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Peterson v. Highland Music, Inc.
United States Court of Appeals for the Ninth Circuit
140 F.3d 1313 (1998)
Facts
The music group the Kingsmen (plaintiffs) sold the rights to their master recordings—including the popular song “Louie, Louie”—to Scepter Records in exchange for royalties. Ownership was then transferred to Gusto Records (Gusto) and GML (defendants). Highland Music, Inc. (Highland) (defendant) negotiated and managed Gusto and GML’s licensing of “Louie, Louie.” The Kingsmen never received any of the royalties from “Louie, Louie.” The Kingsmen brought suit for recission of the contract. The district court granted the recission, which restored ownership of the masters to the Kingsmen. Later, Gusto and GML refused to turn over the masters in a timely fashion, and Highland continued to negotiate licenses. Gusto, GML, and Highland were found in contempt of court for violating the order. Gusto, GML, and Highland appealed, arguing that California’s four-year statute of limitations for recission of a contract required the Kingsmen to commence their suit within four years from the first occasion that the Kingsmen became aware of the breach. The United States Court of Appeals for the Ninth Circuit granted certiorari.
Rule of Law
Issue
Holding and Reasoning (Fletcher, J.)
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