Justia Entertainment & Sports Law Opinion SummariesArticles Posted in US Court of Appeals for the Third Circuit
The Weinstein Co. Holdings, LLC v. Spyglass Media Group, LLC.
Cohen entered into a work-for-hire agreement with SLP, a special purpose entity formed by TWC to make the film, Silver Linings Playbook. Cohen was to receive $250,000 in fixed initial compensation and contingent future compensation of roughly 5% of the movie’s net profits. The movie was released to critical acclaim in 2012. TWC purports to own all the rights pertaining to the movie, including the Cohen Agreement.In 2017, following a flood of sexual misconduct allegations against its co-founder, Harvey Weinstein, TWC filed for Chapter 11 bankruptcy. The bankruptcy court approved TWC’s Asset Purchase Agreement with Spyglass, 11 U.S.C. 363. Spyglass sought a declaratory judgment that the Cohen Agreement and had been sold to Spyglass. If the Cohen Agreement were an executory contract, assumed and assigned under section 365, Spyglass would be responsible for approximately $400,000 in previously unpaid contingent compensation. If Spyglass instead purchased the Cohen Agreement as a non-executory contract, Spyglass would be responsible only for obligations on a go-forward basis. Other writers, producers, and actors with similar works-made-for-hire contracts made similar arguments.The bankruptcy court granted Spyglass summary judgment. The district court and Third Circuit affirmed. Cohen’s remaining obligations under the Agreement are not material and the parties did not clearly avoid New York’s substantial performance rule; the Cohen Agreement is not an executory contract. View "The Weinstein Co. Holdings, LLC v. Spyglass Media Group, LLC." on Justia Law
The Weinstein Co. Holdings, LLC v. Y Movie, LLC
In March 2018, following sexual misconduct allegations against TWC’s co-founder Harvey Weinstein, TWC sought bankruptcy protection. TWC and Spyglass signed the Asset Purchase Agreement (APA). The sale closed in July 2018. Spyglass paid $287 million. Spyglass agreed to assume all liabilities associated with the Purchased Assets, including some “Contracts.” The APA identifies “Assumed Contracts,” as those Contracts that Spyglass would designate in writing, by November 2018.In May 2018, TWC filed an Assumed Contracts Schedule, with a disclaimer that the inclusion of a contract did not constitute an admission that such contract is executory or unexpired. A June 2018 Contract Notice, listed eight Investment Agreements as “non-executory contracts that are being removed from the Assumed Contracts Schedule.” The Investment Agreements, between TWC and Investors, had provided funding for TWC films in exchange for shares of future profits. Spyglass’s November 2018 Contract Notice listed nine Investment Agreements as “Excluded Contracts,”In January 2019, the Investors requested payments from Spyglass--their asserted share of a film’s profits. The Bankruptcy Court rejected the Investors’ claim that Spyglass bought all the Investment Agreements under the APA. The district court and Third Circuit affirmed. The Investment Agreements are not “Purchased Assets” and the associated obligations are not “Assumed Liabilities.” The Investment Agreements are not executory contracts under the Bankruptcy Code. View "The Weinstein Co. Holdings, LLC v. Y Movie, LLC" on Justia Law
In Re: NFL Players’ Concussion Injury Litigation
The Settlement Agreement between the NFL and eligible retired NFL players arose out of a class action based on findings that professional football players are at a significantly increased risk for serious brain injury. The Agreement is intended to provide monetary awards to former players who receive a qualifying diagnosis after following a specified protocol. The Agreement’s claims administrator and the district court created and adopted a set of clarifying, revised rules relating to how players can obtain a qualifying diagnosis.Several retired NFL players or their estates challenged those revised rules, arguing that they amended the Agreement, and alternatively, that the court abused its discretion by adopting the four revised rules. The Third Circuit upheld the rules, noting that the Agreement provided for the court’s continuing jurisdiction and specifies the duties of the claims administrator. The revised rules are permissible clarifications created for the Agreement’s successful administration—for example, to prevent fraud—and were not amendments. They were created, in part, because the claims administrator reviewed many claim submissions and noted that there were certain “clients of a law firm traveling thousands of miles to see the same physician rather than those available to them in their hometowns and excessively high numbers and rates of payable diagnoses from those doctors.” View "In Re: NFL Players' Concussion Injury Litigation" on Justia Law
National Collegiate Athletic Association v. Governor of New Jersey
The 1992 federal Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. 3702, prohibited governmental entities from involvement in gambling concerning competitive sports. New Jersey’s 2012 Sports Wagering Act authorized sports gambling. NCAA and professional sports leagues (Appellees) filed suit. The district court entered a temporary restraining order (TRO) barring the New Jersey Thoroughbred Horsemen’s Association (NJTHA) from conducting sports gambling, finding that the state law violated PASPA. The court required Appellees to post a $1.7 million bond as security. On appeal, NJTHA successfully challenged the constitutionality of PASPA in the Supreme Court. On remand, NJTHA unsuccessfully sought to recover on the bond. The Third Circuit vacated and remanded. NJTHA was “wrongfully enjoined” within the meaning of Federal Rule 65(c) and no good cause existed to deny bond damages. PASPA provided the only basis for enjoining NJTHA from conducting sports gambling. The Supreme Court ultimately held that that law is unconstitutional; NJTHA had a right to conduct sports gambling all along. There was no change in the law; NJTHA enjoyed success on the merits and is entitled to recover provable damages up to the bond amount. View "National Collegiate Athletic Association v. Governor of New Jersey" on Justia Law
In Re: National Football League Players Concussion Injury Litigation.
Multidistrict litigation was formed to handle claims filed by former professional football players against the NFL based on concussion-related injuries. The district court (Judge Brody) approved a settlement agreement, effective January 2017. The Third Circuit affirmed; the Supreme Court denied certiorari. Under the agreement, approximately 200,000 class members surrendered their claims in exchange for proceeds from an uncapped settlement fund. Class members had to submit medical records reflecting a qualifying diagnosis. The Claims Administrator determines whether the applicant qualifies for an award. In March 2017, the claims submission process opened for class members who had been diagnosed with a qualifying illness before January 7, 2017. Other class members had to receive a diagnosis from a practitioner approved through the settlement Baseline Assessment Program (BAP). Class members could register for BAP appointments beginning in June 2017. While waiting to receive their awards, hundreds of class members entered into cash advance agreements with litigation funding companies, purporting to “assign” their rights to settlement proceeds in exchange for immediate cash. Class members did not assign their legal claims against the NFL. Judge Brody retained jurisdiction over the administration of the settlement agreement, which included an anti-assignment provision.Class counsel advised Judge Brody that he was concerned about predatory lending. Judge Brody ordered class members to inform the Claims Administrator of all assignment agreements, and purported to void all such agreements, directing a procedure under which funding companies could accept rescission and return of the principal amount they had advanced. The Third Circuit vacated. Despite having the authority to void prohibited assignments, the court went too far in voiding the cash advance agreements and voiding contractual provisions that went only to a lender’s right to receive funds after the player acquired them. View "In Re: National Football League Players Concussion Injury Litigation." on Justia Law
Tanksley v. Daniels
In 2005, Tanksley, a Philadelphia actor and producer, created a three-episode television pilot, Cream, for which he received a copyright. In 2015, Fox Television debuted a new series, Empire, from award-winning producer and director Lee Daniels. Tanksley sued, claiming that Empire infringed on his copyright of Cream. The district court found no substantial similarity between the two shows and dismissed. The Third Circuit affirmed. Superficial similarities notwithstanding, Cream and Empire are not substantially similar as a matter of law. The shared premise of the shows—an African-American, male record executive— is unprotectable. These characters fit squarely within the class of “prototypes” to which copyright protection has never extended. Considering the protectable elements of Cream, “no reasonable jury, properly instructed, could find that the two works are substantially similar.” View "Tanksley v. Daniels" on Justia Law
Finkelman v. National Football League
In 2014, Super Bowl XLVIII was held at New Jersey's MetLife Stadium. Finkelman alleges that the NFL has a policy of withholding 99% of Super Bowl tickets from the general public; 75% of the withheld tickets are split among NFL teams and 25% of tickets are for companies, broadcast networks, media sponsors, the host committee, and other “league insiders.” The 1% of tickets for public purchase are sold through a lottery system. A person has to enter by the deadline, be selected as a winner, and choose to actually purchase a ticket. Finkelman purchased tickets on the secondary market for $2,000 per ticket, although these tickets had a face value of $800 each. He did not enter the lottery to seek tickets offered at face value but filed a putative class action under New Jersey’s Ticket Law, N.J. Stat. 56:8-35.1: It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets’ release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating. The Third Circuit concluded that Finkelman had standing based on the plausible economic facts he pleaded, but deferred action on the merits pending decision by the Supreme Court of New Jersey on a pending petition for certification of questions of state law. View "Finkelman v. National Football League" on Justia Law