JON LOVITZ: Taking the ‘Business’ of Comedy to the Courthouse

With comedy as big as it is these days there is no better time than now for anyone on the business side of the industry to make a ton of money, especially those who know the industry pretty well or should. Folks like comedian Jon Lovitz. Needless to say, when rough times hit, the gravy train can also simply get derailed and spill a lot of money down the drain. Sometimes, a lot of money, as Lovitz, a former SNL star, claims in his lawsuit against the former manager of his comedy club. Here’s what happened:

In 2009 Lovitz went into the comedy club business with a partner named Frank Kelley. Together, they set up the Jon Lovitz Comedy Club in Universal City, California, with Kelley acting as the manager of the club. A few years later, after losing a lot of money, the business eventually failed; then the blame game erupted. Typical scenario! Lovitz claims he had invested more than $1.5 million dollars in the failed business and he blames Kelley for running the business into the ground. He also accuses Kelley of embezzling at least $100,000 of the club’s money and he’s mad as hell. Not letting matters slide, Lovitz filed a lawsuit against Kelley seeking huge money damages from the former manager for fraud, conversion and breach of fiduciary duty.

Lovitz’ lawsuit is one of those situations where someone might wonder why the district attorney’s office isn’t involved at all, considering all the fraud allegations that seem to suggest a pattern of criminal behavior on the part of Kelley, including the allegation that Kelley falsified books and accounts. Well, the short answer for those who might be wondering about this situation is that much of these events occurred among business partners in the running of their business and the DA’s offices usually have bigger fishes to fry in chasing down violent criminals or more serious financial crimes rather than spending taxpayers’ money on some garden-variety accusations of betrayals among business partners and associates. Such cases are usually left to the civil courts and so Lovitz’ case is taking place in just the proper venue. Yet the Lovitz case is important in today’s comedy industry where comedy clubs are on the rise again after declining in the 1990s. The outcome of this case would at least help both comedy club managers and the club owners who hire them to run the clubs to know, for example, where the lines are drawn in their relationship with each other and when club managers can get in trouble for the way they’re doing their jobs.

But can Lovitz win his claims based on fraud, conversion or breach of fiduciary duty? Well, let’s look at the law. For starters, this is a case about business partners who trusted each other so much that one partner literally handed the keys to the lock box to the other partner for him to run their common enterprise honestly and profitably. In such a situation, the trusted guy running the business owes more than just a ‘thank you’ to the guy who’s coming up with the money. Folks like the guy running the business are regarded in law as “fiduciaries” of the other person. The law imposes the status of fiduciary in most transactions where there is a relationship of “trust and confidence” existing between two people. Typically, in such situations, one person often knows so much about what’s going on in the transaction and is so much in control of the situation that unless the confidence and trust is maintained, the other person who is in a weaker position could get hurt.

So, in order to protect the other person involved, the law obliges the “fiduciary” to act in a trustworthy and transparent manner. One of the biggest requirements imposed upon a fiduciary is that he not put himself in any position where there is a conflict of interest between himself and the other person. In short, a fiduciary is not allowed to benefit himself either at the expense of the work he is hired to do and that of the person who hired him or her to do the work. Aside from business managers, the typical situations where we’ll find fiduciary relationships are the situation between a lawyer and his or her client or a doctor and his or her patient.

Considering what being a fiduciary is all about, there is little doubt that Kelley’s work as a fiduciary of Lovitz is the issue that dominates all others in this case. All the other claims in this case are not nearly as important as the question of whether Kelley’s actions amount to a violation of his fiduciary duties of good faith and fair dealing with Lovitz in the way he handled the affairs of the club. (By the way, given the actual claims that Lovitz is making in this case, some of the allegations in his lawsuit seem sort of idle and unnecessary. For example, since Lovitz is not trying to cancel or “rescind” the agreement on the basis of ‘fraud in the inducement,’ all the talk about Kelley hyping his qualifications and track record as a comedy club manager in the Los Angeles area just to get Lovitz to hire him as club manager aren’t really helpful in supporting any claim stated in the lawsuit. To be sure, this case is well past the ‘rescission’ stage at this time.)

But seriously, how will the court proceed to sort out the actual claims that have been made in the case? As already noted, all the above claims are closely related and ultimately revolve around the whole question of Kelley being a fiduciary. In layman’s language, the claim about fraud is really kind of like saying that somebody’s actions were deceitful (or dishonest) and misleading and that they caused a detriment or disadvantage to somebody else. With respect to “conversion,” we’re talking about the actions of someone who treats another person’s property as if the said property instead belonged to him and in so doing he deprived the true owner of the property of the benefit and use of that property. Typically, this occurs in ‘bailment’ situations where one person entrusts property to the custody of another person on a temporary basis. The claim of breach of fiduciary duty, as explained above, means that someone in a position of trust and confidence betrayed the trust placed in him by another person by taking unfair advantage of their position to the disadvantage of the other person. Of course, in each situation involved in these claims, the plaintiffs must allege that they suffered damage or loss as a result of the defendants’ actions. Without the damage factor, there will be no liability.

For someone trying to win money damages for his former partner’s breach of fiduciary duty, it sure looks like Lovitz is playing a winning hand with the kinds of allegations he has made in his lawsuit. For instance, he claims that Kelley used the comedy club’s checks and credit cards to pay for his own personal expenses and that in so doing he failed or neglected to use the club’s monies to meet the club’s obligations, such as paying both performers who did gigs at the club as well as the club’s own staffers. The allegations that someone in a fiduciary position like Kelley has used the assets of the business as his own ‘piggy bank’ and that he re-routed the company’s assets to his own personal benefit and use lie at the heart of a case based on the breach of fiduciary duty. Lovitz claims that Kelley swiped more than $100,000 in credit card expenses for which the club was ultimately held responsible.

Yet, as good as the allegations are, that is not the end of the matter. Not even close. For one thing, this is only one side of the story and surely the devil is in the details with this one: making the allegations is the easy part, proving up the allegations is the real heavy lifting here. In this case, Lovitz will likely need to prove that the expenses Kelley ran up had nothing at all to do with the business. It won’t be enough to show that he spent too much money on certain things or that he spent money on the wrong things. Or even that his failure to spend money on some things or in certain ways led to the failure of the business. That just won’t cut it in this kind of case, especially because people who manage stuff are allowed the discretion to choose their ways and means of operation. (In other contexts, they call this sort of idea the “business judgment rule.”)

And when there’s some doubt here, they will often award the benefit of the doubt to the guy making the business decision. So, in terms of his liability, it all pretty much comes down to whether Kelley intended to act in violation of his fiduciary duty or whether he was simply being a bad manager. In other words, was Kelley acting on purpose to rip off the business operation or was he just being a sloppy manager? To be sure, answering these kinds of questions aren’t the easiest things to do in the ‘cloud and dust’ of a full-dress courtroom trial. And defense lawyers more than plaintiffs’ lawyers simply enjoy the uncertainty of these answers.

In the end, running a comedy club, just like any business, isn’t easy; and winning a case like this one isn’t easy either. From all indications, a lot of money has apparently gone down the drain here and what we have here is a bad case of misplaced trust and confidence in the hiring of a business manager. Needless to say, it was Lovitz’ job to hire a good manager for his business. Yet, one can’t help but notice that it is in this particular context that Lovitz’ allegations of being misled about Kelley’s qualifications and background seem to make the most sense. The larger point here, though, is that as far as we’re dealing with financial loss or damage resulting from the actions of a business manager or decisions made by him, this kind of problem generally couldn’t have been prevented by a written contract or agreement, no matter how smartly crafted. Fact is, there is only so much anyone can write into an agreement today to control the turbulent waters of human events tomorrow, especially the uncertainties of the business world.

It is hard to predict the outcome of a case like this one and it would be interesting to see how it all shakes out in court, assuming of course that an out-of-court settlement isn’t hammered out between the parties. Yet, however it all winds down, for a guy like funnyman Lovitz, who apparently has lost a lot of money, this whole situation surely is no laughing matter.

 

Stay tuned for my upcoming book “Comedy Under Attack...” coming out soon.

The New Frontier: What if a Comedian is also a Judge?

Comedy can be pretty fascinating stuff, and it is especially so nowadays that comedy is such a big influence on the pop culture. Yet, it can also be pretty controversial. At the time of this writing the New Jersey Supreme Court was set to rule on whether a guy who serves as a judge can also work as a stand-up comic. The case reached New Jersey’s high court after the committee that oversees the work of judges in that state decided that Vince A Sicari, a municipal judge in South Hackensack, NJ, who also works as a comedian under the name of Vince August, cannot continue to work as a comedian.

The committee based its decision on the ground that for somebody to work as both a judge and a comedian would create a conflict with his duties as a judge. (In the interest of full disclosure, I have to state here that in addition to being a comedy industry reporter and blogger, I’m a lawyer and a friend of Vince August’s. But, to be clear, I am of the view that Vince August the comic should not have to resign his position as Judge Sicari just so he can continue working as a comedian.)

Despite his life in the path of the law, Vince August, even by his own admission, has had a long standing passion for comedy and so far he has come a long way in the game: Today, he not only performs regularly as one of the headline acts at Carolines on Broadway, one of the best known comedy clubs in New York City, he also works as a warm-up act on one of the most famous and influential comedy shows on TV, The Daily Show with Jon Stewart on Comedy Central.

In their bid to force him off the comedy stages, the main worry of the ‘ethics committees’ who supervise the conduct of the judges in New Jersey is that Sicari’s work as a comic could cause folks who appear before him when he sits as a judge to worry that he might be biased against them. In addition, given the association of stand-up comedy with weird behavior and the act of just ‘joking around,’ the ethics committees also worry that a judge moonlighting as a comedian would lower the dignity of the office of ‘Your Honor,’ the judge.

Well, to be sure, being a judge at any level of the court system is pretty serious business and it is not surprising that the society sees it fit to put judges on a pedestal and to slap a whole bunch of restrictions on their conduct. Therefore, the concern of the ethics committees is a quite legitimate one and nobody should knock them for doing their job. For starters, there is some concern about the so-called ‘slippery slope,’ something lawyers are quite familiar with. In this particular case, the slippery slope logic will go something like this: If a judge could moonlight as a comedian, then why shouldn’t a female judge, for instance, be able to moonlight as a stripper, as long as she doesn’t tell her customers that she’s a judge during the day.

Plus, all talk about slippery slope aside, when a judge works as a comedian, there is an additional angle to the picture that, frankly, would not quite exist in the case of, say, a judge working as a stripper and maybe dancing quietly on a customer’s lap or even a judge simply moonlighting as a shill on a product commercial. It just so happens that comedians draw a lot of material from the events in their daily life and as a municipal judge in New Jersey, the folks who would often appear before Judge Sicari would be folks involved mostly in traffic violations and disorderly conduct charges, including folks who got drunk or got into barroom fights; played their music too loud; maybe smacked their wives around; urinated in public; menaced a wedding party; unduly threatened law abiding visitors to a public park; gambled illegally and other stuff like that. And anyone familiar with comedians can easily imagine how these situations could provide any comic with a huge treasure trove for comedy material, just the kind of stuff that the ethics committee would worry about. And they should. (In the example above, it is obvious that neither the judge moonlighting as a stripper nor the judge doing a product commercial on the side would enjoy this advantage of being able to use funny material from their courtroom work in their respective extracurricular activities. )

Yet, that’s not what we have in this case. Not even close! In situations such as this one, where things that people worry about may or may not happen, the devil is always in the details, as the saying goes. Long story short here, the situation with Vince August is completely different and the way he has handled matters in general should not provoke any worries from the ethics committees at all. As a result, this case deserves to be treated in a different way than other cases where judges are engaged in extra-curricular activities.

From all indications, Vince August has taken painstaking measures to keep his two lives separate and apart from one another. What exists between his life as a judge and his life as a comedian is nothing short of an airtight-Chinese wall. First, he goes by a different name onstage as a comedian than his real name as a judge. When he does his comedy routines, he never uses any materials from his life as a judge or makes any jokes that might even remotely suggest that he is a judge. Instead, he bases his comedy routines on his own personal experiences from other spheres of his life that have nothing to do with his being a judge ─ for instance, his family upbringing. Unlike many a comic and despite the almost irresistible temptation to do so, August appears to have scrupulously stayed away from using any material from his life as a judge who regularly deals with matters such as traffic violations and disorderly conduct cases. In so doing, he has given up a vast treasure of ‘source material’ that most comedians would kill to get their hands on.

So far, there is no record that anyone one who has attended any of his numerous comedy sessions over the years learned from anything he said onstage that he does have another life as a judge. In fact, there is an equivalent scenario that one can draw here: When Vince August works as a comedian, the odds of folks recognizing him as a judge are the same as their odds of recognizing him as a judge if he were riding a New York City subway train in civilian clothes.

So, as it turns out, this is not one of those extracurricular engagements in which a judge has brazenly ignored or blithely disregarded the decencies of his judicial office in the pursuit of an extra buck. Not at all! And to get more specific, this is not like the sort of situation where a judge tries to supplement his income with a paid outside gig by, for instance, shilling for Shredded Wheat or Kellogg’s Corn Flakes in some product ad. And speaking of judicial post, August’s work as a judge is so small that it is actually the short end of his long career stick: He only works part time as a judge and receives a paltry $13,000 per year for his trouble. August spends the vast bulk of his career time working as a comedian and getting paid as such.

In context, a work life that small ought not to create any real worries about setting a bad example for other career judges: And from the look of things, especially from his busy life as a comedian, it does not seem too much that August is in line for higher office in the New Jersey judiciary. Because of this, there is little chance that he will attain the kind of high profile as a judge that could make him a bad example for other judges or a ‘poster boy’ for judges behaving badly.

Long story short, this is a case that qualifies as an exception to the rule which requires judges to stay within their proper lanes of activity. And this exception should have been recognized from the very beginning. In the broader scheme of judges doing extra-curricular stuff, this case is more like a low-flying aircraft that should have been allowed to simply remain under the radar. Unfortunately, the sheer stubbornness of the ethics committees in refusing to allow this small stuff to slide has generated such publicity that the case has now attained a surprising high profile.

With the cat now out of the bag and considering his long standing desire to keep his comedy and judge careers separate and apart from each other, it is hard not to come to the conclusion that Vince August has been unfairly treated in all of the brouhaha surrounding this case. Yet, when it comes to doing the right thing, it is always better to do it late than never. In that spirit, it is strongly recommended that the New Jersey authorities simply give this one case the pass it deserves and just move on. It’s time to get over it!

Stay tuned for my upcoming book “Comedy Under Attack…” coming out soon!

DONALD TRUMP vs. BILL MAHER: Tensions between a Joke and a Deal

When it comes to money matters, mixing things up with Donald Trump can be a costly proposition. This means that even making a bet with the real estate mogul and Celebrity Apprentice host can earn someone a court date and maybe even set the person back a couple million dollars. Not even if the bet was meant as a joke. Not even if the person on the opposite side is a well known comedian. Like Bill Maher.

Here’s what happened: This past January, Maher, the host of HBO’s Real Time with Bill Maher appeared on Jay Leno’s Tonight Show and mocked Trump as “the spawn of his mother having sex with an orangutan.” Maher then said that if Trump could show proof that what he said wasn’t true, he would give $5 million to Trump which the billionaire would be free to donate to any charity of his choice, such as “Hair Club for Men, the Institute for Incorrigible Douchebaggery, whatever charity…” To drive his point home, Maher also claimed that the color of Trump’s hair and the color of an orange orangutan were the only two things in nature of the same color. Ouch! The audience laughed loudly and applauded. And most people regarded Maher’s offer as merely mimicking or mocking Trump’s own offer a year earlier to donate $5 million to any charity of Barack Obama’s choosing if Obama would produce his birth certificate and college transcripts.

Well, as it turned out, if the comedian was joking, the billionaire apparently didn’t take it like a joke: Two days later, Trump produced his birth certificate to Maher and then demanded that the funnyman pony up, as promised. When that didn’t happen, Trump made a most unexpected move: He sued Maher in a Los Angeles court, for breach of contract.

Lately, it seems like The Donald has been busy trying to teach folks lessons in the courtroom. Last December, just one month before the start of his dust-up with Maher, Trump was awarded $5 million dollars in his lawsuit against ex-beauty queen Sheena Monnin, a former Miss USA contestant, who in June last year pulled out of the pageant after alleging that the competition was fixed. In response, the Trump Organization, owner of the pageant, hit her with a defamation lawsuit, claiming that her false statements had hurt the reputation of the Miss USA Competition. The arbitrator agreed, and ordered Monnin, a former Miss Pennsylvania, to pay $5 million to the Trump Organization.

However, in the comedy industry, Trump’s lawsuit against Maher has not won him a lot of admirers. At stake here is the longstanding freedom of comedians to go on comedy talk shows and just parody public figures without even thinking about it. Needless to say, whatever Trump’s chances of winning the case, his accusers fear that if he wins the lawsuit against Maher, it could open a brand new door against comedians that people had assumed did not even exist. This fear flows in the same stream as the so-called ‘chill’ factor on free speech rights.

But what are Trump’s odds of actually winning? Can he even sue Maher for breach of contract in a situation like this one? For starters, when most folks think about breach of contract, they often imagine a situation where two people have made promises to one another and then one of them either refuses or fails to keep his word. In such situations, the agreement is made ahead of time, with each party knowing exactly what he promises to do and what he gets in return from the other side. Needless to say, they both recognize that the agreement is ‘binding’ on them and that they can be sued in court if they don’t keep their promise. This kind of contract is called a ‘bilateral’ contract and is obviously not the sort of situation that Trump and Maher are involved in.

But that’s not all. There are other situations that might involve people who have never negotiated or ‘bargained’ with each other or perhaps have never even known each other or met each other before. Yet, as long as an offer is made by one person and accepted by the other, a contract situation can arise between them. Again, it must be clear to both parties that the agreement is ‘binding’ on them and that they can be sued in court for not honoring the agreement. Here’s a situation where that could happen: Jose loses his dog and offers to pay $200 to anyone who finds and returns his lost dog to him. Three days go by and Jimmy finds the dog and returns it to Jose. At that point, Jimmy has ‘accepted’ the contract by actually performing it and Jimmy can sue Jose for breach of contract if he fails to pay up. This kind of contract is called a ‘unilateral’ contract and it is obviously less commonplace than the other kind of contract, discussed above. And for whatever it is worth, this is the kind of contract that Trump’s lawsuit assumes exists between the billionaire and the comedian.

Still, Trump has a real problem here as far as trying to establish that he and Maher entered into a contract. The crucial piece that is missing in their situation is something called ‘intent to enter into legal relations.’ Translation: Did Maher intend to make an offer that is ‘binding’ at law? Usually, when it comes to whether a person means what he says to stand as a valid offer or promise, the ‘context’ of the statement can be pretty crucial. Naturally, not every offer will qualify as valid. Consider the case of a ‘puff’ in a product ad. As the court recognized in an old English case from 1893, it is possible that what might seem to one party like a promise or an offer from the other party may be ‘only a puff from which no promise to pay could be implied.’ In layman’s language, a ‘puff’ is just an exaggeration or swagger about something, and when it comes to offers, stuff like ‘puffs’ are out.

Now, speaking of ‘context’ and ‘intent,’ here’s the big question in this lawsuit: what is the ‘intent’ of a comedian making a funny statement on a late night show in America? Is he looking to make an agreement that is ‘binding’ upon him at law, even if he’s mentioning somebody else by name? The short answer here is that any average person (think: a ‘reasonable’ person) who understands the nature of American talk shows as well as how comedians generally behave probably would not think so. More likely, he or she will think that the comedian was merely joking around.

There is another angle to Trump’s lawsuit: As he took Maher to court, Trump rejected the idea that Maher may simply have been joking when he made the offer. “I don’t think he was joking. He said it with venom,” Without directly saying so, this talk about ‘venom’ seems to hint at ‘malice’ on the part of Maher. An accusation that somebody made a statement or did something with malice likely would be more relevant and even helpful in a different lawsuit than a breach of contact claim. Because of this, some folks have wondered why Trump did not choose to sue Maher for something like defamation instead of breach of contract. By the way, Trump presented his birth certificate in an attempt to show that Maher’s statement was false. And we note that a false statement that hurts someone’s reputation is the whole point of a defamation claim. Plus, as a billionaire with huge financial interests in the business arena, the money he can recover against someone who has damaged his ‘reputation’ would be a lot more than $5million. After all, defaming a billionaire like Trump is not like defaming a cabbie or a janitor.

So, why didn’t he sue for defamation instead? Well, apparently because Trump is smart or at least his lawyers are. To be sure, whatever his odds of winning his present breach of contract claim against Maher, his odds of winning a defamation claim against the comedian are even longer. Much longer indeed! A defamation claim against a comedian for what he said on another comedian’s talk show will quickly be consumed by much legal wrangling and bombast over the First Amendment and free speech. Long story short, between the notion that Trump is a ‘public figure’ and other matters that the free speech law concerns itself with, such a messy fight will most likely end up as a losing proposition for him.

Either Maher’s statement will be found to be a mere joke or parody, considering the ‘context’ in which it was made, or it would be considered as a mere statement of opinion rather than fact. One way or the other the result will be the same for Trump: a defeat! Yet, for all the talk about ‘context,’ the law as they often say, remains ‘an ass’ and one can imagine a situation where something that a comedian says even on a talk show can still get him in trouble in a courtroom. For one thing, there is always that old principle that ‘a person is not allowed to murder another’s reputation in jest.’ But that’s not the situation we have in this lawsuit, it seems.

Well, in life, it is said that you win some and you lose some and Trump certainly had a big win in that defamation case against Miss Pennsylvania. But there are real differences between the case he won against the beauty queen and any possible defamation case that he could bring against the comedian. The biggest difference is that the beauty queen made a statement of fact that the pageant was rigged, which turned out to be a false statement. It is awfully easy to imagine the serious damage that such a rather ill-advised statement can cause to the reputation of both the Trump Organization and the competition itself. Consider the context of the two statements: The Miss USA Competition is a serious event where folks win money, careers are made, role models emerge and media interest is high. On the other hand, Maher is a comedian who likely was merely grandstanding or bloviating on another comedian’s talk show, a program which opens every weeknight with a traditional stand-up monologue. The two scenarios are vastly different from one another.

In the end, Maher most probably won’t end up paying $5 million on Trump’s breach of contract case. But between paying his lawyers and going to court in this lawsuit, perhaps Maher has ‘picked on the wrong marine’ and has made a joke that will bring him an unexpected hassle. Despite his likely defeat in this case, The Donald is a tough customer who plays hard ball whenever the whistle is blown in any fight. From all indications, he will not be in any position in the present lawsuit to teach the comedian the kind of ‘expensive lesson’ (as he put it) that he taught the beauty queen. Yet, at the end of the day, he likely will have made his point with his lawsuit, a move that some have angrily denounced as an outrageous attack on comedy.

 

Please stay tuned for my upcoming book “Comedy Under Attack…”. Coming out soon!

‘COMICS UNLEASHED’: Looking for a Pay Day in Court

Comics Unleashed Productions is living up to its name these days in the courtroom thanks to some comedians who have trouble with the way it does business. The production company is one of the entities under the umbrella of comedian Byron Allen’s company Entertainment Studios (ES), which produces shows for syndication and digital distribution. And from the look of look of things both sides have a fair amount of stuff to sort out before this thing blows over. But, first, here’s the story:

In December last year, in Los Angeles Superior Court, some two former employees of the company filed a class action lawsuit against Allen himself, Entertainment Studios and business entities affiliated with them, alleging breach of contract, unfair business practices and failure to pay them wages that were due to them. The plaintiffs, Bernadette Pauley and Thomas Clark, both comedians, claimed that they performed work on the syndicated show Comics.TV under a contract with Comics Unleashed Productions, and that they were not paid for their work. The plaintiffs also claim that they were owed ‘residuals’ as well as reimbursement for work-related expenses.

Before talking about the plaintiffs’ chances of winning the lawsuit, the first question to be answered here is whether this case can even survive as a class action. The typical class action lawsuit usually involves folks who have been injured in a similar or common fashion by a similar or common cause and are seeking a similar or common remedy. One good example here is the case of folks who have been injured by a bad product manufactured by a company, say, a defective drug. Or perhaps folks who have been injured in an accident owing to a defective gas pedal in an automobile.

However, our situation here is not your typical class action scenario: Pauley claims in the lawsuit that she hosted about four episodes of Comics.TV and that Clark appeared as a stand-up comedian in at least one of the episodes of the show. In all, the lawsuit claims that there are about 112 comics and actors who worked on various episodes of the show. Well, it is also safe to assume that these plaintiffs are asking for different kinds of payments from Allen’s side: for example, each person on the plaintiffs’ side likely has a different basis or ground for claiming to be entitled to either the salary or the residual payments or the reimbursements that he or she is claiming. So, given that the plaintiffs in the Pauley/Clark lawsuit worked on the Comics.TV show at different times and in different roles, we are actually dealing with a number of different issues or claims rather than with a similar or common cause of a similar or common injury or claim.

Long story short, all these factors will seriously increase the difficulty of managing the case as a class action. In the way class actions normally work, the plaintiffs in this case would have an easier time if they were hired at the same time or had performed the same kind of work and yet ended up not getting paid. This is because the whole point of having class actions is to make it easier for folks in the same boat to pursue the same kind of relief or remedy. Class actions also help the courts to save both time and tax payers’ money by avoiding having to deal with the same kinds of claims over and over again when they could be done in just one shot.

So, it turns out that the plaintiffs Pauley and Clark won’t have the easiest time mounting this case as a class action after all. But win or lose on the class action front, the plaintiffs are still very much in the game since they can always re-file their cases separately as individual claimants. Plus, their breach of contract claim is an entirely separate issue from the class action itself. Fortunately for the plaintiffs, they have a written agreement with their former employers, as they claim. Still, as with all written contracts, it is the ‘terms’ of the contract that make all the difference in the end.

Concerning the claims in the present lawsuit, it will be most helpful to the comedian-plaintiffs if their contract is written not only in clear language but also in as much detail as possible. For instance, exactly what does the agreement say about salaries, residuals, and reimbursement of work-related expenses? The more clearly the contract is written, the less they’ll have to deal with the hassle of lawyers bending and spinning the words used in the agreement to benefit their partisan points of view. Such a situation is never a good thing for somebody who is owed money or who is trying to enforce some right or benefit given to him or her under a contract. So, the clearer the agreement is on these disputed matters, the better will be the chance that the court will agree with the plaintiffs that the monies are indeed owed to them.

Then again, it may be that the agreement is more complicated than that, especially with matters like the right of the plaintiffs to collect residual payments or reimbursement for work-related expenses. For instance, if as sometimes happens, the agreement contains a couple of things that must be done first before payment can be made (such things are called ‘conditions precedents’), then the person being sued could start a fight on another front by claiming that the conditions precedents have not yet been fulfilled.

Speaking of work-related expenses, the plaintiffs are claiming reimbursement for things like air-travel, car rentals, wardrobe, and gasoline expenses. Usually, these kinds of expenses are required to be reimbursed so long as they are not already included in the employees’ regular compensation. Also, in situations where the staffers use their own phones or cars on their job or lay out their own monies for training or educational materials, they are usually reimbursed for them. But contracts aside, the laws of most states protect the employees’ right to reimbursement of these expenses anyway. In California, where Allen does business, the labor code protects this right even more strongly than in many other states: in that state, once the employee is entitled to reimbursement, it is difficult to see how an employer can avoid paying it, even if the employee makes his claim rather late or miscalculates the amount of the claim. Even where he has already agreed to waive the claim, he can still get it.

Yet, getting reimbursement money in these situations is not automatic. For instance, as already noted, if the expenses are already included in the staffers’ compensation, then it cannot be claimed separately. Also, it may be important to see how Allen’s side classified folks like Pauley and Clark in the course of their operations. If folks like the plaintiffs were considered as ‘independent contractors’ rather than as employees, then they would not have the right to reimbursement of work-related expenses. Unlike an employee, an independent contractor does his job as required under the contract but is not subject to the control and supervision of the person who hires him when it comes to the way and manner in which he performs the work. So, because an independent contractor works for himself and decides on his expenses all by himself, the question of the reimbursement of his work expenses simply does not arise.

With respect to the reimbursement claim in this case, if there is a dispute as to whether Pauley and Clark were regarded as independent contractors during their work for Comics.TV, the question can be answered by simply looking at the terms of their written agreement. And if it is not clear from the agreement itself, then one can look at the way the parties either worked with each other or treated each other during the time the plaintiffs worked on the show to see if they acted as though they were independent contractors.

There is one more thing in this case: Pauley and Clark reportedly claim that they were told by their union and their agents that they would be receiving residual payments from Allen’s side. Well, if the agreement they signed with Allen’s company does not provide for residual payments, then it won’t help that their handlers and associates promised them they would receive such monies. That just won’t cut it, unless it emerges that their union or their agents had signed a separate agreement with Allen’s side in which the plaintiffs were given the status of ‘third party beneficiaries’ with respect to residual payments.

A third party beneficiary is an outsider to a contract who is given a benefit by the parties making the contract. Because such an outsider has been given some right or interest under the contract, he can actually file a lawsuit to claim the benefit he has been given under the contract even though he was not one of the parties who had made the contract. The typical example here is the beneficiary of a life insurance policy. In our case here, Pauley and Clark can sue for residual payments if they can somehow qualify as third party beneficiaries, assuming, of course, that there is a contract between their union and agents and Allen’s side.

In the end, this case will go forward either as a class action or as a regular breach of contract action being pursued by separate plaintiffs. Yet, because it has been filed as a class action, the outcome of this case will be watched by folks other than just the parties involved. At the minimum, one can imagine that the producers of the many successful comedy and entertainment shows on TV who enjoy big production budgets will be interested to see how things shake out here. What usually happens in real life is that when going up against such big money TV shows, aggrieved staffers would much rather do such heavy lifting in the form of a class action than as individuals. One big reason here is that class action folks are often in a great position to attract lawyers who are willing to represent them on a contingency basis, especially if the money numbers make sense to lawyers.

In any event, regardless of how things move forward here, given that there is a written agreement between the parties, if the case doesn’t settle before the trial, the question of who wins or loses will depend on what the actual terms of the contract are. As always, in situations like this, the devil is in the details.

Please stay tuned for my upcoming book “Comedy Under Attack…” Coming out soon!

ABC’s ‘FAMILY TOOLS’: the Money Fight on the Sidelines of a TV Comedy

When money and comedy mix, sometimes things can get way too funny. Like at ABC, where even though the station’s comedy Family Tools is still months away from its debut, one of its stars Leah Remini is already locked in a messy squabble with her handlers over her fat pay check from the show. And they have wasted no time in taking the fight to the courtroom in what is shaping up as a classic fight over ‘commissions’ between an agency and its talent.

Here’s what happened: In November 2011, Leah Remini, former star of the CBS sitcom King of Queens, signed on with the talent management company Collective to manage her career. One month earlier, in October 2011, Remini did enter into a talent ‘holding deal’ with ABC, which allowed the station to put her on a show at the network. Later on, the talent ‘holding deal’ led to a new gig for Remini as one of the stars of ABC’s upcoming comedy Family Tools, which premieres in May 2013. However, in October 2012, Remini fires her managers, claiming they didn’t do a good job and refuses to pay them any commissions arising from her work on Family Tools.

Following Remini’s action, the agency sued her in a Los Angeles court for breach of contract, quantum meruit and accounting. (So far, about ten episodes of the show have been shot ahead of its premiere. Remini reportedly gets paid about $100,000 per episode during the show’s first season with a four per cent pay raise for every new season in the future.)

For now, both sides have dug in their heels and have raised the decibel level of the war of words between them. Remini’s people have dismissed the lawsuit as ‘ridiculous’, claiming that she owes nothing to the agency and that in representing Remini the agency truly sucked at their job in various ways, including passing her through three different managers in just one year and giving her an agency manager who slept through important business meetings. For its part, Collective (the agency) claims that Remini’s ‘pattern and practice of failing to pay representatives speaks volumes’ and vows to get paid for its work. Collective explained that when it first came into the picture, it had agreed not to charge any ‘commissions’ on Remini’s fee under the ‘holding deal’ but that it would get paid a commission for any series that arose out of the ‘holding deal,’ such as Family Tools.

In any event, aside from all the flying brickbats and tough talk, this case is still just a breach of contract case. And like any other contract case, when the chips are down, the key question will be whether there was a valid contract and, if so, whether it was breached. And of course, whether the contract was breached would depend on what the terms of the contract were.

To explain a contract in layman’s terms, one can simply say that it is an agreement between two parties to do certain things or to refrain from doing certain things, with the clear understanding that if any of the parties fails to act or behave as agreed, the other party could enforce the agreement in court. And in order to have the ability to go court to enforce the promise, the agreement itself needs to be supported by something of ‘value’ either given up by one party or received by the other party. This something is called ‘consideration’. What this means is that not every promise made by one person to another gives rise to a contract at law. For instance, if I promise my buddy that I’ll give him a ride to Times Square for the ball drop on New Year’s Eve and I fail to show up, he can’t sue me for breach of contract because all I did was promise to do him a favor. He didn’t give me anything of ‘value’ to support that promise.

By the way, since our situation in this case also involves a talent ‘holding deal,’ perhaps we could use it to further explain the meaning of a valid contract. Usually, when an artist or entertainer signs a “holding deal” with a TV station, it’s really just a way for the station or studio to keep the artist on side and outside the reach of its rivals while the station figures out how or in what capacity it wants to put the artist to work. The artist is usually paid a ‘fee’ during the time period that the ‘holding deal’ is in place. In exchange for the fee, the talent in turn promises not to work for any of the station’s rivals during that period. In this scenario, it is obvious that the parties to the agreement are either ‘giving up’ or ‘receiving’ something of ‘value’ to support the promises they’ve made to each other.)

In our case here, we are dealing with an oral agreement between Remini and her managers. But this by itself is no problem because a contract can be in oral or written form, except in those specific situations where the law requires that contracts be in writing for them to be enforceable. However, the fact that this particular contract is merely an oral contract carries its own set of problems, especially since the matter is now in court and, even worse, the parties now disagree as to what the terms of the agreement were. Between all the maneuvering, hair splitting and clever talk involved in a court room trial, it can be an uphill battle to prove up the terms of an oral contract. In the real world, even when contracts are written down in a formal document (or instrument), lawyers can still disagree on the meaning of the words written into the agreement; so, one can only imagine how difficult things can get when nothing is written down at all and the parties are left with lawyers wrangling up a storm about what was promised during negotiations and what was not included. Tough stuff!

Courts have various techniques they use when it comes to finding out what the terms of an oral agreement are. And the courts can use whatever combination of these techniques it chooses in arriving at the answer. For instance, the court could look at how other parties in the industry have handled the payment of commissions in similar situations where a manager was hired during the time between the signing of a ‘holding deal’ and an actual contract, such as the one Remini received for Family Tools. Plus, the court could also look at the way the parties have conducted themselves during the contract to see if anything they have done so far could give any clues as to what they may have agreed to do at the time they entered into the oral agreement.

If, for instance, the court finds that there was in fact an agreement to pay commissions to Collective for its work, as the agency claims, then it won’t help Remini’s side too much to say that Collective employed folks who were sleeping on the job. That may be a good reason to terminate the contract, but the ‘obligation to pay’ on the contract is a whole different story. And this case really seems to be all about whether Remini has an obligation to pay at all, aside from whether the agency did a good job.

This brings us to the talk about quantum meruit, which is one of the claims that Collective is making against Remini. In a breach of contract case, the injured party usually makes a claim for damages against the party who breached the contract. But a quantum meruit case is a different animal altogether. It often comes up in situations where even though a regular contract does not exist between the parties, yet things have been done that make it only ‘fair’ that the party who did those things should be compensated. Thus, unlike in breach of contract situations where claims for damages are based on law, claims in quantum meruit are based instead on notions of equity and fair play.

What usually happens is that the person who performed services for the other person is awarded the ‘reasonable value’ of his or her services. And because there is no contract in existence, it is necessary to show that when the services were being performed, the person who received the benefit of the services knew that the services were being rendered with the expectation that the services would be paid for and were not being rendered for free. The rule here is that “equity would not assist a volunteer.” So, in plain language, the whole purpose of a quantum meruit claim is to prevent the ‘unjust enrichment’ of one party at the expense of the other party.

So, in the Remini case where there is actually a contract in existence, as both sides admit, a claim for quantum meruit does not exactly seem like the right fit. As it happens, this is mostly a case at law rather than at equity. Yet, considering the difficulties and uncertainties of proving up the terms of an oral agreement, if the court should end up deciding that the parties did not in fact establish a valid contract, then things may well end up on the quantum meruit route, considering that Collective did perform services under the working relationship that existed between both sides, prior to Remni’s firing of the agency.

In addition, Collective also has a claim for ‘accounting’ against Remini. Well, it is fair to simply note that ‘accounting’ claims are commonplace in situations like this one where money is being claimed in a lawsuit and only one side has access to all the records concerning the money. If Collective wins, the court will probably order an ‘accounting’ since Remini’s side has all the information here and she reportedly has not paid any commissions to Collective for any of the ten episodes she has already worked on.

So, what’s the big lesson from all this? And who wins? Well, long story short, an oral contract is simply not a good idea, especially in a situation where the parties intend or hope to collaborate on a long term basis, as with most talent management situations. Going to court on an oral agreement in any situation can be like walking through a minefield. Translation: Calling the odds of winning or losing a case such as this is a tough one and so much can happen as the case proceeds. The better option in situations like this one is to have a written agreement in a formal document.

And when doing so, it is always smarter to state the terms of the agreement in as much detail as possible in order to eliminate unnecessary disagreements. (By the way, most written agreements would probably have been able to avoid the big problems we have in Remini’s case by simply stating clearly when commissions would become due as between the ‘holding deal’ and Remini’s work on Family Tools.)

In the end, it has to be said that a well negotiated written agreement between folks who already are familiar with each other gives both parties a damn good opportunity to control the expectations from their working relationship. And this is the one big advantage of contracts in general, when compared to other areas of the law like torts, where total strangers could simply barge into someone’s life with some wrongful act and force that person to sue them. But oral contracts are a different story altogether and it is hard to see what, if any, advantages they bring to either side.

 

Please stay tuned for my upcoming book “Comedy Under Attack…”. Coming out soon!

KATT WILLIAMS: When a comedian’s time onstage may be too small

Katt Williams is a comedian who’s no stranger to run-ins with the law and with other folks. And lately, his run of legal troubles have been adding up, from attacking an aspiring rapper on his tour bus at an Oakland hotel and then (two days later) leading cops on a high speed chase for reckless driving in Sacramento, California to being sued by his female personal assistant for allegedly punching her at his house and causing her serious and permanent injuries. But for many comedy watchers, there is one particular incident in Williams’ line-up of recent troubles that raises a new kind of question in the way that comedians relate to their fans. And the answer to that question may be something that comics might want to pay attention to. Here’s what happened:

This past November, Williams and events promoter Live Nation collaborated on a comedy gig at the Oracle Arena in Oakland, CA featuring Williams. However, a mere 10 minutes into his set, Williams became provoked by the actions of a heckler and reportedly had serious meltdown. As the story went, he took off his clothes and challenged the audience to a fight, and then attempted to fight at least three members of the audience. Needless to say, by the time the fracas ended, the show itself was over as well. The fans were not amused one bit. In response, a disappointed audience member named Brian Herline, acting on behalf of all the other audience members who attended the flopped event, filed a lawsuit against both Williams and Live Nation.

For starters, the ‘class action’ nature of this lawsuit is something that should be pretty easy to maintain and Herline and his posse likely won’t have a problem with it. The idea of a class action is designed to allow folks who have suffered a ‘common injury or loss’from a ‘common source’ to pull their resources together in order to obtain whatever relief or remedy they are entitled to get under the law. So, in this case, as long as the audience members (the plaintiffs) keep themselves on the same page, they’ll be just fine. But, of course, if, for instance, some of them are seeking a refund of their ticket price while others are claiming damages for assault and battery, then the lawsuit can no longer survive as a class action. The simple explanation for that would be that if the people bringing the lawsuit together are actually seeking different kinds of remedies from the court, it implies that they probably suffered different kinds of losses as well.

Anyhow, what we have in this case seems like a proper class action in which all the audience members are reportedly seeking unspecified damages for “Katt Williams’ non-performance.” To put it all in layman’s terms, Williams and Live Nation are being sued for not living up to their promise to Herline and the other audience members who attended the event. But what exactly did the comedian and his promoters promise to the audience? Well, first of all, when people talk about ‘promise’ in this way, it implies that there is some sort of agreement between the two sides: the comedian and his promoters on the one part and the audience members on the other part.

In this context, it is fair to say that paying money to see a comedian’s performance may be no different from paying money to see a movie. In the movie case, we can assume that in exchange for the moviegoer’s ticket price, he is promised a chance to see the movie he has paid for. Since the moviegoer’s deal is simply to see the movie, if he happens not to like the movie after he sees it, then tough luck. Of course, if the movie theater does not keep its promise to show him a movie, then the moviegoer is entitled to “rescind” or cancel the contract and receive ‘damages’ in return. Typically, the ‘damages’ he would receive in this situation is the chance to get his ticket price back. Translation: there are two promises in this situation and each promise is the price or ‘consideration’ for the other promise. Simple as that!

Similarly, in the situation involving a comedian and a paying audience, the understanding is that in exchange for the cover charge that the audience pays, they get a chance to see the comedian perform. Clearly, what a comedian’s audience is promised is a chance to see the comedian perform. And just as in the case with the movie, whether or not the comedian’s audience like the performance they get is a different matter altogether. But again, just like the movie theater, the comedian and his promoters must at least deliver a performance. This is where Williams and Live Nation may have a real problem in this case. The big question here is: Did they at least deliver a performance that day considering that Williams went bonkers after just 10 minutes, got mixed up in a fracas and brought the show to an end? Could it be a defense in Williams’ favor that a heckler interfered with the show? Well, the odds are not looking too good for Williams’ side with these questions.

Usually, when a comedian is sued for damages for non-performance in a case like this one, it is essentially a breach of contract action. And in a breach of contract case, the person sued might choose to play the hand that his efforts to deliver the thing he had promised was frustrated by the actions of the person to whom the promise was made. In this case, a guy in Williams’ position might try to say that his attempt to give his performance was frustrated by hecklers who were members of the audience. But will that be a good enough defense? Probably not! Because when the court looks begins to look at the whole case, part of what it could consider is something called ‘custom or usage’ in the industry – meaning what the usual practice is among comedians at a performance.

As it happens, hecklers are known to be a problem at comedy performances. Yet, as a practical matter, hecklers can always be removed from the venue of a performance, in the same way as somebody trying to disrupt a theater performance on Broadway or someone heckling an invited speaker at a college campus. Besides, a ‘reasonable’ professional comedian would be expected to find a less disruptive way to handle a heckler rather than to take the heckler’s bait, walk off the stage and challenge the audience to fights. In short, considering that Williams’ actions do not seem ‘reasonable’ under the circumstances, especially when judged by the standards of other professional comics in similar situations, the defense of blame-the-heckler likely won’t be available to him.

Still, there may be more to this case by the time the dust settles down: Williams’ problem may not end with just giving back the audience’s ticket prices to them. The part about him not performing as he promised is a matter of contract law. But then, he may have committed a ‘tort’ as well. For instance, any instance of actual fighting with any members of the audience would likely have rendered him liable for the tort of ‘assault and battery’. By definition, an assault occurs whenever one person puts another person in fear of imminent physical contact. On the other hand, a battery occurs where one person actually makes an offensive physical contact with another person without the consent of that other person or without any lawful justification for making that kind of contact.

Well, there seems to be little doubt that none of the audience members at the event consented to Williams’ actions toward them. Plus, it is hard to see what lawful justification (such as, maybe, self defense or something else) that Williams could have had for his aggressive actions toward the audience. So, if Williams did stop at merely challenging folks in the audience to fights, as the lawsuit seems to suggest, then he is perhaps liable only for an ‘assault’. In that kind of situation, since he didn’t actually make physical contact with anyone, he’ll be spared the more serious hassle of an actual ‘battery’ claim.

And as long as we are talking about claims against Live Nation for Williams’ actions, the assault and battery claims will not lie against them. Otherwise, to say that Live Nation will be liable for these actions will mean creating “vicarious liability” against them for the actions of Williams. ‘Vicarious liability’ is normally reserved for situations where one person controls and directs the actions of another person such as the kind of situations that exists between a master and a servant or between an employer and an employee.

In the case we have here, it is clear that even though Live Nation brought Williams to the show, Williams was not an employee or servant of Live Nation. This means that he was not subject to their control and direction in the way he did his job. So, as a professional comedian, Williams remained an ‘independent contractor’ throughout the event. (An independent contactor is a guy who decides the ways and means of doing his job.) Actions like going offstage and threatening to fight folks in the audience is an “intentional” act and the law will not hold promoters like Live Nation liable for the intentional wrongdoing of an ‘independent contractor.’

This case is also kind of unique for another reason. For example, this is a case where a comedian is being sued for what the comedian does at a performance rather than what he says onstage. Obviously, saying and doing stuff are two different things: What a comic “says” onstage enjoys free speech protection. However, what an irate comic decides to “do” at a performance, whether onstage or offstage, is a different matter altogether. And this is one big reason why Williams is in such a weak position in this case: when he went offstage in a fighting mood, he lost all the normal protections that a comedian would normally enjoy for what he ‘says’ while onstage. His ‘free speech’ protections deserted him.

Needless to say, whatever the temptation, it is never a good idea for any comedian to get offstage and confront an audience. One of the biggest things the comedian would lose in such a situation is the protection of First Amendment. As matters stand here, Williams’ position in this lawsuit isn’t a pretty one. His best move ought to be to find a way to settle this one and just move on.

 

Please stay tuned for my upcoming book “Comedy Under Attack…” Coming soon!

JERRY SEINFELD: A comedian’s lesson from a defamation case

A few years ago, star comedian Jerry Seinfeld’s family spent quite a bit of time in court and with lawyers. First, his wife gets sued for plagiarizing (or copying) somebody else’s cookbook. Then Seinfeld himself gets sued for talking about the lawsuit filed against his wife when he appeared on David Letterman’s show. And it is the same person that is suing them the whole time. In the end, though, the Seinfelds got the last laugh: the wife beat back the lawsuit against her and then another court sided with Seinfeld in denying that he committed defamation against Missy Chase Lapine, the woman who had sued them.

Here’s what happened: Around 2007, Lapine sued Jessica Seinfeld (Jerry’s wife), for plagiarism, claiming that Seinfeld’s cookbook “Deceptively Delicious”, which dealt with sneaking pureed vegetables into kids’ foods was copied from her own cookbook “The Sneaky Chef.” The case ended up getting dismissed because the court said that the two books were different enough from each other and that sneaking pureed stuff into kids’ foods wasn’t such a brand new idea after all. (The back story here is that publisher HarperCollins rejected Lapine’s book twice before picking up Seinfeld’s own book and helping her promote it on Oprah’s show. The book later turned into a hit.) Afterwards, that same year, Seinfeld himself appeared on The Late Show with David Letterman and without mentioning Lapine by name, said some unflattering things about her, including using such words as “wacko”,” stalker” and “nut job”. At one point, Seinfeld had said: “We’re sorry that she’s angry and hysterical and because she’s a three-name woman. She has three names. And if you read history, many of the three-named people do become assassins. Mark David Chapman. And you know, James Earl Ray. That’s what concerns me.” Then Lapine followed that up with a defamation lawsuit against him, claiming that Seinfeld’s use of the words “wacko”, “stalker” “nut job” and “assassin” when referring to her during his appearance on The Late Show amounted to defamation.

Well, the court didn’t agree with her and Seinfeld’s folks celebrated their good day in court. “Today’s decision is a complete victory for Jerry, and also a victory for the First Amendment and the right of comedians to tell jokes,” said Orin Snyder, Seinfeld’s lawyer. The gloating of Seinfeld’s lawyer aside, the defamation part of the court battle is the one that offers up a few good lessons to comedians on just how much space the law allows them to swing their arms when talking about other folks.

For starters, “context” is a big deal in a defamation case, especially because a typical defamation case tries to make the point that somebody else’s false statement of fact had damaged the reputation of the person that is bringing the lawsuit. Since we are dealing with a statement of fact, it means that what the other person [the offender] said must be the kind of statement that can be shown to be true or false. If the statement is false, then the person making the statement is liable for defamation. But then again, a statement about somebody can either be a statement of fact or a statement of opinion. If the statement can be seen as a statement of opinion, then there is no defamation. And this is where the “context” (or in layman’s language the “circumstances”) makes all the difference.

And whenever the law looks at the “context” of the statement, it does not do so through the eyes (or point of view) of the person suing or even the person being sued. Rather it looks at the statement through the eyes of what is known as a “reasonable person” in the community, and this is usually someone who would be unbiased, owing to the fact that he is not involved with any of the parties in the case.

And when a comedian is being sued for something he said, the whole talk of “context” and the difference between “fact” and “opinion” becomes an even bigger deal. As one might expect, comedians, more than any other group of folks out there, would be likely to benefit from this kind of analysis. The simple reason is that comedians are jokesters trying to draw a laugh and most people understand them to be just trying to draw a laugh. And in Seinfeld’s case he obviously got the full benefit of being a comedian, and a well known one at that. In this controversy, everything was in a good place for Seinfeld: he was a comedian by profession; he was appearing on an entertainment show dominated by comedy and hosted by a well-known comedian and he was speaking before a late-night audience looking to be entertained, including those watching at home.

Now, how is a reasonable person supposed to look at statements made in such a “circumstance”? Well, the court applied the “context” test, and flat out said that no reasonable viewer “would have believed that Seinfeld’s statements were conveying facts about Lapine”. The court added that no viewer could have regarded Seinfeld’s statement as an accusation that Lapine was a would-be assassin or was in any way dangerous. Long story short, the court concluded that Seinfeld’s statement on the Late Show were simply statements of ‘opinion’ and not of ‘fact’.

Well, that was the end of the road for Lapine’s defamation claim and it offered yet another proof of how hard it is to make a defamation case stick against a comedian, thanks to the First Amendment and the right of free speech. But does it mean that somebody can’t win a defamation claim against a comedian? Simple answer here is that, as hard as it may be, and despite their advantages in defamation court, comedians can still be found liable for defamation because, just like other citizens, they can sometimes slip up on a banana peel. To be sure, the First Amendment does not give anyone the license to break the law. When it comes to defamation, the general rule is that a person is not allowed to murder another person’s reputation in jest. And here, comedians stand in the same shoes as everyone else.

And again, “context” or “circumstances” play a big role on the flip side, and we’re talking about the same “context” factor that often allows comedians to beat most defamation raps. Thus, when the context or circumstances of the statement make it look like the comedian is stating a “fact” about somebody else, then the comedian will be liable for defamation if that statement of fact happens to be “false” and also damages the other person’s reputation in the community. In such a case, just because the comedian accompanied the statement with a joke will not save him from being liable in defamation. So, the line will be crossed when the humor or joke is simply being used to mask or hide an attempt to injure somebody else’s reputation. To be clear, we are talking only about statements of facts here. And, by the way, if the statement of fact happens to be true, then the comedian or whoever made the statement will be protected from liability, just like in any other defamation case. And of course, as already noted above, when the statement is a matter of opinion, then the comedian will not be liable.

In Seinfeld’s case, looking at everything from the eyes of a reasonable person, the court simply didn’t buy the narrative that the comedian was making a statement of fact about Lapine or that he was expressing anything other than his own personal opinion about Lapine. None of those situations are enough to make him liable for defamation. Yet, just because a person was appearing on a comedy or entertainment talk show doesn’t necessarily mean that they won’t ever be found liable for defamation. They can still get in trouble for defamation, as happened in July last year in Australia when a comedian named Mick Molloy joked on a sports show that a married female politician had slept with a former football player. The court described the broadcast as an attack on a woman’s “self-respect and dignity” and rejected the defense that the “humorous context” of the show suggested that that the joke was not meant to be taken literally. The court then slapped a fine on the TV station for making the broadcast.

In the end, the real lesson from the Seinfeld case is that comedians are indeed allowed a lot of room for maneuver when it comes to defamation. And thanks to the First Amendment, that room is much larger in America than every place else. Yet, while comedians have wiggle room to say an awful lot about other folks, they don’t have the kind of room that allows them to say just about anything. A lot of room and un-limited room are two different things. In our case here, considering that Seinfeld as a celebrity comedian has the sort of media connections and big microphone that Lapine did not have, maybe it was bad manners and a case of unfair play on his part to have knocked his adversary on the Late Show, a national forum where she had no opportunity to hit back at him. Perhaps some folks might even feel that he acted a little like a schoolyard bully toward her. Yet, fair or not, Seinfeld was still operating within the large room space available to comedians in the American public square. Long story short, what he did doesn’t amount to defamation in law.