Management Contracts and Highly Antagonized Litigators – 2010

Generally speaking, there are two kinds of lawyers. (1) Transactional lawyers, who spend their time negotiating agreements so people can happily make money and/or avoid liability; and (2) Litigators (which I used to be) —  whom spend a great deal of time fighting, provoking and plotting the demise of other litigators. Now, imagine the personality types that might logically gravitate towards these two job descriptions, and you will have a general sense of how the following came to be.

Disclaimer: This is not legal advice to anyone under any circumstances, just a general and maybe humorous discussion of a random entertainment law scene.

I went to a lunch meeting of the Beverly Hills Bar Association this afternoon, at a nice restaurant on La Cienega called “Lawrys.” Today’s discussion was about artist management agreements, and the current state of California law. A few high-powered Hollywood entertainment litigators led the discussion, along with Angela Watson, an actress who is also on the board of the Screen Actors Guild.

And now … a little bit of legal context.

Lesson 1 – The Calfornia Talent Agency Act.

Besides the usual 101 legal issues that surround any management agreement, there is one significant legal hurdle for managers under California law. To avoid boring you with a long law review article that even highly medicated lawyers cannot stand to read for more than 10 seconds, just know that at the end of the day, it all comes down to one simple Draconian rule.

Under California law, Managers cannot legally procure employment for artists … unless they are a licensed talent agent.

Period.

This means, for example, the manager of your local band cannot legally get the band a gig unless he is a licensed talent agent. Truth be told, most managers don’t give a [BLEEP], and they book gigs for their band wherever and whenever they want. The chaos, however, begins once the manager has a dispute with the band. The band fires the Manager. Then the Manager tries to enforce his management contract with the band. Kaboom!

The problem is … if the manager once-upon-a-time booked a show (i.e. procured employment) for the band, a Court or the Labor Commission will throw his or her management contract OUT THE WINDOW … just because of the once-upon-a time violation of the Talent Agency Act. Ouch.

It doesn’t matter if the band owes the Manager money. In fact, nothing really matters under the current law, and Managers almost always lose in court.

The score is 74,000,093 to 2.

Scene 1 = Artist wins, pays Manager nothing from now on. Contract is Over.

Grand Finale = Artist sues the Manager for all the money they paid him last year. Ouch.

Note, this outcome is possible even if the Manager booked the show AT THE REQUEST OF THE ARTIST.

Evil, no?

So anyway, the discussion went on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, about this point.

Then, I dumped some iced tea. Which I seem to be getting quite good at lately.

Then, the discussion went went on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on about the same topic.

Then, I dumped some iced tea. Again. Which I am getting quite good at lately. Maybe I should go pro.

Then, the discussion went went on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on about the same topic.

Then, actress Angela Watson started to talk. What captivated me about Angela was not her radiant smile, nor her knowledge of the law. It was her profound explanation of how she started her career as a successful child actor … and then one day, she figured out her management team stole $3M from her. Apparently, the people she trusted most — including her parents — put their hands in the proverbial candy dish … and tried to get Angela not to notice as her money flew out the door and into their pockets.

Faaaaaaaaaaaaaaaast Forward … and a very antagonized Angela sues everyone. Including her parents.

When the dust $ettled, Angela had her money back, an accountant sat in prison, a lawyer lost his license, and I can only imagine that Thanksgiving Dinner at the Watson house was never really quite the same.

That story certainly put our discussion into the proper perspective.

Next up to bat, the Hollywood litigators lead the discussion back to the case law and legal issues. Yippee!

Suddenly … a older litigator with silver hair from across the room raises his hand.

“Yes? … Do you have a question?” the unsuspecting moderator asks.

The guy stands up, picks up a book, and starts out with his best Abraham Lincoln voice.

“What I am about to say will make some of you happy,” he opined.

“And what I am about to say will also make some of you very angry.”

Thought: Uh-oh. Here we go. Turn up the radio.

What follows can only be described as “courtroom drama not in a courtroom.” Or maybe life-imitating-art-imitating-a-tuna-casserole.”

In proper legalease, the now-standing antagonized man proceeds to tell the entire panel of distinguished Hollywood litigators that they are full of shit. Well, he didn’t actually use an obscenity, but he might as well have. He told them all of their information was wrong.

The fireworks are lit … the litigator circus Kamikaze meelee begins … as opposing enemy lawyers clench their teeth like starving animals … others angrily spout out bizarre and often irrelevant numerical case law citations like they are being auctioned off at Southerbys … lizard toungues and narrow rat eyes eagerly size up the competition in front of a half-eaten slice of Apple pie and a non-existent judge … while still others dig through stained yellow paper in search of more irrelevant case citations to recite.

The litigators in the room are in a complete rage … over an obscure legal point that has about as much relevance to your life as the average annual consumption of belly button lint by farm animals in Ecuador. And some of them are really mad. Which is really strange. This small group-in-a-rage includes the standing-up-guy-in-a-rage, who promptly assures his place in the history books by storming out of the room. In a rage. The whole bizarre scene would make an excellent intermission to the film Fear and Loathing in Las Vegas.

Eventually, I can’t stand it any more.

And I have no more iced tea to dump on the table.

I look at my watch, wave goodbye to a few lawyer pals … and escape from the bizarre scene …

I open the door and walk out into the Southern California sunshine.

With an amused smile on my face.

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