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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x 04 cv. 5395 DAVID ELLEFSON, Plaintiff, vs.MEGADETH, MAJESTIC IV, INC., MEGAMERCH, INC., DAVID MUSTAINE and “JOHN DOES” Nos. 1–5, inclusive, Defendants.
ECF CASE COMPLAINT - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - x Plaintiff David Ellefson (“Ellefson”) by his attorneys, Bienstock & Michael, P.C., Randall S. D. Jacobs, Esq., of Counsel, as and for his complaint against defendants Megadeth, Inc. (the “Corporation”), a California corporation, Majestic IV, Inc. (“Majestic”), an Arizona corporation, Megamerch, Inc. (“Megamerch”) a California corporation and David Mustaine (“Mustaine”) (collectively, the “Defendants”), alleges as follows:
Nature of the Claims 1. This Complaint is brought by Plaintiff Ellefson, a minority shareholder of the Corporation, a professional musician and a performing member of the recording group performing as “Megadeth” (the “Group”), one of the two most successful “heavy metal” recording groups. Plaintiff seeks money damages, a declaratory judgment, statutory and equitable relief against the Defendants, as follows: money damages against Defendants, as set forth in Case 1:04-cv-05395-NRB Document 1 Filed 07/12/04 Page 1 of 38
detail herein, for (1) fraudulent registration of the Group’s tradename “Megadeth” (the “Tradename”), (2) fraudulent registration of Plaintiff’s music copyrights, (3) libel per se, (4) defamation, (5) intentional infliction of emotional distress, (6) breach of fiduciary obligations and self-dealing, (7) fraud and conversion, (8) negligence and mismanagement, (9) interference with economic advantage, (10) statutory access to the Corporation’s books and records, and equitable relief providing for (11) an accounting and a constructive trust, (12) temporary and permanent injunctive relief and (13) a declaratory judgment.
Jurisdiction and Venue 2. The Court has jurisdiction of this action under 28 U.S.C. §§ 1331 (federal question), 17 U.S.C. §§ 101 et seq. (Copyright) and 15 U.S.C. 1120 (trademark). 3. This Court has personal jurisdiction over the Defendants under the New York State Long Arm Statute, Section 302 of the Civil Practice Law & Rules, in that the Defendants regularly do business in the State of New York pursuant to their recording, performance and music publishing contracts entered into and performed in the State of New York as well through international and national merchandising of products bearing the Group’s tradename through its interactive internet website. 4. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and 28 U.S.C. §1400(a) as this is a judicial district in which a substantial part of the events giving rise to the claims occurred. 5. Pursuant to 28 U.S.C. §1367 this Court has supplemental jurisdiction over claims against the Defendants arising under state law out of the same series of events. Case 1:04-cv-05395-NRB Document 1 Filed 07/12/04 Page 2 of 38
The Parties 6. The Plaintiff Ellefson (together with Defendant Mustaine) is one of the two cofounders of the Group which initially operated in the mid 1980's as an equal (“50/50") partnership (the “Partnership”). Ellefson is also the Group’s bass guitarist, backing vocalist and co-composer of many of its musical compositions including, but not limited to, such hits as “Foreclosure on a Dream,” “99 Ways to Die” and “In My Darkest Hour” and others set forth on Exhibit A attached hereto. Ellefson and Defendant Mustaine are the only continuing original members of the Group, which has performed throughout much of the United States, as well as in Canada, Japan, Brazil, Argentina, Mexico, the United Kingdom, Germany and many other countries throughout the world. 7. On information and belief, defendant Mustaine is the only other cofounder of the Group and the Partnership. He was also the Group’s lead singer, guitarist and co-composer of many musical compositions. 8. On information and belief, defendant Megadeth is a California corporation incorporated in or about 1990. Defendant Mustaine unilaterally allotted to himself 80% of its common shares and, upon information and belief, the title and control of the Corporation as its Chief Executive Officer and Chairman of the Board of Directors. 9. The Defendant Corporation also operates an interactive internet web site addressed as www.megadeth,com from which it sells merchandise over the internet and its records and provides information about the Group to its fan base worldwide. Upon information and belief, the Corporation also has other merchandising agreements with third parties to distribute and sell its merchandise. Case 1:04-cv-05395-NRB Document 1 Filed 07/12/04 Page 3 of 38