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Former Band Member's Lawsuit Leaves Sour Taste for Sugarland
Founder of music group sues for $1.5 million, claims other members owe her share of post-departure profits
Fulton County Daily Report
August 08, 2008
Country music's Sugarland is enjoying a No. 1 album in "Love on the Inside," but on the outside, there is litigation. The two members of the Atlanta-based group, Jennifer Nettles and Kristian Bush, have been sued by their former musical partner, Kristen Hall, for $1.5 million in federal court.
Hall, a folk musician and one-time Indigo Girls' roadie who founded Sugarland, claims that she has an existing partnership agreement with Nettles and Bush dating from 2002 in which they agreed to share profits and losses equally. Hall also alleges that she created the name Sugarland and agreed to "contribute" the trade name, trademark and service mark to the partnership.
The partnership agreement, however, never was put into writing, according to Hall's lawyer.
According to the complaint, filed July 29 in U.S. District Court for the Northern District of Georgia, since Hall left the band in late 2005 to pursue her own songwriting, Bush and Nettles have "excluded" her from all aspects of the partnership. The complaint adds that Bush and Nettles have failed to account for and pay Hall a share of the profits and have failed to allow her to participate in the partnership's business affairs.
"Despite excluding Hall from all aspects of the partnership business, Nettles and Bush have not compensated Hall for her interest in the partnership property, brand or good will or her individual property interest in the Sugarland trade name, trademark and service mark," the complaint alleges.
Hall claims Nettles and Bush owe her $1.5 million for her share of the profits derived since the band members parted ways in December 2005, as well as interest, litigation costs and unspecified damages for what the complaint calls the defendants' "de facto dissolution" of the partnership.
Hall claims Nettles and Bush breached both their partnership agreement and their fiduciary duty to her, and she has asked Judge Timothy C. Batten Sr. to direct her former band mates to provide her with a full accounting of all partnership business matters. Alternatively, Hall asks the judge to dissolve the partnership and settle the dispute.
Hall is represented by Kenneth J. Abdo and Barry A. O'Neil of Lommen, Abdo, Cole, King & Stageberg in Minneapolis, and by entertainment litigator Scott D. Sanders in Atlanta.
O'Neil acknowledged that his client does not have a written partnership agreement with Nettles and Bush, and that when Hall left Sugarland, the group did not negotiate about what her future compensation might be. He noted, however, that all three former band mates' names are on the Sugarland marks on file with the U.S. Patent and Trademark Office for live performances and T-shirts, hats and other apparel.
O'Neil said he did not see the lack of a written contract as a significant issue. "Partnerships are formed all the time without written agreement," he said. "That doesn't mean there wasn't a partnership."
O'Neil declined to discuss whether Nettles and Bush disputed the existence of a partnership agreement per se, or whether the disagreement was based on how much money Hall wanted. He confirmed that the trio had attempted to negotiate a resolution for several years without success. He said Nettles and Bush have not yet been served with the complaint.
The attorneys for Nettles and Bush, Gary L. Gilbert and Barry E. Mallen at Manatt, Phelps & Phillips in Los Angeles, did not return four calls seeking comment.
Darryl B. Cohen, an entertainment lawyer with Cohen, Cooper, Estep & Whiteman, who is not involved in the case, said his first impression upon hearing that Hall was attempting to collect $1.5 million on an oral partnership agreement was that the claim was crazy and she probably had a publicity hound for an attorney.
But upon learning that she was represented by Abdo -- a well-known entertainment lawyer who also has represented alternative rock band The Replacements, blues artist Jonny Lang and radio host Garrison Keillor -- his opinion changed.
"If Abdo and his group filed, that means [Hall] is not getting a fair shake," said Cohen. "Whoever the partner he is negotiating with is, he has probably stonewalled him."
Cohen said it is by no means impossible to enforce an oral contract. He said that about five years ago, he mediated a case involving the band Limp Bizkit in which two members who left before the group hit the big time attempted to enforce their oral agreements. One ex-Bizkit did not have an attorney and only got about $15,000; the other, who was represented by counsel, got a high six-figure settlement, he said.
"Knowing the reputation of Ken Abdo and his partners ... he's not going to file a frivolous lawsuit," Cohen said. "But that doesn't mean he won't file a lawsuit asking for a lot more than he expects to win."
Trip Aldredge, an entertainment lawyer with a solo practice in Nashville, Tenn., said he often sees partnership disputes between band members, and has worked on some for groups including Alabama and the Toadies.
Even though Hall doesn't have a written agreement, Aldredge pointed out that she might have supporting documents such as letters and e-mails indicating that a partnership exists. He also said that because her name along with Bush's and Nettles' is on the filings with the Patent and Trademark Office, there could be a "de facto partnership agreement."
Even with a written partnership agreement, he pointed out, there still can be lots to fight over. But, he said, "If she's trying to prove an oral partnership agreement, it's going to be fairly difficult to prove."
The issue of the lack of a written partnership agreement is not directly addressed in the pleadings, but the complaint goes into some detail to demonstrate what the claimed partnership between Hall, Bush and Nettles entailed.
Hall alleges that from mid-2002 until late 2005, the three former band mates "jointly endeavored to make the band Sugarland a creative and commercial success, and that Hall contributed significant time, effort, energy and passion" toward doing so.
As evidence, the complaint points out that while the band was together, Hall re-recorded Sugarland's breakthrough single, "Baby Girl," which became one of the longest charting debut singles in country music history. She also allowed the band to use her personal credit cards to pay expenses for touring, recording, promotions and merchandising and served as manager, booking agent and tour organizer, the complaint says.
Hall also wrote or co-wrote every song on "Twice the Speed of Life," the group's double-platinum debut album, released in 2004, says the complaint.
The current Sugarland album, "Love on the Inside," is No. 1 on Billboard magazine's all-genre chart this week. It sold 314,000 copies during the first week of its July 22 release, and another 171,000 this week, according to information from Entertainment Weekly and Country Music Television News.
The case is Hall v. Nettles, No. 1: 08-CV-2437.
