Wednesday, October 5, 2016
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).
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.)
Monday, October 3, 2016
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.)
Wednesday, March 2, 2016
This case out of California, Gilkyson v. Disney Enterprises, Inc., B260103, involves the song "The Bare Necessities," which, as you can see from the above, is readily available on YouTube. The song was written by Terry Gilkyson (this might come up in a trivia competition someday, you never know). His adult children are the plaintiffs in this case.
In the 1960s, Gilkyson wrote several songs for Disney pursuant to a work-for-hire contract under which Disney was deemed the author and owner of the songs and Gilkyson was paid $1,000 per song together with ongoing royalties for certain licensing. The contract specifically excluded royalties for use of the songs in "motion pictures, photoplays, books, merchandising, television, radio and endeavors of the same or similar nature." Disney has paid royalties on the song to Gilkyson and his heirs but Disney has never paid royalties for use of the songs in any audiovisual medium, including DVDs. The Gilkyson heirs disagree with Disney's interpretation of the contract and believe that they are entitled to royalties for use of the songs on VHS tapes and DVDs. Disney argues that the four-year statute of limitations on breach of contract actions bars all of the Gilkysons' claims, because all of the VHS tapes and DVDs complained about were first issued sometime prior to 2007. Therefore, according to Disney, Gilkyson should have brought this claim by 2011, not, as it did, in 2013.
Disney loses this argument, however, based on the continuous accrual doctrine: "[E]ach breach of a recurring obligation is independently actionable." Basically, California law interprets the contract with Disney as being divisible, with each breach of that contract actionable and subject to its own statute of limitation period. Therefore, the court concluded that the Gilkysons could seek recovery of the royalties that were due for a period beginning four years from the filing of their complaint (so, from 2009 onward). According to this court, the California state court jurisprudence on this appears to be clear (although note that, at the trial court level, this case was dismissed without applying the continuous accrual doctrine). Disney pointed to a Central District of California case from 2001 that rejected the plaintiff's continuous accrual doctrine argument, but this California state court noted that it did so without any citation to any California case and that this court disagreed with that case's conclusion.
So it's on to the next step for these parties: fighting over the interpretation of the contract. Or settlement.
Sunday, February 7, 2016
In a case that is a sad testament to today’s apparently increasing loneliness in the Western world despite much technological progress that could have alleviated some of that, but instead only seems to have made it worse, a woman created a YouTube channel bearing the rather uncharming name “bulbheadmyass.” On it, she posted 24 music videos of her band. These videos gathered almost half a million views and many favorable comments. There was no commercial component to the videos. The woman was not trying to sell video or audio versions of the band’s music. Instead, her “sole reward was the acclaim that she received from the YouTube community and the opportunity to make new friends.” (The case is Lewis v. YouTube, H041127, California Court of Appeal .)
Claiming that this woman had breached the company’s Terms of Service, YouTube removed the videos from its website. The woman filed suit claiming breach of contract and seeking specific performance. She alleged that YouTube breached the contract with her when it removed her videos from the website against her will and without notice. The trial court sustained YouTube’s demurrer on the basis that the Terms of Service contained a liability limitation stating that “[i]n no event shall YouTube … be liable … for any … errors or omissions in any content.” Plaintiff had argued that the case was not one of errors or omissions in any content, but rather a deletion of content without prior notice. The appellate court, however, held that the liability limitation governed the issue and that the trial court had correctly sustained the demurrer.
YouTube did, though, agree to restore plaintiff’s video content. YouTube, of course, does not charge for featuring anyone’s videos. Rather, it makes money off the advertising it can generate because of the many hits it receives. (Its revenue is several billion dollars a year.) However, YouTube did not restore the videos to their pre-deletion status, i.e. with comments, URLs from other users who had linked to it, and view counts. (Compare this to SSRN resetting your scholarship records: you’ll lose your view count and all other tracking data should that happen). The court contrasted the case with another where the contract had set forth exactly how to grant specific performance in case of a breach (also a technology case). But in the YouTube case, said the court, “no provision in the Terms of Service can serve as the basis for the relief that [plaintiff] seeks.”
Really? Does it take all that much technological savvy by a court to simply ask YouTube to restore plaintiff’s accounts to their “as were” condition? YouTube may actually not simply have deleted the accounts altogether. If they had, they would undoubtedly have backups. Instead, various technological accounts are simply “turned off” and are thus not accessible to the general public, but they still exist. What really seems to have been at issue here was an annoying plaintiff who was unlikeable to both the court and YouTube. It seems that the court was too eager to dismiss plaintiff’s specific performance claim and chose the too-easy way out by claiming lack of technological knowledge. In 2016, it does not seem to strain the imagination too much to expect billion-dollar IT companies to have ways of doing just what plaintiff sought here. Then again: with a name such as “bulbheadmyass,” maybe it was a case of “you got what you asked for.”
Thursday, July 23, 2015
You cannot say that we are boring you this week. Our blogs have included considerations on advertising on porn sites and having one’s illicit affairs forgotten contractually. Add to that the news that this week, Roman Catholic nuns, the archdiocese of Los Angeles, the formerly Jesuit student turned California Governor Brown and Pope Francis all had something to say about contracting about major and, admittedly, some minor issues.
To start with the important: Pope Francis famously issued his Encyclical Letter Laudato Si’ “On Care for our Common Home.” In it, he critiques “cap and trade agreements,” which by some are considered to be a mere euphemism for contractual permits to pollute and not the required ultimate solution to CO2 emissions. In the Pope’s opinion, “The strategy of buying and selling carbon credits can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.” Well said.
Governor Brown, however, disagrees: Brown shrugged off Francis' comments. "There's a lot of different ways," he told reporters, "that cap and trade can be part of a very imaginative and aggressive program." Brown, however, does agree with the Pope that we are “dealing with the biggest threat of our time. If you discount nuclear annihilation, this is the next one. If we don’t annihilate ourselves with nuclear bombs then it's climate change. It’s a big deal and he’s on it.”
In less significant contractual news, Roar, Firework, and I Kissed a Girl and I Liked It singer Katy Perry is interested in buying a convent owned by two Sisters of the Most Holy and Immaculate Heart of the Blessed Virgin. Why? Take a look at these pictures. The only problem is who actually has the right to sell the convent to begin with: the Sisters or the archdiocese. When two of the sisters found out the identity of the potential buyer (Perry), they became uninterested in selling to her because of her “public image.” They now prefer selling to a local restaurateur whereas the archdiocese prefers to complete the sale to Perry, although she bid less ($14.5 million) on the property than the restaurateur ($15.5 million). Perry may be about to learn that image is indeed everything in California, even when it comes to the Divine. Perry is no stranger to religion herself as she was, ironically, raised in a Christian home by two pastor parents.
Monday, December 1, 2014
We start this week with international news: According to a report from Ghanaweb, Ghana is suing Nigeria for breach of a contract to supply natural gas. Under the West African Pipeline Project, Nigeria is to supply Ghana, Togo and Benin with gas, but it has supplied only about 40% of the gas contracted for. While the report is a bit vague, it seems that the agreement at issue has a $20 million liquidated damages clause, which Ghana thinks is far too low and does not provide an adequate incentive for Nigeria to perform.
In music industry news, the Daily Record informs us that songwriter Wendy Starland won a $7.3 million jury verdict against producer Rob Fusari, who had entered into a settlement with Lady Gaga in 2010. Fusari had claimed entitlement to $30.5 million for helping to launch Lady Gaga's career and contributing to her break-out hit album (are they still called that?). We reported about that suit here. Lady Gaga testified at the trial, at which Starland claimed that she and Fusari had a deal for splitting proceeds from Lady Gaga's career.
And yet another non-disparagement case: this one in the context of realtors. San Diego's ABC's affiliate, 10news.com reports that a realtor sought to arbitrate its breach of contract claim against a homeowner who posted a negative review on Yelp. The homeowner claims that the realtor demanded $8000 and the removal of the Yelp review in order to settle the claim. As Nancy Kim has pointed out, California has a law that will go into effect Jan. 1, 2015, such non-disparagement clauses will be unenforceable. There can also be fines of up to $10,000 for contractual provisions that violate the new law.
Tuesday, September 9, 2014
We previously blogged about Ellington v. EMI, in which Duke Ellington's grandson essentially claims that EMI is double dipping into foreign royalties because it now owns the foreign subpublishers that are charging fees. The New York Appellate Division held that Ellington's 1961 royalties agreement is unambiguous and allows EMI to do this. Ellington has appealed to the New York Court of Appeals and oral argument is scheduled for Thursday. Oral argument will be streamed live on the Court's website.
Here's the summary of the case from the Court's Public Information Office:
In 1961, big-band jazz composer and pianist Duke Ellington entered into a then-standard songwriter royalty agreement with a group of music publishers including Mills Music, Inc., a predecessor of EMI Mills Music, Inc. (EMI). The agreement designates Ellington and members of his family as the "First Parties," and it defines the "Second Party" as including the named music publishers and "any other affiliate of Mills Music, Inc."
Regarding royalties for international sales, the agreement requires the Second Party to pay Ellington's family "a sum equal to fifty (50%) percent of the net revenue actually received by the Second Party from ... foreign publication" of his songs. Under such a "net receipts" arrangement, the foreign subpublisher retained 50 percent of the revenue from foreign sales and remitted the remaining 50 percent to EMI. EMI would then pay Ellington's family 50 percent of its net receipts, amounting to 25 percent of all revenue from foreign sales. At the time the agreement was executed, foreign subpublishers were typically not affiliated with American music publishers; but EMI subsequently acquired ownership of foreign subpublishers and, thus, fees that had been charged by independent foreign subpublishers are now charged by subpublishers owned by EMI.
In 2010, Ellington's grandson and heir, Paul Ellington, brought this breach of contract action against EMI, claiming EMI engaged in "double-dipping" by having its foreign subsidiaries retain 50 percent of revenue before splitting the remaining 50 percent with the Ellington family. He alleges this enabled EMI to inflate its share of foreign revenue to 75 percent, and reduce the family's share to 25 percent, in violation of its contractual agreement to pay the family 50 percent "of the net revenue actually received by the Second Party from ... foreign publication."
Supreme Court dismissed the suit, saying the parties "made no distinction in the royalty payment terms based on whether the foreign subpublishers are affiliated or unaffiliated with the United States publisher." The term 'Second Party' does not include EMI's new foreign affiliates, it said, because the definition "includes only those affiliates in existence at the time that the contract was executed."
The Appellate Division, Second Department affirmed, saying there is "no ambiguity in the agreement which, by its terms, requires [EMI] to pay Ellington's heirs 50% of the net revenue actually received from foreign publication of Ellington's compositions. 'Foreign publication' has one unmistakable meaning regardless of whether it is performed by independent or affiliated subpublishers." It said the definition of 'Second Party' includes only affiliates "that were in existence at the time the agreement was executed," not "foreign subpublishers that had no existence or affiliation with Mills Music at the time of contract."
Paul Ellington argues the agreement was intended to split foreign royalties 50/50 between EMI and his family, while allowing EMI to deduct a reasonable amount for foreign royalty collection costs, and EMI breached the contract by "diverting" half of the revenue to its own foreign subsidiaries. "Per the plain terms of the Agreement..., EMI is 'actually receiv[ing]' all the revenue, and it must, therefore, split it all equally with plaintiff." He argues the definition of Second Party includes affiliates EMI might acquire in the future, since there is no language limiting the term to affiliates then in existence. In any case, he says the language is ambiguous and cannot be resolved on a motion to dismiss.
Here's the Appellate Division decision in Ellington v. EMI.
Wednesday, August 13, 2014
I love concert tour riders -- those sometimes lengthy contract terms that reveal all of a band's idiosyncratic backstage requests. The most famous rider term is, of course, Van Halen's requirement of no brown M&Ms. And we've blogged about the explanation for this peculiar request more than once: here and here.
WNYC's John Schaefer hosted an extended discussion of tour riders on Soundcheck. My favorite is Iggy Pop's request: "One monitor man who speaks English and is not afraid of death."
The Brooklyn band Parquet Courts asked for:
- 1 bottle of communion grade red wine
- 1 bottle of white wine that would impress your average non-wine-drinking American
- 1 bottle of lower-middle shelf whiskey – cheap but still implies rugged masculinity
- Mixers for aforementioned mid-level whiskey, of slightly higher quality than the whiskey
- A quantity of “herbal mood enhancer”
- 1 copy of newspaper with the most interesting headline/front page picture (comic section must feature Curtis)
You can listen to the show here:
Wednesday, July 9, 2014
By Myanna Dellinger
Recently, I blogged here on Aereo’s attempt to provide inexpensive TV programming to consumers by capturing and rebroadcasting cable TV operators’ products without paying the large fees charged by those operators. The technology is complex, but at bottom, Aereo argued that they were not breaking copyright laws because they merely enabled consumers to capture TV that was available over airwaves and via cloud technology anyway.
In the recent narrow 6-3 Supreme Court ruling, the Courts said that Aereo was “substantially similar” to a cable TV company since it sold a service that enabled subscribers to watch copyrighted TV programs shortly after they were broadcast by the cable companies. The Court found that “Aereo performs petitioners’ works publicly,” which violates the Copyright Act. The fact that Aereo uses slightly different technology than the cable companies does not make a “critical difference,” said the Court. Since the ruling, Aereo has suspended its operations and posted a message on its website that calls the Court’s outcome "a massive setback to consumers."
Whether or not the Supreme Court is legally right in this case is debatable, but it at least seems to be behind the technological curve. Of course the cable TV companies resisted Aereo’s services just as IBM did not predict the need for very many personal computers, Kodak failed to adjust quickly enough to the digital camera craze, music companies initially resisted digital files and online streaming of songs. But if companies want to survive in these technologically advanced times, it clearly does not make sense to resist technological changes. They should embrace not only technology, but also, in a free market, competition so long as, of course, no laws are violated. We also do not use typewriters anymore simply to protect the status quo of the companies that made them.
It is remarkable how much cable companies attempt to resist the fact that many, if not most, of us simply do not have time to watch hundreds of TV stations and thus should not have to buy huge, expensive package solutions. Not one of the traditional cable TV companies seem to consider the business advantage of offering more individualized solutions, which is technologically possible today. Instead, they are willing to waste money and time on resisting change all the way to the Supreme Court, not realizing that the change is coming whether or not they want it.
Surely an innovative company will soon be able to work its way around traditional cable companies’ strong position on this market while at the same time observing the Supreme Court’s markedly narrow holding. Some have already started doing so. Aereo itself promises that it is only “paus[ing] our operations temporarily as we consult with the court and map out our next steps.”
Wednesday, November 6, 2013
On Monday, the Distrct Court for the Southern of New York issued its opinion in Beastie Boys v. Monster Energy Company, 12 Civ. 6065 (PAE) (S.D.N.Y. November 4, 2013). The issue in the case was whether DJ Z-Trip had authorized Monster Energy to use a remix and video Z-Trip (Mr. Z-Trip?) had made of Beastie Boys songs. Z-Trip wrote to Monster Energy saying, "Dope!" in the context of series of exchanges with Monster Energy over use of of the remix, and Monster Energy construed that word as consent.
Wednesday, October 23, 2013
Gaynor has filed suit in state Superior Court in Somerville against a Piscataway contractor who replaced a second-floor concrete deck at her home that she says later caused leaks into the house and has to be replaced at a cost of $120,000.
According to the lawsuit filed earlier this month, Gaynor contracted with Diaz Landscape Design and Tree Service of Piscataway in November 2007 to remove an existing second-floor concrete deck and replace it with a new deck at a cost of $38,060.
After the new deck was installed, the lawsuit alleges, water began to leak into Gaynor’s home because of “faulty construction.”
There was also water ponding on the deck, water damage to wood sills and supports and the formation of mold, according to the suit.
Gaynor told the contractor about the problems and asked that the conditions be corrected. The contractor attempted to fix the problems, but the attempts failed and the problems persisted, causing more damage to the property, according to the lawsuit.
Gaynor then had another contractor examine the work performed by Diaz.
The new contractor determined that the work done by Diaz was “so faulty and defective” that the only appropriate remedy is removing the deck and constructing a new one at a cost of $120,000, the suit says.
Besides breach of contract and breach of warranty, Gaynor’s suit also charges Diaz with consumer fraud by not being registered in New Jersey as a home improvement contract and failing to obtain the required building permits, resulting in the work not being inspected.
Is Gaynor entitled to the cost of replacement of the deck? Time for a music break:
[Meredith R. Miller]
Thursday, September 26, 2013
NFL v. MIA: we've mentioned issues related to this incident on this blog in the past. But, if you ask me, it just got good.
Here's the background: at the 2012 Superbowl, this little flip of the bird happened during the halftime show:
The NFL has since sued (in arbitration) M.I.A. (the bird-flipping artist in the video above) for $1.5 million. The NFL’s claim? It claims that M.I.A. breached her contract because the “offensive gesture” was “in flagrant disregard for the values that form the cornerstone of the NFL brand and the Super Bowl." In the contract, she apparently acknowledged “the great value of the goodwill associated with the NFL and the tremendous public respect and reputation for wholesomeness enjoyed by the NFL."
The case, it sounds, comes down to what is “offensive” and what exactly are the “wholesome” values of the NFL. This FoxSports column does a great job explaining why the lawsuit is “laughable” – with video footage as evidence of just how wholesome the NFL is.
A video of M.I.A. has recently surfaced. In the video, she (rather articulately) explains the absurdity of the lawsuit. As 411Mania.com describes:
[M.I.A.] says the NFL is "scapegoating me into trying to set the goalpost for what is offensive in America." She notes that the picture in which she is seen giving the middle finger also has a group of sixteen year-old girls who were selected from a high school in Indianapolis who are in cheerleader outfits with their "hips thrusted in the air, legs wide open, in this very sexual...sexually provocative position."
Here’s M.I.A. regarding the lawsuit, which she describes as "a massive display of... powerful corporation dick shaking." In light of the 16-year-old cheerleaders on stage behind her, she frames the issue in the lawsuit as whether female sexual exploitation or empowerment is more offensive. Interesting stuff:
[Meredith R. Miller]
Tuesday, August 27, 2013
What at thrill to see a contracts story on the front page of the Saturday New York Times Arts Section above the fold! The occasion is a public exhibition by the Dvorak American Heritage Association, which will display the actual contract that brought Antonin Dvorak (pictured contemplating a move to America) to New York for three years beginning in 1892.
According to the Times, Jeanette Thurber, wealthy patron of the National Conservatory of Music of America, agreed to pay Dvorak $15,000 -- 25 times what he was getting in Prage -- in return for his agreement to keep regular hours (well, three hours a day), teaching six days a week at her school. She did give him summers off. He was also contractually obligated to give up to six concertns a year. It's not clear whether that means that he was himself to perform or if he was to conduct an orchestra or chamber music group composed of the Conservatory's students.
The Times reports that the panic of 1893 made it difficult for Mrs. Thurber to keep up with the payments she owed Dvorak. He may have gone back to Prague a few thousand dollars short.
Thursday, May 9, 2013
Duke Ellington’s grandson brought a breach of contract action against a group of music publishers; he sought to recover royalties allegedly due under a 1961 contract. Under that contract, Ellington and his heirs are described as the “First Party” and several music publishers, including EMI Mills, are referred to as the “Second Party.” On appeal from the dismissal of the case, Ellington’s grandson pointed to paragraph 3(a) of the contract which required the Second Party to pay Ellington "a sum equal to fifty (50 percent) percent of the net revenue actually received by the Second Party from…foreign publication" of Ellington's compositions. Ellington’s grandson argued that the music publishers had since acquired ownership of the foreign subpublishers, thereby skimming net revenue actually received in the form of fees and, in turn, payment due to Ellington’s heirs.
The appellate court explained the contract and the grandson’s argument:
This is known in the music publishing industry as a "net receipts" arrangement by which a composer, such as Ellington, would collect royalties based on income received by a publisher after the deduction of fees charged by foreign subpublishers. As stated in plaintiff's brief, "net receipts" arrangements were standard when the agreement was executed in 1961. Plaintiff also notes that at that time foreign subpublishers were typically unaffiliated with domestic publishers such as Mills Music. Over time, however, EMI Mills, like other publishers, acquired ownership of the foreign subpublishers through which revenues derived from foreign subpublications were generated. Accordingly, in this case, fees that previously had been charged by independent foreign subpublishers under the instant net receipts agreement are now being charged by subpublishers owned by EMI Mills. Plaintiff asserts that EMI Mills has enabled itself to skim his claimed share of royalties from the Duke Ellington compositions by paying commissions to its affiliated foreign subpublishers before remitting the bargained-for royalty payments to Duke Ellington's heirs.
Ellington’s grandson asserted on appeal that the agreement is ambiguous as to whether "net revenue actually received by the Second Party" entails revenue received from EMI Mills's foreign subpublisher affiliates. The appellate court found no ambiguity in the agreement; the court stated that the agreement “by its terms, requires EMI Mills to pay Ellington’s heirs 50 percent of the net revenue actually received from foreign publication of Ellington’s compositions.” It reasoned:
"Foreign publication" has one unmistakable meaning regardless of whether it is performed by independent or affiliated subpublishers. Given the plain meaning of the agreement's language, plaintiff's argument that foreign subpublishers were generally unaffiliated in 1961, when the agreement was executed, is immaterial.
The court continued by stating that “the complaint sets forth no basis for plaintiff's apparent premise that subpublishers owned by EMI Mills should render their services for free although independent subpublishers were presumably compensated for rendering identical services.” Thus, dismissal of the suit was affirmed.
Ellington v. EMI Music, 651558/10, NYLJ 1202598616249, at *1 (App. Div., 1st, Decided May 2, 2013).
[Meredith R. Miller]
Thursday, August 2, 2012
Over at Concurring Opinions, David Hoffman has called our attention to a "bizarre" consideration issue at the Olympics. Professor Hoffman liniks to this story in The USA Today, according to which the performers at the Olympics halftime show -- whoops, make that opening ceremonies -- including Paul McCartney, donated their time. According to The USA Today, the performers received a mere one pound for their performances, and that one pound was paid in order to make the performers' agreements with the Olympics binding.
Professor Hoffman comments as follows:
If true, I take it that British law takes the position that nominal consideration can bind obligees, but that “false” nominal consideration can’t. Thus, the organizers had to both promise to pay McCartney a pound and actually pay it before the ex-Beatle was bound to perform.
To my mind, this is the least good resolution of the consideration problem possible. Look: either consideration should mean something – bargained for exchange motivating actual counter-promising – or parties should be free to dispose of the requirement of consideration entirely. In the United States, only Pennsylvania has taken that sensible latter position. The rest generally tend to require actual bargained for exchange, excepting only charitable subscriptions, which the Olympics are not. The Brits, who handed us this mess in the first instance, have apparently now embraced the unfortunate, mumbo-jumbo, hybrid, which reduces the sensible formality of consideration to a bit of a magical contract theatre. Does anyone think that that pound of consideration actually motivated McCartney’s promise to perform?
Interesting comments follow, including those of Patrick O'Donnell, to whom we tip our virtual hats for having directed us to the Concurring Opinions post.
Unfortuantely, we have at present nothing substantive to add to the learned discussion of at Concurring Opinions. However, we would like to observe that perhaps Sir Paul is happy to work for nominal consideration given that just a few weeks ago, as reported by the BBC, concert organizers pulled the plug on him and Bruce Springsteen because they performed past a curfew in Hyde Park.
Band member and erstwhile proprieter of "Da Bing," Steven Van Zandt, tweeted rhetorically "When did England become a police state?"
Wednesday, July 25, 2012
Bratz dolls are no stranger to the blog - we've previously blogged about the Bratz' travails with Barbie. For those uninitiated, in a previous post, our editor D. A. Jeremy Telman described Bratz as barbies that "dress like prostitutes" (or, his sister did). Anyway, Bloomberg now reports that Bratz his initiated a contract suit against Lady Gaga (really, her management company). From Bloomberg:
Pop star Lady Gaga and her management company were sued by MGA Entertainment Inc., the maker of Bratz toys, for failing to approve a line of dolls in her image.
The Van Nuys, California-based company, alleging breach of contract in New York state court, is seeking more than $10 million in damages from the pop star, her management company, Culver City, California-based Atom Factory, and Los Angeles- based Bravado International Group, a merchandising company that works with musicians and music groups.
MGA Entertainment says in the complaint that it agreed to produce dolls in Lady Gaga’s image in December 2011 at Bravado’s “request and insistence” and paid the company a $1 million fee in anticipation of shipping the products to retailers this summer in time for the holiday selling season.
In April, Bravado’s Chief Executive Officer, Tom Bennett, told MGA’s chief executive officer, Issac Larian, that Lady Gaga wanted to delay production and shipping of the dolls until her new album is released in 2013, according to the complaint. MGA says the defendants have continued to withhold final approval in order to delay marketing the dolls until next year and instead sell a licensed Lady Gaga perfume called “Fame.”
“Defendants’ conduct is egregious, in bad faith and is pretextual, especially in light of the fact that MGA has, among other things, paid Bravado a $1,000,000 advance, agreed to an excessively generous royalty rate, invested millions in the preproduction of the Lady Gaga dolls and put its reputation and goodwill on the line in order to secure distributors and retail shelf space,” MGA Entertainment said in the complaint.
Amanda Silverman, a spokeswoman for Lady Gaga, said the singer hasn’t seen the complaint and has no comment.
“This is a dispute between Universal Music Group’s merchandising company and MGA,” Silverman said in an e-mail. “There was no legitimate reason for dragging Lady Gaga into that dispute. Lady Gaga will vigorously defend MGA’s ill- conceived lawsuit and is confident that she will prevail.”
Peter Lofrumento, a spokesman for Vivendi SA’s Universal Music Group, the parent company of Bravado, said in an e-mail that the claims in the suit are meritless and the company will vigorously defend itself in court.
A telephone message left at the headquarters of Atom Factory wasn’t immediately returned.
[Meredith R. Miller]
Wednesday, July 18, 2012
Courney Love is no stranger to ContractsProf Blog. I am beginning to think I could teach the whole course through her legal escapades. Here's a new contracts story from Celebuzz (venerable site of celebrity exclusives):
Courtney Love has found herself wrapped up in legal woes after her former assistant filed a wrongful termination, nonpayment of wages and breach of contract lawsuit last week. But the tables may soon be turned.
Not only has Love’s camp disputed Jessica Labrie‘s claims as “completely unfounded,” but it now asserts that the former employee could find herself in hot water for the suit.
What did Labrie do wrong?
“Miss Labrie signed a very solid confidentiality agreement,” the former Hole frontwoman’s rep, Steve Honig, exclusively tells Celebuzz. “If she has decided to breach that agreement by releasing privileged information covered within that agreement, she could find herself in serious legal jeopardy.”
In a series of voice messages left for Labrie, the “Pretty on the Inside” artist — the widow of iconic Nirvana frontman Kurt Cobain — said she was in deep debt and could not shell out the woman’s wages.
“What am I supposed to do? Not eat? Live on the streets?” Love bemoaned.
Between the leaked Love tapes and Labrie’s confidentiality contract, the conflict seems to be heating up to a contentious court battle.
Believe it or not, this is relevant to something I am currently researching. I'm in the early stages of a paper on confidentiality agreements and what exactly they are good for beyond an in terrorem effect (I mean, once the secret is out, it is no longer a secret and how do you prove damages?). One of the things they are good for is exemplified here: to use defensively. Assistant sues Courtney Love for breach of contract and Love defends (or countersues) by alleging breach of a confidentiality agreement.
If you are interested, Celebuzz has actually posted the complaint. If I represented Love, in her papers somewhere, I would write: "Go on, take everything, take everything, I want you to...":
[Meredith R. Miller]
Tuesday, June 19, 2012
As reported in the Minneapolis/St. Paul Business Journal, former CEO of Napster, Christopher Gorog, filed suit May 31, 2012 against Best Buy in the U.S. District Court in Minneapolis alleging breach of contract, unjust enrichment and breach of good faith and fair dealing, claiming the electronics chain has failed to honor his 2008 employment agreement. Gorog claims that Best Buy did not honor the terms of his severance agreement and short-changed him when it sold off Napster to Rhapsody in 2011.
Gorog was chief executive of Roxio when it acquired the music sharing service, Napster, which the Business Journal characterizes as "copyright violating" until Gorog turned it into a "legitimiate business" with annual music sales of over $100 million (we are shocked, shocked to learn that there were copyright violations associated with Napster).
Best Buy bought Roxio/Napster in 2008 for $121 million, and Gorog became a Best Buy employee. Gorog now alleges that he was to be paid up to $5.8 million if Best Buy sold or shuttered Napster before March 2012. Gorog left the company in 2009 after unsuccessfully trying to convince execs to continue investing in Napster. He now claims that the sale of Napster to Rhapsody was designed to prevent him from getting his fair share from the deal.
We have not been able to locate the complaint, but we think it looks something like this:
[JT & Christina Phillips]
Tuesday, May 29, 2012
According to USAToday.com, Wayne Newton, aka Mr. Las Vegas, is being sued for breach of contract by the company that teamed with Newton to turn his 40-acre estate, called Casa de Shanandoah, into a museum. The company, CSD, LLC (CSD), purchased the rights to convert Newton’s 40-acre estate, which features South African penguins, Arabian horses, paintings by Renoir and 17th century antiques collected from European castles, into “Graceland West." CSD now alleges that Newton, along with his wife and her mother have unreasonably delayed the project.
The complaint states that under the terms of the museum deal, the Newtons agreed to move to a $2 million home on the estate constructed by CSD, so that the mansion, which serves as the Newtons current residence, could be converted into a museum. However, CSD alleges that the Newton family refused to relocate or turn over personal memorabilia. Graceland West is supposed to feature certain animal attractions as well, but right now there are an extra 35 horses on the property along with large vicious dogs that Mr. New ton allows to roam freely, in spite of the fact that the dogs have attacked and bitten people on more than a dozen occasions. The dogs are also credited with killing 75 birds in the estate's aviary, as well as the occasional peacock.
The complaint details the delapidated condition of Casa de Shanadoah before its infusion of $30 million and its efforts to improve the conditions on the estate. If you have a interest in descriptions of horses wallowing in their own feces, this is the complaint for you.
Adding additional spice to the story, the complaint also claims that Newton sexually harassed a female equine management speicalist who was hired to train the horses for hte exhibit. She is allegedly threatening suit against the parties to the lawsuit. As reported by USAtoday.com, Newton’s lawyer, J. Stephen Peek, responded to the sexual harassment claims saying the accusations are merely an attempt to “obtain financial gain,” and the woman has been fired.
Foxnews.com reports that the lawsuit seeks to have the Newton family immediately vacate their estate, Casa de Shenandoah, and allow the $50 million project to move forward. However, the Newton family claims the lawsuit is a preemptive strike based on their plans to sue the company for breach of contract after multiple construction delays. The family plans to file a countersuit challenging CSD’s allegations.
For some reason, Wayne Newton has not played in Valparaiso recently, so we had to go to YouTube to get a sense of what this incomparable performer is like. Here's a taste:
[JT & Christina Phillips]
Monday, April 30, 2012
We were hoping to bring you a copy of the complaint from the EOnline site, but the link seems to be broken (we are keeping it here in case it comes back up). In any case, the EOnline provides the basics here. Apparently Elizabeth Travis served as manager for her husband, Randy Travis (pictured) for nearly 30 years, including throughout their 19-year marriage. After their divorce, the parties allegedly agreed that she was to continue to serve as his manager but Elizabeth Travis now claims that the singer breached that agreement. According to the complaint (as summarized on EOnline):
"[Randy] had a large truck, an armed guard and several other men" turn up at her Music Row office and remove "practically all of the property and business records" from her custody, including computers, photographs and framed record plaques.
It's not clear from these reports (and that's why we'd love to see the complaint) if her claim is that this conduct constituted a constructive termination of the management agreement or if there was some separate termination letter. If the former, than one is put in mind of Schwarzenegger's rather poorly delivered "Consider that a divorce."
According to HuffPo, Mr. Travis is unimpressed: "It is unfortunate that it's come to this," Travis said. "We believe the lawsuit lacks merit and that we have legal defenses to her claims."