<b><i>Counsel Concerns</b></i>50 Cent Sues Lawyers Over Headphones Debacle

Garvey Schubert Barer had worked for Jackson from 2010 through 2014, and represented him in various matters involving Sleek Audio LLC. Sleek Audio had claimed Jackson misappropriated its trade secrets regarding audio headphones it developed.

The malpractice complaint claims Garvey Schubert Barer “failed to employ the requisite knowledge and skills necessary to confront the circumstances of the case,” resulting in a $17 million Florida arbitration award in favor of Sleek Audio, and against Jackson, in 2013.

Starting around 2009, other rap artists such as Dr. Dre, Ludacris, Snoop Dogg, Sean “P. Diddy” Combs, and Jay-Z had released their own lines of headphones. According to the litigation, Jackson decided to market his line of headphones to take advantage of his music celebrity status. He met with members of Sleek Audio to discuss working with them to develop and market a wireless headphone called “Sleek by 50.” In 2010, Jackson invested $1.3 million in Sleek Audio, according to the malpractice complaint. Over the course of the business relationship, Jackson claims to have invested a total of $2 million in the company.

The complaint alleges Jackson's attorneys didn't do due diligence or adequately advise Jackson of the risks of entering into business with Sleek Audio, which never marketed or sold the Sleek by 50 headphones. Jackson then decided to develop headphones to market under his brand through a new venture in 2011, when he incorporated SMS Audio LLC. The headphones were marketed as “Street by 50″ and “Sync by 50.”

According to the malpractice complaint, the Garvey Schubert Barer attorneys assured Jackson that his headphones did not infringe the intellectual property rights, including trade secret rights, of Sleek Audio. In the Florida arbitration, Sleek Audio sought damages against Jackson for lost profits and revenues, and alleged there were similarities between the “Sleek by 50″ headphones and the SMS headphones.

Jackson's complaint claims his former attorneys mishandled his case; he alleges the law firm failed to retain an expert to testify about the technical aspects of Sleek Audio's headphone design and the differences with his products' design to rebut their claims. Sleek Audio then won the $17 million arbitration award against Jackson.

Garvey Schubert Barer issued the following statement in response to the lawsuit: “We understand that Mr. Jackson is disappointed in the outcome of Sleek Audio's arbitration against him. However, Mr. Jackson's complaint against GSB omits a number of relevant facts and misstates a number of others, and we will respond to the allegations in accordance with the court's rules. Our attorneys properly counseled Mr. Jackson and his sophisticated team of financial and operational advisors about the transactions and the arbitrations with Sleek. Unfortunately, the arbitrator in the Sleek case found Mr. Jackson responsible for his actions and the actions of those who performed services for him or his companies. We look forward to demonstrating that our attorneys handled the Sleek matters appropriately in all aspects.”

Michelle Tuccitto Sullo is Managing Editor of The Connecticut Law Tribun', an ALM sibling publication of this newsletter in which this article also appeared.

Rapper 50 Cent is suing his former lawyers for $75 million, accusing them of malpractice and not adequately representing him in business matters, including an intellectual property case involving his line of headphones.

Curtis James Jackson III, whose stage name is 50 Cent, filed a lawsuit in U.S. Bankruptcy Court in Connecticut against Garvey Schubert Barer, a law firm with offices in New York. Jackson, a Connecticut resident, is a Grammy-award winning rap music artist, investor and entrepreneur. He filed for relief under Chapter 11 of the U.S. Bankruptcy code in July of this year. He owns a mansion in Farmington, CT, which is currently for sale.

Attorney James Berman of Zeisler & Zeisler in Bridgeport, is the Connecticut-based attorney representing Jackson in the October malpractice complaint. Craig Weiner, a partner with Robins Kaplan in New York and special counsel to Jackson, said via an e-mailed statement: “As detailed in the pleadings filed there appears to be significant professional liability on the part of Mr. Jackson's former counsel. As special counsel, we intend to dedicate the full resources of our firm to unrelentingly pursue Mr. Jackson's rights to the fullest extent possible.”

Garvey Schubert Barer had worked for Jackson from 2010 through 2014, and represented him in various matters involving Sleek Audio LLC. Sleek Audio had claimed Jackson misappropriated its trade secrets regarding audio headphones it developed.

The malpractice complaint claims Garvey Schubert Barer “failed to employ the requisite knowledge and skills necessary to confront the circumstances of the case,” resulting in a $17 million Florida arbitration award in favor of Sleek Audio, and against Jackson, in 2013.

Starting around 2009, other rap artists such as Dr. Dre, Ludacris, Snoop Dogg, Sean “P. Diddy” Combs, and Jay-Z had released their own lines of headphones. According to the litigation, Jackson decided to market his line of headphones to take advantage of his music celebrity status. He met with members of Sleek Audio to discuss working with them to develop and market a wireless headphone called “Sleek by 50.” In 2010, Jackson invested $1.3 million in Sleek Audio, according to the malpractice complaint. Over the course of the business relationship, Jackson claims to have invested a total of $2 million in the company.

The complaint alleges Jackson's attorneys didn't do due diligence or adequately advise Jackson of the risks of entering into business with Sleek Audio, which never marketed or sold the Sleek by 50 headphones. Jackson then decided to develop headphones to market under his brand through a new venture in 2011, when he incorporated SMS Audio LLC. The headphones were marketed as “Street by 50″ and “Sync by 50.”

According to the malpractice complaint, the Garvey Schubert Barer attorneys assured Jackson that his headphones did not infringe the intellectual property rights, including trade secret rights, of Sleek Audio. In the Florida arbitration, Sleek Audio sought damages against Jackson for lost profits and revenues, and alleged there were similarities between the “Sleek by 50″ headphones and the SMS headphones.

Jackson's complaint claims his former attorneys mishandled his case; he alleges the law firm failed to retain an expert to testify about the technical aspects of Sleek Audio's headphone design and the differences with his products' design to rebut their claims. Sleek Audio then won the $17 million arbitration award against Jackson.

Garvey Schubert Barer issued the following statement in response to the lawsuit: “We understand that Mr. Jackson is disappointed in the outcome of Sleek Audio's arbitration against him. However, Mr. Jackson's complaint against GSB omits a number of relevant facts and misstates a number of others, and we will respond to the allegations in accordance with the court's rules. Our attorneys properly counseled Mr. Jackson and his sophisticated team of financial and operational advisors about the transactions and the arbitrations with Sleek. Unfortunately, the arbitrator in the Sleek case found Mr. Jackson responsible for his actions and the actions of those who performed services for him or his companies. We look forward to demonstrating that our attorneys handled the Sleek matters appropriately in all aspects.”

Michelle Tuccitto Sullo is Managing Editor of The Connecticut Law Tribun', an ALM sibling publication of this newsletter in which this article also appeared.