May 13, 2011
MSNBC's Ed Schultz Lawsuit -- A Nice Intro to BA Review
MSNBC's Ed Schultz has been sued by a former associate who claims Schultz agreed to be his partner, then backed out. When I saw the reports, I could not help but think about all the first month of Business Associations issues the lawsuit raises.
Schultz is a radio personality who moved into television, and allegedly worked with an NBC broadcast engineer. The case has all sorts of good contract, partnership, and corporate opportunity issues.
First, the broadcast engineer, Michael Queen, was a cameraman for Meet the Press. Queen was told by Tim Russert that he could pitch the show to other networks, as long as NBC had the first opportunity to consider it.
Next, Queen says he fronted $11,500 for taping a pilot episode for the proposed show, among other expenses. In addition, according to one report,
In an email quoted in the complaint, Schultz wrote on April 5, 2008, that “any TV deal will obviously involve you. I will not do a TV deal without your involvement and that includes a financial involvement. Rest assured we are together on this,” Queen’s lawsuit purports.
Schultz never signed an official agreement, Queen admits. But in emails, he made promises amounting to an enforceable contact, he alleges in the lawsuit.
Finally, according to Queen, MSNBC contacted Schultz directly about a show, at which time Schultz paid Queen $12,000 for the pilot expenses. Queen alleges that the payment was ordered by MSNBC.
Is it a partnership? Perhaps, but without a term it could be ended at any time, without penalty. Of course, if the timeline about the repayment and other facts are accurate, I think any court would be hard pressed to say that the partnership (again, if there was one) was not in force when MSNBC contacted Schultz. Sounds an awful lot like Meinhard v. Salmon to me.
Apparently NBC got their shot at the deal, so there doesn't appear to be a problem on the corporate opportunity front, but maybe there is an issue.
Is there a contract? It sure seems like there could be, but there are concerns. It appears there is a fairly clear understanding of the basic deal terms, but the amount of the fee sharing is not deteremined. Not a problem if they were partners (default rules are available) but could be a contract-only problem. There seems to be a strong reliance claim here for Queen, especially if all the alleged expenses can be shown.
What else am I missing?