-JLC Cook et al v. Sugar Hill Publishing, Ltd. et al, No. 1:2010cv02632 - Document 107 (S.D.N.Y. 2012)
Court Description: AMENDED MEMORANDUM AND OPINION: Plaintiff s motion for summary judgment dismissing Defendants' counterclaim is granted. Plaintiffs motion for summary judgment is denied in all other respects. Defindants' motion for summary judgment is denie d. Defendants are ordered to facilitate and pay all expenses associated with Plaintiffs deposition of Lavaba Mallison. Failure to do so by November 16, 2012 will result in preclusion of the Mallison declaration and any future testimony by Mallison. This Memorandum Order resolves docket entry nos. 61 and 69. ( Final Pretrial Conference set for 2/8/2013 at 02:00 PM before Judge Laura Taylor Swain.) (Signed by Judge Laura Taylor Swain on 10/12/2012) (cd)
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------------------------x ESTATE OF WILLIAM A. STEWART, JR., Plaintiff, No. 10 Civ. 2632 (LTS)(JLC) -v- SUGAR HILL MUSIC PUBLISHING LTD., et aI., Defendants. -------------------------------------------------------x AMENDEDI MEMORANDUM OPINION AND ORDER The Estate of William A. Stewart, Jr. ("Plaintiff), brings this breach of contract and copyright infringement action, alleging that Defendants Sugar Hill Music Publishing, Ltd. ("Sugar Hill"), Diamond Head Music, Inc., Joey Robinson, Sylvia Robinson, and Leland Robinson (collectively "Defendants") illegally profited by licensing Plaintiff s copyrighted 1996 musical composition, "No Diggity," to music subpublishers without Plaintiffs authorization. Defendants assert counterclaims for breach of contract on the basis of a purported agreement assigning Defendants the right to exploit "No Diggity." Plaintiff, in tum, disputes the validity of the purported assignment/agreement, but also brings alternative causes of action for rescission, breach of contract, and unjust enrichment which Plaintiff claims entitle it to recovery in the event the assignment is determined to be valid. The Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331 and 1332. The parties now cross-move for summary judgment. The sole amendment to the Memorandum Opinion and Order is a correction to the date of the Final Pre-Trial Conference. AMENDED COOK MS].WPD VERSiON 10112/12 For the following reasons, Plaintiffs motion is granted in part and denied in part. Defendants' motion is denied in its entirety. BACKGROUND The following facts are undisputed unless otherwise noted? In or arouqd 1996, decedent William A. Stewart ("Stewart") co-wrote and registered a copyright in a composition entitled "No Diggity." (PI's 56.1 St. ~~ 4-6.) Plaintiff contends that Defendants "have infringed I and continue to infringe the Estate's copyright in the work "No Diggity" by licensing i'No I Diggity" without authorization or pennission, both inside and outside the United Stat." (Am. CompL ~ 28.) I Defendants aver that, in 1999, Stewart and the now-deceased Joe Robi~son, Sr., negotiated an agreement whereby Stewart assigned his interest in "No Diggity" to Sugar Hill in I exchange for 60% of the royalties. (Defs' 56.1 St. Dec."), ~ 1; Declaration of Joey Robinson "Robinson 1.) Defendants counterclaim, on the basis of the purported assignment ("Assignment"), that Stewart improperly exploited "No Diggity," and that Plaintiff oWes Sugar Hill a portion of those proceeds. (Defs' 56.1 St. ~12.) Defendants have produced two documents that they claim support the ixistence of the alleged assignment. The first is a document, dated May 25,1999, that purports ~o be the , AMENDED Facts recited as undisputed are identified as such in the parties' statements pJuant to S.D.N.Y. Local Civil Rule 56.1 or drawn from evidence as to which there is no non conclusory contrary factual proffer. Citations to the parties' respective Local qivil Rule 56.1 statements ("Defs' 56.1 St." or PI's 56.1 St.") and responses thereto ("Defs' Resp. 56.1 St." or "PI's Resp. 56.1 St.") incorporate by reference the parties' citations to underlying evidentiary submissions. . COOK MSJ. WPD VERSION 1Oi12/12 2 1 Assignment itself. (Robinson Dec., Ex. 1.) This document bears two signatures - on reading "William A. Stewart," and one of a notary public. 3 (Id.) It is not signed by any agent f Sugar Hill. (rd.) The Assignment states that it is "subject to all the terms and conditions of he Agreement dated March 13, 1998, between Assignor(s) and Assignee." (Id.) Defend4nts also furnish a copy of the purported agreement ("Agreement") referenced in the Assignme .1. (Defs' 56.1 St. ~ 9.) The Agreement appears to have been originally dated March 13, 1998, ut was altered by hand to read May 25, 1998; these alterations are initialed "WAS." (Id.) Th· ! Agreement provides that Stewart would receive 60% of all royalties collected by Sugar Hill I through the exploitation of "No Diggity," while the remaining 40% would be split evenly between Sugar Hill and Lavaba Mallison ("Mallison"), who is not a party to this actio . (Defs' Resp. 56.1 St. ~121.) Further, the Agreement states that a check for $2,500 was "[e]nc osed" to Stewart as an advance on the "No Diggity" royalties. The Agreement bears two signa ures, which Defendants claim are those of Stewart and Mallison. The Agreement is not si~ed by an agent of Sugar Hill, nor does it bear a notary public'S signature. Sugar Hill asserts that it received $30,000 from the exploitation of "No Diggity" after the execution of the Assignment. Sugar Hill contends that Plaintiff was entitled 0 S15,500 representing 60% of $30,000, less the S2,500 advance. (Defs' 56.1 St. ~118.) While I Defendants concede that they never paid Plaintiff the $15,500, they assert in the counterclaim that Plaintiff made $100,000 by improperly exploiting "No Diggity" after the executio of the Assignment and Agreement. Sugar Hill argues, in error, that it is entitled to 40% ($40 000) of that amount. (Id." 17.) In fact, the Agreement clearly states that Sugar Hill is entitle to net 3 Defendants proffer the testimony of the notary public, Joseph Lamontagne, whp confirms . that his stamp is affixed to the Assignment. (Def s Resp. 56.1 St. ~ 31.) AMENDED COOK MSJ.WPD VERSION IOIJ 2/12 only 20% of the royalties. Mallison is not a party in this dispute, nor has he transferre his claim to Defendants. Thus, according to Sugar Hill's expert's calculations and the plain tex of the Agreement, the value of its counterclaim is $4,500 (i.e., $20,000 minus the $15,500 S gar Hill owes Plaintiff). Plaintiff disputes the authenticity of the Assignment and the Agreemen. (PI's Resp. 56.1 St. ~~ 25-26.) Plaintiff proffers the declaration of Nicole Branker, Stewart s former business assistant, who avers that the signature on the Assignment is not Stewart' s. (~1' s 56.1 St. 'l,r 31-34.) Plaintiff also denies that Sugar Hill paid Stewart the $2,500 advance rJerenced in the Agreement. (PI's 56.1 S1. ~ 9.) Because Joe Robinson, Sr., is deceased, no Defendant has personal knowledge as to whether Stewart was paid the advance. (ld. ~~ 9, 13.) Def1dants aver that a fire destroyed most of Sugar Hill's business records, and that, as a result of the ]:bassage of time, Defendants cannot obtain bank records proving payment of the advance. (Defs' 56.1 S1. '14; Defs' Resp. 56.1 St. ~ 13.) The only evidence Defendants have proffered in response to I Plaintiffs attacks on the Agreement's authenticity and Plaintiffs denial that Stewart r ceived the $2,500 advance is a declaration by Mallison, who states that Stewart "advised [he that ... he wished to assign [his] interest to Sugar Hill" and that he "executed the [Agreement ... [and] gave Mr. Stewart a check in the amount of $2,500.00." (Defs' Resp. 56.1 St. ~~ 9-10, 12-14.) Defendants have not provided Mallison's contact information to Plaint ff. (PI's 56.1 St. ~ 5.) On September 30,2010, Defendant submitted a response to Plaintiffs rst set of interrogatories listing Mallison as a potential witness, but stating that Mallison's curr t address was unknown. (Id.) At Joey Robinson's September 8, 2011, deposition, Plaintiffs c unsel requested production of Mallison's contact information; Robinson rep lied that he had btained Mallison's contact information via a third party acquaintance who had obtained the in ormation AMENDED COOK MSJ,WPD VERSION 10/12112 4 through Facebook, but that he could not recall who had provided him the information, and that he could not obtain it again. (Deposition of Joey Robinson, at 82.) When asked by opposing counsel whether he had provided his attorney with Mallison's contact information, Rqbinson ! answered in the negative. (Id.) At the time of Robinson's deposition, however, the Mallison Declaration which is dated June 28, 2011 - had already been drafted, signed, and notarized. (PI's 56.1 St. ~ 5.) In its motion for summary judgment, Plaintiff argues that Defendants ve failed to proffer evidence sufficient to establish the existence of a valid Assignment. Plainti f also argues that, even if the Court were to find that a genuine dispute exists as to the validi y of the Assignment, Plaintiff should prevail because Defendants failed to pay royalties under he accompanying Agreement, which constitutes grounds for rescission. Plaintiff also m es for summary judgment on Defendants' counterclaim, arguing that Defendants cannot pro e damages and that Defendants are estopped from asserting the counterclaim. In their motion for summary judgment, Defendants argue that Plaintiffs copyright claims fail because the Assignment authorized Defendants to license "No D ggity," and that Plaintiff is estopped from asserting claims based on Defendants' alleged brea h of the Agreement because Plaintiff has argued that no such Agreement exists. In addition, efendants argue that the Court lacks subject matter jurisdiction of the contract claims because th amount in controversy is less than $75,000, and of the copyright claims because the exploitati composition occurred abroad. Summary judgment is to be granted in favor of a moving party if "the avant shows that there is no genuine dispute as to any material fact and the movant is entitle to AMEKDED COOK MSJ. WPD VERSION 1O!l2i12 judgment as a matter oflaw." Fed. R. Civ. P. 56(a); see also Anderson v. Libertv Lotlbv. Inc., 477 U.S. 242, 256, (1986) (the moving party bears the burden of establishing that thele is no genuine issue of material fact). A fact is considered material "if it might affect the ou come of the suit under the governing law," and an issue of fact is a genuine one where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Holtz v. ~ockefeller & Co. Inc., 258 F.3d 62,69 (2d Cir. 2001) (quoting Anderson, 477 U.S. at 248). The Second Circuit has explained that "[tJhe party against whom summary judgment is sought ... 'must do more than simply show that there is some metaphysical doubt as to the material facts. . .. [TJhe nonmoving party must come forward with specific facts showing that there is a genuiI e issue for trial. '" Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986». Similarly, "mere COl clusory allegations, speculation or conjecture" will not suffice to defeat summary judgment. Cifarelli v. Vill. of Babylon, 93 F.3d 47,51 (2d Cir. 1996); see also Fed. R. Civ. P. 56(e). When ~eciding cross-motions for summary judgment, the standard to be used "is the same as that for ndividual summary judgment motions and a court must consider each motion independent ofth ¬ other." Schultz v. Stoner, 308 F. Supp. 2d 289,298 (S.D.N.Y. 2004) (internal quotations omi ted). In demonstrating the absence of a material factual dispute, the moving Jarty must rely on "such facts as would be admissible in evidence." Raskin v. Wyatt Co., 125 F. d 55, 66 (2d Cir. 1997). Because the purpose of summary judgment is to weed out cases in wh ch there is "no genuine issue as to any material fact and ... the moving party is entitled to a judgJlnent as a matter oflaw," it is appropriate for district courts to decide questions regarding the ad nissibility of evidence on summary judgment. Id. A district court deciding a summary judgmen motion has broad discretion in choosing whether to admit evidence, and the admissibility of e idence on AMENDED COOK MS1. WPD VERSION 10/12/12 6 a motion for summary judgment is subject to the same rules that govern the admissibl ityof evidence at trial. Id. at 65; see also Presbyterian Church of Sudan v. Talisman Energy Inc., 582 F.3d 244, 264 (2d Cir. 2009). L Subject Matter Jurisdiction Neither of Defendants' challenges to the Court's subject matter jurisdi< tion of Plaintiffs claims is availing. Defendants first assert that the Court lacks jurisdiction (fthe contract claims because the amount in controversy is less than $75,000. When assess'ng whether the value of a diversity claim brought in district court exceeds 28 U.S.C. § 1332' s S75,000 threshold, "the sum claimed by the plaintiff controls if the claim is apparenth made in good faith." St. Paul Mercury lndem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (193 in the Second Circuit "recognize[] a rebuttable presumption that the face of the n compl~int Courts is a good faith representation of the actual amount in controversy." Wolde-Meskel v. Vocational Instruction Project Cmty. Servs., Inc .. 166 F.3d 59,63 (2d Cif. 1999). To rebut such a presumption, the moving party must show that it is "a legal certainty that the claim is eally for less than the jurisdictional amount to justify dismissaL" St. Paul Mercurv Indem. Co. 303 U.S. at 288-89. The Second Circuit has interpreted the legal certainty standard to mean tha "the legal impossibility of recovery must be so certain as virtually to negative the plaintiffs gooe faith in asserting the claim. If the right ofrecovery is uncertain, the doubt should be resolved .. in favor of the subjective good faith of the plaintiff." Tongkook Am. Inc. v. Shioton SO( rtswear Co., 14 F.3d 781,785-86 (2d Cir. 1994). Plaintiff has submitted an expert report which values Plaintiff s contract claim between approximately $190,000 and $317,000. (Expert Re Dort of Jay L. Berger, attached as Ex. 10 to Declaration of Gary Adelman, docket entry no. 71.) While AMENDED COOK MSJ.WPD VERSION IOil2il2 7 Defendants contest that report's calculations, they have failed to show conclusively th t Plaintiffs recovery of more than $75,000 is a legal impossibility. Defendants also argue that the Court lacks subject matter jurisdiction b cause Sugar Hill only licensed "No Diggity" to foreign publishers, and the Copyright Act do s not extend to extraterritorial infringement. Defendants rely on Update Art, Inc. v. Modiin Publishing Ltd., 843 F.2d 67 (2d Cir. 1988). However, subsequent to Update Art, the Supreme Court held that "a threshold limitation on a statute's scope" shall only count as jurisdi tional when Congress "clearly states" so. Arbaugh v. Y&H Corp., 546 U.S. 500,515 (2006 . Because nothing in the Copyright Act "clearly states" that the scope of the statute's jurisdiction 1 reach affects the court's power to adjudicate the claim, the Court will treat this issue as an el ment of Plaintiffs claim. See Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d 1353, 1367 (F d. Cir. 2008) (whether an accused action is within the extraterritorial limitation [of the Copyr ght Act] should be treated as an element of the claim, not a predicate for subject matter jurisdi (citing Arbaugh, 546 U.S. at 515); accord Roberts v. Keith, 04 Civ. 10079(LAP),200 WL 357296, at *2 (S.D.N.Y. Oct. 23, 2009). Moreover, "[ w Jhile the United States copyright regime does not gener extraterritorial application, an exception exists where the defendant commits a predic te act of infringement within the U.S." Richard Feiner & Co., Inc. v. BMG Music Spain, S.A, 01 Civ. 0937(JSR), 2003 WL 740605 (S.D.N.Y. Mar. 4, 2003) (citing Update Art, 843 F.2d a 73). Plaintiff has adduced evidence that Defendants signed the sub-publishing agreements United States. (Adelman Decl., Ex. 4.) This predicate act suffices to establish the ap lication of the Copyright Act to Plaintiffs claims. II. Validity of the Assi gnment/ Agreement A'>IE!'IDED COOK MSJ.WPD VERSION 10/12/12 There is a genuine dispute as to the validity of the Assignment and the Agreement. The Assignment bears the signature "William A. Stewart" and is notariz d. A evidence of a valid transfer, see 17 U.S.c. § 204( )(1), and notarized assignment is prima notarized documents are considered self-authenticating under the Federal Rules ofEv dence. See Fed. R. Evid. 902(8). Plaintiff fixates on the fact that the Assigmnent was not signed ~y Robinson or any representative of Sugar Hill. However, neither federal nor New Y or~ law4 requires both parties to have signed an assignment in order for it to be deemed valid. U.S.c.A. § 204(b )(1) (West 2009) ("A transfer of copyright ownership, other than by of law, is not valid unless an instrument of conveyance, or a note or memorandum of e transfer, is in writing and signed by the owner of the rights conveyed ....") (emphasi . added); Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 572 (2d Cir. 1993) ("writings creating a contract may consist of letters bearing the signature of only one party or evJn memoranda unsigned by either party"); N.Y. Gen. Oblig. Law § 5-1107 (McKinney 21~11) ("An assignment shall not be denied the effect of irrevocably transferring the assignor's rig s because of the absence of consideration, if such assignment is in writing """,an"",d~si==.=.t--="'-=~=~ his agent.") (emphasis added). Likewise, there is a material dispute of fact as to whether Stewart sign d the Agreement and whether Stewart received the $2,500 advance. The Agreement, in which acknowledges receipt of the advance, bears the signature "William A. Stewart" in a SC~ipt that Interpretation of an agreement purporting to grant a copyright license is a matt~r of state contract law. Random House, mc. v. Rosetta Books LLC, 150 F. Supp. 2 613,61 18 (S.D.N.Y. 2001); Boose & Hawkes Music Publishers Ltd. v. Walt Disne Co., 145 F.3d 481, 487 (2d Cir. 1998). Here, both parties assume in their bri efing that ew York law governs. Thus, the Court construes the contract in accordance with New ork law. See Fed. Ins. Co. v. Am. Home Assurance Co., 639 F.3d 557, 566 (2d Cir. 2011) ("Under New York choice of law rules ... where the parties agree that New York law ontrols, this is sufficient to establish choice onaw."). AMENDED COOK MSJ.WPD VERSIO'J 101] 2112 9 closely resembles the signature affixed to the Assignment. Neither party has supplied expert testimony attesting to or disputing the authenticity of that signature. Defendants also proffer the declaration of Lavaba Mallison, who claim to have witnessed the execution ofthe Agreement and attests to the payment of the $2,500 ad ance. Plaintiff has moved to exclude the Mallison declaration on the grounds that Defendants prevented Plaintiff from taking his deposition by refusing to disclose his contact infol·ation. Federal Rule of Civil Procedure 26(a)(l )(A)(i) provides that "a party ust, without awaiting a discovery request, provide to the other parties ... the name and, if own, the address and telephone number of each individual likely to have discoverable informat on along with the subjects of that information . . . that the disclosing party may use to support its laims or defenses." Fed. R. Civ. P. 26(a)(I)(A). Rule 26(e)(l)(A) requires a party to supplemdnt its Rule 26(a) disclosures "in a timely manner if the party learns that in some material respect he disclosure or response is incomplete or incorrect, and if the additional or corrective in ormation has not otherwise been made known to the other parties during the discovery process r in writing." Fed. R. Civ. P. 26(e). Rule 37(c)(l) provides that, "if a party fails to provid information or identify a witness as required by Rule 26(a) or (e), the party is not allo ed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, nless the failure was substantially justified or is harmless." Fed. R. Civ. P. 37(c)(l). In determ'ning whether preclusion pursuant to Rule 37(c)(1) is appropriate, the court must consider ".1) the party's explanation for the failure to comply with the [disclosure requirement]; (2) the importance of the testimony of the precluded witness[es]; (3) the prejudice suffered b opposing party as a result of having to prepare to meet the new testimony; and (4) the ossibility of a continuance." Patterson v. Balsamico, 440 F.3d 104, 117 (2d Cir. 2006). AMENDED COOK MS),WPD VERSION 10!l2!l2 10 Defendants' explanation for failing to disclose Mallison's contact info ation the passing of Joey Robinson's mother and Plaintiffs failure to "follow up on [his] re the contact information - do not remotely excuse Defense counsel's neglect oftheir d'scovery obligations. However, given the paucity of evidence regarding the authenticity of the and, thus, the importance of Mallison's testimony greement and the ease with which the dis losure violation can be cured by requiring Defendants to produce Mallison for deposition, th Court finds that preclusion is unwarranted. Accordingly, the Court will order Defendants to facilitate and pay all e penses associated with Plaintiffs deposition of Lavaba Mallison. Failure to do so by Novem er 16, 2012, will result in preclusion of the Mallison declaration and any future testimony b Mallison. Even without Mallison's testimony, however, there exists a genuine di I pute as to whether Stewart signed the Assignment and Agreement. Accordingly, both parties' summary judgment on this point are denied. III. Plaintiff s Rescission Claim Plaintiff argues that, even if the Assignment and Agreement are valid, entitled to rescission because Defendants failed to remit royalties as required by the te s of the Agreement. 5 Under New York law, "[ r]escission of a contract is an extraordinary re edy" and "the party asserting rescission ... has the burden of proving it." Ariel UK Ltd. v. R uters Group PLC, No. 95 Civ. 9646,2006 WL 3161467, at *8 (S.D.N.Y. Oct. 31, 2006) (in emal quotations omitted). A right to rescind a contract arises if the breach is "material and 5 illful or, Defendants argue that Plaintiff is estopped from arguing rescission or breach 0 contract because Plaintiff had previously denied the existence of a valid Agreement or Assignment. Defendants' position is meritless. Plaintiffs claims for rescissio or breach of contract are properly pled in the alternative. A\1E'IDED COOK YlSJ. WPD VERSION IOi12!12 II ifnot willful, so substantial and fundamental as to strongly tend to defeat the object 0 the parties in making the contract." Nolan v. Sam Fox Publ'g Co., 499 F.2d 1394, 1397 (2d Cir. 974). "[I]n the absence of fraud, a contract assigning rights in a musical composition cannot be rescinded for non-payment of royalties unless the failure to pay royalties is total." Ca fert v. Scotti Brothers Records, ]nc., 969 Supp. 193,205 (S.D.N.Y. 1997); see also "",S~e~t"",e~"",,-,,~ Publ'g, B.Y. v. Stein & Day, ]nc., 884 F.2d 675, 678-79 (2d Cir. 1989). Plaintiffs rescission claim is predicated on the assertion that Stewart n ver received any payments under the Agreement. However, as explained above, there is a genuine dispute as to whether Sugar Hill paid Stewart a $2,500 advance. If such an advance as paid, no action for rescission will lie. See Maldonado v. Yalsyn, S.A., No. 06 Civ. 15290(RM ),2009 WL 3094888, at *4 (S.D.N.Y. Sept. 23, 2009) affd, 390 F. App'x 27 (2d Cir. 2010) ( rescission where defendants failed to remit royalty payments but plaintiffs received al due under the contract); accord Harris v. Wu-Tang Prods., ]nc., No. 05 Civ. 3157,20 6 WL 1677127, at *4 (S.D.N.Y. June 16,2006) ("[P]laintiffs attempt to distinguish advance payments from royalties is purely academic, as the Second Circuit applied the Nolan rule to sim'lar advance payments in Septembertide PUbl'g, B.Y. v. Stein & Day Inc."). Moreover, it 's well established that rescission is inappropriate where damages are an adequate remedy. See. New Paradigm Software Corp., v. New Era of Networks, Inc., 107 F. Supp.2d 325,33 (S.D.N.Y. 2000); Yestron, Inc. v. Nat'l Geographic Soc., 750 Supp. 586, 594 (S.D. .Y. 1990) ("Where a distributor has not wholly defaulted in making royalty payments and where its breaches, if any, can be compensated in damages, rescission is not an appropriate rem dy."). Plaintiff has not explained why damages would not suffice to make it whole. Accordi gly, the Court finds that Plaintiff has failed to carry its burden of establishing grounds for resc' ssion. AME1'DED COOK MSJ.WPD VERSION IO/121l2 12 IV. Defendants' Counterclaim Plaintiff moves for summary judgment on Defendants' counterclaim, a guing that Defendants' damages' expert, Gary Cohen, is unreliable, and that his report should be excluded. Federal Rule of Evidence 702 permits a "witness who is qualified as a expert by knowledge, skill, experience, training, or education" to testify ifhis or her "scientific, echnical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue," and if: [:I] the testimony is based on sufficient facts or data, [2] the testimony' s the product of reliable principles and methods, and [3] the witness has reli bly applied the principles and methods to the facts of the case. Fed. R Evid. 702. The Court exercises a "gatekeeping" function in connection with e pert testimony. See GE v. Joiner, 522 U.S. 136, 142 (1997); Daubert v. Merrell Dow Pha . Inc., 509 U.S. 579, 589 (1993). To this end, the trial judge must "ensur[e] that an expert's estimony rests on a reliable foundation and is relevant to the task at hand." Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999). This gatekeeping obligation "applies not only 0 testimony based on 'scientific' knowledge, but also to testimony based on 'technical' nd 'other specialized' knowledge." Id. at 141. "[W]hen an expert opinion is based on data, a methodology, or studies that are simply inadequate to support the conclusions reached Daubert and Rule 702 mandate the exclusion of that unreliable opinion testimony." :C=='-b!.'=-'q"-"'-!"":' National RR Passenger Corp., 303 F.3d 256,266 (2d Cir. 2002). The Court is not persuaded by Plaintiffs arguments that the report sho ld be excluded because Cohen neglected to sign the report or strictly comply with the disclo ure requirements of Federal Rule of Civil Procedure 26(a)(2)(B). Cohen has attested to t AMENDED COOK MSJ.WPD VERSION 10112112 report's 13 accuracy in a subsequent, signed declaration and he complied with the disclosure requ rements prior to his deposition. (See Declaration of Gary Cohen ("Cohen Decl.") ~ 2.) Howe Court finds that Cohen's testimony and expert report do not meet the Daubert standar of reliability. Plaintiff has identified numerous flaws in Cohen's methodology. Coh n's conclusions are founded largely on hearsay supplied by Defendants' counsel and dubi us assumptions. First, Cohen uncritically relied on Defendants' representations regardin the amount to which Defendants were entitled under the Assignment and Agreement and, consequently, miscalculated the value of the counterclaim. Cohen assumed in his rep rt that Defendants were entitled to 40% of the royalties under the Agreement, when in fact, t ey were entitled to only 20%. As a result, Cohen overstated the value of the counterclaim by $ 0,000. Cohen admitted in his deposition that he relied on royalty summaries that were create by Defendants and that, deviating from his usual practice, he neglected to review the und rlying documents or even ask Defendants which documents were used to prepare the summa ies. When asked in his deposition whether he knew whether the documents were accurate, he replied: "I do not." (Deposition of Gary Cohen ("Cohen Dep.") Tr. 43:20-22.) He also admitt din deposition that he based his calculations on the assumption - which he was unable to justify that certain companies were collecting 100% of the foreign performance royalties for xploiting "No Diggity." Defendants offer no meaningful response to the flaws that Plaintiff has identified. Accordingly, the Court grants Plaintiffs request to exclude Cohen's re ort and testimony. Because Defendants have no other competent evidence of damages relatin to their counterclaim, Plaintiff s motion for summary judgment dismissing the counterclaim i granted. AMEC'JDED COOK MSJ. WPD YERSJO:-< 10/12112 14 Plaintiff s motion for summary judgment dismissing Defendants' coun erclaim is granted. Plaintiffs motion for summary judgment is denied in all other respects. Defi ndants' motion for summary judgment is denied. Defendants are ordered to facilitate and pay 11 expenses associated with Plaintiffs deposition of Lavaba Mallison. Failure to do so b November 16, 2012 will result in preclusion of the Mallison declaration and any futur testimony by Mallison. A Final Pre-Trial Conference will be held on February 8, 2013 at 2:00p.m. This Memorandum Order resolves docket entry nos. 61 and 69. SO ORDERED. Dated: New York, New York October 12,2012 United States District Jud e AMENDED COOK MSJ.WPD VERSION 10112112 15
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