Posts Tagged Legal

What’s The Verdict: FTC settles crowdfunding fraud with Erik Chevalier!

What’s The Verdict: FTC settles crowdfunding fraud with Erik Chevalier!

The big, bad Federal Trade Commission has settled its first case against a creator on the Kickstarter Project.  Erik Chevalier and The Forking path, Co. jumpstarted a campaign to raise money for a fantasy board game called “The Doom that Came to Atlantic City.” Supposedly, Erik Chevalier raised about 4x his goal for the game, but used some of these funds for personal expenses including personal equipment, personal residence, etc. and we all know that’s not allowed!

Chevalier promised consumers that they would receive a copy of the game along with figurines if the campaign reached its funding goal of $35,000.  He ended up raising over $120,000 from 1,246 backers.  But then, in July 2013, he told his backers that the project had been cancelled.  There had been previous issues regarding patents and overseas manufacturing,  and consumers thought all was good until he told them it was not.  Chevalier made a statement addressing the situation, “Every possible mistake was made, some due to my inexperience in board game publishing, others due to ego conflicts, legal issues and technical complications. I never set out to con anyone or to perpetrate a fraud but I did walk into a situation that was beyond my abilities and for that I’m deeply sorry.”

Backers were upset, Chevalier promised refunds which he of course couldn’t uphold, and the FTC began investigating. The FTC is pursuing him for violating a law on the dissemination of a false advertisement.  Chevalier has neither confirmed nor denied allegations, but has given consent to a permanent injunction barring him from making misrepresentations about any crowdfunding campaign.

And that’s all she wrote.  Stay tuned for more on What’s the Verdict!

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What’s The Verdict: Were Mike Huckabee’s anti-Hollywood phone calls more like a survey or telemarketing? Will he be held liable?

What’s The Verdict: Were Mike Huckabee’s anti-Hollywood phone calls more like a survey or telemarketing? Will he be held liable?

Just earlier today, the 8th Circuit Court of Appeals has revived a lawsuit that accuses U.S. presidential candidate Mike Huckabee along with others of violating telemarketing laws.  The lower court rejected the case, but after today’s decision, Huckabee and others will again face a class action lawsuit over millions of prerecorded  phone message delivered on behalf of the film Last Ounce of Courage back in 2012.

So, what actually happened that led to the lawsuit?

Huckabee was tapped by the film’s producers including Veritas Entertainment in an attempt to get people to a see a movie about a son of fallen U.S. soldier.  The film was Last Ounce of Courage.  To be more precise, there were about 34 million calls to residential phone lines and cells phone.  Based on the script, Huckabee was promoting the film by pitching it as ‘anti-Hollywood.’ For example, Huckabee would call residents and ask the following:

“Do you agree that traditional American values are under attack in mainstream media and by our government?” As well as, “Would you, like me, Mike Huckabee, like to see Hollywood respect and promote traditional American values?”

Two St. Louis residents, Ron Golan and Dorit Golan, filed a $5 million class action suit on behalf of themselves as well as other claiming that the calls were a violation of the Telephone Communication Protection Act and Missouri’s Do Not Call Law. Turns out that the Golans weren’t actually in their home to hear the message but were left with voicemails on their answering machine.

In May 2014, a federal judge rejected the lawsuit because the plaintiffs were unable to demonstrate an injury sufficient enough to give them standing for a law intended to crack down on robocalls.  However, the 8th Circuit judge Diana Murphy has decided to read the law more broadly than the district judge who rejected.  Judge Murphy says that the lower court judge erred in dismissing the claims.

The defendants are arguing that the calls do not fall under the category of telemarketing or advertising, but were more for information gathering with survey questions.  It is now the role of the appeals court to examine and determine the context of the calls to see if the purpose was to promote goods.  Judge Murphy states in her opinion that the messages appeared to be survey-like by asking if recipients had traditional American values, but clearly acknowledges that the producers were most concerned with getting viewers of the film rather than gathering information.

Overall, Judge Murphy recognizes that the Golans are not subject to a unique defense nor did the suffer a unique injury, but what matters for all class members (including Golans) is that the phone calls placed by Huckabee were initiated for the purposes of promoting Last Ounce of Courage.  Additionally, she does not rule on whether or not Huckabee could be “vicariously liable” and is leaving that to the lower district court.

Judge Murphy has reversed the lower court judge’s opinion, meaning the case has been revived and remanded.  The final decision will be left to a lower district court judge.

The case is Golan et al v. Veritas Entertainment LLC et al, 8th U.S. Circuit Court of Appeals, No. 14-2484.

What do you think the lower court judge will do this time around? Stay tuned for more updates on What’s The Verdict!

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Collective Bargaining Hollywood Style: Entourage stars Get $2mil each negotiating as one

Collective Bargaining Hollywood Style: Entourage stars Get $2mil each negotiating as one

After years of speculation and anticipation the HBO hit series Entourage will finally make it to the silver screen. Its long journey to the world’s movie theaters, as with most Hollywood big budget productions, was not without controversy and delay. In a recent article in the Hollywood Reporter, Kevin Dillon, who co-stars in the film said that discussion about a potential film had begun as early as 2008, the same year that HBO’s Sex and the City made its film debut.  Much of the delay was due to writer and director, Doug Ellin’s inability to come up with a script and storyline for the feature. However, once the script was completed the film would be further delayed by marathon salary negotiations.

One of the project’s main stars, Jeremy Piven, who was the only established celebrity prior to the original show’s conception, received a salary that left the other actors feeling like they deserved more than originally offered. After negotiations were finally completed Piven walked away with a cool $5 million, and the film’s other stars, Adrian Gernier, Jerry Ferrera, and Kevin Dillon, each signed deals worth $2 million.

In his interview with the Hollywood Reporter, Grenier discusses how he, Ferrera, and Dillon negotiated as a single unit to get their final deal, “We recognized that we had more leverage when we were aligned.” The utilization of collective bargaining between the project’s stars and the studio is very interesting and could start a new trend in contract negotiations. Rather than negotiate separate deals and contracts it seems as though Gerneir, Ferrera, and Dillon opted to negotiate as a single unit. This allowed them to secure the same uniform deal of $2 million each, rather than have their agents and attorney’s negotiate several different deals for each star. This technique can prove to be a rather effective one for ensemble cast projects, where all the stars can work together to secure a favorable payout.

Stay tuned for more on What’s The Verdict!

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