In honor of the New Year, I am posting an article from The Hollywood Reporter. This is a list of the most outrageous celebrity lawsuits of 2011. Some of my favorites:
An artist’s promises on Twitter to pay $1mm for returning his missing laptop. A stranger returns the laptop. Does the artist have to pay the stranger $1mm? In Pennsylvania, probably yes.
Artist Ryan Leslie lost his laptop while on tour in Germany. This is the tweet : “I’m absolutely continuing my Euro tour plus raised the reward for my intellectual property to $1mm. Click to watch: http://on.fb.me/bCBnrM””. Does this 160-character statement make a contract? Would a reasonable person read this tweet, and believe all she has to do is find the laptop and she will become a millionaire? Well, Armin Augstein has filed a lawsuit in New York claiming that Leslie’s tweet is a binding contract.
While New York law will determine the lawsuit’s outcome, let’s imagine what would happen if Augstein sued Leslie in Pennsylvania. The contract in dispute is called a unilateral contract; it means that Leslie made a promise and all that is requried to convert this promise into a contract is that the other party must merely act—or in this case—find the laptop. Ordinarily, a contract requries two parties to commuincate with each other. (this is called a bilateral contract). If this situation were a bilateral contract, Leslie would make an offer by tweet; someone would accept his offer by tweet, and a contract is born.
However, a unilateral contract is different. The person accepting the offer does not have to communicate his/her acceptance. The person accepts the contract by acting.1 The law will examine the tweet for “some language of commitment or some invitation to take further action without further communication.”2 The threshold question is: would a reasonable person read the tweet and understand that she would receive one million dollars if, without further communication with Leslie, she found the laptop. Without this language, the law may find this tweet was merely an advertisement or invitation to begin negotiations. So, in short, if Leslie were sued in Pennsylvania, he may lose a million dollars. My best advice to Leslie: settle early before your legal bill also reaches a million dollars.
There, of course, is a separate issue of whether Leslie is morally or ethically responsible for paying the promised million. I believe the answer is yes. I think Leslie is a sophisticated public figure, and New York Law School agrees with me. He understands the power of Twitter and the media. He is a Harvard-graduate at the age of 19 and a Grammy-award nominee. He should have known better. Thus, the court should hold him accountable for the promises he makes in public.
Sharmil McKee
sm@mckeeoffice.com
Business Attorney
Philadelphia, PA
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1. Bauer v. Pottsville Area Emergency Med. Serv., Inc., 758 A. 2d 1265 (Pa. Super. 2000).
2. Bourke v. Kazaras, 746 A.2d 642, 644 (Pa. Super. 2000).
Dr.Phil turns 60 years old on September 1st. Dr. Phil is also known as Phillip McGraw. He has a good reason to celebrate this Thursday. Two weeks ago,he settled a lawsuit involving claims of false imprisonment and misrepresentation. Two woman sued the celebrity psychologist after his show’s producers exposed a naked man to the residents of “The Dr. Phil House” in 2007. The producers wanted to record the ladies’ reaction to the naked man. To be fair, the naked man lived in the house to help resolve his obsession with being a flasher.
Nevertheless, the settlement will help Dr. Phil and CBS save legal fees while protecting his substantial wealth. Dr. Phil made $80 million in 2009.
What can you, as a business owner, learn from this situation? A birthday is a great time for a business owner to re-evaluate his or her estate plan. What should you
consider?
These are just a few ideas. I recommend that you schedule a meeting with your attorney immediately.
Feel free to contact McKee Law Office for your free consultation at 215-242-5260.
McKee Law Office | Business Lawyers | Philadelphia, Pa | http://blog.mckeeoffice.com
The player lockout is not the only issue that the NFL must deal with this week. Last week, 75 former NFL players sued the organization claiming that the NFL intentionally concealed and failed to warn the players about potential brain injuries resulting from game-related concussions. The players are suing for fraud, negligence, and failure to warn. The players claim that the NFL knew about the link between game-playing and brain injuries since 1920′s but concealed this knowledge until June 2010.
This story leads me to ask, if a football field poses such a dangerous workplace, as suggested by this lawsuit, then why hasn’t OSHA issued a citation? In 2006, OSHA
answered that question by stating that injuries to professional players are not disproportionately high.
While an OSHA violation is not essential to proving the players’ proposition, it would help establish that the league breached its duty to warn about the dangerous work environment.
Of course, reader, you are asking does OSHA protect professional football players? Yes, assuming that the agency views the player as an employee as opposed to an independent contractor.
The Occupational Safety and Health Administration was created by congress in 1979 to help employers reduce workplace injuries, illness, and death. The
OSH Act covers private employers and their employees either directly through federal OSHA or through an OSHA-approved state program. State programs must meet or exceed federal OSHA standards for workplace safety and health. OSHA does not regulate the self-employed.
Employers who do not comply with the OSH Act are subject to civil and criminal penalties until they cure the dangerous condition. OSHA may impose civil penalties of up to $70,000.00. An employer who is convicted in a criminal proceedings of a willful violation may face up to six months imprisonment and fines up to $250,000.00 (or $500,000.00 if the employer is a corporation). (See 29 U.S.C. § 666.) An OSHA citation does not create a private right to sue or bring a cause of action against the employer. (See Elliott v. S.D. Warren Co., 134 F.3d 1, 4 (1st Cir. 1998)).
Even though OSHA does not authorize an employee to sue an employer for violations, an employee can sue an employer for failure to warn about occupational hazards. In Pennsylvania, the Supreme Court in 1998, ruled that an employer has a duty to communicate the dangers of the job duties to its employees, if such dangers had been known by employer and generally within the industry. (See Phillips v. A-Best Products, Co., 542 Pa. 124 (1998)). And generally Pennsylvania does not recognize the defense of a sophisticated user. Under this defense, an employer could claim that the employee is a sophisticated user and thus is aware of the dangers involved in the assignment. However, Pennsylvania courts have prohibited the application of that defense.
What can you, as a business owner, learn from this case? If you have employees, then you have a duty to warn your employees about potentially dangerous jobs or work conditions. Under OSHA, you also have a duty to mitigate such dangers. The good news is that OSHA helps employers identify these risks and develop methods to mitigate these risks. For help, visit OSHA’s website for more information. OSHA offers free on-site consultations to small businesses.
Do you have a question about your legal obligations as an employer? Then ask a lawyer. Call McKee Law Office for a free consultation at 215-242-5260.
Sharmil McKee
Business Attorney
Philadelphia, Pa
A French court awarded Spike Lee $46 million for a breach of contract. In 2007, Lee and TF1 Droits Audiovisuels executed a contract where TF1 agreed to distribute Lee’s film “Miracle at St. Anna” worldwide, except in the U.S., Canada, and Italy. When TF1 failed to honor it’s promises, Lee sued. Even though TF1 claimed that they could not distribute the film because Lee failed to deliver the film, the court did not agree. In the end, the court ruled that TF1 was at fault for breaching the agreement,
and ordered TF1 to pay $46 million in Euros to the film’s producers.
Lee will collect $1.5 million of the judgment.
The film is about the story of four black American soldiers who get trapped in an Italian village during WWII. The movie is based on a book written by James McBride, which tells the untold story of African American’s contributions in WWII. In the U.S., the film grossed $7 million but cost $45 million to make.
This award is a relief for Lee because reportedly, he is having trouble
finding financing to produce Inside Man 2.
What can you, as a business owner, learn from Lee’s lawsuit? When deciding to execute an agreement, examine contract laws from other countries. In the U.S., no state allows recovery for moral prejudice.* However, in France, this is a valid cause of action.
*I am only licensed in Pennsylvania, so I can only attest to Pennsylvania’s contract law. Nevertheless, I have colleagues in other jurisdictions; I have never heard of a claim for moral violations. If I am wrong, please post a comment.
Has someone breached or violated your agreement? Call us for a free
consultation. Sharmil McKee @ 215-242-5260.
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Sharmil McKee
Business Attorney
Philadelphia, PA
What happens if you demand that a website take down some copyright material, but it turns out that you don’t actually own the material? Well, Summit Entertainment may soon find out. Summit distributes the Twilight series. They successful got songwriter Matt Heart’s song “Eternal Knight” kicked off YouTube, iTunes, and Amazon, claiming the song improperly copied the Twilight intellectual property. This story is interesting because Heart produced the song before the Twilight movie came out. The story is also interesting because Summit is only claiming that Heart violated Twilight’s trademark; however, You Tube, Amazon, and iTunes’ ‘take down’ procedure only refers to copyright infringement. In this case, Heart’s CD cover states “inspired by Twilight”. This only appears to violate Summit’s trademark, not their copyright. (What is the difference between trademarks and copyrights)
So, Heart believes that Summit misled YouTube, Amazon, and iTunes about the extent of their intellectual property rights; thus he is suing Summit for $75,000. Summit is very aggressive about protecting its property; some retailers have filed lawsuits to protect themselves from Summit.
Summit should be concerned. If someone demands that a website takes down infringing material, but misrepresents the extent of their ownership or rights, under the Copyright Law, the innocent party is entitled to cost and attorney fees.
Sharmil McKee
Business Lawyer
Philadelphia, Pennsylvania
blog@mckeeoffice.com
CNN reports on Bishop Long’s attempt to mediate and settle a lawsuit. He is accused of having sex with 4 young boys and abusing his influence as a church leader.
http://religion.blogs.cnn.com/2010/12/08/bishop-longs-sex-case-in-mediation/
Two brothers are claiming that Warner Bros stole their screen play to develop and produce “The Last Samurai”. The basis of the Benay brothers’ claim is that Warner Bros breached an implied contract to pay if they used the script. Of course the brothers filed their lawsuit in California, so California law will determine the outcome of the case. But let’s imagine what would happen if Pennsylvania law determined the outcome.
In this case, the brothers pitched and presented the script to Warner Bros’ screenwriters around 1996. The screenwriters read the script around the same time. Warner Bros began producing the movie a short time later. Presumably, the parties did not discuss price, because a month after the presentation, Warner Bros declined to accept their script.
In Pennsylvania, to determine whether a contract exists, the law will objectively examine the parties actions. It doesn’t matter whether Warner Bros truly believed a contract did not exist if its outward actions reasonably suggested to the Benay brothers that a contract existed. One material fact that is missing from the brothers’ claim of implied contract is price. How much did Warner Bros’ offer for the script?
No agreement which could be inferred from the conduct of the parties in this case regarding a material element of the arrangement, specifically the fee agreement. This is the conclusion a court reached to resolve a breach of implied contract dispute between an employee search firm and an employer. The search firm claimed that the employer owed it a commission for hiring its candidate. The court disagreed and found that no contract existed between the search firm and the employer because the parties‘ did not agree on price. The case is Ameripro Search, Inc. v. Fleming Steel Co, 787 A.2d 988 (Pa. Super. Ct., 2001). If we apply this ruling to the Benay brothers’ claim, then they will likely lose.
What can you learn from this case? If you have intellectual property that you want to protect while discussing it with a potential buyer, then execute a written contract. Be clear about what you expect from the other side in exchange for viewing your idea or property. Discuss what the buyers expect to receive in exchange for viewing your ideas. Discuss confidentiality issues prior to sharing your property. The contract does not need to be long. It is enforceable as long as it accurately reflects your agreement. Perhaps if the Benay brothers had discussed their expectations prior to presenting their script, then this lawsuit would be unnecessary.
Sharmil McKee | Business Lawyer | blog@mckeeoffice.com
Dr. Dre or Andre Young
Last month, Dr. Dre (a/k/a Andre Young) sued WIDEawake Death Row Records for unpaid royalties and copyright infringement. Dr. Dre claims that WIDEawake is a holding company for Death Row Records, after Death Row Records filed bankruptcy. Dre also claims that WIDEawake began re-producing and releasing copies of his album, Chronic. According to the complaint, Dre and Death Row had an agreement where he sold his copyright to Death Row, but Death Row agreed to pay Dre if it ever transferred the copyright to someone else. Thus, Death Row’s transfer to WIDEawake Records violates this agreement and infringes his copyright. Here is the complaint.
Interestingly, Dre is also suing WIDEawake for missing royalty payments since 1992. This lawsuit was filed in California, so California law will decide this dispute. But let us imagine if the lawsuit were filed in Pennsylvania Is Dr. Dre’s claim barred by statutes of limitation?
Generally, the law only allows 4 years to sue for breach of contract. And on the surface, it looks like Dr. Dre would be out of luck here. On the other hand, Pennsylvania does have a 15-year statute of limitation for initiating an action for escheat. Escheat refers to any abandoned unclaimed property that should be turned over to the State Treasury. If Dre argues that his royalty payments should have escheated to the State, then he can survive the Statute of Limitation issue. When Death Row filed bankruptcy, conceivably, his unclaimed royalties could have been sent to the State Treasury.
In addition, Pennsylvania also extends statute of limitations for action based on a contract written under a seal. This section specifically ignores the general 4 year statute of limitations for initiating a breach of contract action.
Also, if Death Row Records concealed their breach from Dre, then the law excludes this time frame from the computation of the statute of limitations.
And finally, Dre can always argue that the contract was continuing, so the statute of limitations did not start. The Pennsylvania Superior Court states that when a contract does not fix a certain time for payment or the termination of the contract, then the contract will be treated as continuous. Thus, the statute of limitations does not start until the termination of the contractual relationship between the parties. (For those who are interested, the case is Crouse v. Cyclops Industries, 704 A.2d 1090 (Pa. Super., 1997)
However, I believe Dre’s best claim is the conversion of his copyright. He could enforce his rights under Section 203 of the U.S. Copyright Act, which returns his copyright to his ownership. This is what Jack Kirby’s family has done with Marvel Comics. This would certainly create some negotiating leverage enabling Dre to collect a settlement from WIDEawake.
Sharmil McKee | Business Attorney | blog@mckeeoffice.com
Will and Jada Smith have responded aggressively to legal threats that they fraudulently induced someone to invest in their film project.
In 2007, Jada wrote a film, the “Human Contract”; Will produced it. They convinced David Grasso to invest in the film. He did with $5 million dollars. The film went straight to DVD. In January 2010, Grasso’s attorney threatened to sue the couple because they failed to guarantee Grasso’s investment. Grasso claims that the couple promised a high return on his $5 million dollar investment. So far, Grasso states that he only recouped $1 million of his investment.
In response to Grasso’s threats, the couple filed a lawsuit in California, asking a judge to declare that they have done anything wrong and are not liable for Grasso’s losses. This is called declaratory relief. Here is the complaint.
Of course this complaint was filed in California, so California law will decide who wins. However, let us pretend that the complaint was filed here, in Philadelphia (this is not a far-fetched fantasy… David Grasso, the defendant lives in Philadelphia).
It would be a tough for Grasso to win here in Pennsylvania because Grasso and the couple formed a limited partnership for the sole purpose of producing this film. Grasso played a management role and was involved in the operation of the business (according to the complaint). With partnerships, members share the profits and the losses. The law would only permit Grasso to recover his losses if he could prove that the Smiths breached their fiduciary duty and wasted the partnership’s assets. Based on the complaint alone, this doesn’t seem to be the case. The couple’s only duty to Grasso is to exercise the best business judgment under the circumstances.
The question on your mind, dear reader, is why would Will and Jada Smith file this lawsuit if they did nothing wrong. The answer is precisely because they do not believe they are liable for Grasso’s losses. The Smiths could have waited until Grasso sued them or they could make a preemptive strike and sue Grasso for declaratory relief. I believe they filed the declaratory relief to send a strong message to the industry. They will not be bullied–if you are going to send a letter threatening a lawsuit, then be sure to have the evidence to support your claim.
What can you, as a business owner, learn from this case? Seeking a declaratory judgment from a court is always an available option to you. In Pennsylvania, under the Declaratory Judgment Act, you may ask a judge to resolve your dispute as long as you meet the following conditions:
The citation to the Pennsylvania Declaratory Judgment Act is 42 Pa. C.S.A. Section 7531. You may bring a declaratory judgment action to construe a contract either before or after a breach of the contract. A declaratory judgment is an ideal avenue if someone threatens to sue you for breaching a contract that you believe you are not responsible for. Otherwise, you must hold your breath for two years while waiting for that person to file a lawsuit against you.
Sharmil McKee | Business Lawyer | blog@mckeeoffice.com
