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

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0942%3A3

## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2006

## Text

ae EET Re ES lle

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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
I GE SaRPE © LOPS Bi ce csoccncoveevescevetousesesecseovosensscsoveeoueeonouers i
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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0942%3A3. Public record. Not legal advice.
