Pop sensation Kesha has dominated the news over the past few weeks, and not for the reasons anybody would want. On October 14, 2014, Kesha sued her producer, Dr. Luke. After bouncing around on jurisdictional issues for a few years, the courts are starting to get to the heart of the case. Kesha’s complaint details a litany of horrors, including allegations that Dr. Luke drugged and raped her and frequently threatened her life, family, and career. The complaint further alleges that he verbally harassed Kesha to the extent that she entered a rehab center, where she was allegedly diagnosed with bulimia nervosa, depression, PTSD, social isolation, and panic attacks to the point where “continuing such contact [with Dr. Luke] would be ‘life threatening.’”
Thus, Kesha’s civil case against Dr. Luke seeks damages and an injunction to void Kesha’s contractual relationships with him. And while no person should ever be forced to endure the presence of their abuser, here’s the problem: none of the alleged abuse towards Kesha has much bearing, legally speaking, on her contracts with Dr. Luke.
The Contracting Parties – Why Sony Can’t Free Kesha
When Kesha was 18, she signed a recording artist contract with Kasz Money Inc., Dr. Luke’s recording company. She also signed as a songwriter with Dr. Luke’s songwriting company, Prescription Songs. Dr. Luke and Sony also operate a joint venture, Kemosabe, with Dr. Luke acting as CEO. A joint venture is a legal organization where both parties, here Dr. Luke and Sony, undertake a project together, equally sharing control, assets, and liabilities unless specified otherwise by contract. However, unlike a partnership, both parties retain their own separate legal identity. So, in running Kemosabe, it appears Sony provides press, radio, partial funding, and royalties and accounting to Dr. Luke’s artists. In exchange, Sony receives a share of profits and Dr. Luke’s A&R (artists and repertoire—talent scouting and development) and production services.
Thus, there’s a contract between Dr. Luke and Sony, setting up the Kemosabe brand. There’s another contract between Dr. Luke and Kesha, signing her as recording artist, then there’s a second contract between Dr. Luke and Kesha, for her songwriting services. So, Kemosabe and Sony own the rights to Kesha’s recordings, and Prescription Songs owns the copyrights to Kesha’s songs. However, despite Kesha working with the Kemosabe label, there appears to be no contract between Sony and Kesha. Even if Sony stopped working with Dr. Luke, Dr. Luke would contractually maintain control over Kesha’s singing and songwriting services.
Kesha’s contracts with Dr. Luke strictly limit what she can and can’t do, and who benefits – Kesha cannot perform, either live or featured on another artist’s song, without Dr. Luke’s permission. Further, for any song she writes, Dr. Luke owns its copyright and can control whether it is released. As it currently stands, anything career-oriented that Kesha does under her current contracts financially benefits Dr. Luke.
Losing the Injunction – The Necessity of Evidence in Court
On February 19, 2016, the Honorable Shirley Werner Kornreich of the Supreme Court of New York (which is actually New York’s lowest level of court, not its ultimate tribunal), ruled against Kesha, refusing to grant her injunction to void all contracts with Dr. Luke. Kesha’s lawyer tried to argue that even though there’s an offer allowing Kesha to record “without any connection, involvement or interaction with Luke,” it is actually illusory. An illusory promise is a promise to perform that leaves the actual performance to the discretion of the promising party, and is thus unenforceable under the law (e.g., “I agree to sell you all of the cake that I want, up to 100 cakes” – this is illusory because I could choose not to sell you any cake).
Kesha tried to convince the Court that because Sony values its business relationship with Dr. Luke more than Kesha, and because Kesha would still be recording under Dr. Luke’s label, any would-be songs would not be promoted, rendering the act of recording pointless. Further, because Dr. Luke’s companies have so few employees, Dr. Luke would necessarily have to be involved with the creation and promotion of Kesha’s music, even if they did not directly interact. Unfortunately, the Court found much of Kesha’s arguments, and specifically that Kesha’s work would not be promoted, to be conjecture with no basis in fact. Explaining that, “My instinct is to do the commercially reasonable thing,” Justice Kornreich said she had to assume Sony and Dr. Luke will do what is in their best business interest and promote any new Kesha songs.
Justice Kornreich emphasized, “You’re asking the court to decimate a contract that was heavily negotiated and typical for the industry.” Noting the total lack of medical evidence to corroborate Kesha’s assault charges and alleged diagnoses, Justice Kornreich explained that she could not grant the injunction because of the harmful precedent it would set, explaining that to do so “undercuts [the] whole system of contracts, our commercial system.” If the Court allowed Kesha out of her typical industry contract based on so little evidence, it would ultimately diminish the courts’ ability to enforce other agreements.
Contract Law (Generally) – Centuries of Legal Precedent & The Difficulty of Voiding Contracts
Now, this whole affair has caused a lot of press and outrage, as people all over the world ask, “How can Sony force Kesha to work with her [alleged] abuser?” And the answer is this: Sony’s not forcing Kesha to do anything. Sony has made a good faith offer to allow her to record without interacting with Dr. Luke. More importantly, Sony has no control over Kesha’s contract, because there is no contract between Sony and Kesha – there’s no privity. Privity of contract basically means that the only people who can seek enforcement or destruction of a contract are those people who are party to it. So, although Sony has privity with Dr. Luke, that contractual relationship does not flow downstream to Kesha. Everybody who is infuriated by Sony for not releasing Kesha from her contract is upset with the wrong party; there is no Sony/Kesha contract to destroy.
It is also worth noting that contract law is old, literally extending back to the Roman Empire, if not earlier. This is important to know because it tells you that contract interpretation rules go back centuries, if not millennia. And here’s the golden rule of contract law: look within the four corners of the document. This is where Kesha’s case really falls apart because at no point in her complaint does she allege any breach of contract claim. Unfortunately, the pop star’s entire case hinges upon actions that, while morally deplorable, are outside the scope of her agreement with Dr. Luke.
Kesha is asking for a truly extraordinary legal remedy, she wants to “void” the contracts and rescind them. Avoidance (the judicial act of rendering a contract void) is a contract remedy of last resort, wherein all parties are released from their contractual obligations. The law treats a void contract as if it had never been formed. It tends to only be granted if one party has fundamentally breached the contract; something truly serious to the performance of the contractual obligations must remain unfulfilled. Avoidance is an especially harsh remedy, because it makes it as if the contracts never existed, so Kesha would likely regain any rights, such as copyrights, that she relinquished during negotiations. Generally, absent a breach, contracts will only be rescinded based upon mistake, impossibility, impracticability, or frustration of purpose. Further, it is rare that any of these doctrines are found applicable in a court of law.
Mistake permits avoidance of a contract through rescission when a party’s expectations have been disappointed. The mistake (a belief not in accordance with facts) must (1) have occurred at the time the contract was made; (2) be a basic assumption upon which the contract was negotiated; and (3) materially affect the agreed performance. Kesha probably can’t argue mistake because there’s already been partial performance of the contract. Again, the alleged abuse Kesha suffered lacks legal relevance to the contract formation and cannot be used to argue mistake.
Impossibility allows for avoidance when it is literally impossible to perform the contract, for example, the death or incapacity of someone essential to the contract. Here, since Dr. Luke and Kesha are both alive and kicking, it’s not currently a strong argument. Impracticability allows for rescission when (1) a supervening event occurs; (2) nobody thought this event would happen; (3) the party seeking rescission isn’t at fault; and (4) this event makes performance impracticable, that is, extreme and unreasonable well beyond the normal range of difficulty. Impracticability is a rescission of contract theory for when something is “technically possible,” but is still so difficult that for all intents and purposes, it’s impossible. While you might think that the alleged abuse by Dr. Luke would be enough to trigger impracticability, that is, sadly, not the case. First, there’s no proof that Dr. Luke abused Kesha, and it is a foundation of American law that a person is innocent until proven guilty. Second, even if there was proof, the event at issue is whether Kesha can sing and record; she is the one in breach of contract. Unless Kesha lost her vocal cords, the alleged abuse and its effects on her is unlikely to make a persuasive argument for impracticability of performance.
Frustration of purpose is extremely similar to impracticability, except instead of focusing on the ability to perform the contract, it looks to whether the principle purpose of the contract has been substantially frustrated, as in, the purpose is completely or almost completely destroyed. For example, consider a contract to rent a stadium; if a hurricane was to strike the town causing the government to declare the stadium a “disaster area” and shut down the town, then there would be no real reason to enforce the contract and it could be rescinded. As with impracticability, Kesha’s allegations are unlikely to frustrate the purpose of the contract to such an extent as to warrant rescission.
Preliminary Injunctions – An Extraordinary Measure That’s Rarely Granted
Here’s the thing: Kesha not only sought an extraordinary remedy when she tried to get her contracts rescinded, she also asked to use an extraordinary form of relief to enact the avoidance. A preliminary injunction is a court order, before a case has been fully heard, to do or not do a certain action. It is essentially a mini-trial on the merits of a case, and if you lose a preliminary injunction hearing, many attorneys think it is unlikely to win the overall case and advise settlement. A party seeking a preliminary injunction bears the burden of showing the following:
- A substantial likelihood of success on the merits of the case;
- An immediate threat of irreparable harm if the injunction is not granted;
- The balance of harms weighs in their favor;
- There is no other available remedy; and
- Granting the injunction serves the public interest.
Here, the Court mostly focused on irreparable harm, balance of harms, and other available remedies. Kesha’s main argument for irreparable harm was that she only has a small window in her life to make pop music. Thus, the longer she is involved with Dr. Luke, the more that window closes. However, the Court focused on Sony’s offer to let Kesha record without Dr. Luke. The Court found that the balance of harms weighed in Dr. Luke and Sony’s favor because they would lose the copyrights to Kesha’s songs and the substantial investment they’d made in her as an artist if the contracts were voided.
Kesha’s public case against Dr. Luke has sparked a much-needed conversation about abuse in the music industry. If the allegations are true, then she absolutely should not have to work with, or share profits with, her abuser. However, to rescind a contract, mere allegations are insufficient. Justice is about hearing out both sides and letting both parties prove their case and defend themselves. Kesha, unfortunately, is trying to fight apples with oranges, and it is extremely difficult to rescind a contract, let alone void it.