Don't play it again, Rich; Amway sued by music industry
Orlando Business Journal - by Alex Finkelstein Staff Writer
Sixteen national music companies have filed a $2.5 million federal court suit against Amway Corp. and 23 "high-ranking" distributors for allegedly crafting underground motivational videos at an unidentified Lake Mary studio to avoid paying royalties and licensing fees.
The Oct. 15 suit alleges Richard M. "Rich" DeVos, a co-founder of Amway and owner of the Orlando Magic, "has specifically commented on the profits reaped from distributors' sales of motivational materials to their downlines (new sales recruits) and the need to `clean up' this aspect of the Amway business."
"At the same time," the suit alleges, "DeVos has acknowledged his reluctance to go after the highly profitable distributors responsible for generating and selling such materials because of their importance within the Amway organization."
DeVos is not a defendant.
"Amway Corp. has expected for some time the filing of this action by the plaintiff music companies as a companion case to a similar lawsuit presently pending in the same court," says Beth Doman, a public relations specialist in Amway's Ada, Mich., headquarters.
"It is likely both cases will be consolidated by the court. As with the former lawsuit, Amway will continue to vigorously defend the charges of the record companies."
The complaint, alleging violations of the federal Copyright Act, is the second filed this year against Amway in Orlando's U.S. District Court.
The Recording Industry Association of America and 11 major studios sued Amway and 16 distributors Feb. 20 for allegedly using songs from 42 popular artists -- including Tina Turner and The Beatles -- in 300,000 promotional videos over the past two years.
Amway denies the charges in that pending suit. The plaintiffs are asking for a permanent injunction and statutory damages that could reach $30 million.
DeVos and Jay Van Andel founded Amway in 1959.
Among the 24 defendants in the latest suit are Tim Foley, Connie Foley and Foley & Co. of Tavares. All are also defendants in the earlier suit.
Foley, a former Miami Dolphins defensive back from 1970-80, is described in the suit as "a high-ranking" Amway distributor "who participated in most of the infringing activity."
Foley also is a member of the Amway Distributors Association Council, comprised of 30 distributors "responsible for establishing and enforcing rules of conduct for Amway distributors."
The Foleys could not be reached, but their daughter Katy Foley, who works at Foley International, also in Tavares, says "there will be no response" from either her parents or their company to the allegations in the suit.
Amway "has a policy pursuant to which all sales and solicitation materials are to be submitted to Amway corporate headquarters for approval before they may be used," according to the suit.
Amway "knowingly contributed to the infringement of the copyrights by permitting its name and/or good will to be used in connection with and to further the production, promotion and sale" of various videos produced by the "high-ranking" distributors for sale largely to entry-level distributors, the suit alleges.
Amway distributors "rise through the ranks to become what are known as `Pearl,' then `Ruby,' `Emerald' and `Diamond' distributors," the highest-ranking distributor, according to the suit.
In the new suit, the plaintiffs are asking Judge G. Kendall Sharp or a jury trial for either actual damages and profits derived "from the infringing activities," or statutory damages of $100,000 on each of the 25 counts.
The suit also asks for a permanent injunction against the defendants; the destruction of all videotapes and related materials; attorneys' fees and court costs.
The plaintiffs include MCA Music Publishing, a division of MCA Inc.; Music Corp. of America Inc.; Out of Pocket Productions Ltd.; Edward T. Riley dba Donril Music; Zomba Enterprises Inc.; Aerostation Corp.; Aqua Music Ltd.; BMG Songs Inc.; Wayne A. Brathwaite dba Wayne Brathwaite Music; Capano Music, a division of Britone Inc.; Careers-BMG Music Publishing International Inc., a division of Careers-BMG Music Publishing Inc.; Duchess Music Corp.; Barry J. Eastmond dba Barry J. Eastmond Music Co.; Horipro Entertainment Group Inc.; Robert K. McFerrin dba Probnoblem Music; and Stevland Morris dba Stevland Morris Music.
Besides Amway and the Foleys, the defendants are Steve Bumstead; Candi Bumstead; estate of Luis Costa by and through Chris Costa as personal representative; Chris Costa; Cliff Dobbrastine; Cheryl Dobbrastine; Hal Gooch; Susan Gooch; Chris Gooch; Gooch Enterprises Inc.; Gooch Support System Inc.; Dave Lewis; Marge Lewis; Pedro Lizardi individually; Pedro Lizardi dba Pedro Lizardi Productions; Patsy Lizardi; Carlos Marin; Carmen Marin; and Jim Richardson and Trish Richardson.
The plaintiffs' lawyers are Jeffrey D. Keiner and Charles W. Sell of Gray, Harris & Robinson; Carey R. Ramos, Steven C. Herzog and Jacqueline C. Charlesworth of Paul, Weiss, Rifkind, Wharton & Garrison of New York; and Charles J. Sanders of The Harry Fox Agency in New York.
Latest News |
Most Viewed Stories |
Most Emailed Stories |
