The judges expressed skepticism about the $1 million fine leveled against Joan Lee. “She wasn’t recidivist in any way,” one judge said.
(CN) — Attorneys for the daughter of comic book legend Stan Lee appeared before California’s Ninth Circuit Court of Appeals on Monday to argue that a federal court incorrectly threw out her lawsuit against POW! Entertainment, a company founded by her father in 2011. That court also slapped her with a heavy fine of $1 million.
Characters co-created by Stan Lee, including Iron Man, Spider-Man, Black Panther, Thor and Hulk form the backbone of the Marvel Cinematic Universe, the highest grossing movie franchise of all time. The 26 films, to date, have taken in more than $26 billion worldwide. Lee himself was such a central figure to the Marvel empire that he appeared in brief cameos in every single Marvel film until his death in 2018 and was even added, posthumously, to a few additional films in 2019.
Lee stepped away from Marvel in the 1990s, and went on to co-found Stan Lee Media, which filed for bankruptcy in 2001. He later co-founded POW! Entertainment. After POW! was acquired by a Chinese holding company in 2018, the aging Lee sued. But he dropped the suit two months later, saying in a statement, “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.”
Numerous lawsuits have been filed since Stan Lee’s death over his estate and his intellectual property — specifically, the rights to his name, likeness and brand. There were also charges of elder abuse leveled against two of Stan Lee’s former business managers, who were alleged to have stolen millions of dollars.
Lee’s daughter Joan sued POW! Entertainment in 2019, alleging that his creator rights and name and likeness rights had been assigned to Stan Lee Media in 1998, and that the co-founders of POW! Entertainment had manipulated her father into giving away those rights.
U.S. District Judge Otis Wright dismissed the suit, finding that the 1998 agreement had already been the subject of more than a dozen different lawsuits, and that courts had ruled that the contract had been terminated in 2001. In his decision, the judge wrote that Joan Lee was “a negligent, if not willful, participant in the frivolous and improper filings.” He leveled $1 million in sanctions against Joan and $250,000 against her attorney, Jonathan Freund, on which Wright placed part of the blame.
“Stan Lee, a superhero in his own right, served to inspire the everyday hero,” Wright wrote. “The Court urges parties to treat his legacy with respect and cease engaging in meritless litigation.”
Lawyers for Lee and Freund argued before the three-judge panel that the previous lawsuits weren’t filed by Joan, and had nothing to do with her. As Lee’s lawyers wrote in their brief, Joan “was not responsible for any of the earlier lawsuits referenced by the trial court; her statutory rights as Stan’s heir did not accrue until Stan died years later; she did not alone make the decision to advance this one but instead relied on her counsel.” Lee’s lawyer asked the court to allow her to re-file her suit and clarify her allegations of fraud against POW! Entertainment.
Charles Rainey, the lawyer representing POW! Entertainment, argued that Lee and Freund were attempting to “rewrite her complaint on appeal,” an action that was itself further “testament to how frivolous and improper this case was from the get go.”
Joan’s lawyer also asked the court to overturn the $1 million sanction, calling it a “heavy-handed measure,” when leveled against “a non-attorney.”
“The seven-figure sanction was supposed to deter her from something that she’d never done before, which was filing a frivolous lawsuit,” said Joan Lee’s lawyer, Craig Huber.
Although the judges did not seem swayed by the arguments to overturn the lower court’s dismissal of Lee’s lawsuit, they did express skepticism over the sanctions.
“She wasn’t recidivist in any way,” Judge Marsha Berzon, a Bill Clinton appointee, told POW! Entertainment’s lawyer. “This is a very unusual circumstances to impose $1 million sanctions against her. Ordinarily, someone has to have some repeat behavior.” She added that since the other lawsuits were filed by other parties, Judge Wright had “sanctioned the wrong people.”
Rainey disagreed, saying, “If there’s no sanction, this will never end.”
“What, there’s another Joan Lee somewhere?” Berzon asked.
After 45 minutes of debate, the panel took the arguments under submission. Judge Johnnie Rawlinson, a Clinton appointee, and John Antoon II, a U.S. District Court judge from the Middle District of Florida, also a Clinton appointee, rounded out the panel.
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