CLASS 14 NOTES
FROM CONTRACT TO COURT: LEGAL DISPUTES
IN THE MUSIC INDUSTRY.
TYPES OF DISPUTE RESOLUTONS, LEGAL
ACTIONS, REMEDIES, CIVIL PROCEDURE, LITIGATION ATTORNEYS FEE AGREEMENTS
Below is a list of legal actions that
often arise between musical artists, labels, and the companies and individuals
that utilize music commercially:
1. infringement of copyright
2. breach of contract (failure to pay
royalties, signing a recording agreement with a second company when under
exclusive agreement to the first, etc)
3. labor commissioner disputes between
managers and artists
4. wrongful use of name and likeness
5. trademark issues
Due to the high cost of using attorneys
to resolve these disputes in court, a variety of non-court dispute resolution
methods are often used first, with court filing being the choice of last
resort. The exception would be circumstances where a party needs to secure a
court order (preliminary injunction) rapidly to prevent irreparable harm from
occurring. Under those circumstances, an action must be filed in Court.
Here are various dispute resolution
methods:
A. Negotiation between the parties
themselves
The least expensive method.
Unfortunately, due to the emotional nature of disputes, parties often are not
able to communicate effectively to arrive at an agreeable solution. Better results can occur when two business representatives of the parties meet to try and resolve the matter. This requirement can be inserted into contracts.
B. Negotiation between the attorneys
for the parties
More expensive, but much less so than
court. Higher chance of resolution because the attorneys have a better handle
on the likely outcome if the matter were to go to court, and can reason with
their clients to fashion a compromise.
C. Evaluation by neutral party or
attorney
Used primarily when the attorney or
party desires an impartial opinion from someone not involved in the controversy
to insure a balanced view.
D. Mediation by a hired third party
Increasingly popular due to lower costs
than court action. Requires both parties to agree, accept, and pay a mediator
who consults with each party separately. The mediator is often an attorney who
has been specially trained in mediation and who attempts to craft a mutually
agreeable settlement.
E. Arbitration by neutral party
Arbitration is similar to a trial, but
without a jury or many of the formalities of trial. Can be less expensive, but
is still an adversarial procedure requiring testimony of witnesses and
presentation of evidence and briefs. Often contracts will specify Arbitration
as the preferred method of dispute resolution to keep costs down.
F. Small Claims Court
Small Claims Court is for claims of
$7,500 or less. No attorneys are permitted, parties only. The parties can
present witnesses and bring documents. Matters are decided by the judge only,
no jury. Very efficient process and judgment can be enforced like any other
judgment.
G. Litigation in State or Federal Court
The most costly form of dispute
resolution. Legal fees can range in the hundreds of thousands of dollars
depending on the complexity of the case and duration. Outcome is always
unpredictable at best, particularly if a jury trial is needed.
H. Issues in Every Litigated Case:
(1) Jurisdiction of the Court to Hear the Case
The court where the case was filed must have some basis for legal jurisdiction to hear the matter. If you are sued in another state and have no contacts with that state, it may be improper. Other defects involving jurisdiction include whether you were served properly, or whether the case should have been brought in Federal Court and it was brought in State court.
(2) Statute of limitations
Every claim has an applicable Statue of
Limitations or period of time within which an action must be filed or lost
forever. The time period varies based on the type of claim.
(3) Ability of defendant to respond in
damages
Since money damages are by far the most
common relief sought, if a defendant does not have the ability to respond in
damages, an expensive law suit is not usually a practical form of relief.
(4) Ability of plaintiff to prove facts
of their case
Is there a written agreement that
supports the plaintiff? Are the witnesses credible? Is there documentation to
support the plaintiff’s version of the facts? All these elements are important
in proving the facts at trial
(5) Legal causes of action
Every wrong does not necessarily have a
legal remedy. Therefore, attorneys have to look at the facts and see what types
of legal causes of action the Plaintiff can justify under the law based on
those facts. Causes of action include breach of contract, torts or civil wrongs
such as fraud, invasion of privacy, libel, and actions specified by statute.
(6) Costs of Representation
Even if the Plaintiff can afford
representation, there should still be a cost-benefit analysis to determine
whether the possible award of damages justifies the legal expense and Client
effort.
I. Basic Steps in State and Federal
Court Litigation
(1) Complaint and Summons
(2) Answer
(3) Discovery (interrogatories,
depositions, requests for documents)
(4) Motions (summary judgment, etc)
(5) Trial (jury or judge)
(6) Judgment
(7) Appeal (loser posts bond)
Of all civil cases filed,95% settle and
less than 5% actually go to trial.
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