Bit Parts

Copyright Infringement Damages Not Dischargeable in Bankruptcy

The U.S. Bankruptcy Court for the Eastern District of Missouri decided that the managing member of a restaurant-bar who was found liable for failing to obtain a public performance license for the music played at the venue, couldn't discharge the copyright-infringement judgment through bankruptcy. In re: Walker, 11-52059-659. Doug Walker operated Twister's Iron Horse Saloon in Imperial, MO. After repeated unsuccessful attempts by ASCAP to get him to enter into a public performance license, the district court issued a default judgment against Walker for $41,231.90. Walker then filed for Chapter 7 bankruptcy and moved to discharge the judgment under 11 U.S.C. '523(a)(6). The music publishing plaintiffs argued the judgment couldn't be discharged because the infringement was “willful and malicious.” ASCAP had tried to contact Walker 28 times by phone, 14 times by letters and twice by sending a representative to the saloon. Chief U.S. Bankruptcy Judge Kathy A. Surratt-States noted: “The Eighth Circuit Court of Appeals [within which the Missouri bankruptcy court resides] has set a high bar for certainty of harm regarding willful and maliciousness for the purposes of Section 523(a)(6).” Chief Judge Surratt-States then found in part: “Debtor's failure to proactively obtain an ASCAP license, and then intentionally ignore ASCAP's several attempts to communicate with Debtor regarding the same, was willful. Debtor knew the consequences of his failure to obtain a license and failure to heed the several contacts by ASCAP ' that royalties due to authors of songs would not be paid ' would cause financial harm to both ASCAP and ASCAP's constituents generally, but Plaintiffs particularly. Debtor's actions were willful.”

Verbal Partnership May Have Existed to Develop MSNBC's The Ed Show

The U.S. Court of Appeals for the District of Columbia ruled that a genuine issue of material fact exists as to whether there was an intent for MSNBC talk-show host Ed Schultz and plaintiff Michael Queen to form an verbal partnership to develop Schulz's TV show. Queen v. Schultz, 12-7099. The D.C. Circuit did agree with the district court that essential terms were missing for there to be a binding contract between Queen and Schultz. But the appeals court then considered the breach-of-partnership loyalty claim under the Revised Uniform Partnership Act, which has been adopted by the District of Columbia. Schultz argued that Queen was his employee, not business partner. The appeals court noted: “We believe, however, that a reasonable jury could conclude from the parties' conduct and communications that Queen and Schultz intended to, and did, form a partnership to develop a television show.” The D.C. Circuit cited five factors: 1) that Queen claimed he developed the show concept, marketed it to the network, and coordinated the pilot's production; 2) that he paid the advance on studio rental and related expenses for making the pilot; 3) that former NBC news director Max Schindler, who was involved with the show's development early on, swore he “agreed to partner in the project”; 4) that Schultz sent an e-mail to Queen stating Queen would receive “a financial involvement” if the show were aired; and 5) that the District of Columbia Code would provide how the partnership's show profits should be divided (i.e., 50/50).