Kesha's Amended Lawsuit Against Dr. Luke Rejected by Judge

A judge rules it's too speculative what Sony might do and also denies her attempt at imposing California's seven-year limit on personal service contracts.
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Kesha

Kesha Rose Sebert has experienced another huge setback in her legal dispute with producer Dr. Luke (Lukasz Gottwald). In what may be the pop star's most significant legal defeat since she was denied an injunction against the man she accuses of rape, New York Supreme Court Justice Shirley Kornreich on Tuesday refused her attempt at amended counterclaims.

Dr. Luke is suing her for smearing him through allegations of sexual abuse. Kesha initially attempted to escape her contract by claiming a "hate crime," but in April 2016, the judge rejected those claims.

In late January, Kesha tried again.

"You can get a divorce from an abusive spouse," began her proposed countersuit. "You can dissolve a partnership if the relationship becomes irreconcilable. The same opportunity — to be liberated from the physical, emotional, and financial bondage of a destructive relationship — should be available to a recording artist."

Usually, judges are fairly permissive by allowing amended complaints, but not this time.

Specifically, Kesha tried to assert that Dr. Luke's company breached contract by refusing to send accounting statements and pay her royalties. Kesha alleged that he wanted to leave her penniless and that he wouldn't sign off on a new album. In response, Dr. Luke's lawyers alleged that it was Kesha who actually owed $1.3 million in royalties and further, that she failed to provide notice and a 30-day cure period.

Judge Kornreich agrees with Dr. Luke.

"Here, Kesha made no showing that it would have been futile to send an appropriate notice or that she was prevented from doing so," writes the judge in an opinion. "Thus, Kesha may not assert a counterclaim for breach of the Prescription Agreement."

Kornreich also rejects Kesha's attempt to assert that Dr. Luke breached the covenant of good faith and fair dealing. Since the judge has determined that Kesha did not perform under her recording agreement and failed to give notice under her songwriting agreement, Kornreich says she "cannot maintain a breach of contract claim based on the implied covenant" in those deals.

The judge then goes even further when analyzing Kesha's bid to escape her contractual situation.

The pop star sought declaratory relief declaring that it will be impossible to perform under the deals due to the acrimonious relationship. Kesha cited reports that Sony's deal with Dr. Luke ends this month and told the judge that she'd have no go-between, making her situation worse.

"It is speculative, not justiciable, whether Sony's contract is ending and whether it will be able to assist after this month," responds the judge. "Furthermore, KMI [Dr. Luke's company] may not choose to exercise its options for future albums after the third is released. Finally, with respect to the Prescription Agreement, signed in November 2008, Gottwald's allegedly abusive behavior was foreseeable."

Finally, represented by Daniel Petrocelli at O'Melveny & Myers, Kesha boldly attempted to assert the so-called Seven Year Rule on personal service contracts under California law in a New York court.

"To protect young, newly discovered recording artists from this precise manner of exploitation in quasi-lifetime un-severable professional relationships, California labor law requires all music contracts to end within seven years of execution," stated her proposed counterclaim. 

But this novel effort also fails because Kornreich decides to honor a New York choice-of-law provision in the agreements.

"The parties' choice of New York law should be enforced, unless the public policy of another jurisdiction has an overriding concern so strong that it trumps New York's strong public policy in maintaining and fostering its undisputed status as the preeminent commercial and financial nerve center of the world," writes the judge. "Turning to the case at bar, the parties to the Gottwald Agreements could have provided that they would terminate in seven years. The parties, represented by sophisticated counsel, chose not to put such an explicit provision into the agreements. Thus, their choice of law should be enforced. Moreover, the single 1944 case cited by Kesha that mentions California's public policy in enacting 2855 does not demonstrate an overriding public interest that is materially greater than New York's interest in enforcing the parties' choice of New York law."

Should this latter part go up on appeal, it would be an important issue that would impact all artists.

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