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Whenever a lawsuit makes news, I like to read the actual complaint to see what's really going on. Even though I've forgotten virtually everything about copyright/entertainment law that I took in law school. And while the lawsuit, in big business terms, doesn't involve that much money, there's a lot going on. After reading the lawsuit, I have a much better idea what Clive Davis was doing in his Beverly Hills bungalow. Huddling with his lawyers and accountants trying to pull a quasi "Madoff" on Kelly and other artists who came out of American Idol. One glaring example: If an album sold at least 1,000,000 copies, the royalty Sony would have to pay 19 would increase by one percentage point. Except that Sony allegedly never computed or paid those additional royalties.
Not that 19, founded by Simon Fuller, is a paragon of virtue. The theme song for both Clive and Fuller is Bob Dylan's "Positively 4th Street."
I was struck that even though 19, which is based in the U.K. and California, is the plaintiff, it hired a Nashville law firm, King & Ballow, to reperesent it. Sony is represented by a Manhattan firm I've never heard of, Gordon, Gordon & Schnapp.
There are A LOT of Kelly mentions in the lawsuit. Near the beginning, there are some quasi-biographical paragraphs summarizing the careers of Kelly, Clay Aiken, Carrie Underwood, Chris Daughtry, David Cook, David Archuleta, Kellie Pickler, and Jordin Sparks.
But the money part of the lawsuit is not about Kelly at all. Its all about 19, which is asking for a minimum of $10,000,000 in damages, reimbursement of the cost of auditing Sony's books, and attorneys's fees. Nothing in the lawsuit indicates that Kelly would get a plug nickel. $3,000,000 of that amount is what lawyers call "prejudgment interest." Since the lawsuit involves New York law, I'm well aware that despite the low interest rates of the last 10 years or so, section 5004 of New York's Civil Practice Law and Rules sets the interest rate on a judgment at 9 percent (it shouldn't surprise you that just one part of New York law has 5,000 sections). The law has not been amended since the 1980's. Lawyers like that 9 percent too much. Both the Speaker of the State Assembly and the co-leader of the State Senate are lawyers who get paid big money by their respective law firms while serving in the New York legislature.
Other than the career biographies, here's some interesting Kelly mentions from the lawsuit:
Paragraph 55 claims that "Sony cannot even provide budgets for numerous videos for which it took deductions from royalties, including the Kelly Clarkson videos "A Moment Like This", "Before Your Love", "Low", "Miss Independent", "Since U Been Gone", and "The Trouble With Love Is."
There's also an "individual claim" (whatever that means) involving Kelly's deal with Vitamin Water, which at the time was manufactured by a company called "Glaceau (Vitamin Water).". The title of the claim is "Failure To Correctly Pay for Kelly Clarkson Masters Used in Connection with Glaceau."
In 2007, 19 and Kelly approved Glaceau's use of some of Kelly's master recordings for a Vitamin Water promotion. Sony decided it would deduct $20,000 from any royalties generated as amounts Sony paid producers, even though it turned out that Sony never paid a red cent to any producers during the Vitamin Water promotion.
There's also something about digital downloads of singles as opposed to segments of the "All I Ever Wanted" album, and something about a promotional campaign in New Zealand for "My December".
19 has asked for a jury trial, which would take place in the Daniel Patrick Moynihan Federal Courthouse in Lower Manhattan. That means that if the case doesn't get settled and goes to trial, Kelly might testify. If that happens, your humble correspondent will do his best to be in the gallery. Unfortunately, its more likely that Kelly would have to sit for a depostion before any trial, probably in Nashville. Depositions are not public. And they are no picnic. A judge is almost never present, and if the lawyers get into an argument, they have to go to the courthouse to get a "ruling" from the judge, or get the judge on the phone. Naturally, fights among lawyers at depostions are nastier than anything that happens in a courtroom.
If you are interested, the Hollywood Reporter has a good article on the lawsuit, with a link to the complaint:
http://www.hollywood...t-claims-681625
Edited by seantrainor, 15 April 2014 - 02:43 PM.
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