David Letterman's Production Company Beats Lawsuit From Royalty Collector

A judge rejects a lawsuit from Worldwide Subsidy Group.
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David Letterman

David Letterman's Worldwide Pants Incorporated has beaten contract claims from Worldwide Subsidy Group, an entity that was retained in 2002 to collect royalties from secondary transmissions on cable and satellite television.

Worldwide Subsidy Group was founded by Raul Galaz, a former entertainment lawyer, and his company's agreement with Letterman's allowed for royalty collection in exchange for 20 percent of the pot. 

But in 2002, less than two months after the agreement was signed, Galaz was convicted of mail fraud in connection with royalty collection. He served more than a year in prison. Letterman's company says the agreement was thereafter terminated.

In 2014, Worldwide Subsidy Group filed its lawsuit in California against Letterman's company contending that in 2007, the parties made a deal resuming authority to collect royalties and that it was owed. Letterman's company retorted that the plaintiff had been wrongfully holding onto its money.

On summary judgment, U.S. District Court Judge Andre Birotte Jr. concludes that the alleged 2007 oral agreement between the parties is barred by the statute of frauds insofar as there being no written instrument stating the essential contract terms. The judge also rules that claims related to old royalty collections are outside the statute of limitations period. Here's the full order.

Worldwide Pants was represented by Orin Snyder at Gibson Dunn.