Duke EllingtonIt’s apparently not double-dipping when a domestic music publisher pays royalties to its own, affiliated, foreign sub-publishers:

The New York County Supreme Court has affirmed a lower court’s dismissal of a breach-of-contract lawsuit filed by the Duke Ellington heirs, in which they accused EMI Mills Music of cheating them out their fair share of overseas royalties due under a 1961 songwriting agreement.

That agreement, between the late jazz great and a group of music publishers in which EMI Mills Music is the predecessor in interest, specify that Ellington and his heirs are to be paid fifty percent of net revenue actually received by the publishers from foreign publication of his compositions.  The court describes this as a “net receipts” arrangement by which a composer, such as Ellington, would collect royalties based on income received by a publisher after the deduction of fees charged by foreign sub-publishers.

Plaintiff Paul Ellington, the composer’s grandson, points out in his complaint that when the agreement was executed, foreign sub-publishers typically were unaffiliated with domestic businesses such as Mills Music.  EMI Mills, like other publishers, since has acquired ownership of the foreign sub-publishers that generated the earlier agreed on sums.  By paying commissions to its affiliated foreign sub-publishers before remitting the bargained-for royalty payments to Ellington’s heirs, EMI essentially gets seventy-five percent of the royalties, while only paying the heirs twenty-five percent, the plaintiffs argued.

The courts rejected this view, declining to distinguish between affiliated and unaffiliated foreign sub-publishers because the contracting parties chose not to do so.  The appellate judges noted that the complaint sets forth no basis for plaintiff’s apparent premise that sub-publishers owned by EMI Mills should render their services for free, although independent sub-publishers presumably were compensated for identical services.

The court also dismissed the plaintiff’s argument that the agreement is ambiguous as to whether “net revenue actually received by the Second Party” entails revenue received from EMI Mills’s foreign sub-publisher affiliates. It found no ambiguity in the agreement, which, by its terms, requires EMI Mills to pay Ellington’s heirs fifty percent of the net revenue actually received from foreign publication of Ellington’s compositions.

Ellington, considered a legend in jazz and American music, wrote thousands of songs, many for stage and screen, for his acclaimed band, its noted soloists and for others. His popular hits including It Don’t Mean a Thing if It Ain’t Got That Swing, Sophisticated Lady, Mood Indigo, Take the ‘A’ Train and Satin Doll.