The opinion of the court was delivered by: RICHARD B. SURRICK, District Judge
Presently before the Court is Plaintiffs' Complaint and Application
for Temporary Restraining Order and Injunctive Relief Pursuant to
Fed.R.Civ.P. 65. (Doc. No. 1.) On April 2, 2004, Plaintiffs filed the
complaint and requested that we temporarily restrain Defendants from
releasing a music record entitled "Together We Are One" (hereinafter,
"Together"). On April 6, 2004, with the parties' consent, we entered an
order temporarily restraining Defendants from distributing any additional
copies of "Together"*fn1 and scheduling a hearing for April 7, 2004, to
hear evidence on Plaintiffs' request for a preliminary injunction. Upon
consideration of the evidence presented at that hearing, arguments of
counsel, and all papers filed with the Court, we will deny Plaintiffs'
request for a preliminary injunction. We will also dissolve the temporary
restraining order we previously issued in this case. I. BACKGROUND
Plaintiffs Edward Levert and Walter Williams are singers and performers
who form the musical group known as The O'Jays.*fn2 The O'Jays have been
recording music for more than forty years and have achieved great
success. Notably, The O'Jays have recorded more than fifty records,
including nine "platinum records" and ten "gold records".*fn3
The O'Jays signed several recording contracts with Defendant Assorted
Music Inc., d/b/a Philadelphia International Records ("PIR"), beginning
in the early-1970's. The O'Jays recorded music pursuant to recording
contracts with PIR until the mid-1980's. At issue in this case is the
recording contract The O'Jays signed with PIR in 1979 (the "Contract").
The songs on Together were recorded by The O'Jays during the term of the
Contract.*fn4 Plaintiffs claim that Defendants breached the Contract and
therefore seek to enjoin the release of Together. They claim that the
songs comprising Together are of inferior quality and that their release
will irreparably tarnish The O'Jays' reputation in the music industry.
Plaintiffs also claim that Defendants are liable for fraud, unjust
enrichment, and breach of fiduciary duty. Defendants argue that we should
deny Plaintiffs' request for a preliminary injunction because Defendants
did not breach the Contract and because pursuant to the Contract
Defendants acquired the right to release the songs on Together.
Defendants also deny that they are liable for fraud, unjust enrichment,
or breach of fiduciary duty. The songs comprising Together were recorded during the term of the
Contract but were not previously released. Williams testified that when
the O'Jays were recording songs for PIR, The O'Jays would record
approximately fifteen songs for each proposed record. Seven or eight of
those songs would then be selected for release on the record. The
remaining songs were not released but the recordings of those songs were
retained by PIR (the "Unreleased Songs"). During the time that The O'Jays
recorded songs for PIR, The O'Jays recorded many Unreleased Songs.*fn5
Plaintiffs claim that in 1999 they asked Defendants if they would help
Plaintiffs secure a contract to produce and distribute a record that
included only songs owned by The O'Jays. Defendants offered instead to
produce a record comprised in part of songs owned by the O'Jays, and in
part of Unreleased Songs, which were owned by Defendants. Plaintiffs
agreed to this proposal. Levert even recorded part of one song to support
this proposal. However, Defendants were unable to secure an agreement
with a distributor to distribute the proposed record. Plaintiffs then
entered into an agreement with another record company and were able to
produce and distribute a record comprised solely of songs owned by The
Sometime later, Defendants decided to produce and distribute a record
that included only the Unreleased Songs. The parties presented
conflicting evidence as to when Plaintiffs learned of Defendants'
intentions. However, it is clear that as early as August, 2003, there
were negotiations between Plaintiffs and Defendants over the Defendants'
proposal to release a record comprised of the Unreleased Songs. In
October, 2003, Plaintiffs learned that Defendants were actually pursuing this proposal. Sometime thereafter, Plaintiffs
learned that Defendants planned to release Together on April 6, 2004. On
April 2, 2004, Plaintiffs filed this action to enjoin the release of
1. Legal Standard Applied to a Request for a Preliminary Injunction
"An injunction is an extraordinary remedy, which should be granted only
in limited circumstances." Novartis Consumer Health, Inc. v. Johnson &
Johnson Consumer Pharms. Co., 290 F.3d 578, 586 (3d Cir. 2002)
(quotations omitted). Before issuing an injunction, the moving party must
show that the following four factors favor issuing the injunction: "(1)
the likelihood that the moving party will succeed on the merits; (2) the
extent to which the moving party will suffer irreparable harm without
injunctive relief; (3) the extent to which the nonmoving party will
suffer irreparable harm if the injunction is issued; and (4) the public
interest." We will only issue an injunction if all four factors favor
relief. AT & T V. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427
(3d Cir. 1994).
2. Likelihood of Success on the Merits
The Contract is to be construed consistent with Pennsylvania law.
(Compl. Ex. A ¶ 23.) Under Pennsylvania law, the interpretation of a
contract is an issue of law. Banks Eng'g Co., Inc. v. Polons,
697 A.2d 1020, 1022 (Pa. Super. 1997). "[T]he goal of contract
interpretation is to discover the parties' objective mutual intent."
Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 613 (3d
Cir. 1995). Pennsylvania law "is firmly settled that the intent of the
parties to a written contract is contained in the writing itself." Id.
(quotations omitted). Where "the parties have reduced their agreement to writing, Pennsylvania
courts presume that the parties' mutual intent can be ascertained by
examining the writing." Id.
As a preliminary matter, we must determine if the contract is clear or
ambiguous. Id. A contract is clear and unambiguous if it is subject to
only one reasonable interpretation. Sanford Inv. Co. v. Ahlstrom Mach.
Holdings, Inc., 198 F.3d 415, 420-21 (3d Cir. 1999). However, whether
contractual language is "clear and unambiguous may not be apparent
without cognizance of the context in which the agreement arose." Steuart
v. McChesney, 444 A.2d 659, 662 (Pa. 1982). Thus, in deciding whether
contractual language is ambiguous, Pennsylvania law permits courts to
consider, among other things, "the words of the contract, the alternative
meanings suggested by counsel, and the nature of the objective evidence
to be offered in support of that meaning." Sanford, 198 F.3d at 421. In
this case, the parties did not present any extrinsic evidence to show
that the Contract contained an ambiguity. Accordingly, we will look only
to the Contract in determining the parties' mutual intent.
In their complaint, Plaintiffs allege that Defendants breached the
Contract in six ways. They claim that Defendants breached: (1) the
Contract in that Defendants plan to release Together without Plaintiffs'
authorization; (2) paragraph 29(a) of the Contract which requires
Defendants to release each "Album" recorded under the Contract within 120
days of delivery of such Album to Defendants; (3) paragraph 32(f) which
contemplates that the Unreleased Songs would be released in the form of
45 r.p.m. singles; (4) a provision that requires Defendants to submit to
The O'Jays an estimated budget of production and other costs prior to the
release of records; (5) paragraph 30(b) which requires Defendants to
obtain The O'Jays' approval for album covers and any use of the O'Jays'
likeness; and (6) ...