Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Entertainment Law & FinanceKickerFeaturesSectionsNewsLJN Newsletters

<b>Counsel Concerns</b>Royalty Contingency-Fee Arrangements

By ALM Staff | Law Journal Newsletters |
July 27, 2006

The New York Court of Appeals has answered several certified questions sent to it by the U.S. Court of Appeals for the Second Circuit, in a contingency-fee dispute between former Lynyrd Skynyrd guitarist Ed King and his former litigator Lawrence Fox. King v. Fox, No. 27. In 1978, Fox had negotiated a settlement of King's artist's and writer's royalties suit against MCA Records. Under a fee arrangement with King, Fox kept a one-third share of King's past-due and future royalties from MCA. In 1987, Fox agreed to not take a share of King's future writer royalties. In 1995, MCA began directly sending artist and writer royalties to King. In 1997, King sued Fox, alleging that the fee arrangement had been unconscionable. A Manhattan federal district court granted summary judgment for Fox on the ground that King had ratified the fee arrangement by accepting the royalty split with Fox for 17 years. The Second Circuit found, in part, that King's suit wasn't time-barred under a 6-year statute of limitations governing the fee agreement because Fox had continued to represent King until 1991 (in matters involving King's membership in the 1960s band Strawberry Alarm Clock).

The New York Court of Appeals responded to the Second Circuit's questions regarding the validity of the fee arrangement by noting: '[A]lthough continuous representation may in some cases toll the statute of limitations, it cannot preclude ratification of an attorney fee agreement. Ratification may occur at any time, so long as a client has full knowledge of the relevant facts (including the terms of the agreement and the choice to disavow it) and has acquiesced. The fact that the agreement's terms may be more advantageous to the attorney does not change the result. Nor is the result necessarily different if misconduct occurs during the period of continuous representation, so long as the client's acquiescence is not procured as a result of the misconduct. '

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Supreme Court Rules Rejection of Trademark License Does Not Rescind Rights of Licensee Image

Mission Product Holdings, Inc. v. Tempnology, LLC The question is whether a debtor's rejection of its agreement granting a license "terminates rights of the licensee that would survive the licensor's breach under applicable nonbankruptcy law."