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MCKEE, STEIN AND THE SEVEN-YEAR STATUTE: A SONG OF LEGAL DISCONTENT

There’s chatter aplenty in highly competitive legal-practice circles regarding clients voicing unhappiness about representation. These clients say they’re not getting the best advice after cashing their fat check. Where is the second line of defense for preventing such situations from becoming litigious? Personal managers and biz-management people come to mind—and for the more astute, read Don Passman’s book. 

In one prominent instance of client discontent, songwriter Bonnie McKee, whose credits include some of Katy Perry’s biggest smashes as well as hits by stars including Cher, Britney Spears, Christina Aguilera and Kelly Clarkson, is in a contentious lawsuit with former attorney Nick Stein and U.K.-based firm Clintons. Stein is said to have set up offices in L.A. and was becoming quite the player on the scene

McKee allegedly reupped a co-publishing deal in 2018 that surrendered half of her ownership going forward, but in her lawsuit, filed in September 2019, she claims she only signed the deal based on bad legal advice, claiming that Stein and his firm lacked the requisite competence to represent her in California and committed professional negligence and breached fiduciary duties. (Plenty of qualified entertainment attorneys, it should be noted, don’t have California licenses.) She is seeking at least $11m in damages.

Prior to signing the 2018 agreement, according to court filings, McKee consulted Stein on how to legally terminate the relationship with the publisher. Instead, Stein negotiated a new agreement on her behalf—one governed by New York law—that ran nine more years to 2027; he recommended she sign it. Before signing, she claims, she asked Mr. Stein if there were any alternatives.

The crux of her suit is the contention that Stein was unaware of a provision in California’s labor code that ostensibly would have enabled her to walk away. The code stipulates that a contract to render personal service may not be enforced against the employee beyond seven years from the commencement of service. Accordingly, McKee argues, she was legally free to walk away.

By recommending she sign a deal governed by New York law, she further alleges, Stein removed the protection of California’s seven-year rule. The suit attributes this oversight to the fact that Stein “never had, and does not have, a California State Bar license,” despite his and Clinton’s claims to have expertise in entertainment-industry representation. Does Stein’s supposed failure to advise McKee to exercise her rights in California leave him—and Clinton—on the hook for $11m? McKee is sufficiently confident that it does to demand a jury trial on each claim.

The defense’s response to the complaint says they acted in good faith at all times, that the actions alleged are barred by the doctrine of unclean hands, and that the cited Labor Code, §2855 does not apply, because within the meaning of the code ;“third-party music publishers with whom Plaintiffs contracted are not ‘employers’” and “contracts referred to in the complaint are not ‘personal service’ contracts.”

Did Stein and the firm misrepresent themselves? Is the onus on an artist to seek additional counsel on a major deal signing away rights? Hearings on motions to compel further discovery response are scheduled for 9/30 and 10/2 in Los Angeles; the jury trial is presently set for September 2021. Regardless of the outcome, this could be a cautionary tale for artists.

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