Bit Parts

Royalty Redirection Ruling

The U.S. District Court for the Northern District of Georgia, Atlanta Division, ruled that there was a genuine issue of fact as to whether music publisher Alan Walden effectively waived his company's interest in new songs written by Hugh Thomasson, a former member of the Southern rock group The Outlaws, for a Lynyrd Skynyrd album. Hustlers Inc. v. Thomasson, 1:01-CV-3026. Walden's Hustlers publishing firm filed suit after Thomasson sent a letter to Sanctuary Records, shortly before his songwriting agreement with Hustler ended, noting that Thomasson's new publisher for current and future projects was Justice Writers, formed by Thomasson and his wife. Sanctuary then began sending Thomasson's songwriter royalties to Justice Writers. Walden had stated in his deposition that he didn't claim rights in the songs written by Thomasson for the Skynyrd album “Edge of Forever.” But denying Thomasson's motion for summary judgment on Hustler's breach of contract claim, the district court noted that “there is no evidence in this case that Walden made this putative waiver with knowledge of the existence of his rights. Rather, the evidence produced suggests that Walden did not know whether he had rights in the compositions at issue when asked about them.” However, the court ruled that Thomasson was entitled to rescind his contract with Hustlers because Hustlers had stopped paying royalties to Thomasson to recoup monies redirected to Justice Writers. The district court concluded, “Although Hustlers may be entitled to equitable recoupment, this does not alter the fact that failure to pay royalties is a breach of the publishing agreement which authorizes Thomasson to rescind or terminate the agreement.”

Concert Fund Suit Proceeds

The U.S. District Court for the Northern District of Illinois, Eastern Division, denied a motion to dismiss a suit over whether escrow funds were properly returned following a failure to negotiate a satisfactory agreement for the rock group Aerosmith to tour Mexico. Cortez Productions Inc. v. Monterey Penninsula Artists Inc., 03-4630. The escrow provision among Aerosmith's agent, Monterey Penninsula Artists, and co-promoters Fifth Degree Concerts and plaintiff co-promoter Cortez Productions required that the $500,000 in escrow funds provided by Fifth Degree and Cortez be returned to “promoters” if a tour agreement wasn't finalized. Monterey argued that included returning the funds to the account from which they were received. Cortez argued that Monterey should have returned the escrow funds directly to the promoters. The district court concluded: “The term 'to Promoters' is ambiguous and susceptible of two reasonable, but conflicting, interpretations. The Court therefore concludes that Plaintiff has established that a set of facts may exist upon which it might prevail at trial on its claims for breach of contract and fiduciary duty.”

Laurel & Hardy Award Upheld

A Manhattan federal district court denied a defense motion for a new trial or for reduced damages following a jury ruling that the defendants' distribution of the film “Laurel & Hardy's Laughing 20's” constituted willful infringement. Richard Feiner and Co. Inc. v. Turner Entertainment Co., 96-1472. According to the court: “This award of $16,000 per infringed work is well within the statutory range of $500 to $100,000 per infringement. 17 U.S.C. Sec. 504(c)(2). There was a basis for a finding of willfulness, and the defendants have not shown that the jury's [total] award of $240,000, while high, viewed against arguable actual damages, was the result of error or that the verdict in the 'lesson-teaching' area was a miscarriage of justice under the governing law the jury was given without exception.”

The Court of Appeal of California, Second Appellate District, Division One, decided that film advertisements constituted commercial speech and thus were not protected by the state's anti-SLAPP statute. Rezec v. Sony Pictures Entertainment Inc., B160586. The plaintiff film viewers sued over the use of quotes from an imaginary film critic in ads for several Sony movie releases. The studio then filed a special motion to strike the suit under California's anti-Strategic Lawsuits Against Public Participation statute, Cal. Code Civ. Proc. Sec. 425.16, which applies to “a cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue.” The trial court denied Sony's special motion. Affirming, the court of appeal rejected Sony's argument that the film ads were an issue of public interest because the public is interested in films

Royalty Redirection Ruling

The U.S. District Court for the Northern District of Georgia, Atlanta Division, ruled that there was a genuine issue of fact as to whether music publisher Alan Walden effectively waived his company's interest in new songs written by Hugh Thomasson, a former member of the Southern rock group The Outlaws, for a Lynyrd Skynyrd album. Hustlers Inc. v. Thomasson, 1:01-CV-3026. Walden's Hustlers publishing firm filed suit after Thomasson sent a letter to Sanctuary Records, shortly before his songwriting agreement with Hustler ended, noting that Thomasson's new publisher for current and future projects was Justice Writers, formed by Thomasson and his wife. Sanctuary then began sending Thomasson's songwriter royalties to Justice Writers. Walden had stated in his deposition that he didn't claim rights in the songs written by Thomasson for the Skynyrd album “Edge of Forever.” But denying Thomasson's motion for summary judgment on Hustler's breach of contract claim, the district court noted that “there is no evidence in this case that Walden made this putative waiver with knowledge of the existence of his rights. Rather, the evidence produced suggests that Walden did not know whether he had rights in the compositions at issue when asked about them.” However, the court ruled that Thomasson was entitled to rescind his contract with Hustlers because Hustlers had stopped paying royalties to Thomasson to recoup monies redirected to Justice Writers. The district court concluded, “Although Hustlers may be entitled to equitable recoupment, this does not alter the fact that failure to pay royalties is a breach of the publishing agreement which authorizes Thomasson to rescind or terminate the agreement.”

Concert Fund Suit Proceeds

The U.S. District Court for the Northern District of Illinois, Eastern Division, denied a motion to dismiss a suit over whether escrow funds were properly returned following a failure to negotiate a satisfactory agreement for the rock group Aerosmith to tour Mexico. Cortez Productions Inc. v. Monterey Penninsula Artists Inc., 03-4630. The escrow provision among Aerosmith's agent, Monterey Penninsula Artists, and co-promoters Fifth Degree Concerts and plaintiff co-promoter Cortez Productions required that the $500,000 in escrow funds provided by Fifth Degree and Cortez be returned to “promoters” if a tour agreement wasn't finalized. Monterey argued that included returning the funds to the account from which they were received. Cortez argued that Monterey should have returned the escrow funds directly to the promoters. The district court concluded: “The term 'to Promoters' is ambiguous and susceptible of two reasonable, but conflicting, interpretations. The Court therefore concludes that Plaintiff has established that a set of facts may exist upon which it might prevail at trial on its claims for breach of contract and fiduciary duty.”

Laurel & Hardy Award Upheld

A Manhattan federal district court denied a defense motion for a new trial or for reduced damages following a jury ruling that the defendants' distribution of the film “Laurel & Hardy's Laughing 20's” constituted willful infringement. Richard Feiner and Co. Inc. v. Turner Entertainment Co., 96-1472. According to the court: “This award of $16,000 per infringed work is well within the statutory range of $500 to $100,000 per infringement. 17 U.S.C. Sec. 504(c)(2). There was a basis for a finding of willfulness, and the defendants have not shown that the jury's [total] award of $240,000, while high, viewed against arguable actual damages, was the result of error or that the verdict in the 'lesson-teaching' area was a miscarriage of justice under the governing law the jury was given without exception.”

The Court of Appeal of California, Second Appellate District, Division One, decided that film advertisements constituted commercial speech and thus were not protected by the state's anti-SLAPP statute. Rezec v. Sony Pictures Entertainment Inc ., B160586. The plaintiff film viewers sued over the use of quotes from an imaginary film critic in ads for several Sony movie releases. The studio then filed a special motion to strike the suit under California's anti-Strategic Lawsuits Against Public Participation statute, Cal. Code Civ. Proc. Sec. 425.16, which applies to “a cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue.” The trial court denied Sony's special motion. Affirming, the court of appeal rejected Sony's argument that the film ads were an issue of public interest because the public is interested in films