GREENFIELD V. PHILLES RECORDS, INC.
98 N.Y.2d 562; 780 N.E.2d 166; 750 N.Y.S.2d 565 (2002)
NATURE OF THE CASE: This was a contract dispute between a singing group and their record
producer, and a dispute over whether the artists' transfer of full ownership rights to the
master recordings of musical performances carried with it the unconditional right of the
producer to redistribute those performances in any technological format.
FACTS: In the early 1960s, Veronica Bennett (now known as Ronnie Greenfield), her sister
Estelle Bennett and their cousin Nedra Talley, formed a singing group known as 'The
Ronettes' (P). P met Phil Spector, a music producer and composer, in 1963 and signed a
five-year 'personal services' music recording contract (the Ronettes agreement) with
Spector's production company, Philles Records, Inc (D). Ps agreed to perform exclusively for
D and in exchange, D acquired an ownership right to the recordings of the Ps' musical
performances. The agreement also set forth a royalty schedule to compensate Ps for their
services. After signing with D, Ps received a single collective cash advance of
approximately $15,000. Ps had some serious hits but the group disbanded in 1967 and D
eventually went out of business. Other than their initial advance, Ps received no royalty
payments from D. D's began to capitalize on a resurgence of public interest in 1960s music
by making use of new recording technologies and licensing master recordings of Ps' vocal
performances for use in movie and television productions, a process known in entertainment
industry parlance as 'synchronization.' Ds earned considerable compensation from such
licensing and sales, but no royalties were paid to Ps. Ps sued for breach of contract action
in 1987, alleging that the 1963 agreement did not provide D with the right to license the
master recordings for synchronization and domestic redistribution, and demanded royalties
from the sales of compilation albums. Ds argued that the agreement granted them absolute
ownership rights to the master recordings and permitted the use of the recordings in any
format, subject only to royalty rights. The Supreme Court ruled in Ps' favor and awarded
approximately $3 million in damages and interest. The Appellate Division affirmed,
concluding that Ds' actions were not authorized by the agreement with Ps because the
contract did not specifically transfer the right to issue synchronization and third-party
domestic distribution licenses. Permitting Ps to assert a claim for unjust enrichment, the
Court found that Ps were entitled to the music recording industry's standard 50% royalty
rate for income derived from synchronization and third-party licensing.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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