Reply Brief — Cusano v. Klein (No. 05-1492)

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No.05-1492 fh iCe OF TE Css

IN THE

Supreme Court of the United States

VINCENT CUSANO, p/k/a Vinnie Vincent and d/b/a Streetbeat

Music and d/b/a Vinnie Vincent Music,

Petitioner,

Vv.

GENE KLEIN, PAUL STANLEY nee STANLEY EISEN, THE KISS

COMPANY, GENE SIMMONS WORLDWIDE, INC., SIMSTAN

Music LTp., KISStTory LTD., and POLYGRAM RECORDS, INC..,

Respondents.

On Petition for Writ of Certiorari

to the United States Court of Appeals for the Ninth Circuit

REPLY IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

ERIK S. JAFFE

Counse! of Record

ERIK S. JAFFE, P.C.

5101 34” Street, N.W.

Washington, D.C. 20008

(202) 237-8165

Counsel jor Petitioner

Dated: August 9, 2006

TABLE OF CONTENTS

Pages

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PE AI FAAS RBUAIORE D LOO eniveereseoversnersecnpeosesorwneveriesiinescores il

REASONS FOR GRANTING THE WRIT. ...........-::ccceeeeeeeees ]

I. The Decision Below Flagrantly Ignores the

Binding Effect of the Confirmed Plan on

Ownership of the LIU Songrights Asset.................:000+ ]

A. Petitioner’s Ownership of the LIU

Songrights, Including Copyrights, Is Res

RD ES SSIES SS ac a PL AD 2

B. Petitioner Did Not Waive His Claim to Full

Ownership of His Songrights. ............::sscsseceeeeeeees 7

Il. This Court Should Exercise Its Supervisory

Authority To Either Take this Case or Summarily

IIIT Hii dial Siahbiasesdiiiibinecevecsscdmpegeitinioipspncbrtpreritiietion 10

TT itlnai dubai vidiseahsseseveveiovicveuinrsiekvurtsiiepextausecsouies 10

TABLE OF AUTHORITIES

Pages

Cases

Bonwit Teller, Inc. v. Jewelmasters, Inc. (In re

Hooker Investments, Inc.), 162 B.R. 426

CEOUNY RIOR CP BE coinctirinsitshvccninsititlestaciuniasiaincneeiisiciecinina 2

Bracewell v. Kelly (In re Bracewell), -- F.3d --,

2006 WL 1814367 (CA11 2006)... eeeeeeeee peiatemintin 5

Brown v. Dellinger (In re Brown), 734 F.2d 119

Pa TOWED iiccicealistncisirnisnicsccalutaiahaisbbucecniibtiepaapeienegilensiiiindiiads 5

Brown v. Pitzer (In re Brown), 249 B.R. 303

eps, Is: IO ccsccinsesscipucenstnsersltiphapadeesocentsislisasitobontbsinesuleciedtiten 6

DiBerto v. The Meadows at Marbury, Inc. (In re

DiBerto), 171 B.R. 461 (Bkrtcy. D. N.H. 1994)................. 4

FDIC v. Lewittes (In re Friedberg), 192 B.R. 338

GIES Bee icccscicsineihsehciciipisniictisctidesceiaduhciieinanmseiteaaiaimenes 2

Gendreau v. Gendreau (In re Gendreau),

122 F.3d 815 (CA9 1997), cert. denied,

FE ic RAE ccisnsita biccinivinsvciaincinitiiniceditionivecaamannaeiiintin 5

Graziadei v. Graziadei (In re Graziadei),

Fe ae I A FO eihintennnisticisiestntinsemnctariabinathinien 5

In re Ratner, 146 B.R. 211 (Bkrtcy. N.D. Ill. 1992)............... 4

In re Regional Bldg. Systems, 251 B.R. 274, 290

(Bkrtcy. D. Md. 2000), subsequently aff'd,

Se Fe Eee Ce BE ieetabcenntitendntiienictenicinciaamesi 3,5

In re Southern Energy, Ltd., 98 B.R. 42

CRI AID, Fie, FP piaiccsirccnisstscsincsnniigctcevticasitiaiatonetanin 4

In re State of Mo., 7 B.R. 974 (E.D. Ark.1980).........:cececeeees 4

Lowenschuss v. Selnick (In re Lowenschuss),

Fe dk ES Ce eniceeincokevinesinicccciinlsivnsbieiniaiiiealiivnaveiian 5

Matter of Penrod, 50 F.3d 459 (CA7 1995) ......:.cessceesseeeeeseees 5

ili

Moody v. Amoco Oil Co., 734 F.2d 1200

(8S 6 ge |: RIESE AREER S CAI Byron seve Sane eV URN RR NRE 5

Resare v. Resare, 154 B.R. 399 (D.R.D. 1993) 2.0... ceseeeseeeeees 6

Stoll v. Gottlieb, 305 U.S. 165 (1938) .........cccccscsccccossceesresseees 4

Trulis v. Barton, 107 F.3d 685 (CA9 1995) .........ccecesesseees 3,4

Universal Suppliers, Inc. v. Regional Bldg. Systems,

Inc. (In re Regional Bldg. Systems, Inc.),

FOE See Fn Ae BEE Bitsicte chcdescéacaenisniserintadnesemicrnocions 4

Virginia Bankshares, Inc. v. Sandberg,

501 U.S. 1083 (1991)......eecsesseeseeseeee scsnssevsenssneseneees ‘aostoatios 7

Washington v. Davis, 426 U.S. 229 (1976) ...ccccscsesseseseseeseeeees 7

Statutes

BE ERs Bea eiieeciestniis esicsintssegurmiotiitcnonapidconsiapuntisiieiatiin 5

Fe eek FON sociecihnsaniinseychanesssepshstenisens piiibaaethpiatiailad passim

Other Authorities

Cole & Bucklo, A Life Well Lived: An Interview

with Justice John Paul Stevens,

32 No. 3 LITIGATION 8 (Spring 2006) ............cescccseeceeeees 10

Respondents beg the res judicata question by asserting

ownership of the LIU songrights asset re-vested in Petitioner

by his confirmed Chapter 11 plan. Pet. 2-3, 17-19. That

collateral attack on the confirmed plan and on the bankruptcy

court’s authority over the songrights asset comes 17 years too

late and is now barred by res judicata.

Respondents’ further suggestion that Petitioner waived his

claim that the confirmed plan re-vested his songrights in him

is absurd. Petitioner’s argument was presented to and

rejected on the merits by the Ninth Circuit, and Petitioner has

consistently asserted his full 50% ownership rights in the LIU

compesitions and the re-vesting of those rights under his plan.

REASONS FOR GRANTING THE WRIT

I. THE DECISION BELOW FLAGRANTLY IGNORES THE

BINDING EFFECT OF THE CONFIRMED PLAN ON

OWNERSHIP OF THE LIU SONGRIGHTS ASSET.

Not bothering to defend the decisions below, Respondents

simply repeat their clearly erroneous holdings and offer

entirely new grounds for the same result. Those new grounds

~ their claimed ownership of the asset, lack of authority of the

bankruptcy court, and waiver — are completely without merit.

At the time Petitioner filed for bankruptcy, ownership of

the LIU songrights was, at worst, disputed, as even

Respondents seem to concede. BIO 1, 20. After Petitioner

scheduled those songrights as an asset of the bankruptcy

estate, Respondents failed to raise their dispute over

ownership and thereafter any such dispute was superseded by

the terms of the confirmed plan, which bind Respondents and

which bar their current assertions of ownership.

' This Court need not resolve the “dispute” over whether the 1984 pur-

chase option was timely exercised; it need only recognize that the exercise

of that option was in fact in dispute. Pet. 6, 14. The confirmation of the

Chapter 11 plan itself effectively resolved that dispute in Petitioner’s fa-

vor. The only issue for this Court is the legal effect of 11 U.S.C.

2

A. Petitioner’s Ownership of the LIU Songrights, In-

cluding Copyrights, Is Res Judicata.

Respondents do not dispute that the listed “songrights” as-

set included copyrights and royalty rights for the LIU compo-

sitions. Pet. 10, 16-17; Pet. App. B12. They likewise do not

dispute that the terms of the confirmed plan re-vested those

rights in Petitioner. Pet. 11, 16-18; Pet. App. B13, B15-B16.

Nor do they dispute that the terms of the confirmed plan are

binding on all parties. Pet. 15-16, 18.7 The confirmed plan

thus resolves the ownership of the songrights “property dealt

with by the plan.” 11 U.S.C. § 1141(c).

Respondents instead collaterally attack the plan by raising

the very arguments they could and should have raised in the

bankruptcy proceeding itself. For example, they now chal-

lenge the authority of the bankruptcy court and the terms of

the plan by arguing that the songrights asset was their prop-

erty, should not have been included in the estate, and hence

should not have been re-vested in Petitioner upon plan con-

firmation. BIO 13, 16. Regardless how that argument might

have fared 17 years ago in a direct challenge to the plan, Re-

spondents did not raise it then and the plan binds them now.’

§ 1141(c) and res judicata. Respondents’ false assertion of “undisputed”

ownership in 1989, BIO 12, contradicts their own assertions of a dispute

regarding exercise of the purchase option, BIO 1, 20, and their admission

that Petitioner owned the LIU copyrights in 1989, see Pet. 9, 17 n. 11.

? See also FDIC v. Lewittes (In re Friedberg), 192 B.R. 338, 341 (SDNY

1996) (confirmed plan extinguishes and replaces “all prior obligations and

rights of the parties”); Bonwit Teller, Inc. v. Jewelmasters, Inc. (In re

Hooker Investments, Inc.), 162 B.R. 426, 433 (Bkrtcy. SDNY 1993) (con-

firmed plan “has full preclusive effect and is binding on all parties”).

> Petitioner does not claim that merely filing for bankruptcy or scheduling

an asset created or revived a property right in that asset. BIO 13, 14.

Rather, the scheduling of the songrights asset asserted an existing prop-

erty right and put Respondents on notice of that assertion. When Respon-

dents failed to dispute Petitioner’s ownership, confirmation of the plan

simply ended the potential for dispute and, in effect, quieted his title.

3

As the Petition notes, and as established by uncontra-

dicted authority, a confirmed plan is res judicata not merely

as to “claims,” but rather as to all of its terms, all issues con-

cerning the plan, and ail objections that could have been, but

were not, raised regarding the plan. Pet. 16 & n. 10 (quoting

cases finding res judicata applies to “any issues” and “all

questions”); see also Trulis v. Barton, 107 F.3d 685, 691

(CA9 1995) (“all questions that could have been raised per-

taining to the plan are entitled to res judicata effect”).‘

Indeed, the caselaw specifically applies res judicata to

competing assertions of property interests in a scheduled

bankruptcy asset, such as Respondents make here. DiBerto v.

The Meadows at Marbury, Inc. (In re DiBerto), for example,

squarely and soundly rejected, on res judicata grounds, the

precise argument made in the BIO, correctly holding that

where a property “interest is subject to unresolved conflicting

claims of ownership, the Court clearly has jurisdiction to de-

Petitioner likewise does not rely on a claim that the 1983 Employment

Agreement was an executory contract “rejected” in bankruptcy. Rather,

Petitioner bases his pre-bankruptcy ownership assertion on the express

operation of ¢ 5(b) of that very Agreement and his post-bankruptcy own-

ership on the res judicata effect of the plan eliminating the possibility for

further dispute over whether § 5(a) or ¢ 5(b) controls. The Petition’s pass-

ing reference to executory contracts, Pet. 19 n. 13, was simply an argu-

ment in the alternative as to | 5(a), and a reason why § 5(b)’s mutually

unperformed agreement to execute a further agreement could no longer be

invoked. Respondents’ various arguments regarding executory contracts,

BIO 3, 21-22, are thus irrelevant to the question presented by the Petition.

* Petitioner was not obliged to file an adversary proceeding to “recover”

his songrights by “avoid{ing]” their supposed transfer to Respondents.

BIO 14-15. Petitioner asserted ownership and “possession” of that intan-

gible asset by scheduling it, thus putting Respondents on notice. Pet. App.

B12. There was no need to avoid a supposed transfer or recover an asset

he claimed as having long-since “automatically” reverted to him ab initio.

Pet. 5-6; see also In re Regional Bldg. Systems, 251 B.R. 274, 290, 292

(Bkrtcy. D. Md. 2000) (debtor need not initiate adversary proceedings to

extinguish creditor’s property interest; interest extinguished “simply by

operation of § 1141(c)”), subsequently aff'd, 254 F.3d 528 (CA4 2001).

4

‘termine what is and what is not property of the estate.” 171

B.R. 461, 475 (Bkrtcy. D. N.H. 1994).

To the extent there was controversy over rights in the

property, this Court, like all federal courts, had the

power to determine its own subject matter jurisdiction

_and in the absence of a direct appeal that determination

can not be upset by collateral attack. * * * [C]onfirma-

tion of the plan necessarily involved a determination that

the court had jurisdiction and power to affect the claims

to the properties [dealt with by the plan]. *** [The

creditors’ claim to be the] rightful owner[s] accordingly

begs the question and is not material on the issue of

whether the confirmed plan has res judicata effect * * *.

Id. This Court in Stoll v. Gottlieb, 305 U.S. 165, 171-72

(1938), also rejected a “collateral attack” on a bankruptcy

court’s power, holding that an order of such court “tacitly, if

not expressly, determines its jurisdiction over” the subject

matter, and a later “court in which the plea of res judicata is

made ‘has not the power to inquire again into that jurisdic-

tional fact.” °

Numerous other cases likewise hold that a confirmed plan

is res judicata even as to property interests dealt with therein.

See, e.g., Universal Suppliers, Inc. v. Regional Bldg. Systems,

Inc. (In re Regional Bidg. Systems, Inc.), 254 F.3d 528, 531

(CA4 2001) (lien “extinguished” by confirmed plan; “every

other circuit * * * to have addressed this issue has reached the

same conclusion”); Jn re Southern Energy, Ltd., 98 B.R. 42,

43-44 (Bkricy. N.D. Fla. 1989) (same — possessory interest).

* See also Trulis, 107 F.3d at 691 (for claim that plan provision is “‘not

within the power, even jurisdiction, of the bankruptcy court * * * only a

direct attack is available and collateral attack is unavailable’”) (citation

omitted); In re Ratner, 146 B.R. 211, 214-15 (Bkrtcy. N.D. Ill. 1992)

(“bankruptcy court always has jurisdiction to determine what is, or is not,

property of bankruptcy estate”); /n re State of Mo., 7 B.R. 974, 980 (E.D.

» Ark.1980) (bankruptcy court “has jurisdiction to resolve competing claims

to the property” and to decide whether “it is property of the estate”).

5

Indeed, because § 1141(c) applies to the disposition of any

“property dealt with by the plan,” not merely “estate prop-

erty,” even property subject to an ownership dispute can re-

vert to the debtor “free and clear.” °

Given that Respondents are 17 years too late in raising

their ownership challenge, the cases they cite, BIO 13-14, 16,

concerning property of the estate are irrelevant. Where there

is a dispute over ownership, the bankruptcy court itself is the

exclusive initial forum in which to resolve that dispute for

purposes of deciding whether to include an asset in the estate.

Indeed, Respondents’ own cases effectively make that point

in that each and every one of them involves a challenge to

ownership raised directly in the bankruptcy proceedings, not

in a post-confirmation collateral attack such as we have here.’

Respondents’ reliance on those cases begs the question of

when that argument should have been raised and the res judi-

cata effect of their having failed to raise it. However the

ownership dispute might have been resolved pre-confirmation

or on direct appeal, Respondents’ cases have no application

post-confirmation. In re Regional Bldg. Systems, 251 B.R.

274, 292 (D. Md. 2000) (quotes from cases involving direct

appeals “are necessarily taken out of context because * * *

[they do not involve] the situation to which § 1141(c) and the

* Matter of Penrod, 50 F.3d 459, 463 (C 47 1995) (“property dealt with by

the plan” under § 1141(c) is broader \aan “property of the estate” as de-

fined in § 541, and claimed property rigats can be extinguished regardless

whether they were estate property); cf 11 U.S.C. § 363(f) (allowing sale,

free and clear, of property subject to bona fide dispute over ownership).

” See Lowenschuss v. Selnick (In re Lowenschuss), 170 F.3d 923, 927

(CA9 1999) (direct appeal); Gendreau v. Gendreau (In re Gendreau), 122

F.3d 815, 817 (CA9 1997) (same), cert. denied, 523 U.S. 1005 (1998);

Bracewell v. Kelly (In re Bracewell), — F 3d --, 2006 WL 1814367, at *1

(CAI1 2006) (same); Moody v. Amoco Oil Co., 734 F.2d 1200, 1204

(CA7 1984) (same); Brown v. Dellinger (In re Brown), 734 F.2d 119, 120

(CA2 1984) (same); Graziadei v. Graziadei (In re Graziadei), 32 F.3d

1408, 1410 (CA9 1994) (same).

6

doctrine of res judicata apply — a collateral attack on a con-

firmed plan, as here”). Respondents cannot now unwind the

confirmed plan by merely assuming the disposition of an

ownership dispute they failed to raise in bankruptcy.

Furthermore, Respondents’ prior judicial admission and

assertions that Petitioner and the estate “owned” the relevant

copyrights and royalty rights precludes any consideration of

their current attempt to revive a long-precluded ownership

dispute. As set forth in the Petition, at 9, 17 n. 11, and

unchallenged in the BIO, Respondents admitted that

Petitioner in 1989 “had a partial copyright ownership in” the

LIU compositions. Such a binding judicial admission renders

the bulk of the BJO irrelevant. Respondents, ostrich-like,

simply ignore their prior admission, making their current

contradictory position frivolous.

Respondents make the related argument, BIO 18, that

their disputed “property interest” in the songrights was not a

“claim” or “debt” that could be discharged in ae

But the plain terms of § 1141(c) dispose of their asserted “i

terest” regardless whether Respondents’ disputed assertion of

ownership was also a claim.® And, as the undisputed caselaw

cited in the Petition and above makes clear, res judicata ex-

tends to the terms of a plan and all issues, including property

ownership, that could have been raised, not merely to the dis-

charge of claims or debts. Pet. 15-16, 18; supra at 2- ty

* Respondents’ citation, BIO 17, to 11 U.S.C. § 1141(d)(1) as supposedly

restricting the effect of a plan to the discharge of “any debt” is strange

beyond words. Section 1141(d) does not purport to limit § 1141(c), which

independently forecloses all “claims and interests,” not merely debts.

* Respondents’ cases defining a claim and distinguishing debts from prop-

erty interests, BIO 19-20, thus are irrelevant to the res judicata issue given

that those cases began within the bankruptcy proceedings, were resolved

there and on direct appeal, and hence did not involve a collateral challenge

regarding “property dealt with” by a final and confirmed plan. Brown v.

Pitzer (In re Brown), 249 B.R. 303, 308-09 (S.D. Ind. 2000) (direct ap-

peal); Resare v. Resare, 154 B.R. 399 (D.R.I. 1993) (same).

ew nn nr ne ae

tae!

B. Petitioner Did Not Waive His Claim to Full Own-

ership of His Songrights.

Having failed to assert their alleged ownership in the

bankruptcy proceedings, Respondents ironically suggest that

Petitioner has failed to preserve that issue. BIO 9, 11-12, 24.

That argument is wrong on multiple levels. First, Respon-

dents concede that the issue was presented to, and rejected by,

the Ninth Circuit. Pet. 12-13; BIO 24-25." That the Ninth

Circuit, on the merits, (incorrectly) resolved the issue pre-

sented to it thus properly places that issue before this Court."

Second, the effect of the bankruptcy was resolved by

Cusano I, and Petitioner was amply entitled to reassert that

resolution in the second appeal. Pet. App. B10, B12, B15

(scheduled songrights asset encompassed unqualified interests

in “copyrights and rights to royalty payments” and reverted to

Petitioner, citing § 1141(b)).'* That decision also rejected a-

misguided attempt by Respondents to invoke res judicata

based on a later ruling, and instead held that the “only res

judicata effect of [the bankruptcy court’s denial of the motion

to reopen the proceedings] is that the consequences of the

prior closing will not be disturbed.” Pet. App. B14-B15.

'° See, e.g., Brief of Appellant, Feb. 27, 2004, at 6, 11-12, 15, 30; Reply

Brief of Appellant, June 7, 2004, at 1-9, 15-16; Supplemental Brief for

Plaintiff-Appellant, Apr. 6, 2005, at 2-3, 4, 6-7, 8-14, 22, 32, 41-42; Sup-

plemental Reply Brief for Plaintiff-Appellant, June 1, 2005, at 1-7, 9-10.

'' Indeed, the issue is properly considered by this Court even had it not.

been presented below and hence it is, a fortiori, proper to consider the

issue where it was raised and resolved in the court of appeals. See Vir-

ginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1099 n.8 (1991)

(even where issue not raised below, “[i}t suffices for our purposes that the

court below passed on the issue presented”); cf. Washington v. Davis, 426

U.S. 229, 238 n. 9 (1976) (Court may notice a plain error not presented).

"? See also Brief of Appellant, Cusano I, at 27, 34-35 (arguing that pur-

chase option failed, publisher’s share was improperly withheld, and

“Chapter 11 plan and the closing of his bankruptcy case permanently

vested in him{] the full interest in his songrights”) (emphasis in original).

Third, the suggestion that Petitioner failed to preserve the

issue by not re-litigating it on remand simply ignores the prior

proceedings and the limited scope of the remand. Leading up

to Cusano I, Petitioner routinely asserted his full 50% owner-

ship rights in the LIU compositions and argued that such

rights reverted to him under the Chapter 11 Plan. See Com-

plaint $9 51-55 [AE Tab 1, at 16-17] (claiming full 50% own-

ership and failure of purchase option); Plaintiff's Separate

Statement of Disputed Issues, Nov. 30, 1998 [AE Tab 9, at

158, 164] (asserting 50% ownership and arguing the “Bank-.

ruptcy proceedings specifically confirmed ownership of the

copyright interests in Plaintiff”).'? Following remand, Peti-

tioner simply renewed his prior position, noting that Cusano I

held that he adequately scheduled his songrights and,

“[a]ccordingly, confirmation of Plaintiff's bankruptcy reor-

ganization plan caused all rights to post-petition royalties on

Plaintiff's pre-petition compositions and other damages ac-

cruing post-petition to revert to Plaintiff.” Joint Status Re-

See also, Opposition to Motion for Fees, July 26, 1999 [AE Tab 21, at

873, 875, 889-92, 901-03] (asserting position re 50% ownership of son-

grights and arguing that confirmed Chapter 11 plan reverted his full son-

grights back to him); id. at 896 (arguing that additional value paid in bank-

ruptcy to retain songrights “was not challenged or questioned by any of

the creditors which included Simmons and Stanley, and according to the

final decree of the bankruptcy court these rights now belong to Cusano.”);

Order, July 16, 1998 [AE Tab 5, at 117] (recognizing that “Plaintiff[] {de-

nied] the valid exercise of [the purchase] option,” finding sufficient sup-

port to make that claim, and denying sanctions). Indeed, Respondents

themselves recognized the scope of Petitioner’s ownership claim. See

Defendant’s Motion for Summary Adjudication, Nov. 30, 1998, at 6

[Docket No. 90] (“alleged 50% ownership interest in [the LIU composi-

tions], and the income and royalty stream generated thereby are, by neces-

sity, based on facts, transactions and occurrences pre-dating” the bank-

ruptcy). Respondents’ principal objection was not that Petitioner did not

own the songrights before, but rather that he did own the rights but failed

to list them adequately. /d. at 12-13; id. at 22 (recognizing that claim to

royalties was based on Petitioner’s asserted copyright ownership); id. at

13 n. 7 (disputed “ownership interest and/or rights arising from the” LIU

compositions should have been listed as an “asset” of the estate).

9

port, Dec. 28, 2001 [Appellee’s SE Tab 74, at 1488]; Joint

Rule 26(f) Report, Apr. 28, 2003 [AE Tab 37, at 1084] (argu-

ing Respondents owed him a “full and complete accounting

of all royalties owed”). Given his well-established position

throughout the case, his reassertion of ownership of “all”

rights following bankruptcy sufficiently preserved his claim.

To suggest that Petitioner was required to relitigate the

very issue so recently resolved by the Ninth Circuit is simply

incorrect. Rather, Petitioner adequately pressed his reverted

rights, and then correctly appealed and raised the res judicata

issue when the district court inexplicably ignored those rights

and revived Respondents’ claim to ownership.

Once the res judicata issue is properly resolved, the re-

mainder of the decision below is clearly erroneous. Pet. 21-

22. Respondents do not refute the Petition’s analysis of the

effect the ownership error had on the Ninth Circuit’s other

holdings."* Aside from collaterally attacking the plan, Re-

spondents effectively concede the extensive error below.’°

'* While Respondents claim that the holding in Cusano ] was limited

merely to potential “royalty claims,” BIO 25-26, they ignore the express

finding that the “songrights” included “copyrights” and that the royalty

rights were Petitioner’s “property,” not merely potential “claims.” Pet.

App. B12-B13, B15-B16. Respondents also elide from their second quote

the final words relating to “other damages,” id. B12, and ignore the rein-

statement of Petitioner’s fiduciary duty, fraud, conversion, and construc-

tive trust claims, id. B15, which confirms that the reverted interest was a

property right, not merely a contractual right to royalty payments.

'S Respondents make 6 ill-advised accusations of misrepresentation. BIO

22-24. Accusations 1 & 3 involve legal positions as to which Respon-

dents are spectacularly wrong. Accusations 2 & 5 simply assert Respon-

dents’ disputed position regarding the purchase option, and Petitioner’s

side of that dispute has ample support in the record. See, e.g., AE Tab 13,

at 403-04; AE Tab 19, at 616, 620, 636-42; ASE Tab 83, at 1672-77; ASE

Tab 84, at 1682; ASE Tab 88, at 1736-39; ASE Tab 99, at 1911-13. Ac-

cusation 4 itself misrepresents the criticized passage in the Petition. Pet.

11. And accusation 6 ignores Petitioner’s asserted ownership via schedul-

ing of his songrights asset and gets the burden of objection backwards.

10

Il. THis CourT SHOULD EXERCISE ITS SUPERVISORY

AUTHORITY TO EITHER TAKE THIS CASE OR

SUMMARILY REVERSE.

The Petition gives ample reason for this Court to take this

case, notwithstanding the admitted lack of a split. Respon-

dents do little more than repeat such a lack of a split, incor-

rectly claim that there are disputed facts precluding review,

and then simply hope this Court will ignore the case and let

them keep the benefit of the Ninth Circuit’s egregious error.

But there are no disputed facts that this Court need resolve

in order to rule on the res judicata issue, see supra at 1-2 n. 1,

and there is no split only because the law is clear and the de-

cision below is so stunningly wrong that no other court, and

no panel of the Ninth Circuit, has ever even considered pub-

lishing such a disposition. Indeed, the unpublished nature of

the opinion should act as a red-flag in favor of review given

that, as Justice Stevens has recognized, “occasionally judges

will use the unpublished opinion as a device to reach a deci-

sion that might be a little hard to justify.” Cole & Bucklo, A

Life Well Lived: An Interview with Justice John Paul Stevens,

32 No. 3 LITIGATION 8, 67 (Spring 2006). In this case the de-

cision is more than “a little” hard to justify; it is indefensible.

The question presented by this Petition goes to the proper

administration of a bedrock aspect of the Bankruptcy Code —

the finality and effect of confirmed plans — and is a proper

subject for this Court’s supervisory authority. While this

Court may be reluctant to devote the resources of full review

to such supervision, when the circumstances and the error

demand it, this Court has not declined to act, often regarding

errors from the Ninth Circuit. See Pet. 24-26. Summary re-

versal is an efficient and appropriate alternative in this case

given the well-settled law and the clear error below.

CONCLUSION

The petition for a writ of certiorari should be granted.

Dated: August 9, 2006

Respectfully submitted,

ERIK S. JAFFE

ERIK S. JAFFE, P.C.

5101 34” Street, N.W.

Washington, D.C. 20008

(202) 237-8165

Counsel for Petitioner