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Hendricks & Lewis PLLC v. Clinton

United States Court of Appeals, Ninth Circuit

June 23, 2014

HENDRICKS & LEWIS PLLC, a Washington professional limited liability company, Plaintiff-Appellee,
GEORGE CLINTON, an individual, Defendant-Appellant

Argued and Submitted, Seattle, Washington February 4, 2014.

Page 1078

Appeal from the United States District Court for the Western District of Washington. D.C. No. 2:12-cv-00841-RSL. Robert S. Lasnik, District Judge, Presiding.



The panel affirmed the district court's order appointing a receiver and authorizing the sale of master sound recording copyrights in an action between musician George Clinton and his former law firm Hendricks & Lewis.

Hendricks & Lewis obtained judgments against Clinton for past-due attorneys' fees, and moved for an order authorizing the sale of master recordings made by Clinton to satisfy the judgments.

The panel held that under Washington law Clinton's copyrights in the masters were subject to execution to satisfy judgments made against him. The panel also held that § 201(e) of the federal Copyright Act did not protect Clinton from the involuntary transfer of his copyrighted works. The panel further held that under Washington law the district court did not abuse its discretion by appointing a receiver to manage or sell ownership of the copyrights. The panel held that Clinton may raise claims of fraud on the court and judicial estoppel for the first time on appeal, but concluded that both claims were meritless. Finally, the panel held that Clinton failed to raise his preemption, Erie doctrine, and due process arguments before the district court, and, therefore, they would generally not be considered, and in any event they were without merit.

Eric Michael Fong (argued), Fong Law, Port Orchard, Washington, for Plaintiff-Appellee.

Katherine Hendricks (argued), Hendricks & Lewis, Seattle, Washington, for Defendant-Appellant.

Before: Raymond C. Fisher, Ronald M. Gould, and Morgan Christen, Circuit Judges.


Page 1079

[111 U.S.P.Q.2d 1380] CHRISTEN, Circuit Judge:

George Clinton appeals the district court's order appointing a receiver, assigning four [111 U.S.P.Q.2d 1381] master sound recording copyrights to the receiver, and authorizing the receiver to use the copyrights to the extent necessary to satisfy monetary judgments a law firm obtained against him. Clinton also raises several issues for the first time on appeal, including fraud on the court and judicial estoppel. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.


A. H& L's Judgments Against Clinton

George Clinton is a musician, bandleader, and touring performance artist. Hendricks & Lewis (H& L) is a law firm that represented Clinton in various disputes from March 2005 to August 2008. H& L billed Clinton $3,341,650.32 for its work, received $1,000,578.87 in payment, and wrote off approximately $600,000 of the remaining balance. This left $1,779,756.29 due. H& L initiated arbitration to secure payment of the balance, and an arbitration panel issued an award in favor of H& L. Clinton did not participate in the arbitration proceedings. H& L petitioned the Western District of Washington for an order confirming the arbitration award, and, in May 2010, the district court entered judgment for H& L against Clinton in the amount of $1,675,639.82, plus interest. The court entered a second judgment awarding H& L an additional $60,786.50 in attorneys' fees and costs in July 2010.

B. H& L's Judgment Collection Efforts

H& L pursued a variety of judgment collection efforts, including garnishments, levies, and liens in several districts across the country. Clinton's attorney declared that these actions created a financial " stranglehold" so that Clinton " [c]an't pay his taxes. Can't pay his lawyers. Now, it is going to affect his touring and his ability to make a living at 72 years old."

C. Ownership History of the Masters

In July 1975, Clinton, through his production company, Thang, Inc., entered into a recording contract with Warner Bros. Records in which Clinton agreed to make master recordings of his performances with the group Funkadelic (" the Masters" ). Clinton had previously entered into a valid and binding agreement with Thang to render his services as a recording artist solely and exclusively for Thang.

The recording contract between Thang and Warner Bros. provided that Warner Bros.:

shall own in perpetuity throughout the world all right, title and interest in and to all the results and proceeds of [Thang's] and [Clinton's] services and performances hereunder, including the sole and exclusive ownership of any and all masters . . . , the copyrights therein throughout the universe, and the right to extend or renew such copyrights, and

Page 1080

[Thang] and [Clinton] acknowledge that they shall at no time have any right, title or interest in the foregoing.

The agreement further provided that Thang:

acknowledges and agrees that [Warner Bros.] is and shall be the owner of all rights of copyright in records embodying the results and proceeds of [Clinton's] services . . . , including the exclusive right to copyright same as " sound recordings" in the name of [Warner Bros.] to renew and extend such copyrights (it being agreed that for this purpose [Thang] and [Clinton] are deemed [Warner Bros.'s] employees for hire) and to exercise all rights of the copyright/proprietor thereunder. To the extent, if any that [Thang] or [Clinton] may be deemed an " author" of such " sound recordings" , [Thang] and [Clinton] further grant to [Warner Bros.] a power of attorney, irrevocable and coupled with an interest for [Thang] and [Clinton] and in [Thang] and/or [Clinton's] name, to apply for and obtain and on obtaining same, to assign to [Warner Bros.], all such renewal copyrights.

Clinton signed a substantially similar agreement with Warner Bros. in May 1979. Under these agreements, the Masters at issue in this appeal--" Hardcore Jollies," " One Nation Under a Groove," " Uncle Jam Wants You," and " The Electric Spanking of War Babies" --were created, and Warner Bros. registered the copyrights in those recordings as " works made for hire" in its name as author.

In August 1982, to resolve a separate dispute involving Clinton, Warner Bros., and other parties, Clinton and Warner Bros. entered into a settlement agreement under which Warner Bros. agreed to " relinquish its ownership of the Clinton Masters" at issue in this appeal, if or when Clinton entered into an agreement with a third party to distribute and [111 U.S.P.Q.2d 1382] sell records produced from the Masters. Clinton's ownership of the Masters was eventually confirmed through litigation in 2005 when the Central District of California issued an order that Clinton " is the sole owner of [the Masters] ...

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