Santa-Rosa v. Combo Records

United States Court of Appeals
For the First Circuit

No. 05-2237

GILBERTO SANTA-ROSA, et al.,

Plaintiffs, Appellants,

v.

COMBO RECORDS, et al.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Jay A. García-Gregory, U.S. District Judge]

Before

Torruella, Circuit Judge,
Baldock,* Senior Circuit Judge,
and Stahl, Senior Circuit Judge.

Roberto Sueiro-del Valle, for appellants.
Juan H. Saavedra-Castro, with whom José A. Hernández-Mayoral,
was on brief, for appellees.

December 15, 2006

*
Of the Tenth Circuit, sitting by designation.
 TORRUELLA, Circuit Judge. Gilberto Santa-Rosa ("Santa

Rosa") sued Combo Records ("Combo"), its owners, insurers, and

distributors, seeking compensation for the sales of five albums he

recorded more than fifteen years ago, and which Combo has been

selling ever since. The district court dismissed all of Santa

Rosa's claims. Santa Rosa now appeals the dismissal of two of his

claims: his claim for rescission of his recording contract, and his

claim for a declaratory judgment that he has an ownership interest

in the recordings. After careful consideration, we affirm.

I. Background

Santa Rosa is an accomplished salsa singer, producer, and

composer.1 He lives in Puerto Rico and is known as the "Caballero

de la Salsa." Combo is a record production company owned by Ralph

Cartagena and located in New York. Santa Rosa states that sometime

between 1984 and 1986, he and Combo came to an agreement by which

he agreed to record four albums for Combo and Combo agreed to pay

him "artist royalties" for all albums sold. Santa Rosa no longer

1
See, e.g., Robert Domínguez, Maite Junco and Leo Standora,
Shakira Crowned New Latin Queen, N.Y. Daily News, Nov. 3, 2006 at
2 ("Popular Puerto Rican singer Gilberto Santa Rosa, known as The
Gentleman of Salsa [won a Latin Grammy for] Best Salsa Album");
David Cazares, Salsa, Merengue Away at Carnaval Miami, Fort
Lauderdale Sun-Times, Feb. 21, 1997 at 19 ("Gilberto Santa Rosa,
the young bandleader and singer whose music is among the most
complex and challenging being produced, performs with a traditional
band that includes a large horn section."); Jon Pareles, Pop and
Jazz in Review, N.Y. Times., July 30, 1992 at C16 ("Gilberto Santa
Rosa [is] one of Puerto Rico's most popular young singers.").

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has a copy of the purported agreement, but claims that a copy of

this agreement exists and that Combo has it.

Santa Rosa recorded four albums between 1986 and 1989 for

Combo, including "Good Vibrations" (1986), "Keeping Cool" (1987),

"De Amor y de Salsa" (1988), and "Salsa en Movimiento" (1989).2

Combo later released "El Caballero de la Salsa," a compilation of

Santa Rosa songs. Combo paid $11,280 in advance royalties to Santa

Rosa between 1986 and 1989. Since 1989, Combo states that it has

"continued to manufacture, distribute, and sell thousands of the

albums and compilations [but Combo] has never paid Santa Rosa any

additional royalties or given him royalty statements for the sale

of the aforementioned albums." Santa Rosa had not requested

additional royalties until he brought the present suit.

On May 7, 2004, Santa Rosa and his then-wife, Nélida

Acevedo Rivera, filed suit against Combo, Ralph Cartagena, Combo's

insurance company, and all record distributors or other persons

liable for the acts of Combo, seeking rescission of his contract

based on material breach and damages for unjust enrichment. On

October 13, 2004, Santa Rosa filed an amended complaint which added

claims for a declaratory judgment as to the ownership of the

recordings and a violation of the Lanham Act.3 On October 18,

2
Santa Rosa was the performing artist on these records; he does
not claim to have been the composer.
3
Santa Rosa declined to appeal the dismissal of his claims for
unjust enrichment and violations of the Lanham Act.

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2004, Combo filed a motion to dismiss the amended complaint. On

June 28, 2005, the district court granted Combo's motion to dismiss

with prejudice. Santa Rosa filed a motion for reconsideration on

July 14, 2005 which the district court denied on May 1, 2006.

Santa Rosa now appeals from the dismissal of his complaint.

II. Discussion

We review a decision to grant a motion to dismiss de

novo, taking as true the well-pleaded facts of the complaint. Isla

Nena Air Svcs., Inc. v. Cessna Aircraft Co., 449 F.3d 85, 87 (1st

Cir. 2006). Dismissal is appropriate only if "it is clear that no

relief could be granted under any set of facts that could be proved

consistent with the allegations." Swierkiewicz v. Sorema N.A., 534

U.S. 506, 514 (2002) (internal citation and quotations omitted).

However, we need not only consider the grounds for dismissal relied

upon by the district court; we may affirm a dismissal on "any

ground fairly presented by the record." Gabriel v. Preble, 396

F.3d 10, 12 (1st Cir. 2005).

A. Claim for Rescission

Santa Rosa's first claim against Combo is that Combo

materially breached his contract. As such, Santa Rosa contends, he

is entitled to rescission of that contract. Combo responded, and

the district court held, that Santa Rosa had failed to adequately

plead the existence of a contract. We need not resolve the dispute

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over whether a contract had been sufficiently pled.4 Even assuming

that a contract between Santa Rosa and Combo existed, we find that

Santa Rosa's claim for rescission would be preempted by the

Copyright Act.

A cause of action is preempted under the Copyright Act,

17 U.S.C. § 301(a), if it does not require an element beyond "mere

copying, preparation of derivative works, performance, distribution

or display." Data Gen. Corp. v. Grumman Sys. Support Corp., 36

F.3d 1147, 1164 (1st Cir. 1994) (quoting Gates Rubber Co. v. Bando

Chem Indus., Ltd., 9 F.3d 823, 847 (10th Cir. 1993)). We have

never squarely decided the question of whether a simple breach of

contract action that only seeks damages would be preempted by the

Copyright Act.5 We need not do so today because Santa Rosa asks

not for damages, but rather for rescission of his contract. As we

noted in Royal v. Leading Edge Products, Inc., Santa Rosa's claim

4
Indeed, both parties seem conflicted on the issue. Combo
admitted that a contract existed, but later suggested that no
contract ever existed, and that if it did, its contents could never
be proven. Santa Rosa never doubted the existence of the contract,
but alleged at various points that it was a written contract, an
oral contract, and a contract implied-in-fact.
5
Some courts have suggested that a simple breach of contract
claim would not be preempted. See, e.g., Ritchie v. Williams, 395
F.3d 283, 289 (6th Cir. 2005)(holding that causes of action which
included substantive elements not implicating "ownership or
infringement" were not preempted because they were substantively
different); Warren v. Fox Family Worldwide, Inc., 171 F. Supp. 2d
1057, 1073 (C.D. Cal. 2001) (finding that there was no Copyright
Act preemption where "there is an express contractual obligation to
pay royalties").

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for rescission of his royalty contract presents an interesting

quagmire:

[I]f the royalty agreement stands, then the
plaintiff's sole remedy for the breach of it
would be money damages -- and the Copyright
Act need not be construed. If, however, as
plaintiff suggests, the royalty agreement is
subject to rescission because of defendant's
material breach thereof, then that agreement
would vanish.

833 F.2d 1, 3 (1st Cir. 1987). Because a successful claim for

rescission would result in there being no "'written instrument'

signed by the parties," we would be required to resort to the

interpretation of 17 U.S.C. § 201(b) to determine ownership of

Santa Rosa's recordings. Id.; see also Rano v. Sipa Press, Inc.,

987 F.2d 580, 586 (9th Cir. 1993) ("After [an agreement is

rescinded], any further distribution would constitute copyright

infringement.").

Because Santa Rosa seeks rescission of his contract, if

we were to grant him the relief that he sought, we would be

required to determine his ownership rights by reference to the

Copyright Act. In such a case, there is little question that we

would be merely determining whether Santa Rosa was entitled to

compensation because of "mere copying" or "performance,

distribution or display" of his recordings. Data Gen. Corp., 36

F.3d at 1164. As such, 17 U.S.C. § 301(a) preempts Santa Rosa's

rescission claim. Once it is determined that Santa Rosa's

rescission claim is preempted, his only remedy is a claim under the

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Copyright Act, and "the court must then dismiss the [contract]

claim for failing to state a cause of action." Briarpatch Ltd. v.

Phoenix Pictures, Inc., 373 F.3d 296, 309 (2d Cir. 2004). Thus, we

find no error in the dismissal of Santa Rosa's rescission claim.

B. Claim for Declaratory Judgment

Because Santa Rosa's rescission claim is preempted, we

are left only with his claim for a declaratory judgment of

ownership, which arises under the Copyright Act, 17 U.S.C. § 201.

Santa Rosa claimed that the courts should resolve the "uncertainty"

over ownership of his recordings by issuing a declaratory judgment

that he is the sole owner of those recordings. Combo responded

that Santa Rosa's declaratory judgment action was time barred. The

district court agreed that Santa Rosa's claim was barred by the

statute of limitations and granted Combo's motion to dismiss. See

LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 509 (1st Cir.

1998) (holding that dismissal is appropriate if the plaintiff's

allegations "leave no doubt" that the statute of limitations would

bar the claim). We agree with the district court that the

declaratory judgment action is time barred and that dismissal was

appropriate.6

6
Because we find Santa Rosa's declaratory judgment action time-
barred, we find no need to address, and we express no opinion as
to, Combo's argument that Santa Rosa's cause of action is also
barred because Santa Rosa failed to comply with 17 U.S.C. § 411(a),
which states that "no action for infringement of the copyright in
any United States work shall be instituted until preregistration or
registration of the copyright claim has been made in accordance

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 17 U.S.C. § 507(b) provides that "[n]o civil action shall

be maintained under the provisions of this title unless it is

commenced within three years after the claim accrued." A claim

accrues when "the plaintiff 'knows or has reason to know of the act

which is the basis for the claim.'" Rodríguez-García v.

Municipality of Caguas, 354 F.3d 91, 96-97 (1st Cir. 2004) (quoting

Rodríguez Nárvaez v. Nazario, 895 F.2d 38, 41 n.5 (1st Cir. 1990)).

Thus, a claim for declaratory judgment of ownership accrues when

the plaintiff "knew of the alleged grounds for the [ownership]

claim." Margo v. Weiss, 213 F.3d 55, 60-61 (2d Cir. 2000); see

also Merchant v. Levy, 92 F.3d 51, 56 (2d Cir. 1996)("[N]o . . .

uncertainty exists as to co-ownership rights based on

co-authorship. A co-author knows that he or she jointly created a

work from the moment of its creation."). It goes without saying

that Santa Rosa was present when his performances were recorded by

Combo Records, and thus knew from the moment that each recording

was created that he had a potential claim for ownership of it.

Thus, there is little question that Santa Rosa's claims for co-

ownership accrued as soon as he finished recording each album.7

with this title."
7
At oral argument, Santa Rosa's counsel noted the distinction
between copyrights on compositions (i.e. the music and lyrics) and
on performances of those compositions (i.e. the tangible, fixed
representation of the music and lyrics). See generally 6 David
Nimmer, Nimmer on Copyright § 30.03 (2006) ("Copyright ownership of
the physical embodiment of the performance of a musical composition
(e.g., a master recording) is distinct from the ownership of the

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 Santa Rosa points to the Ninth Circuit's holding in Zuill

v. Shanahan that a claim for a declaratory judgment would not

accrue until a "plain and express repudiation of co-ownership is

communicated to the claimant." 80 F.3d 1366, 1369 (9th Cir. 1996).

Even applying this test for accrual of a claim, we cannot think of

a more plain and express repudiation of co-ownership than the fact

that Combo openly, and quite notoriously, sold Santa Rosa's records

without providing payment to him: according to documents provided

by Santa Rosa, at least 1,140 of the recordings in dispute were

sold during the six month period between January and June of 2000,

almost four years before Santa Rosa filed suit in May 2004.

Likewise, it is hard to believe that a singer of Santa Rosa's

stature would have been unaware that Combo Records was selling his

recordings and thus claiming ownership over them until three years

before this action was commenced.

Because we conclude that Santa Rosa had reason to know of

his claim of ownership over the recordings soon after they were

created (which was well over three years before Santa Rosa filed

copyright in the musical composition itself and usually is the
subject of an overall contractual relationship between its
performers and a record company."). However, we see no logical
distinction to be made between a composer, who learns of his
ownership claim when he transcribes his music onto a sheet, and
Santa Rosa, who learned of his ownership claim when he performed
his music in a record studio. In both cases, the "author" is "the
person who translates an idea into a fixed, tangible expression
entitled to copyright protection." Cmty. for Creative Non-Violence
v. Reid, 490 U.S. 730, 737 (1989).

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suit against Combo), we agree with the district court that Santa

Rosa's declaratory judgment action is time barred by 17 U.S.C.

§ 507(b).

III. Conclusion

For the foregoing reasons, we affirm the decision of the

district court.

Affirmed.

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