Sugarland Lawsuit filed in Georgia illustrates need for prior provisions among band members

On August 7th, a lawsuit was filed by Kristen Alison Hall, former member of the country band, Sugarland, against the remaining original members of the band, Jennifer Nettles and Kristian Bush.   A copy of the complaint can be viewed here.

Essentially, the lawsuit alleges that Nettles and Bush breached a partnership agreement between the three members, breached their fiduciary duty to Hall, and failed to account to her for partnership profits.  Among other facts alleged, Hall claims that she contributed the trademark, “Sugarland” to the partnership.  A search of the trademark database at www.uspto.gov shows that the partnership owns two marks:  a service mark for live performances, Reg. No. 2747326, and a trademark for merchandise, Reg. No. 3250679.  All three original members, Hall, Nettles and Bush, are identified as the registrants on these marks.

More about the lawsuit can be gleened from this article in the Atlanta Journal-Constitution, written by entertainment journalist Shane Harrison, with contributions by Rodney Ho.  Yours truly is cited as a resource in the article.

This lawsuit provides a dramatic visual aid as to why it is so important for musical groups to plan in advance with regard to issues such as who owns the band name in the event of a dispute.  Either a band partnership agreement, or a  properly established limited liability company or corporation, can effectively provide for what happens to the name in the event a member leaves.  One method I commonly use is to establish a limited liability company and assign the trademark and trade name to the company.  Provisions for what happens to a member that leaves the LLC are then incorporated into the Operating Agreement which set forth the procedure for valuing the company’s assets in that instance.  Such a structure could have eliminated the need for a lawsuit such as the one that Hall filed against the other two members of Sugarland.

If your band does not have a written document dealing with this issue, you should consider retaining an entertainment attorney for such purposes, particular if your band is starting to generate significant income.