Flo Rida v. Celsius: Contract Lessons for All of Us |UTLRadio Podcast
This episode of the UTLRadio Podcast aired on January 23, 2022. If you haven't done so already, make sure that you subscribe to the Understanding the Law Radio, (UTLRadio) Podcast, available wherever you listen to your podcasts.
PODCAST TRANSCRIPT (AI Generated)
Order in the court. It's time for Understanding the Law Radio
Peter J. Lamont, Esq. (00:10):
Well, Hi, and thanks for joining me for another episode of Understanding the Law Radio. I'm your host, Peter Lamont flying solo today. No, Brendan, to join us. So you're gonna have to deal with just me. But we're gonna talk about something that that came out of the news last week. For anyone who likes hip hop or rap, I'm sure you know the artist Flory. He always fascinates me because it's Florida. It's Florida, and, and you're probably like, yeah, of course it is. It's Flory. Of course, it's Florida. But it always just fascinates me because when I think about him, I think of Flow Rider. I don't think of Florida until I see it on paper, but you know, that's just me. So you laugh at me, if you will. But what I wanna talk about is the lawsuit that he had filed against the beverage company Celsius last week, a jury awarded him 82 million.
Peter J. Lamont, Esq. (01:02):
And I wanna talk a little bit about the lawsuit and what we can learn from it. And then I want to jump into some of the worst contracts that rap and hiphop artists have ever signed. So we're gonna, we're gonna talk a little bit about hip hop and, and rap today, and we're gonna tie it together with, with contracts. So let's get back to Florid for a minute. So, florid had entered into a contract with this beverage company, Celsius. And the deal was, and I'm gonna cut to the chase, not give you all the details, but the deal was he's going to promote the company and using his celebrity and, and his own brand, he was going to help promote Celsius. He also happened to say that he liked the drink, and, and so it was easy for him, but in exchange for him building Celsius as a company, they were going to give him back ownership, a percentage of ownership in the company.
Peter J. Lamont, Esq. (02:03):
But at the end of the day, florid, he followed through on his end of the bargain, he made sure that this company started to take off, that sales increased. There's pictures of 'em all over the internet. If you look online and you, you look for Florid and Celsius. He's, he's got the cans all over the place. As a matter of fact, at the press conference following the verdict, he was at the podium with a, a can of Celsius. And, and he's still involved in the company. But what is at issue is the fact that Celsius looked at the contract that they had signed with him, and they said, we don't have to pay you. And he was like, what? And they said, we don't have to pay you the terms that you signed. We read it one way, you're reading it in another. We don't think that we have to pay you the money.
Peter J. Lamont, Esq. (02:57):
And lo and behold, litigation ensues. And now a year later, we get a verdict. And so there's lessons, there's so many lessons to be learned from this, but at the end of the day, the court said, no, no, no. This contract would interpret it by reasonable person's standards. And looking at the totality of the evidence and the circumstances here, he should have, he Flow Rider should have a percentage, some ownership in the company, and they awarded him the $82 million in damages. Now, he says he would just be happy foregoing the damages claim and just taking the percentage, the ownership of the company. So we'll see where that ultimately goes. But it looks as though he's still invested in the company. He still must believe in the company. And at the end of the day, hopefully they they work it out together.
Peter J. Lamont, Esq. (03:55):
But by the way, I'm gonna throw this up on our Instagram page. Do any of you know Flow riders? Flow riders? I got, I got confused there. Flow Riders, real name. I'm gonna post that up in in, on the Instagram page. We'll put it up in the stories and we will leave a little quiz and see how many of you know, I'm gonna give you a hint, just a hint. And of course you can look it up. But what's the fun of looking it up? His first name starts with a T and his last name starts with a D. And it's not touchdown. And if you're a Giants fan, you wish it was a touchdown based on the way that they played this weekend or, or a Cowboys fan for that matter. But see if you can get the answer right without looking it up, because there's just no fun in cheating, right?
Peter J. Lamont, Esq. (04:48):
And don't ask the chat bot or, or any ai, let, just rely on your own brain power. You can do it. All right? So we'll put that up and, and look forward to seeing your answers. All right. So what happened here? They're saying that the contract was confusing, was ambiguous, that when they read it, it doesn't look like they have to give flory the money. He says, Hey, when I read it, it looks like you, you do. And, and that's where the lawsuit was. Well, what's the takeaway? What's the lesson that we can learn from this? Well, it's actually a really important lesson. And that lesson is number one, if you are going to enter into a contract with somebody, whether you're a business owner or whether you are an employee, or whether you're a contract, whatever you are, right? Contracts are everywhere.
Peter J. Lamont, Esq. (05:36):
You've contracts for everything, rappers signed, contracts, movie stars, signed contracts, you signed contracts to get work done in your house, you know, employment contracts, contracts for car repair, everything that, that we are a contract based society there. I say, so knowing this is gonna help you when you are writing a contract, whether you are a small business owner or not, you need to have it properly drafted. Don't go on the internet and pull something off and say, this looks pretty good because so-and-so used it. It doesn't necessarily reflect what your intentions are. So form-based contracts, while not inherently evil, are not good for everyone. So when, when could a form-based contract be useful? And what do I mean by form-based? Well, form-based is a generic contract that you find online that's like a, you know, one size fits all contract. When could that be useful?
Peter J. Lamont, Esq. (06:47):
I don't know. Maybe in a very limited situation where, you know, you are going to sell a piece of property, a small piece of property, and I'm not talking about like real estate. I'm not talking about real property. I'm talking about, you know, I sell Kevin, my autographed Mickey Mantle baseball, right? And he's going to pay me over time. And, and I get a form based agreement that says, you know, I'm gonna give you my Mickey Mantle baseball and you're gonna pay me $500 over three months. Something like that, whatever it is. Very, very basic, very, very limited and simple. Okay? Maybe you can use a form-based contract for them. But when the stakes are high, things like salary ownership of a company, real property, real property is real estate, right? Whether it's commercial real estate or residential real estate, these are things that are big.
Peter J. Lamont, Esq. (07:45):
The numbers are big, the impact is big, the money is big. And, and using a form-based contract, an internet obtained contract makes zero sense. I mean, it's like you are looking to get yourself hitting the knees with a lead pipe in the back of an alley that it's like, Hey, hey, come on, somebody take advantage of me, because that's exactly what's gonna happen. And, and it's, it's not farfetched at all. You should see how many times people will call and say, I need you to get me out of this situation. I didn't have an attorney for this real estate contract. And I, I got it off of the internet and here's what's going on, and now I'm really stuck and, and I'm going to be sued for $500,000. What do I do? And sometimes it's too late and sometimes it's like, you know, well now you're gonna be wrapped up in litigation.
Peter J. Lamont, Esq. (08:41):
You have to hope that we can settle this at a, a reasonable amount, otherwise you are on the hook, and this could have been prevented. So don't use form-based contracts unless your situation is ridiculously simple. And if you are adverse to risk and you want to make sure that you are protected or you know what you're doing, then always have an attorney look at it. All right? Now, larger contracts should always be attorney drafted. So that's, that's 0.1. Have an attorney draft your contracts. But 0.2 is, regardless of who drafts your contracts, you need to understand what is in that contract. What do the terms mean? What are the paragraphs mean? What are you giving, what are you getting? What are the terms of the payments? How does it work? What happens if you don't abide by the terms of the contract? Or what happens if the other side doesn't abide by the terms of the contract?
Peter J. Lamont, Esq. (09:47):
These are are legal terms that you need to understand in your contract. And if you have an attorney drafted and you still don't understand what's in it, you need to ask, you need to say, Hey, attorney, I don't understand this provision that says severability. What does that mean? Yeah, sure, you can look it up online, but you know, you're not going to necessarily get an answer that is specific to you or applies to you. Sure, you can look up what, what the term severability in a contract is, and it might help you. You might have a better understanding. And if you are the type of person that just doesn't want to ask, and you would prefer to go research it on your own, it's better than doing nothing, obviously, right? You don't go to Dr. Google to find out if you have, you know, a blood clot, right?
Peter J. Lamont, Esq. (10:44):
You go to a doctor, even though you're so tempted to cause it's so easy. Don't, don't do that when it comes to your contracts, either. If there's a term or a condition or a provision that you don't fully understand that you don't have a handle on, then then ask, ask a lawyer. Ask, because it'll help you in the long run. Now conversely, if you are the person signing the agreement, in this case flow rider, you need to have a full understanding of what it is you are signing because you don't want to think that you're signing an agreement that says, Hey, you can have X percent of this company without fully understanding what is the triggering event? When do I get my percentage un under what conditions? What do I have to do? What are my responsibilities? You have to understand that. And then, and here's the most important part.
Peter J. Lamont, Esq. (11:37):
Party A, the party that's drafting the agreement has an understanding party. B, the person that's signing the agreement has an understanding, but there needs to be a mutual understanding of what it is that this contract means. People aren't signing contracts or shouldn't be signing contracts, trying to dup the other person. That's not the point of it. The point of it is to legally bind each other to a set of conditions that you both agree upon, right? It's not like, well, I have the better lawyer, so I'm gonna have a contract that dupes you and you're gonna be screwed. That's not the point of it. We, we make contracts to try to avoid litigation. We make contracts to memorialize what it is that we are offering and receiving. And that's, that's a critical component in contract law. A mutual understanding of what it is, a meeting of the minds.
Peter J. Lamont, Esq. (12:41):
That's the legal term of art that we use when we're talking about contracts. Has there been a meeting of the minds? In other words, do both parties intend for the same thing to happen? And if you don't understand what it is that you're signing or writing, or worse yet neither of you understand what you're doing, then you are most likely going to end up in litigation because you had no understanding from, from, you know, the, the day that you looked at the contract. So it's really important, and I think that this flow writer lawsuit is a very good modern day example of why it's so important to A, have an attorney draft your contract. B as the drafter of the contract, have an understanding of what the terms are that your attorney is giving you. C as the receiver, the recipient of the contract, have an equal understanding as to what the contract means and have it reviewed by your own attorney.
Peter J. Lamont, Esq. (13:47):
And d make sure everybody's on the same page. Make sure there's this meeting of the minds. If you all know what the expectations are, you have a much higher chance of eliminating unnecessary litigation. That's just a fact. So take this story, take it to heart, look into it a little bit. It's an interesting lawsuit. If you have any interest in reading the complaint it's interesting, you know, but the, the real important message here is don't take contracts lightly. Don't download 'em off, off the internet. Don't try to be a hero and, and say, I don't need a lawyer to review my real estate contract or to draft my employment agreement, or, you know, to look at a severance agreement, whatever it might be. You just, you can't enter into these things without certainty that you have an idea of what it is you're getting that the other side has that same idea.
Peter J. Lamont, Esq. (14:49):
You're both on the same page. So this is a good lesson. All right, now staying with the rap hiphop genre, let's take a look at some of the worst rap contract disputes that are out there, and it'll highlight some of what we've talked about already. But let's just jump into this. So we've had Chuck D, Chuck D versus Universal Records. So anybody that that knows Public Enemy Chuck D was the front man. And in 2011, he sued Universal Records for a hundred million dollars in unpaid royalties. According to Chuck D Universal, which had acquired the rights to public enemy's First five studio albums had been paying the group only 25% of the royalties owed from digital downloads. And the, and the lawsuit, which cited a case in which Eminem's lawyer argued that digital sales should yield a higher payment than that of standard royalty on the grounds that online agreements double as licensing deals, which is a completely separate issue.
Peter J. Lamont, Esq. (15:57):
Chuck d argued that public enemies should receive 50% of the net revenues from their digital sales instead of the 18% that they had been receiving up to that point. Now, when Public Enemy signed their original deal with Def Jam, this is before digital downloads and streaming even existed. The contract didn't include those explicit terms for digital royalties. So Chuck D's claim which was ultimately, and this is just getting into technicalities, ultimately it was consolidated with a class action lawsuit brought against Universal by Rob Zombie in the estate of Rick Da James ultimately settled in 2015, and the label agreed to pay up to 11.5 million to approximately 7,500 artists, including Chuck, Chuck D and bump up the royalties. So that's an interesting one because at the time they signed the contract, there was no such thing as digital downloads. However, they did enter into a royalties agreement, and no one thought about the future of music.
Peter J. Lamont, Esq. (17:08):
No one thought to include language in there that would address the changing nature of music. And when you think about it for a minute, right? We had records, right? As early a as the Phonograph records, then we transitioned into eight tracks for those of you who you know, have memories of eight tracks. I, I remember, I think, I think it was Kenny Rogers hits on Eight Track. I remember playing that when I was a kid. And then you move from eight tracks into cassettes, which is funny. I was just going through my cassette collection the other day, and it was like, wow, just a massive trip down memory lane. You know, remember putting the pencils in the wheel when the, the tape got caught in the player, and you had to, to wind it back up, right? It's just those simple things. I missed that.
Peter J. Lamont, Esq. (18:04):
I missed the joy of what I thought at the time was like super frustrating when it would eat your tape. But now it's like, man, if I could just sit there and roll back my cassette with my pencil, how, how life would be grand. And then from cassettes, we went into CDs. And then, so what I'm saying is that there's a progression of, of evolution of the way that we consume music. And so moving forward, if you were a recording artist, maybe you'd think about ways to incorporate language, which would take into account the changing nature of how we consume music. So that's just an interesting an interesting point there. All right, the next one, Lil Wayne or Lil Wayne, I, I, I like him, by the way. He's not little. He's Lil Lil Wayne versus Cash Money Records. So back in 2014, there had been a lot of rumors that there were tensions between Lil Wayne and the record company.
Peter J. Lamont, Esq. (19:08):
And Lou Wayne Fire filed a 51 million lawsuit against Birdman and Cash Money accusing the c e o of violating terms of his contract by withholding his 12th solo studio album, the Carter Five. And the suit, which was moved from New York to New Orleans, and all over the place, it, it's sought to extricate his young money artists from Cash Money. And this was followed by, this lawsuit was followed by a 40 million lawsuit against Universal Music Group in March of 2016. The whole idea here is that he was seeking to reclaim profits made from young money artists who include Drake Nicki Minaj tiger, maybe. And, and they were all part of this lawsuit that they owed money. And in September of 2016 Lil Wayne accused by man of taking the majority of the hundred million advanced that U Mg had initially given to Young Money for himself.
Peter J. Lamont, Esq. (20:18):
And at the end of the day you know, this was, this was a massive lawsuit, by the way. So, so involved in getting into the, the details of it would bore you to death. But ultimately, in 2018 Lil Wayne was granted a release from his contract in a settlement that was upwards of 10 million. So think about this for a minute. You know, here you've got a contract and you, you wonder, was this contract properly written, properly worded? Did people understand it? So the dispute starts in 2014, it ends in 2018, that's four years. Do you have any idea what these guys must have been paying their lawyers to litigate this case four years worth of litigation? It is massively expensive. How could it have been fixed? Well, you know, we don't know the, the details and, and how deep that beef was, but what we do know is that if everyone had understood and nobody had breached the terms, then they wouldn't be there.
Peter J. Lamont, Esq. (21:30):
And again, you know, breach is something we didn't talk about because I was talking more about contract formation and entering into the contract and understanding it. But obviously, if you know what the terms and conditions are and you breach it, well, well, then that's on you, right? Because you're clear on what the terms are. But sometimes you can actually breach your contract because you didn't understand it, and that's what the points that we talked about earlier will hopefully help you avoid. All right? So that's really important. All right, so next, Snoop Dogg, Snoop Dogg versus Death Row Records. This started back in 1997, right now, prior to that, he had signed an agreement with Death Row Records, I believe it was back in 91 or 92. But by 1997, he and the record label were having problems, and there were all kinds of problems that arose out of the death of Tupac Shakur.
Peter J. Lamont, Esq. (22:28):
And then of course, the incarceration of Death Row Records, c e o, Suge Knight. And it, it just began to become a problem. And, and Snoop Dogg had started to publicly denounce death row records, accusing the label of withholding payments and cheating him out of some of his song publishing rights. That in 1998 with the release of the song Death Row Killer, which was a song really aimed at death row records and its principle members snoop's pending departure from the label. That's the whole focus of this song. Well, what ultimately happens is that Snoop collaborated with some other rappers and they negotiated with Suge Knights personally and then managed to resolve this. And, and here's a funny quote from one of the guys involved there went to go visit him, meaning Suge Knight in prison. He had some deals for Snoop on the table.
Peter J. Lamont, Esq. (23:33):
You know me, I'm a country boy. I'm like, how much money they gonna give you? He told me the number. I said, well, I'm gonna give you 300,000 more than whatever's the deal you got on the table. And that's what we did. So this is a situation where they were able to resolve this. And, and here, I mean, the, the history of this, the, the beef with Snoop Dogg and Death Row, and the fact that you got a c e O in jail, this one's one where you think, wow, this is never gonna settle. But it did. So there's hope there when you've got contract issues, it doesn't have to become full-blown litigation, but for the most part it does. And that's why taking these precautionary steps that we're talking about, they're only gonna help you. It's gonna help you in the long run. All right, let's look at the next the next one.
Peter J. Lamont, Esq. (24:25):
How about Wiz Khalifa and Rostrum records? So in 2016 Khalifa had filed a lawsuit against his former manager and the record label in a, in an attempt to void his 360 day recording contract with the label. Now, he signed this when he was 16 years old, 16 years old. In this lawsuit, he sought a million dollars in punitive damages and legal fees. It alleged the suit alleged that Khalifa's agreement could be terminated under California's seven year Labor code, and it all stemmed from when he signed the agreement. Now, in this case, the record label did not just sit back and take it, they actually filed a counterclaim against w Khalifa seeking 2 million worth of unpaid fees for the existing deal, and 15% of his touring and music royalties. Ultimately though, in January, 2017, both parties reached a settlement outta court, and they en announced this statement.
Peter J. Lamont, Esq. (25:34):
It says this agreement includes the dismissal of lawsuits that each party had previously filed against each other earlier this year. Both parties are pleased with the outcome and look forward to putting this matter behind them. And you know, what's interesting about this is so many times you get into a contract dispute and you really don't want to be there. It's not your intention to be there. Nobody wants to be tied up over a contract, because think back, think back to when you signed that contract. You were both excited, right? Whether it's because you, you were buying a new car, or you were this or that, whatever it was, you were happy to be entering into this agreement. You were getting something, you were giving something, the other side was getting something, they were giving something. So contracts typically start off happy, right? And then they ultimately can end up where, you know, whoever it is that you were involved with you know, you, you don't speak anymore, whether it's a record label, whether it's an employer, whether it's a family member.
Peter J. Lamont, Esq. (26:47):
So one of the key things that I can, I can give you here, the takeaway from this entire episode, is make sure that you do contracts the right way. Do them right from the beginning. Don't say, well, this is clear enough. And then, you know, you end up in, in litigation, because all it does is it costs a ton of money, it creates a ton of stress, a lot of animosity between the parties. It wastes a lot of your time. So do it right, follow the steps that we talked about earlier in the, in the episode, and hopefully you can avoid what Florea and some of these other artists have been through. And I think that, you know, we'd all be a lot happier if we had less litigation and everybody, you know, was able to just move forward under agreements that they had signed.
Peter J. Lamont, Esq. (27:40):
So that's just my 2 cents on that. But that's gonna do it for this episode. Hopefully this was not too boring with me on my own, with with no Brendan as my co-host, but we're gonna try to get Ben Brendan back on soon. And we've got some other shows that are, are gonna be entertaining as well coming up. But every once in a while, I think it's good to throw in one of these, you know, still pop culture related, but I think the message here is, is really important and it affects so many of us. So hopefully you learn something from this. Let me know in in the comments. Make sure that you subscribe to the podcast. And don't forget to follow us on social media too. Don't forget, we're gonna put that quiz up on Instagram and let us know if you know Flow Rider's real name. All right, that's gonna do it. Thanks for joining me. We'll see you next time. Thanks for listening to Understanding the Law Radio. If you haven't done so already, make sure that you subscribe to the podcast. We're available anywhere that you listen to your podcast, including Amazon, apple Music, Spotify, iHeartRadio, and many more. Also, don't forget to check us out online on Facebook, Twitter, and Instagram. Thanks again. We'll see you next time.
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