And The Defense Wins
The United States Court of Appeals for the Eleventh Circuit has affirmed a federal district court ruling in favor of Lil’ Joe Records Inc. in a copyright infringement case brought by Jeffrey Thompkins, a.k.a. rapper JT Money. Thompkins had sued Lil’ Joe Records, claiming that it did not legally hold the copyrights to songs made by his group, Poison Clan. “The trial and appellate courts both understood that the copyrights at issue here had properly been conveyed to our client,” said attorney David H. Levitt of Hinshaw & Culbertson LLP in Chicago, which represented Lil’ Joe Records.
In 1989, Thompkins signed a five year exclusive recording agreement with a predecessor company to Luke Records, a record label owned by musician Luther Campbell. The contract called for Thompkins to record albums under the group name “Poison Clan” in exchange for future royalties. Thompkins contractually assigned copyrights in his songs to Luke Records.
In 1995, Luke Records and Luther Campbell filed for bankruptcy. During the course of the bankruptcy proceedings, the sound recording copyrights to Poison Clan’s records were sold with bankruptcy court approval to Lil’ Joe Records. Lil’ Joe Records is owned by former Luke Records General Counsel, Joseph Weinberger. Under the bankruptcy court order, the copyrights were transferred “free and clear of any and all liens, claims, encumbrances, charges, setoffs or recoupments of any kind . . .” The bankruptcy court order confirming the order found that Weinberger was a good faith purchaser.
In 2002, Thompkins sued Lil’ Joe Records, seeking to recover royalties and other damages for alleged contractual and copyright violations. The United States District Court for the Southern District of Florida ruled in favor of Lil’ Joe Records. Thompkins appealed, but the Eleventh Circuit upheld the lower court ruling.
The appellate court agreed that, due to the bankruptcy judge’s determination that Lil’ Joe Records acquired the copyrights at issue “free and clear,” the issue was resolved and could not later be revisited. Any rejection of Thompkins’ contracts with Luke Records did not void the contracts themselves, nor did it cause the previously transferred copyrights to somehow revert to Thompkins. Accordingly, the bankruptcy sale to Weinberger was valid, and Thompkins did not have a valid claim against Lil’ Joe Records.
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