Legal Issues Affecting Festivals & Events Zachary J. Crain Moore, Costello & Hart, PLLP 55 East Fifth Street, Suite 1400 St. Paul, MN 55101 Photos used from Wikimedia Commons
April 26, 2012
Order of Presentation
Recent Cases Intellectual Property Issues Sponsorship versus Advertising Conflicts of Interest
Why Would an Event Planner be Sued? (Recent Cases of Interest)
Free Speech
Injury
Insurance
Twin Cities Pride
Gay-Lesbian-Bisexual-Transgender Pride/Twin Cities d/b/a Twin Cities Pride v. Minneapolis Park & Recreation Board (D. Minn. 2011) Twin Cities Pride sought to exclude Brian Johnson, an evangelical Christian, from Loring Park during the Twin Cities Pride Festival Twin Cities Pride argued that Johnson’s expressions violated its rights to free speech Under Supreme Court precedent, a parade organizer has the constitutional right to choose the content of its message; Twin Cities Pride sought to expand this rule to a festival
Twin Cities Pride (cont.)
Under the precedent, the festival can deny an application to obtain a booth as an exhibitor However, a festival cannot exclude a protester from attending the event, if it is in the public and free and open to the public, so long as there is no danger that the protestor’s message will be confused with the festival’s message But -- if the protestor affects traffic flow or safety, then police or other actors can interfere and stop any disruption The Court noted that “free speech zones” could be adopted.
Tucker v. CBS Radio (Personal Injury)
Tucker v. CBS Radio Stations, Inc. (Cal. App. 2010) Radio station sponsored “Poker Run” off-road vehicle riding event The plaintiff participated in the “Poker Run,” but did not purchase the t-shirt necessary to win a prize During the “Poker Run,” the plaintiff’s vehicle was stuck on railroad tracks with a train approaching; the plaintiff got away, but the train hit the vehicle which hit the plaintiff
Tucker (Cont.)
The Plaintiff was crossing the railroad as a shortcut to the end of the race The Court held that the circumstances leading to the Plaintiff’s injury were unforeseeable because the Plaintiff was a nonpaying participant, and a nonpaying participant would not have reason to use the shortcut No duty to prevent this injury existed because it was not foreseeable The Court decided not to impose a duty of care by event planners to protect persons who are not registered participants
Salmon Days Festival
Ascherl v. City of Issaquah (W.D. Wash. 2011)
Salmon Days Festival organized by the local Chamber of Commerce The city passed an ordinance establishing a designated “expression area” within the festival area The Plaintiff distributed literature outside of the “expression area” and was told to leave; he filed a request for a preliminary injunction allowing him to distribute literature outside of the “expression area”
Salmon Days (Cont.)
The rule of law is that content-neutral regulations are valid if they:
(i) are narrowly tailored to serve a significant governmental interest, and (ii) leave open ample alternative channels for communication
The Court held that the ordinance failed the “narrowly tailored� requirement because there was no evidence of issues with leafletting and protesting
Arab International Festival
Saieg v. City of Dearborn (6th Cir. 2011)
The Festival is an annual festival organized by the American Arab Chamber of Commerce The Plaintiff annually leads an effort to convert Muslim attendees to Christianity In 2009, the City’s police department instituted a leafleting restriction for the festival, permitting leafleting only from a stationary booth This was not narrowly tailored, and failed to protect a legitimate purpose because other obstacles existed
FACE (Insurance)
FACE, Festivals & Concert Events, Inc. v. Scottsdale Insurance Co. (8th Cir. 2011)
Festivals & Concert Events, Inc. (“FACE�) promoted WE Fest in Detroit Lakes, and purchased a CGL policy from Scottsdale Insurance FACE hired an employee to provide security services; the employee gave a woman tickets to the festival and allegedly sexually assaulted the woman at the festival The woman sued FACE for claims including negligent retention and supervision, and FACE tendered defense of the claim to Scottsdale Insurance
FACE (Cont.)
Scottsdale denied coverage on the basis of an exclusion for injuries arising from assault and battery In a jury trial, the victim was awarded more than $300,000 from FACE The District Court and the Eighth Circuit held that the refusal of coverage was appropriate because an exclusion within the policy existed for injuries caused by an assault or battery, or injuries arising from the negligent employment of one who assaults or batters Importantly, there is normally no duty to protect from criminal behavior, unless the criminal behavior is foreseeable
Intellectual Property Issues
Trademark Issues
Reported cases exist where statutes similar to Academy Awards are used to decorate
Intellectual Property Issues (Cont.)
Copyright Issues
Some copyright holding companies are trolling bars for infringing music and should be presumed to be trolling festivals and events too
Intellectual Property Issues (Cont.)
Coachella Music Festival v. John Does 1-5 (C.D. Cal. 2012)
The festival sought a preliminary injunction enjoining anticipated manufacturing, selling or distributing of merchandise containing trademarks of the music festival and its performers, including “Dr. Dre,” “Snoop Dogg,” “Radiohead,” and “The Black Keys.” A copy of the injunction was posted at the festival entrance, and the injunction authorized police to enforce the injunction and impound any unauthorized merchandise 48 hours before and 48 hours after any performance within 15 miles
Unrelated Business Income Tax (UBIT)
Income will be taxed on activities that are: A trade or business Regularly carried on Not substantially related to the organization’s exempt mission
Sponsorship (non-UBIT)
A payment is not a sponsorship if the sponsor receives a “substantial return benefit� which is anything other than:
Mere use or acknowledgement (but not advertising) Benefit with an aggregate value of no more than 2% of the sponsorship payment
Sponsorship (non-UBIT)
The following is sponsorship, not advertising:
Distributing the sponsor’s products at a sponsored event is not advertising. Acknowledgements:
publication of sponsor logos and slogans that do not contain comparative or qualitative description of the sponsor’s products, services, or facilities or company
Advertising (UBIT)
The following is advertising, not sponsorship:
qualitative or comparative language price information or other indications of savings or value associated with a product or service; a call to action an endorsement an inducement to buy, sell, rent, or lease the sponsor’s product or service.
Conflicts of Interest
Contracts or Transactions Involving Financial Interest of Directors are Voidable Unless:
Fair, OR Approved by Majority of Board or Committee in Good Faith After Full Disclosure
Conflicts of Interest (Cont.)
Best Practices:
Written Policy is essential Annual disclosures (Documented in Minutes) When Considering Transaction, Conflicted Director discloses and leaves meeting Rest of Board considers and determines (1) whether a conflict exists and (2) whether to proceed with transaction
Legal Issues Affecting Festivals & Events Zachary J. Crain Moore, Costello & Hart, PLLP (651) 602-2677 zcrain@mchlaw.com 55 East Fifth Street, Suite 1400 St. Paul, MN 55101