After the death of Stan Lee, his daughter attempted to challenge an assignment clause that had been deemed valid in previous litigation. The Court found that Lee’s daughter was in privity with Stan Lee Media, and therefore dismissed the suit on res judicata grounds. The district court also sanctioned Lee $1 million and held her lawyer jointly and severally liable for 25 percent of the sanction.
The U.S. Ninth Circuit Court of Appeals affirmed the dismissal, but reversed the sanctions: “This record does not support a finding that Lee’s filing was clearly frivolous, legally unreasonable, or brought for an improper purpose. Lee was not a party to the Abadin litigation. Nor was she a party to any of the subsequent litigation regarding enforceability of the SLE Agreement. Although we conclude that Lee was in privity with SLE, the privity had not been litigated previously, and there are at least some allegations in the complaint which suggest an attempt to establish a claim independent of any connection to SLE. Finally, we do not agree that Lee filed this action for an improper purpose. The existence of a single article reporting the filing of the action was insufficient evidence of fueling the media fire.”
Lee v. Pow Entertainment, No.20-55928, 2021 WL 5768462 (9th Cir. Dec. 6, 2021).
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