Wednesday, February 22, 2017

Essay IV (Due Monday, February 27)

Klein and JLA v. Goldsmith

Jonathan Goldsmith is a long-time working actor, primarily in commercials and television guest-spots. Beginning in early 2007, Goldsmith struck gold as the spokesman for Dos Equis beer, playing the “Most Interesting Man in the World.” A series of commercials showed Goldsmith engaging in all sorts of activities, with a voiceover offering statements demonstrating how interesting and awesome he is (“Socrates taught law school using his method”). Each ad closed with Goldsmith saying into the camera, “I don’t always drink beer. But when I do, I drink Dos Equis,” then urging viewers to “Stay Thirsty.” The commercials were pop-culture sensations; they spawned memes, won awards, helped fuel a 15% increase in Dos Equis sales, and made Goldsmith a well-known actor. In 2016, his final year playing the character, Goldsmith earned more than $ 1 million in royalties from the ads.

William “Butch” Klein of the Jordan Lee Agency, Inc. (“JLA”) has served as Goldsmith’s talent agent since 2002. Under their original contract, Goldsmith agreed to pay a 10% commission on his annual earnings. The deal was orally renegotiated and amended several times over the next decade.

In October 2016, Klein and JLA sued Goldsmith in federal district court for breach of contract. The Complaint alleged that Goldsmith had not paid the contractually required commissions on his earnings from 2015 and the first three quarters (January-September) of 2016. To show how much Goldsmith owed in commissions, plaintiffs attached to the Complaint the 2012 contract between Goldsmith and Dos Equis, while describing in the Complaint details of the terms and conditions of that agreement.

In January 2017, Dos Equis announced that it would replace Goldsmith with a new, younger “Most Interesting Man.” The announcement said nothing about the JLA lawsuit, insisting that the company wanted to update the character to reflect changing popular culture and tastes.

You are counsel for Goldsmith, drafting his responsive pleading (the court gave you the additional time to file).
You want to include two counterclaims for Breach of Fiduciary Duty against both Klein and JLA.

Count I alleges that, since 2013, Klein and JLA have failed to put forward good-faith efforts to help get Goldsmith commercials and other acting jobs; it states that Klein and JLA decided that, because Goldsmith had landed such a successful and lucrative commercial gig, they would focus their attention on finding work for other clients. Count II alleges that Klein and JLA breached their duty to him by disclosing the terms of Goldsmith’s 2012 contract with Dos Equis by including the contract with the Complaint and quoting it in the pleading. That contract includes a broad confidentiality clause prohibiting public disclosure of any terms, conditions, or details of that contract. By publicly presenting the contract in its filing to the court and detailing the agreement’s terms in the Complaint, Klein and JLA jeopardized Goldsmith’s future as a spokesperson for the beer company.

As counsel for Goldsmith, discuss whether you must or may raise these counterclaims in the responsive pleading.