Appeals court backs Lizzo over $5m festival fee

A US appeals court has upheld a ruling that Lizzo can keep her US$5 million booking fee for a cancelled 2020 festival in Los Angeles.

Promoter VFLA Eventco LLC filed a lawsuit against WME in July 2020, as well as artists Lizzo, Ellie Goulding and Kali Uchis, saying the parties had agreed to return monies they had been advanced in the event of cancellation of Virgin Fest due to “an uncontrollable factor”.

The acts had been scheduled to play the debut edition – which was funded by commercial real estate magnates Marc and Sharon Hagle, and run by Jason Felts, CEO of the Virgin Group’s festival arm – at the Banc of California Stadium (22,000-cap.) and Exposition Park in LA on 6-7 June 2020, before it was axed due to the pandemic.

WME insisted that Lizzo be paid 100% of the fee prior to the festival announcing her as a headliner and that Uchis and Goulding be paid 50% upon signing and the remaining 50% paid 90 days prior to their performances, emails produced for the lawsuit showed.

“As a result of the Covid-19 pandemic and in compliance with the government restrictions meant to mitigate the pandemic, VFLA cancelled the festival and demanded the return of the deposits from WME, who negotiated the performance contracts and held the deposits as the artists’ agent,” reads the court filing.

“VFLA claimed its right to the deposits under the force majeure provision in the parties’ performance contracts, which determined the parties’ rights to the deposits in the event of a force majeure cancellation. The artists refused VFLA’s demand, claiming VFLA bore the risk of a cancellation due to the pandemic.”

“Since VFLA conceded that, if the artists prevailed, WME should prevail as well, we affirm the judgement in its entirety”

VFLA sued the acts for breach of contract and breach of the implied covenant of good faith and fair dealing, plus WME for conversion, money had and received, unfair business practices and declaratory relief.

Following an initial two-year legal battle, LA Superior Court judge Mark Epstein ruled in September 2022 that clauses added by attorneys for WME to its clients’ performance contracts shifted the financial risk of cancellation onto the festival. That ruling has now been backed by a California court of appeal.

“The trial court granted summary judgement in favour of the artists and WME, finding VFLA bore the risk of the festival’s cancellation, and that WME could not be held liable as an agent for the actions of its principals,” it concludes.

“We hold the trial court properly granted summary judgement in favour of the artists and WME. The force majeure provision is not reasonably susceptible to VFLA’s interpretation, and, in any event, the parol evidence favours the artists.

“Further, we also hold the artists’ interpretation does not work an invalid forfeiture or make the performance contracts unlawful. Since VFLA conceded that, if the artists prevailed, WME should prevail as well, we affirm the judgement in its entirety.”

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