Michael Jackson’s estate is the gift that keeps on giving for celebrity estate watchers.
A recent motion decided in his case offers some insight into how the courts handle the often messy intersection of the general presumption that all evidence should be open to the public, and the potential damage that could be caused by the revelation of certain financial and business details of high-profile estates. It’s important to note that the ruling in this particular motion by Tax Court Judge Mark V. Holmes does not create precedent, but it offers a look at the court’s thought process that may be valuable to planners with high profile clients (or those of us who just like to watch the fallout).
Jackson’s attorney wanted to seal certain portions of expert testimony offered on Jackson’s behalf by Mark Roesler, an attorney and agent with the firm CMG, which deals primarily in high-profile estates and publicity right disputes (such issues popping up more often with the popularity of holograms and the ability to digitally insert actors into films — Carrie Fisher being a recent example). The court denied the motion (though it did allow for certain redactions).
Though Jackson’s team maintained that four portions of Roesler’s testimony should be sealed, two hold the greatest interest for estate planners: The historical incomes of several dead celebrities whom Roesler represents — going back as far as Marilyn Monroe and Princess Diana, and details on the terms of deals that Jackson made with third parties and Roesler's process of disaggregating the right of publicity portion of the income from those deals.
Putting aside the issues surrounding rights of publicity, which are beyond the scope of this article, what Holmes decided in this motion was where it was going to draw the privacy line in this case when it came to the career earnings and business dealings of deceased celebrities.
The general presumption is that all evidence received by the court should be open to the public, however there is an exception for “trade secrets or other confidential information.” Though these terms can mean many things, the court decided that the issue hinged on whether the disclosure of this information would cause economic harm to either Roesler or the estate. The sorts of information usually found by courts to be economically harmful include patents, trade secrets and details of confidential business dealings.
“Asserting annoyance isn't enough. There must be some demonstration of harm that disclosure will cause," Holmes wrote. "Our focus on harm means that the presumption of public access trumps any private interest in nondisclosure when otherwise confidential business information is stale.”
For the celebrity earnings section, the court noted that most of the information offered was many years old, and that which was more up to date didn’t reveal any “trade secrets” because individual deals weren’t noted, but were instead aggregated into a single income number. Further, since there is no mention of living heirs, who exactly ended up with the money is also kept confidential. Ultimately, Holmes decided that “no serious injury or competitive damage that will result from making this portion of Roesler's report public.”
As for Jackson’s business deals, the court also deemed this information stale, as all deals mentioned were between seven and 37 years old. Thus, the estate couldn’t demonstrate that their revelation would materially effect any similar deals currently in progress. Additionally, the court believed that the potential insight offered into the effects of Jackson’s bad publicity in the last 15 years of his life would have a significant impact on the value of his estate.
Though the decision on this motion is nonprecedential and highly fact specific, it’s nonetheless interesting because of the insight it offers into how courts attempt to reconcile their preference for open proceedings and records when it comes to the business dealing of high-profile estates.