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Shuster Estate Loses Appeal

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Shuster Estate Loses Appealhttp://ift.tt/eA8V8J

The Siegel and Shuster lawsuits are over – again. My thoughts on the latest decision after the jump.

Today’s Ninth Circuit ruling is the latest in a series of predictable setbacks for the Siegel and Shuster heirs. In an unpublished opinion, the appellate panel agreed with the district court that the Shuster estate’s filing to terminate the transfer of his half of the Superman copyright is invalid.

The reason for this finding once again goes back to a settlement agreement. In 1992, Shuster’s siblings, Frank and Jean, entered into an contract with DC in which Jean would receive a pension in exchange for any and all rights to Joe Shuster’s works. According to both the lower and appellate courts, this settlement agreement superseded the 1938 agreement with DC, thereby revoking the original Superman sale and re-granting the rights to DC.

The court summarily disposed of Toberoff’s arguments to the contrary. As is sometimes the case in judicial opinions, you can learn a lot from the footnotes about how the judges in the majority saw the case . Footnote 2 dispenses with Toberoff’s assertion that the agreement was not revoked under New York contract law, while footnote 3 offers pointed jabs at the Shuster side’s failure to introduce evidence and to raise a certain claim involving California probate law that allegedly might have bolstered its case. The opinion also notes that it isn’t going to rule on the issue of whether the Siegel & Shuster heirs and Toberoff violated the law by failing to disclose the sale of the heirs’ rights to Toberoff’s development company–and then, of course, observes that they appear to have done just that.*

Although the opinion is unpublished–the decision does not break new legal ground, is not to be cited as precedent and was likely considered to be a slam-dunk–one judge on the panel did dissent. However, his argument turns on the issue in California probate law that the majority’s footnote 3 observes was missing in Toberoff’s opening brief on appeal. It’s also worth noting that at one point the dissent also spells Shuster’s name as Schuster, which in some circles is enough to make all of its other points subject to question.

This is where I am obliged to say that Toberoff could ask for the case to be considered by a larger number of Ninth Circuit judges sitting en banc, but the odds of this happening for a unpublished opinion in which the majority finds a key issue to have been waived and notes that the losing parties improperly withheld material information is not exactly high.

The majority opinion further inoculates itself against Supreme Court review by noting that there does not appear to be a circuit split on the question of whether a subsequent agreement dispose of termination rights by revoking a previous transfer and re-assigning the copyright. The Second Circuit has reached the same conclusion in principle as the Ninth Circuit–thus, there wouldn’t be a difference in interpretation for the Supreme Court to resolve.

Is it fair that the Shuster heirs only secured a meager pension while the Siegel heirs stand to gain tens of millions of dollars in exchange for the same rights? Arguably not, but from a legal perspective it’s a cautionary tale as old as the biblical story of Jacob and Esau, who sold his precious birthright for some lentil soup. Immediate benefits can be extremely costly in the longer term, especially if an attorney isn’t on hand to negotiate a better deal.

*Footnote 1 gives a shout-out to Brad Ricca’s Super Boys and Larry Tye’s Superman: A Biography. Legally, this means that everyone who hasn’t bought these essential books must do so now or risk having to read them in a prison library!

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