Coverage for 'Restitution' Claims, Public Policy Notwithstanding
Insurance carriers frequently argue that when insureds face claims for "disgorgement" or "restitution," they need not defend or indemnify under a wide-range of liability policies. Carriers argue that, at least in California, public policy bars coverage for such claims including claims alleging failure to pay employees overtime, failure to pay taxes and penalties, and, in the intellectual property area, for disgorgement of "ill-gotten gains" or payment of a defendant's profits as a measure of damages. Insurance carriers advance this argument under various policies, including commercial general liability (CGL), directors and officers (D&O), employment practices liability (EPL), and errors and omissions (E&O) policies.
Collateral Damage: The Venture Capital Outlook and Potential
Joseph Schumpeter, in a celebrated phrase, noted that capitalism depends, for its foundation and longevity, on the "animal spirits" of the entrepreneurial class in a given region. Absent the turbo charge which the entrepreneurial culture has in the past projected into the U.S. economy, we in this country are in for an indefinite slide to economic stagnation. The national balance sheet is alarming, in the vicinity of insolvency; our manufactures are increasingly non-competitive; our labor force is displacing itself in favor of, eg, China, our currency is depreciating. I often use hypothetical benchmarks called (by me) the Fidelity Index ' an assumed list of factors professional investors are wont to use when rating and distinguishing between the debt of a AAA national credit and a Third World obligor state. Absent robust growth, look at our score card on the Index ' increasing debt as a percentage of GDP and GNP; balance sheet insolvency (in legal terms, insolvency 'in the bankruptcy sense'); extraordinary spending in the military sector growing rich/poor disparity; continuing barriers to women's rights; environmental indifference; wide spread tax evasion; attempts by both the Left and Right to politicize the judiciary; elections for sale; tainted election procedures; a state highly dependent on imported capital to recycle its debt.
The Hedge Fund Probes
On Sept. 3, New York State Attorney General Eliot Spitzer announced a $40 million settlement with Canary Capital Partners LLC (a multimillion-dollar hedge fund), Canary Investment Management LLC, Canary Capital Partners Ltd. and the managing principal, Edward Stern, for fraudulent trading of mutual fund shares. Because of suggestions that such schemes are widespread, the news has triggered a flurry of media attention and, more notably, significant regulatory inquiries, criminal probes and private class actions.
<B><I>Decision of Note</b></i>'Daily Show' Wins Dispute on Fair Use
A Manhattan federal district court decided that the airing of an unlicensed clip from a public access TV show to introduce a segment on Comedy Central's "The Daily Show" constituted fair use under copyright law. The "Daily Show" segment at issue opened with a one-second, full-screen shot of the plaintiff ' comedienne/stripper Sandy Kane ' dancing in a bikini. The title of "The Sandy Kane T.V. Show" is visible in the background. The clip is then further shown briefly as part of a video collage. A shorter clip of Sandy Kane's show is used in a commercial promoting "The Daily Show."
Courthouse Steps
Recently filed cases in entertainment law, straight from the steps of the Los Angeles Superior Court.
Bit Parts
Recent developments in entertainment law.
Court Rulings on Industry Attorney Fees
Depending on the circumstances and the law, parties on either side of an entertainment suit may ask a court for an award of attorney fees. Following are court rulings from recent months that deal with this and related concerns. In future issues, <i>Entertainment Law & Finance</i> will report on such relevant rulings in Attorney-Fee Updates.
