The US Court of Appeals for the Second Circuit affirmed a summary judgment grant, ruling that an author was an independent contractor when writing the screenplay for a horror film and entitled to authorship rights, and therefore entitled to exercise his copyright § 203 termination right. Horror Inc. v. Miller, Case No. 18-3123 (2d Cir. Sept. 30, 2021) (Carney, J.)

Victor Miller is an author who has written numerous novels, screenplays and teleplays. Sean Cunningham is a producer, director and writer of feature films and is the general partner of Manny Company. Miller and Cunningham were close friends who began working together around 1976 and collaborated on five motion pictures in their first five years working together. Miller was a member of the Writers Guild of America, East (WGA) and was a signatory of their Minimum Basic Agreement (MBA), which was the collective bargaining agreement at the time.

In 1979, the success of the horror film Halloween inspired Cunningham to produce a horror film. Cunningham reached out to Miller and they orally agreed that Miller would write the screenplay for their upcoming project. The two came to an agreement using the WGA standard form. Miller then began developing the screenplay and the two worked closely together in discussing ideas for the film. Miller picked his working hours but was responsible for completing drafts based on the production schedule of the film. Cunningham had no right to assign additional works to Miller beyond the screenplay.

The dispute concerns whether, for Copyright Act purposes, Miller was an employee or independent contractor of Manny Company, of which Cunningham was the general partner. Cunningham argued that he taught Miller the key elements of a successful horror film, that he gave significant contributions and that he had final authority over what ended up in the screenplay. Miller agreed that Cunningham gave notes but stated that Cunningham never dictated what he wrote. The parties agreed that Cunningham did provide the ideas for making the movie killings “personal,” that the killer remain masked and that they kill a major character early. Miller received “sole ‘written by’ credit” as the screenwriter.

Horror Inc. (successor to Georgetown Horror) financed the project and was given complete control over the screenplay and film. Manny assigned its rights in the film and screenplay to Horror, which registered the copyrights. In the registration, Horror was listed as the film’s work made for hire author with a credit given to Miller for the screenplay. The initial film was a huge hit and has spawned 11 sequels.

In 2016, Miller attempted to reclaim his copyright ownership by invoking his termination rights under 17 U.S.C. § 203 and served notices of termination to Manny and Horror. The two responded by suing Miller and seeking a declaration that the screenplay was a “work for hire,” and therefore Miller could not give a valid termination notice. The district court granted summary judgment to Miller, stating that Miller was the author as he did not prepare the screenplay as a work for hire and that Miller’s termination notice was not untimely. Manny and Horror appealed.

In its de novo review, the Second Circuit considered the district court’s determination as to whether Miller was an employee or an independent contractor based on its balancing of the 13 factors established by the Supreme Court in its 1987 ruling in Community for Creative Non-Violence v. Reid. Because a “work made for hire” is a statutory exception to the general rule of author ownership of a copyright, the party claiming the exception bears the burden of proving that the exception applies.

Manny and Horror argued that the screenplay was a work for hire as Miller was an employee under his WGA membership, that the district court erred for not considering the WGA collective bargaining agreement within the Reid factors and that the court incorrectly balanced the Reid factors by not giving more weight to Miller’s membership in the WGA or his collective bargaining agreement.

The Second Circuit found that Miller was not an employee, explaining that a finding of employment status for copyright claims is determined under copyright law and not labor law. The Court determined that Miller’s employment status under the National Labor Relations Act (NLRA) and the terms of his membership in the WGA do not remove the determination of employment status under the Copyright Act and principles of agency. The Court found that the district court correctly declined to consider NLRA arguments and was correct to focus on common law principles and the Reid factors.

After finding that the WGA membership was not dispositive, the Second Circuit determined that the WGA collective bargaining agreement should not be considered as an additional Reid factor. The Court found that although Miller’s WGA membership could play a role in how the relationship between the parties played out, membership itself would not alter the Reid factors analysis.

The Second Circuit approved the district court’s application of the Reid factors and its refusal to accord “great weight” to Miller’s union membership. Rather, the Court rejected the proposition that the WGA membership should be given “great weight,” explaining that the membership was not to be treated as a separate factor and that union membership was relevant only to the extent it played into the analysis of the Reid factors. Ultimately, the Court concluded that Miller was an independent contractor and had sufficiently rebutted the statutory presumption given to Georgetown’s copyright registration listing the work as for hire.