Five percent or ten percent?
On Thursday, a California appeals court got to address a subject that’s of limited public interest. Surely, no reporter would ever write about it. It has to do with what entertainment lawyers charge their clients.
The particular client in this dispute is DJ Mustard, born Dijon McFarlane, who has produced hits for Tyga, Trey Songz, Jamie Foxx and others.
Until recently, Mustard’s lawyer was Helen Yu at Yu Leseberg. For a while, she’s been charging a 10 percent commission.
Then, the business managers came along. Mustard is represented in this regard by Wallace Fortune at Nigro KarlinFeldstein & Bolno, one of the top firms in Hollywood. Sometime in 2014, Yu alleges that Fortune inaccurately told Mustard that other entertainment law firms charge their clients a maximum of 5 percent. And so, anadjustment to Yu’s fee was demanded. Eventually, after some stern words, Yu says she agreed to five.
But according to Yu’s firm, Fortune then sent Mustard an email saying he was being charged 10 percent for all producer and publisher deals. Yu was fired.
The law firm then sued Nigro Karlin for tortious interference, claiming the firm had advised Mustard he was being overcharged as well as misled about the fee arrangement. The lawsuit further claims that the accounting firm intended to induce Mustard to terminate his relationship with Yu.
In reaction to the lawsuit, the defendant brought a special motion to strike under California’s anti-SLAPP statute, which is meant to deter actions that impinge First Amendment rights at an early stage of litigation. But to exploit the statute, NigroKarlin had to show that the statements being complained about were “in connection with a public issue or an issue of public interest.”
Hence, how a California appeals court got to opine on the topic of whether the fees charged byentertainment lawyers is something the public cares about.
NigroKarlin had a pretty neat argument.
The firm told the justices that the “issue of business professionals like managers or attorneys taking advantage of their creative clients has been a matter of public concern and discussion for decades.
Alas, the argument fails.
“While it may be true that the public has an interest in these issues in the abstract, the statements at issue in Law Firms complaint were not directed to these amorphous public interests,” writes California appeals court justice Thomas Willhite. “In this case, the statement Managers contend invokes section 425.16 concerned a private fee arrangement between Mustard and Law Firm. The fact that Managers allegedly referred to the customary fee that other entertainment law firms charged their clients when advising Mustard that Law Firm was overcharging him does not render that statement one concerning a matter of public interest.”
As such, the motion to strike fails and the lawsuit will proceed. If you’re wondering about who pays the money for the appeal, the law provides that in some situations, the loser does. However, in this instance, Willhite writes, “while we find the appeal has no merit, we are not persuaded that is enough for us to declare it to be frivolous or brought solely for the purpose of delay. Therefore, we decline to award attorney fees on appeal.”