Bit Parts

Executive Compensation Deals/ Stockholders' Suit. The Court of Chancery of Delaware, New Castle, decided that the terms of The Walt Disney Co.'s hiring of, and $140 million severance package for, Michael Ovitz, who briefly served as company president in the mid-1990s, didn't constitute breach of fiduciary duties or corporate waste by Disney's board of directors. In Re The Walt Disney Co. Derivative Litigation, 15452. In a lengthy and often informative look inside Disney corporate life, the court's opinion, based on a suit by Disney stockholders, noted: “This Court strongly encourages directors and officers to employ best practices, as those practices are understood at the time a corporate decision is taken. But Delaware law does not — indeed, the common law cannot — hold fiduciaries liable for a failure to comply with the aspirational ideal of best practices, any more than a common-law court deciding a medical malpractice dispute can impose a standard of liability based on ideal – rather than competent or standard-medical treatment practices, lest the average medical practitioner be found inevitably derelict.” The chancery court also noted that former talent agent Ovitz ” 'was a little elitist for the egalitarian Walt Disney World cast members [employees]' and a poor fit with his fellow executives.” … Record Distribution/ Trade Violations. The U.S. District Court for the District of Columbia held that PolyGram Holding failed to rebut a presumption that a 1998 agreement with Warner Communications to refrain from advertising or discounting earlier, competitive album releases of The Three Tenors violated Sec. 5 of the Federal Trade Commission Act. PolyGram Holding Inc. v. Federal Trade Commission, 03-1293. The record companies had agreed in 1997 to distribute an album of a 1998 Three Tenors album, with Warner having U.S. distribution rights and PolyGram the worldwide distribution rights. The agreement also committed the companies to work together on all “marketing and promotional activities” and team up for future Three Tenors releases. … Musical Compositions/Rights Transfers. The Court of Appeal of California, Fourth Appellate District, Division Two, found that a trial court's premature judgment- filing regarding rights to songs by the late James Van Heusen wasn't prejudicial error. Estate of Van Heusen v. Music Sales Corp., E035910. The trial court found that copyright interests in the Van Heusen songs “I Thought About You” and “Darn that Dream” were assets of an inter vivos trust — set up several days before Van Heusen died in 1989 — that were transferred to claimant Range Road Music. Objector Music Sales Corp. had argued that it obtained the song rights from Van Heusen's estate in 1996. The trial court found for Range Road in its statement of decision. Under California court rules, a party may have 15 days to object to a proposed court judgment, but the trial court had signed and filed its judgment only 10 days after it received the proposed judgment it ordered Range Road to prepare. The court of appeal noted in an unpublished opinion that: “Music Sales has failed to show that the court's premature filing and failure to consider [Music Sales'] objections resulted in a miscarriage of justice. While the judgment's verbiage does not exactly mirror the Statement of Decision, it properly addresses the issues raised by the pleadings, as well as the issues jointly framed by the parties prior to trial, and accurately reflects the court's decision as revealed by the Statement of Decision.” … Video Games/Use of Likeness. The U.S. District Court for the Western District of Michigan, Southern Division, decided that the use of a picture of former football player Steve Neal, who is African-American, in a section of a video game that listed the statistics of New England Patriots football star Steve Neal, who is Caucasian, didn't constitute defamation, or invasion of privacy by appropriation or false light. Neal v. Electronic Arts Inc., 374 F.Supp. 2d 574 (2005). The court found no appropriation in the video games “Madden NFL Football 2004″ and “Madden NFL Football 2005″ because the plaintiff had signed a standard National Football League player contract, in connection with his tryout for the Tennessee Titans, that included a right-of-publicity release. The court found on the false light claim: “To allow Plaintiff recovery based solely on an accidental depiction of his race would wrongly imply a preference of race, which the Court cannot countenance.” The court noted of the defamation claim that “merely publishing Plaintiff's picture when the correct picture would be a person of another race is not, by itself, reasonably capable of a defamatory interpretation.”

Executive Compensation Deals/ Stockholders' Suit. The Court of Chancery of Delaware, New Castle, decided that the terms of The Walt Disney Co.'s hiring of, and $140 million severance package for, Michael Ovitz, who briefly served as company president in the mid-1990s, didn't constitute breach of fiduciary duties or corporate waste by Disney's board of directors. In Re The Walt Disney Co. Derivative Litigation, 15452. In a lengthy and often informative look inside Disney corporate life, the court's opinion, based on a suit by Disney stockholders, noted: “This Court strongly encourages directors and officers to employ best practices, as those practices are understood at the time a corporate decision is taken. But Delaware law does not — indeed, the common law cannot — hold fiduciaries liable for a failure to comply with the aspirational ideal of best practices, any more than a common-law court deciding a medical malpractice dispute can impose a standard of liability based on ideal – rather than competent or standard-medical treatment practices, lest the average medical practitioner be found inevitably derelict.” The chancery court also noted that former talent agent Ovitz ” 'was a little elitist for the egalitarian Walt Disney World cast members [employees]' and a poor fit with his fellow executives.” … Record Distribution/ Trade Violations. The U.S. District Court for the District of Columbia held that PolyGram Holding failed to rebut a presumption that a 1998 agreement with Warner Communications to refrain from advertising or discounting earlier, competitive album releases of The Three Tenors violated Sec. 5 of the Federal Trade Commission Act. PolyGram Holding Inc. v. Federal Trade Commission, 03-1293. The record companies had agreed in 1997 to distribute an album of a 1998 Three Tenors album, with Warner having U.S. distribution rights and PolyGram the worldwide distribution rights. The agreement also committed the companies to work together on all “marketing and promotional activities” and team up for future Three Tenors releases. … Musical Compositions/Rights Transfers. The Court of Appeal of California, Fourth Appellate District, Division Two, found that a trial court's premature judgment- filing regarding rights to songs by the late James Van Heusen wasn't prejudicial error. Estate of Van Heusen v. Music Sales Corp., E035910. The trial court found that copyright interests in the Van Heusen songs “I Thought About You” and “Darn that Dream” were assets of an inter vivos trust — set up several days before Van Heusen died in 1989 — that were transferred to claimant Range Road Music. Objector Music Sales Corp. had argued that it obtained the song rights from Van Heusen's estate in 1996. The trial court found for Range Road in its statement of decision. Under California court rules, a party may have 15 days to object to a proposed court judgment, but the trial court had signed and filed its judgment only 10 days after it received the proposed judgment it ordered Range Road to prepare. The court of appeal noted in an unpublished opinion that: “Music Sales has failed to show that the court's premature filing and failure to consider [Music Sales'] objections resulted in a miscarriage of justice. While the judgment's verbiage does not exactly mirror the Statement of Decision, it properly addresses the issues raised by the pleadings, as well as the issues jointly framed by the parties prior to trial, and accurately reflects the court's decision as revealed by the Statement of Decision.” … Video Games/Use of Likeness. The U.S. District Court for the Western District of Michigan, Southern Division, decided that the use of a picture of former football player Steve Neal, who is African-American, in a section of a video game that listed the statistics of New England Patriots football star Steve Neal, who is Caucasian, didn't constitute defamation, or invasion of privacy by appropriation or false light. Neal v. Electronic Arts Inc. , 374 F.Supp. 2d 574 (2005). The court found no appropriation in the video games “Madden NFL Football 2004″ and “Madden NFL Football 2005″ because the plaintiff had signed a standard National Football League player contract, in connection with his tryout for the Tennessee Titans, that included a right-of-publicity release. The court found on the false light claim: “To allow Plaintiff recovery based solely on an accidental depiction of his race would wrongly imply a preference of race, which the Court cannot countenance.” The court noted of the defamation claim that “merely publishing Plaintiff's picture when the correct picture would be a person of another race is not, by itself, reasonably capable of a defamatory interpretation.”