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January 2, 2014

Week in Review

By Martha Nimmer

Welcome to the Public Domain, Detective

Late last month, an Illinois federal judge declared the famous British detective Sherlock Holmes to be in the public domain.

Author and editor Leslie Klinger initiated the lawsuit in February of last year, seeking a declaration that many of the stories and characters in the Holmes oeuvre had passed into the public domain. Klinger, a Sherlock Holmes expert who authored The New Annotated Sherlock Holmes and contributed to an anthology called In the Company of Sherlock Holmes, went to court after repeatedly being threatened with legal action by the estate of Sir Arthur Conan Doyle.

How, exactly, could a character who first appeared in publication in 1887 not be anything but public domain, you ask? As noted by The Hollywood Reporter, "all but about 10 of Doyle's Sherlock Holmes stories predate 1923, and the essential issue of this dispute was to determine what that meant exactly." In response to Klinger's suit, the Doyle estate argued that the Sherlock Holmes character was developed over time in a series of works that spanned decades, which would make it virtually, if not impossible, to carve out the detective's "personality into both in- and out-of-copyright parts." Essentially, the estate's attorneys averred, "to deny the estate copyright on the whole character would be to give the detective 'multiple personalities.'"

Unfortunately for the late author's estate, U.S. District Judge Ruben Castillo was unconvinced, stating that "[i]t is a bedrock principle of copyright that 'once work enters the public domain it cannot be appropriated as private (intellectual) property,' and even the most creative of legal theories cannot trump this tenet." Judge Castillo was careful to point out, however, that some elements of the Sherlock Holmes story are still protected by copyright. Dialogue, characters and traits first introduced in stories published after 1923 are still subject to copyright.

http://www.hollywoodreporter.com/thr-esq/sherlock-holmes-judge-declares-popular-667755

Read the complaint here: http://www.scribd.com/doc/125702680/Holmes

Read the ruling here: http://www.scribd.com/doc/194106658/Gov-uscourts-ilnd-280181-40-0

Oh, Snap

On New Year's Day, millions of Snapchat users were greeted with news that a hacker had published a database said to contain 4.6 million Snapchat user names and phone numbers. The popular disappearing photo app, which boasted 350 million users as of September, has yet to comment on the data breach.

The hacker, or hackers, known as "Lightcontact," originally posted the database on the social news and entertainment website Reddit, as well as on a website called SnapchatDB.info. The site was removed, "but not before the data quickly circulated around the Web, with programmers building web tools - such as GS Lookup and Snapcheck - to help Snapchat users check to see if their own user names or phone numbers were leaked," writes The Wall Street Journal. Snapchat users around the world have found their user names and phone numbers in the database.

This data security breach comes just five months after Gibson Security, a computer security research firm, warned the Venice Beach, California-based company that its data were vulnerable to hacking. After its warnings went unheeded, Gibson Security published a blog post, alerting Snapchat users to the risk of personal data theft.

http://blogs.wsj.com/digits/2014/01/01/snapchat-alleged-leak-4-million-users/

"Bound" to Be Sued

The music video for Kanye West's new single, "Bound 2," has received attention from comedians and talk show hosts. The (bizarre) video for the song features Kanye West on a motorcycle, with a naked Kim Kardashian holding on to the singer as they ride off into a southwestern sunset. Despite the inexplicable video, the song itself has become quite popular. Unfortunately for West, this acclaim has also brought with it certain legal implications.

Last month, Ricky Spicer, the former soul singer of The Ponderosa Twins Plus One, filed suit in New York court against West, Roc-a-Fella Records, Universal Music Group and Island Def Jam Music Group. According to the complaint, Spicer seeks an "injunction and damages for alleged violations of New York civil right of publicity law (section 51), unjust enrichment and common law copyright infringement."

The suit states that the plaintiff's voice is the audible, albeit altered, "vocal heard throughout the chorus of the Yeezus track, singing the lyrics, 'Bound, bound / Bound to fall in love.'" Specifically, "Mr. Spicer's voice is sampled exactly as he recorded it and his voice, altered by the Defendants, is also heard several times," the 13-page complaint states. Spicer further alleges that this audio was sampled without his authorization, and that he has received no compensation for its use.

Spicer was discovered in the late 1960s after singing with friends at a local high school talent competition. According to The Hollywood Reporter, "Chuck Brown of Suru Records introduced [Spicer] to The Ponderosa Twins, and the group recorded 'Bound' when Spicer was 12 years old. Though he performed with Gladys Knight and James Brown, the court papers say that 'for all of his accomplishments, Mr. Spicer was not fairly compensated.""

http://www.hollywoodreporter.com/thr-esq/kanye-west-sued-bound-2-667655

http://www.cnn.com/2013/12/24/showbiz/kanye-west-sued/index.html

Read the complaint here: http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/west.pdf

Little Bill, Big Problems

Heirs of the late-artist Varnette Patricia Honeywood have sued Viacom, MTV and Nickelodeon for allegedly defrauding the cartoon artist's estate of millions of dollars of residuals for her work on the "Little Bill" cartoon series, based on books by (nonparty) Bill Cosby.

Filed in Los Angeles Superior Court, the heirs' complaint claims that Honeywood, who died in 2010, created the original art for the "Little Bill" television series, "which the defendants exploited, 'but failed and continue to pay substantial 'residual' compensation due" to the trust." According to the suit, this residual compensation amounted to over $500,000 a year for broadcasts of the cartoon in just the Los Angeles television market alone.

The series, set in Philadelphia, feature an imaginative and inquisitive five year old boy -- "Bill/little Bill" -- and his family members. The main character is based on Bill Cosby's deceased son, Ennis William Cosby. The series is broadcast by the Nick Jr. Network, sister channel of Nickelodeon.

Honeywood's heirs demand an accounting, money owed plus interest, and damages for fraud and breach of contract.

http://www.entlawdigest.com/2014/01/02/2888.htm

January 8, 2014

Capitol Records, LLC et al. v. Vimeo LLC et al., case number 1:09-cv-10101, (SDNY)

Blurb adapted from a report by Andrea Calvaruso

On January 2nd, Judge Ronnie Abrams of the SDNY ruled to allow Vimeo LLC (Vimeo), a video-sharing service, to file an immediate appeal with the Second Circuit regarding whether the DMCA safe harbor for copyright infringement covers pre-1972 recordings covered by state copyright law. Vimeo's questions regarding what constitutes red flag knowledge were also certified.

The court rejected the right to appeal of the other questions regarding the DMCA safe harbor mid-case, including Vimeo's repeat infringer policy, whether it was willfully blind and "right and ability to control "the allegedly infringing activity, whether it acted with "willful blindness" and whether it had a repeat infringer policy in place.

The Judge Abrams also allowed the plaintiffs to amend the complaint to add more claims of infringement, finding the amendment timely.

January 9, 2014

Job Description -- Public Interest Law Center Assistant Director

The Public Interest Law Center (PILC) Assistant Director, reporting directly to and working under the supervision of the PILC Director, plays a critical role in Pace Law School's public interest community, assuming responsibility for managing and implementing many of the PILC programs, providing public interest career counseling to law students and alumni, and representing Pace Law School and the PILC to the larger legal community.

The Assistant Director is responsible for:
• Daily operation and management of many PILC programs, including the PILC Summer Fellowship Program and the annual calendar of public interest career programs;
• Public interest career counseling for 1L's, 2L's, 3L's, and alumni, including conducting counseling sessions, editing resumes and cover letters, mock interviewing, and advising students and alumni in internship and post-graduate career activities;
• Coordination of the PILC Summer Fellowship Program, including supervising the application process, coordinating with other law school and university departments, implementation of Federal Work Study requirements, and conducting site visits;
• Managing student participation in annual public interest career events, such as the NYU Career Fair and Equal Justice Works Career Fair;
• Supervision of the annual PILSO online auction;
• Collaborating with the Center for Career and Professional Development on creating and co-sponsoring programs;
• Speaking regularly at PILC and CCPD events;
• Assigning tasks and overseeing the work of PILC student assistants;
• Managing the Pro Bono Justice Program, including outreach to and collaboration with legal services agencies, bar associations, and other partners;
• Assisting students in complying with New York State's new 50-hour pro bono rule, including providing pro bono opportunities, and coordinating with other law school departments such as the Office for Student Services and John Jay Legal Services;
• Representing Pace Law School and the PILC in the broader public interest community through activity on specific bar associations, such as the Westchester Pro Bono LAC Committee, the WWBA, the Metro Area Advisors Group, and others;
• Creating and regularly updating PILC career guides, handouts, fellowship and job listings and maintaining the PILC's pages on the Pace Law School website;
• Assisting the Director in creating new programs and initiatives for law students and alumni;
• Assisting the Director with projects and paperwork as needed;
• Other duties as assigned.

Qualifications

The ideal candidate would possess a JD and have a minimum of 1-5 years of legal experience in the public sector. S/he would possess a strong knowledge base of public interest legal employers and an understanding of the practice of public interest law and pro bono legal services. S/he would demonstrate strong interpersonal, writing, individual and public speaking, administrative and organizational skills; work well both independently and with a team and possess initiative, enthusiasm and creativity. S/he would possess the skills to collaborate extensively with students, law school faculty, administration, and departments, public interest employers and outside entities.

Applications may only be submitted through Pace University's career site, at https://careers.pace.edu. Interested candidates can search for the posting number: 197563. Applications are being considered immediately, and on a rolling basis. Interested candidates should apply as soon as possible.

January 11, 2014

Week in Review

By Martha Nimmer

Settling the Score

The National Basketball Association (NBA) has reached an agreement with the owners of the long defunct American Basketball Association team (ABA), the Spirits of St. Louis. The team owners, Daniel and Ozzie Silna, will receive a staggering $500 million from the NBA, and will continue to receive a share of the revenue generated by the NBA's broadcasts of Spirits games. The Silnas have also received over $300 million from the NBA in the years since the ABA and the Spirits met their end. In other words, the Silna family has managed to amass almost a billion dollars from a team that has not played a game since Gerald Ford was president.

How, exactly, did Ozzie and Daniel Silna find themselves in such an enviable position? Their agreement with the NBA dates back to 1976, the year that the ABA closed up shop. The ABA tried to merge with the much more successful NBA, but ultimately, only four teams were successfully incorporated into the NBA: the New York Nets, Denver Nuggets, Indiana Pacers and San Antonio Spurs. The NBA, according to The Hollywood Reporter, offered the other teams $3 million to cease operations. The Silnas, however, refused, and eventually "received what the merging teams got: a share of the NBA's "visual media" rights." The NBA has "long regretted" that decision, even trying to buy out the brothers in 2008 before the Great Recession made the deal go south. The Silna brothers were also unhappy with their arrangement with the NBA, and ended up suing in New York district court, arguing that they were entitled to a portion of the NBA's money from international broadcasts, its cable network and digital and online streaming, including NBA League Pass. The NBA countered that those new sources of revenue could "never have been imagined" back in 1976.

Decades later, it appears that the NBA is almost rid of the Silna brothers. The agreement between the Silnas and the NBA was announced on Tuesday. The NBA declined to comment, however, because the settlement must still be approved by the presiding judge, Loretta A. Preska.

http://www.hollywoodreporter.com/thr-esq/nba-settles-historic-dispute-tv-668931

http://www.nytimes.com/2014/01/07/sports/basketball/payout-may-come-for-an-aba-team-that-is-long-gone.html?_r=1

Be Careful What You Tweet

On Monday, Courtney Love will "become the first celebrity to defend an allegedly defamatory tweet inside a U.S. courtroom," writes The Hollywood Reporter. Love, the widow of Nirvana frontman Kurt Cobain, is being sued by attorney Rhonda Holmes over a 2010 tweet wherein Love said, "I was fucking devestated [sic] when Rhonda J. Holmes esq. of san diego was bought off." Holmes' defamation action against Love also involves comments that she made during an interview. Love retained Holmes to pursue a fraud case against the individuals managing Cobain's estate.

During the trial, which promises to entertain and probably confound, one of the jury's responsibilities will be to determine whether those who follow Love on Twitter "reasonably understood the statement to be about her former lawyer (and her law firm)." The jury must also tackle the issue of intent: Love claims that she meant to send a "DM" (a private, direct message to an individual), but unintentionally made the tweet public by posting it to her followers. As Holmes is a "limited-purpose public figure," she must prove that Love acted with "malice" when she posted her tweet.

Although the former singer is free to pursue a "mistake" defense, this strategy risks opening "a wider inquiry into Love's larger behavior," which, in the past, has ranged from odd to downright bizarre and even disturbing. Other witnesses scheduled to testify include journalists, former Love assistants, and "economic and language experts versed in the medium of Twitter." Yes, those experts actually exist.

http://www.hollywoodreporter.com/thr-esq/trial-alert-courtney-love-defend-669832

Chris Kluwe Retains Legal Counsel

After calling Minnesota Vikings special teams coach Mike Priefer a bigot and saying that former coach Leslie Frazier and current general manager Rick Spielman were cowards for their reaction to his advocacy of marriage equality, former Vikings punter Chris Kluwe has retained legal counsel. This decision comes after the team hired former Chief Justice of the Minnesota Supreme Court Eric Magnuson and former U.S. Department of Justice trial attorney Chris Madel to lead an independent investigation into Kluwe's accusations, according to CBS Sports.

The media firestorm began last week when Kluwe published a piece on Deadspin that claims that he was fired in May from the Vikings after eight years on the team because of his support of gay marriage. According to Kluwe, problems with the team started to arise in 2012, when the punter began to speak out in support of marriage equality. In 2012, Kluwe aligned himself closely with the LGBT rights group Minnesotans for Marriage Equality, which fought to defeat the Minnesota Gay Marriage Amendment, which was working "to define marriage as being between a man and woman in the state's constitution." Minnesotan voters failed to approve this amendment, and same-sex marriage has since been legalized in the state.

Kluwe also found himself in the spotlight in 2012 "after writing a blistering open letter to Maryland state delegate Emmett Burns, in which he blasted the politician for his 'vitriolic hatred and bigotry.'" State Delegate Burns had written to Baltimore Ravens owner Steve Bisciotti, demanding that he prohibit linebacker Brendon Ayanbadejo from publicly endorsing same-sex marriage. According to Kluwe, after his letter was published, former Vikings Head Coach Leslie Frazier approached him and instructed him "to be quiet, and stop speaking out on this stuff." After that encounter, Kluwe says that he was "approached on different occasions by Frazier and Spielman with similar requests to be silent, but he was also ridiculed and treated unfairly by Special Teams Coordinator Mike Priefer."

The Vikings have denied the athlete's claims, stating "any notion that Chris was released from our football team due to his stance on marriage equality is entirely inaccurate and inconsistent with team policy. Chris was released strictly based on his football performance."

http://www.huffingtonpost.com/2014/01/02/chris-kluwe-vikings-gay-rights_n_4532821.html?ncid=edlinkusaolp00000009

Dennis Rodman, North Korean Ambassador?

Despite decades of human rights abuses and recent revelations that North Korean leader Kim Jong Un ordered the execution of his uncle, Dennis Rodman was able to convince six other former NBA players to accompany him on a trip to North Korea. To celebrate the 31st birthday of the "Dear Leader," Rodman, along with Kenny Anderson, Cliff Robinson, Vin Baker, Doug Christie, Craig Hodges, and Charles D. Smith played against "a top North Korean Senior National team" in a Pyongyang sports arena on Wednesday. Attendees were prohibited from bringing cameras into the event, but video posted online shows Rodman leading the crowd in song in honor of his friend, the dictator. The North Korean team won by a score of 47-39, according to Associated Press.

This latest trip marks Rodman's fourth visit to North Korea. The former NBA player's "basketball diplomacy" has not been so well-received stateside, however. Rodman's trip has drawn criticism from "several members of Congress as well as the family of Kenneth Bae, a tour guide and U.S. citizen who has been held captive in the country for more than a year." Rodman later apologized to the family of Bae after an outburst on CNN during which the former Chicago Bulls player implied that the American was to blame for being held captive.

http://www.latimes.com/world/worldnow/la-fg-wn-dennis-rodman-north-korea-cnn-apology-20140109,0,223935.story#ixzz2px0m98KC

http://www.latimes.com/world/worldnow/la-fg-wn-dennis-rodman-happy-birthday-north-korea-20140108,0,4827481.story#ixzz2pwzPQ3rJ

Bad Lawyering On "The Good Wife": Setting The Record Straight On Music Publishing Law

By Eric S. Goldman
http://ericgoldmanesq.com/blog/

Even though I'm not usually a fan of shows featuring lawyers, I am a big fan of "The Good Wife". So when "The Good Wife" ran an episode entitled David And Goliath that delved deeply into my legal wheelhouse, I was excited. The show was all about copyright law and music publishing, and I've been an entertainment lawyer for 20ish years. Yet as the episode unfolded, I kept finding myself saying: "Wait a minute, that's not right. That's not how the law works."

Things started out well, because the fact pattern was pretty interesting. Two little known singer/ songwriters recorded a pop version of a rap song entitled THICKY TRICK. Basically, the pop version took the entire song lyric from the rap song, slowed down the tempo and added a bubble gum melody. The singer/ songwriters thought that the pop treatment highlighted how ridiculous the lyrics were. The pop treatment of the song was then performed on a "Glee"-style television show. After the show, the pop version of the song became a top seller on iTunes, generating millions of dollars in sales.

The issue was: could the singer/ songwriters sue the television show for copyright infringement over the misappropriation of a song they did not write?

Sadly, things rapidly went downhill. The episode touched on a number of copyright and music publishing issues, and pretty much got them all wrong.

1. Compulsory License. First, a little background. The U.S. Constitution laid the groundwork for modern copyright law in Article 1, Section 8, Clause 8, which reads "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries". In other words, a copyright is a man-made bargain - authors give the public access to their work, and the authors get a state-mandated monopoly on the exploitation of that work.

In the music publishing world, a license of the right to record a song is called a mechanical license. The basic copyright bargain found in the Constitution has led to a compulsory mechanical licensing scheme. Artists can record and distribute their music, provided that anyone else can record and distribute new versions of that music by obtaining a government-mandated mechanical license. In other words, the government tells artists that the liberal licensing of their works is "compulsory."

In "The Good Wife", the manager for the singer/ songwriters obtained a compulsory mechanical license because he wanted to do the simplest thing. The problem is, no one in the music industry uses compulsory licenses because they are unduly burdensome. Insert joke about government-run programs here.

Compulsory licenses have vigorous accounting and record keeping requirements - the costs of complying with the terms of a compulsory license usually exceed the income generated by the use of the licensed song. So pretty much everyone in the industry obtains mechanical licenses for previously recorded songs from record labels and music publishers, who are in the business of granting those licenses and grant them pretty freely.

Mistake Number One: It would have been far easier and cheaper to get a mechanical license for the rap song from the music publisher or record label than it would have been to obtain and comply with a compulsory mechanical license.

2. Derivative Copyright. The lawyers on "The Good Wife" spent a fair amount of time running around trying to obtain a derivative copyright in the covered rap song. However, there is no such thing as a derivative copyright.

There is such a thing as a derivative work. A derivative work is a new work based on a pre-existing work. When someone produces a Broadway musical version of a film, the Broadway musical is a derivative work. There is also copyright in a derivative work. That Broadway musical qualifies for all of the protections available under copyright law as an original work of authorship. Yet there is no such thing as a derivative copyright.

The basic issue on the show was that the singer/ songwriters incorporated a new melody into the rap song. All of the lawyers on the show accepted without question the proposition that incorporating a new melody into the rap song made the cover version a derivative work. In order to create a legal derivative work, the singer/ songwriters would have had to obtain an underlying rights agreement giving them permission to create a new pop song based on the original rap song.

However, was the cover version a derivative work based on the rap version? Maybe not.

The singer/ songwriters obtained a compulsory mechanical license in the rap song. A mechanical license to record a previously recorded song, compulsory or otherwise, includes the right to make a new arrangement of that song to the extent necessary to conform it to the style or manner of interpretation of the performance involved. An arrangement can be defined as chord progression, harmonies, accompaniment rhythm and musical fill phrases which define the style and feel of a song.

It's not clear whether, by incorporating a new melody line, the singer/ songwriters created a derivative work, which was beyond the scope of their compulsory mechanical license, or merely created a new arrangement which would be within the scope of their license.

Mistake Number Two: There is no such thing as a derivative copyright. There is such a thing as copyright in a derivative work, and there is such a thing as an underlying rights agreement which grants permission to create a derivate work.

Mistake Number Three: It is not a foregone conclusion that incorporating new music into a song creates a derivative work. It is a question of fact whether the changes are merely a permitted new arrangement.

3. Satire. The lawyers for the singer/ songwriters, including The Good Wife herself, argued that the cover version was a satire of the rap version. Such assertion confused satire with parody, and then misapplied the parody defense to a copyright infringement claim.

A satire misappropriates material protected by copyright in order to comment on society as a whole. A parody misappropriates material protected by copyright in order to comment on the copied material. In Campbell v. Acuff-Rose Music, Inc., 510 US 569 (1994), the Supreme Court reasoned that, because of this distinction, it was much easier for a parody to qualify as a fair use than it is for a satire.

In this instance, the singer/ songwriters were intentionally making fun of the song they copied, as well as rap music in general. So, rather than arguing satire, the singer/ songwriters' lawyers should have been arguing parody, as parody was the stronger (and more accurate) defense.

That being said, this cover song took the entire lyric from the underlying rap song. While a parody may take enough from the original work in order to conjure up that original work in the minds of the audience, a parody may not take the entire original work.

Mistake Number Four: The best available defense was that the cover song was a parody, not that it was a satire.

Mistake Number Five: The parody cover song probably used too much of the original rap song to qualify as a fair use, since it took the entire lyric.

4. Master Recording Copyright. The dispute between the singer/ songwriters and the television show ultimately hinged on one thing. The TV show's version of the song included very specific background noise - bowling balls hitting pins. And the singer/ songwriters' version of the song was recorded in a bowling alley. Which proved that the television show actually broadcast the singer/ songwriters recording.

Lawyer Alicia Florrick noted: "That's just theft." Yes, but theft of what?

The lawyers had been arguing that the TV show stole the singer/ songwriters' song, violating the copyright in that song. Yet the case was resolved when it was demonstrated that the TV show stole the master recording of the singer/ songwriters' song, violating the copyright in the master recording.

This is a tricky concept. An MP3 recording of a song incorporates two copyrights. The first is the copyright in the song. The second is the copyright in the master recording of the song. If you want to make a new recording of the song itself, you get a mechanical license, compulsory or otherwise. If you want to use the specific master recording of the song incorporated into the .mp3 file, you have to get a master use license.

This distinction between the copyright in a work of art and the copyright in the physical copy of that work of art plays out in odd ways. For example, I own several original oil paintings. While I have the right to display the physical copies of those paintings in my possession, I do not have the right to make and sell copies of those paintings. The right to make and sell copies remains with the artists.

Why is this important in our episode? It is because while there was a lot of talk about whether or not the singer/ songwriters were entitled to a copyright in their cover version of the original rap song, there was absolutely no discussion about who owned the copyright in the master recording of the cover song. All parties concerned simply assumed that the singer/ songwriters owned the copyright in the masters.

The thing is, the artist almost never owns the copyright in master recordings. The label usually owns the copyright in the master recordings, because the label supplies the recording equipment and personnel necessary to create them. Here, the master recording was created in a bowling alley owned by an unidentified party, using recording equipment and people provided by an unidentified party. It's entirely possible that the singer/ songwriters don't own the copyright in the master recording of their cover song. Which means that the happy ending in the episode may be very, very short-lived.

Mistake Number Six. The lawyers did not distinguish between the copyright in the song and the copyright in the master recording of the song.

Mistake Number Seven. The lawyers assumed that the singer/ songwriters owned the copyright in the master recording of the songs.

Fortunately for all parties concerned, I don't think most people watch "The Good Wife" for its realistic portrayal of the legal profession. On the show, first year lawyers spend a lot of time in court; associates have reasonable expectations of making partner in their fourth year; litigators routinely handle both civil and criminal matters; and the current economy is the perfect time for a Chicago law firm to go national.

That being said, I can't help but feel a little disappointed. For a brief second, I felt validated by "The Good Wife", because what I do for a living was deemed interesting enough to supply the plot for an episode of a top-rated TV show. It's kind of like getting to sit at the cool kids' table at lunch, only to find out that it's because they want you to do their homework.

Maybe I just need to watch less television.

January 13, 2014

The NFL Concussion Litigation: Settlement Hits a Snag

By Carter Anne McGowan

On Monday, January 6th, attorneys in the consolidated NFL Concussion Litigation (In Re: National Football League Players' Concussion Injury Litigation, No. 2:12-cv-03224-AB (E.D. Pa. Mar. 6, 2012)) (Concussion Litigation) submitted a motion to the court requesting approval of the terms of the settlement agreement (the Settlement Agreement) reached by the player-plaintiffs in the class action suit and the NFL. This Settlement Agreement, revealed in detail for the first time as an Exhibit appended to the motion, immediately resulted in controversy among the players.

The Settlement Agreement proposes a fairly complicated methodology of compensating former players suffering from some form of neurocognitive impairment greater than Level 1 Neurocognitive Impairment (i.e. the neurocognitive impairment must amount to at least early dementia in order to be compensable under the Settlement Agreement). Amyotrophic Lateral Sclerosis (ALS, or Lou Gehrig's Disease), Chronic Traumatic Encephalopathy (diagnosed post-mortem), Parkinson's Disease, Alzheimer's Disease, and Levels 1.5 and 2 Neurocognitive Impairment (early or moderate dementia) are compensable under the Settlement Agreement, with ALS eligible for compensation at a maximum amount of $5 million dollars, and the maximum compensation for Level 1.5 Neurocognitive Impairment being $1.5 million dollars. If players played in the NFL for fewer than five years or were over 45 years of age at diagnosis, they are not eligible for maximum compensation, and the Settlement Agreement sets forth in chart form the reductions in compensation for impairments diagnosed in former players over 45 years and in players who played fewer than five "Eligible Seasons" (seasons in which the player was on the active list or out with a head injury for a combination of three regular season or post-season games or on the practice squad for eight games, which earns a player half an eligible season).

While this structure does provide predictability with regard to the amount of compensation players and their families can expect, the Settlement Agreement faced immediate criticism, as the amounts to be received by most players will be far lower than the $5 million per player bandied about in early press regarding the settlement. In addition, legal fees will further reduce those amounts received by players who sued the NFLe, while those players who did not sue, but who remain beneficiaries of this Settlement Agreement, do not bear legal fees; already one attorney has indicated that he will file an objection to this perceived inequity. (Ken Belson, With NFL Concussion Deal, Two Tiers of Payouts, N.Y. TIMES, January 11, 2014. http://www.nytimes.com/2014/01/12/sports/football/with-nfl-concussion-deal-two-tiers-of-payouts.html?_r=0. The NFL has in addition agreed to pay $112.5 million in legal fees; however, these fees are intended to pay the lead attorneys on the case, and not all the attorneys, many of whom were working on contingency, and represented individual players before they joined the class action.) This alone could create a conflict of interest between the players who sued (numbering 4,500) and the number of beneficiaries of the Settlement Agreement (numbering 18,000) which could result in the settlement being struck down on appeal. (Id., quoting Prof. Lester Brickman of Cardozo Law School.)

Once Judge Anita B. Brody approves the Settlement Agreement, the player-plaintiffs will have 60 days to opt in or opt out of the settlement. With some players unhappy about the lower-than-expected payouts or the lack of NFL admission of responsibility for the players' neurocognitive impairments, it is possible that there will be a large number of opt-outs. At some point, then, this settlement may become irrational for the NFL, as the NFL would be left in the position of having settled one case for a large sum of money while still having to defend numerous lawsuits from former players. Under Paragraph 16.1 of the Settlement Agreement, the NFL does have the "absolute and unconditional right... to unilaterally terminate and render null and void this Class Action Settlement and Settlement Agreement for any reason whatsoever following notice of Opt Outs and prior to the Fairness Hearing."(Concussion Litigation, Document 5634-2.)

While it is still much too early to determine whether this settlement will fail, the warning signs are there, and this case - initially thought to be settled quickly and elegantly by the NFL and the plaintiffs - may still have some rough going in the months ahead.

January 14, 2014

Update on NFL Concussion Settlement

By Carter Anne McGowan

Today, Judge Anita B. Brody issued a preliminary denial of the motion to approve the settlement reached by the NFL and its retired players in the lawsuit relating to neurocognitive impairments suffered by retired NFL players (In Re: National Football League Players' Concussion Injury Litigation, No. 2:12-cv-03224-AB (E.D. Pa. Mar. 6, 2012). In her denial of the motion, the judge cited concerns about whether the amount to be funded by the NFL in order to compensate neurocognitively impaired former NFL players would be adequate to pay all potential claimants. For example, if only 1,000 members of the possibly 20,000-strong class were able to prove Level 1.5 Neurocognitive Impairment, the amount allocated to the compensation fund would fall far short of the $1.5 billion necessary to compensate the impaired players. Judge Brody was unconvinced by representations from both the plaintiffs and defendants, as well as the declaration of the mediator on the case (retired U.S. District Judge Layn Phillips), that the analysis of independent economists justified the parties' belief that the fund would be adequate, as the statements made were conclusory and the record lacked supporting evidence. Therefore, Judge Brody ordered the parties to provide additional documentation supporting their conclusions.

Perhaps this is a minor snag in the process or perhaps - given that the standards for preliminary approval of a class action settlement are fairly low - it signals something more, but for now, the settlement recently presented is on hold.

Insane Clown Posse

By Michael Cataliotti

Insane Clown Posse, better known as ICP and comprised of two members, Joseph Bruce and Joseph Utsler, have been on the fringe of the music industry for decades with its "horrorcore" rap style. Although predominantly underground, ICP's fanbase is loyal and comprised of individuals who are passionate about everything ICP and being "juggalos". "Juggalos" is a moniker used by ICP fans to describe themselves, similar to "Deadheads" for Grateful Dead fans or "Little Monsters" for Lady Gaga's followers.

In 2011, the FBI designated the "Juggalos" as a "loosely organized hybrid gang" in its 2011 National Gang Threat Assessment. In response, ICP sought evidence as to how this determination was made and filed a FOIA request. That request has gone unanswered in any substantitive manner.

ICP and four "Juggalos" have filed suit in order to combat the gang designation which they allege has "violate[d] fans' constitutional rights, including free speech, freedom of association and the right to due process", as well as having caused significant financial harm to Insane Clown Posse and its label.

While the suit is not likely to impact the industry on a grand scheme or cause a large-scale ripple effect, it is interesting to note that other mainstream artists have fans who are rather zealous, but certainly should not be deemed a "loosely organized hybrid gang", such as Lady Gaga's "Little Monsters", Justin Bieber's "Beliebers", and Opie & Anthony's "Pests".

http://www.cnn.com/2014/01/08/showbiz/juggalo-gang-lawsuit/index.html

Yet Another Fight in Hockey

By Jonathan Goeringer

The Official 2012-2013 National Hockey League (NHL) Rulebook has dedicated an entire rule, Rule 46, with 22 provisions stipulating how, when, and with whom fighting may occur during an NHL contest. (http://www.nhl.com/nhl/en/v3/ext/pdfs/2012-13_RuleBook.pdf) With only a minor change to its 2013-2014 Rulebook, which has not been publicly released in its entirety, the NHL has made every effort to ensure that fighting, a long-standing component of this sport, remains firmly entrenched in hockey culture.(http://espn.go.com/blog/nhl/post/_/id/26690/2013-14-season-new-rules-defined) Surely the fans, who derive only an enjoyable, entertainment-based benefit from watching the combative game within a game will continue to support and encourage fighting's presence in the NHL. However, for those players that have felt the tangible, negative impact of hand-to-hand combat, the fighting has only just begun, and this time, the opponent is the NFL.

In August 2013, the National Football League (NFL) settled a widely publicized lawsuit involving thousands of former NFL players to compensate those players' damages incurred as a result of playing in a league without adequate protective measures and safety information provided (http://nysbar.com/blogs/EASL/2014/01/update_on_nfl_concussion_settl.html, http://nysbar.com/blogs/EASL/2014/01/the_nfl_concussion_litigation_.html). Prior to its settlement, the impending ramifications of resolution with those former players brought with it a wave of changes to current NFL policy so as to thwart future issues of the same ilk. One of those changes, enacted prior to the 2011-2012 NFL season, involved moving kickoffs forward five yards and reducing the distance between defensive players and such kickoffs. In doing so, the NFL was able to reduce both the amount of speed defensive players could build in anticipation of the kick and the liklikehood that a receiver of the kick would chose or have the ability to physically engage in the play. As a result, in a sport where concussions had been on the rise since 2006, the rule change was vastly effective for its purpose. That season, the NFL saw an overall decline in the amount of concussions sustained across the league, and a steep 46% decline in the amount of concussions on kickoffs specifically. (http://www.nfl.com/news/story/0ap1000000047303/article/concussions-decline-after-change-to-kickoff-rule) Still, despite the coinciding uproar from fans who relished the opportunity to witness the unparalleled excitement that kickoffs used to bring, the NFL managed to increase revenues by over 5%, showing that doing so could still leave owners and the likes financially unaffected in the face of fan disapproval.(http://www.businessinsider.com/sports-chart-of-the-day-nfl-revenue-still-dwarfs-other-major-sports-2012-10) However, even with a safer environment in which to play this sport, some of the players themselves were left with no sport to play.

For players like Devin Hester, kick return extraordinaire for the Chicago Bears, their livelihoods have been dramatically affected by such rule changes. In response to disallowing return men from earning a Pro Bowl (all star) selection,and thereby making the earning of bonuses in satisfaction of that condition impossible, Hester said, "they are trying to change up the whole game of football and they're messing with people's jobs and lives." In response to the same rule change, Joshua Cribbs, another of the NFL's best return men said, "we have a great league filled with tradition and history but I'm not sure about that now." In support of Cribbs, punter Chris Kluwe said, "[I] wonder if NFL teams are planning on altering any contracts of kick returners who have Pro Bowl contingent bonuses. Only seems fair." While these players represent a small sample of those visibly affected by policy changes, their plight does not even come close to accounting for the countless others who can no longer find employment as members of the NFL due to their irrelevant but once coveted skill-set. For those that currently find themselves in the employ of the NHL due to their ability to literally beat opponents, that same concern may very well be shared in due time.

Former NHL player Jim Thomson, a self-proclaimed enforcer during his heyday, had this to say about fighting in hockey: "Todd Ewen, an enforcer who had more fights than I did said, 'take it out'...I was friends with Bob Probert, maybe the best fighter of all time. He hated it. He hated what it did to him; he hated the demons he had to live with. I could go through the list." Those "demons," or symptoms about which Thomson spoke, reside in many former NHL and NFL players who suffer from chronic traumatic encephalopathy (CTE), a degenerative disorder spurred on by multiple concussions that can cause severe depression, confusion, memory loss and aggression. The very demons that haunt these players through retirement are the same demons that may now haunt the NHL. On November 25, 2013, 10 former NHL players filed a lawsuit, Leeman v. National Hockey League, citing many of the same issues raised in the NFL lawsuit. The players intend to argue that by creating safety protocols, the NHL assumed the duty to protect the players from injury, and that they further failed to adequately inform the players of the potential risks involved in the playing, among other issues. With the threat of litigation as much a reality now as it was when the NFL instituted its policy changes, the likelihood of the NHL taking the same course of action becomes greater with each punch. General Manager of the Tampa Bay Lightening and former Detroit Red Wings legend Steve Yzerman, supported by a contingent of other NHL General Managers, released this statement mere weeks after the NFL settlement: "either anything goes and we accept the consequences, or take the next step and eliminate fighting." While Yzerman's statement may echo the sentiment of former players, including Thomson, now united in their potential opportunity to cash in on former league policy, it equally demonstrates the disconnect between NHL officials and those who still rely on their league's current policy.

In 2011, the National Hockey League Players Association (NHLPA) and CBC Sports conducted a poll of 318 current NHL players, which yielded a telling result-- 98% of players are opposed to a ban on fighting.(http://www.thestar.com/sports/hockey/2013/11/07/nhl_fighting_survey_shows_canadian_hockey_fans_want_ban_players_dont.html ) According to the 6'8", 260 pound Buffalo forward John Scott, "[t]here are not many concussions if you watch fighting. I think it's the easiest target that people go after: Get fighting out of the game and it'll solve everything. I think when fighting's out of the game then everyone's going to be taken off on stretchers because of hits from behind and high-sticks and dirty checks. It'll be a little different story." Of course, Scott, currently serving a suspension for an illegal check of his own, makes his living by dropping the gloves and would instantly feel the direct affect of any change in policy. However, Scott raises the valid point that may be the lone differentiating factor between what has taken place in the NFL and what may transpire in the NHL, that eliminating fighting affects all players on the ice. Georges Laraque, Yzerman's former teammate may have stated it best when he said: "Because of them [tough players], Steve Yzerman had all the room he needed to be a successful player. [They] put him on the road to the hall of fame...And he's spitting on that job [by saying], 'lets take fighting out of the game.'" According to Laraque, one of the most notorious fighters NHL fans have ever seen, the skill players require a certain level of protection from the brutality of an already contact-driven and ruthless game. In removing that level of protection, the NHL runs the very real risk of having to supplement fighting with far-reaching and imposing protective measures that might forever change the face of hockey as its loyal fans have known it.

The debate currently permeating the NHL can be synthesized into this question-- is protection of league image through policy changes and compensation of its former players worth a change in culture that has the potential to affect the viewers, current players and the game in a way that could prove far more detrimental than was seen in the NHL? The answer is yet to be written.

Alex Rodriguez's Ongoing Legal Battle to Overturn His MLB Suspension

By Danielle Browne

On January 11th, Fredric Horowitz, an independent arbitrator, upheld the majority of a 211-game suspension levied against New York Yankees' Alex Rodriguez. Rodriguez's suspension is based on his role in the Biogenesis performance enhancing drug (PED) scandal. Horowitz ruled there was "clear and convincing evidence" that Rodriguez used three banned substances (testosterone, Insulin-like Growth Factor-1, and human growth hormone) in violation of the Joint Drug Agreement (JDA), and twice tried to obstruct Major League Baseball's (MLB) drug investigation in violation of the Collective Bargaining Agreement (CBA). Horowitz's ruling stated that "[d]irect evidence of [the JDA] violations was supplied by the testimony of Anthony Bosch [Biogenesis founder] and corroborated with excerpts from Bosch's personal composition notebooks, BBMs [Blackberry messages] exchanged between Bosch and Rodriguez and reasonable inferences drawn from the entire record of evidence."

Although Horowitz trimmed the suspension to 162 games (the entire 2014 regular season and postseason), it remains the largest penalty for PED use in MLB history. In his decision, Horowitz wrote, "[w]hile this length of suspension may be unprecedented for a MLB player, so is the misconduct he committed."

Just two days after Horowitz's ruling, Rodriguez filed a lawsuit in U.S. District Court against MLB and the Major League Baseball Players Association (MLBPA), seeking to overturn the season-long suspension. Specifically, the lawsuit seeks to vacate Horowitz's decision, hold the MLBPA responsible for its alleged breaches of the duty of fair representation, and hold the MLB responsible for violating the CBA by imposing a suspension on Rodgriguez without just cause.

Vacating the Arbitration Award

Rodriguez's complaint alleges that Horowitz's ruling must be vacated for four reasons:

(1) It "does not draw its essence from the collectively bargained agreements." Rodriguez argues that the 162 game suspension disregards the "progressive, disciplinary framework set forth in the JDA." The JDA establishes a 50-game suspension for the first doping offense, 100 games for the second offense and a lifetime ban for the third. While Rodriguez proclaims his innocence, he argues that he should have been suspended for 50 games, at most, as a first-time offender under the JDA;

(2) Horowitz "exhibited a manifest disregard for the law." Rodriguez claims that Horowitz denied his legal team the opportunity to cross-examine Bosch and Selig. Additionally, Rodriguez's legal team was denied the right to examine the BlackBerry devices that MLB alleges were used to transmit incriminating text messages between Rodriguez and Bosch;

(3) Horowitz "acted with evident partiality"; and

(4) Horowitz refused to "entertain evidence that was pertinent and material to the outcome."

Courts, generally, review arbitration awards with great deference. If the arbitration proceeding is conducted in a fair and impartial manner, courts do not vacate the ruling or interfere with the arbitrator's relaxed evidentiary standard. The U.S. Court of Appeals for the Second Circuit has held that an arbitral decision may be vacated when an arbitrator has exhibited a manifest disregard for the law (i.e. something beyond and different from a mere error in the law or failure on the part of the arbitrators to understand or apply the law.) This is difficult standard to meet. Although Rodriguez's legal team has alleged that Horowitz's conduct meets the standard, it is not clear that this is true.

Duty of Fair Representation

The duty of fair representation obligates unions to represent its members fairly, in good faith, and without discrimination. Rodriguez's complaint alleges that the MLBPA "completely abdicated its responsibility to Rodriguez to protect his rights" by failing to stop MLB from leaking prejudicial information and using abusive investigative tactics. Further, the complaint alleges that"[t]his inaction by the MLBPA created a climate in which MLB felt free to trample" on Rodriguez's confidentiality rights.

Like challenges to arbitration awards, the courts have taken a deferential approach when reviewing union-member conduct. The courts have held that a union only breaches the duty of fair representation when it acts arbitrarily, discriminatorily or in bad faith. Furthermore, the courts have refused to classify union decisions as arbitrary as long as they were based on a reasoned decision by the union. Therefore, Rodriguez will likely have a difficult time proving his duty of fair representation claim.

Barring success in the federal court, Rodriguez stands to lose $25 million in salary for 2014, lost opportunities for bonuses, and playoff money. Additionally, Rodriguez will be turning 40 years old in the 2015 season, and there are substantial doubts that he can return to the plate with success after this suspension.

The complaint: https://s3.amazonaws.com/s3.documentcloud.org/documents/1004908/ar-complaint-1.pdf

January 16, 2014

Week in Review

By Martha Nimmer

May It Please The Court

The U.S. Supreme Court has decided to hear an appeal from television networks including ABC, NBC Universal, Fox and CBS, as part of the "hotly debated issue of whether the online dissemination of television broadcasts infringes on network rights." Aereo, a service that uses mini antennas to stream broadcast television online, is the brainchild of IAC/InterActiveCorp and Expedia, Inc. Chairman Barry Diller.

Since its founding in February 2012, Aereo has found itself at the center of a complex legal battle: "[t]he main complaint from the networks is that Aereo is violating copyright law by retransmitting signals without paying the same retransmission fees that cable and satellite providers pay." Supporters of the new service counter, however, that Aereo has broadened the public's access to the media, decrying the major networks' control of the airwaves.

Hoping to shut down Aereo's feed, ABC, CBS and NBC sued Aereo in New York federal court in 2012. U.S. District Judge Alison Nathan sided with Aereo, however. Last April, a divided three-judge panel of the Second Circuit affirmed the trial court's decision in favor of Aereo. Now, Aereo and the nation's biggest television networks find themselves ready to go before the Supreme Court. In response to the high court's granting of cert., Aero released a lengthy statement that touched on everything from consumers' rights to cloud storage. Dana McClintock from CBS corporate communications was more concise, tweeting "we are pleased that our case will be heard and we look forward to having our day in court."

http://www.theverge.com/2014/1/10/5296222/aereo-case-to-be-taken-up-by-the-supreme-court#

http://www.entlawdigest.com/2014/01/14/2895.htm

Banned from Baseball

On Saturday, an arbitrator handed Alex Rodriguez a season-long suspension for his use of performance enhancing drugs (PEDs). This punishment, "the most severe punishment in the history of baseball's drug agreement," comes as a result of a lengthy investigation by Major League Baseball (MLB) into the now-shuttered Florida health clinic, Biogenesis of America. Biogenesis founder, Anthony Bosch, appeared before the arbitration panel "after reaching an agreement with MLB to provide evidence."

The decision by arbitrator Fredric Horowitz to suspend the Yankees' third baseman for the entire 2014 season reduced the August 5th suspension issued by baseball Commissioner Bud Selig from 211 games to this year's entire 162-game regular-season schedule, plus any postseason games. Despite the ban, baseball's rules permit Rodriguez to participate in spring training and exhibition games, although the Yankees may tell him not to report for spring training.

Rodriguez, a 14-time All Star, is the most high profile and successful player to have been found in violation of the MLB's "drug rules, which were first agreed to in 2002 as management and union attempted to combat the use of steroids and other performance-enhancing drugs." Rodriguez admitted in 2009 that he had used PEDs while playing for the Texas Rangers from 2001-2003, but has adamantly denied using such substances since then.

As a result of the suspension, the Yankee will lose approximately $22 million of his $25 million salary. Rodriguez has been baseball's highest paid player under a $275 million, 10-year contract, although he has spent periods throughout the last six seasons on the disabled list. Rodriguez will be 39 years old when he is eligible to return to the game in 2015. According to the Associated Press, he is signed with the Yankees through the 2017 season.

http://m.apnews.com/ap/db_289563/contentdetail.htm?contentguid=tzNne3ZS

A-Rod Back in Court

Seeking to vacate his season-long suspension from baseball, Yankees third baseman Alex Rodriguez has sued Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA) in New York federal court. In his lawsuit, Rodriguez claims that he was unfairly suspended from the game "for allegedly using banned drugs, 'without a positive test result.'" The 42-page lawsuit, with 37 pages of attachments, goes on to accuse Fredric Horowitz--MLB's chief arbitrator -- of "manifest disregard for the law," and calls the 162-game ban "wholly unjustifiable." The complaint further alleges that Horowitz "ignored the stipulation of baseball's Joint Drug Agreement," which sets out a 50 game ban for a first time drug offense. Rodriguez also alleges that Horowitz was not impartial, adding that "he refused to hear evidence in Rodriguez's appeal of the suspension imposed against him last year" by MLB Commissioner Bud Selig. Specifically, the lawsuit accuses Horowitz of denying Rodriguez and his attorneys the right to cross-examine Biogensis founder Anthony Bosch and Commissioner Selig. Additionally, Rodriguez claims that Horowitz denied his attorneys the opportunity to examine the BlackBerries that the MLB says were used to "transmit incriminating text messages" between Rodriguez and Bosch.

Rodriguez has petitioned the court to vacate the arbitration award, hold the players' union "responsible for its breaches of the duty of fair representation owed to Mr. Rodriguez prior to and during the grievance process, and to hold MLB responsible for its violation of the collectively bargained agreements between MLB and the MLBPA by imposing a suspension upon Mr. Rodriguez without just cause."

It appears unlikely, however, that Rodriguez will prevail in his latest legal maneuvering. Judges are generally hesitant to intervene in arbitration proceedings in a situation where private parties have agreed to arbitrate as a means for resolving disputes. To succeed, Rodriguez will need to establish that Horowitz was unfair or biased. Rodriguez will likely have a difficult time convincing a judge that the arbitrator was unfair or biased, however, considering that Horowitz heard 12 days of testimony in the case, and reviewed other evidence, such as text messages between Bosch and Rodriguez, before issuing his decision.

http://www.courthousenews.com/2014/01/13/64490.htm

http://espn.go.com/new-york/mlb/story/_/id/10288380/alex-rodriguez-sues-mlb-union-seeking-reversal-suspension

http://www.cbssports.com/mlb/eye-on-baseball/24408397/arod-suing-mlb-mlbpa-in-effort-to-overturn-suspension

http://www.nytimes.com/2014/01/17/sports/baseball/rodriguez-seems-to-accept-that-suspension-will-stand.html

Saving Detroit, One Work of Art at a Time

In an effort to save the Detroit Institute of Arts' renowned collection and avoid cuts to retirees' pensions, nine philanthropic foundations have committed $330 million, according to mediators working in the city's bankruptcy proceedings. This commitment would "essentially relieve the city-owned Detroit Institute of Arts museum of its responsibility to sell some of its collection to help Detroit pay its $18 billion in debts." Specifically, the allocated funds can help "reduce a portion of the city's obligations to retirees, whose pensions are at risk of being reduced in the bankruptcy proceedings." According to some estimates, the city's pensions are underfunded by a staggering $3.5 billion.

This plan is a much-needed "sign of progress" in the mediation with Detroit's creditors to help resolve the city's financial woes. As part of the plan, ownership of the museum would be transferred from Detroit to the control of a nonprofit; this arrangement also has the added benefit of protecting the museum from future municipal financial threats. Another facet of the plan is that Detroit must put the money received from the philanthropic foundations into the city's ailing pension system.

City and museum officials worry, however, that $330 million may not be enough to save the museum's entire collection from the auction block. According to The New York Times, "as much as $500 million may be needed to protect the art from an auction, officials have said, so additional philanthropic donations are being sought."

http://www.nytimes.com/2014/01/14/us/300-million-pledged-to-save-detroits-art-collection.html?hp

Embattled Barbie

MGA Entertainment, the maker of the highly popular Bratz dolls, has demanded $1 billion in damages from Mattel for misappropriation of trade secrets. This is just the latest move in a nearly decade-long legal fight over Bratz, the skinny doll with the big head and flashy outfits.

Last year, the Ninth Circuit vacated a $172 million judgment against Mattel, leading MGA to move the case from federal to state court. In its decision, the Ninth Circuit ruled that MGA's claim of theft of trade secrets was "not logically related" to Mattel's claim that a former employee still worked for Mattel when he showed MGA a concept that spawned the Bratz doll. Undeterred by the Ninth Circuit's unfavorable ruling, MGA went back to court, and filed suit again against Mattel on Monday. In the lawsuit, MGA claims that the Ninth Circuit ruling covered a "technical procedural issue having nothing to do with the merits of the claims." In addition to the $1 billion in general and actual damages, the plaintiff has also requested a jury trial.

http://www.entlawdigest.com/2014/01/14/2891.htm

January 24, 2014

Week in Review

By Martha Nimmer

A Killer of a Case

American Psycho, the 1991 novel about a Manhattan investment banker turned serial killer, is an unlikely plot for a musical, but a fact pattern more suited for a courtroom. This case, however, does not take place in criminal court, but instead, on the civil side.

Claiming tortious interference and breach of contract, Nate Bolotin has sued The Johnson-Roessler Company and ACT 4 Entertainment -- the producers of the musical stage version "American Psycho" -- in New York court. Bolotin claims that he "came up with the idea" for an "American Psycho" musical over five years ago while working for Collective Management Group (Collective), which is not a party to the suit. The plaintiff claims that he tried "to bring the project to the stage," but ended up signing a separation agreement with Collective and leaving the company in June 2008. Bolotin further alleges that under the terms of his contract with Collective, he agreed to create the musical "in exchange for paying the management company a 25 percent cut of any money he received from the project," with Collective agreeing to pay him a 75 percent share of the musical's revenue. Collective, Bolotin states, eventually partnered with the defendant producers in late 2008 to develop an "American Psycho" musical, "'fully aware' of the separation agreement and his right to 37.5 percent of income from the musical as a 'third-party beneficiary' of the original partnership." According to the complaint, in August 2012, the defendants claimed that Bolotin had violated the separation agreement, and moved to "shut him out of the project."

Bolotin seeks damages for breach of contract and tortious interference with contractual relations, lost earnings and costs.

http://www.entlawdigest.com/2014/01/14/2893.htm

ICP v. FBI

Detroit hip-hop duo Insane Clown Posse (ICP) and four fans have sued the Department of Justice (DOJ)and FBI in Detroit federal court to challenge what the band calls an "unwarranted and unlawful decision to designate [Insane Clown Posse] supporters as a criminal gang." "Organized crime is by no means part of the Juggalo culture," the complaint reads, calling the gang designation "unlawful" and "unconstitutionally vague." ICP fans, who call themselves "Juggalos," also alleged that as a result of the FBI's designation, "state and local police routinely stop, detain, interrogate, photograph and document Juggalos, with some fans even being denied consideration for employment."

The DOJ officially identified Juggalos as a "loosely organized hybrid gang" in 2011 when the Department included the fan group in the National Gang Threat Assessment. Juggalos are recognizable "by the way they paint their faces to look like clowns" and for using the band's "hatchetman" logo on clothes, skin or bumper stickers. According to the American Civil Liberties Union, the federal government estimates that there are more than one million Juggalos in the United States.

The ICP and its fans seek an injunction, declaratory judgment and damages for violations of the First Amendment, due process under the Fifth Amendment, arbitrary and capricious agency action, and violations of the Administrative Procedure Act.

Read the complaint here: http://www.aclumich.org/sites/default/files/Complaint%20-%20Parsons%20v%20DOJ%20-%20FINAL.pdf

http://www.entlawdigest.com/2014/01/14/2896.htm

http://usnews.nbcnews.com/_news/2014/01/08/22232523-insane-clown-posse-sues-fbi-justice-department-over-juggalo-gang-classification?lite

Viking Victory

The Minnesota State Supreme Court lacks jurisdiction to hear a challenge brought by three Minneapolis residents to the planned sale of $468 million in bonds to help pay for a new stadium for the Minnesota Vikings, according to an unsigned ruling. The statute under which the residents sued "does not confer original jurisdiction on the court to resolve all challenges to legislation authorizing the use of appropriation bonds," wrote six members of the court. The court's seventh member, former Vikings defensive tackle Alan Page, did not participate in the case. The justices did note, however, that the residents could "file a lower-court case raising a constitutional challenge to a matter involving taxation," but did not hint at whether such a claim would be successful. Doug Mann, lead petitioner in the case and a one-time Minneapolis mayoral candidate, said in an emailed statement that he would consider his "appeal options" against the city.

The residents' lawsuit, filed on January 10th, claimed that the financing plan for the new football stadium "unconstitutionally relied upon city sales taxes to pay the bond debt." According to Bloomberg News, Minneapolis is required "to pay debt service on its share of a principal amount of $150 million plus interest, while the state's liability is limited to payment on as much as $348 million of bonds plus interest, according to the residents' petition."

After the suit was filed, Minnesota was forced to postpone a sale scheduled for January 13th. No new date has been set yet for the bond sale, however. Construction on the new $975 million stadium began last month, after years of posturing and pleading by the Vikings to secure a new home for their team. In 2010, the roof of the Hubert H. Humphrey Metrodome collapsed under the weight of snow.

http://about.bloomberglaw.com/legal-news/vikings-stadium-bond-suit-thrown-out-by-minnesota-court/

Kanye, Not Coinye

Kanye West has likely dreamed about having his name or face on a coin, but it is unlikely that the coin was part of a new cryptocurrency called Coinye West. Similar to Bitcoin, Coinye West is billed as a "PROPER and FAIR ... [currency] for the masses." The coders behind the new currency, who operate through the Coinyeco.in website, released their first "coins" on January 7th, saying, "we want to release this to the public before the man can try to crush it." The coins were originally set to debut on January 11th, but after receiving a cease and desist letter from West's attorneys, the coders moved the release date forward, tweeting in the style of Kanye West "WHO GON STOP ME HUH." "Coinye feelin' the heat, gonna spread what we got so far before the bigwigs steal our work!!"

In a cease and desist letter dated January 6th, an attorney for the hip-hop artist accused the coders of attempting to trade on the celebrity of West: "[G]iven Mr. West's wide-ranging entrepreneurial accomplishments, consumers are likely to mistakenly believe that Mr. West is the source of your services." The letter continues to accuse the Coinye creators of trademark infringement, trademark dilution, unfair competition and cyberpiracy, but notes that West "seeks to resolve this matter without resort to litigation." To avoid a lawsuit, Coinye's developers must cease "development, sale, distribution and promotion" of all Coinye West products and services, deactivating their Facebook and Twitter accounts, and transferring the coinyewest.com website into West's hands, West's attorney wrote. Failure to comply will not just result in legal action against Coinye's creators, however -- the rapper's attorneys will also "notify the cryptocurrency community at large of [Coinye's] infringing actions" and pursue legal action against any business that accepts the currency.

Despite this looming juggernaut of legal action, Coinye's creators do not seem to be backing down. In a Skype interview with the Wall Street Journal, one of the coders said, "[t]hey'll still come after us, but that's OK." The creators did, however, change the name of their currency from Coinye West to Coinye, and have also changed their website from a .com URL to a domain name registered in India, http://www.coinyeco.in/.

http://www.theguardian.com/music/2014/jan/08/kanye-west-bitcoin-coinye-west-trademark

http://about.bloomberglaw.com/legal-news/apple-jj-kanye-west-fullscreen-intellectual-property/

http://blogs.wsj.com/digits/2014/01/07/kanyes-lawyer-moves-to-block-coinye/

January 27, 2014

Curing Common Misconceptions about COBRA

By Kristine Sova
www.sovalaw.com

Confusion abounds whenever the subject of COBRA arises, especially with smaller employers and owner-operated businesses. The most common misconception I've encountered is that an eligible employee simply receives COBRA benefits because he/she is eligible without the employer (or someone designated by the employer) having to actually facilitate COBRA benefits. This is simply wrong.

COBRA isn't a complicated law, but it doesn't get the attention it deserves, particularly from smaller employers, who probably (and logically) assume they don't have any continuing obligations to employees when they're parting ways at the end of the employment relationship.

To correct this and other misconceptions, some COBRA basics are in order.

What is COBRA?

COBRA (short for the Consolidated Omnibus Budget Reconciliation Act) is a federal law that gives workers and their families who lose their group health benefits under certain circumstances the right to choose to continue their health insurance benefits for a limited period of time. What are those circumstances? Voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. In COBRA speak, these are known as "qualifying events."

Does COBRA apply to all employers?

No, COBRA does not apply to all employers. COBRA generally only applies to group health plans of employers with 20 or more employees on more than half of its typical business days in the prior calendar year. Both full and part-time employees are counted to determine whether a plan (and thus the employer) is subject to COBRA. Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.
The above applies to the federal law, COBRA. Some states have their own version of COBRA, which usually apply to group health plans of employers with fewer than 20 employees.

Are all employees eligible for COBRA?

Not all employees are eligible for COBRA. To be eligible for COBRA coverage, the employee must have been enrolled in his/her employer's health plan when he/she worked and the health plan must continue to be in effect for active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would, except for the COBRA continuation coverage, cause an individual to lose his/her health care coverage.

What are COBRA benefits?

The benefit provided by COBRA is the opportunity for an employee (and his/her covered family) to temporarily extend health coverage (called continuation coverage) at group rates when coverage under the plan would otherwise end. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since employers usually pay a part of the premium for active employees while COBRA participants generally pay the entire premium for coverage (and sometimes a 2% administrative charge). COBRA coverage is ordinarily less expensive, though, than individual health coverage.

COBRA benefits are generally available for a maximum of 18 months, although certain qualifying events, or a second qualifying event during the initial period of COBRA coverage, may extend COBRA benefits by up to another 18 months.
Who is responsible for notifying an employee of COBRA coverage when the employee is no longer eligible for health coverage? (This is where most small businesses and owner-operated businesses trip up, so take note.)

Short answer: Employers and "plan administrators," or just the employers, where no "plan administrator" has been designated.

Long answer: When an employee is no longer eligible for health coverage, the employer has to provide the employee with a specific notice regarding his/her rights to COBRA continuation benefits.

Employers must also notify their "plan administrator" within 30 days after an employee's termination or after a reduction in hours that causes an employee to lose health benefits. The "plan administrator" is the person (or entity) responsible for the management of the plan, and is specifically designated by the terms of the plan. If the plan does not make such a designation, the employer (as plan sponsor) is generally the plan administrator.

The plan administrator (or employer if no "plan administrator" has been designated) must then provide notice to the employee of his/her right to elect COBRA coverage within 14 days after the administrator (or employer) has received notice from the employer.

Is that all there is to COBRA?

COBRA doesn't end here. COBRA sets forth a number of other requirements relating to notifications, timing of elections, and payment of premiums, among other topics, all of which may place further obligations on employers.

About January 2014

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in January 2014. They are listed from oldest to newest.

December 2013 is the previous archive.

February 2014 is the next archive.

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