Rogers & Tartaro Business Litigation Blog : New York and Connecticut Business Litigation Lawyer & Attorney : Rogers & Tartaro Law Firm : Commercial Litigation : Westchester County NY, Fairfield County CT

• Email This
• Print
• Comments
• Trackbacks

The New York Times recently ran an informative article about NBC’s late night television woes. Low ratings and pressure from affiliates have made NBC move Jay Leno from 10 pm to 11:35 pm, thereby bumping Conan O’Brien’s The Tonight Show to 12:05 am (actually, wouldn’t that be tomorrow?)

Mr. O’Brien issued a respectful but witty statement expressing his thoughts and disappointment. He also remarked on the speculation that a rival network is wooing him. But the Times suggests that O'Brien's contract with NBC includes a non-compete clause that could prevent him from jumping to another network.

Time to call in the lawyers.

As an attorney, I don’t practice in entertainment law but I find the story raises some interesting general contract issues. Of course, the terms of the contract are not public, so I can only draw some general inferences. Mr. O’Brien signed a contract with NBC to take over The Tonight Show. According to the Times, although the contract did not specifically state that the show will begin at 11:30 pm, for 60 years it has immediately followed the local nightly news. In order for O'Brien to extricate himself from the contract, he would have to show that the time change constitutes a breach. Or, he could leave and possibly breach the contract.

The article states that NBC executives are confident they have not breached Mr. O’Brien’s contract, since he still will be the host of The Tonight Show.

What does this story teach us about contracts? First, a decision to breach a contract is usually a business decision, not a moral one. But, if a contract is enforceable, the breach is going to cost. The question is whether the cost of the breach is greater than the cost of faithfully carrying out the contract.

Secondly, a contractual right provides certain protections. But, it doesn’t protect individuals or a management team from sabotaging their own interests. As I’ve told clients numerous times, it may seem attractive to play “hardball,” but it’s not always the best alternative.

A case in point is the subplot mentioned in the article concerning the Fox network. I’m curious as to whether Fox, which, according to the article, has the contractual right to impose a new late-night program on its affiliates, would actually enforce its contractual right if that action jeopardized its long-term relationship with the affiliates. Those "Seinfeld" re-runs are reportedly very lucrative.

Finally, aggrieved employees should follow Mr. O’Brien’s example and take the high road. Don’t burn any bridges or publicly lash out at those you believe wronged you.

Incidentally, another Celebrity vs. Network case was put to bed today. The AP reports that New York's top court rejected Dan Rather's bid to reinstate his $70 million breach-of-contract lawsuit against CBS. Apparently, the court ruled that since he was paid, there was no breach of contract.

• Email This
• Print
• Comments
• Trackbacks

For the record, I’m not a big fan of Justice Antonin Scalia. But he certainly is provocative, as the Wall Street Journal Law Blog pointed out recently.

According to the Journal post, Justice Scalia is concerned that there aren’t more people with varying professional backgrounds being nominated to the Supreme Court. At the time of his nomination, there were three justices with no prior judicial experience. Today there are none. An AP story quotes Justice Scalia as saying, “Every aspect of your career broadens your outlook and gives insights that you wouldn’t have in some other aspect of the legal practice.”

The Justice raises a good question: should the judges of the highest courts (he talks about US Supreme but the question could apply to the highest state court) be exclusively judges, or should there be a mix of backgrounds?

Ironically, in the debate over the last Supreme Court appointment (Justice Sonia Sotomayor) there seemed to be a big issue over whether the law should be followed closely or informed by the judge’s background. Many seemed to be against the application of non-legal insights into a legal decision. Now, none other than Justice Scalia implies that background matters.

Here’s my take: In principle, a variety of backgrounds would be best. But, the highest courts almost exclusively decide questions of law, not questions of fact. Thus, if the role of the justices is to tell us “what the law is,” should that be done by a non-lawyer of any background? Also, wouldn’t a non-lawyer become even more dependent on his or her law clerks (lawyers) than the lawyer-judges already are?

• Email This
• Print
• Comments
• Trackbacks

As of January 1, the federal estate tax went away for a year. Under current law, it’s scheduled to return at a higher rate next year. Personally, I’m surprised that Congress allowed the estate tax law to lapse, and I'm curious to see the ramifications.

According to the Wall Street Journal, families facing end-of-life decisions in the immediate future are finding that the change is making one of life's most trying episodes only more complex. Beneficiaries stand to inherit a lot more for a death this year than a death after December 31, 2010. The ethical dilemma is clearly significant.

Of course, what Congress giveth, Congress can taketh away. As discussed in the Journal article, the repeal of the federal estate tax is accompanied by reinstatement of the capital gains tax on property passing to beneficiaries.  Previously, when property passed to beneficiaries, the property received a “step up” in basis, wiping out the capital gains tax. The net result is that many estates, including smaller estates, will be taxed anyway but it just won’t be called an estate tax.

The Journal says that the uncertainties of the new tax law (will it be changed? will it be retroactive?) are “forcing family legal advisers to craft various provisional financial-planning strategies that can be undone later if the rules do change.” According to the article, at least one person has added the prospect of euthanasia to his estate-planning mix.  That might be a little extreme.

For a more conventional planning environment, we look forward to some kind of retroactive resolution.
                                                                

• Email This
• Print
• Comments
• Trackbacks