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Ninth Circuit's Novel Ruling that Copyrights In Masters Can Be Sold to Satisfy Legal Fees
When the U.S. District Court for the Western District of Washington faced the issue, District Judge Robert Lasnik noted that “the court has not found any reported case authorizing” a receiver to sell an artist's sound recording masters to pay off a judgment assessed against an artist. Affirming last month ' that a court-appointed receiver could sell funkmeister George Clinton's master recordings to pay off legal fees he owed the Seattle law firm Hendricks & Lewis ' the U.S. Court of Appeals for the Ninth Circuit added: “We know of no federal statutory law directly addressing whether copyrights are subject to execution to satisfy a judgment.” Hendricks & Lewis PLLC v. Clinton, 13-35010.
Chasing clients for legal fees can be a complex matter, and the Clinton recording masters dispute has as many twists and turns as the polyrhythms on a funk track. The fee dispute arose out of litigation work Hendricks & Lewis handled for Clinton against Universal Music. In 2009, after the law firm stopped representing Clinton, it obtained an arbitration ruling that Clinton owed Hendricks & Lewis more than $1.5 million in unpaid legal fees. The Western District of Washington confirmed the award in 2010.
But in 2011, Clinton sued Hendrick & Lewis for alleged malpractice. The suit claimed Hendricks & Lewis should have sued Universal Music for fraud, instead of breach of contract, in representing Clinton. Clinton v. Hendricks & Lewis, 11-1142 (W.D.Wash.). In 2012, District Judge Lasnick dismissed the malpractice suit by applying the one-year statute of limitations for such claims in California, where the record company litigation took place. In 2014, the Ninth Circuit affirmed, in Clinton v. Hendricks & Lewis, 12-35791.
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