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IP/Entertainment Case Law Updates

Queen v. Schultz

D.C. Circuit partially reverses summary judgment in favor of MSNBC host Ed Schultz, affirming district court’s judgment on contract claims but finding that whether plaintiff formed partnership with Schultz was disputed issue of fact. 

Defendant Ed Schultz is a radio and television personality currently hosting “The Ed Show” on the MSNBC network. Plaintiff Michael Queen is an NBC employee who claims that between January 2008 and the commencement of “The Ed Show” in April 2009, he worked with Schultz and various television networks to develop a show hosted by Schultz.

Queen sued Schultz in May 2011 for breach of contract, fraud in the inducement, tortious interference with business relationships, and intentional infliction of emotional distress, claiming that he was entitled to compensation from Schultz based on their alleged partnership agreement to co-develop a television show starring Schultz. Schultz denies that he and Queen had any agreement or partnership to co-develop a television show and counterclaimed for fraud, slander per se, and libel per se.

The district court granted summary judgment denying both parties’ claims, and Queen appealed respecting his claims for ordinary breach of contract and breach of partnership agreement. The D.C. Circuit affirmed as to Queen’s ordinary breach-of-contract claim, concluding that Queen failed to demonstrate an agreement as to all material terms of a contract with such reasonable certainty that the court could establish a breach.

Although Queen argued that the parties, with a third partner, had agreed on a 50-25-25 percentage allocation of profits after expenses from the television show, the court found that the parties never finalized any terms of compensation or agreed on what amount was to be allocated.

With respect to Queen’s breach-of-partnership-duties theory, the court reversed the district court’s grant of summary judgment. Noting that whether a partnership existed is an issue of fact, the court concluded that there was sufficient evidence to overcome summary judgment. Although Schultz argued that Queen was his employee and/or agent and not his partner, the court could not make such a determination at the summary judgment stage. The court also found that the trial court erred in determining that Queen’s partnership theory failed as a matter of law, because Schultz was an independent contractor for MSNBC. The court acknowledged that the statutory presumption of partnership--which applies when parties share in the profits of a business--does not apply when those profits are received in payment for services as an independent contractor. It distinguished this case by noting that under Queen’s partnership theory, Schultz’s television program was an opportunity belonging to the partnership, requiring Schultz to account for the profits. Concluding that there was sufficient evidence of a partnership to survive summary judgment, the D.C. Circuit reversed on that ground and remanded.

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