The estate of Stan Lee sued POW! Entertainment to regain the rights to Stan Lee's intellectual property, similar lawsuits have been filed before and were presumed settled. The Judge handling this case thought so as well and sanctioned the plaintiff and their attorneys big time.
There is a long a sordid history here that we have reported on numerous times of the years at this blog and as of last July, we reported that the lawsuit was finally resolved. Here is a quick version of the beginnings of this dispute. This tale starts at a dark part in history, way before the MCU, way before the influence of Mickey Mouse, and way before anyone but us true geeks cared about comic books. In August 1998, Marvel filed for bankruptcy and Stan Lee was fired by Marvel. Stan then took any rights he had to any intellectual property that he still owned and transferred in to a company called Stan Lee Entertainment Inc. Stan brought on a group of “trusted” advisors to help run the company but it did not succeed and had to declare bankruptcy. Following bankruptcy, two of these advisors and Stan formed a new company POW! Entertainment and Stan’s rights were assigned to this new company. That is the clean side of the story. Now, let’s get into the dirty allegations.
Joan Celia Lee is the only daughter and heir of Stan Lee. She claims that Stan’s trusted advisors tricked Stan into believing that he retained his rights individually when POW! actually owned such rights. After his death Joan claims that she hired a team of forensic investigators who determined that Stan’s rights were transferred to corrupt China-based company.
Joan sued for a declaration stating that defendants have no rights to Stan’s intellectual property, damages, and costs. This is not the first time a similar lawsuit was filed. While Stan was still alive he was involved with several litigations against POW!. But those seemed to be resolved when Stan dropped the lawsuit and stated "The whole thing has been confusing to everyone, including myself and the fans, but I am now happy to be surrounded by those who want the best for me. I am thrilled to put the lawsuit behind me, get back to business with my friends and colleagues at POW! and launch the next wave of amazing characters and stories!”
Lawyers love their Latin phrases and one is "re judicata". This means that claims raised in another lawsuit and decided cannot be retried. I mean, this doctrine could not have been more clear here for the plaintiff and the Court thought so as well.
Federal Rule of Civil Procedure 11 sanctions are often threatened but rarely accessed. Rule 11 is a sanction against parties, and their lawyers, that forbids the filing of baseless actions and process. According to this Court, Rule 11 sanctions are an extraordinary remedy to be exercised with extreme caution. And the Court thought it was reasonable here. The Court said this matter was dead and buried and it was frivolous to re-file another lawsuit. Further, the Court said the lawsuit was filed to harass the defendants and for publicity.
POW requested sanction in the amount of $5 million to adequately deter future wrongful filings. POW said that Lee had inherited $50 to $70 million after the death of her father and therefore, such a fine is appropriate. The Court said that sanction in the amount to Lee of $1 million was appropriate and sanctions against her and her attorneys in the amount of another $250,000 was also appropriate.
Lee can appeal this decision but the Court is permitted liberal discretion to make such a decision so a reversal on the amount of the sanction is not likely. I think we can safely say that no new lawsuits will be filed but this battle will wage on for some time.