ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, August 18, 2017

Brian O'Conan Hypo

Having disappeared for a couple of weeks into frantic preparation for the new semester, I thought I would re-emerge by sharing a hypo that I do with my students on the first day of class, based on Conan O'Brien's contract dispute with NBC from a few years ago. The hypo goes something like this: 

Brian O’Conan is a comedic host who has helmed a show on CBN, Later at Night, for sixteen years. Later at Night airs at 12:30, and Brian has always wanted to “move up” in the world of late night hosts to host a show at the earlier time of 11:30. Five years ago, in order to keep Brian at the network, CBN promised to give Brian hosting duties for its legendary 11:30 show, Somewhat Late at Night, as soon as Len Jayo’s current contract was up. Somewhat Late at Night is a flagship show that has aired in its time slot on CBN for 43 years; prior to that, it started at 11:15 for 14 years. For its entire 57-year existence, Somewhat Late at Night has begun directly after the late local news.

Brian and CBN enter into a contract with the following terms:

  • Brian is guaranteed that he will be the host of Somewhat Late at Night.
  • Both Brian and CBN promise to act in good faith in executing the contract.
  • Both parties will mitigate any damages caused by a breach of contract, but CBN agrees that it will pay Brian $40 million if it breaches the contract.
  • Brian is prohibited from being a late-night host on any other network in the event of a breach of the contract.

As promised by the contract, Brian becomes host of Somewhat Late at Night. After a strong start, Brian’s ratings trail off. Six months into Brian’s stint as host, CBN makes a public announcement that Somewhat Late at Night will be moved to start at midnight. It will use the 11:30 time slot for a new late-night show with old Somewhat Late at Night host Len Jayo.

Brian, learning all of this for the first time from the public announcement, tells CBN it has breached the contract, demands payment of $40 million, and also opens discussions with a competing network, Wolf, to host a new late night show at 11:30.

***

I like this hypo because, even though it was several years ago now, most students recognize the real-life situation this problem was based on and so feel somewhat engaged with it. In addition, even though I have taught them literally nothing about contract law at this point, I think they gain a lot of confidence from being able to examine the problem and come up with ideas for how the analysis should begin. I usually split them up and assign them a side to represent and have them make arguments on their client's behalf, and then allow them time for rebuttal. Along with discussing the contract's terms around the show itself, the students get into discussions about good faith, mitigation of damages, and just basic fairness. When we're done with the discussion, I then ask them how they felt about the side they had been assigned to, and if any of them had wished they'd had the other side. I think it is a good basic introduction to the task of being lawyers that I find relaxes them a little on the first day: If they can already talk about this problem on the first day, imagine how much better they'll be once they know some law!

If you're starting school years like I am, good luck!

August 18, 2017 in Celebrity Contracts, Commentary, Current Affairs, In the News, Law Schools, Teaching, Television, True Contracts | Permalink | Comments (0)

Thursday, June 22, 2017

“Bachelor in Paradise” – Or Contractual Hell?

An article on CNN Media posted on June 21 reads, in part: “A contract for the current season of ‘Bachelor in Paradise,’ which CNNMoney … has confirmed as authentic, provides a rare window behind the scenes of reality shows, in the ‘Bachelor’ franchise and beyond, revealing how they are able to manipulate ‘reality’ and create drama where none actually exists….” Shocker! More surprising, perhaps, is the extent to which the companies producing these types of TV shows seek to avoid liability in potential legal proceedings. Unknown

Whereas the “Bachelor in Paradise” contract requires participants to “refrain from unlawful behavior or harassment” and to acknowledge that the producers “do not encourage intimate or sexual contact with other contestants on the show,” the contract also tries to free the producers from any responsibility if a contestant is injured, even if that injury comes from “unwelcome/unwanted sexual contact or other interaction among participants.” Participants will also have to agree that the producers are not liable for almost anything that happens to them in the course of filming, whether they are injured, suffer emotional trauma, or catch a sexually transmitted disease.

Furthermore, the producers of the show can do nearly anything they want to the participants and their reputation, including filming them naked, airing the details of any part of the life they think is relevant, or flat out lying about them and things they have done. Nicole Page, a New York-based entertainment attorney with Reavis Parent, said that the contract means, from the producers' perspective, "I can basically take your image and do whatever I want with it and I own it and you have no recourse." Contracts like these are common in reality TV, she said. They "have been around since reality TV began," she added. Needless to say, should participants wish to pursue civil legal action, they will have to arbitrate. Unknown-2

Why would contestants want to agree to such far-reaching contracts? For their chance at 15 minutes of fame, of course. If a contestant tries to renegotiate the contract, plenty of other people are ready to take their place.

The contracts, however, may be so broad that they are not legally enforceable, according to one CNN/HLN legal analyst. Another commentator says that these contracts are “so one-sided it seems absurd, but this is the price people are willing to pay to be on television for whatever it is.” “It's not a two-sided contract," the CNN/HLN attorney says. "A contract is supposed to be what they call 'at arms length,' which means there is leverage on both sides and it's freely entered into and freely negotiated. But this is clearly a contract that is one-sided.”

With all due respect to the CNN/HLN attorney, the mere argument that the contract is “one-sided” is, of course, not very strong unless the contracting procedure reaches the level of unconscionability. Yes, this might be a “take-it-or-leave-it” type of contract, but those are, as we all know, also widely used in numerous other industries and companies where courts have upheld them. I think it highly unlikely that contestants on a famous TV show will prevail on an argument that their contracts were so one-sided as to reach the level of unconscionability under contract law. After all, the TV contestants really don’t need to be on these shows at all; they choose to do so on their own free volition, typically for a rather vain chance at fame and fortune (I know that that is not a legal argument, but we all know what this would look like in court…).

Much worse are the alleged attempts by the companies to have the participants sign away their rights under criminal law. That they might very well not be able to do. "If the contract requires you to release any claims you have that you were sexually assaulted, which is a crime, then the contract may or may not be enforceable under the public policy of the state of California [where this contract was drafted]," said entertainment litigator Josh Schiller of Boies Schiller Flexner. "Law enforcement could get involved and bring charges ... would we want to enforce a contract that no one would be liable if they were filmed being sexually assaulted? That would create a real problem." No kidding. In other cases, contestants should closely consider what this type of deal really involves. Unknown-1

For the rest of us, we live in times when lines between fact and fiction are blurred significantly. It seems that an increasing amount of people are comfortable dismissing facts as “fake” when the converse is true. I’ve encountered that numerous times after the most recent presidential election myself, both in South Dakota and even “liberal California.” In addition to the usual climate change denial in the Midwest, I encountered a “crazy cat lady” in Los Angeles the other day claiming that highly established Audobon studies and Smithsonian studies demonstrating how feral cats kill numerous birds and other small wildlife is “not true”! Sigh.

We should consider how we best teach our students to account for this new reality in contract and other law. I think we also need to increasingly point out to them that what they see in the media is not necessarily true. Granted, with reality TV shows, that is obvious, but I have had to undertake rather serious discussions with my own students recently about what “news” really is and what it is not! What we have taken as granted as law professors even in recent years may no longer be the case or may be changing.

 

June 22, 2017 in Celebrity Contracts, Current Affairs, Film, In the News, Television | Permalink | Comments (0)

Monday, June 5, 2017

Prince's Music: More Contract Disputes

I've already blogged about the contractual disputes around the music that the late artist Prince left behind when he died unexpectedly. They continue with another case in the District of Minnesota, Paisley Park Enterprises, Inc. v. Boxill, Case No. 17-cv-1212 (WMW/TNL). In this dispute, Boxill, a consultant and sound engineer who worked with Prince, had announced that he would release five Prince recordings in his possession on the anniversary of Prince's death. Prince's estate sued, seeking a preliminary injunction against the release, which the court granted. One of the causes of action revolved around the Confidentiality Agreement that Boxill had entered into with Prince. Under the terms of the agreement, Boxill was allowed to enter Prince's home and work with Prince and disclaimed any property interest connected with this work. Yet when Prince's estate demanded return of the recordings in Boxill's possession, he refused to turn them over. This was sufficient to demonstrate a likelihood of success on the merits for breach of the contract. 

Boxill's main argument was that the Confidentiality Agreement only covered his work consulting on the remodel of Prince's music studio; the Confidentiality Agreement did not cover Boxill's work as a sound engineer recording music with Prince. Boxill's reasoning on this was that the Confidentiality Agreement prohibited him recording any of Prince's performances, but he was required to do so when he was working with Prince as a sound engineer. The Prince estate's response to this was that it had waived the recording portion of the Confidentiality Agreement but the rest stayed in force and covered all of Boxill's activities. The Court concluded that either interpretation was plausible, and that Prince's estate had a "fair chance" of prevailing on the merits. 

A motion to dismiss is currently pending in the case, so we'll see what happens!

June 5, 2017 in Celebrity Contracts, Current Affairs, In the News, Labor Contracts, Recent Cases, True Contracts | Permalink | Comments (0)

Tuesday, April 25, 2017

Contractual Rights to Prince's "Vault"

On April 14, the Wall Street Journal reported that Universal Music Group has won the licensing rights to late pop/rock star Prince's music in the "vault" he apparently kept on his property.  The price tag was $30 million.  Now, however, Warner Music Group, the singer's first record label, claims that it has conflicting rights in the material.  

That turn of events is hardly surprising, but what is is the fact that Universal "hadn't seen a copy of Prince's 2014 contract with Warner, so it asked [a relevant party] to clarify the details afters signing the deal and running into roadblocks as it tried to move forward." Unknown

Of course, legal disputes also arose as Prince did not leave a will, thus ceding his entire estate to his sister and five half-siblings.

Textbook lessons of what NOT to do in the contracts and wills and estates areas of the law.

April 25, 2017 in Celebrity Contracts, Commentary, Famous Cases, In the News, Music | Permalink | Comments (0)

Thursday, February 23, 2017

No Deal, No Exchange of Money or Possession, No Ownership in Elvis Guitar

The National Music Museum (“NMM”), located in South Dakota, brought suit against Larry Moss and Robert Johnson asking the court to declare it the legal owner of a Martin D-35 guitar formerly owned by Elvis Presley. Images

Moss and Johnson, both interested in collectibles, have been friends for thirty-five years. In 2007, Johnson contacted Moss stating that he may be interested in acquiring three guitars previously owned by Elvis, which included the D-35. Johnson originally was going to negotiate a deal for Moss to buy all three guitars for $95,000 from a third-party seller. In 2007, a two-part contract for $120,000 was finally drafted stating that (1) Moss would pay Johnson $70,000 and take immediate possession of two of the guitars, and (2) that Johnson would deliver two remaining guitars – including the D-35 – in exchange for the remaining $50,000.

At trial, Moss testified about the 2007 interaction and said, “Well, we never had a deal. I never gave him the money. He never gave me any guitars. There was no deal.” Moss’s actions in 2007 and from 2008-2010 are consistent. Moss never asserted title of the Martin D-35 during either time period because Moss did not believe he had title to the guitar. Moss knew he would not own the Martin D-35 until Johnson delivered it and Moss paid him for it. Because delivery never occurred, Moss never acquired title to the Martin D-35.

Nonetheless, in 2013, Moss contacted a friend of Johnson's inquiring about the status of the D-35. Moss then contacted the NMM where the guitar was on display claiming that he owned the D-35. A lawsuit was filed and removed to federal court seeking declaratory judgment on who was the rightful owner of the guitar.

Under Article 2 of the Uniform Commercial Code, which is the governing law for Tennessee and South Dakota, “[u]nless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes performance with reference to the physical delivery of the goods . . . .” Tenn. Code Ann. § 47-2-401(2) (2008); SDCL 57A-2-401(2). Here, Johnson never physically delivered the Martin D-35 to Moss. Moss never had physical possession of the Martin D-35. Because Johnson never delivered the guitar and Moss never had possession of it, Moss never acquired title to the Martin D-35. Peeps-with-guitar

Furthermore, in spite of Moss's attempt to seek specific performance under a breach of contract theory, the court did not find this persuasive because the contract specifically stated that Moss would not pay the $50,000 balance until there had been delivery of the guitar. Based on the plain text of the contract, delivery was set to be a future date. Additionally, Moss and Johnson exchanged emails for five years, but Moss never asked Johnson to deliver the guitar, nor did he claim to the owner of the guitar. As a result, the court found Johnson had the title to the D-35 guitar, and transferred it to the NMM. Thus, the NMM is the rightful owner of the guitar.

The case is National Shrine Museum; America’s Shrine to Music v. Robert Johnson and Larry Moss.

 

February 23, 2017 in Celebrity Contracts, Current Affairs, Famous Cases, In the News, Music | Permalink | Comments (0)

Saturday, January 7, 2017

When the Break-Up of a Marriage Is Also a Breach of Contract

HGTV

Photo Source: hgtv.com

The main reason I have cable these days, honestly, is because of my HGTV addiction. I like that the shows are so predictable and formulaic, which makes them low-stress. It's a habit I started years ago as a stressed-out lawyer in a law firm, when I needed to come home and watch something that didn't require thought, and it's kept me company as I transitioned into academia. And I'm apparently not alone in using it as comfort television

I use HGTV a lot in my Contracts class as the foundation of hypotheticals (so much that I'm contributing a chapter to a book detailing how I use it) and so I'm always interested when there is a real-life HGTV contract problem...such as is happening right now with "Flip or Flop." 

You might not be anxiously following HGTV shows, so let me tell you that the world was recently rocked (well, a small corner of the world) by the revelation that Christina and Tarek, the married couple with two young children at the center of the house-flipping show "Flip or Flop," were separated and/or getting divorced. And now come reports that HGTV has threatened them with a breach of contract action if their ongoing marital problems affect the filming of the show.

This is an example of the interesting issues that arise when your personal life becomes the equivalent of your contractually obligated professional life. Christina and Tarek no longer want to be married to each other, apparently, which is a stressful enough situation, without adding in the fact that their marriage is also the source of their livelihood. HGTV has a point that the show is less successful when you know that their personal life is a mess. The network was running a commercial pretty steadily through the holiday season where Christina and Tarek talked about their family Christmas, and every time I saw it I thought it was so weird and that they should pull the commercial. But that was clearly the advertising campaign HGTV had long planned for the show and it was probably costly for HGTV to change it at that point.

I am curious to see what the resolution of this is. I'm unclear how much longer Christina and Tarek were under contract for. They probably hoped to keep their separation quiet for as long as they could (they had, after all, kept it quiet for several months). But now that it's out in the open, we'll have to see how the parties recalibrate not just their personal but also their contractual relationships with each other. There is always a lot of talk about how "real" the shows on HGTV is. This situation is testing where our boundaries on "real" vs. "fake" actually lie. 

January 7, 2017 in Celebrity Contracts, Commentary, Current Affairs, In the News, Labor Contracts, Teaching, Television, True Contracts | Permalink | Comments (1)

Wednesday, December 7, 2016

Prince's Complicated Legal Legacy Continues

When the legendary musician Prince died suddenly, he left behind an enormous volume of music and no will. The courts have already been dealing with how to distribute Prince's assets to a complicated and squabbling cadre of potential heirs. The rights to all of his music have raised their own complicated issues that have most recently manifested themselves in a lawsuit in the District of Minnesota, NPG Records, Inc. v. Roc Nation LLC, Case No. 16-cv-03909

The case revolves around Roc Nation's streaming of Prince's music on its streaming service Tidal, and whether or not it had the contractual rights to do so. Roc Nation alleges yes, based on what it terms both written and oral agreements that it struck with Prince before his death. Commentators have tried to draw conclusions about these agreements based on Prince's statements and other behavior before his death. NPG, meanwhile, claims that there was a single contract between Prince and Roc Nation and that it only allowed Roc Nation to stream a very limited number of songs, which Roc Nation has now violated in streaming a much wider variety of Prince's song catalog. The case has been reported on in multiple places, including here and here and here and here.

If this case progresses, it seems like it's going to require an untangling of written contracts between the parties, whatever oral statements Prince will allege to have been made, and the interaction between the two. It adds an interesting layer to consider that Prince was notorious for fighting for artists' rights to their music and had a fraught relationship with online streaming of music. He does seem to have favored Tidal above the other Internet services. In any case, although NPG claims that there was never any such license and Tidal has been infringing the songs' copyright since it began streaming them, NPG has already proactively sought to cancel any license that Prince may have granted to Roc Nation to stream the music in question. 

(I'd post something Prince-related from YouTube, but Prince didn't like his music to be on YouTube. And, in fact, Lenz v. Universal Music Corp., the recent case that wended its way through the Ninth Circuit and is currently on petition to the Supreme Court, involves a Prince song in a YouTube video.)

December 7, 2016 in Celebrity Contracts, Commentary, Current Affairs, In the News, Music, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Air Force None?

Recently, Donald Trump famously tweeted that “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!”  Trump has not said why he believes the planes will cost "more than $4 billion." Boeing says it currently has an Air Force One contract worth $170 million.

Air-force-one-3

This raises several contractual issues that could be used as an interesting issue-spotting practice for our students. At first blush, it seems like an impossible attempt at a breach of contract that would, conversely, at least give very reasonable grounds for insecurity if not constitute an anticipatory repudiation outright.

Needless to say, Trump’s remark that “[w]e want Boeing to make a lot of money, but not that much money” finds no support in contract law. One contractual party has no control over how much money the other party should make. One would have thought that Trump – as a staunch “market forces” supporter – would have understood and embraced that idea, but that either was not the case or he is flip-flopping in that respect as well.

Digging deeper into the story, however, it turns out that “not even [Boeing] can estimate the cost of the program at this time, since the Pentagon has not even decided all the bells and whistles it wants on the new Air Force One." Further, “without knowing all the security features, it is hard to estimate the cost … and the Air Force isn't even sure whether it wants two or three of the planes.” Does a contract even exist at this point, then, when the essential terms have apparently not been mutually agreed upon, or is there simply an unenforceable agreement to agree? A valid argument cold be made for the latter, I think.

Mr. Trump has been accused of overestimating the cost of the planes. Does he, however, have a point? “So far[,] the Air Force has budgeted $2.9 billion through 2021 for two new Air Force Ones.” It is not inconceivable that the price tag may, in these circumstances, run higher than that. That circularity goes back to the essential terms – the price in this case – arguably not having been decided on yet.

There might, of course, be other issues in this that I have not seen in my admittedly hasty review of the story, but it is interesting how the media jumps at a legally related story without thoroughly or even superficially attempting to get the law right.

December 7, 2016 in Celebrity Contracts, Commentary, Contract Profs, Current Affairs, Government Contracting, In the News, Travel, True Contracts | Permalink | Comments (0)

Wednesday, November 30, 2016

Trump: Contractual Landlord and Lessee at the Same Time

The lease for the Trump International Hotel, housed in Washington’s historic Old Post Office Pavilion owned by the federal General Services Administration (“GSA”), contains a clause forbidding elected officials from involvement. Trump, as president, essentially would be both landlord and tenant.

That may be an ethical problem as well as a federal contract law violation. Trump would oversee the GSA and appoint its administrator ― a conflict of interest with his hotel interest. GSA officials are looking into the matter.

Steven Schooner and Daniel Gordon, former government officials who specialize in federal contract law, have recommended that GSA “immediately end the hotel lease relationship, before Trump becomes president” to avoid ethics problems. Of course, if GSA terminates the lease contract, it risks litigation potentially with… Trump as a winner.

However, says Schooner, that’s a risk worth running. “In the end, it’s just a frigging lease.” It would also be a president heavily involved in private business affairs over which he would exercise significant power, real and perceived. But that may just be how our country is developing these days. We frown on similar behaviors in relation to other countries, but when it comes to our own, we are apparently either becoming accepting of unacceptable behaviors or powerless to do much about them.

November 30, 2016 in Celebrity Contracts, Commentary, Contract Profs, Government Contracting, In the News | Permalink | Comments (0)

Monday, November 21, 2016

Top Gear, Grand Tour, Non-Competes--What Could Possibly Go Wrong?

My love for the British car show "Top Gear" over the past few years was deep and abiding, despite the fact that I am not interested in cars at all. Like most of the people I know, I watched Top Gear for the hosts, Jeremy Clarkson, Richard Hammond, and James May--a trio of men whose friendly and hilarious chemistry was, I thought, a little like capturing lightning in a bottle; it comes around so infrequently that it's striking when it does. 

For a taste of what this version of Top Gear was like, please enjoy my personal favorite, one of the caravan episodes: 

 

Or maybe you would prefer one of the boat-car episodes: 

 

The Top Gear Wikipedia entry details that the show's popularity resulted in consistently high ratings, a waiting list for tickets to the stage-filmed portion of the show that numbered in the hundreds of thousands, and a Guinness World Record for the world's most widely watched factual television show

There have been a number of high-profile Top Gear events over the years that I could document here, from Richard Hammond's terrifying crash while filming the show to the fascinating contractual dispute over the Stig, the show's famously anonymous racing driver, revealing his true identity

But what I'm really focusing on in this entry is the fact that the Top Gear hosts have a new show, "The Grand Tour," that looks a whole lot like their old show, and it made me wonder what their contracts looked like. 

The hosts left Top Gear over controversially. The BBC declined to renew Jeremy Clarkson's contract in March 2015, following an attack by Clarkson on one of the producers on the show (later the subject of a lawsuit that Clarkson settled for a hundred thousand pounds and a formal apology). The other two presenters, Hammond and May, also had contracts up for renewal and chose not to re-sign with the BBC, instead following Clarkson to Amazon, where the trio have launched a show called The Grand Tour

I didn't know what to expect from The Grand Tour but it turns out to be Top Gear by a different name. Where Top Gear had a Stig, The Grand Tour has "the American" -- and they tell us who he is right off the bat, rather than get embroiled in that kind of controversy again. Top Gear had a segment called, simply, "The News"; The Grand Tour launched a similar segment called "Conversation Street." Top Gear had a segment called "Star in a Reasonably Priced Car"; The Grand Tour...well, you should watch the show for its take on that segment. This review does a nice job running down all the similarities between the old show and the new. 

This all fascinated me from a contract perspective. I knew that Clarkson had previously co-owned the commercial rights to Top Gear. He sold them to the BBC in 2012 for fourteen million pounds. So, having given up those rights and left the BBC, Clarkson clearly couldn't keep making "Top Gear." But he is making a motoring show that is almost identical in every cheeky winking respect to the one he left behind (right down to a simple title highlighting a prominent "T" and "G"). 

I do think, from an IP point of view, the new show seems safe: they've been careful to avoid any trademarks and only seem to resemble Top Gear in the uncopyrightable idea level, i.e., being a playful show about cars. But I assumed that Clarkson, Hammond, and May had to have had a non-compete with the BBC, so I went looking for it, and I did find evidence that there was one. It apparently prohibited the three from presenting a competing car program for a period of two years. The two years aren't up yet, leaving lawyers to speculate that a conclusion was drawn that the non-compete only applied to terrestrial broadcast stations and not to Amazon's streaming Internet television. The entertainment industry is changing so quickly, it doesn't surprise me that the contracts are having trouble keeping up. 

Surely the BBC would have preferred to keep Clarkson, Hammond, and May from kicking a rival car show into production so quickly, especially while the BBC's relaunched Top Gear has reportedly struggled. But apparently their contracts failed to give them sufficient protection to save them from the result. 

I will leave for another day the issues of contracts made during the filming of Top Gear itself; like, for instance, the time Clarkson offered to save Hammond from a sinking boat in exchange for a bucket...that turned out to have holes. 

And instead I will leave this entry with an acknowledgment that Jeremy Clarkson is a problematic and controversial figure who is not a stranger to making offensive statement. That's beyond the scope of this article about the BBC's contracts, but this review, I think, does a decent job of capturing the internal tension of a former Top Gear fan contemplating the new Grand Tour.  

November 21, 2016 in Celebrity Contracts, Commentary, Current Affairs, Film Clips, In the News, Television, True Contracts, Web/Tech | Permalink | Comments (0)

Saturday, October 22, 2016

Donald Trump's Many Confidentiality Provisions

A friend of mine asked me the other day about the ongoing controversy over all of that unaired Apprentice footage that is apparently sitting around somewhere. MGM and Mark Burnett have both claimed that they are not allowed to release the tapes due to confidentiality provisions in their contracts with Donald Trump. (Fortune has an article about this here, as does the New York Times.) My friend's question basically boiled down to this: Yeah, sure, maybe that deal made sense when the contract was signed with a New York self-professed billionaire but now he's running for President of the United States, and shouldn't that mean something? 

Other people have raised this issue. What seems to me unique about the Donald Trump situation isn't necessarily the confidentiality provisions over the Apprentice tape, but how often, during this political campaign, we've been debating the secrecy Trump requires from all of those around him. The Apprentice contract is just the latest example of this. Over the summer, several news outlets reported on the unusually broad terms of the NDA Trump required his staffers to sign. To be fair, NDAs are not unusual during a Presidential campaign and Hillary Clinton has allegedly had her staffers sign them as well. But Trump's apparently are unusually broad, and he requires them even of volunteers who show up to make calls for Trump's campaign and presumably never even really meet Trump? What confidential information could these volunteers even know? Well, Trump is the one who gets to tell them that. And he's not afraid to sue on the NDAs: We know of at least one arbitration filed against a former staffer, alleging damages of $10 million

Two things I take away from this: 

(1) Donald Trump seems to be obsessed with controlling his image, which makes total sense, as he's made an entire career out of Being Donald Trump and it could even make him President. Trump is so fond of restricting what those around him can say about him that he's even said he'll make his federal employees sign NDAs if he does become President. At the same time, of course, Trump himself doesn't appear to feel restrained in any way to say any thought that comes into his head. So we seem to have a situation where part of the advantage of being rich is being able to say absolutely anything you want and also control to some degree what the people around you get to say, even once your relationship with them has been terminated.  

(2) Despite this, however, we all know more about Donald Trump than I think he wants us to know. In the relentless glare of a Presidential campaign, no matter how many NDAs you leave in your wake, is it just impossible to keep secrets forever? And, maybe, is there something comforting about that? My friend wants to see the Apprentice tapes, but we don't know what's in the Apprentice tapes, and we don't know who even has time to review them. But we do know a great deal, maybe not Apprentice-related, but maybe enough? 

P.S. This is not the first time I've blogged about Donald Trump's contracts. If you're curious, that case hasn't really progressed since that blog entry. 

October 22, 2016 in Celebrity Contracts, Commentary, Current Affairs, In the News, True Contracts | Permalink | Comments (0)

Monday, October 17, 2016

If Albert Einstein Wins the Nobel Prize...

I was listening to the podcast No Such Thing as a Fish (highly recommended) when I learned that Einstein used his Nobel Prize money as a divorce settlement to his first wife...the only catch being that he divorced her in 1919 and won the Nobel Prize in 1921. The podcast characterized this as: "If I win the Nobel Prize, I'll give you the money." Amazing! Imagine being so confident in your Nobel Prize chances! (I guess if you are Einstein, you would be that confident.) 

I couldn't find the contract myself, although the story was verified by Time and also shows up on Wikipedia

I know I just found a new go-to hypo to use in class. 

October 17, 2016 in Celebrity Contracts, Commentary, Law Schools, Teaching, True Contracts | Permalink | Comments (2)

Wednesday, October 5, 2016

Further Adventures in Hip-Hop Contracts: Jay-Z Edition

Hip-Hop Contracts Week continues! This time with a recent ruling out of the Southern District of New York in Walker v. Carter, #1:12-cv-05384-ALC-RLE (behind paywall). 

Rocafella

source: Wikipedia

In the case, the plaintiff, Walker, sued Jay-Z and others regarding not a song but the logo for Roc-a-Fella Records. The court was dismissive of Walker's relationship to the logo right off the bat: "Plaintiff casts himself as the creative mastermind of the Logo's design, though he admits that he neither came up with the idea for the Logo nor drew any part of it." Right away you can tell that this doesn't sound like a judge who's inclined to find for the plaintiff here. 

And he doesn't. He grants defendants' motion for summary judgment, finding that there was no evidence of any written contract between the parties and so Walker's breach of contract claims could not survive. Walker had alleged that he and the defendants had entered into a contract providing for royalties to be paid over a period of ten years. Unfortunately for Walker, this contract--which couldn't possibly be performed within a year--is subject to the Statute of Frauds and required to be in writing, or at least for there to be sufficient evidence that a writing once existed. Generally, in New York this evidence has consisted of either the admission by the other party that a writing did exist at one time or the testimony of witnesses regarding the signing and content of the now-lost writing. Here, defendants denied that any writing had ever existed (which seems predictable, frankly) and Walker could produce no witnesses as to the signing of the contract, as Walker stated that no one other than the defendants and himself were there when the contract was signed.

Walker did produce two witnesses regarding the existence of the contract. However, they were insufficient. One testified that he had seen a piece of paper Walker told him was a contract but that he didn't read the contract and did not know what the contract said. The other testified in a number of ways that contradicted Walker's own testimony regarding the contract: Walker claimed to have written the contract in the same face-to-face meeting when it was signed, but the witness claimed to have seen the contract before it was signed, which couldn't have been possible if Walker's testimony was true. Walker claimed to have lost the contract in 1996, but the witness claimed to have seen it in 2000. Walker claimed the contract was written on blank paper, the witness claimed the contract was on lined paper. Et cetera. The court felt justified, given all of these impossible contradictions in the testimony, in disregarding this witness's testimony, especially since the witness also claimed to have a direct interest in the contract due to his close relationship with Walker. In fact, the court recounted that the witness had initially testified that he had never seen the contract, and only changed his testimony after being spoken to by counsel and after the statute of frauds had become an issue in the case. 

Therefore the court concluded that the statute of frauds required the contract to be in writing, there was no writing, and there was no genuine issue of material fact that there had ever been a writing, and so granted defendants' summary judgment motion. 

(He also found that Walker's copyright infringement claims were time-barred, so this was a total victory for Jay-Z and the other defendants.)

(A Reuters article about the case can be found here.)

October 5, 2016 in Celebrity Contracts, Commentary, Current Affairs, Music, Recent Cases, True Contracts | Permalink | Comments (0)

Monday, October 3, 2016

50 Cent, P.I.M.P., and Contracts Concerning Hip-Hop Songs

In 2003, 50 Cent released the song "P.I.M.P." The song was a huge top-ten hit for the hip-hop artist, achieving gold status in sales. 

The problem is that Brandon Parrott alleges that the song contains, without his prior consent, a track he wrote called "BAMBA." 

The parties had apparent discussions about this in 2003, entering into a settlement agreement under which Parrott received some royalties on "P.I.M.P." in exchange for Parrott licensing the pieces of his song that were used in "P.I.M.P." and agreeing to release all of his remaining claims. According to the defendants, the contract between the parties contained a clause in which Parrott represented "that no promise, representation, or inducement not expressed herein" was made in connection with the contract. 

The parties are back in court, though, with Parrott alleging in a pro se complaint filed in the Central District of California, Parrott v. Porter, #2:16-cv-04287-SJO-GJS (behind paywall), that that the settlement agreement is invalid because he was basically tricked into signing it "under false and fraudulent pretenses." Parrot argues that he thought the defendants acted in "Good Faith" and used "BAMBA" in "P.I.M.P." entirely accidentally. However, Parrott claims that he has now realized that the defendants knew that "P.I.M.P." contained Parrot's music and deliberately released "P.I.M.P." without attempting to contact Parrot for permission beforehand. In addition, Parrott appears to contend that there are inconsistencies with the royalty statements he's been sent under the settlement agreement that he has been unable to reconcile due to the defendants' lack of cooperation.

The defendants have now responded to the complaint with a motion to dismiss, apparently resting mainly on the fact that the settlement agreement is valid and governs the situation between the parties, under which Parrott has been collecting royalties for years. 

Where is 50 Cent in all of this? Preoccupied with his own ongoing bankruptcy proceedings. 

(Hollywood Reporter article on all this here.)

October 3, 2016 in Celebrity Contracts, Current Affairs, In the News, Music, True Contracts | Permalink | Comments (0)

Wednesday, August 31, 2016

Ownership of Steve Harvey's Comedy Tapes Is Ambiguous

Ambiguous contracts can be a nightmare to untangle, especially twenty years later. A recent case out of the Northern District of Texas, Cooper v. Harvey, Civil Action No. 3:14-CV-4152-B (behind paywall), illustrates just that. 

Steve Harvey, currently the host of "Family Feud," has been sued by Joseph Cooper over Harvey's attempts to curtail Cooper's use of performances Cooper taped at Harvey's comedy club in 1993. Cooper claims Harvey gave him permission to film the performances, paid Cooper to film them, and gave Cooper ownership of the videotapes and the right to use and display them. Since that time, Harvey and Cooper have had multiple disputes over the footage, most recently over Cooper's posting of some of it to YouTube. 

Harvey disputes Cooper's claim. He says that he paid Cooper to tape the performances so that Harvey could use them "as study material," and that he never granted Cooper ownership or any rights in the videotapes. Harvey alleges that Cooper uses the video footage as a type of blackmail, essentially, knowing that Harvey might find the material on the videotape embarrassing to have made public. 

This case isn't just he-said/he-said, in that there does appear to be an actual written contract between the parties, even if there is some debate whether or not Harvey ever signed it. At any rate, seeking summary judgment, Harvey argues that the written contract is ambiguous and that the court can therefore hear parol evidence as to whether the parties intended for Harvey to bargain away all of his rights to the work in question. Cooper, for his part, argues that the contract is unambiguous and that, according to its terms, bargaining away all of his rights is exactly what Harvey did. 

The court agreed with Harvey that the contract is ambiguous in whether Cooper or the Comedy House was intended to own the videos under the contract. But, turning to the parol evidence, the court found that nothing Harvey had put forth shed any light on Cooper's intent in entering into the contract. Harvey provided an affidavit that he did not intend the contract to convey his ownership rights but that didn't resolve what the parties' intent was when they signed the contract in 1993. Therefore, the court denied summary judgment on the breach of contract claim. 

Which seems like, in the end, this written contract is going to come down to he-said/he-said. 

August 31, 2016 in Celebrity Contracts, Commentary, Film Clips, Recent Cases, Television, True Contracts, Web/Tech | Permalink | Comments (2)

Friday, August 26, 2016

Ryan Lochte and Morals Clauses

I have witnessed with interest the evolving story of what exactly happened in Rio involving Ryan Lochte the morning of August 14. Initially Lochte claimed he had been robbed at gunpoint. I later heard through the gossip mill that that story was untrue and that Lochte had in fact beat up some security guards. That turned out, it seems, just to be rumor-mongering, but the story has continued to evolve from there, with both Lochte and the Rio police making statements that later seem untrue, or only partially true, or exaggerated. Slate has a good run-down of the changing versions of Lochte's story, although it's from a week ago. Now Lochte has been charged with filing a false police report, since it does seem clear at this point that no robbery happened. Even that, however, is confusing to parse if you read a lot of articles about it: It seems like the crime is more accurately making a false communication to police, as some articles have eventually stated, since there are conflicting reports about whether a police report was ever filed. 

In the wake of this whole mess, Lochte has lost several of his sponsorship deals (although he's also picked one up). It's unclear, because the contracts don't seem to be public, whether this is a choice of just not renewing the contract (apparently that's the case with Ralph Lauren) or if a violation of a morals clause is being invoked to allow cancellation of the contract (which might be what's going on with Speedo). All of this provokes an interesting morals-clause conversation to me, and we had a bit of discussion about it on the Contracts Professors listserv. It seems clear that Lochte engaged in some sort of inappropriate behavior, and it seems also clear that whatever that behavior was, even the most minor version of the story is arguably a violation of any morals clause out there.

What is most clear is that, no matter what really happened, this has definitely served to tarnish his reputation, and that's is what's striking to me. This story has taken on an enormous life of its own, with many differing versions of it floating around the Internet. This situation has been caused, of course, by Lochte's many differing stories, together with some apparent conflicting statements by the Rio police, coupled with reporting that may have been less than precise itself in describing what was going on. One online story details all the conflicting information and asks the individual reader what they believe about the story.

While this particular maelstrom seems to have some basis in fact, it's not difficult to imagine something like this getting out of control without such justifying behavior at the root of it. Morals clauses tend to be about perception, but does that mean you can manipulate the perception of someone, through no real fault of their own? Take, for instance, the "Ted Cruz is the Zodiac Killer" meme that was popular on the Internet earlier this year. Ted Cruz wasn't born until after some of the Zodiac killings had happened, so he obviously could not have been the Zodiac Killer, and in fact some people interviewed about the meme noted that was the point: what they were saying was impossible. Nevertheless, it was reported that polls indicated 38% of those surveyed thought he might, in fact, be the Zodiac Killer, despite the impossibility. If a substantial number of people start thinking you did something you absolutely did not do, is that enough for a morals clause to be violated, because of the perception that you did it? 

August 26, 2016 in Celebrity Contracts, Commentary, Current Affairs, Games, In the News, Sports, Travel, True Contracts, Web/Tech, Weblogs | Permalink | Comments (0)

Tuesday, July 5, 2016

Donald Trump and the Covenant of Good Faith and Fair Dealing

Everyone else is talking about Donald Trump, so I guess why shouldn't we hop in, right?

This recent New Yorker Talk of the Town piece introduced me to an ongoing contract dispute involving Trump that I hadn't been paying attention to, even though now I see it's been widely reported by various news outlets, including food blogs, because it involves restaurants. So if you don't normally like to read political stuff but you consider yourself a foodie, this blog entry is also for you!

It turns out that Trump is embroiled in breach of contract lawsuits with a couple of famous chefs who pulled out of commitments to put restaurants into one of Trump's new developments. According to the reports, the impetus for pulling out of the business deal was Trump's anti-immigrant rhetoric during his presidential campaign. Jose Andres, himself an immigrant, was not too happy about Trump's statements. As seems to be the case with Trump, his business concerns don't necessarily track his political rhetoric when the bottom line is at issue. Faced with an immigrant refusing him rather than the other way around, Trump sued Andres for breach of contract. Andres counter-sued, alleging that Trump's many derogatory remarks about Hispanics rendered Andres's proposed Spanish restaurant "extraordinarily risky."

The chefs sought partial summary judgment, which a court recently denied, finding that material facts were still in dispute.

The crux of this lawsuit revolves around the covenant of good faith and fair dealing: Did Trump breach that covenant when he made his remarks, which would make him the one in breach of contract? Or were Trump's remarks not a breach of the covenant, either because they're not relevant to the contract or because they did not harm the prospects for success of Andres's restaurant? I don't know if the parties will continue to litigate this question but I'm curious what the result would be. In the current climate where rhetoric is frequently extremely inflammatory, could there be contract implications to such statements? How far, policy-wise, do we want the covenant of good faith and fair dealing to extend?

The case is Trump Old Post Office LLC v. Topo Atrio LLC, 2015 CA 006624 B (behind paywall), in District of Columbia Superior Court. 

July 5, 2016 in Celebrity Contracts, Commentary, Current Affairs, Food and Drink, In the News, Recent Cases, True Contracts | Permalink | Comments (0)

Friday, April 15, 2016

Gilmore Girls, Netflix, Derivative Works, and Contracts in a Changing Television Landscape

Gilmore Girls

(image from IMDB)

Gilmore Girls fandom rejoiced when it was announced that the show would receive a revival on Netflix (and, even better, that it will include Sookie!). But, as often seems to be the case, developments that bring a fandom joy can come with legal entanglements. In this case, producer Gavin Polone's production company Hofflund/Polone has filed a lawsuit against Warner Bros., alleging breach of contract. The lawsuit, Hofflund/Polone v. Warner Bros. Television, Case No. BC616555 (behind paywall), was filed in the Los Angeles County, Central District, Superior Court of California. 

The case revolves around the agreement between the parties concerning the original production of Gilmore Girls. The parties agreed, according to Hofflund/Polone, to provide Hofflund/Polone with "$32,500 for each original episode of Gilmore Girls produced in any year subsequent to 2003," along with some percentage of the gross and with "executive producer" credit. With the news of the recent Netflix revival, Hofflund/Polone allegedly reached out to Warner Bros. seeking compensation under the agreement. According to the complaint, Warner Bros. took the position that the Netflix version of Gilmore Girls is a derivative work based on the original series, and so therefore does not trigger compensation to Hofflund/Polone. 

It's an interesting question that highlights one of the debates copyright scholars have: What, exactly, is a "derivative" work? Copyright owners have the exclusive right to reproduce their own works or works substantially similar to those works. They also have the right to produce derivative works based on those works, which, in the jurisprudence, has ended up using the same substantially similar standard to elucidate the "based on" language. Which means: what is the point of the derivative work right, if its standard seems the same as the reproduction right? This case has the potential to force confrontation with that problem: Where do we draw the line between infringement of the reproduction right and infringement of the derivative work right? When does a substantially similar work cross the line between reproduction and derivative work? 

One thing that's been noted about the derivative work right is it tends to be talked about when there's some kind of change in medium or other kind of adaptation different from the original form (book to film, or translation from one language to another). The definition in the statute points us to that focus.  Which raises the question: Is a Netflix revival more like a translation or adaptation of Gilmore Girls than it is like an exact copy of Gilmore Girls? Does this depend on how true it is to the original show? 

The "television" landscape has shifted dramatically since Gilmore Girls premiered. It'll be interesting to see how contracts formed pre-Netflix-and-Amazon-production-era function going forward. 

April 15, 2016 in Celebrity Contracts, Commentary, Current Affairs, In the News, Recent Cases, Television, True Contracts | Permalink | Comments (1)

Thursday, April 7, 2016

Cosby Files Breach Of Contract Lawsuit Against Rape Accuser

Bill Cosby has filed a lawsuit against a woman who settled a civil sexual abuse case against him for allegedly breaching a confidentiality clause in the settlement. That confidentiality clause allegedly barred the woman from voluntarily discussing the case with law enforcement agencies. She has cooperated with police after the criminal case against Cosby was opened. Cosby wants the settlement money paid by him repaid.

Just as you think this case could not sink any lower….

April 7, 2016 in Celebrity Contracts | Permalink | Comments (0)

Friday, March 11, 2016

Who to “Look to” for Royalty Payments

If a recording artist enters into a personal services agreement with a record company that, among other things, contains a promise that the artist will “look solely to [a corporate version of the music band] for the payment of my fees and/or royalties … and will not assert any claim in this regard against [the record company],” has the artist then waived his/her right to sue under the contract if the band’s corporated version does not do so? Probably not, according to the Ninth Circuit Court of Appeals. At least this is a factual inquiry that cannot be resolved on a 12(b)(6) motion. The case is Dale Bozzio v. EMI Group Limited, et al. 41H230CGE9L

In the 1980s, Dale Bozzio was the frontwoman of the band Missing Persons. The band incorporated as “Missing Persons, Inc.,” as is normal in the entertainment industry, so that any contracts with entertainment companies would be signed by one legal entity and not all the individual band members. The corporation, however, was suspended under California law. Bozzio recently sued Capital Records for royalties that she believed were still owed to her notwithstanding the suspension issue. Capitol Records argued that Bozzio waived any right to sue Capitol – including the right to sue as a third-party beneficiary – by signing the “look solely to” artist declaration mentioned above. This in spite of other contract clauses stating, for example, that if the band corporation should case to exist, the individual artists would assume the corporation’s contractual obligations. The contract also stated that Capitol Records had agreed to “pay Artist all royalties and advances required to be paid….” Bozzio argued that the “look solely to” clause was intended to prohibit an artist from asserting a claim against Capital Records only in cases of a dispute among individual band members over the internal allocation and distribution of royalties that have already been paid for by the record label.”

The court found that nothing in the record foreclosed this latter argument and that the issue should be resolved by a trier of facts. Under California law, third-party beneficiaries to a contract “made expressly for the benefit of a third party, may be enforced by him[/her] at any time before the parties thereto rescinded it.” This quite clearly seems to cover Bozzio’s case. The argument that artists should look to their own companies for royalty payments from the entertainment companies with which they have “signed” is not only highly circular, it also flies in the face of logic. This again goes to show the craftiness of litigating attorneys and their client’s willingness to try almost anything to win a case whether warranted or not.

March 11, 2016 in Celebrity Contracts, True Contracts | Permalink | Comments (0)