Tuesday, August 28, 2012
At Last...The End Of Stan Lee Media Inc vs Stan Lee
That sigh of relief that you might have heard over the weekend was due to one thing and one thing only – the final nail in the coffin that was the longest running legal saga of them all – Stan Lee Media vs Stan Lee! After a decade and change of legal back and forth Judge Stephen Wilson has finally out a pin in the whole thing and ended the case once and for all – well, until the expected appeal is lodged.
The mess that is Stan Lee Media and their legal shenanigans is far too complicated to go into here - it deserves a book, if not an entire series of books, plus a mini-series - and it wasn’t that long into it all that people began to become highly frustrated by the seemingly endless litigations. In a hearing on January 24th, 2011, Judge Wilson summed up the case and the car wreck as such:
Be seated for a moment because this has become -- and not just today, but over time -- an unbelievable mess. I mean it almost is an embarrassment. I'm not saying that in a manner to impugn anyone's integrity, but through one decision or another, the case has become so entangled that it raises more questions than are easily answerable; and what it doesn't come close to doing is addressing what otherwise would be a rather straightforward dispute. To me, the dispute, which has been absolutely lost in the shuffle, is whether Stan Lee had a right to breach the -- not breach -- but void the contract with SLMI -- as he says he did -- shortly before the SLMI bankruptcy or, alternatively, whether the contract between Stan Lee and SLMI was voidable at the outset and because the essential dispute is who has the copyrights to the creations of Stan Lee. Somehow -- and this is not fully understood to this court -- Stan Lee transferred copyright interests at some time shortly after this contract was entered into between Stan Lee and SLMI to Marvel Comics, and there has been a judgment in that case in the federal court in New York, and I don't know the specifics of it, but it appears that the judgment awarded some copyright interest to Stan Lee and some to Marvel Comics.
The question arises: How could Stan Lee transfer copyright interest to Marvel Comics a year or so after he had supposedly transferred his copyright interest to SLMI?
I suppose it is possible if there's some explanation that only some copyright interests were transferred to SLMI and those that weren't transferred were then transferred or assigned to Marvel. I don't know the answer to that at the moment.
But the case began, at least in this court, with a derivative action by someone named Abadin -- is that the name, Abadin? -- and maybe there was -- and then there was sort of a parallel case, but essentially involving the same dispute about the copyright holder differences between SLMI and Stan Lee.
So Abadin sues on behalf of SLMI, and then there was a lawsuit by QED -- which is essentially Stan Lee – against someone named Nesfield, and those lawsuits ran into procedural problems because SLMI had not kept up its status as a corporation in Colorado and so it wasn't in a position to be heard. That since has been remedied.
QED was not in a position to be a plaintiff because SLMI, when it was in bankruptcy, was ordered to transfer the copyright interests it had, those interests that were in dispute with Stan Lee, to another company called SLC. As a prior order of this court shows, that never happened somehow, and the copyright interests were transferred to QED.
And my assumption is that when the bankruptcy court involving SLMI allowed the transfer of the copyright interests at play to SLC, it did that understanding that there was a dispute between SLMI and Stan Lee but thought that for the benefit of the bankruptcy estate, that transfer ought to be made to better develop the copyright asset.
In the cases in New York, there is the dispute between Stan Lee and Marvel, which I'll call the -- just for sake of convenience -- the Judge Sweet case, and then there is the derivative action that was dismissed by Judge Crotty -- call that the Judge Crotty case -- and that case was dismissed because the derivative action representative was unqualified by virtue of not having stock at the time of the events alleged in the complaint. And there's a collateral issue here surrounding whether Judge Crotty's decision about the merits has some res judicata effect.
I want to address two things -- and not to limit discussion as to others -- but two things that concern me more than others. Everything concerns me because it's a gigantic mess. Just my recitation here ought to allow that conclusion, and it's a mess in large part because of the derivative plaintiffs. I mean some time ago, they just whaled away and filed lawsuits everywhere. The result is that some courts were ahead of other courts, some decisions were made that arguably 0 impact other cases, perhaps not, and instead of addressing, as I said at the outset, what is the seminal issue or issues, we're here trying to untangle a web of procedural questions, some of which seem difficult.
I'll post some more hearing transcripts in the coming weeks. Suffice to say the when the presiding judge becomes frustrated, if not downright pissed off, and confused then your case is in serious trouble. Another judge, the Hon Paul Crotty, also showed his frustration in court when presented with yet another hearing with the name Stan Lee Media. “…this is a case that's going around for sometime,” Crotty stated on the 17th of November, 20120, “Why would I want to reopen a case that went through three sets of attorneys in a couple of years, and they kept on shuffling, they kept on saying wait for California, wait for Colorado, wait for this, wait for that? I waited, I waited, I waited, and then finally came in and, you know, they missed all kinds of deadlines, and finally, in response to a motion to dismiss, which was untimely, I considered it, and I dismissed it. I've been considering the interests of Stan Lee Media, Inc., one way or the other, for the better part of two and a half years, three years.”
The case was fraught with bankruptcy, suit and counter suit, claim and counter claim, accusations of impropriety and, in the case of former Stan Lee Media executive Peter Paul, drug smuggling and imprisonment. At one stage Hillary Clinton, in her role as First Lady, was brought into proceedings by virtue of a tenuous connection with Stan Lee and Fidel Castro was also dragged into the case, on the back of Paul reportedly selling over $8,700,000 worth of nonexistent coffee to Cuba. Despite all of that the case continued on, due to the sheer amount of money that was at stake and what it all boiled down to was this – did Stan Lee assign Marvel’s characters to Stan Lee Media? Clearly SLM thought so, and as Judge Wilson rightly pointed out in the January 2011 hearing, “The Marvel characters are -- for lack of a better term -- the centrepiece of the litigation.”
In 1998 Stan Lee, recently released from his long standing Marvel Comics contract, formed Stan Lee Entertainment with Peter Paul. Boasting a portfolio with names such as Gene Roddenberry, Mary J Blige and Mobius, the company was rebranded Stan Lee Media Inc, rode the dot.com boom but rapidly went under, filing for bankruptcy in February 2001 with assets of less than half a million dollars offsetting debts of just under $4,500,000 (which included payments for services rendered by artists Shawn McManus, Will Meugniot and Aaron Sowd). Stan Lee jumped ship; Peter Paul was accused of insider trading and conspiracy amongst other charges, before he finally fled to Brazil to escape the wrath of the SEC who struck Stan Lee Media off the stock exchange. Paul was eventually tracked down, extradited and is now safely tucked up in the big house. Stan Lee duly formed POW! Entertainment; Stan Lee Media filed for bankruptcy, obtained the rights to Conan and lost them (resulting in another court case that they lost, currently under appeal) and filed seemingly endless law suits in various courts across America. To quote Judge Wilson again, “This is just a real tangle, and as I said at the outset, I'm not pointing any fingers, but it certainly could in and of itself and nothing more be the subject of a federal civil procedure course in law school.” Anyone who has attempted to unravel the mess would fully agree. A good summary of the case can be found here if you’re so inclined to get a vague handle on it but be careful; you can easily get a headache navigating this maze and still not fully understand it.
Judge Wilson was totally correct when he stated that the case boiled down to this: Stan Lee Media were arguing that Stan Lee had signed a contract back in 1998 handing over any and all characters that he’d created in the past and would create in the future to Stan Lee Media. Stan Lee argued that any copyrights on Marvel characters were not included in the deal; they belonged, and still belong, to Marvel Entertainment and, to add more confusion, Lee signed a new deal with Marvel a month later (November 1998) which reassigned his copyrights and trademarks, in return for a million dollar per year deal, plus perks. Anything and everything else was smoke, mirrors and window dressing, but the titles of the cases themselves provided much amusement. Associated with this case you’ll find the following: Stan Lee vs. Marvel Enterprises, Stan Lee Media vs. Marvel Enterprises and, most amusing of them all, Stan Lee Media vs. Stan Lee. It mattered not who the filed suit against, Stan Lee Media lost them all, along with the resulting appeals. People have gotten very rich off this saga, but they’re all lawyers. It's unknown where this leaves Stan Lee Media Inc as their major asset was, well, Stan Lee. If they can't have him, or any of the Marvel characters that they wanted, then they pretty much have nothing, other than an appeal to gain Conan which will more than likely fail and some serious legal fees.
Still, with this sixteen page summary, Judge Wilson has finally shut the door. If you read the summary you’ll get a basic, but better, understanding of the case(s) on the whole, but you'll still not have scratched the surface. No matter what happens now, and going on the legal history of Stan Lee Media an appeal will be forthcoming, Stan Lee has finally freed himself from the shackles of Stan Lee Media, until next time.