Jones v. Mjj Productions, Inc.

2020 WL 2140759 (2020)

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Nature of the Case

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Facts

Jackson entered three recording agreements with Sony. The Recording Agreements governed their relationship for Jackson's Off the Wall, Thriller, and Bad albums, respectively. For record sales, Jackson was entitled to a royalty that was derived by applying his basic royalty rate or a reduced royalty rate to the price of a record. Pursuant to the Producer Agreements, P agreed to produce Jackson's music. The 1978 producer agreement governed their relationship for Off the Wall and Thriller, and the 1985 producer agreement governed their relationship for Bad. Pursuant to the Producer Agreements, P agreed to produce Jackson's music. Section 4(a) of the Producer Agreements entitled Jones to a basic royalty rate of 10 percent of the wholesale price for records, subject to being reduced, prorated, and calculated the same as Jackson's royalties in the Recording Agreements. P had a right of first opportunity to remix the Masters. Section 12 of the 1985 producer agreement gave P the right to receive a share of license income from video shows. D paid P a share of all license fees for the use of Masters, not just license fees covered by section 12 of the 1985 producer agreement for video shows. D did so even though section 4 of the Producer Agreements is the only other section that provides for royalties, and even though there is no mention of licenses or license fees in section 4.11. In 1991, D and Sony formed the Joint Venture to sell records and license the Masters. Each party was entitled to 50 percent of the net profits. Between 1993 and 2008, D released a variety of remixes of the Masters done by well-known artists such as Kanye West and will.i.am. P was not offered the opportunity to perform these remixes. After Jackson died in 2009, his estate negotiated an amendment to the Recording Agreements and the Joint Venture in a single agreement (2009 Amendment). D's share of net profits was increased from 50 percent to 66 2/3rds percent. A documentary about Jackson entitled This Is It was made using Masters and then released in December 2009. It grossed over $500 million. In 2013, P sued or breach of the Producer Agreements and an accounting. P claimed he was owed fees for the remixing work that should have been offered to him; he was entitled to share in the increased revenues paid to D when it began receiving 66 2/3rds percent of the net profits under the 2009 Amendment; and he was not paid his full producer's royalty for use of the Masters in the video show This Is It. The trial court instructed the jury that it was required to interpret the Producer Agreements and determine if P had proved his interpretation.

The jury found that P was entitled to $1,574,128 for D's failure to provide him with the right of first opportunity to remix Masters; he was entitled to $5,315,787 of the Joint Venture profits paid to D; he was entitled to $1,960,167 for licensing of the Masters in the video show This Is It; he was entitled to $180,718 related to SoundExchange, foreign public performance income,1and foreign income tax deductions under the 1985 producer agreement; and D agreed that it owed $392,895. The special verdict form did not ask the jury to determine the meaning of any of the specific terms in the Producer Agreements. A final judgment was entered for $9,423,695 in damages plus costs. D appealed.