June 24, 2016

Week in Review

By Michael Smith

IOC Agrees with Exclusion of Russian Track & Field from Rio

The global governing body for track and field (the IAAF) barred the Russian track & field team from competing in the summer Olympics in Rio de Janeiro, after reports of state-sponsored doping. Russia appealed the decision to the International Olympic Committe (IOC), which said that it "welcomes and supports" the ruling and the IAAF's "strong stance against doping."

http://www.nytimes.com/2016/06/19/sports/olympics/ioc-russia-ban-rio-track-and-field.html

International Trade Commission Upholds Converse Diamond Soles Trademark

On Thursday, the International Trade Commission (ITC) upheld Nike's trademark rights in the distinctive diamond-patterned outsole of Converse Chuck Taylor sneakers, but found that other aspects of the shoes, including the toe band and toe cap, are not protected. The ITC issued a broad exclusion order barring importation of any shoes that copy the trademarked outsole.

http://www.nytimes.com/2016/06/24/business/for-chuck-taylor-a-sole-trademark-is-upheld.html

RIAA Amicus Brief Urges Applicability of Pre-1972 State Laws to Remasters

The RIAA submitted an amicus brief in ABS Entertainment, Inc. v. CBS Corp., arguing that even if (as the defendants in that case argue) remastered versions of pre-1972 songs are sufficiently original to be derivative works governed by the Copyright Act, pre-1972 state laws still apply to the original works and, therefore, the defendants cannot exploit such derivative works without authorization from the owners of the underlying works. The RIAA relies primarily on Section 301(c) of the Copyright Act, which exempts pre-1972 recordings from preemption until 2067.

http://www.law360.com/articles/810025/pre-1972-songs-protected-by-state-laws-riaa-tells-court

Wolfe Doesn't Get What He Came for; Zeppelin Needn't Buy "Stairway to Heaven"

A unanimous jury found that Led Zeppelin did not copy the opening riff of "Stairway to Heaven" from an earlier song by the band Spirit. Wanting to be sure, jurors called for both tunes to be played during deliberations. After listening intently, the jury concluded that the compositions were not "substantially similar." Wolfe's attorney expressed misgivings about the ruling, which made him wonder if "money speaks louder than common sense." There are two paths he can go by, and it remains to be seen if Wolfe will appeal the decision, but there is still time to change the road he's on.

http://www.latimes.com/local/lanow/la-me-ln-led-zeppelin-copyright-20160623-snap-story.html

Bank Appoints Managers of Prince Estate

Bremer Trust, special administrator of the Prince estate, appointed L. Londell McMillan, a lawyer who represented Prince, and Charles A. Koppelman, former chairman of EMI records, to manage the estate. Their focus is anticipated to be on the management and licensing of unreleased material in Prince's legendary "vault", of which there is expected to be an enormous amount.

http://www.nytimes.com/2016/06/18/business/media/bremer-trust-hires-2-to-manage-princes-entertainment-assets.html

Viacom to Pay for Redstone Legal Battles; Shareholder Says Pox on Both Houses

Viacom announced that it had agreed to pay expenses incurred by its CEO and President, Phillipe P. Dauman, and director George S. Abrams in connection with litigation over who should control the company. Last month, Sumner Redstone, Viacom's controlling shareholder (through his company, National Amusements), ousted Dauman and Abrams from National Amusements' board. Dauman and Abrams have filed an action in Massachusetts challenging Mr. Redstone's mental capacity.

Viacom also will pay the legal fees of Frederic V. Salerno, Viacom's lead independent director, who filed a lawsuit in Delaware to block Redstone's efforts to replace five Viacom directors. Shareholder Eric Gilbert also filed suit in Delaware (presumably on his own dime), against National Amusement, Viacom, and Viacom directors alleging that they have all breached their fiduciary duties and that the company should be turned over to public stockholders. Viacom released disappointing financial reports on Friday.

http://www.nytimes.com/2016/06/18/business/media/viacom-to-pay-chiefs-legal-bills-in-fight-over-redstone-empire.html

Sony Settles with Aggrieved Nerds

When Sony first shipped the PS3 game console, it came with "Other OS" functionality that allowed users to boot operating systems other than the PS3's native operating system--in particular, flavors of the open source Linux operating system. Citing security concerns, Sony later issued a firmware update that removed that functionality. Several class actions were filed and consolidated and, after six years, a settlement has been reached. Class members who purchased the "Fat" PS3 model intending to use the "Other OS" feature will get $9. Class members who can demonstrate that they actually used the feature will get $55.

http://arstechnica.com/tech-policy/2016/06/if-you-used-to-run-linux-on-your-ps3-you-could-get-55-from-sony/

Musician Alleges Unauthorized Use of His Work in NBA 2K16

Composer John J. Simon filed a lawsuit in the Northern District of California on Monday, alleging that portions of his song "Everything You Are to Me" appear in the soundtrack of NBA 2K16, a game published by defendant 2k Games Inc., without his consent.

http://norcalrecord.com/stories/510933071-man-claims-game-nba-2k16-used-song-without-permission

Tencent Acquires "Clash of Clans" Developer

Chinese behemoth Tencent Holdings Ltd., the world's largest game publisher, has agreed to pay $8.6 billion for a majority stake in Supercell Oy, the company behind the mobile game "Clash of Clans". Tencent previously acquired Riot Games (makers of "League of Legends") and Epic games ("Unreal", "Gears of War"), and owns a significant share of Activision Blizzard.

http://www.wsj.com/articles/tencent-agrees-to-acquire-clash-of-clans-maker-supercell-1466493612

Penn State General Counsel Told University to Report on Sandusky Complaint

In a deposition transcript made public on Thursday, former Penn State general counsel Wendell Courtney said that he advised the university's vice president in 2001 to report a complaint about former assistant football coach Jerry Sandusky showering with a player to the Pennsylvania Department of Public Welfare. He also testified that if he had "any idea that there was even remotely improper conduct with children on any day since the beginning of time, nothing in the world would have kept me from being absolutely certain that it was reported to the police immediately."

http://www.philly.com/philly/news/20160623_ap_1ebec60af9dc420a8f31c0f3df456624.html

Copyright Alliance Says TVEyes's Copying Not Fair Use

The Copyright Alliance, an advocacy group representing major entertainment companies, filed an amicus brief with the Second Circuit in Fox News Network, LLC v. TVEyes Inc. The Copyright Alliance says that although it is a "staunch supporter of fair use principles," TVEyes's services go "far beyond the boundaries of fair use," and the group is urging the Second Circuit to overturn the Southern District's ruling that TVEyes's practice of recording live television broadcasts and compiling them into a searchable database was protected fair use. TVEyes has appealed the trial court's decision that TVEyes cannot allow users to download and share video clips.

https://www.copyrightalliance.org/2016/06/far_fair_use_fox_news_v_tveyes#.V2xyPvkrKUl

Netflix Says Bankruptcy Court Won't Let Netflix Speak and is Forcing Netflix to Speak

On Monday, Netflix told the Southern District of New York that the Bankruptcy Court improperly nullified contractual provisions that would have permitted Netflix to distribute two films from debtor Relativity Media. Among other things, Netflix argues that the Bankruptcy Court's ruling constitutes an unconstitutional prior restraint on free speech to the extent that it enjoins Netflix from "contending that they have the right to distribute the films" or "collaterally attacking" the order itself. Netflix also contends that the order "force[s] Netflix to 'confirm' the position of other parties--i.e., an order compelling Netflix to speak."

https://www.lexisnexis.com/legalnewsroom/litigation/b/newsheadlines/archive/2016/06/22/netflix-invokes-1st-amendment-in-relativity-streaming-fight.aspx?Redirected=true

DISH Sues Tribune Over 'Dishgusting' Ads

On Monday, DISH Network sued Tribune Broadcasting for breach of contract, alleging that the broadcasting network disseminated "disparaging content regarding DISH, its services and its performance" as a "last-ditch bid to force DISH to accept its terms" in negotiations to renew an expiring carriage deal.

http://www.hollywoodreporter.com/thr-esq/dish-network-sues-tribune-broadcasting-905147

Frontier Accuses Charter of False Advertising

Telecommunications company Frontier Communications Corp. sued Charter Communications, Inc. claiming that Charter launched a "false and misleading" ad campaign against Frontier in California and Texas just as Frontier was moving into those markets.

http://www.cablefax.com/distribution/frontier-sues-charter

Dance Mom to Plead Guilty to Tax Fraud

Abby Lee Miller, star of the reality TV show "Dance Moms," is expected to plead guilty to tax fraud next week. Miller was indicted in October for concealing $775,000 in income, and was additionally charged on Monday with failing to report foreign currency transfers.

http://www.forbes.com/sites/kellyphillipserb/2016/06/22/dance-moms-star-abby-lee-miller-reaches-deal-with-feds-will-plead-guilty/#39b9d684622f

Run the Jewels Not Happy About Run the Jewels

Members of the rap duo Run the Jewels have expressed dismay, and raised the specter of legal action, upon learning that comedian Kevin Hart plans to release a film called "Run the Jewels."

http://www.billboard.com/articles/columns/hip-hop/7415592/el-p-kevin-hart-film-run-the-jewels

News Anchor Fired for Racial Insensitivity Claims She Was Fired Because of Her Race

Pittsburg television station WTAE fired Wendy Bell after her Facebook comments regarding the shooting of five black people were deemed racially insensitive. Bell contends that her comments were "clearly and obviously not intended to be racially offensive," and that "had her race not have been white, Defendant would not have fired her, much less disciplined her."

http://www.nbcnews.com/news/us-news/wendy-bell-sues-tv-station-says-firing-was-because-her-n596076

Academy: "You're Saving all those Emmys for Us"

The Academy of Television Arts & Sciences sued the estate of Whitney Houston for copyright infringement, seeking to block the sale at auction of the singer's Emmy statuette. The Academy asserts that a label allegedly affixed to the award when it was given to Houston in 1986 declared that the figurine remained property of the Academy and that heirs must keep or return the Emmy.

http://bigstory.ap.org/article/f8a53bf4a17744ca95a908f68065a5ef/tv-academy-sues-block-auction-whitney-houstons-emmy

June 17, 2016

Week in Review

By Eric Lanter

Second Circuit Court of Appeals Rules on Copyright Use

Capitol Records, LLC, the record company, brought an action against Vimeo, LLC, an Internet service provider where users post videos, for copyright infringement. The Second Circuit, on appeal from the Southern District of New York, held that as to pre-1972 sound recordings, the fact that a video contained a "recognizable, copyrighted sound recording" does not prove knowledge of infringement by Vimeo, LLC and falls under the safe harbor of Section 512(c) of the Digital Millennium Copyright Act. As to post-1972 recordings, Capitol Records, LLC did not provide evidence sufficient to show that Vimeo, LLC was willfully blind as to impute knowledge of the infringement.

http://www.ca2.uscourts.gov/decisions/isysquery/29833831-a6ea-4d6f-a37c-66a21f8d8afd/1/doc/14-1048_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/29833831-a6ea-4d6f-a37c-66a21f8d8afd/1/hilite/

U.S. Supreme Court Rules on Legal Fees in Copyright Cases

The United States Supreme Court unanimously ruled on Thursday that a Thai student who won a copyright case in 2013 involving imported textbooks should have a second chance to persuade a lower court that the publisher of the textbooks should pay his legal fees. Justice Elena Kagan, writing for the Court, stated that while a losing side's position being objectively reasonable was one proper consideration, the lower court gave it too much weight, in light of other considerations: motivation, deterrence, and compensation. Her opinion also seemed to suggest that the student was unlikely to prevail under the current standard, however, that will be for the lower court to decide.

The decision is available to read at: http://www.supremecourt.gov/opinions/15pdf/15-375_4f57.pdf.

http://www.nytimes.com/2016/06/17/business/supreme-court-rules-on-legal-fees-in-copyright-cases.html

Court Backs FCC's Rules Treating Internet as Utility, Not Luxury

The Court of Appeals for the District of Columbia ruled against the cable and telecommunications companies with a 2-1 ruling upholding the Federal Communications Commission's (FCC) recent regulations. Those regulations include ensuring net neutrality, which prohibits companies from slowing data delivery to consumers. The cable companies indicated that they will appeal to the United States Supreme Court.

http://www.nytimes.com/2016/06/15/technology/net-neutrality-fcc-appeals-court-ruling.html

Russia's Track and Field Team Barred from Olympics

The global governing body for track and field, known as IAAF, announced on Friday in a unanimous ruling that Russia is barred from competing in this summer's Olympics in Brazil because of the doping conspiracy that has come to light. The International Olympic Committee is set to discuss the decision on Tuesday, however, it would be an unusual move if Olympics officials were to amend the ruling, as they typically defer to governing bodies of the specific sports.

http://www.nytimes.com/2016/06/18/sports/olympics/russia-barred-rio-summer-olympics-doping.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0


World's Doping Watchdog Did Nothing After Confession of Cheating

Following the news that several of Russia's athletes in the 2012 London Olympics and the 2008 Beijing Olympics may have been doping, new evidence has emerged that shows the World Anti-Doping Agency (WADA) could have been more proactive in investigating Russia's athletes. Following the 2012 Olympics, one Russian athlete, Darya Pishchalnikova, sent an email to WADA disclosing that she was taking banned drugs at the direction of Russian sports authorities, and she pleaded that WADA investigate. Rather than investigate, WADA forwarded the email to Russia's sports authorities and apparently turned a blind eye to the issue, allowing it to fester.

http://www.nytimes.com/2016/06/16/sports/olympics/world-anti-doping-agency-russia-cheating.html

WADA Accuses Russian Athletes of More Violations

On Wednesday, WADA announced that more violations have occurred in Russian sports in just the past seven months, since the country was accused of government-sponsored doping. A track and field athlete was caught attempting to smuggle a clean urine sample for drug testing, sports officials did not provide a list of athletes who were at a boxing training camp until after an hour of stalling, and armed federal police officers threatened drug testers who sought to collect athletes' urine. These developments call into question whether Russia has taken remedial action since the accusations of government-sponsored doping were revealed seven months ago.

http://www.nytimes.com/2016/06/16/sports/world-anti-doping-agency-accuses-russian-athletes-of-more-violations.html

Commentary: In Russian Doping Scandal, Time for Punishment to Fit the Crime

In a commentary by Michael Powell, he argues that it is time for there to be a strict, severe punishment for Russia's doping history. Anything short of that, Powell states, would be too lenient, given the deeply ingrained culture of doping and the lengths that the Russian state has gone to in perpetuating the doping. He seems to agree with Sanya Richards-Ross, a gold medal runner, that Russia should not be allowed to participate in the 2016 Olympics in Brazil.

http://www.nytimes.com/2016/06/17/sports/olympics/russia-doping-scandal-world-anti-doping-agency.html

Picasso Sculpture in Dispute Goes to Leon Black

A heated dispute regarding one of Picasso's sculptures, thought to be worth more than $100 million, has come to an end. Leon Black will take possession of the sculpture, while his adversary, the Qatari royal family, will receive an undisclosed amount in financial compensation.

http://www.nytimes.com/2016/06/16/arts/design/picasso-bust-settlement-leon-black.html

Expelled Yale Basketball Player Sues

Jack Montague, who Yale University expelled in February after a committee found that he had raped a fellow student, filed an action against Yale on June 9th. Montague alleges that Yale used a "deeply flawed process" in making him an example because of criticism that has emerged about the university's handling of sexual assaults on campus. The complaint was filed in federal court in Connecticut, and Yale's spokesman stated that "Yale will offer a vigorous defense."

http://www.nytimes.com/2016/06/10/sports/ncaabasketball/jack-montague-yale-rape-lawsuit.html?_r=0

A Push to Improve Welfare of Horse Racing's Involuntary Heroes

Amidst the growing concerns about animal welfare in places like SeaWorld, horse racing has come under scrutiny as well. With horses sometimes collapsing and dying on the track, and doping a regular occurrence, a piece of federal legislation, the Thoroughbred Horse Racing Anti-Doping Act of 2015, has started to gain momentum. The legislation would put doping under the purview of the United States Anti-Doping Agency, which many believe would restore the credibility to horse racing that has been increasingly compromised in recent years.

http://www.nytimes.com/2016/06/13/sports/amid-doping-and-death-a-push-to-improve-the-welfare-of-horse-racings-involuntary-heroes.html

Owner of Modigliani Portrait is Adamant the Work is Not Nazi Loot

Billionaire and art dealer David Nahmad owns a Modigliani portrait that is said to be worth at least tens of millions of dollars. However, an action in New York court brought by Philippe Maestracci challenges his ownership. The complaint claims that Maestracci's grandfather owned it, and that during World War II, the Nazis invading Paris looted it from his grandfather's shop only for Nahmad to later come to wrongfully own it. Now, both parties are attempting to retrace the history of the portrait in the pending action. Nahmad insists that he is ready to fight the action, but he acknowledges that if it is in fact a stolen portrait, he will return it.

http://www.nytimes.com/2016/06/13/arts/design/owner-of-modigliani-portrait-named-in-panama-papers-says-its-not-nazi-loot.html

Maria Sharapova Appeals Two-Year Doping Ban

Maria Sharapova filed an appeal of her two-year doping ban in the Court of Arbitration in Lausanne, Switzerland. She hopes to overturn or at least reduce the suspension imposed by the International Tennis Federation, which was imposed after she tested positive for meldonium at the Australian Open in January of this year. An expedited ruling is expected to be issued next month, before the Olympics in Brazil.

http://www.nytimes.com/2016/06/15/sports/maria-sharapova-appeals-two-year-doping-ban.html

Russia Faces Threat of Expulsion from Euro 2016 Competition

As a result of violence by Russian fans in the Euro 2016 soccer competition, UEFA has penalized the Russian soccer federation approximately $170,000 and given a suspended disqualification. This effectively leaves the Russian soccer team on the precipice of being disqualified from Europe's most prestigious tournament just two years before Russia hosts the World Cup. Given UEFA's broad definition of "crowd disturbance," which the Russian fans' violence apparently constituted, an act by fans short of violence could still disqualify Russia.

http://www.nytimes.com/2016/06/15/sports/soccer/russia-euro-2016-suspended-disqualification.html

Cable Industry Mobilizes Lobbying Army to Block FCC Moves

The FCC has proposed new regulations that would permit an opening of the market for cable set-top-boxes, which are currently dominated by the major cable companies. In May, 60 lawmakers signed a letter from the cable industry voicing their concerns about the adoption of such regulations and the impact it would have on the cable companies.

http://www.nytimes.com/2016/06/13/technology/cable-industry-mobilizes-lobbying-army-to-block-fcc-moves.html

Gawker Article on Trump's Hair Draws Threat from Hulk Hogan's Lawyer

Charles Harder, the same attorney who represented Hulk Hogan in his lawsuit against Gawker, sent a letter last week to Gawker on behalf of a hair treatment clinic, stating that in a recent article about Donald Trump's hair on Gawker's website, Gawker made "numerous false and defamatory statements about my clients." The letter demanded that Gawker remove the article, issue a public apology, and execute a full retraction of the article, threatening legal action otherwise.

http://www.nytimes.com/2016/06/15/business/media/gawker-article-on-trumps-hair-draws-lawsuit-threat.html

Foo Fighters File Action Against Insurance Companies

The rock band the Foo Fighters brought a lawsuit against London-based insurance market Lloyd's. The lawsuit comes as the Foo Fighters cancelled four shows in the wake of the terrorist attacks in Paris in November of 2015, which they expected would be covered under the Terrorism Policy of their insurance with Lloyd's. However, Lloyd's has neither paid nor offered to pay any money for this claim. The Foo Fighters are seeing damages as well as punitive damages and attorneys' fees.

http://www.billboard.com/articles/business/7407909/foo-fighters-lawsuit-lloyds-of-london-robertson-taylor-tour-cancellations

Led Zeppelin's Jimmy Page Testifies in Copyright Trial

On Wednesday, Jimmy Page of Led Zeppelin testified in a copyright trial, claiming that Led Zeppelin's 1971 hit "Stairway to Heaven," was copied from Spirit's "Taurus," a 1968 song. Page insisted that when he heard "Taurus," it sounded "totally alien" to him. This trial comes just a year after Robin Thicke and Pharrell Williams were ordered to pay $5.3 million to the family of Marvin Gaye for their song "Blurred Lines."

http://www.nytimes.com/2016/06/16/business/media/led-zeppelins-jimmy-page-testifies-in-stairway-to-heaven-copyright-trial.html

June 15, 2016

BEWARE: Recent Decision in CBS Lawsuit Over Pre-1972 Sound Recording Could Wreak Havoc In The Copyright World

By Wallace Collins

Wallace Collins is an entertainment lawyer and intellectual property attorney with more than 30 years of entertainment business experience. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. T: (212) 661-3656; www.wallacecollins.com

The recording artist and songwriter communities should take note of a recent decision in ABS Entertainment, Inc. v. CBS Corporation, et al., a case concerning pre-1972 copyrights - and raise an outcry! The judge in this case held that remastered versions of old songs are entitled to a new copyright, and owners of the originals are not allowed to stop the public performance of them.

Over the past few years, the public performance of songs authored before sound recordings fell under Federal copyright law has become a contentious legal issue. This ABS v. CBS ruling could help immunize terrestrial radio operators and others from lawsuits and disturb many preconceived notions about copyright law. The case arose from a dispute between ABS, owner of recordings by Al Green and others, and CBS Radio, which was dragged into court in this case after other plaintiffs had been successful litigating the theory that pre-1972 songs are protected under State law and could not be broadcast without permission. The ABS lawsuit cut against decades of precedent that songs on the radio served promotional purposes and should not generate compensation for owners. As times have changed, with sales becoming less meaningful to artists, owners have pushed lawsuits and lobbying efforts to shake up the system.

As its defense to the ABS lawsuit, CBS argued that it was not broadcasting the original analog recordings, but rather remastered versions that came out after 1972. Under this specious argument, the specifically performed works would not be protected by State law and CBS would not have to pay anything. ABS argued that what sound engineers accomplish by tweaking timbre, balance and loudness is "mechanical", and not sufficiently original to be entitled to copyright protection. ABS further argued that to accept otherwise would mean that owners of sound recordings would enjoy perpetual copyright over works.

Incredibly, the judge accepted the position of CBS. On the issue of originality, the judge gave credence to the CBS expert, an acoustic engineer and research scientist specializing in forensic investigation of audio evidence, and held that the plaintiffs' pre-1972 sound recordings "have undergone sufficient changes during the remastering process to qualify for federal copyright protection," adding that ABS did not offer sufficient evidence to even make this a contestable point for a jury to decide. As a specific example, the judge referred to the remastered version of Ace Cannon's 1961 recording "Tuff," which the expert found had additional reverberation, was played in a different musical key and at a faster tempo. The judge accepted the proposition that these were not merely "mechanical changes or processes ... such as a change in format, de-clicking and noise reduction," nor were the changes "trivial," making note of the fact that experienced sound engineers were brought in for a reason. "Instead, the changes reflect 'multiple kinds of creative authorship, such as adjustments of equalization, sound editing and channel assignment...'" ABS also tried to argue that sound recordings authored before 1972 cannot serve as a "pre-existing work" for a later derivative work, but the judge found that argument to be unpersuasive. For now therefore, based on this decision, the remastered versions are independently copyrightable.

The holding in this case determined that for some of the recordings in dispute, such as Green's "Let's Stay Together" and Jackie Wilson's "I'm Coming on Back to You": there is no disagreement that the version publicly performed is different from the pre-1972 versions; that for other songs there is no genuine dispute that CBS is performing the post-1972 versions; and that for the remaining songs ABS failed to offer up sufficient evidence that CBS is performing pre-1972 versions. It all adds up to huge victory for CBS, as well as road map for how radio can publicly perform older sound recordings without liability... and it is a horrific, although hopefully temporary, decision for the recording artist community.

Hopefully, this decision will be overturned on appeal so as not to wreak havoc on issues of copyright term, termination rights and its singular determination that sound engineers do copyrightable work when they remaster sound recordings.

June 11, 2016

Week in Review

By Ben Natter

Russian Court Frees Artist Known for Needling Putin Government

A Russian court this week freed Pytor Pavlensky, an artist known for blurring the lines between artistic expression and protest of the Russian government. On November 9th of this past year, Mr. Pavlensky set fire to the front door of Russia's principal intelligence agency. He was held in detention since that time, with prosecutors asking for fines far exceeding the cost of replacing the oak door. A judge ruled that Mr. Pavlensky should only be fined slightly more than the cost of replacing the door. Mr. Pavlensky is best known for nailing his scrotum to crack in a cobblestone in the Red Square as an act of protest and artistic expression.

http://www.nytimes.com/2016/06/09/world/europe/russian-court-frees-pyotr-pavlensky.html?_r=0

Expelled Basketball Player Sues Yale

Jack Montague, the basketball player who was expelled from Yale in February after being found guilty of rape by a university committee, filed suit against Yale for defamation. The lawsuit alleges that Yale intended to make an example of the high profile athlete and lists both it and two Title IX representatives as defendants.

Montague's expulsion gained media attention after his teammates supported him when it was initially announced that the then captain of the basketball team had "departed" from the team.

http://www.nbcnews.com/news/us-news/jack-montague-yale-basketball-captain-expelled-sexual-misconduct-sues-school-n589311

Hamilton raises ticket prices, doubles lottery seats

The producers of Hamilton raised the price of premium seats to a staggering $849 per seat, but doubled the amount of lottery seats available for $10. The move was made to deter the skyrocketing resale market and steep markups. The box office price for premium seats has set a new Broadway record. A New York Times analysis estimated ticket resellers were making approximately $60 million in revenue.

http://www.nytimes.com/2016/06/09/theater/hamilton-raises-ticket-prices-the-best-seats-will-now-cost-849.html

Sepp Blatter and Deputies Arranged Huge Payouts After Indictments, FIFA Says

On Friday, lawyers for FIFA published some findings from their investigation of Sepp Blatter and other former FIFA officials. The report shows millions of dollars in self-approved bonuses for Blatter (some issued after the recent indictments) and salary increases totaling tens of millions of dollars, all approved by Blatter.

http://www.nytimes.com/2016/06/04/sports/soccer/fifa-corruption-sepp-blatter-jerome-valcke.html

Maria Sharapova is Suspended From Tennis for Two Years

An International Tennis Federation Tribunal ruled on Wednesday that Maria Sharapova unintentionally violated doping rules and will be suspended from tennis for a period of two years. Sharapova faced a suspension of up to four years, which could have been career-ending. Sharapova plans to appeal the suspension.

http://www.bbc.com/sport/tennis/36482288

Russian Officials Say Retests Are Flawed

Russian officials are disputing the findings of the IOC's retesting of the samples from the 2008 and 2012 Olympic games that included 55 positive results. Of the 55 positives, 22 are from Russian athletes. Russian officials claim that two of the athletes were cleared when a second set of samples were tested.

https://www.thestar.com/sports/2016/06/08/russia-wants-all-olympic-doping-retests-thrown-out.html

Spotify Hires Troy Carter as Liaison with Artists

Troy Carter joined Spotify as its global head of creator services. Carter was previously the manager of Lady Gaga, and is expected to take on a role being the central contact for high profile artists. Spotify has roughly 89 million users around the world. Carter also previously worked with Puff Daddy and Will Smith.

http://www.recode.net/2016/6/6/11869444/spotify-troy-carter-lady-gaga

Zeppelin's Stairway to Heaven to Be Scrutinized in Court

A trial scheduled to begin next week in California will determine whether or not parts of Led Zeppelin's "Stairway to Heaven" were copied from the band Spirit's 1968 song "Taurus". The case focuses on the opening of "Stairway to Heaven", in which an acoustic guitar chords in a descending pattern. The suit argues that the members of Led Zepellin heard Spirit's song early in their careers, and copied the tune. The band members of Led Zepellin claims that they never heard the song.

http://www.nytimes.com/2016/06/06/business/media/led-zeppelins-stairway-to-heaven-to-be-scrutinized-in-court-in-copyright-case.html

Vikings Fight Back Against Wells Fargo

The Vikings' new U.S. Bank Stadium will open this summer. However, across the street and visible from the stadium, are two giant Wells Fargo logos placed on the outside of a mixed use building developed by the bank. Vikings lawyers have called the logos photo bombs, and filed suit in federal court. A federal judge hearing the Minessota Vikings case against Wells Fargo said he will rule by June 24th with respect to whether or not the case can proceed to trial.

http://www.startribune.com/minnesota-vikings-say-wells-fargo-s-new-signs-near-u-s-bank-stadium-are-too-big-and-bright/363378351/

Committee in Albany Reaches Deal to Legalize Daily Fantasy Sports

The Chairman of New York State's Gambling Committee said that the legislature made a decision that Fantasy Sports were games of skill and not chance and would be legalized in New York State. Companies like FanDuel and Draftkings will pay a $150,000 fee to operate in New York State, and turn over 15 % of revenues awarded to State residents.

http://www.nytimes.com/2016/06/08/nyregion/committee-in-albany-reaches-deal-to-legalize-daily-fantasy-sports.html

Senate Bill Would Help Recover Art Stolen by Nazis

A bipartisan Senate group proposed a bill that would lengthen the statue of limitations to six years to prove ownership of works that were looted by the Nazis. The bill was drafted to avoid situations where reclaiming stolen art is barred by legal technicalities and the claims are not decided on the merits.

http://www.nytimes.com/2016/06/08/arts/design/senate-bill-would-help-recover-art-stolen-by-nazis.html

Sports Arbitration Court Ruling Against German Speedskater Claudia Pechstein is Upheld

Germany's Federal Court of Justice ruled that Claudia Pechstein, Germany's most decorated Winter Olympian, received a fair hearing by the arbitration court in 2009 when her blood levels showed an abnormal amount of red blood cells, and she was suspended from speed skating for two years. Olympic Federations require athletes to sign arbitration clauses limiting any claims and punishments to arbitration hearings. Ms. Pechstein's appeals bounced around both Swiss and German courts before the German Federal Court agreed to hear the claim. She challenged the arbitration clauses and specialized sport courts. Ms. Pechstein has a remaining claim pending before the European Court of Human Rights.

http://www.nytimes.com/2016/06/08/sports/sports-arbitration-court-ruling-against-german-speedskater-claudia-pechstein-is-upheld.html?_r=0

Twitter Hoax National Football League Account

The National Football League (NFL) Twitter account was recently hacked, and the hackers announced that Commissioner Roger Goodell had died. Experts think that the hacked twitter account and other accounts that were hacked the same day may be linked to the LinkedIn security breach. The hackers followed up with responses on the NFL account, and Roger Goodell seemed to take the hoax in stride, posting a humorous response.

http://www.nytimes.com/2016/06/08/sports/the-nfls-twitter-account-just-got-hacked-it-wont-be-the-last.html

June 7, 2016

Center for Art Law Case Law Updates

The following case selection first appeared in this week's Center for Art Law newsletter:

Bennett Goldberg, et. al v. Stephens Institute, 16-cv-02613-JSC (U.S. District Court for Northern District of C.A. May 13, 2016) -- Parents of decedent college student seek class action lawsuit against Stephens Institute (also known as the Academy of Art University) for violating rental ordinances by failing to maintain student housing and deprive students of their right to exercise tenant rights. Specifically, they allege violations of the California False Advertising Law and the California Unfair Competition Law.

General Services Administration v. Matthew Schwartz, (U.S. District Court, N.J. May 23, 2016) -- The federal government is suing New Jersey art dealer Matthew Schwartz to reclaim possession of the painting "1934 Farmer." Schwartz claims he obtained the severely damaged painting from the Chrysler Museum, who disposed of it in 1990, and has since spent thousands of dollars restoring it. The federal government's General Services Administration (GSA) has reportedly been pursuing the painting, which was previously believed to be lost or stolen. Because the painting was made during Franklin D. Roosevelt's Works Progress Administration, the federal government allegedly holds full legal title to the artwork. In their complaint, GSA cites conversion, trespass to chattels and unjust enrichment and seeks a declaratory judgment and injunctive relief.

The Center for Art Law strives to create a coherent community for all those interested in law and the arts. Positioned as a centralized resource for art and cultural heritage law, it serves as a portal to connect artists and students, academics and legal practitioners, collectors and dealers, government officials and others in the field.

Protecting Yourself Legally in the Film Industry

By Neville Johnson and Douglas Johnson
www.JJLLP.com

We litigate controversies on behalf of producers, distributors, writers, actors, directors, talent, and independent film companies. We frequently sue the major studios on behalf of talent and independent producers. Here are common issues arising in the industry:

Get all agreements in writing. Film legend Samuel Goldwyn once said: "A verbal contract isn't worth the paper it's written on." That's not true. Oral contracts are just as enforceable, but they are much more difficult to prove. Get it in writing as best you can, as soon as you can. We have had many cases based on handshake agreements that would not have arisen had there not been this barrier. We have seen this especially in situations where one party is raising money for another, typically investment in a film. The investor is obtained, and thereafter, details of the deal become fuzzy between or among the parties because there is no clear documentation. A sound recording of the parties agreeing on an iPhone constitutes a writing. Always confirm details and understandings of any deal with relevant parties so there is a record. Send follow-up emails and letters that state the deal agreed upon as this can be relevant and important evidence that there was an agreement.

Another term that must be considered in the event of a dispute is venue, which means where the dispute be adjudicated? It is always thought that the city or "home court" of the contracting party is best. Otherwise, there are travel costs associated, and the possibility of being "hometowned," that is, that the other side and its attorneys are more wired into the legal process than the other. The parties need to specify where the venue will be otherwise it will be in one of the jurisdictions where the parties reside - probably the one with more leverage. In international agreements, they must consider which country the dispute will be adjudicated in. The party fighting will surely want it to be in its country. The smart business person has the contract state the venue for jurisdiction, the country, the city.

What is the forum for dispute resolution --- the courts of one of the parties or arbitration? Many contracts provide the forum and this is an increasingly controversial problem. In foreign sales agreements, the Independent Film & Television Alliance (IFTA), arbitration process is commonly required. This makes good sense for the parties because it is a relatively speedy process, inexpensive in comparison to full-blown court litigation, and arbitrators are knowledgeable about industry practices. However, in IFTA arbitration, punitive damages are not allowed. Therefore, if one party defrauds another, the only claim effectively can be for contract damages.

Contracts frequently require disputes to be heard in a confidential, binding arbitration before one provider, Judicial Arbitration and Mediation Service (JAMS), which has offices in the United States and London, thus preventing the establishment of precedent or publication of unfavorable information. The major movie studios are all requiring JAMS arbitration clauses and refuse to negotiate on this. Most attorneys for claimants say that because of this there is at least a perception of repeat player/provider bias in requiring mandatory arbitration before one provider. There are merely 14 entertainment arbitrators working for JAMS in Los Angeles and six studios that employ them. Rule once for serious damages against studios, so the argument goes, and that arbitrator won't adjudicate another case. This is called "repeat player" bias.

Add to the forgoing the cost of arbitration. If a small amount is owed, talent or other claimant is easily priced out of the market on a risk/reward basis given the administrative costs and the hourly fees charged by arbitrators -- often up to $900 per hour. There is no realistic way to challenge the fees of arbitrators either. Few qualified contingency fee attorneys (and this is if one can legally be allowed to work on this basis, which can be a factor affecting lawyers outside the United States) will take such cases, and studios habitually do not provide attorney fees clauses in their agreements.

Additionally, discovery is usually limited in arbitrations, sometimes with only one deposition per side permitted. This disfavors claimants, who may need to depose several witnesses from the other side to create a clear picture of events.

For these reasons, having a case in a court of law may be the best scenario if there is a dispute. Public trials provide unwanted "sunshine" on nefarious business practices and can intimidate wrongdoers and warn others by such exposure, and they may be much less expensive. Further, if the trial court or jury "gets it wrong" there is always the possibility of a winning appeal, which would otherwise be foreclosed in a binding arbitration. If the other side insists on arbitration, document the refusal to negotiate on this issue as some courts of law may find this to be "unconscionable" and thus allow a court trial instead.

If it is not going to be an IFTA arbitration, or in a court of law, and arbitration will be the forum, we recommend a provision that provides that the arbitrator will be selected by the parties and if they cannot agree, they shall each designate a third person who shall select the arbitrator.

To be enforceable, the agreement must state that the arbitration is binding, final, and can be enforced by any court of competent jurisdiction.

Auditing. In any contingent compensation or distribution agreement, there must be an accounting and audit provision. Ensure the right to audit or suffer the consequences, namely, the inability to know if there has been an underpayment. Get regular accountings and the right to see all relevant documents relating to any income and costs. (One common area of dispute is the "allocation" a distributor/sales agent may charge for marketing and attending festivals, such as Cannes or MIP.)

Can attorney's fees and costs of litigation be obtained? The general rule of the United States is that the prevailing party in litigation is not entitled to attorney's fees and costs unless there is a requirement stating so in the contract. The rule in Europe is that attorney's fees and costs are awarded to the prevailing party. The attorney fees can sometimes dwarf the amount at stake. Some lawyers work on contingency or partial contingency basis; they may be willing to do so when attorney's fees are available, warranted, and collectable. For this reason, we generally suggest that an attorney's fees provision awarding them to the prevailing party be made in part of the contract.

In sum, there is no substitute for conscientiousness in deal-making and being aware of the legal pitfalls and strategies if the deal goes sour, as so many do.

June 4, 2016

Week in Review

By Michael B. Smith

Court Won't Alter National Football League Concussion Settlement

The Third Circuit has denied a request for en banc rehearing of its April decision affirming the $1 billion settlement of a class action suit alleging that the National Football League (NFL) failed to inform players of the long-term implications of concussions. In addition to monetary payments, the settlement provides for medical monitoring of the former players' conditions.

http://www.nytimes.com/2016/06/02/sports/football/nfl-concussion-settlement-appeals-court-ruling.html

Court Says Women's Soccer Can't Strike in Brazil

A federal judge in Chicago ruled that the United States women's national soccer team remained bound by its collective bargaining agreement, which by its terms expired in 2012. The court found that a 2013 memorandum of understanding was sufficiently detailed to be enforceable, and that terms not included in that memorandum (such as the players' rights to strike) would remain the same as under the earlier agreement.

http://www.nytimes.com/2016/06/04/sports/soccer/judge-rules-us-womens-soccer-team-cant-strike-before-olympics.html?_r=0

News Corp. Settles Antitrust Suit On Day One of Trial

News Corp. announced that it had reached a settlement with the plaintiffs in an antitrust case just as the trial in that case was about to begin. Consumer product makers, including Dial and Heinz, sued News Corp., alleging that it had monopolized the U.S. market for third-party in-store promotions, and overcharged them by over $674 million. News of the settlement came as a surprise to Judge William H. Pauley III, who ordered opening statements to proceed and would not stop the trial unless the parties agreed to publicly disclose the terms of their settlement. News Corp. agreed to pay $244 million and change the way it contracts with retailers for in-store promotions.

http://www.law360.com/articles/765130/news-corp-discloses-244m-antitrust-deal-as-trial-begins

Electronic Arts Victory: "Updating Sports Games" Not Patentable

Not long after White Knuckle Gaming sued Electronic Arts for infringing its patent for a "Method and System for increased Realism in Video Games," the Electronic Frontier Foundation gave it the "Stupid Patent of the Month" award. On Thursday, the Southern District of Utah tacitly agreed. Judge Jill N. Parrish dismissed the case, finding that the patent claimed only the abstract idea of updating software in sports video games, which was not patentable under the Supreme Court's decision in Alice Corp. Pty. Ltd. v. CLS Bank Int'l.

http://www.law360.com/articles/803207/ea-scores-patent-victory-under-alice-in-sports-game-case

https://www.eff.org/deeplinks/2015/01/january-stupid-patent-month-method-updating-video-game-grass

Ninth Circuit Agrees That Madonna's Copying Was De Minimis

A divided Ninth Circuit panel upheld the Central District of California's determination that Madonna did not commit copyright infringement if she copied a quarter-second "horn hit" from the plaintiff's song in her 1990 hit, "Vogue." Judge Barry Silverman dissented, opining that the court should have followed the Sixth Circuit's decision in Bridgeport Music v. Dimension Films, in finding that the de minimis exception does not apply to fixed sound recordings. Silverman wrote: "in any other context, this would be called theft. It is no defense to theft that the thief made off with only a 'de minimis' part of the victim's property."

http://www.bbc.com/news/entertainment-arts-36442456

Central District of California Accepts "Remaster" Copyright Argument

Sound recordings made prior to February 15, 1972 are governed exclusively by state law. Until recently, state law was assumed not to grant owners of sound recordings the exclusive right to publicly perform their works. When sound recordings were added to the federal Copyright Act in 1972, Congress did not give sound recording owners the exclusive right of public performance. It did subsequently grant that right in 1995, but only for "digital audio transmission." As a result, broadcast radio stations have not had to pay royalties to the owners of sound recordings. In recent years, however, some courts have found that owners of pre-1972 sound recordings did have exclusive performance rights under state law. On the strength of those decisions, ABS Entertainment sued CBS Radio for playing pre-1972 recordings without paying royalties. CBS argued that it only played remastered versions of those recordings, which were created after February 15, 1972. On Wednesday, the Central District of California agreed, granting summary judgment in CBS's favor.

http://www.completemusicupdate.com/article/cbs-radio-defeats-pre-1972-royalties-claim-with-remaster-reboots-copyright-argument/

Mister Softee Battles Rage On

The Manhattan ice cream truck business is terrifying. In 2013, a Mister Softee franchisee, Dimitrio Tsirkos, broke away from the franchise and started his own company under the "Master Softee" brand. Mister Softee sued for trademark infringement, and last week Judge Laura Swain ordered Mr. Tsirkos to pay Mister Softee's attorneys' fees (the court earlier had entered a default judgment against Mr. Tsirkos). According to a recent New York Times article, the fight has not been confined to the courtroom. Apparently, Mr. Tsirkos's trucks have taken over midtown Manhattan and are using threats and physical intimidation to keep Mister Softee out. Nor is this a new phenomenon. The New York Times reports that, in 1969, "a Mister Softee driver was kidnapped by rivals who blew up his truck," and in 2004 an elderly couple was critically beaten with a wrench by competitors. Not cool.

http://www.nytimes.com/2016/05/31/nyregion/a-king-of-ice-cream-a-renegade-upstart-and-a-simmering-turf-war.html

Troy Ave Charged With Attempted Murder

Rapper Troy Ave (whose real name is Roland Collins) is being held without bail pending trial on charges of attempted murder and criminal possession of a weapon. When a fight broke out backstage at a concert at Irving Plaza last week, shots were fired and Troy Ave's bodyguard was killed. Troy Ave was shot in the leg. Police say security footage shows him firing a gun; Troy Ave's attorneys say that he was a victim.

http://www.nytimes.com/2016/05/31/nyregion/troy-ave-formally-charged-with-attempted-murder-in-irving-plaza-shooting.html

Viacom Board Moves to Block Ouster

In a preemptive move to keep Sumner Redstone from dismantling Viacom's Board of Directors, Viacom's lead independent director, Frederic V. Salerno, sent a letter to Viacom employees stating the Board's intention to "challenge in court" any efforts to remove Board members. Salerno acknowledged that if Sumner, whose mental competency has recently been the subject of a dramatic and public family dispute, "is found competent and acting without undue influence, we may be legally removed simply for having explored strategic options," including a plan to spin off Paramount Pictures.

http://www.nytimes.com/2016/05/31/business/media/viacoms-directors-vow-to-fight-any-removal-efforts-by-redstone-family.html

Gawker Gets a Defamation Win

Embattled blog network Gawker Media won dismissal of a lawsuit brought by former Major League pitcher Mitch Williams, who alleged that Gawker defamed him in an article reporting that Williams was ejected from his child's baseball game for arguing and cursing. The Williams case is only one of many lawsuits recently brought against Gawker, including actions filed by Hulk Hogan (for invasion of privacy; Hogan was awarded $140 million); entrepreneur Shiva Ayyadurai (seeking $35 million for defamation), and journalist Ashley Terrill (seeking $10 million for defamation). Gawker contends that all of these lawsuits are part of a campaign by PayPal co-founder Peter Thiel to bring down the company.

http://www.nytimes.com/2016/05/31/business/media/gawker-lawsuits.html

Spanish Court Denies Request for Extradition in Forgery Case

Jose Carlos Bergantinos Diaz, accused by U.S. prosecutors of organizing a scheme to sell more than $80 million in forged artworks through the Knoedler & Company gallery, will not be extradited from Spain. The same court that granted a request to extradite Mr. Bergantinos Diaz's brother, Jesus Angel, earlier this year denied the request to extradite Jose due to health risks associated with neurological ailments.

http://www.nytimes.com/2016/05/31/business/media/gawker-lawsuits.html

University of Mississippi Reduces Football Scholarships in Response to Allegations of Misconduct

In January, the NCAA gave the University of Mississippi notice of 28 rules violations. On Friday, the University issued a 154-page response, which included the announcement that it would drop 11 football scholarships. The school also asked for more time to investigate whether school officials gave former Rebel Laremy Tunsil money to pay personal expenses.

http://abcnews.go.com/Sports/ole-miss-imposes-double-digit-reduction-football-scholarships/story?id=39430139

FIFA Clears World Cup Stadiums in Response to Offensive Fans

FIFA has ordered the Croatian soccer team to play two qualifying matches in empty stadiums due to repeated instances of fans chanting fascist slogans. FIFA also penalized several Latin American soccer federations for "discriminatory and unsporting conduct by fans."

http://www.usatoday.com/story/sports/soccer/2016/05/27/croatia-gets-2-match-world-cup-stadium-ban-for-fascist-chant/85032680/

23 Olympians Failed 2012 Drug Tests

After 265 blood and urine samples from the 2012 Olympics were retested, 23 new athletes have been banned from the Rio Games this summer.

https://www.theguardian.com/sport/2016/may/27/olympics-23-athletes-caught-out-london-2012-drug-retests

Mets Owners Renegotiate Madoff Payments

As part of a settlement reached with the Trustee representing victims of Bernie Madoff, the owners of the New York Mets, Fred Wilpon and Saul Katz, agreed to pay a maximum of $162 million over five years, with the amount to be adjusted based on the success of the Trustee's efforts to recover the $17.5 billion lost by Madoff's victims. On Tuesday, the Trustee announced that the parties had agreed to modify the payment schedule. Wilpon and Katz currently owe $61 million, of which $23.3 million was to have been paid on Wednesday. That amount was reduced to $16 million, with the remaining $45 million to be paid over four years, beginning in 2017.

http://www.nytimes.com/2016/06/01/sports/baseball/ny-mets-bernie-madoff-settlement-wilpon-katz.html

Poland Takes Another Shot at Polanski

Last fall, a Polish judge ruled that Roman Polanski would not be extradited to California. This week, Poland's chief prosecutor - whose office previously said it would abide by the ruling - announced that he would appeal the decision. The prosecutor accused the judge of bias, and said Polanski would have been deported "a long time ago" were he not famous.

http://www.nytimes.com/2016/06/01/world/europe/roman-polanski-poland-extradition.html

Music Industry Asks for Changes to the Digital Millennium Copyright Act

At the same time that major record labels are renegotiating their licensing contracts with YouTube, industry leaders are asking for changes to the Digital Millennium Copyright Act (DMCA) to address their problems with YouTube's role in the distribution of music. Recording artists, managers, and songwriters have circulated letters outlining their complaints with the DMCA's "safe harbor" provisions, and with the paltry sums derived from distribution on YouTube.

http://www.nytimes.com/2016/06/01/business/media/music-world-bands-together-against-youtube-seeking-change-to-law.html

Gambler Pleads Not Guilty to Insider Trading

William "Billy" Walters pleaded not guilty to charges that he derived over $40 million in benefits from insider tips from Thomas Davis, former chairman of Dean Foods Co.

http://www.wsj.com/articles/gambler-billy-walters-pleads-not-guilty-in-dean-foods-insider-trading-case-1464810545

Wrestler Incompetent to Stand Trial

A Pennsylvania state court found former professional wrestler Jimmy "Superfly" Snuka mentally incompetent to stand trial for the murder of his girlfriend. Snuka was charged last year in the 1983 death of Nancy Argentino, who suffered traumatic brain injuries and more than three dozen cuts and bruises.

http://espn.go.com/moresports/story/_/id/15883191/judge-says-jimmy-superfly-snuka-incompetent-stand-trial-death-girlfriend

Schoenefeld v. Schneiderman

By Pia Katerina Tempongko

It is easy for attorneys to have their practices not only in their home states, but also in another or several states. In an analysis of the Constitution in Schoenefeld v. Schneiderman, guidance is provided as to how interpret laws that affect non-citizens who wish to engage in trade in a particular state.

The plaintiff, Ekaterina Schoenefeld, is a citizen and resident of Princeton, New Jersey, and licensed to practice law in New Jersey, New York, and California. She maintains an office solely in New Jersey. The plaintiff states that while attending a continuing legal education course entitled "Starting Your Own Practice", she learned that under N.Y. Judiciary Law Section 470, non-citizen attorneys may not practice law in New York without maintaining an office located in that State. (Schoenefeld v. New York 907 F.Supp.2d 252 (2011)). Schoenefeld claims that she has declined representing clients in New York so as not to violate Section 470, which states that: "A person, regularly admitted to practice as an attorney and counselor in the courts of record of this state, whose office for the transaction of law or business is within the state, may practice as such attorney or counselor, although he resides in an adjoining state."

The plaintiff sought a judicial declaration that the office requirement for non-citizens violated the Constitution's Privileges and Immunities Clause by infringing the right to practice law in New York. The district court agreed, and declared Section 470 unconstitutional.

On appeal, the Second District certified the following question to the New York Court of Appeals: "Under New York Judiciary Law Section 470, which mandates that a non-citizen attorney maintain an "office for the transaction of law business" within the state of New York, what are the minimum requirements necessary to satisfy that mandate?"

The Court of Appeals held that Section 470 requires non-citizen attorneys to maintain physical offices in New York. The Court observed that the statute presupposes a residency requirement in order to practice law in New York, with the exception of allowing non-citizen admitted attorneys to practice law if they maintain an office for the transaction of law business in New York. The Court of Appeals also acknowledged legitimate state interest by alleviating logistical difficulties when it comes to service of process.

The Second District reversed the district court, and based its decision based on the principles of the Privileges and Immunities Clause, as discussed in the case of McBurney v. Young (133 S. Ct. 1709, 1715 (2013)). The Privileges and Immunities Clause states that: "the Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." (U.S. Const. art. IV, SECTION 2, cl.1.)

The Court held that the Constitutional Clause did not demand that a non-citizen enjoy the privileges and immunities he or she has in his or her state of residence to another state. Rather, the Clause demands that the non-citizen be afforded the same privileges and immunities that a citizen enjoys in any state. The purpose of this Clause was to prevent any State from discriminating against citizens of any other States in favor of its own (Baldwin v. Fish & Game Comm'n of Mont. 436 U.S. 371, 382 (1978)).

However, the Privileges and Immunities Clause is not absolute in the sense that it doesn't have to always apply all its laws and services to its citizens and non-citizens equally. For a challenge under this Clause to survive, the plaintiff must demonstrate that the State has burdened non-citizen activity that is sufficiently basic to the livelihood of the U.S. as to fall within the purview of the Privileges and Immunities Clause (Supreme Court of Va. v. Friedman, 487 U.S. at 59, 65 (1988)). Constitutionally protected privileges and immunities are burdened only when challenged laws were enacted for a protectionist purpose (McBurney v. Young). The protectionist purpose, and not disparate effects alone, pertains to the advantage that a State provides to its citizens when passing these laws. The State may defend itself by emphasizing that a substantial reason exists for the discrimination and the degree of discrimination bears a sufficiently close relation to such reason (Supreme Court of Va. v. Friedman).

In this case, the Court ruled that the facial distinction between citizens and non-citizens was not sufficient to admit an inference of protectionist purpose in light of statutory text and legislative history (Circuit Judge Hall in his dissent, however, found the statute discriminatory on its face, and said that therefore no other threshold showing of discriminatory intent was required). The statute originated in 1862 from Chapter 43, a predecessor law. Chapter 43 stated that a non-citizen attorney could practice law in New York as long as he maintained an office in the state as an accepted site for service. Chapter 43 was not enacted for the protectionist purpose of burdening non-citizen attorneys practicing law in New York; rather, it was enacted as a means for non-citizens to establish physical presence in the State (place for service of process) like that of citizen attorneys. Chapter 43 was later on codified as Section 60 of the New York's Code of Civil Procedure, and a later recodification split Section 60 into two - with the service part remaining at Section 60, and the office requirement becoming Section 470. The courts observed that the new section maintained the original purpose and remains a means for ensuring service.

The Court ruled that Schoenefeld did not produce evidence that Section 470 was meant to offer some economic advantage to citizen New York attorneys. Section 470 was meant to place citizen attorneys and non-citizen attorneys on an equal footing. A plaintiff must point to more than a failure to amend or repeal a statute enacted for a nonprotectionist purpose to demonstrate that the law was meant to have a protectionist purpose. Schoenefeld mentioned a ban on non-citizen attorneys that was invalidated in 1979. Her argument failed because she was not burdened by the ban, due to its previous invalidation. Furthermore, Section 470 was meant to be an exception to the ban. The fact that a non-citizen attorney has to establish his or her presence by leasing an office while a citizen attorney can use his or her residence does not unduly burden the non-citizen attorney. The Court pointed out that the expense of leasing a New York office is less than owning a New York home, and Schoenefeld did not offer any evidence that a majority of New York attorneys practiced at home. Schoenefeld also contended that Section 470 was unconstitutional because by applying the statute, she was required to incur costs of a New York office when she was already incurring the costs of an office in New Jersey. The Court ruled that this argument was flawed, because her New Jersey cost was not a product of a New York law. McBurney states that the Privileges and Immunities Clause does not promise non-citizens that it will be as easy for them as for citizens to comply with a state's law, but it promises only that the state laws will not differentiate for the protectionist purpose of favoring citizens at the expense of non-citizens. In essence, the Court observed that the plaintiff sought to practice law on different terms specifically without maintaining a physical presence.

The Court concluded that state laws only violate the Privilege and Immunities Clause when those laws are enacted for the protectionist purpose of burdening non-citizens. Section 470 was not enacted for a protectionist purpose, but as a means for non-citizens to establish presence in New York through service. The Court therefore reversed the district court's judgment invalidating Section 470.

Options for Compliance with the New Federal Overtime Rule

By Kristine A. Sova
www.sovalaw.com

Six months from now, on December 1, 2016, a new federal overtime rule goes into effect. The new overtime rule doubles the annual salary threshold that must be paid to an employee in order for the employee to qualify for an exemption from the overtime pay requirements. The current annual salary is $23,660 and the new annual salary is $47,476.

It's likely that your organization has at least a few white collar employees who satisfy one of the duties tests for exemption and earn between the old salary level and the new salary level. In light of the new rule, employers should evaluate these job categories to determine which employees do and do not work more than 40 hours per workweek.

Ultimately, employers may determine that changes to pay or hours are not necessary because the employee will never work any overtime. If the employee's salary will be kept the same (that is, less than $47,476 a year), the only change to be made is to re-classify the employee as non-exempt (and thus overtime eligible). In addition, employers should keep an accurate record of hours worked by such an employee.

If, after evaluation, an employer determines that there are employees likely to work more than 40 hours in a workweek, there are a few options to consider:

Raise Salaries

Employers may choose to raise the salaries of employees who meet the duties tests and who regularly work over 40 hours per workweek, particularly if their current salaries are close to the new salary level. These employees would remain exempt and no overtime would be due to the employees.

Pay a Salary plus Overtime

In lieu of raising salaries, employers may choose to continue paying employees a salary covering a fixed number of hours of work per workweek, on top of which overtime pay would be due.

One option is to pay employees a salary that covers 40 hours of work per workweek, and then pay overtime at time-and-a-half the employee's regular rate of pay for any hours over 40 in a workweek. This might be a preferred option for employees who work 40 hours per workweek and do not frequently work overtime, or for employees who do not consistently work the same amount of overtime.

A second option is to pay employees a salary for a certain number of hours in excess of 40 hours in a workweek. By doing so, an employer would pay an employee a salary to cover all straight time hours worked, one-half the employee's regular rate of pay for overtime hours included within the salary, and time-and-a-half the employee's regular rate of pay for overtime hours beyond those included in the salary.

For example, let's consider an employee who earns a fixed salary of $41,600 per year for a 50-hour workweek ($800 per workweek). The salary does not include the overtime premium. As the salary is for 50 hours per workweek, the employee's regular rate of pay is $16 ($800/50). In a normal 50-hour workweek, the employer would pay the employee the additional half-time overtime premium for the 10 hours of overtime ($8 per hour). In that normal 50-hour workweek, then, the employee would earn $880. If the employee worked more than 50 hours in a workweek, the employer would also owe overtime compensation at time-and-a-half the employee's regular rate (1.5 x $16 = $24/hour) for hours beyond 50 because the salary does not cover payment for those hours. Therefore, if the employee worked 52 hours in a workweek, the employee would earn $928, which is $880 plus 2 hours of overtime at a rate of $24/hour.

Another option is to pay employees a fixed salary that covers a fluctuating number of hours at straight time. This method permits employers to pay fluctuating workweek employees overtime at the one-half rate, instead of at the time-and-a-half rate. In order to do so, an employer must communicate to the employee that "the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number" and pay the employee a salary large enough to ensure that the employee always earns more than the minimum wage.

Adjust Wages

Another option is for employers to adjust the amount of an employee's earnings to reallocate it between regular wages and overtime, so that the total amount paid to the employee remains largely the same. For example, an employee who satisfies the duties test for the administrative exemption earns a salary of $37,000 per year ($711.54 per week). If the employee regularly works 45 hours per workweek, the employer may choose to instead pay the employee a regular hourly rate of $15 and pay overtime at a rate of time-and-a-half (1.5 x $15 = $22.50) for the 5 overtime hours worked each workweek. By doing so, the employer would pay the employee $712.50 per week.

Reorganize Workloads, Adjust Schedules and Redistribute Work Hours

Last, but certainly not least, employers may consider reorganizing workloads, adjusting employee schedules, and redistributing work hours (which may or may not include hiring new employees) to reduce or eliminate overtime hours.

May 27, 2016

Week in Review

By Eric Lanter

Bill Cosby and An Accuser Could Face Each Other

One of Bill Cosby's alleged victims, Andrea Constand, was set to face Cosby in the course of the criminal proceeding against him in Montgomery County, Pennsylvania. Prosecutors have filed charges against Cosby, saying that the 2004 encounter between him and Constand was a case of criminal sexual assault. At the hearing on Tuesday, prosecutors attempted to demonstrate that they have enough evidence to go to trial. The judge agreed.

http://www.nytimes.com/2016/05/23/arts/television/bill-cosby-and-an-accuser-could-face-each-other-at-pretrial-hearing.html

Bill Cosby Sexual Assault Trial Can Proceed, Judge Rules

Following the prosecutors' presentation of evidence, the judge ruled in the Pennsylvania sexual assault criminal proceeding that the matter will move forward. As this was essentially the first legal skirmish in the action, it is expected that matters will only become more contentious as it progresses.

http://www.nytimes.com/2016/05/25/arts/television/bill-cosby-trial.html

U.S. Soccer and Women's Team Move Toward Trial

On Thursday, lawyers representing the United States Soccer Federation (U.S. Soccer) and the union for the women's national soccer team battled in federal court in Chicago. Judge Sharon Johnson Coleman reserved ruling at the hearing, which increases the chance that the case will go to trial. If there is in fact a trial, it will likely come around the time of the Summer Olympics in Rio de Janeiro, Brazil, where the women's team is set to defend its Olympic gold medal. This action began in February, when U.S. Soccer sued the women's team's union, demanding that it holds the players to their contracts. The players, however, maintain that there is not a valid collective bargaining agreement in place. The court is tasked with resolving this contract interpretation dispute.

http://www.nytimes.com/2016/05/27/sports/soccer/us-soccer-and-womens-team-union-argue-in-court-over-cba.html?_r=0

'The Founder,' Like Ray Kroc, Feasts on McDonald's Imagery

In "The Founder," a film about the rise of the McDonald's Corporation, there is an abundance of McDonald's imagery and trademarks, such as the famous golden arches. All of this raises questions about whether the film's use will fall within the "fair use" exception of using McDonald's intellectual property. One risk is whether the film falsely portrays McDonald's, in which case, the film could be deemed an unauthorized use of trademarks.

http://www.nytimes.com/2016/05/20/business/media/the-founder-like-ray-kroc-feasts-on-mcdonalds-imagery.html

Muirfield Golf Club Barred as British Open Host After Vote Against Female Members

Muirfield Golf Club, a renowned golf course that has been the site of 16 British Opens and dates back to 1744, no longer has the right to host the British Open. This comes as a result of the Club voting against allowing female members, as 64% voted in favor of admitting women, falling short of the two-thirds majority required for the vote. Golf's governing bodies has increasingly sought to eliminate gender discrimination, at least partially in part due to its goal of growing the game.

http://www.nytimes.com/2016/05/20/sports/golf/muirfield-golf-club-british-open-female-members.html

Case Against Photographer Over Paris Massacre Picture is Dismissed

During the November 13, 2015 terrorist attacks in Paris, photographer Maya Vidon-White took a photo of a victim, Cedric Gomet, who was injured. That photograph would be published, supposedly in contravention of a French criminal law, which forbids the publication of photographs of survivors of violent crimes. However, last Friday, the case was dismissed.

http://www.nytimes.com/2016/05/21/world/europe/paris-attacks-maya-vidon-white-photograph.html?_r=0

Sumner Redstone Moves to Replace Ousted Trust Members

In the wake of Sumner Redstone, who is the head of the $40 billion media empire of Viacom, ousting two executives, speculation is abound as to who the replacements will be. It is rumored that the replacements have close connections to Shari Redstone, Mr. Redstone's "long-estranged, recently reconciled daughter." Some see Mr. Redstone's removal of the executives as a long-awaited victory for Ms. Redstone, fueling her hopes to succeed her father.

http://www.nytimes.com/2016/05/23/business/media/criticism-intensities-as-redstone-moves-to-replace-trust-members.html

Redstone and Viacom Executives Go to Court Against Each Other

The ousted Viacom executives are going to court over Sumner Redstone's recent actions taking them off the Board of Directors. The executives accuse Shari Redstone, Mr. Redstone's daughter, of organizing this "unlawful corporate takeover." Mr. Sumner, who has controlled Viacom since 1987, has had his mental capacity questioned, and after an examination, the judge has not made a determination as to his capacity. The ousted executives cite a lack of mental capacity to explain his recent actions.

http://www.nytimes.com/2016/05/24/business/viacom-ceo-sumner-redstone-competency-lawsuit-philippe-dauman.html

Redstone's Great-Grandchildren and Ex-Wife Added to Lawsuit

On Wednesday, attorneys for the ousted Viacom executives added Sumner Redstone's two great-grandchildren and ex-wife, Phyllis Redstone, as nominal defendants in their action. As nominal defendants, they cannot be held liable or responsible for any outcome in the action, but they are named as a result of being beneficiaries of the trust that controls the fate of the $40 billion Viacom empire.

http://www.nytimes.com/2016/05/27/business/media/viacom-directors-add-redstones-great-grandchildren-to-suit.html

Myanmar Poet Who Wrote of Private Tattoo is Convicted of Defaming Ex-Leader

A poet in Myanmar, Maung Saungkha, has been sentenced to a six month jail term for defamation, after he wrote last October that he had a tattoo of the country's president on his penis. While Myanmar has been viewed as limiting censorship in recent years, human rights advocates say that restrictions on free speech still exist, and violating those restrictions is accompanied by great peril.

http://www.nytimes.com/2016/05/25/world/asia/myanmar-poet-tattoo.html

Misconduct Allegations Roil Baylor

Kenneth Starr, the current president and chancellor of Baylor University, as well as the former solicitor general and a federal judge, is the subject of scrutiny after information surfaced that former football players reportedly committed sexual misconduct (two of whom were convicted of such), with no action taken by the University. Law firm Pepper Hamilton investigated Baylor's adjudication and discipline of the students.

http://www.nytimes.com/2016/05/25/sports/ncaafootball/report-over-sexual-assaults-roils-baylor-and-stirs-criticism-of-kenneth-starr-the-universitys-president.html

Baylor Takes Disciplinary Action

On Thursday, Baylor University took disciplinary action, removing Kenneth Starr as the president of the university and firing the football coach, Art Briles. Mr. Starr will remain Baylor's chancellor and a professor at the law school. However, both Mr. Starr and Mr. Briles are being dismissed for their mishandling of the accusations against football players of sexual assault.

http://www.nytimes.com/2016/05/27/sports/ncaafootball/baylor-art-briles-kenneth-starr-college-football.html

Report: BMX Legend Dave Mirra Had Brain Disease CTE

Dave Mirra, the BMX legend who took his life in February, is reported to have had the brain disease chronic traumatic encephalopathy (CTE). CTE is a prominent issue in the National Football League (NFL), as it has been revealed that repeated concussions fosters the disease, which has led to the suicide of numerous former players. Mr. Mirra was one of the most successful athletes in X Games history, racking up 24 medals, with 14 of those gold. He was 41.

http://www.nytimes.com/aponline/2016/05/24/world/ap-cyc-dave-mirra-cte.html

Bubba Smith, NFL Star and Actor, Had CTE

Bubba Smith, an All-Pro defensive end in the NFL had the degenerative brain disease CTE when he died in 2011. This was confirmed by researchers affiliated with the Department of Veterans Affairs, Boston University, and the Concussion Legacy Foundation. Mr. Smith is the 90th former NFL player found to have CTE, of the 94 former professional players that were examined.

http://www.nytimes.com/2016/05/25/sports/football/bubba-smith-cte-nfl-concussion.html

Russia Says 14 that of its Athletes are Suspected of Doping at Beijing Olympics

The Russian Olympic Committee announced on Tuesday that 14 of Russia's athletes in the 2008 Summer Olympics in Beijing tested positive for doping. This comes after the International Olympic Committee retested 454 doping samples from the Beijing Olympic Games. Russia's Olympic Committee's announcement follows chemist Grigory Rodchenkov's announcement that he developed a three-drug cocktail of steroids and liquor that allowed Russian athletes to evade detection during performance enhancing drug tests and also ensure Russia's dominance in international competition.

http://www.nytimes.com/2016/05/25/sports/olympics/russia-names-14-implicated-in-doping-at-the-2008-olympic-games-in-beijing.html

Russian Vaulter Threatens Lawsuit

After the International Association of Athletics Federations (IAAF) suspended Russia's athletics federation, two-time Olympic pole vault champion Yelena Isinbayeva said she will file a lawsuit if the ban is upheld and she cannot compete in Rio de Janeiro for the 2016 Summer Olympics. The IAAF is set to rule next month on whether Russia will be reinstated prior to the beginning of the Games.

http://www.nytimes.com/2016/05/24/sports/brady-appeals-for-a-new-hearing-in-the-deflategate-case.html

PayPal Founder Said to Bankroll Hulk Hogan's Suit Against Gawker

Peter Thiel, a billionaire entrepreneur and philanthropist who founded PayPal, privately agreed to fund Hulk Hogan's fees in his action against Gawker Media for invasion of privacy. Mr. Thiel's connection to Gawker goes back to 2007, when Gawker published an article outing Mr. Thiel as gay. That led Mr. Thiel to call Gawker "the Silicon Valley equivalent of Al Qaeda." Legal observers questioned whether Hulk Hogan, whose real name is Terry Bollea, had financial support for his lawsuit when his lawyer removed a claim that had the effect of eliminating Gawker's insurance company from the case.

http://www.nytimes.com/2016/05/25/business/dealbook/peter-thiel-is-said-to-bankroll-hulk-hogans-suit-against-gawker.html

Gawker's Founder Speaks Out

On Thursday, a day after Peter Thiel, the billionaire founder of PayPal, announced that he bankrolled Hulk Hogan's lawsuit against Gawker, the founder of Gawker, Nick Denton, released his own statement. He accused Mr. Thiel of being "thin-skinned" and a "comic book villain," and challenged Mr. Thiel to "a public debate about the role of journalism in society." Mr. Denton summed up Mr. Thiel's involvement as "vindictive", but also pointed out that his involvement now opens him up to public scrutiny.

http://www.nytimes.com/2016/05/27/business/dealbook/gawker-sale-peter-thiel.html

Google Prevails as Jury Rebuffs Oracle in Code Copyright Case

A jury ruled in favor of Google on Thursday, after a long legal dispute with Oracle regarding the software used on most smartphones. While Oracle argued that Google had used copyrighted material in 11,000 of its 13 million lines of software code in Android, Google claimed that it made fair use of the code, owing nothing to Oracle. Oracle's general counsel stated that the company planned to appeal.

http://www.nytimes.com/2016/05/27/technology/google-oracle-copyright-code.html

Settlement in Dispute Over Picasso Bust

A dispute about ownership of a Picasso bust was settled in New York District Court on Monday, with no public information available about the terms of the settlement. The dispute arose between two major collectors, the Qatari royal family and Leon Black, the chairman of the Apollo private equity firm and co-chairman of the Museum of Modern Art. The work, a bust of Marie-Therese Walter, last sold in May of 2015 for approximately $106 million.

http://www.nytimes.com/2016/05/25/arts/design/settlement-reached-in-dispute-over-ownership-of-picasso-bust.html

Political Light Installation on Hong Kong Skyscraper is Pulled

Artists Sampson Wong and Jason Lam installed an art installation by displaying a cryptic political message on the facade of Hong Kong's tallest building. The installation was effectively a countdown timer to July 1, 2047, the date when the former British colony's status as a handover to China expires. Officials and exhibition organizers pulled the plug on the installation, citing the artists' "disrespect" in changing the work without prior permission.

http://www.nytimes.com/2016/05/24/world/asia/hong-kong-2047-countdown-icc.html

Brady Appeals for a New Hearing in the Deflategate Case

Lawyers for Tom Brady have requested an en banc hearing before the Second Circuit Court of Appeals in the "Deflategate" case, arguing that the action involves a basic right to fair process, shared by all union workers, and the issue of underinflated footballs is ancillary to that. Mr. Brady's attorneys argued that Commissioner Goodell's "biased, agenda-driven and self-approving appeal ruling must be vacated."

http://www.nytimes.com/2016/05/24/sports/brady-appeals-for-a-new-hearing-in-the-deflategate-case.html

Patriots Join Deflategate Fight in Court for First Time

The New England Patriots organization has filed an amicus curiae brief with the Second Circuit Court of Appeals, arguing that it "stand[s] to lose their All-Pro quarterback for 25 percent of the upcoming regular season based on a severely flawed process." Robert Kraft, the owner of the Patriots, is a staunch proponent for Commissioner Roger Goodell, so this brief comes as a surprise to some analysts. However, Mr. Kraft is seeking to protect his four-time Super Bowl winning quarterback, Tom Brady, from sitting on the sidelines in the upcoming season.

http://www.nytimes.com/aponline/2016/05/25/us/ap-fbn-brady-lawsuit-appeal.html

Tony Gwynn's Family Sues Tobacco Industry, Seeking Recourse Over Fatal Habit

The family of Tony Gwynn, the Baseball Hall of Fame member who died in 2014 of salivary gland cancer, filed a wrongful death lawsuit in San Diego against the tobacco industry, alleging that Mr. Gwynn was manipulated into becoming addicted to smokeless tobacco, which killed him. Mr. Gwynn used up to two cans of smokeless tobacco each day for 31 years. While the family alleges that companies like Philip Morris induced him to become addicted to smokeless tobacco, analysts expect that the defendants will take the typical position of blaming the victim.

http://www.nytimes.com/2016/05/24/sports/baseball/tony-gwynn-family-sues-tobacco-altria-death.html

NFL Tried to Influence Concussion Research, Congressional Study Finds

A Congressional committee released a report that is damaging to the NFL, alleging that the NFL attempted to influence government research regarding concussion research by steering the study toward a doctor that had ties to the NFL. Dr. Robert Stern, the director of clinical research for Boston University's CTE Center, allegedly had a study directed away from him, which some believe is because Boston University's CTE Center has become a leader in researching CTE, the degenerative brain disease. The impetus for this Congressional report began in December of 2015, when the NFL was rumored to be backing out of its promises to objectively fund concussion research.

http://www.nytimes.com/2016/05/24/sports/football/nfl-tried-to-influence-concussion-research-congressional-study-finds.html

Kermit Washington Accused of Stealing from His Charity

Former NBA star Kermit Washington was accused of embezzling approximately $500,000 in charitable donations to his charity that were to be spent in Africa helping the needy. Instead, Mr. Washington allegedly spent that money on "jewelry, vacations and other things." The U.S. Attorney for the Western District of Missouri, Tammy Dickinson, stated that Mr. Washington was using his celebrity status to take advantage of others' goodwill, for his benefit, as a "very small fraction" of the money collected for Project Contact Africa allegedly actually went to the charity.

http://www.nytimes.com/aponline/2016/05/25/us/ap-us-kermit-washington-arrest.html