Interpretation and Parol Evidence Issues in Quincy Jones Case

In 2013, as we reported here, Rock & Roll Hall of Fame producer Quincy Jones (right) brought suit seeking $30 million from MJJ production.  Jones alleged that he was entitled royalties and remix fees in connection with his role in making three Michael Jackson records, Off the Wall, Thriller, and Bad.  Jones alleged that MJJ had violated his contractual rights by using music from those records  in the posthumous Jackson documentary This Is It and in two Cirque du Soleil shows.  In 2017, a Los Angeles jury awarded Jone $9.4 million in royalties in connection with "This Is It."

This week, a California appellate court reduced that award by $6.9 million, finding that the trial court had inappropriately allowed the jury to decide issues of contractual interpretation that should have been decided by the court. The appellate court found that the jury misinterpreted the extent of Jones' entitlement to payment under the contract and that some of the claims were too speculative to be a basis for recovery.

The appellate court first held that § 4(a) of Jones's Producer Agreements entitled him only to a 10% royalty fee on record sales.  Jones was not entitled to licensing income, nor was he entitled to fees for remixing Masters.  In the alternative, the appellate court held that remix damages were too speculative to be recoverable.  

According to the court, the Producer Agreements gave Jones a right of first opportunity to remix the Masters, and Michael Jackson (with his family, left) had paid Jones a share of all license fees for use of Masters for some time.  However, between 1993 and 2008 Jackson released remixes without offering Jones the opportunity to participate.  After Jackson's death in 2009, the remixes of the Masters were used in This is It, which grossed $500 million.

The appellate court's interpretation of ¶ 4(a) turned on its determination that extrinsic evidence proffered by Jones was inadmissible.  The trial court erred in permitting the jury to consider that evidence, and the jury's erroneous award was informed by that inadmissible evidence.  The court held that the Producer Agreement did not require Jackson to pay Jones remixing fees and that extrinsic evidence revealed no latent ambiguity regarding that term.

Hat tip: Rachel Arnow-Richman