# Gee v. CBS, INC.

> District Court, E.D. Pennsylvania · March 7, 1979 · 471 F. Supp. 600

URL: https://www.frixlaw.com/law-library/cases/1804873

## Case

- **Full name:** Jack GEE, Jr. and William D. Harris, Esquire, Executor of the Estate of Jack Gee, Sr. v. CBS, INC., and Columbia Records, Inc.
- **Court:** District Court, E.D. Pennsylvania
- **Decided:** March 7, 1979
- **Citations:** 471 F. Supp. 600; 202 U.S.P.Q. (BNA) 486; 1979 U.S. Dist. LEXIS 13962
- **Precedential status:** Published
- **Opinion:** Opinion by Becker
- **Judges:** Edward R. Becker
- **Cited by:** 91 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1804873

## How later opinions describe it (automated extraction)

- noting that Rule 17 prohibits dismissal “solely on the grounds that the real party in interest is not a party to the action”
- applying the more stringent federal standard in the copyright context

## Opinion text

OPINION AND ORDER
EDWARD R. BECKER, District Judge.
I.
Preliminary Statement
This suit for damages and injunctive relief arises out of the luminous career of the late Bessie Smith, who may be fairly described as “Empress of the Blues.”
See
C. Albertson,
Bessie
(1972). Bessie Smith (“Smith”) was a great singer and composer
*610
of the “blues.”
1
During the 1920’s, Smith was one of America’s top box office attractions and recording stars. From 1923 to 1928, the theatres in which she appeared on tour were filled to overflowing and thousands were turned away. During that period Smith earned from $1,500 to $2,000 per week, a staggering sum for anyone then to earn, and an awesome achievement for a black woman of that era.
From 1923 until her death in 1937, Smith was an exclusive recording artist for Columbia Phonograph Company, whose successor, Columbia Records, Inc. and its parent corporation, CBS, Inc., are the defendants herein. Some of plaintiffs’ claims relate to Columbia Phonograph Company in the 1920’s and 1930’s and some to actions of its corporate successors in the 1950’s and 1970’s. For convenience defendants will simply be referred to as “Columbia.” Smith died on September 26, 1937, in a tragic automobile accident near Clarksdale, Mississippi.
2
She'was survived by her husband, Jack Gee, Sr., who died in 1975. His executor, William D. Harris, is one of the plaintiffs herein. The other plaintiff is one Jack Geé, Jr., who claims to be the adopted son of Smith and Jack Gee, Sr.
3
The multifaceted suit asserts a variety of claims against Columbia arising out of its dealings with Smith and her recordings during her lifetime, and out of Columbia’s posthumous issue and reissue of those recordings. The case was originally filed only by Jack Gee, Jr., and its initial allegations concerned only federal copyright protection which Smith either obtained or might have obtained for the approximately forty (40) songs she composed, as well as recorded, between 1924 and 1934.
4
The original complaint alleged that this copyright protection was subsequently infringed by defendants.
Columbia filed a motion to dismiss, based on plaintiff’s failure to allege ownership of the copyrights and renewals upon which he based his claim. At this juncture, alleging that many if not all of the copyright registrations referred to in the original complaint were renewed in the name of Jack Gee, Sr. “as spouse and heir of Bessie Smith” and that they were still in effect, Jack Gee, Jr. filed an amended complaint adding Mr. Harris, Jack Gee, Sr.’s executor, as party plaintiff. What is now before us, however, on defendants’ motion to dismiss, or in the alternative for summary judgment, is plaintiff’s
second
amended complaint (“complaint”) which adds a number
*611
of additional claims
5
which may be summarized as follows.
6
First, the complaint asserts that all the recording contracts and copyright agreements entered into by Smith and Columbia between 1924 and 1933 are invalid because of their unconscionability and Columbia’s overreaching: Columbia is said to have taken advantage of Smith’s illiteracy and lack of sophistication in business affairs. Complementing these allegations are the claims that the invalid contractual dealings were the product of race discrimination. On the average, Smith received a flat fee of $200 per selection recorded for Columbia with no royalties, allegedly in contrast to much larger sums, including royalties, paid to white artists then recording for Columbia such as Eddie Cantor, Ted Lewis, Rudy Vallee, Sophie Tucker and Bing Crosby. The complaint alleges that this corporate racism constituted wilful and intentional violation of the civil rights of Smith and of others similarly situated “by failing to afford them the opportunity to make and enforce contracts to the full extent as is enjoyed by white citizens, in violation of 42 U.S.C. § 1981 .” Plaintiffs have also advanced a novel theory of § 1981 liability by contending that these original contract discriminations are actually direct wrongs to
themselves,
as Smith’s heirs.
The § 1981 claims are asserted in Count I of the complaint; Count II alleges invalidity of the 1924-33 recording contracts as a matter of state contract law. Count III focuses exclusively on copyrights, apparently under both federal and state (common) law. Counts IV and V, also added in the second amended Complaint, concern actions taken by Columbia in the past two decades. Columbia decided to re-issue Smith’s records in album form in the early 1950’s, and again in the early 1970’s. On both occasions it re-recorded the songs using available new technology, re-assembled the original 78 r. p. m. records into 33 r. p. m. album format, wrote biographical and descriptive notes for the album jackets and printed photographs of Smith on the jacket covers.
In Count IV, plaintiffs claim that by rerecording the original 78 r. p. m. songs in the 1950’s and again in the 1970’s without the permission of Bessie Smith’s heirs, Columbia infringed property rights protected under state law. Those property rights are said to have vested in Smith at the time she originally recorded the songs between 1923 and 1933, and relate not to her composition of forty of the songs, but to her
singing style
on the 160 records. In essence, the claim is that Smith acquired rights in her artistic performance which have descended to her heirs, the present plaintiffs, which rights were abridged in the early 1950’s and again in the early 1970’s. Count IV also contains a claim focusing on the reissuance in 1952 of one record (“At the Christmas Ball”) for which Smith was never paid at the time of its original recording, and another claim focusing on the re-issuance of eight songs for which plaintiffs claim Smith was not fully paid in the 1930’s. Under the rubric “misappropriation of artistic property,” these nine songs are also the subject of a motion for summary judgment by the plaintiffs.
Count V concerns “publicity rights.” These are analogous to, but somewhat distinct from, the “artistic performing rights” which are the subject of Count IV. Plaintiffs complain in Count V that defendant has exploited the image and likeness of Bessie Smith on record jackets and elsewhere, without their permission.
Upon analyzing plaintiffs’ claims, one is struck at once by their vintage. The claims asserted in Counts I & II arose more than forty years ago (and some as much as fifty years ago). The claims in the other counts are also hoary, except for those relating to the 1970’s reissues. Accordingly, defendants have invoked the applicable statutes of limitations. Such statutes, in the words of the Supreme Court are:
*612
designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.
Order of Railroad Telegraphers v. Railway Express Agency,
321 U.S. 342, 348-49 , 64 S.Ct. 582, 586 , 88 L.Ed. 788 (1944).
Plaintiffs on the other hand contend that notwithstanding the age of the claims, under the facts of record the applicable statutes of limitations must be tolled. Plaintiffs have propounded four different tolling theories which we shall, in due course, consider in detail: 1) tolling because of inherent fraud in the transactions; 2) tolling because of subsequent fraudulent concealment by defendant; 3) tolling because of a breach of fiduciary or agency duty and subsequent concealment of that breach; and 4) tolling because of a “revival” of a stale claim by a recent acknowledgment. The third argument stems from the fact that during most of Bessie’s recording career her alleged “manager,” Frank Walker, was a Columbia executive. The fourth argument results from the fact that in 1974, Columbia’s President, Bruce Lundvall, noting the disparity between sums paid to the artists circa 1974 and those paid in days past, announced that Columbia was donating some of the proceeds of sale of the 1970-72 reissue to a scholarship fund for needy black students.
Needless to say, a 'significant portion of this opinion will be concerned with statute of limitations matters. However, the statute of limitations arguments are not the only points of substance raised by Columbia. Equally cogent are their arguments about plaintiffs’ standing to bring the action (and the real party in interest rule) and their arguments against the cognizability of plaintiffs’ Count IV & V claims.
As we have noted, the matter is before us not only on a motion to dismiss but also on partial (cross) motions for summary judgment. The various arguments raised by the defendants in support of these motions — including the important statute of limitations points — are thus presented on a factual record. That factual record is an extensive one, coming to us in the form of affidavits (filed mainly by the plaintiffs); certain copyright assignments executed by Jack Gee, Sr. (filed by the defendants); and pretrial discovery (principally deposition transcripts) filed of record. Interestingly, it is apparent that the vast bulk of the data accumulated by plaintiffs derives either from Chris Albertson’s biography of Smith, which is itself part of the record (as an exhibit to the deposition of one John Hammond), or from Albertson’s research.
Albertson has chronicled Smith’s life and times in great detail, drawing mainly upon interviews with persons who knew her. His volume sheds helpful background light upon the statute of limitations problem by demonstrating that many, if not most of the people who might have had knowledge of the events of the 1920’s surrounding Smith’s relationship with Columbia, are now dead.
7
It is worth noting too that the Albertson book (and research) seems veritably to be the wellspring of plaintiff’s case. For example, whole paragraphs of the complaint are copied almost verbatim from the volume.
8
*613
We shall not summarize the extensive record at this juncture. Rather, we will make reference to the necessary record facts as we confront each argument. Suffice it to say now that for reasons set forth in the extensive discussion which follows,’ judgment under either Rule 12 or Rule 56 will be granted for defendants on all of plaintiffs’ claims.
We engage in such extensive discussion notwithstanding what we deem to be an inexorable result (given the many problems with plaintiff’s claims) for two reasons. First, we are impressed with the great resourcefulness and sophistication of the arguments advanced by plaintiffs’ counsel. Second, given the great stature of Bessie Smith in the history of American music and the consequent importance of this case, we can do no less.
II.
The Civil Rights Claim ( 42 U.S.C. § 1981 )
A.
Introduction
In Count I plaintiffs assert a claim based upon 42 U.S.C. § 1981 , which provides:
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
Plaintiffs’ § 1981 claim rests specifically on the “to make and enforce contracts” phrase of § 1981,
9
and is, at first blush, straightforward: Columbia Records, during the 1920’s and 1930’s, discriminated against all black performers by fraudulently signing them to contracts with low payment terms and no royalty provisions, while at the same time signing white performers to contracts for much greater sums, including royalty provisions; Bessie Smith was one of many performers who suffered from this contractual discrimination.
Since Smith died in 1937, plaintiffs realize they must connect the alleged wrong to Smith in the 1920’s and 1930’s with a protected right of their own. They have attempted to do so on two different theories. One is by action of the appropriate survival statute: Since plaintiffs are the putative son of Bessie Smith and the heirs of Bessie Smith’s husband, they can sue in a representative capacity for any cause of action which Bessie Smith had at her death which
*614
survived her. Plaintiffs’ alternative theory is far more ingenious. It is based on the notion that the contractual discrimination suffered by Smith is a “continuing wrong” to plaintiffs. Since
she
was allegedly defrauded in her various contracts (which governed copyright, performing rights, royalties,
et alia),
instant
plaintiffs
are foreclosed from signing contracts today which would entitle them to benefits on the renewal of those copyrights, performing rights, royalties,
et alia.
On this theory, plaintiffs are alleging it is
their
§ 1981 contractual rights which are implicated, and that they are not suing simply in a representative capacity by virtue of a survival statute, but on their own behalf for wrongs done in the present to themselves.
Defendants’ response to the first theory is that while § 1981 causes of action that accrued to Bessie Smith by the time of her death would indeed have survived on behalf of her representatives, the plaintiffs are not those representatives hence are not real parties in interest under Fed.R.Civ.P. 17. Additionally, they rejoin that the statute of limitations period would have permitted suit for six years after her death at most. Plaintiffs counter the statute of limitations point by arguing that any statute of limitations was tolled by defendants’ duplicity, and did not begin to run until Chris Albert-son revealed that duplicity in 1972 by publishing his biography,
Bessie.
Defendants’ response to the second or continuing wrong theory is that plaintiffs have no standing to proceed. Since it is an alleged contract wrong to Smith that is at the root of the claim, defendants maintain that plaintiffs are attempting to assert her rights vicariously, which they may not do under any of the civil rights acts, including § 1981. We consider first the theory predicated on the survival of causes of action which once belonged to Bessie Smith.
B.
Survivorship and Suit in a Representative Capacity
1.
Introduction
Consideration of plaintiffs’ first theory requires the following steps. Initially, we must locate the sources of a) the survivor-ship statute that will determine which causes of action survive a person’s death and who is entitled to bring suit on those causes of action; b) the statute of limitations that will govern the § 1981 claim; and c) the law that will govern tolling of this statute of limitations. In each case, since § 1981 is “deficient in the provisions necessary to furnish suitable remedies,” § 1988 instructs us to look to Pennsylvania law, provided that law is “not inconsistent with the Constitution and laws of the United States.”
Polite v. Diehl,
507 F.2d 119, 122 (3d Cir. 1974). The phrase “not inconsistent with” has been recently interpreted by the Supreme Court in
Robertson v. Wegmann,
436 U.S. 584 , 98 S.Ct. 1991 , 56 L.Ed.2d 554 (1978).
The appropriate survival statute is 20 Pa. Cons.Stat.Ann. § 3371 (Purdon), which provides:
All causes of action or proceedings, real or personal, except actions for slander or libel, shall survive the death of the plaintiff or of the defendant, or the death of one or more joint plaintiffs or defendants.
Robertson v. Wegmann, supra,
held that a Louisiana statute was “not inconsistent” with the broad remedial purposes of § 1983 simply because it provided for survival of certain actions only in favor of certain categories of relatives, rather than decedent’s personal representative. Since it was “not inconsistent,” the federal district court was bound to employ the statute in the § 1983 action. Employing
Robertson
as a model to determine whether the above survivorship statute is “inconsistent” with the Constitution and laws of the United States, we will find it to be not inconsistent, because it is compatible with the broad remedial purpose of the civil rights acts generally, and § 1981 in particular.
As to the appropriate statute of limitations, defendants agree that that six year Pennsylvania statute found in 12 Pa.Stat. Ann. § 31 (Purdon) is appropriate in the § 1981 action for the reasons set forth in Judge Fogel’s opinion in
Jones v. United
*615
Gas Improvement Corporation,
383 F.Supp. 420 (E.D.Pa.1974). The Third Circuit recently decided, in a § 1981 claim, that the underlying type of action must be examined to determine which Pennsylvania statute of limitations is appropriate, and that for a claim of wrongful employment discharge the six year statute is the appropriate one.
Davis v. United States Steel Supply,
581 F.2d 335 (3d Cir. 1978). In this case many of the claims are basically contractual in nature, although some appear to sound in lost business opportunities, an admixture of tort and property law. We need not, however, decide which statute is appropriate for each. Instead, we will assume the six year statute applies to all aspects of the § 1981 count, since it is the longest one possible under Pennsylvania law. As such, it gives plaintiffs the benefit of any doubt that would be raised by characterizing their various § 1981 claims as essentially “contract” or “tort” or “property” and applying different statutes of limitations to them. Moreover, in this particular case, the discussion of which statute applies is largely academic. Since the claims at issue involve events that transpired over forty years ago, the real issue is not choosing a particular statute, but rather whether any tolling principles may apply.
Finally, it seems logical that if Pennsylvania law provides the statute of limitations, Pennsylvania law should also supply the circumstances for tolling that statute, since the tolling provisions are essentially judicial gloss on the statute. This result seems to us compelled by the decision in
Ammlung v. City of Chester,
494 F.2d 811, 816 (3d Cir. 1974):
given the absence of a federal limitation period in the Civil Rights Act, the court has no basis for fashioning federal tolling principles, and due regard for our system of federalism requires that state concepts of tolling be applied to state statutes of limitations. .
We hold that state tolling principles govern the tolling of the applicable state statutes of limitations in federal civil rights actions arising under 42 U.S.C. § 1983 .
We think
Ammlung
dictates the same conclusion in a § 1981 suit. We add the proviso, which we think consistent with the interpretation given
Ammlung
by Chief Judge Lord in
Eubanks v. Clarke,
434 F.Supp. 1022, 1032 (E.D.Pa.1977), that we are not
foreclosed
from fashioning a federal tolling remedy. But we may only do so if we determine in the first instance that the state remedy mandated by § 1988 and
Ammlung
is “inconsistent” with our Constitution or federal law. We will look first to Pennsylvania law on tolling, and to the extent that law is “inconsistent” with the purposes of § 1981 we will then look to federal common law.
Having identified the appropriate rules to use, we now turn to an examination of the survival statute.
2.
The Survival Statute and the Real Party in Interest Rule.
In applying the survivorship statute of 20 Pa.Cons.Stat.Ann. § 3371 (Purdon), we note first its “derivative” nature:
The cause of action created by the survival statute is strictly derivative. It is, as it is named, a surviving action. It is grounded upon an existing personal cause of action
which the deceased could have but did not institute during his or her lifetime.
Carroll v. Skloff,
415 Pa. 47, 48 , 202 A.2d 9, 10-11 (1964) (emphasis added). Since it applies to all kinds of actions,
10
it must apply to any claims Bessie Smith
might have had
under § 1981 for racially discriminatory contracts at the time of her death in 1937. By operation of law, any such claims may be pursued by, and ultimately redound to the benefit of her estate and thence her heirs. However, a crucial limitation on the survival statute is contained in 20 Pa.Cons.
*616
Stat.Ann. §§ 3372 and 3373 (Purdon); suit may only be brought by the personal representative of decedent, meaning (under 20 Pa.Const.Stat.Ann. § 102), the executor or administrator of the estate.
Burns v. Goldberg,
210 F.2d 646, 650 (3d Cir. 1954);
Gebhardt v. Edgar,
251 F.Supp. 678, 680 (W.D. Pa.1966);
Johnson v. Trustees of General Assembly,
408 Pa. 31, 35 , 182 A.2d 724, 726-27 (1962). We cannot ignore this limitation, which is part and parcel of the Pennsylvania survival statute, any more than the district court in
Robertson v. Wegmann, supra,
could rightfully ignore the Louisiana statutory limitation that certain kinds of actions could only survive in favor of certain kinds of relatives. In our case,' the executor or administrator of Bessie Smith’s estate is not before us. Rather, there is one plaintiff who claims to be her adopted son, and another who is the executor of her
husband's estate.
Neither plaintiff is entitled to avail himself of the Pennsylvania survival statute. This statutory requirement that a surviving cause of action must be brought by decedent’s administrator or executor is not a hollow formality. On the contrary, it is the vehicle for insuring that a decedent’s assets are fairly and equitably distributed among heirs and creditors. In Pennsylvania, the procedure is governed by Title 20 of the Consolidated Purdons Statutes. These statutory procedures would apply to Bessie Smith’s estate by virtue of 20 Pa.Cons.Stat.Ann. § 3151 (Purdon), since it is uncontroverted that she died domiciled in Pennsylvania. For an executor or administrator to be appointed now to administer Bessie Smith’s estate, a petition would have to be made for a grant of letters of administration or letters testamentary pursuant to 20 Pa.Cons.Stat.Ann. § 3151 (Purdon). Since more than twenty-one (21) years have elapsed since decedent’s death, the Pennsylvania Orphans Court of the appropriate county
(id.
at § 3151) would have to determine if there is sufficient “cause shown” to grant such letters.
Id.
at § 3152.
11
If the instant § 1981 derivative claim went to trial and were ultimately successful — or if it settled for a monetary amount pre-trial — the proceeds could only benefit Bessie Smith’s
estate,
for as stated in
Burns v. Goldberg,
210 F.2d 646, 650 (3d Cir. 1954) the Pennsylvania survival statute “gave the personal representative a distinct action
on behalf of the estate . .
. ” (emphasis supplied). If that happened, and the proceeds were intact after Bessie Smith’s creditors, if any, came forward, the Orphans Court would be called upon to distribute them according to her will or the statute of distribution. In doing so, the Orphans Court might have to decide whether Jack Gee, Jr. is in fact the adopted son of Bessie Smith, and hence entitled to take a share of the estate. It would also have to decide whether there are any other heirs of Bessie Smith’s now living
not
represented in our lawsuit who are entitled to a statutory share, and whether Jack Gee, Sr.’s heirs (who are represented in our lawsuit) are by law entitled to take from Bessie Smith’s estate under the Pennsylvania statute.
Our point is that if, as plaintiffs have asked us to do, we were to waive the requirement that only the personal representative of the
decedent
(here Bessie Smith) has the capacity to sue under Pennsylvania’s survival statute, we would be short-circuiting all the orderly legal procedures enumerated above. We, and not the Pennsylvania Orphans Court, would be deciding “cause” exists for granting letters of administration more than 21 years after decedent’s death; we would be dispensing with the requirement that a bonded, qualified individual oversee the estate procedure; and most importantly, we would be dispensing with the heart of the survival statute itself, that the causes of action (and therefore all proceeds from successful prosecution of such cause of action) benefit the decedent’s
estate.
Such would not be the case in our lawsuit: creditors of Smith’s estate would have no opportunity to share in any award, nor would any heirs share in
*617
any award except instant plaintiffs (if indeed they are her rightful heirs under the distribution statute). Finally, as the last parenthetical pointed out, we would have to make the determination that instant plaintiffs are indeed heirs entitled to inherit by virtue of the Pennsylvania distribution statute (including a determination that Jack Gee, Jr. is actually Bessie Smith’s son) — or alternatively, we would have to dispense with the distribution statute entirely and award proceeds to instant plaintiffs regardless of whether they are lawful heirs.
In short, far from being a hollow formality, the requirement that a qualified administrator or executor sue under the survival statute reflects the heart of the statute, which is that a cause of action survives in favor of the decedent’s estate. We would be evading and circumventing this core if we permitted instant plaintiffs to be proper parties plaintiff under the survival statute.
We implement these principles in this case pursuant to Rule 17(a) of the Federal Rules of Civil Procedure, which requires that “Every action shall be prosecuted in the name of the real party interest.” Wright & Miller instruct that:
To determine whether the requirement that the action be brought by the real party in interest has been satisfied, the court must look to the substantive law creating the right being sued upon to see if the action has been instituted by the party possessing the substantive right to relief.
6 C. Wright & A. Miller, Federal Practice & Procedure § 1544 at 647 (1971).
The “substantive law creating the right being sued upon” in our case is the Pennsylvania survival statute. (In the related
Erie
context, Wright & Miller observe that the survival statute is indeed substantive, and not procedural.
Id.
§ 1952 at 642.) Under that statute only the personal representative of decedent is entitled to institute and maintain a survival suit. Accordingly, we conclude that the real party in interest is not before us, and that Count I must be dismissed because Rule 17(a) has not been complied with.
Rule 17(a) prohibits dismissal of an action solely on the grounds that the real party in interest is not a party to the action. Accordingly, we would normally grant plaintiffs leave to amend to substitute Bessie Smith’s personal representative as plaintiff. In this case, however, we do not do so for two reasons. First, as will appear, we find that the § 1981 action is conclusively barred by the statute of limitations. Therefore, permitting substitution of the personal representative at this time would not avail plaintiffs in the disposition of this claim. Under these circumstances, we see no reason to grant leave to amend under 17(a).
See
Wright & Miller,
supra,
§ 1555: “The rule [calling for substitution rather than dismissal] should be applied only to cases in which substitution of the real party in interest is necessary to avoid injustice.”
Id.
at 707. Alternatively we could deny plaintiffs’ leave to amend because they have already amended their complaint twice;
i. e.,
they have had “three strikes” and to give them a fourth opportunity to get their pleadings in order goes beyond the pale of justifiable judicial indulgence.
12
3.
The Statute of Limitations and the Matter of Tolling
(a)
Introduction
Even if there were no real party in interest objection, we would still confront the
*618
enormous obstacle of the statute of limitations. The statute of limitations defense to the § 1981 claim, as well as to the other counts, is obviously of critical significance in a lawsuit based on events which occurred between 1923 and 1933. Applying the six year statute of limitations found in 12 Pa. Stat.Ann. § 31 (Purdons) means that suit should have been brought on the
last
of these contracts by 1939 at the latest. Since Bessie Smith died in 1937, the executor or administrator of her estate would have had to have brought suit within two years of her death. Thus the crucial question before us is that of the tolling of the statute.
We turn to the (second) amended complaint. The following allegations are the only ones which could conceivably affect the running of the statute of limitations:
9. Bessie Smith recorded 180 songs for Columbia Records from 1923-1933, of which, on information and belief, 20 were never released at that time or since, and the maters are now lost. Because she was an “exclusive artist” for Columbia, Bessie Smith’s total recorded output, with one exception, was recorded under the Columbia label, with her last 4 sides in 1933 being issued on the Okeh label, a Columbia subsidiary corporation. Her records were and are also issued worldwide during her lifetime and to the present, under various labels of Columbia subsidiaries, affiliates or licensees.
11. Bessie Smith was born in Chattanooga, Tennessee, between 1895 and 1900. She did not have any formal education. For all of her unparalleled musical talents, she was nevertheless unsophisticated and ignorant in legal and financial matters and was easily taken advantage of by those who managed her business and financial affairs.
12. In June 1923, Bessie Smith married Jack Gee (Sr.) [who] . finished only a couple of years of grade school and was unable to read or write for his entire life. ...
14. In 1923 Frank Walker was then Director of Recording for Columbia Records and sought to initiate Columbia’s ‘Race Record’ series, a new venture for the company which had gone bankrupt the year before.
17. When Bessie went to Frank Walker’s office after obtaining contractual releases from [former manager Clarence] Williams, Walker offered her an exclusive contract with Columbia for a one-year contract commencing April 20, 1923. The contract required Bessie to record 12 selections at $125 per usable side. It guaranteed her $1500 and included a 1 year renewal option for 12 sides at $150. Because Williams had not yet received her fee for 4 sides made during April, Walker gave Bessie a check for $500. Walker struck out the royalty clause in the contract, thus making a lucrative deal for Columbia. Because neither Bessie nor Jack were aware of such things as royalties, they felt that Walker was generous with her and Bessie appointed him her manager.
18. Frank Walker, Columbia Record executive, served also as Bessie’s manager until the late 1920’s for all purposes, and until 1931 for her recording dealings. While Walker may not have personally benefited financially, while serving in this conflicting role, he took advantage of Bessie’s color and ignorance and he made Columbia Records rich through Bessie’s efforts, and made others like Clarence Williams, rich as well. Bessie’s later recording arrangements with Columbia were made on her behalf by Walker, and even at her prime in the middle 1920’s, Bessie never received more than a maximum of $200 flat fee per selection with no royalties. This small flat fee per selection arrangement with no royalties was part of a pattern and practice of race discrimination by Columbia Records and its officers to exploit black artists who were recording “exclusively” and otherwise for Columbia’s race record series. Only white artists and others who were sophisticated in entertainment law were given substantial sums per selection, or a royalty package by Columbia.
19. By way of contrast, in 1925 when Bessie was the top black entertainer in
*619
the country, and a recognized superstar, and when her records had already outsold those of any other Columbia artist— white or black who preceded her — Bessie, through Frank Walker (Columbia’s Recording Director and simultaneously her manager) was receiving a flat fee of $200 per selection with no royalties as an “exclusive artist” for Columbia. In that same year, 1925, Phonofilm publicity announced that Al Jolson had received $15,-000 for 2 sides from Brunswick Records, and that he received $10,000 for a single song on Phonofilm. White artists who were then recording for Columbia at about this time such as Eddie Cantor, Ted Lewis, Ruth Etting, Paul Whitman, Rudy Vallee, Sophie Tucker, Bing Crosby, Kate Smith, Blossom Seely, and others, were on information and belief, all receiving very substantial fees per selection or else receiving a royalty arrangement, even though Bessie Smith record sales were outstripping theirs.
20. Moreover, Bessie Smith authored and composed many of her own songs which she recorded for Columbia. On information and belief, as a routine matter, Frank Walker entered into copyright license agreements for Columbia to record these tunes, by signing such agreements “Frank Walker for Bessie Smith.” These agreements paid no or nominal payments by Columbia to Bessie for the privilege of recording her copyrighted songs. On information and belief, Bessie never received any sums from Columbia under such purported agreements.
21. On information and belief, Jack Kapp, a Columbia Records official during the period when Bessie was recording, paid Bessie a few dollars for her tunes during the regular course of business with Columbia. He would then copyright the tunes under a dummy publishing company and collect royalties himself, at the expense of Bessie. On information and belief, these activities, were carried on with the actual and constructive knowledge of Columbia and no reasonable payment or accounting to Bessie or her heirs has ever been made as a result of these activities.
22. In 1933, Bessie recorded her last 4 selections for Columbia, which were later issued on the Okeh Record label, a Columbia subsidiary which made a lower priced record produce which sold for 35$ in contrast to the usual 75$ for a Columbia single. John Hammond, while an official of Columbia, made financial arrangements on Bessie’s behalf for this recording session and paid Bessie $37.50 per selection or a total of $150 for the 4 sides pursuant to a verbal contract. While Hammond did not personally benefit financially while serving simultaneously in the conflicting positions of Columbia executive and agent for Bessie Smith with respect to the 1933 78 rpm recordings, these recordings were sold at a profit by Columbia and were subsequently re-issued and re-recorded in LP 33Vs albums many years later with a major profit being reaped by Columbia as a result thereof, for which no further monies or accounting has ever been paid to Bessie, or her heirs.
23. From the limited discovery to date and from the contentions of defendants, Bessie Smith was supposed to have entered into the following contracts with Columbia for her artistic recording efforts:
Date of Contract Period Terms
(a) approx. February, 1923 2/16/23-4/20/23 $125 flat fee per selection. Royalties for records sold: NONE. Copyright royalties for authoring or composing tunes: NONE.
On information and belief, plaintiffs aver that Bessie signed no contract with Columbia but a contract was signed or implied without Bessie’s consent, but with collusion of Walker and Columbia, between Clarence Williams, Manager for Bessie Smith and Columbia providing for the payment to Bessie, c/o Clarence Williams of a flat fee of $125 per selection.
*620
During the period of this self-appointed collusive managerial contract, Bessie recorded some of her most important records including:
Down Hearted Blues 2/16/23
Gulf Coast Blues 2/16/23
Aggravatin Papa 4/11/23
Beale Street Mama 4/11/23
'Taint Nobody’s Business If I Do 4/11/23
Keeps on A-Rainin 4/11/23
Baby Won’t You Please Come Home Blues 4/11/23
Oh Daddy Blues 4/11/23
Columbia ledger sheets for this time period do not reflect any recording contract under Bessie Smith’s name, and defendants have produced none.
Date of Contract Period Terms
(b) 4/20/23 4/20/23-4/20/24 1 year, with 1 year renewal option on same terms by Columbia Exclusive Artist 12 songs at $125 each, with $1500 guarantee
Royalties for records sold: NONE. Payment to Bessie as song composer or author (copyright owner) for right to make records: NONE
(c) 12/22/23 (revision of preceding contract) 12/22/23-1/22/25 with 1 year renewal option on same terms by Columbia Exclusive Agent 12 songs at $200 each with $2400 guarantee
Royalties on records sold: NONE Payment to Bessie as song composer or author for right to make records: NONE
(d) 12/22/23 (renewal option exercised) 1/22/25-1/22/26 Same terms,
(e) 1/22/26 1/22/26-3/16/27 with 1 year renewal option on same terms by Columbia Exclusive Artist 12 songs at $200 each, with no guarantee
Royalties on records sold: NONE Payment to Bessie as song composer or author, for right to make records: reserved to artist
(f) 1/22/26 (renewal option exercised) 3/16/27-4/9/28 (same terms)
(g) 4/9/28 4/9/28-9/5/29 Exclusive Artist 12 songs at $200 each, with no guarantee
Royalties on records sold: NONE Payment to Bessie as composer or author, for right to make records: reserved to artist. Columbia has radio broadcasting rights without payment.
(h) 7/11/30 7/11/30-8/11/31 (contract not renewed at end of term) Exclusive Artist 12 records at $125 each, $1500 guarantee
Royalties on records sold: NONE Payment to Be-sie as composer or author, for right to make records: NONE
*621
Date of Contract Period Terms
(i) 11/24/38 (verbal contract with John Hammond, officer of Columbia) 11/24/33 4 sides at $37.50 each, for total of $150 Royalties on records sold: NONE
24. On information and belief, while Columbia ledger sheets show the existence of such contracts from April 20,1923 to August 11, 1931, plaintiffs aver that Bessie Smith neither saw nor signed any written contracts with Columbia for this period. Columbia has not produced any such contracts, or any copy thereof. Columbia has produced 3 unsigned form contracts, which Columbia claims were effective between Bessie and Columbia for the «period of January 22, 1926 to August 11, 1931. On information and belief, if any such contracts existed in writing or prior thereto between Bessie Smith and Columbia, plaintiffs aver that they were signed “Frank Walker for Bessie Smith” or the equivalent, without Bessie Smith’s knowledge or consent but with the collusion, approval and acquiescence of Columbia, as was customary by Columbia with respect to “race record” recording artists.
25. On information and belief, copyright contracts giving rights to Columbia to record songs authored or composed by Bessie Smith without payment to Bessie Smith, or in return for a nominal payment, were routinely signed “Frank Walker for Bessie Smith” without her knowledge or consent and with the collusion, approval and acquiescence of Columbia, as was customary.
26. Bessie Smith never had a royalty agreement with Columbia during all of her smash hit years as an Exclusive Artist. Bessie received a total of $28,575, “a fraction of what many young performers of lesser talent receive on signing a recording contract today.”
29. During the course of Bessie Smith’s life, and continuing thereafter to the present, Columbia has misrepresented to the world that Columbia is the exclusive property owner of all rights, title and interest to Bessie’s recordings. In 1951, when Columbia re-recorded and re-issued a four long-playing record album series of Bessie Smith’s stories, the liner notes for Volume I, The Bessie Smith Story, prominently state, “She [Bessie] left behind her 160 recordings (every one of them, incidentally, the property of Columbia Records).” Similar representations are made in other literature and liner notes disseminated by Columbia. Until his death in 1973, Jack Gee (Sr.) was unable to read or write. During his lifetime, Columbia had never revealed to him, nor did he have access to any information concerning the defendants’ activities in fraudulently misappropriating the personal and property rights of his wife, Bessie Smith. Jack Gee, Jr., son of Bessie Smith, was a minor at the time of Bessie’s death in 1937. Upon his inquiry in later years, his father Jack Gee, Sr. advised him that he, Jack Gee, Sr., was taking care of all of the rights flowing from Bessie’s estate. Jack Gee, Sr. and Jack Gee, Jr. did not get along well, with Jack Sr. often placing Jack, Jr. in various homes and institutions during Bessie’s life, and thereafter communicating infrequently with him. In any event, by virtue of defendants’ concealment activities, and Jack Gee, Sr.’s illiteracy, plaintiffs had no knowledge and could not have reasonably obtained any knowledge of defendants’ unlawful activities as aforesaid, or of any fact which might have led to the discovery thereof, until the publication of the biography of Bessie Smith by Chris Albertson by Stein & Day Publishers in 1972. The author had special access to archive records of Columbia that were not generally available to the plaintiffs. Plaintiffs could not have discovered the unlawful activities of defendants at an earlier date by the exercise of due diligence, since the unlawful activities as set
*622
forth herein had been fraudulently concealed by the defendants by various means and methods to avoid their detection.
30. In 1974, Bruce Lundvall, President of Columbia, appeared live on a public television program and he re-affirmed earlier and continuing obligations of Columbia to Bessie Smith and her heirs. Mr. Lundvall stated with respect to the re-recordings of Bessie’s songs in five double album sets in 1970 to 1972, that “There was a royalty paid, a payment made to the Bessie Smith Foundation . We made one payment initially, but the royalties have accumulated in an account and will be used for a fund for needy black students in the future . . ” No payment or accounting to the plaintiffs has ever been made by Columbia, in connection with any accumulated “royalties” by Columbia with respect to record sales from the 1970-72 album series, and after demand, Columbia has refused to make any such payments to plaintiffs. In a recent annual report to shareholders, Columbia referred to the Bessie Smith re-issues as the biggest-selling re-issues in the history of the record industry, and on information and belief gross sales to Columbia of the re-issues are currently in excess of $6 million.
We consider all the foregoing allegations to bear upon the statute of limitations questions in the § 1981 claim since it is broadly asserted that the § 1981 claim applies to
every
contract Bessie Smith actually entered into with Columbia Records or might have entered into but for racial discrimination, including,
inter alia,
contracts for royalties and flat fees on recorded performances, those for royalties and flat fees on compositions which she actually did or might have copyrighted, and those for use of her name and likeness. The question before us is whether the allegations we have enumerated above are sufficient, under the Pennsylvania law we are bound to apply by virtue of 42 U.S.C. § 1988 and the Third Circuit’s
Davis v. United States Steel Supply
and
Ammlung
decisions, to toll the six year statute of limitations which would have long since run on all the events transpiring between Bessie Smith and Columbia Records between 1923 and 1933.
As we understand the case law, there are several separate inquiries we must make under facts as alleged here. The first is whether the
underlying events
being sued upon — here, the course of dealings between Bessie Smith and Columbia Records during 1923-33 — sound inherently in fraud or deceit. If they do then that, without more, will toll the statute of limitations until such time as the fraud has been revealed, or should have been revealed by the exercise of due diligence by plaintiffs. This doctrine finds expression in Justice Frankfurter’s opinion in
Holmberg
v.
Armbrecht,
327 U.S. 392, 397 , 66 S.Ct. 582, 585 , 90 L.Ed. 743 (1946):
[T]his Court long ago adopted as its own the old chancery rule that where a plaintiff has been injured by fraud and remains in ignorance of it without any fault or want of diligence or care on his part, the bar to the statute does not begin to run until the fraud is discovered, though there be no special circumstances or efforts on the part of the party committing the fraud to conceal it from the knowledge of the other party.
Holmberg
is based on the premise that fraud as a common-law cause of action is self-concealing by its nature. Its elements were stated nearly a century ago as:
First.
That the defendant has made a representation in regard to material
fact; Second,
that such representation is false;
Third,
that such representation was not actually believed by the defendant, on reasonable grounds, to be true;
Fourth,
that it was made with intent that it should be acted on;
Fifth,
that it was acted on by complaint to his damage; and
Sixth,
that in so acting on it the complainant was ignorant of its falsity, and reasonably believed it to be true.
Southern Development Co.
v.
Silva,
125 U.S. 247 , 8 S.Ct. 881 , 31 L.Ed. 678 (1888),
quoted in 2A Moore’s Federal Practice,
*623
¶ 9.03 at 1923 (2d ed. 1978).
13
As long as plaintiff continues to reasonably rely to his detriment on the knowingly misleading representation the fraud continues, and of necessity it is concealed from plaintiff. No additional special efforts of concealment are then necessary.
Pennsylvania case law has worked a slight modification on the
Holmberg
doctrine. In
Nesbitt v. Erie Coach Company,
416 Pa. 89 , 204 A.2d 473 (1964), the Pennsylvania Supreme Court announced that the fraud or deceit necessary to toll the statute of limitations “does .not mean fraud in the strictest sense encompassing an intent to deceive, but rather fraud in the broadest sense which includes an unintentional deception.”
Id.
at 96 , 204 A.2d at 476 . It is also clear that under Pennsylvania law there must be a misrepresentation of material fact.
See
in
Guy v. Stoecklein Baking Co.,
133 Pa.Super. 38 , 1 A.2d 839 (1938). Apparently the Pennsylvania rule is that once plaintiff has shown that such a misrepresentation has occurred, and that he reasonably relied to his detriment on it, he need not also show the opposing party intended he should act on it; the fact that he did so is a sufficient showing. In terms of the elements of fraud enumerated in
Southern Development Co., Nesbitt
and
Guy
apparently eliminate element number four — the requirement that the misrepresentation was made with intent that it should be acted on. None of the other elements is affected by
Nesbitt
and
Guy ;
all are necessary to show fraud sufficient to toll the statute of limitations. Furthermore, under the Pennsylvania view, the showing that must be made to invoke fraud as a grounds for tolling the statute requires particularity: “an estoppel becomes operative only in
clear
causes of fraud, deception or concealment.”
Walters v. Ditzler,
424 Pa. 445, 449-50 , 227 A.2d 833, 835 (1967) (emphasis in original).
Under
Holmberg
and
Nesbitt
then, our first line of inquiry is whether the facts alleged concerning the transactions between Bessie Smith and Columbia from 1923 to 1933 constitute either “intentional” or “unintentional” fraud. If so, we must determine when the fraud ended, or whether it is alleged to have continued unabated to the present.
Our second line of inquiry involves the doctrine of “fraudulent concealment.” Fraudulent concealment does not depend, as do
Holmberg
and
Nesbitt ,
on the underlying cause of action — here the 1923-1933 transactions — being inherently fraudulent. Rather, it requires independent acts of “fraudulent concealment” of the events or circumstances constituting the underlying cause of action, irrespective of whether those underlying events are inherently fraudulent or not.
See
Dawson,
Fraudulent Concealment and Statutes of Limitations,
31 Mich.L.Rev. 875 (1933). This doctrine, as explicated by Judge Goodrich in
Overfield v. Pennroad Corporation,
146 F.2d 889, 896 (3d Cir. 1944), finds expression in Pennsylvania case law:
The plaintiffs say, however, that there was concealment and such concealment would toll the running of the statute under Pennsylvania law. We are confronted at the outset, however, with the proposition, laid down over and over again in the Pennsylvania decisions that the concealment'which tolls the statute must be an affirmative, independent act of concealment; mere silence or nondisclosure, even by corporate officials is not enough. The time at which it takes place is immaterial: whether before, contemporaneous with or subsequent to the act complained of. But independent act, “affirmative efforts to divert, mislead, or prevent discovery” there must be. We do not see here any such conduct independent of the very things about which the plaintiffs complain. The plaintiffs complain of investments and say that they were made with an eye not to Pennroad’s interest, but that of the Pennsylvania
*624
Railroad. But the sum and substance of that complaint is a series of transactions which alone make up the gravamen of the alleged offenses. We see no independent acts, designed to “divert, mislead, or prevent discovery.”
(citations to Pennsylvania case law omitted). Nearly thirty years later Judge Gibbons affirmed the correctness of
Over-field’s
statement of the Pennsylvania law by citing it as the “governing standard” in
Knuth v. Erie-Crawford Dairy Cooperative Ass'n.,
463 F.2d 470 , 482 (1972). Judge Gibbons emphasized that there must be an “affirmative effort ... to conceal.”
Id.
at 482.
In sum, the “fraudulent concealment” doctrine directs our attention to the following question: even if none of the transactions between Columbia Records and Bessie Smith between 1923 and 1933 involved inherent fraud, was there a subsequent “affirmative effort to divert, mislead, or prevent discovery,” so as to constitute “fraudulent concealment” sufficient to toll the statute of limitations?
14
Plaintiffs’ third basis for tolling the statute of limitations consists of the allegations that Frank Walker and John Hammond served in conflicting roles as Smith’s agents and as officials for Columbia in negotiating and executing Smith’s recording contracts, to her financial detriment. In plaintiffs’ view, the “breach of fiduciary duty” resulting from these conflicting roles, and manifested in allegedly pro-Columbia Records recording contracts, stops the running of the statute.
Plaintiffs’ fourth basis for tolling is found in ¶ 34, alleging that Bruce Lundvall “revived” the contract actions underlying the § 1981 claim in 1974 by publicly acknowledging the existence of money owed to Bessie Smith.
We examine the sufficiency of the allegations to support each of the above four theories of tolling
seriatim.
In each case, we read the complaint in the context of the instruction of
Conley v. Gibson,
355 U.S. 41 , 78 S.Ct. 99 , 2 L.Ed.2d 80 (1957) that we construe the allegations in the light most favorable to plaintiffs. In the case of (b) and (c)
infra
(inherent fraud and fraudulent concealment) we also read the complaint bearing in mind the salutary provision of Fed.R.Civ.P. 9(b) that “In
all
averments of fraud . . . the circumstances constituting fraud shall be stated with particularity.” (Our emphasis). This requirement would be necessitated in any event by the holding of Walters
v. Ditzler, supra,
that “an estoppel becomes operative only in
clear
cases of fraud, deception, or concealment.”
(b)
The Doctrine of Inherent Fraud: The Existence of Fraud in the Underlying 1923-33 Transactions Between Bessie Smith and Columbia Records
Our starting point under this theory is whether any of the facts as alleged concern
*625
ing the original course of dealings between Bessie Smith and Columbia Records constitute fraud in the
Nesbitt
sense. We refer here to ¶¶ 11,12,14,17,18,19, 20, 21, 22, 23, 24, 25, and 26 of the complaint.
Paragraphs 11 and 12, which relate to the lack of education and sophistication of Smith and Jack Gee, Sr., might be relevant if a subjective standard for deception were used, because they could help demonstrate that Bessie Smith was in fact misled. However, the appropriate standard is an objective or reasonable person one,
see
p. 626
infra,
so these allegations are not relevant to our inquiry.
Paragraphs 14, 17, 18 and 19. together allege that while Frank Walker served in a dual capacity as record company official and agent, he signed Bessie Smith to contracts. Plaintiffs admit Smith was paid the amounts indicated in the recording contracts,
i.
e., the allegedly “small” flat fee payments. (“. . . even at her prime . Smith never received more than a maximum $200 flat fee per selection with no royalties.” ¶ 18). These paragraphs also contain the allegation Walker struck out the royalty provision in the form contracts to which he signed Smith’s name. We cannot find any allegations of inherent fraud in these paragraphs. We infer that Smith must have been aware of the amounts she actually received. There is no allegation that she was misled, for example, by being induced to believe she was going to be paid royalties when in fact she wasn’t. Quite the contrary, Frank Walker is alleged to have crossed out that provision, conforming the form contract with the reality of her apparently oral contractual arrangement. Paragraph 18 simply states that Bessie was paid less than white performers because of racial discrimination. There is no allegation that she was deceived or misled in- any fashion. Reading ¶¶ 17 and 18 together, the most that can be inferred is that Bessie Smith was
not told
that such things as royalties were possible to receive. Such nondisclosure is categorically different from common law fraud, which requires a “false
representation
of a material fact.”
15
Nor can these allegations suffice to allege fraud under the “unintentional fraud” formulation of
Nesbitt .
In that case, as in
Guy v. Stoecklein Baking Co., supra,
and in every other case in Pennsylvania we have reviewed, the predicate for even considering whether “unintentional fraud” exists is an actual misrepresentation of a material fact. We cannot find any such misrepresentation alleged in ¶¶ 14, 17, 18, or 19, whether read singly or together. As to whether these allegations state a valid § 1981 claim, we express no opinion at this juncture. But they are manifestly insufficient to allege the kind of inherent fraud necessary to toll the statute of limitations.
As for paragraph 20, at first blush it sounds as though Smith was defrauded with respect to copyrights owned by her,
i. e.,
that she held the copyrights, and that in executing licensing agreements to make records derived from these copyrights, Columbia fraudulently signed her name without paying her any licensing proceeds. Crucially, however, paragraph 20 fails to allege that Bessie Smith
owned
any of the copyrights which Columbia Records licensed. The only phrase suggesting she (as opposed to someone else) owned any copyrights is contained in the ambiguous phrase “her copyrighted songs.” The confusion is augmented by reading ¶ 20 along with ¶ 21, the latter of which she clearly states she
didn’t
own copyrights. However, bearing in mind the mandate of
Conley v. Gibson, supra,
and giving full rein to the federal rules’ permission for inconsistent pleadings, we give plaintiffs the benefit of any doubt and construe the pleadings to allege that she did own at least some copyrights. This is the first allegation we can infer to even remotely sound in fraud.
Paragraph 21 itself contains no allegation of fraud It simply states that
*626
Bessie Smith sold the copyrights to songs she composed to a Columbia subsidiary. There is no allegation that the subsidiary or Columbia made a knowingly false representation on which she justifiably relied to her detriment. The allegations in paragraph 21 may well state a valid claim under the substantive law of § 1981, the copyright laws or appropriate state law protecting property. We express no opinion on those questions here. We simply note that ¶ 21, like ¶¶ 17 and 18, does not describe any inherently fraudulent activity, as that term is defined to determine the statute of limitations issue.
The facts alleged in ¶22 do not constitute fraud any more than do those in ¶¶ 17,18, or 21. They say only that she was paid too little (in relation to what she potentially could have commanded with the help of a devoted agent) for her recordings. Smith clearly was paid the money, and clearly must have known how much she was paid. There is no allegation of any attempt to pretend to pay her more than she actually received. At most, it alleges nondisclosure of how much other performers were earning, which may or may not be an actionable wrong under various laws, but which is not common law fraud.
Paragraphs 23 and 24 allege that there exist a number of form contracts Smith neither saw nor consented to, but to which her name was signed by her agent who was simultaneously a Columbia official. The Columbia executive is not alleged to have forged her name. Rather he signed them in his name
“for
Bessie Smith.” According to the allegations and plaintiffs’ motion papers, Columbia paid Smith the amounts stated in the contracts, (with the possible exception of eight songs discussed in Part V of this opinion) and reflected those amounts in its ledger book. We can find no element of fraud here.
Finally, ¶ 25 seems to contain exactly the same allegations as ¶ 20: that Bessie Smith owned copyrights (this is nowhere clearly stated in ¶ 25, just as it was not in ¶ 20), and that Columbia defrauded her out of licensing proceeds by signing her name as copyright holder and licensor to licensing contracts with Columbia as licensee. We construe ¶¶ 20 and 25 together as one allegation, and it is the
only
allegation we c.an discern in this complaint that in any way suggests inherent fraud in the 1923-33 course of dealings between Bessie Smith and Columbia Records.
In sum, none of the allegations allege inherent fraud with any cogency or specificity as demanded by Fed.R.Civ.P. 9(b) and the Pennsylvania case law on tolling the statute of limitations. The only allegations we can even construe to sound in fraud are those contained in ¶¶ 20 and 25. As to those allegations (which we can only read as in reality the same allegation stated twice), our next inquiry under
Holmberg
is whether the fraud is alleged to have concealed itself by reason of its inherent nature from the 1920’s to the 1970’s, without the reasonable possibility of detection.
Turning to that inquiry we cannot find, and cannot reasonably construe, any allegation which would support the proposition that a scheme to defraud Bessie Smith between 1923 and 1933 (by obtaining licensing agreements to songs of which she was the copyright holder by signing her name to the agreements and not paying her licensing fees, as alleged in ¶¶ 20 and 25) was inherently self-concealing until the 1970’s. Quite the contrary, the only reasonable inference we can draw is that if Bessie Smith were indeed the copyright holder, she knew, or
should have known,
that certain legal rights, including the rights of licensing, were hers by virtue of those copyrights. We are precluded from drawing any other inference because, under the allegations of the complaint, she recorded those very songs she composed (and for which by hypothesis she held the copyright) for Columbia, and she had to know Columbia was making the records and releasing them to the public for sale. The applicable legal standard is that inherent fraud continues to be concealed as long as the person defrauded “ha[s] failed in [the exercise of]
reasonable diligence
to discover” the alleged deception.
Holmberg v. Armbrecht,
327 U.S. 392 ,
*627
397, 66 S.Ct. 582, 585 , 90 L.Ed. 743 (1946) (emphasis added); “In Pennsylvania . the statute of limitations is deemed to run . from the time of discovery of the fraud
or facts which would lead a reasonable man to discovery of the actual fraud.” Tober v. Charnita, Inc.,
58 F.R.D. 74, 84 (M.D.Pa.1973) (emphasis added). It is impossible for us to conclude that Bessie Smith, acting with due diligence under
Holmberg
or as a reasonable person under
Tober,
would not or should not have discovered the kind of fraud alleged in ¶¶ 20 and 25. If there are facts about the scheme which would make it self-concealing from the 1920’s until the 1970’s, without the reasonable possibility of detection, they have not been set forth in plaintiffs’ pleadings or response to Columbia’s motion for summary judgment. And we must categorically reject the possibility that the ignorance and lack of business sophistication alleged in ¶¶ 11 and 12 is legally sufficient to “conceal” the fraudulent scheme for more than forty years. Ignorance on the part of Bessie Smith or her husband is simply different from concealment by defendants. And the ease law requires an objective, or reasonable person standard, not a subjective one.
See Holmberg v. Armbrecht
and
Tober v. Charnita, Inc., supra.
We conclude that plaintiffs have not made specific and legally sufficient allegations of inherent fraud to warrant tolling the statute of limitations from the 1930’s to the 1970’s.
(c)
The Doctrine of Fraudulent Concealment
We turn, then, to the alternative possibility — not that the original transactions between 1923 and 1933 were inherently fraudulent and hence concealed by their own nature, but that, under
Overfield
and
Knuth,
there were “affirmative efforts to divert, mislead, or prevent discovery” as opposed to “mere silence, or nondisclosure, even by a corporate official.”
Overfield, supra,
146 F.2d at 896 .
For this inquiry, we focus on ¶¶ 14 through 25
as read with
¶ 29 — the former provide the matter concealed, the latter contains all the allegations bearing on Columbia’s efforts of “fraudulent concealment.” We note preliminarily that ¶ 15, involving the allegations about Clarence Williams, cannot form the basis of any “fraudulent concealment” theory. The complaint itself alleges that Jack Gee “learned that spring” [1923] of Williams’s activities and that “Jack Gee and Bessie Smith forthwith fired Williams as Bessie’s manager after a confrontation meeting in April, 1923.”
16
These allegations clearly demonstrate the exact opposite of “concealment,” fraudulent or otherwise.
Focusing on ¶ 29, we do not find any allegations of any affirmative, independent acts of concealment, or of anything more than mere corporate silence by defendants. Plaintiffs apparently ask us to infer from the 1951 publication by Columbia, in which it represented it owned the rights to Smith’s recordings, that plaintiffs justifiably relied on this representation (or what plaintiffs contend is a misrepresentation) and that they therefore understandably let down their guard. The short answer is that this is simply not the kind of “concealment”
Overfield
and
Knuth
contemplate. On the contrary, we can only construe this publication by Columbia as the opposite of concealment, and it should have put anyone who thought he might have a legal entitlement to Bessie Smith’s recordings on notice to investigate further.
Turning to the allegation in ¶29 that Columbia “had never revealed” to Jack Gee, Sr., its “misappropriating” of his wife’s property, this is clearly insufficient as an allegation of concealment under
Overfield .
It is simply “non-disclosure . . by a corporate official.” And the gratuitous reference in ¶ 29 to nature of the relationship between Jack Gee, Jr. and Jack Gee, Sr. is legally irrelevant in this lawsuit, since there is no allegation that Columbia took advan
*628
tage of this relationship to actively conceal anything from anyone.
That leaves two allegations in ¶ 29. The first concerns Jack Gee Sr.’s illiteracy. This is the same allegation contained in ¶ 11. There is no allegation that Columbia actively took advantage of Gee’s illiteracy in any fashion. Perhaps this circumstance would have made concealment
easier
had there been other attempts to conceal, but since there has been no other concealment alleged, his illiteracy is insufficient standing alone.
The final allegation is that Columbia used “various means and methods” to work a concealment until 1972 (when Chris Albertson published
Bessie).'
The Fed.R.Civ.P. 9(b) requirement is that “In
all
averments of fraud . . the circumstances constituting fraud . . . shall be ■ stated with particularity.” This rule must apply fully to the doctrine of “fraudulent concealment” as a tolling principle. The phrase “various means and methods” is precisely the vague pleading that 9(b) was drafted to prevent. Rule 9(b)’s “particularity” requirement is wholly salutary in view of the free abandon with which the term “fraud” is prone to be used. The salutary character of the rule is especially apparent in our situation, where the existence of “fraud” (/. e. fraudulent concealment) will determine not simply whether defendant will be summoned to stand trial, but whether defendant will have to stand trial concerning events that happened more than forty years ago. Where, as here, the presence or absence of fraud is not simply the basis of a cause of action which has been timely commenced, but rather is the very precondition for tolling the statute of limitations and examining a cause of action which has lain dormant for nearly half a century, it is especially important that the requirements of Rule 9(b) be met. Plaintiffs have not done so.
17
We conclude, therefore, that plaintiffs have not made specific and legally, sufficient allegations of “fraudulent concealment” to warrant tolling the statute of limitations from the 1930’s until the 1970’s.
(d)
The Doctrine of Breach of Fiduciary Relationship
Plaintiffs’ next theory is that a “fiduciary relationship” existed between Bessie Smith on one hand, and Frank Walker and John Hammond, on the other.
18
Plaintiffs allege that each served simultaneously as her business manager and as an executive of Columbia Records. They are alleged to have “breached” the “fiduciary relationship” of being her business manager by signing her to contracts in the best interest of Columbia, in that those contracts contained low payment fees and no royalty provisions. According to plaintiffs,
It is a well established principle of federal law that where the fraudulent conduct of a defendant prevents a plaintiff from becoming aware of the existence of a cause of action, the bar of the statute of limitations does not begin to run until the fraud is discovered. . . . Moreover, if there exists a fiduciary or confidential relationship between the plaintiff and the person alleged to conceal the cause of action, the plaintiff need show no evidence of the fraudulent concealment other than that implied from the transaction itself.
*629
Plaintiffs’ Memorandum in Opposition to CBS’s motion to dismiss at 5-6 (citations omitted).
In other words, according to plaintiffs, by merely alleging that a “fiduciary or confidential” relationship exists between two people who entered into a contract (as has been done in this case), and by simply alleging that any given contract was one-sided, one can succeed in tolling the statute of limitations, apparently indefinitely. Moreover, in plaintiffs’ submission one can infer “fraudulent concealment” merely from the allegation that the transaction was unfair. If this were an accurate depiction of the law, it would be startling indeed. Any contract made hundreds of years ago could become the subject of a present day lawsuit. One would simply have to allege that: (a) the two people who contracted, presumably at arms length, were really in a “fiduciary relationship” which involved a “conflict of interests” for one of the parties; and (b) that the terms of the presumably arms length contract were in reality unconscionable. From such allegations, one could infer “fraudulent concealment,” and with a magic legal wand stop the march of time for all the intervening years.
The correct doctrine of “breach of fiduciary duty” as it relates to tolling the statute of limitations is a much more modest and limited one. The best explication thereof we have found is in
Developments in the Law
— Statutes
of Limitations,
63 Harvard L.Rev. 1177,1214-16 (1950). While only the author’s reference to “principal-agent” relationship is directly relevant to this lawsuit (since the relationship of Bessie Smith and her business manager is one of principal and agent), we find it helpful to review the scope of the whole doctrine as background:
(b)
Breach of Fiduciary Duty.
— To establish a cause of action for fraud or mistake the plaintiff must have been unaware of the wrong at the time it was done; such proof is of course not necessary to an action for a breach of fiduciary duty. Nevertheless, the two types of actions have been accorded similar special treatment under statutes of limitation, which is justified because here too the plaintiff will not ordinarily learn of the wrong for some time after the defendant’s defalcation. This consideration is especially appropriate to the express formal trust, a relationship used frequently for the preservation and management of property for the young, infirm, or inexperienced, who are unlikely to have sufficient business acumen to determine when a breach has occurred. Indeed, the beneficiary of a trust is generally forbidden to interfere in the management of the res. Thus, the statute does not begin to run during the existence of the relationship unless the beneficiary knows, or reasonably should know, of the facts constituting the breach of duty. But when the trust terminates, and the property is delivered to the new trustee or to the beneficiary with a final accounting, the probability that the wrong will be disclosed is sufficient to warrant commencement of the statutory period. In view of these considerations, the rule of postponement is applied to defalcations of executors, administrators, and guardians, as well as trustees, but not to wrongs upon which a constructive trust is imposed by operation of law as a remedial device for the specific restitution of property, in the absence of a particular type of fiduciary relationship.
A similar probability of ignorance characterizes a breach of the fiduciary duty of a corporate officer or director, for the shareholder would ordinarily have no opportunity to learn of the wrong. But when the guilty officers do not dominate the corporation’s affairs, it may be appropriate to charge the corporation with notice of the wrong, imposing on the other officers some duty of vigilance. Indeed, in the case of a close corporation, such vigilance might be demanded of the shareholders. In any event the business background of the corporate entity, as distinguished from the purposes of the express trust, might warrant the general imposition of a greater duty of diligence. Although some courts have treated the corporate director as a trustee, generally
*630
the statute runs from the date of the wrong.
Where an agent violates a duty owing to his principal, as by misappropriating his principal’s property, limitations treatment will vary depending not only upon the nature of the wrong, but also upon the nature of the particular agency relationship involved.
Thus, where the type of activity being carried on, the duration of the agreement, and the relationship of the parties all tend to create the probability that the breach of duty will be unknown to the principal for some time, as in the case of a general agent managing his principal’s business, the courts are likely to commence the statute only when the plaintiff discovers the wrong or when an account is rendered, as in the case of a trustee.
But where the circumstances indicate that the principal would ordinarily supervise his agent’s activities fairly closely, as in the case of a collecting agent who makes frequent accountings, the statute begins to run when the agent commits the breach of duty. Since no general rule can be formulated in agency terms, in view of the wide variety of agency relationship, it would be desirable to deal with each case on its facts, delaying the running of statute only where the tendency of the wrong to remain unknown for a considerable time approaches a certainty,
(citations omitted) (emphasis added).
It is clear, then, that the phrase “breach of fiduciary duty” is not talismanic, in the presence of which the statute of limitations withers away. Quite the contrary, the contours of each particular
kind
of “fiduciary” relationship must be examined with care, to determine when the person wronged might reasonably, given the nature of the particular relationship, have been expected to learn of the breach.
We have examined the Pennsylvania case law, and have found it in accord with the general statement of the law expressed in the above passage. Indeed, a Pennsylvania Supreme Court case,
In re Huffman’s Estate,
349 Pa. 59 , 36 A.2d 640 (1944) was the authority chosen in the Harvard article to illustrate the principle that “where the circumstances indicate that the principal would ordinarily supervise his agent’s activities closely . . the statute begins to run when the agent commits the breach of duty.”
Huffman’s Estate
makes explicit that in Pennsylvania, an objective standard of “reasonable diligence” governs
a 11
“fiduciary” relationships, and especially that of principal and agent, by adopting the following language of an earlier decision:
Clients and principals, who employ attorneys, whether at law or in fact, like all other men, are bound to exercise reasonable diligence about their own affairs.
The creditor, who allows his simple contract debts to run on, overdue, for more than six years, must charge their loss to his own negligence;
... so with the constituent who neglects to call his agent or attorney to account.
Statutes of Limitation are intended to promote promptness and punctuality in business; the settlement of claims while parties are alive; before papers are lost and witnesses die; and he who will not take the hint, must take the consequences.
349 Pa. at 63 , 36 A.2d at 643 (emphasis added). We turn then to an examination of the complaint in light of the doctrine of breach of fiduciary duty.
Frank Walker is alleged to have been Bessie Smith’s “manager” during the 1920’s and early ’30’s (¶ 18). He is alleged to have been a “Columbia Record executive” at the same time he was her manager (¶ 18). John Hammond is alleged to have been her “agent” during 1933 (¶ 22). He is alleged to have acted as her agent in 1933 “while an official of Columbia” (¶22). Both men, then, alleged to have been Bessie Smith’s agents, are of course chargeable with whatever fiduciary duty inheres in the principal-agent relationship. Nowhere in the complaint is there delineation of the duty of these agents supposedly had, or of the “breach” for which they are supposedly liable. We therefore construe the complaint to allege the following breaches: first, act
*631
ing simultaneously as agent for a principal and as official of the recording company with whom that principal enters into contractual relationship is an inherent breach; and second, actively negotiating a contract as agent with the record company for whom one works as employee, at terms less than the fair market value of the principal’s services, is a breach of fiduciary duty.
See
¶ 18, quoted in full
supra.
Reasoning backwards, if these are the breaches involved, then plaintiffs must be alleging that Walker (and Hammond) had the
duty
(1) not to act in conflicting roles, and (2) not to negotiate contracts on Bessie Smith’s behalf at less than her artistic services were worth at fair market value.
With some effort, then, we have been able to extract from this opaque complaint an allegation of agency, allegations of the particular kind of agent-principal duty involved, and allegations of breaches of this duty. However, this is not the end of the line. We must apply to those allegations the legal standard of
In re Huffman’s Estate
that principals are bound to exercise “reasonable diligence about their own affairs.” Taking as true the allegations of agency, of duty and of breach as delineated above, are they sufficient as a matter of law to permit the inference that the breaches alleged would have remained
concealed
from a “reasonably diligent” principal (and his or her successors in interest) for over forty years? For it is of course only if there has been
concealment
of the principal-agency breach that the statute is tolled for the time of that concealment.
At the threshold, we must separate the discussion of Frank Walker and John Hammond. We first focus on the latter. The only allegations implicating Hammond are found in ¶ 22 described above. These allegations are contained in an unverified complaint. Plaintiffs have submitted no evidence by way of affidavits, depositions, or the like, tending to establish that Hammond was either an employee of Columbia Records or Bessie Smith’s agent. (This contrasts with the allegations concerning Frank Walker, where plaintiffs have submitted from contracts signed “Frank Walker for Bessie Smith,” which certainly raises an issue of some kind of agency relationship, albeit of unspecified dimensions).
From John Hammond’s deposition in this case, filed of record, it clearly appears that Hammond was
not
an employee of Columbia, at least at the time in question. It further clearly appears that he did not act in the capacity as Bessie Smith’s agent. Quite the contrary, according to his deposition, he persuaded Columbia — which after recording Bessie Smith as an exclusive artist during the years 1923 to 1931, had no further resources to pay to record her in 1933 — to make and issue the records in 1933 provided that
he,
John Hammond, paid Smith. If anything, the deposition shows the reverse of the roles alleged — that John Hammond was the principal in the relationship, and Bessie Smith the agent.
See
Hammond’s deposition at 98-99. Therefore, there can not have been either a breach of any principal-agent relationship with Smith as principal, or a breach involving a conflict of interest. We must thus grant summary judgment in favor of defendants on the issue whether the allegations of ¶ 22 of the complaint state a legally sufficient ground to toll the statute of limitations.
That leaves the allegations concerning Frank Walker, contained in ¶¶ 17, 18, 19, and 20. Plaintiffs allege that Walker, as agent, owed Bessie Smith, his principal, the duty to inform her of the “two hats” he wore, and the duty to negotiate recording contracts for her at fair market value. Plaintiffs further allege that Walker breached both of these duties. Assuming the correctness of plaintiffs’ view of Walker’s duties to Smith and his breaches thereof, the issue we must decide for statute of limitations purposes relates to the discovery or discoverability of those breaches. Although plaintiffs claim that Smith was unaware of Walker’s “conflicting” roles, and that she was also ignorant of the value of her services, we think the record belies this view. What is more important though, is that these claims relate to Smith’s
subjec
*632
tive
knowledge, while
Huffman’s Estate
clearly instructs that the applicable legal standard is a reasonable person or
objective
test. Applying the appropriate standard, the question is not whether Smith actually discovered Walker’s alleged breaches of duty, but whether she should have discovered those breaches had she acted as a reasonably diligent principal. The answer to that question is an unequivocal yes. The fact of Walker’s employment with Columbia was widely known, and Bessie Smith, so intimately involved with Columbia as a recording star, is certainly chargeable with this general knowledge. Smith also must be charged as a reasonably diligent principal with the obligation to ascertain what her artistic services were worth in the record market.
Other allegations in the complaint support our conclusion that an inference of immediate discoverability is the only reasonable one. Paragraph 23 alleges that eight recordings contracts were executed between Bessie Smith and Columbia between 1923 and 1931. Columbia has stated that there was immediate payment to Smith with each contract, and neither by allegation nor record evidence have plaintiffs disputed this. It is clear then, that the Smith-Walker agency relationship that plaintiffs describe is very similar to that of
In re Huffman’s Estate, supra, i. e.,
one where there reasonably should have been constant supervision of the agent’s activities. “. . . Where the circumstances indicate that the principal would ordinarily supervise his agent’s activities fairly closely, as in the case of a collecting agent who makes frequent accountings, the statute begins to run when the agent commits the breach of duty.”
Developments in the Law, supra
at 1216.
The only reasonable inferences permissible under the allegations of the complaint are that the principal (Bessie Smith) would constantly have been in a position to know what she was receiving as payment, that she would have been in a position to know what her artistic services were worth at fair market value, and that she would have been in a position to discover that her “agent” was an official of the very recording company for which she was an exclusive artist for ten years. If there are reasons why she, or her successors in interest, could not learn of the alleged breaches, they have been nowhere alleged nor otherwise raised by the record in this case.
It is apparent to us that plaintiffs are actually attempting to allege a theory that the breaches were concealed from Bessie Smith and her heirs because of their ignorance, lack of business sophistication, and general societal conditions.
See
¶¶ 11, 12 and 29. “The amended complaint in this action alleges,
inter alia,
that defendant and its agent took undue advantage of the confidential relationship that existed between them and Bessie Smith and that both Bessie Smith and Jack Gee, Sr. were uneducated and illiterate and unable to discover the existence of the pending cause of action.” Plaintiffs’ Memorandum at 5. In terms of the Harvard
Developments
article, plaintiffs seem to be seeking to avail themselves of the theory that there was an “express formal trust,” rather than the kind of agency relationship described in
Huffman’s Estate.
“ ‘The express formal trust’ is used frequently for the preservation and management of property for the young, infirm, or inexperienced, who are unlikely to have sufficient business acumen to determine when a breach has occurred. Indeed, the beneficiary of a trust is generally forbidden to interfere in the management of the res.” Harvard
Developments, supra
at 1215. Under this theory, of course, “the statute does not begin to run during the existence of the relationship unless the beneficiary knows, or reasonably should know, of the facts constituting the breach of duty:”
Id.
at 1215.
Even if we construe the allegations to assert the existence of an “express formal trust,” this theory is dispelled by the record. The only evidence of any agency relationship between Bessie Smith and Frank Walker are the recording contracts he signed on her behalf. They could not be further from express trust instruments.
*633
Without a showing of an express formal trust, an allegation of mere ignorance or lack of business sophistication is clearly insufficient as a matter of law to toll the statute.
See Walters v. Ditzler,
424 Pa. 445 , 227 A.2d 833 (1967) (“mere mistake, misunderstanding or lack of knowledge do not toll the running of the statute of limitations . . . the statute of limitations will run against persons under a disability, including minors and incompetents.”
Id.
at 449-50 , 227 A.2d at 835 .)
19
To summarize, then, on the question of the Smith-Walker relationship, we have found the allegations of the existence of an agency relationship, of the type of duty inhering in that relationship, of the breach of that duty and of the
concealment
of that breach insufficient under the applicable law to permit the statute of limitations to be tolled for over forty years.
(e)
The Doctrine of Revival of a Promise to Pay
Plaintiffs’ final theory for tolling is contained in ¶ 30 quoted in full
supra.
Here plaintiffs are advancing the “acknowledgment” doctrine as applied to the statute of limitations: a debt which is time-barred may be “revived” by an acknowledgment by the debtor. “It has long been recognized that the expiration of the statutory period does not bar the claim if the plaintiff can prove an acknowledgment, a new promise, or part payment made by the defendant either before or after the statute has run. Such conduct ‘revives’ the cause of action so that the statute starts to run again for the full statutory period.”
Developments in the Law
— Statutes
of Limitations,
63 Harvard L.Rev. 1177, 1254 (1950).
The statement on which the “acknowledgment” or “revival” theory is based in our case has been made part of the record of this case, and is reproduced below in full. The statement was originally made on WNET-TV:
With me in the studio this evening is an executive of one of the country’s largest recording companies, he is Bruce Lundwall, Vice President in charge of marketing for Columbia Records. Ray McArthur, the producer of tonight’s feature report is also with us. Mr. Lundwall, you’re with Columbia Records, this company has produced a lot, a sizeable number of jazz recordings and among them some very good reissues. Is there an attempt to compensate the artists economically, beyond the restrictions of the contractual stipulations?
L. I think so, I think at Columbia and it’s really true of other recording companies as well, today, that the kind of compensation that I’m thinking about here is the type of thing where the company will support the artist while on tour, will support an engagement with an advertising campaign surrounding that engagement so that we are also promoting his appearance, trying to get people into the nightclub or into the concert hall to see the artist as well as to sell his album product. I think that in fact the contractual arrangements with all artists today, jazz artists as well as rock artists, gives the artist far more than he would have gotten in a contractual situation 10 years ago or 20 years ago. And furthermore, I rather disagree with much of what I saw in this film although it’s certainly to a degree accurate. I think that the outlook for jazz today is indeed very healthy.
Q. The economic outlook or the reception by the audience?
L. Well
Q. Both?
L. Both certainly go hand in hand
Q. Bessie Smith is once again very much in vogue, I learned that from the film, the book is out by Chris Albert-son and her records are again making
*634
money. Now in the film we were told that there was no compensation being paid to her estate or so, but what happens in situations like these? Does the money just go back into the company, to be reinvested in company stock or is some support of the art thought about?
L. No, absolutely, the latter is the case. There was royalty paid, a payment made to the Bessie Smith Foundation, number one, and secondly John Hammond and Clive Davis, the President of Columbia Records, are attempting to form a scholarship fund in Bessie Smith’s name to support needy black students with royalties from the sale of these albums. And indeed they have sold well.
Q. In other words, Bruce are you saying then that you are paying royalties on the reissues constantly or did you just make one block?
L. We made one payment initially, but the royalties have accumulated in an account and will be used for a fund for needy black students in the future and this is being arranged for by the president of the company and John Hammond who was largely involved with Chris Albertson in putting the repackaging together.
Pennsylvania has taken a strict view of the “acknowledgment” doctrine, requiring “a clear, distinct or unequivocal acknowledgment of the debt”:
A clear, distinct, or unequivocal acknowledgment of the debt is sufficient to take the case out of the operation of the statute. It must be an admission consistent with a promise to pay. If so, the law will imply the promise, ■ without its having been actually or expressly made.
There must not be uncertainty as to the particular debt to which the admission applies.
In re Nicolazzo’s Estate,
414 Pa. 186, 190 , 199 A.2d 455, 458 (1964),
quoting Palmer v. Gillespie,
95 Pa. 340 (1880). The above quote reflects the fact that in Pennsylvania use of the doctrine is confined almost exclusively to suits upon a promissory note.
The last sentence notwithstanding, we assume arguendo that the Pennsylvania rule of acknowledgment is applicable to the various “contract” actions in the § 1981 count. Doing so, we are unable to find in Lundvall’s statement an acknowledgment of any debt that is clear, distinct or unequivocal. Mr. Lundvall states that the Columbia Records corporation desired to “support the art” (presumably of jazz and/or blues, judging by the context of the remarks), and in doing so contributed money to various foundations or funds. Several vague references to “royalties” by Mr. Lundvall are insufficient to dispel any “uncertainty as to the particular debt to which the admission applies,” as required in Pennsylvania.
We, therefore, will grant defendant summary judgment on the issue whether the statement by Bruce Lundvall is sufficient “acknowledgment” of any of the § 1981 claims to “revive” them.
4.
Consistency of the Tolling Principles with § 1981
Our final step in this extended inquiry is to ask whether any of the Pennsylvania tolling principles we have located as applicable to this action are “inconsistent” with § 1981, as that phrase is explained in
Robertson v. Wegmann, supra.
We find no such inconsistency. The Pennsylvania tolling provisions are not unique or unduly restrictive when compared with the general law of tolling summarized in the
Developments in the Law
article
supra.
A comparable consonance was a factor in leading the Supreme Court in
Robertson
to declare the Louisiana survival statute not inconsistent.
See
436 U.S. at 592 n.3, 98 S.Ct. 1991 . And simply because application of the Pennsylvania tolling doctrine may time-bar some or all of plaintiffs’ claims in this suit, we are not necessarily lead to- a conclusion of “inconsistency,” for as stated in
Robertson :
A state statute cannot be considered “inconsistent” with federal law merely because the statute causes the plaintiff to lose the litigation. If success of the .
*635
action were the only benchmark, there would be no reason at all to look to state law, for the appropriate rule would then always be one favoring the plaintiff, and its source would be essentially irrelevant. But § 1988 quite clearly instructs us to refer to state statutes; it does not say that state law is to be accepted or rejected based solely on which side is advantaged thereby.
436 U.S. at 593 , 98 S.Ct. at 1997 . We conclude that the tolling provisions we have identified and used in this suit are not inconsistent with § 1981.
5.
Summary
In the foregoing discussion, we have limited ourselves to those claims based on 42 U.S.C. § 1981 , which accrued to Bessie Smith herself before her death in 1937, and specifically to transactions between her and Columbia from 1923 to 1933.
We first found that the claims do not satisfy Fed.R.Civ.P. 17(a), the real party in interest rule. Although under other circumstances we might grant plaintiffs leave to amend to correct the deficiency at this time, this is a case in which plaintiffs have already amended twice, and as in baseball, one doesn’t get a fourth strike. There is, however, a second ground on which we dispose of plaintiffs’ § 1981 claims: the statute of limitations. Despite plaintiffs’ assertion that summary disposition, via either Rule 12 or Rule 56, is improper to resolve issues of tolling the statute of limitations, we find the weight of authority to be otherwise. Our Circuit has held that a Rule 12 motion may be utilized to raise a statute of limitations issue.
Hanna
v.
United States Veterans’ Administration Hospital,
514 F.2d 1092, 1094 (3d Cir. 1975). Such a motion is the proper vehicle for disposing of a claim on statute of limitations grounds if “the time alleged in the statement of a claim shows that the cause of action has not been brought within the statute of limitations.”
Hanna, supra,
at 1094 .
In this derivative § 1981 claim there is clearly such a showing. We are considering only claims Bessie Smith might have had. As pleaded, these claims all arose before 1933, in a situation where a six year statute of limitations is operative.
The issue then becomes whether plaintiffs have made sufficient allegations to state a legally sufficient reason for tolling the statute of limitations for forty years. Where plaintiffs’ pleadings clearly show that the statute of limitations would otherwise be a bar, it must, by logic, be part of plaintiffs’ further pleading burden to allege facts, which are taken as true for purposes of the motion, to justify tolling the statute of limitations. We find this wholly logical extension supported in case law.
See e. g. Hellebrand v. Hoctor,
331 F.2d 453 (8th Cir. 1964) (“Where, as here, the complaint on its face is barred by the Statute of Limitations, the plaintiff by appropriate allegation must bring himself within one of the exceptions contained in the above disability statute.”
Id.
at 455 .) As we see it, the inclusion of factual considerations into the equation transforms the motion to dismiss into one for summary judgment under Rule 56, and there is no question that the statute of limitations bar may be effectuated on a Rule 56 motion.
In our situation, unlike
Hellebrand,
we are not concerned with a legislatively-enacted statute of disabilities. Instead, we are concerned with common law tolling doctrine as enunciated by the Pennsylvania state courts.
20
This places an additional burden on plaintiffs in our case: since two of the four possibly-applieable tolling doctrines (inherent fraud and fraudulent concealment) involve fraud, those additional pleadings demanded of plaintiffs must meet the specificity requirements of Fed.R.Civ.P. 9(b). That requirement means that facts showing the existence of at least five of the
*636
six elements enunciated in
Southern Development Co. v. Silva, supra, (i.e.
all those except the “intent that the misrepresentation be acted on,” eliminated by
Nesbitt, supra)
must be pleaded. 2A
Moore’s Federal Practice
¶ 9.03 at 1924 (2d ed. 1978). (This additional 9(b) burden is, of course, not imposed on the pleading requirements under the other two applicable tolling doctrines raised by the complaint, breach of fiduciary duty and acknowledgment of debt). Under the above standards, all of Count I must be dismissed either under Rule 12 or Rule 56. More specifically we hold as follows.
We will grant defendants summary judgment on the allegations contained in ¶ 22 concerning John Hammond. There is no genuine dispute of a material fact concerning his role in the 1933 recordings, and as a matter of law those facts cannot serve to toll the statute of limitations from 1933 to 1974. The allegations of ¶ 22 may not be considered further as to any count of this complaint. We also grant defendants summary judgment on the allegations of ¶ 30, involving Bruce Lundvall’s supposed acknowledgment of a debt. There is no dispute as to the facts of that “acknowledgment,” and we find as a matter of law that there was insufficient acknowledgment of a specific debt owed to Bessie Smith to revive any contractual debts from the 1920’s and 1930’s. The allegations of ¶ 30 may not be considered further as to any count of this complaint.
Under the
Holmberg-Nesbitt
theory of inherent fraud, only ¶|¶20 and 25 can remotely be construed as alleging inherent fraud. We dismiss the “inherent fraud” claim of ¶ 20 and ¶ 25 because, after three opportunities, plaintiffs have still failed to allege with sufficient particularity or specificity the fraudulent scheme involved in the copyright/licensing transactions of those two paragraphs.
See generally
2A
Moore’s Federal Practice
¶ 9.03 at 1923-37 (2d ed. 1978), especially at n.15 and accompanying text, showing examples of sufficient pleadings under Rule 9(b). Instant plaintiffs have not set forth, as to the scheme involved in ¶¶ 20 and 25, factors which would permit a reasonable inference that the scheme was self-concealing, without the reasonable possibility of detection, until at least 1969 (six years before this lawsuit was filed). We have previously discussed the general principles which govern the grant of leave to successively amend, and see no need to rescribe them here. We do add that this is not a case where plaintiffs have been deprived of opportunity to develop facts which would give rise to adequate pleadings, or if requisite specificity migjit equally be appropriate in their answering papers (to defendants’ motion), to set them forth then.
Plaintiffs have propounded two sets of interrogatories during the three years since commencement of this suit, and both sets have been answered. By plaintiffs’ own admission in the allegations, Chris Albert-son finally revealed the fraud in 1972 by publishing his biography of Bessie Smith. Chris Albertson has been deposed by plaintiffs in this lawsuit. In short, under plaintiffs’ own theory, the fraudulent scheme engaged in by defendant has been fully exposed for several years, and plaintiffs have had every opportunity in this lawsuit to learn the particulars of that scheme and to set it forth in their second amended complaint or their answering papers (to defendants’ motion). Their failure to do so can only be deemed as a concession that they cannot do so. Accordingly the doctrine of inherent fraud used as a tolling device cannot prevent the dismissal (via Rule 12 or Rule 56) of Count I of plaintiffs’ complaint.
Turning to the doctrine of “fraudulent concealment” as a tolling principle, in ¶ 29 plaintiffs fail to meet the requirements of
Overfield
and
Knuth.
Plaintiffs have not alleged facts which permit the reasonable inference that defendant took affirmative efforts to mislead, divert or prevent discovery of the facts alleged in ¶¶ 14, 17, 18, 19, 20, 21, 22, 23, 24, 25, or 26, and that such efforts succeeded, without the reasonable possibility of detection, .on a continuous basis until at least 1969. Rule 9(b) and the failure to be more specific by this time are
*637
fatal. It is insufficient for plaintiffs to allege that the “various means and methods” of concealment are known only to defendant. It is
plaintiffs’
pleading burden to satisfy Rule 9(b).
Finally, turning to the doctrine of “breach of fiduciary relationship,” 'all paragraphs of the complaint implicating this doctrine except ¶¶ 17 and 18 are irrelevant. As to ¶¶ 17 and 18, plaintiffs claim fails because they have not alleged, despite years of opportunity to explore the matter and to do so either in their second amended complaint or their answering papers, facts which can support the reasonable inference that
concealment
of the breach of the principal-agency relationship alleged between Bessie Smith and Frank Walker would not have been possible to detect by a reasonably diligent principal until at least 1969. In accordance with our discussion, we deny leave to amend a third time. Thus neither the fraudulent concealment nor breach of fiduciary relationship doctrines used for tolling purposes can prevent the dismissal (via Rule 12 or 56) of Count I. For the foregoing reasons, we dismiss all of Count I as predicated on a representative, derivative theory of liability.
C.
Suit in a Non-Representative Non-Derivative Capacity
Plaintiffs have, as an alternative § 1981 theory, sought what we can only characterize as an ingenious way around the foregoing hurdles of the survival statute and the statute of limitations: they are not suing under § 1981 for wrongs done to Bessie Smith in the past; rather, they are suing for wrongs being done to
themselves
in the
present.
Therefore, any questions of proper “survival” of an action, and any possibility of a time bar, disappear in one fell swoop. They explain the theory in the following manner:
Plaintiffs here are heirs of Bessie Smith and in their own right now possess the property rights of Bessie Smith. In the instant complaint, plaintiffs are seeking redress under federal and state statutory and common law to protect plaintiffs’ own property rights which are clouded by racially discriminatory contract arrangements allegedly made between Bessie and defendant. Plaintiffs allege that the mechanical license and artist contract arrangements to which defendant claims they are bound as successors in interest to Bessie Smith, were racially discriminatory when originally signed and continue to be racially discriminatory as long as they are in force, or otherwise affect current rights of plaintiffs. Since plaintiffs are directly affected and allegedly bound by these purported contracts which defendant claims impose restrictions and obligations on them, presently and into the future, and on which defendant relies to support its nonliability to plaintiffs’ claims, plaintiffs themselves are harmed by the racially discriminatory character of these contracts.
See Baker v. F & F Investment,
420 F.2d 1191, 1196 (7th Cir. 1970).
sfc * * * sfc s(e
Here we have individuals [instant plaintiffs] who themselves are subject and directly wronged by defendant’s discriminatory actions. Plaintiffs, as heirs of Bessie Smith, (as composer) have independent property rights to the copyrights and copyright renewals for those musical compositions written and composed by Bessie. ... In addition, plaintiffs have inherited property rights in the artistic renditions, name, likeness, and reputation of Bessie Smith as performing artist. . . . Since defendants’ discriminatory conduct affects the plaintiffs’ rights and continued interest in this property, the discriminatory character of the contracts inflicts upon plaintiffs a wrong equally as great as that inflicted upon Bessie Smith.
Contract Buyers League v. F & F Investment,
300 F.Supp. 210, 221 (N.D.Ill. 1969) , aff’d sub nom.
Baker v. F & F Investment,
420 F.2d 1191 (7th Cir. 1970) ,
cert. den.
400 U.S. 821 , 91 S.Ct. 42 , 27 L.Ed.2d 49 (1970).
We start with the authority on which plaintiffs place primary reliance,
Contract
*638
Buyers League.
In that case, plaintiffs were a group of black homeowners in the Chicago area who charged defendants with violating their § 1982 rights to “purchase, lease, sell, hold, and convey real and personal property” on terms equal to that of white citizens by the following scheme: first, defendants would “blockbust” a “white” neighborhood, obtaining depressed prices from panicked white homeowners; second, defendants would take advantage of the shortage of homes available for blacks in Chicago by selling them these same homes at rates greatly in excess of the fair market value. These exorbitant purchase prices led to contracts with defendants for exorbitantly high mortgage payments. Plaintiffs charged there was a continuing series of § 1982 violations being inflicted on them: the harm did not occur simply in the original
execution
of the purchase contracts, rather it recurred until the
termination
of the contracts, because of the high installments exacted and because plaintiffs were frequently evicted from their homes for non-compliance with the contracts. The district court and the Seventh Circuit agreed with plaintiffs that, under these factual allegations, the
termination date
rather than
execution date
governed for purpose of determining the running of the statute of limitations.
To say that plaintiffs’ reliance on
Contract Buyers League
is “misplaced” is a considerable understatement.
Contract Buyers League
stands for the wholly reasonable proposition that in an action alleging continually recurring harms under a racially discriminatory contract, the statute of limitations runs not from the contract’s execution date, but rather from the date of the last harm inflicted, up to the contract’s termination date. Plaintiffs here attempt to work an alchemy on that holding by asserting that Bessie Smith’s failure to execute favorable contracts in the first place, caused by what plaintiffs contend was racial discrimination, constitutes a continuing harm against those claiming to be Smith’s heirs, analogous to the
Contract Buyers League
harm, because they are foreclosed from re-entering or renewing what should have been more lucrative contractual provisions.
The analogy clearly fails. In the first place, the nature of the “continuing” harm is entirely different in the two cases. While the
Contract Buyers League
“continuing harm” theory is predicated on precise, delineated contractual obligations between plaintiffs and defendants, instant plaintiffs’ “continuing harm” theory is predicated on lost or missed contract opportunities. In
Contract Buyers League
plaintiffs were Obligated to pay regular, allegedly exorbitant and discriminatory, installment payments. The harm “continued” for the duration of the contracts, which we assume to be between twenty and thirty years (the normal range for mortgages), and was re-inflicted at each installment interval. In contrast, the theory of harm in this case is based on contract rights Bessie Smith might have had but did not execute, allegedly because of discrimination; royalty provisions she might have benefited from but never entered into, lucrative flat recording fees she might have had, fees she might have demanded for Columbia’s use of her name and likeness, royalties for the songs she composed and could have copyrighted but did not, and so forth. Plaintiffs’ theory is that the harm from missing these might-have-been-but-for-racial-discrimination contract opportunities “continues” and is re-inflicted anew every time Columbia Records and its corporate successors make a profit from a Bessie Smith song or recording, or from use of her name or likeness. The harm “continues” unabated to her purported heirs, who of course “might have inherited” the rights to renew the lucrative contracts if she had ever entered into them in the first place. The argument falls of its own weight.
While the
Contract Buyers League
“continuing harm” theory has a definite time limit — the duration of the contractual obligation — plaintiffs’ theory in our case, by its internal logic, has no time limit whatever. Bessie Smith’s failure to enter into beneficial contracts means her heirs cannot renew these beneficial contracts. Presumably
their
heirs cannot renew the contracts, and
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their
heirs are similarly foreclosed, and so on through the ages. Each generation of heirs would have to merely assert that “but for” the original discrimination against Bessie Smith, they would have inherited more from her estate, and by such an allegation the hypothesized harm against Bessie Smith is metamorphosed into a harm against plaintiffs, no matter how many generations removed. Concomitantly, the failure of any previous generation to sue on its cause of action would be irrelevant to the next generation’s ability to maintain a new cause of action, since the harm has “continued” with undiminished force until someone asserts rights he or she “might have had” but for the original act of contractual discrimination against Bessie Smith. In sum, plaintiffs argue that so long as the corporate defendant continues to profit by virtue of the contractual arrangements it had with Bessie Smith (e.
g.,
so long as it gains by selling her records and not having to pay her heirs royalties), each generation has a new § 1981 cause of action. By the logic of plaintiffs’ theory this could go on in perpetuity.
It becomes clear that while
Contract Buyers League
addressed the limited question whether the execution date or termination date of a contract should govern for purposes of determining the running of the statute of limitations, the plaintiffs’ novel theory of § 1981 liability dispenses with the statute of limitations entirely. Since each new generation “inherits” a new cause of action and since there is a new harm inflicted each time defendant profits, there is never any question of an action being time-barred so long as it is filed within six years of the last instance of corporate profit.
21
We see then that plaintiffs’ theory is simply an ingenious attempt to play legal hopscotch over the various lines delimiting the proper scope of a § 1981 cause of action. Plaintiffs have attempted to avoid the requirement that a federal civil rights action can continue from the original person wronged to another
only
by virtue of the applicable survival statute,
see Spence v. Staras,
507 F.2d 554, 557 (7th Cir. 1974), by asserting that each generation automatically “inherits” the lost contractual opportunities of the previous generation. They have similarly attempted to avoid the requirement that they prove they are in fact Bessie Smith’s heirs through the normal intestacy or probate process, which would entail suit by Bessie Smith’s personal representative, by simply assuming they are her heirs (see plaintiffs’ first sentence quoted
supra
at 637). They have attempted to avoid the requirement that the statute of limitations governs a § 1981 action by proposing a theory of “continuing harm” which “continues” in perpetuity, and on which the statute of limitations can never run. And finally they have ignored the fact that the gravamen of their § 1981 action is the
lack
of contractual rights Bessie Smith enjoyed during her lifetime and therefore at the time of her death.
This is not, as plaintiffs style it (see language quoted
supra
at p. 637), “clouded property rights” they have “inherited” or to which they are “bound” as “successors in interest”. Rather, it is an alleged deprivation of Bessie Smith’s right to contract, or otherwise put, the § 1981 cause of action Bessie Smith might have had. Like any cause of action, it is only capable of surviv
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ing her death pursuant to an applicable survival statute. And like any cause of action, it is subject to the running of the statute of limitations. In short, there can be no § 1981 claim in this lawsuit other than the one we discussed in part II.B.
supra,
which we found to have failed because of the Pennsylvania statute, the real party in interest rule, and the statute of limitations.
Therefore, as to plaintiffs’ claim founded on a § 1981 harm to themselves based on purportedly “inherited clouded property rights,” we conclude plaintiffs have failed to state a claim upon which relief can be granted. Accordingly, we dismiss with prejudice all claims founded upon 42 U.S.C. § 1981 which are predicated on “non-derivative” liability,
i. e.,
all claims which are not based on causes of action which accrued to Bessie Smith herself, and which survived her death by virtue of the applicable survival statute. Thus we dismiss Count I in its entirety.
III.
Common Law Contract Remedies
Count II, based on either diversity of citizenship or pendent jurisdiction, reads as follows:
Count II
INVALIDITY OF CONTRACTS BETWEEN BESSIE SMITH AND COLUMBIA
33. During her lifetime, Bessie Smith purportedly entered into certain agreements, contracts, and understandings with Columbia with respect to payment to her as a recording artist, and as a composer and author of songs for recording. By reason of defendants’ actions, and those of its predecessors, agents and representatives as aforesaid, all of such contracts for payment for performer’s recording rights, and for author’s and composer’s rights in recorded songs, are null and void on the following alternative grounds:
(a) With one exception involving a minor copyright contract for a single song, Bessie Smith never actually executed personally during her lifetime any contract for recording rights or copyrights with Columbia, and accordingly no contract exists which would limit or restrict the rights of the plaintiffs herein, except insofar as verbal agreements with Columbia were executed by Bessie Smith’s performance during her lifetime. As a result, Columbia is obligated to the plaintiffs under an implied contract or under quantum meruit, in consideration of the services rendered by Bessie Smith to Columbia during her lifetime.
(b) In the alternative, if any contracts between Bessie Smith and Columbia were in writing, they were executed without her consent or authority by Bessie Smith’s reported agent who was in fact a person or persons employed by Columbia, who did not protect her interests, all to the knowledge, approval and acquiescence of Columbia. All contracts signed or entered into between Bessie Smith and Columbia by Clarence Williams, Frank Walker or John Hammond are void and of no effect because they were entered into without the consent or authorization of Bessie Smith, to the knowledge of Columbia, at a time when those persons served in the conflicting roles as manager or agent of Bessie Smith, and also an officer of Columbia. In addition, any contracts entered into between Jack Kapp, or publishing companies which he owns or in which he has an interest, and Columbia are void and of no effect insofar as they relate to royalties payable on songs authored or composed by Bessie Smith and surreptitiously appropriated by Jack Kapp, at a time when he was an employee of Columbia.
(c) In the event the Court determines that recording and copyright contracts were executed by Bessie Smith or with her authorization, with Columbia, they should be invalidated because they were negotiated on her behalf and executed on the advice of
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persons having a direct conflict of interest with her own interests, and who otherwise stood in a fiduciary duty in relation to her, which fiduciary duty was breached in connection with the execution of these contracts. Columbia had actual and constructive knowledge of this conflict of interest and the breach of fiduciary duties when it entered into these contracts.
(d) In the event the Court determines that these contracts were executed between Bessie Smith and Columbia, these contracts should be invalidated because their terms for payment to Bessie Smith for her performances and her copyright rights are unconscionable, and there has been a failure of consideration on the part of Columbia in return for those rights and services.
34. By means of such invalid contracts, and misrepresentations to the public that the contracts are valid and that all property rights in Bessie Smith’s recordings and in the songs which she composed and authored belong to Columbia, Columbia has produced numerous recordings, master records, matrices, re-issues, and re-recordings of works composed and performed by Bessie Smith without valid authorization to do so, all to plaintiffs’ great detriment and loss, and to the great profit and enrichment of defendants.
35. Defendants are continuing to produce re-recordings of Bessie Smith records under claim of valid contract rights which are in fact invalid, and unless enjoined, will continue to produce such re-recordings and make other uses of Bessie Smith’s recordings for Columbia without payment to the plaintiffs, and foreclosing to plaintiffs the opportunity to sell such rights to these recordings to others for valuable consideration.
Plaintiffs are quite clearly asking us to invalidate all contracts between Bessie Smith and Columbia Records. The contracts must be those set forth in ¶ 23, quoted
supra.
Therefore they must be limited to events that occurred between 1923 and 1933. As in Count I, this poses an obvious statute of limitations question.
We are sitting with respect to this Count as a state court would, exercising either diversity or pendent jurisdiction. (Both appear to be present). Our mandate under
Klaxon v. Stentor Electric Manufacturing Co., Inc.,
313 U.S. 487 , 61 S.Ct. 1020 , 85 L.Ed. 1477 (1941) is to apply the choice of' law principles of the forum state, here Pennsylvania. The threshold issue is which state’s statute of limitations would be applied by a Pennsylvania state court sitting on the claim before us.
The traditional Pennsylvania choice of law rule on statutes of limitation is found in
Freeman v. Lawton,
353 Pa. 613, 617 , 46 A.2d 205, 206-207 (1946): “But whether the suit was in time is not to be determined by the law of Florida; the law of thfe remedy must be found in this Commonwealth.” .(The “rights/remedies” distinction is virtually identical to the more familiar “substance/procedure” distinction, whereby the forum court automatically applies forum law to all “procedural” questions). Judge Weber, in a thoughtful opinion, carefully considered whether this traditional rule had remained intact after
Griffith v. United Air Lines,
416 Pa. 1 , 203 A.2d 796 (1964). He concluded it had.
Schenk
v.
Piper Aircraft Corp.,
377 F.Supp. 477 (W.D. Pa.1974),
aff’d mem.
521 F.2d 1399 (3d Cir. 1975).
See also Bulkin v. Western Kraft East, Inc.,
422 F.Supp. 437 (E.D.Pa.1976). We find no cases which reach a different result.
Cf. Melville v. American Home Assurance Co.,
584 F.2d 1306, 1310 (3d Cir. 1978) (Pennsylvania would adhere to traditional substance/procedure distinction for things routinely labeled as procedural by the Pennsylvania courts.) In sum, all the authority points in the direction of applying the Pennsylvania statute of limitations, regardless of which state’s substantive law is chosen to be applied to the contracts themselves. It follows inexorably that Pennsylvania would apply its own tolling provisions to the limitations period.
Having so decided, we find ourselves traversing the identical terrain we did in dis
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cussing Count I, although this time we do so by virtue of
Klaxon
rather than 42 U.S.C. § 1988 . Fortunately, in the wake of that discussion, we can proceed more expeditiously.
Paragraph 33, in subsections (a), '(b), (c), and (d), states four alternative theories for rescinding the Bessie Smith-Columbia Records contracts between 1923 and 1933. We do not reach the question of rescission as a doctrine of substantive contract law. We do not even reach the question of which state’s law would govern the rescission question of Count II. We are reading Count II solely to ascertain what justification plaintiffs set forth for asking a court in 1979 to examine the validity of contracts allegedly made forty-five to fifty-five years ago.
We can locate only two such allegations. One is that the contracts were “negotiated on her behalf and executed on the advice of persons having a direct conflict of interest with her own interests, and who otherwise stood in a fiduciary duty in relation to her, which fiduciary duty was breached in connection with the execution of these contracts.” ¶ 33(c). The four individuals alleged to have breached the fiduciary duty are Frank Walker, John Hammond, Clarence Williams, and Jack Kapp. ¶ 33(b).
With respect to the claims concerning Jack Kapp and Clarence Williams, we dismiss because the allegations themselves preclude tolling the statute of limitations— the Williams transaction is alleged to have been revealed in 1923, and Kapp is nowhere alleged to have been Smith’s “agent” in any “conflicting” role. As to the claim concerning John Hammond, we grant defendant summary judgment for the same reasons we did in Count I. As for the Frank Walker claim, both Counts I and

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1804873. Public record. Not legal advice.