Wednesday, June 29, 2011

Sued This Way

It will be interesting to see how Lady Gaga's relentless publicity machine counters the negative media arising from a lawsuit alleging that she defrauded the "Little Monsters" who responded to her call for donations to help Japan's earthquake and tsunami victims.

Lady Gaga sued over proceeds from earthquake relief wristbands

A Michigan-based law firm has filed a purported racketeering class action against Lady Gaga and several entertainment companies, claiming they made false representations that all proceeds from sales of a wristband would go to victims of Japan's massive earthquake and tsunami.

Thursday, June 23, 2011

A Full Court Press

Lawyers for Dallas Mavericks' owner Mark Cuban are trying to turn the Mavs win over the Miami Heat on the basketball court into wins in the court of public opinion and the court of law. This "full court press" is in response to a 2009 lawsuit by Hillwood Investment Properties, a company controlled by H. Ross Perot, Jr., son of the former presidential candidate, against Dallas Basketball Limited, the company controlled by Mr. Cuban that operates the Mavs. Hillwood is a minority owner of the Mavs, having retained a 5 percent share of the team after Mr. Perot sold Mr. Cuban a controlling interest in 2000 for $285 million. The suit seeks the appointment of a receiver to manage the team's affairs, claiming that Mr. Cuban's mismanagement has pushed the team to the brink of insolvency and that the Mavs are $200 million in debt.

Mr. Cuban's legal team, Thomas Melsheimer and H. Brett Johnson of Fish & Richardson, contend that winning the NBA championship amounts to a slam dunk in Mr. Cuban's favor and have filed a summary judgment motion seeking the dismissal of Hillwood's lawsuit. The four page motion, which you can read here, is dominated by a large color photograph showing the Mavs celebrating, Mr. Cuban being interviewed, and Dirk Nowitzki hoisting the championship trophy. The motion is also remarkable in that it cites no cases in support of its terse argument:
On June 11, 2011 the World Champion Dallas Mavericks defeated the Miami Heat to claim the franchise's first NBA championship. . . . Under Hillwood's ownership, the team was deemed the 'worst franchise' in all of professional sports. Under Cuban's stewardship the Mavericks have become one of the league's most successful teams and are now NBA champions. Accordingly, there can be no genuine question that Hillwood's claims of mismanagement lack merit and Hillwood's claims should be disposed of on summary judgment.
When asked by to comment on the filing, Mr. Melsheimer offered the following embellishment:
You don't have that many cases when you're watching television and a game ends, and you think, 'wow this is really great for my lawsuit.' . . . It's a humorous twist, but it has legal force. It makes a serious point that allegations of mismanagement are ridiculous. A substantial part of our defense is that the Mavericks are successful, and what more obvious success for an NBA team than an NBA championship?
It is doubtful that the summary judgment motion will result in the dismissal of the lawsuit, but it has certainly garnered positive media attention for Mr. Cuban.

Friday, June 10, 2011

The SEC: Where Fun Goes To Die

The United States Securities and Exchange Commission, whose employees were exposed for watching and downloading pornography at their desks during the financial crisis, is now clamping down on all fun and games. The Commission sued two advertising executives who started the website "," hoping to raise $300 million to buy Pabst Brewing Co. The putative beer barons also created a Facebook page and Twitter feed to attract would be investors, promising them "a certificate of ownership as well as beer of a value equal to the amount invested," according to the SEC press release. The two men consented to the entry of an administrative cease and desist order, for the moment ending their dream of owning a brewery.