Jones v. MJJ Productions, Inc.

Michael Jackson had recording agreements with Sony Music as a member of the Jackson Five, as a solo artist, and through Jackson’s production company, MJJ Productions, Inc. (MJJP) (defendant). The recording agreements entitled Jackson to receive royalties equal to a percentage of record prices. The recording agreements also entitled Jackson to receive a 50 percent share of net receipts if Sony licensed Jackson’s master recordings to third parties. Quincy Jones (plaintiff) entered into producer agreements with MJJP, pursuant to which Jones agreed to produce Jackson’s music. Section 4(a) of the producer agreements entitled Jones to receive a base royalty of 10 percent of wholesale record prices. Although Jackson historically had paid Jones a share of the license fees Jackson received for the use of the master recordings, the license fees were not mentioned in the producer agreements. In 1991, MJJP and Sony formed a joint venture to sell records and license Jackson’s master recordings. The joint-venture agreement entitled MJJP and Sony to a 50-50 split of net profits. Following Jackson’s death in 2009, Jackson’s estate negotiated an amendment to the recording and joint-venture agreements that increased MJJP’s share of net profits from 50 percent to 66.67 percent. In late 2009, a documentary about Jackson’s life was made using Jackson’s master recordings. The documentary made over $500 million. In October 2013, Jones sued MJJP, asserting that MJJP had breached the producer agreements by failing to pay Jones (1) increased revenues once MJJP began receiving an increased share of net profits and (2) the full amount purportedly owed for the use of the master recordings in the documentary. Jones claimed that under Section 4(a), Jones was entitled to a proportional increase in royalties if Jackson’s revenue share increased. At trial, Jones and MJJP presented evidence regarding music-industry customs and the parties’ past practices. The trial court allowed the jury to interpret the producer agreements without first finding that (1) the language of the producer agreements was subject to two competing interpretations, including Jones’s interpretation, or (2) the extrinsic evidence relevant to interpreting the agreements was in conflict. The jury ultimately concluded that MJJP had breached the producer agreements and awarded Jones roughly $9.4 million. MJJP appealed.