Tuesday, April 7, 2020

Music Industry’s Biggest Lawsuits Have Been Put on Hold Due to Coronavirus

Written by Dave Brooks - Even for someone like former KAABOO owner Bryan Gordon, who’s no stranger to a courtroom, 2020 was going to be rough. In February, the 58-year-old Wall Street executive-turned-festival promoter was found to have breached a deal with a former business partner and was ordered to pay a $7 million judgement. Less than a month later, Gordon was scheduled to start a nine-day trial in a lawsuit filed by billionaire Ronald Dickerman over the $10 million wind-down of a joint venture the men launched in 1997.

But now, Gordon’s legal battles have been delayed indefinitely, as court systems around the United States struggle to come to grips with the deadly coronavirus pandemic that has cities across the country sheltering in place. From California’s capital, Sacramento, to the U.S. Supreme Court, America’s sprawling federal, state and local judicial network is being forced to shut its doors to the public over fears the contagious virus could easily spread in a courtroom.

Like many other industries, the judges, lawyers and clerks that handle the bulk of the courts’ business are working remotely and doing their best to keep things moving. But the inability to hold public hearings or jury trials is changing how lawyers adjudicate their cases, explains San Francisco attorney Michael Seville with the firm Seville Briggs.

“I’ve seen the impact in some of my cases already — opposing attorneys who are changing their strategy knowing the court system has been impacted by this pandemic,” Seville says. “The threat of trial is part of a plaintiff attorney’s leverage and if jury trials are delayed for six months, that knocks everything back. It takes longer to go into discovery and dilutes the leverage attorneys have as they build toward a settlement.”

That will mean delays for high-profile cases in the music business, like Dr. Luke’s $50 million defamation lawsuit against Kesha and Cox Communications’ appeal of a $1 billion judgement in its lawsuit against Sony. Such a postponement could affect a defendant’s ability to pay a judgment or delay requests for injunctive relief, like in Sonos’ patent lawsuit against Google.

For the first time since the Spanish Flu pandemic, the U.S. Supreme Court has canceled oral arguments for the next two weeks. In New York, where the coronavirus has hit hardest, the state’s unified court system has postponed all non-essential court functions and new trials, and the appellate courts are temporarily barring oral arguments. Arraignments hearings for new arrests are happening via video, while felony cases where the defendant is not in custody are being postponed.

California Chief Justice Tani Cantil-Sakauye has issued a similar order, giving local judicial officials more flexibility to extend arraignment deadlines and allowing some proceedings to move forward.

Besides ongoing lawsuits, the standstill comes at a time of major economic uncertainty, which typically is followed by a spike in personal injury claims and workers’ comp filings, explains Tim Epstein, an attorney for independent promoters and festivals like Riot Fest in Chicago.

“I tell venues to keep their insurance policies up-to-date because economic downturns usually bring about an increase in slip-and-fall claims and workplace injuries,” says Epstein. “There’s just more activity and that’s going to be a challenge for an impacted court system.”

That doesn’t mean the courts aren’t working and new suits can’t be filed, Seville explains. While the partial shutdown will delay most cases, lawyers are still filing legal motions and in the absence of public hearings, judges are issuing rulings based on the pleadings. Some requests for emergency injunctive relief or temporary restraining orders can still be adjudicated in a timely manner, but most cases will face a long delay as a result of the backlog.

“There’s not really any reason to wait to file a lawsuit,” said Seville. “Just expect your case to take a while as it winds its way through the system.”

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