For me, March 3, 2020, was the day that the music died.1 My favorite rock group, Journey, broke up and the members went their separate ways.2 But this time, the breakup came complete with a salacious lawsuit filed in a California state court.3
Journey originally disbanded in the late 1980s when lead singer Steve Perry left the group to embark on a solo career. The band floundered for the next decade or so until 2007, when Arnel Pineda joined as lead vocalist. From 2016 until March 3, 2020, Journey and its almost-original lineup — which consisted of Pineda, Neal Schon on guitar, Jonathan Cain on keyboards, Ross Valory on bass, and Steve “Machine Gun” Smith on drums — continued to tour, filling arenas around the world and reminding audiences everywhere to never stop believin’.
How does Journey’s breakup and appellate work go hand in hand, you may ask? Well, allow me to explain.
Over the past few decades, appellate practice has grown into a specialized industry. In my experience, more and more trial attorneys are turning to experienced appellate lawyers either to pursue or defend an appeal. Appellate rules are technical and the arguments that need to be crafted on appeal are vastly different from trial court arguments. In a broad sense, the trial court is all about the facts. The appellate court, on the other hand, is all about the law.
Appellate lawyers, generally speaking, are a different breed. To put it bluntly (and with the most endearing respect), we’re legal nerds. We enjoy reading cases, court rules, and rules of evidence, and we love to spend hours discussing and debating rules of grammar. For us, this is the fun stuff. In our world, millions of dollars at stake in a case have often hinged on comma placement4 or, in this instance, the difference between “and” and “or.”5 Accordingly, appellate lawyers are not only invaluable to trial lawyers, but we are equally (if not more) valuable in the transactional context as well.
Back to Journey. I was able to pull the complaint which, conveniently, had attached to it the band’s governing documents.6 In short, Jonathan Cain and Neal Schon accused Ross Valory and Steve Smith of effectuating a coup to take over the corporation that owns Journey’s trademark and branding. According to the complaint, Cain, Valory, Schon, Smith, and Steve Perry owned equal shares of stock in Nightmare Productions, Inc., Journey’s managing and governing corporation. In 1985, Perry, Cain, and Schon formed a general partnership, Elmo Partners. Nightmare Productions, in turn, signed a trademark agreement in which Elmo Partners was granted an exclusive license to the Journey mark and brand without having to pay any royalties to Nightmare.7
The lawsuit claims that on Feb. 13, 2020, Smith and Valory held improper board meetings of Nightmare Productions to ultimately regain control over the Journey mark.8 If successful, Smith and Valory would be entitled to receive their respective ownership shares of millions of dollars of Journey’s revenues and royalties. What caught my eye was the following clause contained in the licensing agreement:
Under the terms of the agreement, the license shall continue “until the date upon which none of Stephen Perry, Neal Joseph Schon, or Jonathan Cain, is actively engaged in a professional music career utilizing the name ‘Journey.’ Because Cain and Schon continue to engage in their music careers under the name ‘Journey,’ Elmo Partners holds and retains its exclusive license to the Journey Mark.9 (emphasis added)
The clause is certainly not the model of clarity. Should the word “or” between Schon and Cain be read as disjunctive or conjunctive? Does the licensing agreement expire when Perry and Schon and Cain all retire from performing musically under Journey? Or does it expire when either Perry or Schon or Cain retires? Again, millions of dollars in royalties were at stake; this author suspects the entire matter centered on whether the parties intended the word “or” to be “and.”
As in Michigan, California courts attempt to determine the parties’ intent at the time of contracting from the plain language used in the agreement.10 For example, in Houge v. Ford, the court was faced with an analytically similar contract clause containing the word “or.”11 In Houge, the parties disputed an attorney’s right to recovery under a written contingency fee agreement; the contract provided that the attorney’s right to payment was contingent upon either “protecting” or “collecting” on an estate.12 The attorney argued that his right to payment vested when he finished services in “protecting” the estate. The client, on the other hand, argued that the attorney had to both “protect” the estate and “collect” a recovery. The court, in construing the agreement, sided with the attorney:
The cases cited by plaintiff to sustain his claim that the word ‘or’ should be construed here as meaning ‘and’ do not sustain his position. Resort to such unnatural construction of the word ‘or’ is sanctioned only when such construction is found necessary to carry out the obvious intent of the legislature in a statute or the obvious intent of the parties in a contract, when such intent may be gleaned from the context in which the word is used [internal citations omitted]. In its ordinary sense, the function of the word ‘or’ is to mark an alternative such as “‘either this or that’” [internal citations omitted], and such was the plain meaning of the word ‘or’ as used by the parties here in the phrase ‘protect or collect.’13
In the Journey case, Cain and Schon asserted that their licensing agreement with Elmo Partners never terminated because both were actively engaged in professional music careers under the Journey name.14 Perry, on the other hand, has not performed under the Journey name for more than two decades. Schon and Cain, both of whom sued for more than $10 million, were obviously betting that the court would read the word “or” as an “and” and accept their argument with open arms.15
Had the case progressed,16 the court would have been required to faithfully17 attempt to determine what, exactly, the parties meant when they drafted the agreement with Elmo Partners. Given that the licensing deal was signed in 1985, it probably wouldn’t have been too hard to determine who’s cryin’ now.18 Back then, Perry, Cain, and Schon represented Journey’s core; the three went on to release the “Raised on Radio” album in 1987. At that time, Perry, Cain, and Schon likely intended that Elmo Partners and the licensing agreement would cease to exist if any one of them left the group. Put differently, they all probably intended that Journey would not exist if either Perry or Cain or Schon decided that the party’s over.19 In this context, it would have been relatively easy for Valory and Smith to argue that the lights20 on the license agreement went down when none of Perry, Schon, or Cain was actively engaged in Journey. Given that Perry stopped performing years ago, Smith and Valory had a strong argument that the licensing agreement expired under its own terms. But given the parties’ 2021 settlement, and given Journey’s constant touring, Schon and Cain presumably are saying that they’ll be alright21 without Smith and Valory.
As stated previously, appellate lawyers love working with words because we’re charged with litigating and arguing such words in great detail. While transactional lawyers are trained to put deals together and draft documents reflecting their client’s intent, having an appellate lawyer or trial lawyer review documents to negate potential unintended future litigation could be well worth the expense. Appellate lawyers are keen on focusing on grammar and its litigation consequences. With millions of dollars potentially at stake, commas and other grammar rules, along with critical words like “and” and “or” become all too important to ignore.