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Singer Management Consultants, Inc. v. Milgram

April 7, 2009

SINGER MANAGEMENT CONSULTANTS, INC. AND LIVE GOLD OPERATIONS, INC., PLAINTIFFS,
v.
ANNE MILGRAM, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, DEFENDANT.



The opinion of the court was delivered by: Debevoise, Senior District Judge

FOR PUBLICATION

OPINION

On August 16, 2007, Singer Management Consultants, Inc. ("Singer Management") and Live Gold Operations, Inc. ("Live Gold) (collectively, "Plaintiffs") filed this action against the Attorney General of the State of New Jersey, Anne Milgram, (the "Attorney General" or the "State") seeking a temporary restraining order and preliminary and permanent injunctive relief. Plaintiffs allege that the State's action under the Deceptive Practices in Musical Performances Statute, N.J.S.A. 2A:32B-1 et seq. (the "Truth in Music Act" or the "Act") is preempted by the Lanham Act, 15 U.S.C. § 1125, and violates their rights under the takings clause, equal protection clause and the First Amendment to the U.S. Constitution. The State now moves, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss the Complaint. Additionally, the Plaintiffs now appeal Magistrate Judge Salas's December 29, 2008 Order (the "December 29 Order") denying their request for an award of attorneys' fees and costs pursuant to 42 U.S.C. § 1988(b). For the reasons set forth below, the State's motion to dismiss will be granted and the Plaintiffs' appeal of the December 29 Order will be denied.

I. BACKGROUND

A. The Complaint Live

Gold claims to hold exclusive rights to the unregistered marks "The Platters" and "The Cornell Gunter Coasters," and manages and promotes singing groups by those names. Singer Management claims to hold exclusive rights to the unregistered mark "The Elsbeary Hobbs Drifters" and previously managed and promoted a singing group by that name. In their Complaint, Plaintiffs allege that the Defendant specifically purported to exercise authority under the Truth in Music Act "to restrain promotion for a collective group performance of The Platters, The Cornell Gunter Coasters and the Elsbeary Hobbs Drifters at the Hilton Hotel in Atlantic City (the 'Hilton Show') scheduled to take place on August 18, 2007 and for two weeks thereafter." (Compl. ¶ 9.) Plaintiffs claim that they attempted to work in good faith with the Defendant by voluntarily producing evidence of their rights to these unregistered marks and explanations of why they should be considered in compliance with the Truth in Music Act, but that the Defendant refused to recognize those rights and permit promotion for the Hilton Show to continue. (Id. ¶ 10.)

Plaintiffs' First Count alleges that the Truth in Music Act conflicts with the Lanham Act, and thus violates the Supremacy Clause, because the Lanham Act protects registered and distinctive unregistered trademarks equally and the Defendant's enforcement of the Act prevents the fulfillment of the objective of the Lanham Act. (Id. ¶¶ 49-52.) Plaintiffs' Second Count alleges a violation of the takings clause of the Fifth Amendment to the U.S. Constitution in that Defendant's enforcement of the Truth in Music Act effects a taking of the Plaintiffs' property rights in their unregistered trademarks without compensation. (Id. ¶¶ 56-59.) Plaintiffs' Third Count alleges a violation of the right to free speech under the First Amendment to the U.S. Constitution in that it prevents holders of unregistered but valid trademarks from causing their musical groups to perform, to be promoted and to speak. (Id. ¶¶ 63-64.) Plaintiffs' Fourth Count alleges a violation of the equal protection clause of the Fourteenth Amendment to the U.S. Constitution. Plaintiffs allege that Defendant's enforcement of the Truth in Music Act "between performing groups with registered trademarks (who may perform) and performing groups with unregistered trademarks (who may not perform unless they receive some additional approval or involvement from 'recording groups')." (Id. ¶ 67.) In Counts One through Four, Plaintiffs ask the court to preliminarily and permanently enjoin the Defendants from enforcing the Truth in Music Act against Plaintiffs. In their Fifth Count, Plaintiffs seek a declaratory judgment either that the Truth in Music Act must be construed to recognize Plaintiffs' rights and that Defendant's enforcement of the Act is unconstitutional, or that Defendant may not enforce the Act because it is unconstitutional. In Count Six, Plaintiffs allege that Defendant, acting under color of state law, has deprived Plaintiffs of rights secured by the U.S. Constitution and the law of the United States in violation of 42 U.S.C. § 1983. Plaintiffs seek equitable relief on all counts except for the alleged violation of 42 U.S.C. § 1983, for which they seek damages, including but not limited to attorneys' fees and costs incurred in connection with this case. (Compl. ¶ 76.)

B. The Truth in Music Act

The Truth in Music Act, which became effective May 4, 2007, provides:

A person shall not advertise or conduct a live musical performance or production through the use of an affiliation, connection or association between the performing group and the recording group unless:

a. The performing group is the authorized registrant and owner of a federal service mark for the group registered in the United States Patent and Trademark Office; or

b. At least one member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation of the group; or

c. The live musical performance or production is identified in all advertising and promotion ...


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