Bill Griffith’s “Zippy the Pinhead”
Back-to-back examples this week of sorts of silliness that consume some percentage of the busy lives of U.S. civil litigators….
Harriet Ziefert has written several hundred children’s books. She and her publisher, Blue Apple, believe that a Minneapolis-based book distribution company, Consortium Book Sales and Distribution, L.L.C. (“Consortium”) and/or Consortium’s parent company, Perseus, is infringing on several of Ms. Ziefer’s copyrights.
Blue Apple and Consortium were allegedly parties to a distribution agreement that included an arbitration clause providing for arbitration of disputes in Minneapolis. Blue Apple and Perseus were parties to another agreement called an “agency agreement.” Blue Apple and Ms. Ziefert brought a claim under the arbitration clause of the distribution agreement against Consortium and its owner, Perseus.
This seems straightforward, doesn’t it? Either Consortium and Perseus infringed Ms. Ziefert’s copyrights or they did not, right? And the parties agreed to resolve the dispute through arbitration, right?
Apparently, things will not go simply for Blue Apple and Ms. Ziefert. Blue Apple started the arbitration on July 11, 2016 but Perseus purportedly assigned substantially all of Consortium’s assets, including the Distribution Agreement, to a third-party, Ingram, in March 2016.
Both Ingram and Perseus apparently claim that they are not bound by the arbitration agreement, causing Blue Apple and Ms. Ziefert to launch the battle on multiple fronts against several businesses. The case highlights yet another often-overlooked problem with arbitration clauses. As if the forum fight between state and federal court systems were not enough, too often arbitration clauses give rise to yet another “meta fight” that has to play out before disputing parties can sit down and engage one another in the actual merits of the underlying dispute.