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July 1, 2011

Take Me Out to the Courts: the Los Angeles Dodgers File for Bankruptcy

By Marie-Andrée Weiss

On Monday June 27th, the Los Angeles Dodgers, owned by Frank McCourt, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. Bankruptcy filing is the last episode of a saga that had been featured in the news for some two years now.

The bankruptcy filing lists the creditors holding the 40 largest unsecured claims. Among them are Manny Ramirez, the now-retired slugger who is owed $20,992,086, and Andruw Jones, now playing for the New York Yankees, who is owed $11,075, 000. The assets of the team are listed in the filing as being 500,000,001 to one billion dollars. Major League Baseball (MLB) Commissioner Bud Selig issued a statement the same day, writing that "[t]he action taken today by Mr. McCourt does nothing but inflict further harm to this historic franchise."

Indeed, the Dodgers are an historic baseball team, still dear to many New Yorkers, whether or not they can remember when the Brooklyn Dodgers became the Los Angeles Dodgers in 1958. It is the team of Jackie Robinson, Sandy Koufax, and Pee Wee Reese, a team which won six World Series titles, one of these titles while still playing at Ebbets Field.

Jamie and Frank McCourt bought the franchise in 2004. After the couple commenced divorce proceedings in 2009, the question of whether the team was community property, and thus co-owned by Ms. McCourt, or whether it was owned solely by Mr. McCourt, became contentious.

Citing "deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball," Commissioner Selig seized control of the Dodgers on April 20, 2011, and took over day-to-day operations of the club. Mr. Selig then appointed Tom Schieffer, a former president of the Texas Rangers, to monitor the franchise.

On June 17, 2011, Frank and Jamie McCourt agreed to a binding divorce settlement. The court would then have conducted a one-day trial to characterize the Dodger's assets as community property, or as Mr. McCourt's sole property. However, the agreement was contingent upon MLB approving a proposed transaction with Fox. Mr. Selig, however, rejected a 17-year, $2.7 billion deal with a Fox, citing the "best interests of Baseball" clause of the MLB Constitution when rejecting the deal between the Dodgers and Fox. Mr. McCourt planned to use some $150 million from the deal to settle his divorce with Jamie McCourt, and to pay off some of his debts.

MLB and its two constituent members, the National and the American Leagues, is largely self-regulated, and operates under its own private rules, the MLB Constitution, the document governing all major league baseball franchises. Article II § 2(b) of the MLB Constitution describes the Office of the Commissioner of Baseball as being "Chief Executive Officer of Major League Baseball" and gives him the power to "investigate, either upon complaint or upon the Commissioner's own initiative, any act, transaction or practice charged, alleged or suspected to be not in the best interests of the national game of Baseball."

Indeed, the office of the Commissioner stems from the "Black Sox scandal" of 1919, when players of the White Socks team "threw" World Series games. Baseball club owners (16 at the time) decided in 1920 to have one sole commissioner of baseball, and Judge Kenesaw Mountain Landis was appointed in 1921 as the first Commissioner of Baseball. The team owners pledged to "loyally... support the Commissioner in his important and difficult task..."

Baseball clubs are still privately owned, by persons of great wealth, and more often than not, big personalities. George Steinbrenner will not be forgotten any time soon in New York, and Frank and Jamie McCourt were wealthy real estate developers when they bought the team. However, Article II § 3(c) of the Baseball Constitution gives the Commissioner the right to suspend or remove any owner of a Major League club. The sale of a team must be approved by a vote of the MLB owners, who indeed voted unanimously in 2004 to approve the sale of the Dodgers to the McCourts.

Pursuant to article II § 4(ii)(l) of the MLB Constitution, "[t]he rights, privileges and other property rights of a Major League Club hereunder and under any other Baseball-related agreement may be terminated... if the Club in question... files a voluntary petition in bankruptcy." The New York Times reported on June 30 that MLB may plan to use this rule and to ask the court to let it take control of the Dodgers.

What could be next? According to the New York Times, the Dodgers and the MLB agreed on June 29 to let the Dodgers accept interim financing from an outside lender in order to continue to operate, and agreed that the loan would not have to be tied to a sale of the team's future television rights. This compromise was approved by Judge Kevin Gross in the U.S. Bankruptcy Court in Wilmington, Delaware. However, the MLB contended in court that the Dodgers should have first obtained approval from Mr. Schieffer, the MLB-appointed monitor, before filing for bankruptcy.

Two other baseball teams have filed for bankruptcy in the last two years, the Chicago Cubs in 2009, and the Texas Rangers in 2010. Before that, the Seattle Pilots was the last baseball team to have filed for bankruptcy in... 1970. In the case of the Texas Rangers, the general partnership operating the Rangers had entered into an agreement with the Commissioner of Baseball, giving the Commissioner certain rights concerning the sale of the team, and the Commissioner contended that the agreement gave him the right to bar any unapproved sale of the team. The bankruptcy Judge, however, ordered the team to be sold at an open auction, not to a preferred bidder.

Meanwhile, baseball is still America's favorite summer pastime. The MLB reported the best weekend attendance since 2008 during last Father's Day weekend, when 1,646,000 spectators attended the 45 games played over the weekend.

Bankruptcy filing: http://online.wsj.com/public/resources/documents/dodgers.pdf

Bud Selig statement re bankruptcy filing, June 2011: http://mlb.mlb.com/news/press_releases/press_release.jsp?ymd=20110627&content_id=21076822&vkey=pr_mlb&fext=.jsp&c_id=mlb

Bud Selig statement re Dodgers, April 2011: http://mlb.mlb.com/news/press_releases/press_release.jsp?ymd=20110420&content_id=18038724&vkey=pr_mlb&fext=.jsp&c_id=mlb


Entertainment Merchants Association

By Jason E. Carlie

On Monday, the Supreme Court struck down a California statute that prohibited the sale or rental of "violent video games" to minors, required modification of the labeling of their packaging, and established a civil fine of up to $1000 for violations. Cal. Civ. Code Ann. §§1746-1746.4 (West 2009). The statute, challenged by representatives of the video game industry, covered games "in which the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being, if those acts are depicted" in a way that "[a] reasonable person, considering the game as a while, would find appeals to a deviant or morbid interest of minors," "patently offensive to prevailing standards in the community as to what is suitable for minors," that "causes the game, as a whole, to lack serious literary, artistic, political, or scientific value for minors." Id. at §1746(d)(1)(A).

The majority opinion written by Justice Scalia, with Justices Kennedy, Ginsburg, Sotomayor and Kagan concurring, concluded that videogames communicated ideas and as such, were protected by the First Amendment.

Relying upon its decision in United States v. Stevens from the previous term, the majority stated that "new categories of unprotected speech may not be added to the list by a legislature that concludes certain speech is too harmful to be tolerated." Under Stevens, a facial challenge based on the First Amendment can succeed only if "a substantial number of its applications are unconstitutional, judged in relation to the statute's plainly legitimate sweep." U.S. v. Stevens, 559 U.S. __,___ (2010). It is more difficult to mount a facial First Amendment attack on a statute that seeks to regulate activity that involves action as well as speech. Broadrick v. Oklahoma, 413 U.S. 601, 614-615 (1973). The Court stated that Stevens controlled Entertainment Merchants Association, and opined that "California has tried to make violent-speech regulation look like an obscenity regulation by appending a saving clause" and analogized the statute at issue attempting to mimic the obscenity-for-minors statute upheld in Ginsberg v. New York.

The Court noted that "[i]t is rare that a regulation restricting speech because of its content will ever be permissible." California acknowledged that it could not show a direct causal link between violent video games and harm to minors. The Court criticized the State's reliance on Turner Broadcasting System v. FCC, 512 U.S. 622 (1994), which applied intermediate scrutiny to content-neutral regulation. The California statute at issue in Entertainment Merchants Association, however, is content-specific, and as a result, must meet a strict scrutiny which requires that the California law must be "narrowly tailored" to further a "compelling interest" without there being a "less restrictive" alternative that would be "at least as effective." Reno v. American Civil Liberties Union, 521 U.S. 844, 874, 875, 879 (1997).

The California statute at issue suffered from three insurmountable issues. It was under-inclusive in two respects. First, it singled out video game creators and compared them against other kinds of speakers, such as "booksellers, cartoonists, and movie producers," without giving any "persuasive reason why." As such, the statute raised "serious doubts about whether the government is in fact pursuing the interest it invokes, rather than disfavoring a particular speaker or viewpoint."

Second, the Court felt that the statute was under-inclusive, in that California is "perfectly willing to leave this dangerous, mind-altering material in the hands of children so long as one parent [or guardian]" approves of it. Further, the majority also notes that there weren't any requirements to verify the nature of the relationship. This appeared to the court to be a rather lax way to address "a serious social problem."

As a result, California could not show that the statute's restrictions "meet a substantial need of parents who wish to restrict their children's access to violent video games but cannot do so." The Court then pointed to the video-game industry's voluntary rating system designed to inform consumers about each games' content.

Third, the Court held that the Act was wildly over-inclusive. It pointed out that "[n]ot all of the children who are forbidden to purchase violent video games on their own have parents who care whether they purchase violent video games." The Statute's entire effect, according to the Court, "is only in support of what the State thinks parents ought to want." (emphasis in original). Thus, the statute was not narrowly tailored to assisting parents, as the First Amendment requires.

Justice Alito, in his concurrence, would reach the same conclusion, but instead chose to focus on the "impermissibly vague" argument that the video-game industry raised.

Justice Alito started by citing the due process rule, requiring that laws give people of ordinary intelligence fair notice of what is prohibited. Grayned v. City of Rockford, 408 U.S. 104, 108 (1972). Then he pointed out several deficiencies that, in his opinion, rendered the statute void for vagueness. First, the California statute did not define "violent video games" with the "narrow specificity" the Constitution requires. Second, California "relied on undefined societal or community standards" as to what is suitable for minors. The California law is heavily dependent on the identification of generally accepted standards regarding the suitability of violent entertainment for minors, while leaving such critical terms as "deviant" and "morbid" undefined in the statute.

Moreover, the fact that there is no jurisprudence on the books regarding the standards for expression related to violence further weakens the state's failure to define what he felt were critical terms.

Justice Alito disagreed with the majority that Stevens controlled the analysis, because the statute in that case was sharply different from the one in Entertainment Merchants Association. Stevens related to a law that "broadly prohibited any person from creating, selling, or possessing depictions of animal cruelty for commercial gain." The Justice stated that the California statute in Entertainment Merchants Association "limited the sale or rental of violent video games to minors," and pointed out that there was no restriction on the creation of the games, nor was there one against adults from purchasing them.

Stevens, according to Alito, does not support the proposition that a law like the violent video games law has to satisfy strict scrutiny. For Justice Alito, the end result is that the majority opinion is a "sweeping" suggestion that "no regulation of minors' access to violent video games is allowed - at least without supporting evidence that may not be realistically obtainable given the nature of the phenomenon in question."

Justice Thomas' dissent took a novel approach. He did not rule on the statute on First Amendment grounds, essentially holding that minors have no constitutional right to speak or be spoken to without their parents' consent. There is no case citation supporting that proposition. It appeared to be an exercise in discerning what the Framers envisioned for the First Amendment's application to children via extended references to historical books on the nature of colonial- and post-Revolutionary War- era childrearing.

Justice Breyer's dissent applied a more conventional approach. He applied both the Court's vagueness precedents, and Stevens. He opined that the special category of protection is not "depictions of violence," but rather the protection of children. He would hold that the California statute provides fair notice of the prohibition, and therefore, it isn't impermissibly vague, in contrast to Justice Alito's concurring opinion. Breyer also believed that the California law survived strict scrutiny in that it was narrowly tailored, furthered a compelling state interest, and there was no less restrictive alternative that was at least as effective. Applying that rule, he would find that California's law imposed merely a modest restriction on expression, prevented no one from playing a video game, no adult from buying one, and no minor from getting one if a parent got one for them. To him, the California law advanced a compelling state interest in that the basic parental claim to authority over childrearing makes it proper to enact laws designed to further that cause, and the State's independent interest in the well-being of youth. He eschewed the majority's acknowledgement of the video-game industry's voluntary rating system as a less restrictive alternative as least as effective. Thus, he found that the law is not fatally under-inclusive, and cited many psychological studies to support his opinion.

July 5, 2011

DANCING AROUND THE ISSUE OF COPYRIGHT OF CHOREOGRAPHIC WORKS

By Merlyne Jean-Louis

Identical twins Laurent and Larry Bourgeois (known professionally as Les Twins), who are currently touring with Beyonce Knowles, are two of new style/studio hip-hop dance's rising stars. In 2010, on the San Diego leg of the World of Dance Tour, the brothers performed an eight minute self-choreographed routine that displayed their remarkable technical ability and quirky personalities. (See http://www.youtube.com/watch?v=_XLGYxeL1iQ.) In June 2011, Fox broadcasted a portion of the audition piece of D*Day, an Atlanta hip-hop dance duo, on the dance competition "So You Think You Can Dance." For one minute, practically step for step, D*Day performed a sequence from Les Twin's routine. As a result, judges allowed D*Day to proceed to the next stage of the competition. Some of Les Twins' outraged fans posted on YouTube videos that compared both routines to ensure that the "biters" did not become finalists on the show. (See http://www.youtube.com/watch?v=3s1doSilyQc.) If Les Twins desired to do something about this controversy, they would have a powerful weapon in their artillery: copyright.

Note: Because the twins are from France, they would probably choose to enforce their copyright under French Law or the Berne Convention. To simplify the legal analysis, I use American law.


Requirements of Copyright Protection for Choreographic Works

To qualify for copyright protection under the Copyright Act of 1976, a choreographer must satisfy three requirements. First, a choreographer must create a choreographic work. Although the 1976 Act defines the majority of copyrightable subject matter, the statute does not define the term choreographic works. However, the U.S. Copyright Office provides a standard definition for the term choreography ("the composition and arrangement of dance movements and patterns, and is usually intended to be accompanied by music") and dance ("static and kinetic successions of bodily movement in certain rhythmic and spatial relationships"). (Compendium of Copyright Practices ("Compendium II") §§ 450, 450.01 (1984).) Although Compendium II prohibits the copyrighting of dance steps and simple routines, such as the basic waltz step, the manual permits copyright registration of dances that incorporate of improvisation, which is relevant to many forms of hip-hop dance. Given these provisions, even though it contains improvised moves, the Les Twins' piece does constitute a choreographic work.

Second, the choreographic work must also qualify as an "original work[] of authorship." (Copyright Act of 1976, 17 U.S.C. § 102(a) (2010).) Today, a work is deemed to be original if it is "independently created by the author [and if] it possesses at least some minimal degree of creativity." (Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991).) A choreographic work can be deemed to be original if similarity to another piece is "fortuitous [and] not the result of [deliberate] copying." (Id.) Thus, because the twins created the work and it is creative, the Les Twins piece is original.

Third, the choreographic work must be "fixed in any tangible medium of expression" in a manner that it "can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." (17 U.S.C. § 102(a).) Currently three forms of fixation for choreography satisfy the Act's requirement: video recording, notation, and computer technology. As the Les Twins' piece was recorded and posted on YouTube by Yak Films, the work was fixated. Thus, assuming that the Bourgeois brothers 1) jointly claim copyright of the piece and 2) do not encounter work for hire issues, Les Twins own the copyright of the World of Tour piece under American law.

Potential Claims of Les Twins

As copyright protection provides the holder with a bundle of exclusive rights, Les Twins could have three major claims. First, the brothers could sue D*Day for infringing upon their right to perform, because D*Day performed most of Les Twins' piece in front of judges and other dancers in Atlanta's Fox Theater. (See 17 U.S.C. §§ 101 (defining public performance), 106(4) (enumerating exclusive right).) Second, because D*Day used dance moves that differed from those used in the Les Twins' piece, the Bourgeois brothers could claim that D*Day created a derivative work of their piece. (See 17 U.S.C. § 106(2).) Finally, Les Twins could sue Fox Television for transmitting the infringing D*Day piece to the American audiences via television and the Internet. (See 17 U.S.C. § 101.)

Potential Defenses of D*Day and Fox

D*Day and Fox could have some potential defenses to such a lawsuit. D*Day could claim that use of the Les Twins piece constituted fair use, because the members were somehow commenting on the piece or teaching the judges about new style/studio hip-hop dance. Balancing the four factor test of fair use, this defense would probably fail, however, because D*Day used a substantial portion of the Les Twin piece and used it for a commercial purpose (to audition for a show on which they could ultimately win $250,000). (See 17 U.S.C. 107.) With respect to the second claim, although D*Day could claim that the piece was sufficiently original and unlike that of Les Twins', this claim would also probably fail because D*Day stated that the piece was a tribute to and inspired by Les Twins. Finally, with respect to Les Twins' third claim, Fox could state that the piece was not transmitted over the Internet, because a viewer would have to take proactive steps to download and view the video of the show that displayed the D*Day audition piece. This defense could survive.

The Implications of a Suit by Les Twins

Although Les Twins can benefit from copyright protection of their works, they have chosen not to enforce their exclusive rights. This is most likely because of the dance culture: choreographers are honored and feel respected when others perform their pieces. According to D*Day, Les Twins told the group not to worry about the negative feedback from Les Twins' fans and wished them luck in the next stage of the dance competition. When Les Twins were asked about the D*Day incident by a dance magazine, Les Twins avoided answering the question. They do not even realize that Fox Television, whose legal department ensures that it secures all licenses for the music used on "So You Think You Can Dance" to avoid lawsuits, is not concerned about a suit from choreographers whose works they transmit on television.

Thus, my hypothetical suit will not occur. As evidenced by the action of the fans, most members of the hip-hop dance community may not even know about copyright protection. Until dance's most recognized choreographers start to enforce their copyright, all choreographers (especially the average, less known choreographers) will not be able to fulfill their earning potential.

The State of Copyright Protection for Choreographic Works in General

Using copyright law is an excellent tool because it assists most who devote their time to creating art to reap the financial benefits of their works. While copyright protection can serve well other artistic industries, the law as it stands does not help most choreographers. In essence, average choreographers encounter hurdles from the moment they attempt to secure copyright protection to when they file infringement suits because of the lack of clear standards from the judiciary as to the boundaries of their copyrights.

How is the state of copyright protection and choreography? Currently, the two are not dancing in unison.

About July 2011

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in July 2011. They are listed from oldest to newest.

June 2011 is the previous archive.

August 2011 is the next archive.

Many more can be found on the main index page or by looking through the archives.