No._______________
`_________________________________________________
`
`IN THE
`
`SUPREME COURT OF THE UNITED STATES
`
`ALEXANDER GRAHAM-SULT
`and
`DAVID GRAHAM
`
`
`Petitioners
`
`
`v.
`
`NICHOLAS P. CLAINOS
`
`
`Respondent
`____________________
`
`On Petition for Certiorari to the United States Court
`of Appeals for the Ninth Circuit
`_____________________
`
`PETITION FOR WRIT OF CERTIORARI
`_____________________
`
`Karl Olson (SBN 104760)
`Supreme Court Bar No. 187154
`Therese Y. Cannata (SBN 88032)
`Kimberly A. Almazan (SBN 288605)
`Zachary Colbeth (SBN 297419)
`Cannata, O’Toole, Fickes & Almazan LLP
`100 Pine Street, Suite 350
`San Francisco, CA 94111
`Tel: (415) 409-8900
`Counsel for Petitioner
`
`
`
`
`_________________________________________________
`
`IN THE
`
`SUPREME COURT OF THE UNITED STATES
`
`ALEXANDER GRAHAM-SULT
`and
`DAVID GRAHAM
`
`
`Petitioners
`
`
`v.
`
`NICHOLAS P. CLAINOS
`
`
`Respondent
`____________________
`
`On Petition for Certiorari to the United States Court
`of Appeals for the Ninth Circuit
`_____________________
`
`PETITION FOR WRIT OF CERTIORARI
`_____________________
`
`Karl Olson (SBN 104760)
`Supreme Court Bar No. 187154
`Therese Y. Cannata (SBN 88032)
`Kimberly A. Almazan (SBN 288605)
`Zachary Colbeth (SBN 297419)
`Cannata, O’Toole, Fickes & Almazan LLP
`100 Pine Street, Suite 350
`San Francisco, CA 94111
`Tel: (415) 409-8900
`Counsel for Petitioner
`
`
`
`
`
`
`
`QUESTION PRESENTED
`
`
`I. Whether the “instance and expense” test for
`determining copyright authorship between the
`commissioning party and the artist under the
`work-for-hire doctrine
`is properly used
`to
`determine copyright ownership as between the
`commissioning party and the commissioning
`party’s wholly-owned corporation, under the
`Copyright Acts of 1909 and 1976.
`
`
`II. Whether the Court of Appeals, in refusing to hold
`a fiduciary accountable for the loss of valuable
`estate assets belonging to rock and roll concert
`promoter Bill Graham, failed to view evidence at
`summary judgment in light most favorable to
`petitioners as nonmoving parties.
`
`
`
`
`i
`
`
`
`
`
`
`
`PARTIES TO PROCEEDING
`
`The petitioners are David Graham and Alexander
`Graham-Sult, as individuals, who were plaintiffs-
`appellants in the Ninth Circuit. The respondent is
`Nicholas P. Clainos, an individual, who was a
`defendant-appellee in the Ninth Circuit.
`
`
`
`ii
`
`
`
`
`
`TABLE OF CONTENTS
`
`Questions Presented ................................................... i
`
`Parties to Proceeding ................................................. ii
`
`Table of Contents ...................................................... iii
`
`Table of Authorities .................................................. vi
`
`Introduction ............................................................... 1
`
`Opinion Below ............................................................ 3
`
`Jurisdiction ................................................................ 3
`
`Statutory Provisions Involved ................................... 3
`
`Statement of the Case ............................................... 4
`
`Reasons for Granting the Petition .......................... 11
`
`I. The Ninth Circuit’s Decision Erroneously Applied
`the Instance and Expense Test to a Copyright
`Ownership Dispute Where There Is No Dispute on
`the Issue of Authorship ........................................... 11
`
`II. The Ninth Circuit’s Refusal to Hold a Fiduciary
`Accountable for the Loss of Valuable Estate Assets
`and Undisputed Self-Dealing Conflicts With Well-
`Established Law That One Must View Evidence at
`Summary Judgment in the Light Most Favorable to
`the Non-Moving Parties .......................................... 17
`
`
`
`
`iii
`
`
`
`
`
` A. Petitioners Presented Sufficient Evidence to
`Create Genuine Issues of Material Fact Concerning
`Bill Graham’s Personal Ownership of the Disputed
`Assets and Clainos’s Conversion of Those Assets .. 17
`
`1. The Ninth Circuit Erroneously Allowed
`
`
`Summary Judgment on the Claim for Conversion of
`the Poster Copyrights .............................................. 17
`
`2. The Ninth Circuit Erroneously Allowed
`
`
`Summary Judgment on the Claim for Conversion of
`the Poster Scrapbooks ............................................. 21
`
`3. The Ninth Circuit Erroneously Allowed
`
`
`Summary Judgment on the Claim for Conversion of
`the 100 Sets Collection ............................................ 24
`
`4. The Ninth Circuit Erroneously Allowed
`
`
`Summary Judgment on the Claim for Conversion of
`“The Fillmore” Trademark ...................................... 25
`
` B. Petitioners Presented Sufficient Evidence to
`Create Genuine Issues of Material Fact Concerning
`Clainos’s Breach of His Fiduciary Duties ............... 27
`
`Conclusion and Prayer for Relief ............................ 29
`
`APPENDIX............................................................... 31
`
`APPENDIX TABLE OF CONTENTS .................... A-i
`
`Memorandum of the United States Court of Appeals
`for the Ninth Circuit, Alexander Graham-Sult and
`David Graham v. Nicholas P. Clainos, et al.
`Nos. 15-17204, 16-16768, 16-17083 (9th Cir. Dec 13,
`2017) ....................................................................... A-1
`
`
`iv
`
`
`
`
`
`Order Granting Defendant Clainos’s and BGA
`Defendants’ Motions for Summary Judgment (Docket
`Nos. 217 and 221), Alexander Graham-Sult, et al. v.
`Nicholas P. Clainos, et al., No. 10-cv-04877-CW (Cal.
`N.D. Oct. 6, 2015) ................................................ A-10
`
`Judgment in a Civil Case Alexander Graham-Sult, et
`al. v. Nicholas P. Clainos, et al., No. 10-cv-04877-CW
`(Cal. N.D. Oct. 6, 2015) ........................................ A-45
`
`Order of the United States Court of Appeals for the
`Ninth Circuit, Alexander Graham-Sult and David
`Graham v. Nicholas P. Clainos, et al., Nos. 15-17204,
`16-16768, 16-17083 (9th Cir. Jan. 22, 2018) ....... A-47
`
`Appellants’ Opening Brief, Alexander Graham-Sult
`and David Graham v. Nicholas P. Clainos, et al. No.
`15-17204 (9th Cir. June 17, 2016) (Excerpt) ...... A-49
`
`Appellants’ Reply Brief, Alexander Graham-Sult and
`David Graham v. Nicholas P. Clainos, et al. No. 15-
`17204 (9th Cir. Nov. 2, 2016) (Excerpt) .............. A-92
`
`Expert Disclosure Statement of David Nimmer
`Pursuant to Federal Rule of Civil Procedure 26(a)(2),
`Alexander Graham-Sult, et al. v. Nicholas P. Clainos,
`et al, No. 10-cv-04877-CW (Cal N.D. Served July 31,
`2015) ................................................................... A-101
`
`Declaration of Phiz Mezey in Support of Plaintiffs’
`Opposition to Defendant Nicholas P. Clainos’s
`Motion for Summary Judgment, Alexander Graham-
`Sult, et al. v. Nicholas P. Clainos, et al, No. 10-cv-
`04877-CW (Cal N.D. Filed July 23, 2015) ......... A-153
`
`
`
`v
`
`
`
`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`
`Aloe Vera of Am., Inc. v. United States
`
`(9th Cir. 2012) 699 F.3d 1153 ................ 25, 27, 29
`
`Baker Manock & Jensen v. Superior Court
`
`(2009) 175 Cal.App.4th 1414 .............................. 28
`
`Datastorm Techs., Inc. v. Excalibur Commc’ns, Inc.
`
`(N.D. Cal. 1995) 888 F.Supp. 112 ...................... 18
`
`Dolman v. Agee
`
`(9th Cir. 1998) 157 F.3d 708 .............................. 12
`
`E. & J. Gallo Winery v. Gallo Cattle Co.
`
`(9th Cir. 1992) 967 F.2d 1280 ............................ 26
`
`Entm’t Research Grp., Inc. v. Genesis Creative Grp.,
`Inc.
`
`(9th Cir. 1997) 122 F.3d 1211 ............................ 19
`
`Estate of Sanders
`
`(1985) 40 Cal.3d 607 ........................................... 28
`
`Estate of Seifert
`
`(2005) 128 Cal.App.4th 64 .................................. 28
`
`Graham-Sult v. Clainos
`
`(9th Cir. 2014) 756 F.3d 724 ............ 10, 22, 23, 28
`
`In re Emery
`
`(9th Cir. 2003) 317 F.3d 1064 ............................ 22
`
`
`
`vi
`
`
`
`
`
`In re Niles
`
`(9th Cir. 1997) 106 F.3d, 1456 ..................... 28, 29
`
`Lin-Brook Builders Hardware v. Gertler
`
`(9th Cir. 1965) 352 F.2d 298 .............................. 12
`
`Lee v. Hanley
`
`(2015) 61 Cal.4th 1225 ....................................... 27
`
`Marya v. Warner/Chappell Music, Inc.
`
`(C.D. Cal. 2015) 131 F.Supp.3d 975, 979 ........... 15
`
`May v. Morganelli-Heumann & Assocs.
`
`(9th Cir. 1980) 618 F.2d 1363 ............................ 12
`
`Nelson v. City of Davis
`
`(9th Cir. 2009) 571 F.3d 924 ........................ 18, 25
`
`Olsen v. Idaho State Bd. of Med.
`
`(9th Cir. 2004) 363 F.3d 916 .............................. 18
`
`Severe Records, LLC v. Rich
`
`(6th Cir. 2011) 658 F.3d 571 .............................. 12
`
`Siegel v. Time Warner Inc.
`
`(C.D. Cal. 2007) 496 F.Supp.2d 1111 ................. 12
`
`Simo v. Union of Needletrades
`
`(9th Cir. 2003) 322 F.3d 602 .................. 25, 27, 29
`
`Spates v. Dameron Hosp. Assn.
`
`(2003) 114 Cal.App.4th 208 ................................ 22
`
`Tolan v. Cotton
`
`(2014) 134 S. Ct. 1861 .................. 2, 21, 23, 25, 27
`
`
`vii
`
`
`
`
`
`Twentieth Century Fox Film Corp. v. Entm’t Distrib.
`
`(9th Cir. 2005) 429 F.3d 869 .............................. 12
`
`United Fabrics Int’l, Inc. v. C&J Wear, Inc.
`
`(9th Cir. 2011) 630 F.3d 1255 ...................... 18, 19
`
`Vai v. Bank of Am. Nat’l Trust & Sav. Ass’n
`
`(1961) 56 Cal.2d 329 ........................................... 28
`
`Weiss v. Marcus
`
`(1975) 51 Cal.App.3d 590 ................................... 27
`
`
`STATUTES
`
`17 U.S.C. § 26 (repealed)
`(Copyright Act of 1909) ............................... 2, 3, 9, 10
`
`17 U.S.C. § 410(c) ................................................. 3, 18
`
`28 U.S.C. § 1254(1) .......................................... 3, 9, 10
`
`
`viii
`
`
`
`
`
`INTRODUCTION
`
`
` This case is about the two sons of the legendary
`rock and roll impresario Bill Graham seeking their
`rightful
`inheritance. For
`seven years now,
`Petitioners have sought to hold their
`father’s
`executor, who was also their trustee, accountable for
`his breaches of fiduciary duty and conversion of their
`assets, which they did not discover until 2009 and
`2010. They seek their day in court.
` When Bill Graham died in a tragic helicopter
`accident in 1991, his close associate Respondent
`Nicholas Clainos, was designated both executor of
`Graham’s estate, and trustee of the testamentary
`trusts formed for the benefit of Petitioners. He
`concealed certain estate assets from Petitioners,
`including
`copyrights
`for
`the groundbreaking,
`psychedelic promotional posters that are iconic
`artifacts of the 1960s, and other invaluable items in
`Graham’s
`personal
`archives. Rather
`than
`distributing these assets to Petitioners, Clainos
`concealed them until he arranged, more than a
`decade later, to sell them to a third party as part of a
`corporate sale of a large rock and roll memorabilia
`collection that became known as “Bill Graham’s
`Archives.” Clainos took a substantial commission for
`himself in that sale, never allowing even a whisper of
`his malfeasance to pass to Petitioners. In 2009,
`Petitioners came into possession of some boxes of
`documents that Clainos left behind after he left the
`Bill Graham company (which had been twice sold
`since Graham’s death). There, Petitioners discovered
`the existence of poster copyrights registered in the
`name of their father as of the date of his death in
`1991. This triggered a further investigation, which
`revealed additional hidden assets.
`
`- 1 -
`
`
`
`
`
` The lower courts have dismissed Petitioner’s
`claims without any factual hearing. They did so, in
`part, by
`improperly applying the wrong
`legal
`standard: in evaluating who owned the Graham
`poster copyrights at his death, both the District
`Court and the Ninth Circuit applied the “instance
`and expense” test under the Copyright Act of 1909.
`That test, however, is used to determine who owns a
`copyright as between a commissioning party and an
`artist, which is not in dispute here. The issue here,
`by contrast, is who owns a copyright of a work-for-
`hire between the commissioning party – Graham –
`and his wholly owned corporation. By applying the
`wrong legal standard, the lower court improperly
`truncated the legal analysis of copyright ownership,
`ignoring substantial evidence that Graham and his
`corporation’s intent was that Graham personally
`owned the copyrights. If the lower courts had
`applied the correct legal test, there would be at a
`minimum a triable issue of fact as to the ownership
`of the poster copyrights.
`
`In granting and affirming summary judgment,
`the lower courts also failed to adhere to the Supreme
`Court’s summary judgment standards. Indeed, the
`District Court went out of its way to ignore and
`explain away Petitioners’ evidence,
`improperly
`weighing
`conflicting
`evidence,
`and
`drawing
`inferences in favor of the moving party.
` This Court should grant Petitioners’ petition for
`writ of certiorari to clarify that the “instance and
`expense” test under the Copyright Act of 1909 should
`be utilized only in assessing disputes between a
`commissioning party and an artist, and not between
`a commissioning party and
`that
`individual’s
`corporation. This case also provides an ideal vehicle
`to reiterate the summary judgment principles set
`forth in Tolan v. Cotton, 134 S. Ct. 1861 (2014).
`
`- 2 -
`
`
`
`
`
`OPINION BELOW
`
`
` On December 13, 2017, a panel of the Ninth
`Circuit Court of Appeals entered its memorandum
`affirming the judgment of the United States District
`Court for the Northern District of California. The
`opinion of the Court of Appeals is reported as
`Graham-Sult v. Clainos, Nos. 15-17204, 16-16768,
`16-17083. On January 22, 2018, the Ninth Circuit
`denied Petitioners’ petition
`for rehearing and
`petition for rehearing en banc. The Ninth Circuit’s
`memorandum is included at Appendix (“App.”) A1-
`A9. A copy of the order denying rehearing is
`included at App. A47-A48.
`
`
`JURISDICTION
`
`
` The Court of Appeals entered its judgment on
`December 13, 2017. App. A1-A9. On January 22,
`2018, the Court of Appeals denied the Petitioners’
`petition for rehearing and rehearing en banc. App.
`A47-A48. Jurisdiction of this Court is invoked under
`28 U.S.C. § 1254(1).
`
`
`STATUTORY PROVISIONS INVOLVED
`
`
`17 U.S.C. § 26 (repealed) (Copyright Act of 1909)
`
`“. . . the word ‘author’ shall include an employer in
`the case of works made for hire.”
`
`17 U.S.C. § 410(c) (Copyright Act of 1976)
`
`“In any judicial proceedings the certificate of a
`registration made before or within five years after
`first publication of the work shall constitute prima
`
`- 3 -
`
`
`
`
`
`facie evidence of the validity of the copyright and of
`the facts stated in the certificate. The evidentiary
`weight to be accorded the certificate of a registration
`made thereafter shall be within the discretion of the
`court.”
`
`
`STATEMENT OF THE CASE
`
`
` Petitioners Alexander Graham-Sult and David
`Graham are the sons of the late Bill Graham. App.
`A50. Graham was a legendary rock and roll
`producer and promoter who helped launch the
`careers of the Grateful Dead, Carlos Santana, and
`Jefferson Airplane, among others. He produced
`culture-shifting events featuring icons such as Lenny
`Bruce, Otis Redding, and Jimi Hendrix, and
`managed tours for Bob Dylan, the Band, and the
`Rolling Stones. See, e.g., App. A52-A53. His story
`exemplifies the “American Dream.” App. A52. He
`fled Germany during World War II as a child war
`refugee, made it to American shores, overcame
`adversity to graduate from college, and eventually
`made his way to San Francisco, where he would go
`on to become the most well-known music promoter in
`rock and roll history. Id. In promoting his concerts,
`he pioneered the use of artistic, psychedelic posters –
`often featuring bright colors, kaleidoscopic patterns,
`and distorted
`typography – which became
`emblematic of the 1960s. Id.
`
`
`- 4 -
`
`
`
`
`
`
`
`
`
`
`
`- 5 -
`
`
`
`
`
`
`
`
`
`
`
`
`- 6 -
`
`
`
`
`
`The concert posters are valued today as stand-
`alone works of art, with some selling for tens of
`thousands of dollars. App. A52-A53. Graham also
`had an incredible talent for discovering bands and
`musicians that would later become world renowned –
`musicians who would often be featured on Graham’s
`posters and who would play at his various venues,
`including San Francisco’s world-famous Fillmore
`Auditorium and New York’s Fillmore East. App. A52
`Graham helped nurture rock and roll through its
`infancy, going on to eventually be inducted into the
`Rock and Roll Hall of Fame. App. A52-A53.
`Throughout his career, Graham collected a vast
`collection of rock and roll memorabilia, preserving as
`many mementos of his accomplishments as possible.
`App. A53. These
`included
`items such as a
`tambourine given to him by Janis Joplin, a pair of
`boots once belonging to The Rolling Stones’ Keith
`Richards, and thousands of copies of posters, tickets,
`and handbills promoting his concerts. Id. It also
`included the four categories of disputed property in
`this case, consisting of the following: (1) 325
`copyrights to the posters announcing rock and roll
`shows (the “Poster Copyrights”), (2) scrapbooks
`containing posters from Graham’s rock and roll
`shows (the “Poster Scrapbooks”), (3) a collection of
`posters known as the “100 Sets Collection” and (4)
`the trademark to “The Fillmore” (the “Trademark”).
`App. A54.
`Tragically, Graham’s life was cut short by a
`helicopter crash in 1991. App. A50. Graham left the
`bulk of his estate (“Estate”) to his two sons,
`Petitioners David (then 23 years old) and Alex (then
`14 years old). App. A50, A64. He designated his
`friend and business colleague, Nicholas Clainos, as
`both executor of his Estate and
`trustee of
`
`- 7 -
`
`
`
`
`
`testamentary trusts formed for the benefit of David
`and Alex. App. A64. David and Alex – reeling from
`the death of their father and still steeped in youthful
`naiveté – believed that Clainos had their best
`interests at heart. Id. Unfortunately, years later,
`they came to the wrenching realization that their
`fiduciary Clainos had betrayed them. App. A50-A51,
`A54, A67, A70-A73. In 2009, Petitioners discovered
`that Clainos had executed an Assignment in August
`1995
`that purported
`to
`transfer
`the Poster
`Copyrights from the Estate to a company in which
`Clainos was now a shareholder. App. A69-A70.
`Clainos backdated the Assignment to make it appear
`as if the Assignment was disclosed in the probate
`proceedings
`(even
`though
`it was not).
`
`Id.
`Petitioners’
`further
`investigation disclosed that
`Clainos had also arranged to separate and conceal
`other Estate assets from the beneficiaries, despite
`substantial evidence that each of the disputed
`property
`items belonged to Graham personally
`rather than as part of his business. These assets
`were also excluded from and never referenced in
`extensive probate proceedings. App. A50-A51, A54,
`A67, A70-A73.
`Important here, Petitioners discovered, in 2009
`and 2010, four valuable assets that personally
`belonged to their father as of the date of his death,
`and which the executor of their father’s estate
`concealed from them for his own personal gain and
`benefit. With the exception of the Trademark,
`Clainos concealed and years later facilitated their
`sale to a third party, collecting a substantial
`commission for his efforts. App. A70-A73. As to the
`Trademark, he hid it from Petitioners, allowed it to
`expire, and then re-registered it in the name of the
`corporate entity, in which he was now a shareholder,
`
`- 8 -
`
`
`
`
`
`forever erasing Petitioners’ claim and title to that
`asset.
`in federal court, with
`Petitioners filed suit
`jurisdiction pursuant to 28 U.S.C. §§ 1332, 1338(a).
`App. A51, A73. In opposing Clainos’s motion for
`summary judgment, Petitioners provided the District
`Court with substantial and significant evidence
`demonstrating the existence of triable issues of fact
`on each element of their claims against Clainos.
`App. A52-A74. Plaintiffs provided a report by David
`Nimmer, the expert on copyright law, who opined
`that the Poster Copyrights in fact belonged to
`Graham personally, not his company. App. A94,
`A113-A118, A128-A130. Nevertheless, the District
`Court applied the wrong legal standard to the issue
`of who owned the Poster Copyrights, and went out of
`its way to ignore and explain away Petitioners’ vast
`quantities of
`compelling evidence,
`improperly
`weighing conflicting evidence, resolving key factual
`disputes, and drawing inferences in favor of the
`moving parties. App. A10-A44.
`Critically, the District Court erroneously held as
`a matter of law that “[i]n order for Bill Graham
`personally to own the copyrights, he — as opposed to
`BGE
`[“Bill Graham Enterprises,” Graham’s
`company] — must have been the commissioning
`party under the works-for-hire doctrine.” App. A26.
`In affirming, the Ninth Circuit held Petitioners to an
`improper standard, finding that Petitioners must
`show that the posters at issue “were created at
`Graham’s personal instance and expense.” App. A3
`(emphasis added). In other words, the Ninth Circuit
`applied the “instance and expense” test, applied in
`work-for-hire situations under the Copyright Act of
`1909, to determine ownership of copyrights as
`between
`a
`commissioning
`party
`and
`the
`
`- 9 -
`
`
`
`
`
`commissioning party’s corporation, when in fact it
`should only determine ownership of copyrights as
`between a commissioning party and the artist. This
`ruling has far-reaching implications. It means that,
`for any copyright governed by the Copyright Act of
`1909 (i.e., for works published before 1978), the
`factors laid out in the instance and expense test –
`which notably, focus only on the moment the work
`was commissioned and not on other indicia of
`ownership (such as, for instance, the name on the
`copyright registration and the stated intent of the
`commissioning party) – will determine ownership of
`the copyright in the years that follow. It also means
`that the presumption typically provided for the
`timely registration of a copyright
`is rendered
`meaningless.
`On October 6, 2015, the District Court granted
`summary
`judgment
`for Clainos and entered
`judgment in favor of Clainos. App. A10, A45-A46.
`Petitioners then appealed the decision to the Ninth
`Circuit Court of Appeals, with jurisdiction pursuant
`to 28 U.S.C. § 1291, hoping that as it had previously
`in the matter Graham-Sult v. Clainos, 756 F.3d 724
`(9th Cir. 2014), the Ninth Circuit would recognize
`that Petitioners were entitled to move forward with
`their claims against Clainos.1 App. A51. The Ninth
`Circuit did not, however. On December 13, 2017, the
`Ninth Circuit issued a memorandum affirming the
`District Court’s grant of summary judgment in favor
`of Clainos. App. A1. The Ninth Circuit held that
`Graham could not have personally owned the Poster
`Copyrights because Petitioners did not show that the
`posters were created at Graham’s “personal instance
`
`
`1 Petitioners presently pursue claims in this action
`only against Respondent Clainos.
`
`- 10 -
`
`
`
`
`
`and expense.” App. A3. Petitioners filed a petition for
`rehearing or rehearing en banc, but the Ninth
`Circuit denied the Petitioners’ request for rehearing
`or rehearing en banc on January 22, 2018. App. A47-
`48.
`Petitioners respectfully submit that the Ninth
`Circuit erred as a matter of law when it held that the
`“instance and expense” test – used to determine
`questions of
`copyright ownership between a
`commissioning party and an artist under the work-
`for-hire doctrine – applied
`to
`this copyright
`ownership dispute between a commissioning party,
`Graham, and his wholly owned
`corporation.
`Petitioners also respectfully submit that the Ninth
`Circuit erred when it refused to hold Petitioners’
`fiduciary, Clainos, accountable
`for the
`loss of
`valuable Estate assets belonging to their father,
`utterly failing to view the evidence at summary
`judgment in a light most favorable to Petitioners as
`the nonmoving parties.
`
`REASONS FOR GRANTING THE PETITION
`
`I. The Ninth Circuit’s Decision Erroneously
`Applied the Instance and Expense Test to a
`Copyright Ownership Dispute Where There
`Is No Dispute on the Issue of Authorship
`
`The Ninth Circuit erred in applying the “instance
`and expense” test for two distinct reasons. First, the
`Ninth Circuit erroneously applies the “instance and
`expense” test to a dispute that is not between an
`artist and a commissioning party. App. A3. Second,
`by applying the wrong legal standard, the Ninth
`Circuit improperly ignores the broader, fact-intensive
`assessment of ownership. Had the correct legal
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`standard been applied, the only possible conclusion is
`that Petitioners raised triable issues of fact on
`whether the Poster Copyrights were Bill Graham’s
`personal property when he died on October 25, 1991.
`The “instance and expense” test exists to resolve
`copyright ownership disputes between an artist and
`a commissioning party. As set forth by the Ninth
`Circuit, “[W] hen one person engages another . . . to
`produce work of an artistic nature,
`.
`.
`. the
`presumption arises that the mutual intent of the
`parties is that the title to the copyright shall be in
`the person at whose instance and expense the work is
`done.” App. A3 (quoting Twentieth Century Fox Film
`Corp. v. Entm’t Distrib., 429 F.3d 869, 877 (9th Cir.
`2005). The test essentially takes a snapshot of the
`moment the commissioning party commissions the
`work, asking (1) at whose instance the work was
`prepared, (2) whether the commissioning party had
`the power to control the creation of the work, and (3)
`at whose expense the work was created. See, e.g.,
`Twentieth Century Fox Film Corp., 429 F.3d at 876-
`882; Siegel v. Time Warner Inc., 496 F.Supp.2d 1111,
`1113-21, 1135-44 (C.D. Cal. 2007). If the copyright
`arises from a “work for hire” agreement, the
`commissioning party acquires a right of ownership
`through authorship. See Severe Records, LLC v.
`Rich, 658 F.3d 571, 581 (6th Cir. 2011).
`The Ninth Circuit has applied the “instance and
`expense” test to determine questions of authorship
`under the work-for-hire doctrine. See, e.g., Twentieth
`Century Fox Film Corp., 429 F.3d at 876-882;
`Dolman v. Agee, 157 F.3d 708, 711-13 (9th Cir. 1998);
`May v. Morganelli-Heumann & Assocs., 618 F.2d
`1363, 1368-69 (9th Cir. 1980); Lin-Brook Builders
`Hardware v. Gertler, 352 F.2d 298, 299-300 (9th Cir.
`1965); Siegel, 496 F.Supp.2d at 1113-21, 1135-44.
`
`- 12 -
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`In this case, the issue is not whether the Poster
`Copyrights were owned by Graham or the poster
`artists. It is undisputed that the posters are a work-
`for-hire, and the District Court so found. App. A26-
`27.
` Rather, the issue is whether the Poster
`Copyrights belonged to Graham personally, or to his
`wholly owned corporation. The instance and expense
`test is inapplicable to this issue, and there are no
`cases applying the instance and expenses test in
`analogous circumstances. The appropriate analysis
`is a broader assessment of ownership, taking into
`account factors beyond the narrow snapshot of the
`instance and expense test. By improperly applying
`the instance and expense test, rather than a broader
`test of ownership, the Ninth Circuit ignored critical
`record evidence, including, for example, (1) that the
`Poster Copyrights were registered in Bill Graham’s
`name (as opposed to the name of one of his corporate
`entities). (App. A55, A81), (2) that Bill Graham
`himself consistently took the position that he owned
`the Poster Copyrights personally (App. A54-A57,
`A80-A81), and (3) Graham personally received
`settlement checks when those copyrights were
`infringed (App. A56).
`David Nimmer, the renowned authority on
`copyright law, provided an expert report in the
`record before the District Court, which set forth the
`proper ownership analysis for the Poster Copyrights.
`App. A103, A143-A151. First, he determined that
`Bill Graham, as the commissioning party and by
`reason of the work-for-hire doctrine, qualified as the
`“author” of the Poster Copyrights. App. A94, A113-
`A118. Clainos agrees, as does the District Court.
`App. A24-A29. Accordingly, it is undisputed that
`Graham met the “instance and expense” test
`sufficient to demonstrate that he, not the poster
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`artists, owned each of the Poster Copyrights in
`dispute.
`However, the Ninth Circuit, as incorrectly urged
`by Clainos, failed to continue the ownership analysis,
`and therefore failed to properly credit the substantial
`evidence demonstrating that Graham personally
`owned the Poster Copyrights. App. A3; see App. A24-
`A29. Nimmer completed the analysis and concluded
`that Graham “personally owned the copyrights” as
`supported by the facts mirrored in Petitioners’
`opposition to the defendants’ motion for summary
`judgment. App. A94; see App. A112-A131.
`When ownership is assessed under the correct
`legal standard, the evidence that Bill Graham
`personally owned the Poster Copyrights, including
`Nimmer’s assessment, is compelling and certainly
`enough to create a triable issue of fact.
`First, eight of the disputed BG-Series posters
`entirely pre-date the formation of any of Graham’s
`businesses. App. A78. The Ninth Circuit decision
`concludes that even as to these eight posters,
`“plaintiffs have not raised a triable issue of fact as to
`whether the posters were created at Graham’s
`expense.” App. A3. In other words, the Ninth
`Circuit held that as to who owned the copyrights in
`these eight posters between Bill Graham personally
`and his corporation, which had not yet been formed,
`the purported lack of evidence that Bill Graham
`could meet the “expense” prong of the instance and
`expense test meant that they must belong to his
`future corporation. By applying the wrong test, the
`Ninth Circuit reached an illogical result. Indeed,
`these eight Poster Copyrights had to belong to
`Graham personally because there was no entity in
`existence to potentially own those posters. Id.
`
`- 14 -
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`On the other side of the question, the Graham
`corporate entity(s) had no legal or factual basis to
`assert a claim of ownership of the Poster Copyrights.
`The decision in Marya v. Warner/Chappell Music,
`Inc., 131 F.Supp.3d 975, 979 (C.D. Cal. 2015), a case
`involving a dispute over copyright ownership interest
`in the lyrics to the song “Happy Birthday,” illustrates
`that the unsubstantiated contention that a transfer
`of copyrighted material occurred is not sufficient to
`establish ownership. Id. at 1002 (explaining that
`“Defendants have no evidence a transfer occurred,
`whether by oral statement, by writing, or by conduct”
`and that they therefore could not assert ownership
`rights over the lyrics to the song). Similarly, here,
`Clainos has produced no evidence whatsoever that
`Graham ever transferred his rights to the Poster
`Copyrights to any of his companies, thus showing
`that ownership always remained with Graham
`personally.
`the Poster
`that
`is undisputed
`it
`Second,
`Copyrights were registered in Graham’s personal
`name – rather than one of his businesses – at the
`same time that other copyrights were being
`simultaneously registered
`in the name of the
`Fillmore Corporation (one of his companies). App.
`A99. This is important as it shows his specific intent
`with respect to these valuable assets. It shows that
`the registration in Graham’s personal name was
`done deliberately and that the Poster Copyrights
`were intended to be Graham’s personal property. See
`id. The mere fact that the Poster Copyrights were
`used for his concert promotion business, or that the
`copyright registration was paid for by the company,
`does not alter the fundamental nature of the Poster
`Copyrights as a personal property interest – as
`explained by Nimmer. App. A94, A112-A131.
`
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`Third, in finding that Clainos as the executor
`exercised his independent judgment on the issue of
`ownership, the Ninth Circuit also failed to consider
`what Clainos and his counsel unquestionably knew –
`that title to the Poster Copyrights was held by
`Graham as an individual (and not in his corporate
`status). Clainos knew that Graham, mere months
`before his death, intended to donate a large number
`of posters, and possibly
`their
`corresponding
`copyrights, to the Oakland Museum in order to
`obtain a personal tax deduction. App. A63. In fact,
`Graham's attorney, Richard Greene, who was
`working with Clainos on this issue, just days before
`Graham’s death, opined in a memorandum that the
`Poster Copyrights belonged to Graham personally.
`Id. Years after Graham died and a few weeks after
`the final probate court distribution order, Greene
`told Clainos that because title to the Poster
`Copyrights was held by Graham personally at the
`time of death, they would need to obtain an
`assignment from the Estate of Bill Graham to the
`company. App. A69-A70. This led to the Assignment
`– prepared and executed on August 30, 1995, and
`backdated to August 1, 1995 in order to appear as a
`legitimate and lawful act by the executor of the
`estate prior to the final probate court order dated
`August 8, 19
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