified that his
opinion was that Bellmark was the designee. Nor does Bell contest that he




       4  DM points to testimony from its expert witness, Samuel Fox. In Fox’s opinion, the
Recording Agreement made Bellmark the designee. This testimony rebuts the district court’s
ultimate conclusion that Bellmark was not the designee, but does not conflict with any other
piece of extrinsic evidence, and did not call Bell’s credibility into question. Bell testified about
the intent of the parties, while Fox—as a non-contracting party—does not know the intent of
the parties and opined solely on the Recording Agreement’s language. Thus, there is no
conflict requiring jury resolution.
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                              No. 13-40878 c/w 14-40545
never paid Tag Team any of the royalties he collected or that Bellmark never
paid Bell mechanical royalties. The only dispute is over the meaning of the
Recording Agreement and the inferences that should be drawn from the
numerous undisputed pieces of extrinsic evidence. This is a question of law for
the court, not for a jury. See 
Parsons, 402 P.2d at 842
(“It is therefore solely a
judicial function to interpret a written instrument unless the interpretation
turns upon the credibility of extrinsic evidence.”).
                                         B.
      Second, DM challenges the denial of its Rule 50(b) motion. DM does not,
on appeal, pursue the argument that the district court erred in determining
that the Recording Agreement transferred a fifty percent interest in the
composition copyright to “Bellmark’s affiliated designee publisher,” Alvert
Music. Rather, DM contends that, accepting that transfer, the court erred in
not finding as a matter of law that the Recording Agreement also assigned a
second fifty percent interest in the composition copyright to Bellmark. By not
raising this argument at trial or in its Rule 50(a) motion, Bellmark has waived
its right to bring a Rule 50(b) motion on this ground.
      Since a Rule 50(b) motion “is technically only a renewal of the [Rule 50(a)
motion for judgment as a matter of law] . . . it cannot assert a ground that was
not included in the [original] motion.” Mozingo v. Correct Mfg. Corp., 
752 F.2d 168
, 172 (5th Cir. 1985) (internal quotation marks and citation omitted); see
also Arsement v. Spinnaker Exploration Co., 
400 F.3d 238
, 247 (5th Cir. 2005)
(“If a party fails to raise an issue in its Rule 50(a)(1) motions at trial, it may
not do so in its post-trial Rule 50(b) motion.”) (citation omitted); 9B Charles
Alan Wright & Arthur K. Miller, Federal Practice and Procedure § 2537 (3d
ed.) (“[T]he district court only can grant the Rule 50(b) motion on the grounds
advanced in the preverdict motion, because the former is conceived of as only
a renewal of the latter.”).
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                          No. 13-40878 c/w 14-40545
      The grounds for DM’s Rule 50(a) motion were different from those for its
Rule 50(b) motion. DM originally moved for a directed verdict on the grounds
that Bell “cannot, as a matter of law show that [he] was intended to be third
party beneficiary to the Tag Team Agreement; hence [he] cannot show [he] is
the owner of [Whoomp!],” and that “DM was expressly assigned all licenses in
favor of Bellmark.”    DM argued that, based on the Recording Agreement
(including Exhibit B thereto), “the only assignee is defined to be Bellmark.” In
its Rule 50(b) renewed motion, DM pivoted and argued for the first time that
there must be two separate assignments, one to Alvert Music and the other to
Bellmark. In its Rule 50(b) motion, DM admitted that, in its 50(a) motion, it
pursued only its theory that there was a single assignment, to Bellmark.
      In addition to simply not raising the “two assignments” theory in its 50(a)
motion, DM expressly disclaimed that theory at the 50(a) hearing:
      [DM’s counsel]: But then you go down to the next two paragraphs
      that have the same transfer, the same transfer of 50 percent, and it
      says subject to the agreement between the assignor and the
      assignee. And the only possible assignee could be Bellmark.
      Because Alvert [Music] is not a party to that agreement.
      The Court: The first paragraph is conveying 50 percent interest in
      the copyrights in and to the musical composition Whoomp! (There
      It Is). Right?
      [DM’s counsel]: And that’s what the second and the third
      paragraphs do as well. So only in one paragraph does it use the
      word “Bellmark’s Affiliated Designee Publisher.” And in the other
      two paragraphs—
      The Court: And then it goes on to say “And 50 percent”—
      [DM’s Counsel]: It’s the same 50 percent. It can only be the same
      50 percent.
(emphasis added).     Counsel’s statements are in direct contradiction to its
argument in the Rule 50(b) motion that “it becomes obvious that the second
paragraph . . . must be read to refer to a separate 50% from the 50% referenced

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                           No. 13-40878 c/w 14-40545
in the first paragraph.” Thus, DM raised the theory for the first time in its
renewed Rule 50(b) motion that there were two assignments of a fifty percent
interest in the copyright. See McCann v. Tex. City Refining, Inc., 
984 F.2d 667
,
672–73 (5th Cir. 1993) (not permitting a post-judgment challenge on the
sufficiency of the evidence for the second tier of Age Discrimination in
Employment Act liability when the 50(a) motion addressed only the first tier
of ADEA liability); Allied Bank-West., N.A. v. Stein, 
996 F.2d 111
, 115 (5th Cir.
1993) (overturning grant of judgment as a matter of law on different ground
than that in the initial directed verdict); Sulmeyer v. Coca Cola Co., 
515 F.2d 835
, 846 (5th Cir. 1975) (holding that plaintiff could not receive post-judgment
relief on claims it did not raise at trial or in its original JMOL motion).
      Moreover, permitting DM’s Rule 50(b) motion on alternative grounds
would not be consistent with the rule’s purposes. The purposes of Rule 50(b)
are “to enable the trial court to re-examine the question of evidentiary
insufficiency as a matter of law if the jury returns a verdict contrary to the
movant, and to alert the opposing party to the insufficiency before the case is
submitted to the jury,” thereby affording the opposing party an opportunity to
cure any defects in proof should the motion have merit. Scottish Heritable
Trust, PLC v. Peat Marwick Main & Co., 
81 F.3d 606
, 610 (5th Cir. 1996)
(internal quotation marks and citation omitted); see also Dimmitt Agri Indus.,
Inc. v. CPC Int’l. Inc., 
679 F.2d 516
, 521 (5th Cir. 1982) (“The rationale for the
rule that a [Rule 50(b) motion] cannot assert a ground not included in a motion
for directed verdict is obviously to avoid ‘ambushing’ the trial court and
opposing counsel.”) (internal quotation marks and citation omitted); Quinn v.
Sw. Wood Prods., Inc., 
597 F.2d 1018
, 1025 (5th Cir. 1979) (“When a claimed
deficiency in the evidence is called to the attention of the trial judge and of
counsel before the jury has commenced deliberations, counsel still may do
whatever can be done to mend his case. But if the court and counsel learn of
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                              No. 13-40878 c/w 14-40545
such a claim for the first time after verdict, both are ambushed and nothing
can be done except by way of a complete new trial. It is contrary to the spirit
of our procedures to permit counsel to be sandbagged by such tactics or the
trial court to be so put in error.”).
       By not raising the two assignments theory at trial or in its Rule 50(a)
motion, DM failed to provide Bell with an opportunity to cure defects in proof
should the motion have merit. See Scottish 
Heritable, 81 F.3d at 610
. Rather
than offering its two assignments theory as an alternative ground for judgment
as a matter of law at the close of evidence, DM expressly disclaimed this theory
at the 50(a) stage. See Abbott v. Equity Grp., Inc., 
2 F.3d 613
, 629 (5th Cir.
1993) (“[A]ppellants’ theory requires the assertion of legal issues not previously
raised; the introduction of additional evidence; and the analysis of a different
law. The court was under no obligation to permit appellants to interject a new
legal theory, without explanation, after they had failed to do so during three
years of discovery, two additional years between the court's granting summary
judgment and entering judgment, and almost two months following that
entry.”). Since DM has waived its argument based on the two assignments
theory, we need not consider the theory’s merits.
                                II. Rule 60(b) motion
       DM also appeals the district court’s denial of is Rule 60(b) motion for
relief from judgment based on fraud and lack of standing. 5 DM moved for relief
under both Rule 60(b)(3) and Rule 60(b)(6) on the basis that it was prevented
from presenting the defense of Bell’s lack of standing because Bell never
produced a 2006 Security Agreement in favor of Currency Corporation. DM



       5The parties do not address whether the district court’s inclination to deny DM’s Rule
60(b) motion is a final appealable order. We hold that we have jurisdiction to review the
order. See Lopez Dominguez v. Gulf Coast Marine & Assocs., 
607 F.3d 1066
, 1076 (5th Cir.
2010).
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                           No. 13-40878 c/w 14-40545
argues that the Security Agreement, along with a separate exhibit filed in 2000
(the “2000 Exhibit”), transferred infringement claims and ownership in the
composition copyright.
      This court reviews a denial of a Rule 60 motion for abuse of discretion.
Smith v. Alumax Extrusions, Inc., 
868 F.2d 1469
, 1471 (5th Cir. 1989). To the
extent the Rule 60 motion challenges Bell’s standing to bring the suit, this
court employs de novo review. See Frazar v. Ladd, 
457 F.3d 432
, 435 (5th Cir.
2006) (“We review de novo . . . any questions of law underlying the district
court’s [Rule 60(b)] decision.”); Ctr. for Individual Freedom v. Carmouche, 
449 F.3d 655
, 659 (5th Cir. 2006) (“We review all questions of subject matter
jurisdiction, including the justiciability issues of standing, ripeness, and
mootness, de novo.”).
      DM is not entitled to Rule 60(b) relief on the basis of the allegedly
withheld Security Agreement because, even if improperly withheld, it would
not have affected Bell’s standing to sue and thus would not have impacted
DM’s defense. A “court may relieve a party . . . from a final judgment, order,
or proceeding” for “fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party.”         Fed. R. Civ. P.
60(b)(3). “A party making a Rule 60(b)(3) motion must establish by clear and
convincing evidence (1) that the adverse party engaged in fraud or other
misconduct and (2) that this misconduct prevented the moving party from fully
and fairly presenting his case.” Washington v. Patlis, 
916 F.2d 1036
, 1039 (5th
Cir. 1990) (emphasis added) (internal quotation marks and citation omitted);
see also Rozier v. Ford Motor Co., 
573 F.2d 1332
, 1339 (5th Cir. 1978) (“The
conduct complained of must be such as prevented the losing party from fully
and fairly presenting his case or defense.”).
      Even if DM’s interpretation of the Security Agreement as transferring
Bell’s entire ownership interest in Whoomp! has merit, this establishes only
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                          No. 13-40878 c/w 14-40545
that Bell would have lacked standing to sue in 2006. But Bell originally filed
his complaint in this action in 2002 and “standing is . . . determined as of the
commencement of the suit.” Kitty Hawk Aircargo, Inc. v. Chao, 
418 F.3d 453
,
458 (5th Cir. 2005) (alteration in original) (quoting Lujan v. Defenders of
Wildlife, 
504 U.S. 555
, 571–72 n.5 (1992)). Neither is there any merit to DM’s
argument that the transfer occurred in 2000. The 2000 Exhibit does not
effectuate an assignment; moreover the 2000 Exhibit was produced and
therefore cannot be the basis of a Rule 60(b) motion. It is not plausible that
the non-produced 2006 Security Agreement somehow made the assignment
retroactive to 2000.
      In the alternative, DM contends that Bell’s lack of standing, even if not
fraudulently concealed, is an independent basis for overturning the judgment
under Rule 60(b)(6). DM’s argument must fail for the same reason; because
standing is determined at the time of suit, the 2006 Security Agreement does
not establish that Bell did not own the copyright in 2002 when Bell commenced
the suit. For this basic reason, the “extraordinary circumstances” necessary to
grant Rule 60(b)(6) relief are not present. See Hess v. Cockrell, 
281 F.3d 212
,
216 (5th Cir. 2002) (“Rule 60(b)(6) motions will be granted only if extraordinary
circumstances are present.”) (internal quotation marks and citation omitted).
                             III. Damages Award
      DM argues that the jury’s damages award is rendered erroneous by the
district court’s ruling on ownership and its jury instructions. The jury awarded
Bell $2,131,482.28 in actual damages for the infringement in the Whoomp!
composition copyright, a figure that is essentially 100 percent of the royalties
DM collected from licensing Whoomp!. DM contends that, since the court ruled
that Bell owned only fifty percent of the copyright, he should have only been
awarded, at most, fifty percent of the royalties. DM urges the panel to find
error in the district court’s failure to instruct the jury that it was only
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                              No. 13-40878 c/w 14-40545
permitted to award Bell damages for its fifty percent interest in the
infringement.     Specifically, DM claims that the following instruction was
erroneous because it misled the jury into believing that all royalties must go to
Bell: that DM “does not now have, and it has never had, an ownership interest
in the musical composition copyright for Whoomp!”.
                                            A.
       Although this court typically reviews jury instructions for abuse of
discretion, Duvall v. Dallas Cnty., Tex., 
631 F.3d 203
, 206 (5th Cir. 2011),
Federal Rule of Civil Procedure 51(c) requires a party to object to an
instruction, either before it is given or before the jury begins to deliberate. Fed.
R. Civ. P. 51. If a party does not object, this court reviews jury instructions for
plain error. Dahlen v. Gulf Crews, Inc., 
281 F.3d 487
, 494 (5th Cir. 2002).
       DM did not object to the instruction it now asserts is improper.
Therefore, we review the instruction for plain error. 6              “In reviewing jury
instructions for plain error, we are exceedingly deferential to the trial court.”
Id. (internal citation
and quotation marks omitted); see also Branch-Hines v.
Hebert, 
939 F.2d 1311
, 1317 (5th Cir. 1991).               Under plain error review,
“[r]eversal is appropriate if the error is (1) plain, (2) affects the appellant’s
substantial rights, and (3) seriously affects the fairness, integrity, or public
reputation of judicial proceedings.” Alaniz v. Zamora-Quezada, 
591 F.3d 761
,
776 (5th Cir. 2009) (citation omitted).


       6DM urges the panel to review this issue de novo because “the calculation of damages
emanates from an interpretation of a contract.” In Art Midwest Inc. v. Atl. Ltd. P’ship XII,
742 F.3d 206
, 213–14 (5th Cir. 2014), this court employed de novo review because damages
depended on the interpretation of a partnership contract, specifically a provision of the
contract that dealt directly with the apportionment of damages. De novo review is not
appropriate here because the calculation of damages does not stem directly from an
interpretation of the Recording Agreement. The district court interpreted the Recording
Agreement as a matter of law and instructed the jury accordingly. The jury was left to
determine damages as a fact issue by considering the testimony, including that of experts,
regarding profits and losses. Thus, plain error review is appropriate.
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                            No. 13-40878 c/w 14-40545
                                         B.
      The district court did not plainly err in instructing the jury. The district
court properly instructed the jury that Bell “was and is an owner of a 50 percent
interest in the copyright in the musical composition Whoomp! (There It Is) by
Tag Team.” The district court also was correct in instructing the jury that DM
“does not now have, and it has never had, an ownership interest in the musical
composition copyright for Whoomp!”. DM argues that these two instructions
misled the jury into thinking that all royalties must go to Bell because the court
did not define any other entity as having an entitlement to them and DM was
characterized as clearly not having any entitlement to them. DM has not
shown that the instructions were clearly erroneous. These two statements are
a correct summary of the legal conclusions made by the court. Further, since
there was testimony that Tag Team owned a 50 percent interest in the
copyright, it is difficult to see how the jury was misled to believe that no other
party could be entitled to the royalties. There was therefore no plain error in
the jury instructions.
      Apart from the propriety of the jury instructions, DM’s argument
essentially seems to be that Bell, as fifty percent owner of the copyright, may
not, as a matter of law, recover damages for Tag Team’s share. The jury’s
award of over $2 million in damages is, in fact, the full amount of all royalties
received by DM without a reduction for Tag Team’s fifty percent share. It
appears to be an issue of first impression in our court whether a partial owner
of a copyright can ever be awarded infringement damages for his co-owner’s
share. In Edward B. Marks Music Corp. v. Jerry Vogel Music Co., 
140 F.2d 268
(2d Cir. 1944), the Second Circuit held that “the recovery shall be confined
to the plaintiff’s own part; that is to say, to its own actual damages, to its proper
share of any statutory damages, and to its proper share of the profits.” 
Id. at 270;
see also Manno v. Tenn. Prod. Ctr., Inc., 
657 F. Supp. 2d 425
, 433 (S.D.N.Y.
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                           No. 13-40878 c/w 14-40545
2009) (“Edward B. Marks Music Corp. makes clear that a co-owner of a
copyright is limited to its ‘proper share’ of any statutory damage award.”)
(citation omitted). Edward B. Marks is distinguishable because it dealt with
the nonjoinder of a copyright co-owner and did not involve a situation where
there was evidence from which the jury could find that the plaintiff was
administrator for all of the royalties. See Edward B. 
Marks, 140 F.2d at 269
.
Here, there was evidence in the record from which the jury could have
determined, as it did, that Bell is entitled to 100 percent of the royalties in the
first instance. There was testimony that Bell is the administrator of 100
percent of the royalties and is responsible for accounting to Tag Team. As such,
the jury could have determined that Bell was properly awarded 100 percent of
the royalties, from which it could pay Tag Team its share. See, e.g., Edgenet,
Inc. v. GS1 AIBSL, No. 09-CV-65, 
2010 WL 55843
, at *5 (E.D. Wis. Jan. 5,
2010) (“In a case where infringement damages are awarded to only one of two
co-owners of a copyright, redress is properly sought through a suit between the
co-owners and not through further litigation against the defendant.”) (citation
omitted); Copyright.net Music Publ’g. LLC v. MP3.com, 
256 F. Supp. 2d 214
,
218 (S.D.N.Y. 2003) (upholding damage awards that contained more than the
plaintiff’s share, ruling that the proper resolution was for the co-owner to bring
an action against the prevailing plaintiff for its share).
                        IV. Bell’s Closing Statement
      Finally, DM maintains that the district court erred in denying DM’s Rule
59 motion for a new trial and in not finding that Bell’s closing argument—in
which Bell’s counsel repeatedly accused DM of being a thief and stealing from
Bell—was abusive and improper.
                                        A.
      Since DM did not object to Bell’s closing statement, this court reviews for
plain error.   United States v. George, 
201 F.3d 370
, 373 (5th Cir. 2000);
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                          No. 13-40878 c/w 14-40545
Schleunes v. Am. Cas. Co. of Reading, Pa., 
528 F.2d 634
, 638 (5th Cir. 1976).
“Reversal is appropriate if the error is (1) plain, (2) affects the appellant’s
substantial rights, and (3) seriously affects the fairness, integrity, or public
reputation of judicial proceedings.” 
Alaniz, 591 F.3d at 776
. A court has
discretion to grant a new trial under Federal Rule of Civil Procedure 59 “where
it is necessary to prevent an injustice.” United States v. Flores, 
981 F.2d 231
,
237 (5th Cir. 1993) (internal quotation marks and citation omitted).          “In
determining the effect of statements made during closing argument, we
consider the record as a whole and not merely isolated remarks.” Daniel v.
Ergon, Inc., 
892 F.2d 403
, 411 (5th Cir. 1990) (citation omitted).
                                       B.
      The district court’s denial of DM’s Rule 59 motion for a new trial was not
plainly erroneous.    A closing statement may implicate the interest of
substantial justice when counsel’s assertions are “either false or without basis
in the record.” Wallner v. Ziegler, 470 F. App’x 230, 233 (5th Cir. 2012) (citing
Hall v. Freese, 
735 F.2d 956
(5th Cir. 1984)); see also 
Alaniz, 591 F.3d at 779
(finding no plain error where statements “were sufficiently based on the
record”).   Bell’s closing statement does not contain material facts not in
evidence and does not rise to the level affecting substantial justice.       See
Edwards v. Sears, Roebuck & Co., 
512 F.2d 276
, 284–86 (5th Cir. 1975)
(ordering new trial where closing argument contained an “untrue admission”).
Evidence was presented at trial from which the jury could find that DM’s
conduct was willful and that DM stole the copyrights from Bell. The jury heard
evidence of DM’s shifting defense theories, and evidence that DM falsely
created documents announcing that Alvert Music transferred ownership to
DM. The jury also heard testimony from DM’s principals from which the jury
could determine credibility. Bell’s counsel’s statements that DM stole the
copyrights were not without basis in the record.
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                             No. 13-40878 c/w 14-40545
      Further, any prejudice from Bell’s closing statement was minimized.
First, any prejudice was offset by the district court’s instruction that
“[s]tatements and arguments of the attorney are intended only to assist you in
understanding the evidence and the parties’ contentions and are not evidence
of the facts or instructions on the law.” See Learmonth v. Sears, Roebuck &
Co., 
631 F.3d 724
, 732–33 (5th Cir. 2011); Nissho-Iwai Co. v. Occidental Crude
Sales, Inc., 
848 F.2d 613
, 620 (5th Cir. 1988). Second, the disputed statements
went to DM’s willfulness in infringing, an element that had little or no effect
on the jury’s verdict. The jury was only deciding damages, so there was no risk
that the allegedly improper statements influenced a determination of liability.
Further, while the jury did find DM’s infringement of Whoomp! to be willful,
this finding increased the amount of statutory damages only. 7 A prevailing
plaintiff in a copyright infringement action must elect to recover either actual
damages or statutory damages. 17 U.S.C. § 504(a). Here, Bell elected actual
damages, which are not affected by willfulness. Thus, it was not plain error
for the district court to allow Bell’s closing statement and not to grant DM’s
motion for a new trial.
                                   CONCLUSION
      For the foregoing reasons, we AFFIRM the various district court rulings
that DM challenges on appeal.




      7A finding of willfulness may increase statutory damages from up to $30,000 to up to
$150,000. 17 U.S.C. § 504(c).
                                           20

Source:  CourtListener

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