ContractsProf Blog

Promises, Promises on Cardozo, Barry Manilow, and Van Halen

I am teaching Jacob & Youngs v. Kent this week, which makes me happy.  I am always happy when I get to teach a Cardozo opinion just like I would be happy if I were teaching in the humanities, and this was the week we get to discuss James Joyce's "The Dead."  Always happy to have new insights on the case, and the Promises, Promises episode on the case is full of them.  

For one thing, the hosts point out, in passing, that Kent might have had a special yearning for Reading pipe, because it had a special status.  He longed to shower every morning in water coming through his Reading pipes, the Manolo Blahnik of pipes.  Knowing that the water he was using was flowing through the high-status Reading pipes delighted him, and he so he would sing Barry Manilow's "Looks Like We Made It" every morning as he exfoliated.  Yes, I know, that's totally not what that song is about.  It doesn't help.  The hosts' brief, anachronistic mention of the Manilow song planted an earworm, leaving me no choice but to exorcise it by sharing it with you.

In the alternative, Professors Wilkinson-Ryan and Hoffman entertain the possibility that the Reading pipes were Kent's brown M&Ms, a topic on which we have previously posted.  If that were the case, however, the time to object to the Reading pipes was before completion.  If the building is otherwise sound, the lack of Reading pipe does not serve the purpose that the brown M&Ms allegedly served.

Weekend Frivolity: Sarah Dooley Explains Infancy Doctrine in "Stupid Things"

Readers of this blog are probably tired of me taking every possible opportunity to encourage people to download Sarah Dooley's new album, Is This Heartbreak?   I know.  It's tiresome.  But Sarah is the daughter of my fabulous former colleague, Laura Dooley, and I can honestly say that Sarah is to music what Laura is to Civil Procedure.  I can also honestly say that I don't know what that means.

I've decided to turn over a new leaf.  Today, I'm pushing people to buy Sarah's first album, Stupid Things. And the infancy doctrine has given me a reason to do so.  Readers of this blog are familiar with the infancy doctrine, which lets people under age 18 disaffirm their contracts, often without any adjustment for depreciation or damage (unless caused by the infant's tortious conduct).  Seems nuts, especially if the contracts are basically fair and the infant gets to enjoy whatever was bought without having to compensate the seller for depreciation.  Sarah's lyrics on the title track explain why this might make sense from a policy perspective:

You're allowed to do stupid things
When you're young
People look the other way
It's okay
At least that's what people say
You're allowed to try pot
You're allowed to get shot
You're allowed to do anything once
Cause you're young
Yeah you're young
Yeah you're young

Public policy analysis you can dance to.

Extended Holiday Weekend Frivolity: Holiday Greetings via Sarah Dooley

Beautiful rendition of this classic, fittingly sombre for this very odd version of the holiday.

Sarah Dooley is the daughter of my former colleague, Laura Dooley, currently at Touro Law.  Sarah's new album, Is this Heartbreak? is available, for example, here.

We wish everyone a safe holiday with best wishes that the vaccines will facilitate raucous celebrations some time in the coming year!

Long Weekend Frivolity: The Amazing Things One Finds on Twitter!

In this Italian hit song from 1972, you will hear what sounds like unaccented American English lyrics but is in fact gibberish.  Fascinating.  Thanks Kim Krawiec!

But if you listen to Kim's Taboo Trades podcast on blood you will hear accented English (from Nicola Lacetera and Mario Macis) that is anything but gibberish!

 

More Frivolity: Moving an Icehouse? No Promises

From the sublime (Joni Mitchell) to the ridiculous.

Mitchill v. Lath is about a collateral oral agreement to remove an icehouse from a neighboring property as part of a real estate transaction.  I make much of the fact that my students probably have no idea what an icehouse is.  I knew there was a band called Icehouse.  Actually, I knew of two bands called Icehouse.  I play short excerpts from each band and invite the students to imagine how annoying it would be to have them on the neighboring property. 

But I didn't know until now that one of the bands has a song called "No Promises."  Enjoy, even though it does not seem that the promise at issue in contractual:

h/t Edward Swaine

Weekend Frivolity: Joni Mitchell on the Parol Evidence Rule

We have it on good authority that Joni Mitchell's song "California" is about the parol evidence rule.  When she says that Paris is "too old and cold and settled in its ways," she is really talking about New York.  When she says "cold," she is referencing the icehouse in Mitchill v. Lath, when she says "old," she is noting that Mitchill is an old case, and the fact that her name is Joni Mitchell is a dead giveaway, even though she tried to fool us by varying the spelling.  The lyric "Oh, but California . . ." clearly indicates her preference for Judge Traynor's approach to the parol evidence rule.  Listen for yourself:

Weekend Frivolity: Sarah Dooley Album Release Party

One of the best things about teaching at Valparaiso University Law School was getting to work with Laura Dooley, a fantastic, teacher, scholar, and colleague.  In addition, Laura comes with two lovely daughters, one of whom is the supremely talented Sarah Dooley.  Below is a video highlighting Sarah's talents as a singer, songwriter, musician, actor, and comedian.  If you like what you see, please support Sarah's art and Laura's retirement by watching Sarah' album release show tonight!

 

Weekend Frivolity: Answering a Student's Question

One of my students asked me why so many of my hypotheticals involve cats, rather than dogs.  We ran out of time before I could complete my answer, so here's the full version:

 

Weekend Frivolity: Yet Another Pandemic-Induced Hamilton Variant

 

 

The Blog Mourns the Passing of John Lewis

. . . and celebrates his memory

Weekend Frivolity: Music to Quarantine by from Sarah Dooley

One of the great benefits of being at a small law school in a small town is that you get to know not only your colleagues but also their delightful and talented children.  Among the most delightful and talented is the incomparable Sarah Dooley, daughter to my former colleague, Laura Dooley.  Sarah is trying to continue to entertain us from her small New York apartment.

If you enjoy this video and would like to see more content from Sarah, you can follow here on Instagram or on Twitter at @iamsarahdooley

 

Weekend Frivolity: Some Good News

If you are like us, you could use some good news.  Fortunately, John Krasinski is providing it.  You can watch the first episode on your own.  We're Hamilton fans (spoiler alert!) so we're sharing the second.

 

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

Weekend Frivolity: Part of the World

Some of our readers might recognize this new feature of the Blog, "Weekend Frivolity" is ripped off form the frivolity segment of the National Security Law Podcast.  In this case, imitation is indeed the sincerest form of flattery.  If you aren't currently subscribing to the podcast, you should be, even if you aren't interested in National Security Law.  It is fun to listen to Bobby Chesney and Steve Vladeck argue about just about anything.

I'm tipping my hat extra hard in the post because I discovered this video on Bobby's Twitter feed.  It has something of an Austin feel to it, but I'm afraid I don't know if the Bar & Grill responsible for this video is an Austin joint.  Perhaps a knowledgeable reader can enlighten me in the comments!

 

Madonna Sued for Late Concert Start

"There's something that you all need to understand," Madonna said during her Las Vegas concert, "and that is, that a queen is never late."

Maybe so, but concertgoer Nate Hollander is suing her and concert promoter Live Nation for breach of contract. Hollander claims that first announcing the concert start time to be 7.30 p.m. and then changing it to 10.30 is a breach of contract.  No refund has been offered, he alleges, and attempts to resell the tickets will not make up for the money lost as tickets have now "suffered an extreme loss of value" because of the time change, Hollander further alleges.  Each ticket cost approx. $340.

Does Hollander have a point?  For those who are not night owls, it is certainly an inconvenience to have to be out and about until mightnight if they had hoped to hit the sack earlier.  Sure, a big name like Madonna will, hopefully, cause a perhaps much-needed adrenaline rush, but what about having to pay babysitters for very late hours worked, increased difficulty getting home on public transportation or shared rides that late, etc.

Notwithstanding the fact that concert tickets to see big names often increase dramatically in value on the secondary market if the show is sold out (if it is even contractually possible to resell the tickets), it does not seem, however, like any true loss had been suffered here.  Madonna still performed and thus provided the benefit of the bargain even if not perfectly so.  The tickets were still honored.  It was still a night out in Las Vegas.  There really was no reason to have to resell tickets, so any value allegedly lost in the deal is speculative.

For law teaching purposes, this case may, though, still be interesting when discussing material v. minor breach with our students.

Taylor Swift to Re-record Her First Albums in Contractual Dispute

For artists, master recordings — the original recordings of musicians' work — are vital musically, historically and financially.  In most situations, labels own those masters.  But many musicians, both prominent and independent ones, have tried to hang on to their masters.  As Prince famously told Rolling Stone back in 1996, "If you don't own your masters, your master owns you."

Taylor Swift is the most recent major artist to want to own her own masters, but can’t because of earlier contractual provisions.  This will change with her newest album, Lover, which she will own outright.  The masters of her first five albums were and are, per her contracts with Big Machine, owned by that company and, now, its contractual assignees.  However, Taylor has stated that “my contract says that starting November 2020 … I can record albums 1 through 5 all over again — I'm very excited about it. ... I think artists deserve to own their work. I just feel very passionately [sic] about that."

Of course, Swift now also has significant contractual bargaining powers that she did not while an early teenaged recording artist.  Still, girl power!  Does this make her a “nasty woman”?..  And if so, isn't this a compliment?!

The challenges of licensing music

This isn’t, strictly speaking, about contracts, I guess. But it is about a consent decree, which is at heart a document that binds parties to terms. The Department of Justice has announced that it is reviewing the antitrust consent decree that governs ASCAP and BMI, the two major performing rights organizations used by songwriters and music publishers. Because ASCAP and BMI control so much of the music licensing market, they have been governed by a consent decree for several decades, with the Department of Justice worried about the competitive effects of their near-monopoly over music licensing.

I thought, therefore, that maybe it was time for me to share my friend's Music Licensing Experience.

The music copyright holders keep noting that piracy is a major problem. However, piracy tends to decrease if you make it easier for people to gain legal access to the work in the question. For some time now, studies have shown that people will pay for content, if they are given a feasibly legal way to do it.

A friend of mine was starting a noncommercial podcast. Podcasts are all the rage now. They’re low-cost and have few barriers to entry, and recording equipment is so cheap and easy to come by these days, basically anyone can have a podcast. I am frequently asked by students for information about using music on podcasts. They’ve heard, of course, that any length of time less than thirty seconds is “automatic fair use.”

So my friend’s got this noncommercial podcast and they want to use, in a single episode, two separate clips of the same copyrighted song. Together, the clips total less than forty seconds. My friend, who is not a lawyer, was inclined to do what so many lawyers do, and just take the risk and use the song. “But no!” I protested. “You know me, a copyright lawyer! You should properly license the song!”

I had, in actuality, never licensed a song before. But, I thought, how hard can it be? It shouldn’t be hard, right? Wouldn’t it be in the best interest of the music copyright holders to make it relatively easy for this kind of use to be licensed? Especially given the apparent stance BMI takes that there is no way for you to use music without a license.

(Fair use? What fair use?)

I told my friend that either BMI or ASCAP would probably have the rights to the song, and they should just ask for a license through the right one. So they looked into it. BMI ended up being the organization to contact, and my friend found a literal tab for Podcasts on the BMI website, so they contacted BMI.

I thought that would be the end of it for my friend, but BMI’s response, unfortunately, was not very helpful. BMI said that the only license it offers is a blanket license, so my friend could not license a single work the way they wanted. The blanket license would be an annual license of almost four hundred dollars a year – a lot of money for a noncommercial podcast that wanted to use a grand total of forty seconds of music from a single song. But, BMI informed them, that license would get my friend access to fourteen million songs!

The problem: My friend didn’t want access to fourteen million songs. My friend wanted one song. Also, I’m pretty sure that BMI is actually required by that consent decree currently under review to offer per-song licensing rates. See Section IX.C ("[BMI] shall not, in connection with any offer to license by it the public performance of musical compositions by music users other than broadcasters, refuse to offer a license . . . for the performance of such specific (i.e., per piece) musical compositions, the use of which shall be requested by the prospective licensee."); see also United States v. Broad. Music, Inc., 275 F.3d 168, 178 n.2 (2d Cir. 2001) ("[T]he per piece license . . . is explicitly required in Section IX(C).”). My friend told me what BMI said, and I told my friend that maybe they should try again, maybe they weren’t clear the first time. So they wrote back to BMI, clarifying that they wanted a per-song rate.

BMI responded saying that it was not capable of providing my friend with the licensing rights they wanted. Despite the fact that it had been very willing to provide my friend with a license for several hundred dollars in the previous email, it now took the stand that it did not have the ability to provide rights for a song used within a podcast, and my friend had to contact a different entity. I don’t know if I’m more alarmed by BMI trying to sell my friend a license that wouldn’t actually cover their use, or BMI lying about whether it could sell them a license that would cover their use.

At any rate, BMI at least provided my friend with the contact information for another entity, which my friend contacted. But that entity wrote back and said it was not the right entity and provided the contact information for yet another entity. Which never wrote back to my friend’s request at all.

So, in the end, that’s how music licensing goes if you’re a little guy, I guess: It doesn’t. My friend lost a little bit of faith in the U.S. copyright legal system as a result of their experience, and that definitely harms all of us. And as we’re thinking about the music business in the context of the consent decree, maybe we should also think about the people who use music. Because, sometimes, as studies keep showing, they’d really love to pay the artist, they literally can’t find the way to do it.

(Could my friend’s use qualify as fair use? I am offering no legal opinion on that. What I will say is that, fair use doesn’t stop you from getting a DMCA notice.)

Don't just stand there, let's get to it: Second Circuit orders payment of "Vogue" royalties (aside, I hadn't listened to "Vogue" in a while, and it totally started my week off right!)

A recent case out of the Second Circuit, Pettibone v. WB Music Corp., 18-1000-cv, caught my eye because I teach the underlying copyright dispute driving this contractual dispute. You can listen to the case's oral argument here.

Pettibone composed the song "Vogue" with Madonna and entered into a contract with Warner where Warner collected the royalties for the song and split them with Pettibone. In 2012, Pettibone and Warner were sued for copyright infringement. They each had their own counsel and each bore their own costs in successfully defending the lawsuit, both in the trial court and on appeal. (You can read the appellate court decision here. We talk about it in my Transformative Works and Copyright Fair Use class when we do a unit on music.)

After the conclusion of the copyright suit, Warner withheld over $500,000 worth of royalties from Pettibone, claiming that under Section 8.1 of the agreement between Warner and Pettibone, it was allowed to withhold the royalties to pay for its defense of the copyright infringement suit. Section 8.1 read in part, "Each party will indemnify the other against any loss or damage (including court costs and reasonable attorneys' fees) due to a breach of this agreement by that party which results in a judgment against the other party . . . ." 

Pettibone sued, arguing that he had never breached the agreement and therefore Section 8.1 did not permit Warner to withhold any royalties. The district court found that Section 8.1 "unambiguously requires Pettibone to indemnify Warner for the attorneys' fees and costs," and dismissed Pettibone's complaint. 

In another example of ambiguous understandings of ambiguity, the appellate court here reversed the district court's holding, instead finding that Section 8.1 is "pock-mocked with ambiguity." In the Second Circuit's opinion, a better reading of the section was that, if there was no breach, each party should carry its own attorneys' fees and costs. In fact, Section 8.1 went on to read that "each party is entitled to be notified of any action against the other brought with respect to [the song 'Vogue'], and to participate in the defense thereof by counsel of its choice, at its sole cost and expense" (emphasis added). A fair reading of the section, the Second Circuit said, was that it required Pettibone to indemnify Warner if Pettibone breached the contract, but not otherwise.

Warner was the party that drafted the contract, and could easily have stated that indemnification happened in the event of any allegations, not just any breach. That was not, though, how the contract was drafted. 

The effect of Warner's argument would be to shift a million dollars' worth of attorneys' fees onto Pettibone, just because there was a lawsuit, "regardless of merit or frivolousness." The Second Circuit found that to be "an extraordinary result" not justified by the section's ambiguous language. Therefore, the Second Circuit ordered reversal of the district court's dismissal, judgment for Pettibone, and calculation of the royalties improperly withheld from Pettibone, as well as consideration of Pettibone's request for attorneys' fees in connection with the instant action and appeal. 

Taylor Swift and Contract Law

Sorry for being absent lately. Blame exam season! So this is slightly old news but I plan to bring it up in my Entertainment Law class in the spring, so I was doing a sprint through the news reporting on it: Taylor Swift and her new contract. 

Beyonce faces a breach of contract suit over Formation

I teach many Beyonce cases in entertainment law, but usually in an intellectual property context. The New Orleans Advocate reports that Beyonce has been sued in connection with her single Formation, but the lawsuit is contractual in nature. The plaintiff, Kimberly Roberts, is alleging that she entered into a contract with Beyonce to use footage from her documentary in exchange for a lump-sum payment and royalties. Roberts is alleging that Beyonce has breached the contract by failing to pay royalties. Roberts also alleges that Beyonce has exceeded the scope of the license that Roberts granted.