As a music attorney, most of my time is spent drafting and negotiating contracts. But another type of work frequently comes up—getting clients out of contracts, or trying to. When you enter into a legal contract, you can’t just terminate it before the term expires because you changed your mind or you don’t like the person you contracted with. You must have a valid legal reason, such as the other side breached the contract or there is a law that can be used to terminate it.
Let’s examine the twists and turns of the Kanye West vs. EMI litigation. EMI entered into a music publishing contract with Kanye in 2003. The parties agreed to a number of extensions of the agreement. In January 2019, Kanye filed suit against EMI in federal court in California claiming he had the right to terminate the agreement. Kanye relied on a California statute (known as the 7 Year Rule) that limits personal service contracts to no more than seven years. Kanye claimed that EMI was trying to tie him up in a contract for the rights to his music publishing for the rest of his life and that amounted to “servitude.” After Kanye filed his case in California, EMI filed a lawsuit in New York federal court asserting that Kanye was attempting to “forum shop” to avoid the provision in his contract, which provided that New York had exclusive jurisdiction over any dispute. EMI claimed New York Law applied and New York does not have a similar seven-year rule.
In September 2019, the parties appeared to have settled the dispute and informed the court that they had “an agreement in principal.” Therefore, the Court indicated that the case was dismissed, but the parties had until Dec. 27, 2019, to reopen it.
After failing to finalize a settlement, on Dec. 23, 2019, EMI requested the federal court in New York to re-open the lawsuit and the judge agreed. As stated by TMZ, EMI’s lawyers said: “Unfortunately, the parties have been unable to finalize the terms of the settlement agreement.” Sometimes in litigation lawsuits appear to settle only to fall apart before a written settlement agreement is signed by the parties. That is what happened in this case.
Often these types of disputes are settled before trial. Record labels and publishers are concerned about losing such a case and setting a bad precedent. There are also attorneys’ fees and costs to consider with litigation as well as possible bad publicity. So both sides usually have some incentive to settle.
There are a number of ways cases like this can be resolved. For instance, Kanye can buy himself out of it, he can enter into a new contract with EMI and be paid a new advance or the parties can agree to terminate the contract and agree that EMI will receive an override on any new publishing deal he enters into.
GLENN LITWAK is a veteran entertainment attorney based in Santa Monica, CA. He has represented platinum-selling recording artists, Grammy-winning music producers, hit songwriters, management and production companies, music publishers and independent record labels. Glenn is also a frequent speaker at music industry conferences around the country, such as South by Southwest and the Billboard Music in Film and TV Conference. Email Litwak at gtllaw59@ gmail.com or visit glennlitwak.com.