Counsel Concerns

As to Summit's summary judgment motion, District Judge Daniels observed that Summit hadn't shown BBW had to establish it directly relied on the advice of its counsel for use of “Twilight Woods” and “Twilight Crush” marks. Rather, the district judge wrote: “At this stage, all BBW must demonstrate is that it received an opinion from its outside counsel, and then acted consistent with that opinion. ' BBW has produced enough evidence such that a reasonable jury could conclude that it relied, at least in part, on the advice that its counsel generated.”

Former Litigation Attorney's Handling of Case Doesn't Relieve Film Company of Liability for Judgment

The California Court of Appeal affirmed a Los Angeles Superior Court ruling that Morgan Creek Productions (MCP) is the alter ego of its international affiliates. In doing so, the court of appeal found no grounds, based on how MCP's former litigator handled the case, for setting aside a $5.7 million judgment for which Morgan Creek is liable. Toho-Towa Co. Ltd. v. Morgan Creek Productions Inc., B242095.

The case arose out of Toho-Towa's Japanese distribution rights to MCP's motion picture The Good Shepherd. The rights were granted through Morgan Creek International B.V., based in the Netherlands, and the contract guaranteed by Morgan Creek International Ltd., based in Bermuda. Toho-Towa later won an arbitration ruling against International B.V. and International Ltd. to recoup distribution expenses the Japanese distributor had advanced. The trial court then ruled that the three Morgan Creek companies constituted a single business enterprise.

MCP had also appealed the trial court's denial of the film company's motion to release it from liability per Calif. Code Civ. Proc. '473(b), which gives courts wide latitude to “relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.”

First, MCP argued that its former counsel, Alan Gutman, had mistakenly believed MCP wasn't required to introduce evidence against Toho-Towa's alter ego claim. The Court of Appeal noted that Gutman had believed so in “good faith” based on his research into the issue. But the Court of Appeal emphasized that MCP claiming Gutman didn't know “the trial court would decide the case based on the evidence presented to it ' was not a winning argument, given the fact that Mr. Gutman had been practicing law for 28 years, had experience representing entertainment clients, including MCP, in litigation, had conducted over 50 jury trials, and had obtained several multimillion dollar verdicts and settlements.”

On MCP's excusable neglect argument, the court of appeal found: “The failure to introduce readily available, compelling evidence which supports the client's position that it is not the alter ego of a sister corporation with a $5.7 million outstanding judgment is not a mistake that a reasonably prudent person in the same circumstances might have made but rather conduct falling below the professional standard of care.”

Motion to Disqualify Counsel Is Denied in Suit Involving Process for Selling Concert Recordings

A federal magistrate denied a motion to disqualify defense counsel in a suit alleging the plaintiff's former patent lawyers disclosed confidential information about her live-recording process to the latter firm's clients. Gurvey v. Cowan, Liebowitz & Latman (CLL), 06 Civ. 1202. Amy Gurvey's suit claims Cowan, Liebowitz & Latman (CLL), who represented Gurvey in patent applications for a process to sell recordings of live shows at concerts, had disclosed the confidential information. Gurvey filed a motion to disqualify Greenberg Traurig as counsel to case co-defendants Mike Gordon, bassist for the jam band Phish, and his wife, attorney Susan Gordon. Gurvey argued that Michael Wolfson, a former chair patent partner at CLL who had left to join Greenberg Traurig, had “access to Plaintiff['s] formal draft patent applications, drawings, schematics, specifications and claims” and will be a material witness at trial.

But Federal Magistrate Henry Pitman found: “Plaintiff's motion is frivolous and is clearly made for the purpose of delaying the adjudication of the Gordon defendants' pending motion to dismiss. It is telling that, in moving to disqualify Greenberg Traurig based on the theory that Wolfson's purported conflict should be imputed to the entire law firm, plaintiff omits the fact that Mr. Wolfson left Greenberg Traurig in April 2009 and never overlapped with [Michael Berlin, who joined Greenberg Traurig in 2011,] the attorney representing the Gordons.”

Stan Soocher is Editor-in-Chief of'Entertainment Law & Finance and a'tenured Associate Professor of Music'& Entertainment Industry Studies'at the University of Colorado's'Denver Campus. He can be reached'at [email protected] or via www.stansoocher.com.

Advice-of-Counsel Affirmative Counterclaim Defense to Remain in Case Brought over Use of “Twilight” Marks

The U.S. District Court for the Southern District of New York denied motions to strike and for summary judgment regarding legal advice a declaratory suit plaintiff had received regarding its use of the marks “Twilight Woods” and “Twilight Crush” on personal care products. Bath & Body Works Brand Management Inc. (BBW) v. Summit Entertainment LLC, 11 Civ. 1594. Summit, which produces the Twilight movies, filed several trademark-infringement related counterclaims and fought BBW's bid to rely on advice of BBW's trademark counsel as an affirmative defense to willful infringement.

District Judge George B. Daniels first observed “there is no explicit rule that advice of counsel is an affirmative defense that must be pled in one's answer pursuant to Fed. R. Civ. P. 8(c) in a trademark case.” But, “[e]ven if this Court were to grant Summit's requested relief, and technically strike BBW's assertion of advice of counsel as a tardy affirmative defense, it would have no impact on BBW's ability to use the information procured during discovery regarding the advice it received from counsel as evidence of good faith,” Judge Daniels noted.

As to Summit's summary judgment motion, District Judge Daniels observed that Summit hadn't shown BBW had to establish it directly relied on the advice of its counsel for use of “Twilight Woods” and “Twilight Crush” marks. Rather, the district judge wrote: “At this stage, all BBW must demonstrate is that it received an opinion from its outside counsel, and then acted consistent with that opinion. ' BBW has produced enough evidence such that a reasonable jury could conclude that it relied, at least in part, on the advice that its counsel generated.”

Former Litigation Attorney's Handling of Case Doesn't Relieve Film Company of Liability for Judgment

The California Court of Appeal affirmed a Los Angeles Superior Court ruling that Morgan Creek Productions (MCP) is the alter ego of its international affiliates. In doing so, the court of appeal found no grounds, based on how MCP's former litigator handled the case, for setting aside a $5.7 million judgment for which Morgan Creek is liable. Toho-Towa Co. Ltd. v. Morgan Creek Productions Inc., B242095.

The case arose out of Toho-Towa's Japanese distribution rights to MCP's motion picture The Good Shepherd. The rights were granted through Morgan Creek International B.V., based in the Netherlands, and the contract guaranteed by Morgan Creek International Ltd., based in Bermuda. Toho-Towa later won an arbitration ruling against International B.V. and International Ltd. to recoup distribution expenses the Japanese distributor had advanced. The trial court then ruled that the three Morgan Creek companies constituted a single business enterprise.

MCP had also appealed the trial court's denial of the film company's motion to release it from liability per Calif. Code Civ. Proc. '473(b), which gives courts wide latitude to “relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.”

First, MCP argued that its former counsel, Alan Gutman, had mistakenly believed MCP wasn't required to introduce evidence against Toho-Towa's alter ego claim. The Court of Appeal noted that Gutman had believed so in “good faith” based on his research into the issue. But the Court of Appeal emphasized that MCP claiming Gutman didn't know “the trial court would decide the case based on the evidence presented to it ' was not a winning argument, given the fact that Mr. Gutman had been practicing law for 28 years, had experience representing entertainment clients, including MCP, in litigation, had conducted over 50 jury trials, and had obtained several multimillion dollar verdicts and settlements.”

On MCP's excusable neglect argument, the court of appeal found: “The failure to introduce readily available, compelling evidence which supports the client's position that it is not the alter ego of a sister corporation with a $5.7 million outstanding judgment is not a mistake that a reasonably prudent person in the same circumstances might have made but rather conduct falling below the professional standard of care.”

Motion to Disqualify Counsel Is Denied in Suit Involving Process for Selling Concert Recordings

A federal magistrate denied a motion to disqualify defense counsel in a suit alleging the plaintiff's former patent lawyers disclosed confidential information about her live-recording process to the latter firm's clients. Gurvey v. Cowan, Liebowitz & Latman (CLL), 06 Civ. 1202. Amy Gurvey's suit claims Cowan, Liebowitz & Latman (CLL), who represented Gurvey in patent applications for a process to sell recordings of live shows at concerts, had disclosed the confidential information. Gurvey filed a motion to disqualify Greenberg Traurig as counsel to case co-defendants Mike Gordon, bassist for the jam band Phish, and his wife, attorney Susan Gordon. Gurvey argued that Michael Wolfson, a former chair patent partner at CLL who had left to join Greenberg Traurig, had “access to Plaintiff['s] formal draft patent applications, drawings, schematics, specifications and claims” and will be a material witness at trial.

But Federal Magistrate Henry Pitman found: “Plaintiff's motion is frivolous and is clearly made for the purpose of delaying the adjudication of the Gordon defendants' pending motion to dismiss. It is telling that, in moving to disqualify Greenberg Traurig based on the theory that Wolfson's purported conflict should be imputed to the entire law firm, plaintiff omits the fact that Mr. Wolfson left Greenberg Traurig in April 2009 and never overlapped with [Michael Berlin, who joined Greenberg Traurig in 2011,] the attorney representing the Gordons.”

Stan Soocher is Editor-in-Chief of'Entertainment Law & Finance and a'tenured Associate Professor of Music'& Entertainment Industry Studies'at the University of Colorado's'Denver Campus. He can be reached'at [email protected] or via www.stansoocher.com.