Hendricks & Lewis PLLC v. Clinton

Under Washington law copyrights in the masters are subject to execution to satisfy a debt.

Hendricks & Lewis (“H&L”), a law firm, obtained judgments against George Clinton (“Clinton”), a musician, for past due attorney’s fees. To satisfy the judgment the district court ordered that a receiver was to be appointed with four master sound recording copyrights assigned to it and that the receiver was permitted to use the copyrights to satisfy the judgment. After H&L obtained a judgment against Clinton, Clinton sued them under various theories of legal malpractice. The panel first considered whether the copyrights could be subject to an execution to satisfy the judgment. Using analogous case law involving patent assignment, the panel held that the copyrights were assignable. Clinton argued that the Copyright Act protected the copyrights from judgment collection. The panel rejected this argument because Clinton was not an author of the copyrights. Furthermore, the panel held that it was not an abuse of discretion for the district court to appoint a receiver in order to sell or manage the copyrights. Washington law permits broad discretion to appoint receivers. The panel concluded that the district court had sufficiently balanced the equities of both parties in appointing a receiver and therefore it was not an abuse of discretion for the court to appoint one. Finally, the panel held that although it was permissible for Clinton to raise the claims of fraud on the court and judicial estoppel for the first time on appeal, neither claim had merit. Finally, the panel held that because Clinton failed to raise his preemption, Erie Doctrine, and Due Process arguments to the district court they were not appropriate to raise on appeal. AFFIRMED.