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Week in Review

By Martha Nimmer

Concussion Case Closed?

The National Football League (NFL) has agreed to a $765 million settlement with roughly 4,500 former NFL players who alleged brain injuries caused by repeated concussions on the playing field. This announcement came last Thursday after two months of negotiations. Notably, the settlement does not include any admission of liability from the NFL. The $765 million settlement, if approved by presiding U.S. District Court Judge Anita Brody, will go towards compensating "the 4,500 or so living plaintiffs who claim dementia and other injuries, as well as fund medical exams and medical research." Specifically, $675 million "will go to compensate former players who have suffered cognitive injuries." As much as $75 million, it is rumored, will be earmarked for medical exams. The remainder of the settlement funds will be devoted to research and providing notices to class members. Additionally, according to the American Bar Association, "an unspecified amount of legal fees will be paid separately in addition to the settlement amount." Under the agreement's framework, the NFL is required to pay 50% of the settlement amount over three years, and the balance over the following 17 years.

The settlement, hailed by Judge Brody as "historic," came just a week before the NFL regular season began. The NFL will benefit from the agreement by avoiding a finding of liability. It can also avoid long, drawn out discovery regarding "what the league knew and when concerning a claimed connection between head injuries and degenerative brain disease, as well as the possibility of a mega-verdict if the case had gone to trial that could have made it difficult or impossible for the NFL to obtain insurance coverage." As for both current and retired players and survivors of players who have died, those parties "will be taken care of without having to fight a lengthy court battle," stated plaintiffs' attorneys. Parties who want to pursue separate claims are still able to opt out of the proposed settlement.



Happy Birthday to No One

Warner/Chappell Music wants you to have a happy birthday, but whatever you do, do not sing the "Happy Birthday" song, at least not without a license. Why? Well, according to Warner/Chappell Music, the "English language's most recognized song" is not in the public domain.

Last Friday, the mega music publisher went to court to respond to a lawsuit that claims that "Happy Birthday" is in the public domain. According to The Hollywood Reporter, the plaintiff in the "Happy Birthday" case has "traced the origins of the popular composition to a schoolteacher named Patty Smith Hill and her sister Mildred Hill in the late 19th century." The plaintiff also provided evidence that "much of what we know about the song was already published by the time a copyright registration was attempted. As such, the lawsuit seeks to confirm that 'Happy Birthday,' if there ever was a valid copyright to any part of the song, expired no later than 1921 and that if defendant Warner/Chappell owns any rights to 'Happy Birthday,' those rights are limited to the extremely narrow right to reproduce and distribute specific piano arrangements for the song published in 1935."

Unsurprisingly, Warner/Chappell is moving to dismiss this action. First, the publisher says that allegations by the plaintiff that Warner/Chappell violated California unfair competition and false advertising laws are "preempted by federal copyright law." Additionally, the defendant is also "looking to have the lawsuit narrowed by having a judge reject state-based claims." These arguments aim to limit Warner/Chappell's liability "and to test the resolve of the plaintiffs' attorneys."

In the meantime, find another way to wish your loved one a happy birthday, preferably a way not set to music!


Read the motion to dismiss here: http://www.scribd.com/doc/165236111/wchb

Sirius Problems

SiriusXM has some major legal problems: the satellite radio giant was just hit with its fourth $100 million lawsuit in the last month--and you thought you had problems!

The satellite radio company's latest legal woes arose from its longstanding assumption that SiriusXM had "the right to distribute and perform pre-1972 recordings." Turns out, however, that this may not be the case. Last month in California court, Flo & Eddie of the music group the Turtles filed a "proposed $100 million class-action lawsuit against the satellite radio giant, premised on the theory that because sound recordings didn't fall under federal copyright protection until 1972, then SiriusXM couldn't rely on statutory royalty rates for these older tunes." The duo did not stop there, however. The plaintiffs recently filed another, similar lawsuit in New York, and then filed a third proposed class action suit in Florida. SoundExchange then initiated its own $100 million lawsuit last week against SiriusXM, alleging that the satellite radio company should not have subtracted recordings made before 1972 from gross revenue calculations. Specifically, SoundExchange avers that "SiriusXM has taken the position that the federal statutory license does not cover pre-1972 sound recordings, and on information and belief, SiriusXM is not separately licensing the pre-1972 sound recordings from their owners, even though they are subject to common law copyright or equivalent protection under state law."

The defendant, likely still reeling from this string of $100 million legal actions, has not responded to any of the suits, "except to remove one filed in California state court to California federal court." Given the financial magnitude of the lawsuits facing SiriusXM, a response should be coming soon.


Taxing the King of Pop

Yes, even music royalty has to pay taxes, although this reality may have eluded the executors of Michael Jackson's estate.

The Internal Revenue Service (IRS) is currently seeking more than $700 million in tax penalties from the pop star's estate. The IRS has valued Jackson's estate at more than $1.1 billion, claiming that executors "significantly undervalued his property, resulting in a tax deficiency of more than $505 million and additions to tax of more than $196 million." In July, the singer's estate filed a petition that challenged the numerous deficiencies and penalties alleged by the IRS; in that petition, specific dollar valuations were redacted. The IRS, in turn, responded last week and "included a non-redacted copy of the government's deficiency notice." One of the assets of note is a 2001 Bentley Arnage driven by the deceased recording artist and valued by the estate at $91,600; the IRS, in contrast, valued the car at a cool $250,000. Other assets noted in the deficiency notice include: Jackson's "share of artist mechanical rights related to Jackson 5 master recordings," valued by the estate at $11.19 million, compared with $45.49 million by the IRS; tangible personal property valued by the estate at zero, compared with $47.46 million by the IRS; and a contingency non-appearance and cancellation policy issued by Lloyd's of London, valued by the estate at zero, compared with $17.5 million by the IRS. Most notably is the divergent valuation of Jackson's "image and likeness." While the Jackson estate claimed the ridiculously low value of a mere $2,105 for Jackson's image and likeness, the IRS determined a value of more than $434 million. The generally applied method for valuing an individual's image and likeness when he or she dies, according to Bloomberg News, is to "use an income-stream model where the executor "forecasts the income streams to be earned in the future and applies a capitalization rate to reach a present value." Perhaps the Jackson estate should check its math...


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This page contains a single entry from the blog posted on September 7, 2013 11:50 AM.

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