La-la-lawsuits: A Look at November’s Most Litigious Moments

December 1st, 2012

Pandora is suing ASCAP, one of the largest performance rights organizations, to implement lower statutory rates for songwriters.  Pandora has called the current rates as “ill suited and not reasonable”.  The major problem with this suit is that publishers, on the other hand, are trying to drive statutory rates up, not down.  This is because Pandora currently pays record labels over ten times more on a song play than they do to publishers and songwriters.  Furthermore, Sony/ATV isn’t making the suit easier for Pandora, since after recently acquiring EMI’s publishing catalog, Sony/ATV is pushing for their own independent royalty rates.  This move by Sony/ATV is yet another reason why Pandora is pushing so hard to lower the rates.

A 2006 divorce between Tory Burch and Chris Burch has turned into a legal battle between the two, totally unrelated to any actual marital issues.  In October 2011, Chris had opened up his own store, C Store, that is more affordable than the Tory Burch company line.  However, the C Store’s appearance and inventory look a little too similar to the Tory Burch company’s merchandise and stores.  Meanwhile, both Tory and Chris still own stake in the popular clothing line company.  Mr. Burch filed a complaint earlier this month accusing Tory of delaying the sale of his shares of the Tory Burch company, along with other accusations regarding inappropriate board behavior (a breach of fiduciary duties).  Tory answered the complaint with various counterclaims, including accusations that he is stealing the company’s trade secrets.  The bottom line issue is whether the existence of C Wonder will negatively effect the value of the Tory Burch company.  We will have to wait and see.

The Talent Agencies Act (TAA) in California is under attack by former personal managers of various stars.  The TAA states that only licensed agents can procure employment for their clients.  It was further decided that this restriction applies not only to talent agents, but personal managers, as well.  In mid-November, The National Conference of Personal Managers (NCOPM) sued the CA governor, attorney general, and labor commissioner, claiming that the TAA is entirely unconstitutional and that is violates “due process, equal protection, involuntary servitude, and interferes with interstate commerce and free speech”.  Essentially, clients can fire their managers and refuse to pay any commission to them because they weren’t licensed and technically not legally employable under the TAA.

Hurricane Sandy left quite a path of destruction, not only physically, but now also legally.  New York resident, Irwin Bard, and his son are suing Cablevision for $250 million for non-existent cable, Internet, and phone services during the time of the power outages.  Bard demands a rebate to all customers who were affected by this unfair charge.  Cablevison assured their customers, however, that anyone who was overcharged can visit the Cablevision website and ask for a credit back.  However, the issue is whether this should be automatic versus an “opt-in” action.  The case is still undecided as of now.