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Foreclosing On The Life Story In Your Head

posted by Melissa Jacoby

BrainsIn the fictional worlds of Charles Yu, George Saunders, or Etgar Keret, a person's accumulated life stories and thoughts when she files for bankruptcy might be withdrawn, like blood, then filtered for marketability. In such a world, a debtor might be required to spin her tale for the sole benefit of creditors, or forever silenced. Planning to give a five-minute anecdote about your childhood at The Moth? Don't even think about it.

Casey Anthony's bankruptcy was filed in January 2013 as a no-asset Chapter 7, with nearly  $800,000 in debt - not counting scores of claims with amounts identified as "unknown." Ms. Anthony's income and expense schedules list, literally and rather remarkably, zeroes all the way down. At the 341 meeting of creditors in March, Ms. Anthony asserted that friends and strangers take care of her needs. Presumably, this arrangement is not sustainable. Will she seek to support herself in the future by talking about her past? 

The bankruptcy trustee wants to auction off something that probably has never been expressly sold in a bankruptcy case (it certainly wasn't listed as an asset in the schedules): exclusive rights in perpetuity to the commercialization of Ms. Anthony's life story, including "her version of the facts, her thoughts and impressions of whatever nature, in so far as these pertain to her childhood, the disappearance and death of her daughter . . . her subsequent arrest . . . and withdrawal from society. . . ." (see the lengthy paragraph 3 in here). How much debt would be satisfied by such a sale? 

The reported written offers, so far, are a pittance compared to the nearly $800,000 debt: $10,000 and $12,000. Don't forget to deduct trustee and auction expenses.  

Maybe bids are low because public appetite for Ms. Anthony's inner life and history is sated (the $10,000 bid was specifically tied to the intent to bury her story, not to pursue it). Or, perhaps, because the emperor has no clothes, e.g., there doesn't seem to be a property interest to sell at this time, and enforcement of such a sale order likely would strain the power and authority of a bankruptcy court. The motion to sell isn't focused on a right of publicity (see this reliable source's summary of Florida law) - assuming that rights of publicity are even alienable. This is not about a name or likeness. Or a tag line ("Here's Johnny" portable toilet). Or an existing performance (the human cannonball). Other basic intellectual property categories don't seem to be implicated. What is the property interest of the debtor at the time of the bankruptcy? The trustee has a few more days to supplement the record with legal authority, so let's see what emerges. Although we may need to call for reinforcement from property theorists, federal court experts, and First Amendment scholars, as of now the requested auction seems to venture into speculative fiction territory. 

For general readers out there: I carry no brief for this particular debtor. But the trustee and creditors have other, more legally grounded avenues to pursue if they would like to prevent Ms. Anthony from getting chapter 7 bankruptcy relief in whole or in part. That's what this dispute in bankruptcy court is, or should be, about. 

Image courtesy of Shutterstock.

 

Comments

It appears, based on the trustee's motion, that the trustee implicitly concedes he and the court do not have the power to compel the debtor to write, produce or assist in the production of any book, film, etc. about herself. That seems correct; the trustee cannot compel the debtor to enter into a personal services contract.

The trustee also says that the intention of the stalking horse bidder is to block the debtor or anyone else from publishing or profiting from her story in the future. That is where it starts getting a bit squirrelly in my mind. Outside of bankruptcy, the fact that someone publishes an unauthorized biography would not bar the subject of the work from writing an autobiography, unless the subject had entered into some contractual agreement with the author or someone else to that effect. Does the trustee have the power to compel debtor to be bound in such a way? In effect, the trustee is saying that he can't force the debtor to enter into a personal services contract, but he can accept money contingent on the court entering an order forbidding debtor to enter into the same personal services contract in the future.

Looks like the Bankruptcy Clause versus the 13th Amendment. I wonder which is Godzilla and which is Mothra?

I wouldn't say the 13th Amendment is implicated, as nothing requires her to tell her story or do any work. It's just that somebody else would own the rights and therefore, if she volunteers to tell the story, the buyer would be entitled to any profits deriving from it. The buyer could also do their own research and sell the story without her doing anything at all.

Of course, a rational buyer who wants her input would know that she would have no incentive to tell the story if it were not personally proitable. So in reality, they'd really own nothing more than the exclusive right to negotiate with her in the future.

Unlike the 13th Amendment, I think the 1st Amendment is implicated, especially if the buyer wants to bury the story. A celebrity, infamous or otherwise, cannot lose their right to speak about their lives by virtue of going bankrupt. This might be able to be remedied by simply limiting the restriction to her right to sell her life story to someone else; if she wants to give it away/openly talk about it, she would be free to do so.

My question if the Trustee is permitted to make this sale, is: under 541, what if she filed bankruptcy prior to her celebrity status? Although the value of her "life story" would be derived post-petition, her alleged abuse and other facets of her life, the majority of her life story in both time and substance, was all pre-petition. Are Chapter 7 estates full of undisclosed and therefore unabandoned "life stories" waiting to be sold if something interesting happens to the debtor?

What "more legally grounded avenues to pursue if they would like to prevent Ms. Anthony from getting chapter 7 bankruptcy relief in whole or in part" do you have in mind?

Not sure if any special grounds for denial of discharge or nondischargeability exist here - but I don't follow the case very closely.

I suppose, if it is still viable under the statute of limitations, perhaps the trustee could auction off the right to sue Casey Anthony for the wrongful death of her daughter, Caylee, and the corresponding ability to assert that any wrongful death award be non-dischargeable.

Although that would be a lot like authorizing someone to use Casey Anthony's standing as the mother to sue herself as the **alleged** murderer . . . .

This case is different than the O.J. Simpson situation, where third parties can assert wrongful death claims and then pursue collection. Simpson can't file bankruptcy because there is a civil judgment based on what would clearly be held to be a "willful and malicious injury".

I didn't follow the case closely, but I don't think the father of Caylee Anthony was known - and there was some talk that he died in a car accident. Not sure who else would have standing for a wrongful death action - other than Casey Anthony on behalf of Caylee Anthony. Which might be too circular to split off and sell.

As far as the sale of the rights to her "story" - intellectual property rights are sold all the time in bankruptcy. If she had written a book about her life, the rights to that book could be sold. Songs are sold - and when they are sold, the person who wrote the song can't perform it commercially without compensating the owner of the song.

I'm not sure this situation is that much different from the sale of those kinds of assets and rights of publicity.

http://blogs.wsj.com/bankruptcy/2012/04/06/young-buck-songs-royalties-on-the-block/

@AMC- absolutely, intellectual property rights existing at the time of bankruptcy are treated as assets for the benefit of creditors all the time (less so for rights of publicity as best I can tell). But here, what's the property right? She hasn't written her story into a book. Or a song. Don't all debtors come into bankruptcy with thoughts about their life? The breadth of the sale motion is notable.

As for other avenues, trustees might argue under 707(a) for bad faith in cases such as this, following a case like Tamecki in the 3rd circuit (in that case, the trustee successfully argued that the debtor was frontloading his bankruptcy and delaying his divorce so that when the tenancy by the entirety was broken, he would not have to share with creditors). I did not think Tamecki was correctly decided (in addition to questioning the trustee's interpretation of the facts) and another MDFL judge has previously declined to use 707(a) that way, but it is out there. There are also arguments about the accuracy of the schedules, exceptions to discharge, etc. Whether they will prevail, I'm not sure. But they are more conventional lines of argument.

So if I incurred a genetic mutation that was cancer fighting, and filed for copyright protection of that unique trait, it would become property of my bankruptcy estate?

The BK judge should let the applicant profit post BK. Even if it is Casey Anthony.

It seems to me that the best way for the Trustee to proceed is a forced conversion to Chapter 13, because if she does "write"* a life story within the term of the repayment plan, that can then be treated as an asset of the estate... and if she doesn't, she will largely have been forgotten by the time the repayment plan would be expected to end.

* Keep in mind that under the Copyright Act, there is no "intellectual property" to be defined until there is a "fixation" ("writing," in the strictly constitutional sense of Art. I § 8 cl. 8). That is, there's no intellectual property in her thoughts or experiences or perspectives or perceptions until they're written down or otherwise recorded.

@C.E. Petit: An individual cannot be forced into a Chapter 13. She also would be ineligible under 109 if her schedules are accurate because she lacks "regular income."

Even if something exists as of the petition date that is alienable, I don't see how anyone can distinguish it from a life story that might be written, say, 10 years after discharge. Assuming the trustee concedes s/he can't reach the debtor's future thoughts, how does a buyer know if is getting anything at all? The debtor could just have a ghostwriter write the post-discharge version in a way that made it clear it was her post-discharge thinking about pre-petition events. Instead of saying, "on X (prepetition) date, event Y happened to me" it would be written: "as I sit here today, I am most upset when I think about event Y". Or suppose a publisher just pays her an hourly wage to sit with a fact checker on a book someone else writes but she gets nothing directly from the resulting work? She hasn't "sold her life story"; she's just being paid for her time. I suppose a buyer could try to get the court, on notice to the debtor, to write a really broad order that captured all of the above but Idk, it seems like just buying a future litigation.

She deserves the freedom to tell her story or state her opinions. They want to foreclose on her freedom of speech? That won't hold up in court.

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