Wachs v. Curry

In 1990 Arsenio Hall sued Robert Wachs and X Management (plaintiffs) for procuring employment for Hall without a license. In 1987 Hall had signed a contract with X Management, a personal management firm, run by Robert Wachs and Mark Lipsky. The contract indicated that X Management was not being engaged as a talent agent and had no obligation to procure employment for Hall. Hall alleged that Wachs told him that Wachs’s commission would be 15 percent and that Hall would not need a talent agent. For the next three years, X Management secured significant contracts for Hall, such as Hall’s role in the movie Coming to America, The Arsenio Hall Show, and other hosting and endorsement deals. X Management received $2.62 million in commissions, reflecting the agreed-on 15 percent rate. However, when Hall learned that Wachs and Lipsky were also receiving credit as producers on Hall’s television show and receiving $5,000 per week for production, Hall ended the agreement. Hall brought a claim before the labor commissioner, James Curry (defendant), alleging that the contract with X Management was void from the beginning because the company was procuring employment on Hall’s behalf as a talent agent without a license, in violation of the Talent Agencies Act (the act). The act carried civil penalties. The labor commissioner agreed and ordered Wachs and Lipsky to return $2.12 million to Hall. Wachs and X Management sought appellate review and claimed the act was unconstitutional for lack of a rational basis for excluding only recording contracts from its licensure requirement for procuring employment for artists and also for vagueness or ambiguity. In fact, the California legislature commissioned a two-year study of the act. The commission issued a report citing reasons for maintaining the exemption. A trial court upheld the constitutionality of the act and granted summary judgment against the plaintiffs.