Sunday, December 18, 2011

Clearances For Name & Likeness, Location License, And Life-Story Rights In Motion Pictures And Television: Written By New York Entertainment Lawyer And Film & Television Lawyer John J. Tormey III, Esq.


Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

Clearances For Name & Likeness, Location License, And Life-Story Rights In Motion Pictures And Television: Written By New York Entertainment Lawyer And Film & Television Lawyer John J. Tormey III, Esq.
© John J. Tormey III, PLLC. All Rights Reserved.

This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.

An entertainment lawyer handling production and rights motion picture work can spend much of his or her time fighting off detractors. One example? It is actually quite common for individuals who incidentally appear in a film or television shot, to later sue or otherwise claim upon the production company or network, asserting violations of their personal or proprietary rights. It is also fairly common for those that believe their life-story in whole or in part has been used or referenced in a film or TV program, to put an adverse life-story rights claim on the motion picture project, even if the reference is but a passing reference. When such a claim is long on bluster but short on underlying legal merit, it is known as a nuisance claim, or “strike suit” if and once litigated.

Entertainment lawyers with a motion picture practice in the U.S. who have worked in Business Affairs or other in-house positions at entertainment companies, as well as most all entertainment lawyer litigators at outside law firms, will confirm all of this. I have served as both, prior to my solo law practice here in New York. One thing you learn quickly in this line of work, is that, while some claims are valid, more people claim more rights in more situations than actually have them.

Film and television producers usually complain to their own entertainment lawyers that the commencement of such a rights nuisance claim is a sleazy thing to do, and the sign of someone watching too many motion pictures with too much time on his/her hands. Often true. Yet the film or TV production can be out time and money by the time that same complaint can be made to the person with the power to dismiss the claim – that is, the judge in the applicable court system. The film or TV producer’s feeling is understandable, unless the person incidentally depicted in the motion picture program is truly ridiculed or hurt in some way. But many Americans use litigation as a sport, and greed is a powerful motivator. There is an entire section of the motion picture entertainment insurance industry and an entire cadre of in-house entertainment lawyers devoted almost exclusively to extinguishing rights nuisance claims and strike suits, often but not always through what is known as errors and omissions (E&O) insurance. Without insurance, even a strike suit can sometimes close a company down.

The first thing an entertainment lawyer does when fielding an adverse film or television claim – life-story, likeness, location, or otherwise - is evaluate the apparent sense and sensibility of the rights-complainant. So, let’s assume that the distinction has already been made between an unstable unfortunate soul who thinks that every successful Hollywood motion picture director is stealing his persona and private thoughts with implanted electrodes and radio waves, on the one hand – versus a person whose full name, likeness, and/or life-story in whole or in part actually appears in an exhibited film or television property. Let’s assume that the entertainment lawyer has reviewed the claimant’s identity with his or her film or TV producer client, and it turns out that the claimant has certain rights and is sane, stable, sympathetic, aggrieved – and unsigned. If the person’s name or likeness or life-story is recognizable in the film shot or in the television script, and no written “clearance” (to wit, signed “license”, “release”, or “agreement”) is in place, then the entertainment lawyer tells the producer of the film or TV production that rights may have been violated thereby and the motion picture production is that much more at risk.

Period.

In reply to the next likely question, the entertainment lawyer next opines that the dollar value at law of the risk or exposure to the rights violation claim cannot be accurately quantified, unless and until the issue is litigated between the aggrieved claimant on the one hand, and the film or TV company (or its insurer) on the other hand.

Period.

These decidedly-fuzzy motion picture law principles even apply to film and television location licenses and related rights, albeit under different legal theories than those corresponding to names, likenesses, and life-stories. As an example, the entertainment lawyer might next ask the motion picture producer to consider the Hollywood Chamber of Commerce that historically has licensed uses of the famous “Hollywood” sign located up on Beachwood Canyon. The Chamber has, at least in the past, asserted rights to claim and sue for unauthorized uses and depictions of the “Hollywood” sign itself - even though the sign is comprised of but a bunch of letters, and rights to letters of alphabet themselves should in theory be public domain and not owned by anyone. In any event, reasonable minds in the film and TV businesses and elsewhere, including as between entertainment lawyers themselves, have differed in the past as to whether there is legal support for these types of “location” rights claims in motion picture practice. Rather than risk it, though, a careful film producer, or television producer or executive producer, usually “clears” depicted locations rather than pay the entertainment lawyer to tell him to clear those (possible) rights post facto after the film or TV project is in the can - or else the producer moves the motion picture shot to a different location if the location license rights “clearance” is too expensive. This is particularly true of the film or TV executive that knows he or she must keep the company’s errors and omissions (E&O) insurance carrier happy and motivated to provide and not cancel coverage. Much of an entertainment lawyer’s detractor-fighting discussed above, includes the creation of alliances with the E&O carriers and their counsel. E&O carrier counsel are sometimes even more rights-sensitive and risk-averse than the motion picture studio or television network Business Affairs in-house counsel are, themselves.

Sure, a film or television producer - particularly one without an in-house or other entertainment lawyer to advise him/her, or an E&O carrier to chastise him/her - can try and fly under the radar on the “incidental use” issue, and hope no rights-violation claims occur. Many producers in fact do try this. But seemingly-incidental shots and uses cannot necessarily be safely assumed to be immune from rights claims. And Murphy’s Law will tell you that someone whose life-story truly appears in a picture in whole or substantial part, will always see it and recognize it. Some of these seemingly-innocuous motion picture uses can in fact turn out to be legally-actionable, and there are plenty plaintiff-side entertainment lawyer litigators out there who seem to be hungry to take on such causes. Even if not legally-actionable, a nuisance claim or lawsuit based on location, likeness, or life-story rights against a film or TV company can still be predicated upon an incidental-shot use in a motion picture, as a practical matter. Even with no supporting legal merit to it, it can still become an expensive headache. In other words, the law is what you read in the casebooks and statutes, but life is what happens out on the street, and rights are often what even undeserving allege until extinguished in a litigation.

Moreover, most of the good film and TV rights and “clearance” stories, though perhaps bandied-about as anonymous and sanitized hypotheticals, never make it to the casebooks. Most of these types of motion picture rights and clearance claims are never litigated, much less revealed by the publication of judicial opinions thereafter. From a film or TV entertainment lawyer defense counsel’s perspective, it is often worth paying the motion picture rights claimant US$2,500 or more, just to go away. Oftentimes, the deductible on the errors and omissions (“E&O”) insurance policy for a film can be at least US$10,000. Sometimes the deductible is even more. (Life-story encroachments and celebrity likeness rights violations can be far more expensive). Therefore, in practice, in the case of an incidental use “passing shot”, the film or TV company, with or without its entertainment lawyer’s advice, may simply pay the rights claimant. The producer may elect to do this rather than (rightfully or wrongfully) even report the claim to the E&O insurance carrier, much less seek coverage on it. Moreover, the E&O carrier will typically not defend against the motion picture rights claim and staff it up with its own defense-counsel entertainment lawyers, unless and until the suit is actually commenced or filed. So it is often the film or TV producer’s or distributor’s exclusive headache unless and until the lawsuit is filed.

The New York statute on point for those in the film and television industries and other media and entertainment industries as well, is New York Civil Rights Law, Sections 50 and 51, a statutory lattice which should be deemed relevant to both name & likeness and life-story rights matters:



If anyone thinks that an individual can’t sue for an unauthorized use of his or her likeness in a motion picture, then that skeptic should read that statute and the cases decided under it. California (Civil Code Section 3344) and most other American states have law similar to New York’s Civil Rights Law 50/51, on the books.

“50/51” and “3344”, are the bread and butter of entertainment lawyers. A private person usually sues a film or TV company on this type of likeness claim, under his or her “right of privacy”, whereas a celebrity usually sues the motion picture company on this type of likeness claim under his or her “right of publicity”. And the best way to evaluate a life-story rights claim is to navigate through a morass of prior case law, or else, better yet, have your entertainment lawyer do it for you.

It’s rough out there. One should obtain signed written rights clearances from those whose names, likenesses, or life-stories recognizably appear in one’s motion picture or TV production. Even a location-depiction claim could tie up a film or television shoot in a worst-case scenario, including that familiar case that many entertainment lawyers have dealt with on an incoming cell phone call when the location-landlord shows up on set 15 minutes before cameras roll and demands more money. When that happens, count your blessings, though. After all, the film likeness rights claimant or life-story rights claimant often doesn’t approach the production company until after the film is in theatrical release, when it is too late to cut the film’s negative.

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My practice as a film lawyer and entertainment attorney includes film and television rights, life-story rights, clearances, location agreements, licensing matters, and other aspects of motion picture development, production, exhibition, and distribution. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

Page:
Clearances For Motion Pictures

Title Metatag:
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Thursday, December 15, 2011

Independent Contractors vs. Employees - Part I: Written By New York Entertainment Lawyer And Employment Attorney John J. Tormey III, Esq.


Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

Independent Contractors vs. Employees - Part I: Written By New York Entertainment Lawyer And Employment Attorney John J. Tormey III, Esq.
© John J. Tormey III, PLLC. All Rights Reserved.

This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.

As an entertainment attorney practicing in New York, I see people and companies struggling to address the definition of independent contractor vs. employee, frequently. Anyone who hires workers or is thinking of doing so, in New York or elsewhere in the United States, should be aware of the following. Before hiring anyone, it is critical that one carefully determines with one’s accountant and entertainment attorney or other counsel whether the new hire is to be an “employee”; or, alternatively, an “independent contractor”. The terms have legal and financial import; they are mutually exclusive; and one should never use them interchangeably.

The distinction between the two types of workers is important because, among other things, it is usually more expensive and more administratively inconvenient to hire and pay “employees” as opposed to “independent contractors”. On the other hand, few persons or companies that hire workers are truly willing to relinquish control over their hires, to a sufficient degree to allow those workers to accurately be characterized as “independent contractors” as opposed to employees. As an entertainment attorney, I frequently encounter business projects of short duration such as a single film shoot, a single album recording, or a single pilot shoot. The question of “independent contractor vs. employee” therefore arises most often in the context of media and entertainment projects of multi-week or multi-month duration. Though the two constructs, “independent contractor” and “employee”, are not necessarily self-defining, the word “independent” is used for a reason, and truly translates to “loss of hiring-party control”. I’ll explain below.

The U.S. Internal Revenue Service in (former) “IRS Publication 937” identified 20 “checklist” factors that it considered when determining whether or not an individual worker is an “independent contractor” as opposed to an “employee”. The litmus test has apparently since evolved somewhat. See, e.g.:
The hiring party should review the most updated version of the IRS criteria prior to any hires, and it is probably more important to do so with one’s payroll company and tax accountant, than one’s entertainment attorney. The hiring party should also be aware that the IRS is not the only institution with whom to be concerned regarding the all-important “independent contractor vs. employee” determination. Other governmental agencies have a stake in preventing mischaracterization of workers as independent contractors, too.

For example, the state Department of Labor (state “DOL”) in one’s own home state may apply its own checklist of criteria to distinguish independent contractors vs. employees. One needs to be aware that there is a federal [US] Department of Labor as well as a state Department of Labor. A hiring party needs to comply with the requirements of both. In a perfect world, there should be consistency between the respective “checklists” of the IRS and the applicable DOL, as well as consistency between each agency’s interpretation of those checklists. However, your entertainment attorney and tax accountant will opine to you that the world isn’t perfect, and those interpretations could differ as to what constitutes an independent contractor versus an employee. Therefore, one should be aware as to how a local state DOL characterizes the two different types of workers, too - if different than the IRS characterization. Additionally, from an enforcement perspective, the DOL could challenge a hiring business’ characterization of its workers as “independent contractors” vs. employees, without the IRS joining in on the contest. The IRS and the DOL are separate agencies, although there is a suggestion that they will more thoroughly share electronic data with each other on field data and this issue in the near future.

The “independent contractor” determination can be the proverbial unstable apple cart, easily tipped. An employer, as most know, should withhold taxes from an employee’s pay, and make unemployment contributions with respect to those employees, among other things. Hiring companies in the entertainment field, for example, even if they already have an entertainment attorney and a tax accountant, still often wisely use a “payroll company” to administrate payment obligations to workers, so as not to transgress. The cost of a hiring party mischaracterizing an employee as an independent contractor instead, could be high. If ever in doubt, payroll companies and accountants should skew cautious and conservative when making the distinction for their clients in favor of employees – and the entertainment attorney will usually tell the client to listen to his or her payroll company and tax accountant.

However, let’s say that a hypothetical music recording studio, or film production company, for that matter, hires 20 workers, characterizes them all (in reasonably good faith) as “independent contractors”, but uses no payroll company, tax accountant, or entertainment attorney initially. Let’s further assume that the film production or music studio pays no unemployment insurance or workers compensation contributions with respect to any of the hires, and does not withhold taxes from their paychecks. Then, one independent contractor worker is terminated, and vindictively files with the local state DOL for unemployment compensation, claiming to be a fired “employee” instead. Even after phoning the entertainment attorney and tax accountant to enlist their retroactive help, it may now be too late. The recording studio or film production could now find itself faced with a state DOL that characterizes not just the one claimant-worker - but all 20 workers - as “employees” as opposed to “independent contractors”. The apple cart tips. The camel’s nose is now in the tent.

The recording studio or film company may be required to litigate administrative hearings on the independent contractor v. employee question, and may thereupon be assessed retroactive unemployment insurance contributions, interest, and penalties with respect to the workers that “should have been paid as employees”. Other actions may also follow, such as a workers compensation audit, and perhaps even findings by the IRS and local tax authorities with respect to claimed monies that “should have been withheld” from the “employees” pay. The argument of, “But I told them they were independent contractors” may be considered a mere ipse dixit proposition and might not wash with the government. The entertainment attorney or the business owner can state the case to the authorities that short-term hires are the bread-and-butter of the local entertainment economy in the jurisdiction and so should be rewarded and not punished, but the adjudicating authorities may not accept that distinction between entertainment and non-entertainment sectors. Their only care may be to decrease the overall number of independent contractors and increase the total number of employees across all industries and sectors.

Could this nightmare have been avoided by the recording studio or film production company, through documentation, prospective use of its entertainment attorney, or otherwise? The answer is “Maybe yes, maybe no”. Please see Part II of this article for a further discussion.

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My entertainment law practice includes state and federal employment law matters relating to independent contractors and employees and other human resource matters as they arise in the fields of film, music, television, publishing, Internet, and other media and industries. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.
John J. Tormey III, PLLC
1324 Lexington Avenue, PMB 188
New York, NY  10128  USA
(212) 410-4142 (phone)
(212) 410-2380 (fax)

Page:
Independent Contractors vs. Employees - Part I

Title Metatag:
independent contractor,entertainment attorney,employee

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