Lil' Joe Records, Inc. v. Christopher Won, Jr., et al

FOR PUBLICATION
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 24-13978
____________________
LIL’ JOE RECORDS, INC.,
a Florida corporation,
Plaintiff-Counter Defendant-Appellant,
versus
MARK ROSS,
Defendant,
CHRISTOPHER WONG WON, JR.,
RODERICK WONG WON,
LETERIUS RAY,
ANISSA WONG WON,
LUTHER CAMPBELL, et al.,
Defendants-Counter Claimants-Appellees.
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2 Opinion of the Court 24-13978
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:21-cv-23727-DPG
____________________
Before J ILL PRYOR , L UCK , and BRASHER , Circuit Judges.
B RASHER , Circuit Judge:
This appeal presents a question of first impression at the in-
tersection of copyright and bankruptcy. The Copyright Act gives
artists a “termination interest”—the right, after a certain amount
of time, to reclaim the copyright in their work despite having
granted it to a third party. An artist’s termination interests are per-
sonal and inalienable, although they can be passed to an artist’s
heirs. Invoking this part of the Copyright Act, Mark Ross and two
other members (or their successors in interest) of the rap group 2
Live Crew purported to terminate grants of copyright in five of the
group’s albums. Because the rap group had four members, these
three members could decide as a majority to reclaim the copyrights
for the group.
Here’s where bankruptcy law comes in. About twenty years
before Ross signed the notice to terminate, he filed a Chapter 7
bankruptcy. When someone files for bankruptcy, the Bankruptcy
Code says that all that person’s interests in property enter the bank-
ruptcy estate, “notwithstanding any provision in . . . applicable
nonbankruptcy law” that “restricts or conditions transfer of such
interest[s] by the debtor.” 11 U.S.C. § 541(c)(1). Ross’s termination
interests were never mentioned or addressed in the bankruptcy
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24-13978 Opinion of the Court 3
proceedings. And the Bankruptcy Code says that any property in a
Chapter 7 estate that isn’t addressed by the bankruptcy court re-
mains property of the estate until it is. Id. § 554(c), (d).
Lil’ Joe Records, Inc., which eventually acquired the copy-
rights, argues that 2 Live Crew did not terminate their copyright
grants. Among other things, it says that Ross’s termination inter-
ests (to the extent he had any at all) were held by his bankruptcy
estate at the time he attempted to exercise them. We agree. De-
spite the Copyright Act’s alienability restriction, we conclude that
Ross’s interests became part of his bankruptcy estate and were held
as property of that estate at the time he purported to exercise them.
Because a majority of 2 Live Crew did not exercise their termina-
tion interests, Luke Records still owns the copyrights to these five
albums. We reverse the district court’s contrary conclusion and re-
mand for proceedings consistent with this opinion.
I.
We start by summarizing the statutory framework because
it provides context for this dispute. We then turn to the facts and
procedural history of this appeal.
A.
This case is about section 203 of the Copyright Act and sec-
tions 541 and 554 of the Bankruptcy Code.
Section 203 of the Copyright Act allows the authors of cop-
yrighted works (or their successors in interest) to terminate grants
of copyrights. 17 U.S.C. § 203(a). The author (or his successors) can
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4 Opinion of the Court 24-13978
exercise his termination interests only by serving a signed, written
notice on a copyright grantee or the grantee’s successor in title. Id.
§ 203(a)(4). The grantee must receive the notice two to ten years
before the effective date of the termination. Id. And that effective
date must fall during a five-year window that begins no earlier than
thirty-five years after a grant of the copyright. Id. § 203(a)(3).
There are two aspects of section 203 that are important in
this case. First, if a work has multiple authors, section 203 requires
a majority of those authors (or their successors in interest) to sign
a notice to cause a termination. Id. § 203(a)(1), (4). And the termi-
nation will not take effect unless the notice is recorded in the Cop-
yright Office. Id. § 203(a)(4)(A). Second, section 203 makes an au-
thor’s termination interests inalienable by agreement. See id.
§ 203(a)(5) (explaining that termination can be effected “notwith-
standing any agreement to the contrary”). And it restricts the in-
heritors of the interests to close family members or the author’s
executor, administrator, personal representative, or trustee. Id.
§ 203(a)(2)(A)–(D).
As for section 541 of the Bankruptcy Code, it defines what is
the property of the bankruptcy estate. Section 541(a)(1) defines the
property of a debtor’s bankruptcy estate to include “all legal or eq-
uitable interests of the debtor in property” as of the creation of the
estate. 11 U.S.C. § 541(a)(1). Although it contains exceptions, see id.
§ 541(a)(1), (b), (c)(2), none are relevant here. And it applies “not-
withstanding any provision in . . . applicable nonbankruptcy law”
that “restricts or conditions transfer of such interest[s] by the
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24-13978 Opinion of the Court 5
debtor.” Id. § 541(c)(1). Property that is scheduled but not adminis-
tered defaults back to the debtor when his Chapter 7 case closes.
Id. § 554(c). But property that is not scheduled, administered, or
formally abandoned remains property of the estate “[u]nless the
court orders otherwise.” See id. § 554(c), (d).
B.
With this framework in mind, we turn to the facts. The rap
group 2 Live Crew recorded five albums between 1986 and 1989. 2
Live Crew had four members: Luther Campbell, Mark Ross, Chris-
topher Wong Won, and David Hobbs. The group entered into a
written agreement with Luke Records, Inc.,1 a recording company
owned by Campbell, that gave Luke Records the sound recording
copyrights in all master recordings that the group made during the
agreement’s term. It covered an initial term from January 1 to De-
cember 31, 1987, but it gave Luke Records the option to extend the
agreement through 1990.
In 1995, more than four years after the last possible effective
date of the agreement, Luke Records and Campbell entered jointly
administered Chapter 11 bankruptcy proceedings. As part of the
bankruptcy, Luke Records sold all sound recording copyrights that
it received under the agreement to Lil’ Joe Records and Joseph
Weinberger.
1 Luke Records, Inc. was named Skyywalker Records, Inc. at the time of the
agreement. But we describe all iterations of the record company as Luke Rec-
ords to avoid confusion.
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6 Opinion of the Court 24-13978
In 2000, over nine years after the last possible effective date
of the agreement but more than a decade before 2 Live Crew could
terminate any grants that the agreement enacted, Ross filed for
Chapter 7 bankruptcy. The parties concede that no one scheduled,
administered, or mentioned Ross’s termination interests during his
bankruptcy.
In 2020, over twenty-nine years after the last possible effec-
tive date of the agreement and within the window for noticing ter-
minations of its provisions, Campbell, Ross, and Wong Won’s
heirs served a termination notice on Weinberger, Lil’ Joe, and re-
lated companies. That notice purported to terminate 2 Live Crew’s
grants to Luke Records of copyrights in the five albums that the
group recorded between 1986 and 1989. Campbell, Ross, and
Wong Won’s heirs recorded the notice with the Copyright Office.
C.
We now turn to the procedural history. After Lil’ Joe re-
ceived the termination notice, it sued Campbell, Ross, and Wong
Won’s heirs. Lil’ Joe sought a declaratory judgment that they could
not or did not terminate the grants of the copyrights listed in the
termination notice. As relevant here, Lil’ Joe argued that Ross
transferred his termination interests through bankruptcy, render-
ing the termination notice ineffective because too few interest
owners signed it.
Campbell, Ross, and Wong Won’s heirs counterclaimed for
a declaration that Ross could and did terminate the relevant trans-
fers. The parties then cross-moved for summary judgment about
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24-13978 Opinion of the Court 7
whether Ross lost his termination interests to bankruptcy and the
notice terminated the copyrights. The district court interpreted 17
U.S.C. § 203 and 11 U.S.C. § 541(a)(1) to exclude Ross’s termination
interests from his bankruptcy estate, but it denied on other grounds
both parties’ motions for summary judgment about the effective-
ness of the notice. The case proceeded to trial. Before trial, Lil’ Joe
moved for the district court to reconsider its summary judgment
ruling, but the district court denied its motion.
After trial, the district court concluded that the termination
notice was valid based on the jury’s factual findings. Lil’ Joe then
appealed the district court’s final judgment, its denial of Lil’ Joe’s
motion for summary judgment, and its denial of Lil’ Joe’s motion
for reconsideration.
II.
We review de novo the district court’s interpretations of 17
U.S.C. § 203 and 11 U.S.C. § 541(a). See Wilson v. Hearos, LLC, 128
F.4th 1254, 1259 (11th Cir. 2025) (citing Lindley v. FDIC, 733 F.3d
1043, 1050 (11th Cir. 2013)).
III.
For 2 Live Crew’s termination notice to be valid, Ross had
to properly exercise his termination interests. See 17 U.S.C.
§ 203(a)(1). Lil’ Joe argues that Ross could not exercise his interests
when he signed the notice because he had previously filed for bank-
ruptcy and those interests were still held in his bankruptcy estate.
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8 Opinion of the Court 24-13978
2 Live Crew2 argues that Ross’s interests were never part of the
estate but, even if they were, they were released by the time Ross
signed the notice.
We agree with Lil’ Joe. We believe Ross’s bankruptcy estate
gained control of his termination interests because they are inter-
ests in property. And, because Ross’s bankruptcy did not dispose of
those interests, we believe his bankruptcy estate still held them at
the time Ross tried to exercise them. Thus, we conclude that the
termination notice was ineffective.
A.
We start with whether Ross’s termination interests were
part of his bankruptcy estate. The Bankruptcy Code, 11 U.S.C.
§ 541(a)(1), swept Ross’s termination interests into his bankruptcy
estate before he invoked them because he held them as “inter-
ests . . . in property” when he filed for bankruptcy. Section
541(a)(1) sweeps into the debtor’s bankruptcy estate (1) “all legal or
equitable interests of the debtor in property” that (2) existed “as of
the commencement of the [bankruptcy] case.” Id. It contains lim-
ited exceptions, see id. § 541(a)(1), (b), (c)(2), but none are relevant
here.
Ross’s termination interests meet each of the section’s re-
quirements. A termination interest is an “interest[] . . . in property”
2 The appellees are one of 2 Live Crew’s four original members and the suc-
cessors in interest of two other members. But, for ease of reference, we’ll refer
to the appellees as 2 Live Crew.
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24-13978 Opinion of the Court 9
under section 541(a)(1) because it is a contingent right to regain in-
tellectual property. A property interest is “all or part of a legal or
equitable claim to or right in property.” Interest, B LACK ’S LAW
DICTIONARY (12th ed. 2024). Copyrights are intellectual property.
Dowling v. United States, 473 U.S. 207, 216 (1985); see also 11 U.S.C.
§ 101(35A) (defining “intellectual property” to include “work[s] of
authorship protected” by the Copyright Act “to the extent pro-
tected by applicable nonbankruptcy law”). And termination inter-
ests are contingent rights to regain that intellectual property years
after transferring it away. See 17 U.S.C. § 203(a)(3), (b). Because ter-
mination interests are contingent legal “right[s] in property,” they
are “interests . . . in property” under section 541(a)(1).
Moreover, Ross’s termination interests—if they existed at
all—existed “as of the commencement of” his bankruptcy case. 11
U.S.C. § 541(a)(1). Makers of works for hire do not ordinarily gain
copyrights in those works, 17 U.S.C. § 201(a), (b), or termination
interests in those copyrights, id. § 203(a). But authors of copy-
righted works other than works for hire gain termination interests
when they transfer copyrights in those works. See id. Assuming the
relevant records were not made for hire, Ross acquired and trans-
ferred copyrights in them ten or more years before he filed for
bankruptcy. So his interests existed as of the commencement of his
bankruptcy case if they existed at all.
2 Live Crew’s counterarguments are not convincing. 2 Live
Crew asserts that termination interests cannot enter a bankruptcy
estate because 17 U.S.C. § 203 makes them inalienable from and
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10 Opinion of the Court 24-13978
personal to an author or his statutory heirs. But 2 Live Crew looks
to the wrong law to determine what property enters a bankruptcy
estate. Although the “underlying substantive law”—ordinarily
state law but here section 203—determines the nature and extent
of a debtor’s interest in property, see Raleigh v. Ill. Dep’t of Revenue,
530 U.S. 15, 20 (2000), “federal bankruptcy law” determines “to
what extent that interest is property of the estate,” In re Builders
Transp., Inc., 471 F.3d 1178, 1185 (11th Cir. 2006) (quoting In re
Thomas, 883 F.2d 991, 995 (11th Cir. 1989)). And federal bankruptcy
law sweeps termination interests into a debtor’s estate under sec-
tion 541 “notwithstanding any provision in . . . applicable non-
bankruptcy law” that “restricts or conditions transfer of such inter-
est[s] by the debtor.” 11 U.S.C. § 541(c)(1). So Ross’s termination
interests entered his bankruptcy estate under section 541 regardless
of whether section 203 made them personal and inalienable.
We reached a similar conclusion in In re Smith, 85 F.3d 1555
(11th Cir. 1996). That case asked whether the statutory right of re-
demption under Alabama law could become part of a debtor’s
bankruptcy estate under section 541 of the Bankruptcy Code. Id.at
1558. Like section 203 termination interests, the right of redemp-
tion was protected by substantive nonbankruptcy law from “alien-
ation except in the cases provided for” by that law. A LA . C ODE § 6-
5-250 (1975). And nonbankruptcy law also defined the right of re-
demption as a “mere personal privilege[] and not property or [a]
property right[].” Id. Regardless, we held that the right of redemp-
tion became property of the debtor’s bankruptcy estate under sec-
tion 541 because it fit within that section’s “broad definition” of
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24-13978 Opinion of the Court 11
property of the estate. See In re Smith, 85 F.3d at 1558. Although
substantive nonbankruptcy law defined the scope of the right, fed-
eral bankruptcy law determined whether it entered the bankruptcy
estate. See id. at 1558, 1561. So too here.
Even if section 203 conflicted with section 541 about what
property interests can enter a debtor’s bankruptcy estate, section
541 would supersede section 203 to the extent of that conflict.
When a specific law conflicts with a general law, the specific law is
ordinarily “treated as an exception to the general rule.” Savage
Servs. Corp. v. United States, 25 F.4th 925, 946 (11th Cir. 2022) (quot-
ing A NTONIN S CALIA & BRYAN A. G ARNER , R EADING LAW: THE
INTERPRETATION OF LEGAL TEXTS 183 (2012)). If section 203 created
a general rule that living authors could not transfer their termina-
tion interests anywhere, including to their bankruptcy estates, sec-
tion 541 would create a specific exception to that rule that permits
those interests to enter bankruptcy estates. See 11 U.S.C.
§ 541(a)(1), (c)(1).
2 Live Crew also argues that Ross’s termination interests did
not enter his bankruptcy estate because they were contingent
rights. Ross’s rights to regain his copyrights were contingent on (1)
Ross surviving until he could use his termination interests and (2)
Ross and his co-grantors deciding to use those interests. See 17
U.S.C. § 203(a)(1), (3)–(4). But “an interest is not outside” the reach
of the Bankruptcy Act because it is “contingent or because enjoy-
ment must be postponed.” In re Alvarez, 224 F.3d 1273, 1279 (11th
Cir. 2000) (quoting Segal v. Rochelle, 382 U.S. 375, 379 (1966)); see
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12 Opinion of the Court 24-13978
also In re Nordlicht, 115 F.4th 90, 105 (2d Cir. 2024) (“[E]very con-
ceivable interest of the debtor, . . . contingent, speculative, and de-
rivative, is within the reach of § 541 . . . .” (alteration in original)
(quoting Chartschlaa v. Nationwide Mut. Ins. Co., 538 F.3d 116, 122
(2d Cir. 2008))); In re Majestic Star Casino, LLC, 716 F.3d 736, 750 (3d
Cir. 2013) (explaining that an interest is not outside the reach of the
Bankruptcy Act because it is “contingent or because enjoyment
must be postponed” (quoting In re Fruehauf Trailer Corp., 444 F.3d
203, 211 (3d Cir. 2006))); In re Burgess, 438 F.3d 493, 499 (5th Cir.
2006) (“[A] debtor’s interest in property may be contingent—or en-
joyment of the interest may be postponed . . . .”); Ryan v. Branko
Prpa MD, LLC, 55 F.4th 1108, 1117 (7th Cir. 2022) (explaining that
section “541’s definition of the ‘property of the estate’ is to be con-
strued broadly and includes contingent interests” (citing Chi. Bd. of
Trade v. Johnson, 264 U.S. 1, 12 (1924))); In re Simply Essentials, LLC,
78 F.4th 1006, 1009 (8th Cir. 2023) (“The property of the estate in-
cludes . . . contingent interests held by the debtor prior to the filing
of bankruptcy.” (citing Segal, 382 U.S. at 379)). But cf. In re Bracewell,
454 F.3d 1234, 1242 (11th Cir. 2006) (explaining that “[t]he Segal de-
cision,” which held that novel and contingent interests could enter
a debtor’s bankruptcy estate, “told us how to define property under
the old bankruptcy code, before it was amended in 1978”).
Ross’s termination interests existed when he entered bank-
ruptcy as contingent rights to regain his copyrights, so those inter-
ests entered his bankruptcy estate under 11 U.S.C. § 541(a)(1).
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24-13978 Opinion of the Court 13
B.
Two legal conclusions follow directly from our determina-
tion that Ross’s termination interests were part of his bankruptcy
estate.
First, Ross could not exercise his termination interests when
he signed the notice because they remained with his bankruptcy
estate. A debtor has “no right to . . . control” property of the estate
“while it remains property of the estate.” In re Mwangi, 764 F.3d
1168, 1178 (9th Cir. 2014); see also Hutchins v. IRS, 67 F.3d 40, 43 (3d
Cir. 1995) (explaining that “only the bankruptcy trustee” has au-
thority to control “unscheduled assets” retained by the estate). And
Ross’s termination interests remained property of his estate when
he tried to exercise them. In a Chapter 7 case like Ross’s case, prop-
erty that is not scheduled, administered, or formally abandoned re-
mains property of the estate “[u]nless the court orders otherwise.”
See 11 U.S.C. § 554(c), (d). 2 Live Crew concedes that the bank-
ruptcy court and bankruptcy filings “never mentioned, let alone
identified” Ross’s termination interests. Appellees’ Br. at 8–9, 31.
Because no one scheduled, administered, formally abandoned, or
mentioned those interests, they remained part of Ross’s bank-
ruptcy estate when he signed the notice. See 11 U.S.C. § 554(d). So
he could not exercise them at that time.
Second, without Ross, the group’s termination notice exer-
cised at most two of the group members’ interests. That number is
too few to terminate a transfer of copyright that—like the alleged
transfer at issue—was executed by four authors. See 17 U.S.C. §
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14 Opinion of the Court 24-13978
203(a)(1), (4). A termination notice ends a transfer made by multi-
ple authors only if it exercises most of their interests. Id. So two out
of four interests is one interest short of an effective termination.
Although we conclude that Ross’s termination interests
were property of the bankruptcy estate at the time he purported to
exercise them, our decision is limited. We do not address how ter-
mination interests should be treated in bankruptcy. And we do not
decide today what Ross’s heirs need to do to exercise those inter-
ests in the light of his bankruptcy.
IV.
We REVERSE the judgment of the district court and
REMAND for further proceedings consistent with this opinion.
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