5 Ambitious Corporate Lawsuits That Backfired Hilariously
The legal world is incredibly complicated — for good reason, but infuriatingly so. Of course, the more rules there are, the more loopholes they create, and someone with intimate knowledge of those is happy to rent out their talents for wriggling out of legal trouble. If you’re very, very good at this, you’re in high demand, which in turn allows you to charge atmospheric sums for your help.
This all leads to the richest folks being protected by the best lawyers, forming what feels like an impenetrable wall stopping anyone from benefiting from a system that, in theory, is meant to protect them. It would be nice if it wasn’t that way, but you’d probably have better luck taking on Smaug from atop his gold pile wielding a letter opener. So, what are we to do? Well, for now, just enjoy the schadenfreude of the few times company lawsuits blow up in their face.
Nintendo Bends Universal Over A Barrel
Nowadays, Nintendo isn’t exactly known for wielding the legal arm of its business with kindness. Maybe they’re just trying to get full use out of their retainer fees by suing a guy who made Mario work in full-screen, but it still feels a little petty. Or maybe, their legal lashings-out come from resentment over a big company that attempted to take them to task back when gaming wasn’t much more than a way to pass time in a laundromat.
Nintendo’s Donkey Kong had just become a smash hit, and given that it starred a big ape with the surname “Kong” who galloped up girders, Universal decided to sue for infringement over King Kong. Does the character Donkey Kong infringe on the King Kong IP, or does it qualify as parody? That’s an interesting legal discussion, but the case never even got there because it turned out that Universal didn’t actually own the rights to King Kong, something they quietly knew.
King Kong himself and his copyright, it seems, have been terrorizing copyright lawyers just as much as the denizens of a fictional Manhattan. Even Universal’s lawyers themselves had already fought over the ape’s owner in the past — from the other side. They ended up losing the lawsuit because of a precedent they themselves had set when they sued RKO Pictures arguing that King Kong was in the public domain, and won. Nintendo and Donkey Kong’s legend would only grow, not to mention that the lawsuit informed another iconic Nintendo character: Kirby, the lovable pink puffball with pica, is named for the lawyer that won them the case, John Kirby.
Amrock Insurance Pays Out
If you’re a huge company that thinks you might be able to pull a fast one, why wouldn’t you? History usually bears out in favor of whoever can feed more money into the legal machine, and when your own sizable coffers are backed up by a monolith like Quicken Loans, you might feel invincible. That’s what happened when Detroit-based insurer Amrock decided to sue a software provider named HouseCanary. HouseCanary was contracted for software to aid Amrock in appraisal and valuation, and in return, Amrock was to cough up a cool five million a year for the privilege.
Here’s the thing about companies, though: They really, really hate paying for stuff. So they figured they could kick HouseCanary to the curb and get out of their contract by claiming the software they’d provided was useless. Sure, they’d lose access to the software, but that wasn’t an issue, since Amrock had already reverse-engineered the software in-house, something that’s a smart move as long as a judge and jury don’t find out about it while you’re trying to argue their software sucks. Amrock tried to wiggle out of a $5 million annual bill, and instead ended up owing HouseCanary $706 million.
Robin Thicke Gets Dicked
For a song that seemed at first like it was going to rocket Robin Thicke to superstardom, “Blurred Lines” ending up being an absolute nightmare on almost every level. The lyrics and their questionable attitude toward consent, certainly not helped by the title or the fact that Thicke was allegedly groping co-stars during the making of the music video, had already landed everyone in hot water. When Marvin Gaye’s estate added to the pile by threatening to sue Thicke et al for copyright infringement, it’s safe to say he probably wished he’d never recorded the fucking thing.
In a world of limited melodies and notes, is pinpointing musical inspiration versus thievery amorphous and difficult? Yes, incredibly so. In the legal world which lives, literally, by the books, mixing in an incredibly subjective artistic discipline is a recipe for a mess. That’s why usually, the solution is a quick settlement. If the song’s big enough to be a target, it’s probably not equivalent to much more than a couple coins from a dragon’s hoard. Thicke and co-writer Pharrell Williams instead took it personally and preemptively sued Gaye’s estate. What did they get for making the first move? A dagger between the ribs to the tune of $7.3 million.
Bad Guess Costs Big
So far, I understand if my promises of schadenfreude haven’t been entirely fulfilled, given that even the winners in these lawsuits aren’t exactly the little guy. Most of these are still fights between two companies, and as someone famously said of one of King Kong’s contemporaries, “Let them fight.” Here, I hope I can provide a little more of a gleeful downfall when jeans mogul Georges Marciano had to pay out the nose to five ex-employees. Marciano, who, from everything I’ve read, is exactly like you’d expect a man who made his fortune off of sexy jean advertisements to be, suspected his employees of dishonest behavior.
He sued them for it, claiming that they embezzled from him, plotted to sell his expensive wine and art, and stole his personal information and emails. This lawsuit was promptly thrown out. The real pain came from the counterpunch: a defamation lawsuit from the accused, who said Marciano had blabbed liberally about their guilt to anyone willing to listen before it was decided. The judge agreed, and Marciano ended up paying $370 million in damages. “Guess” that’ll teach him to “zip it”! (If you don’t like those top-notch jeans puns, you can indi-go fuck yourself.)
If that last case tickled your proletariat pickles, this one is going to make you cream your Carhartts. It’s not a single legal case, but instead an attempt by corporations to strip legal rights from workers wholesale that instead, provided those same workers a convenient path to place some shit in their employers’ sandwich. See, companies were getting awful tired of class-action lawsuits being brought against them by employees or customers just because they’d treated them like a disposable resource.
In what surely seemed like a brilliant stroke at the time, they introduced “arbitration agreements,” which make workers agree they can’t sue the company and instead have to go through arbitration, a process that relies on a company-chosen mediator instead of the legal system. All based off of a 1991 Supreme Court decision that, quelle surprise, favored corporations, saying that they can force employees into this arrangement.
Some smart lawyers, however, ended up turning this loophole into a slipknot when they figured out that they could just organize all the wronged folks who would have entered a class-action lawsuit, and instead have them all file for arbitration simultaneously. Arbitration might not be part of the legal system, but that doesn’t mean you aren’t paying legal fees. Not only that, but because of the rules they themselves set up to screw class-actions, every single case has to be arbitrated independently. Both sides also owe fees to the arbitrators.
For example, every arbitration case brought against DoorDash requires $1,900 in arbitration fees from both sides. A tidy sum for the plaintiff, sure, but also a one-time pocketbook hit. The company in question, meanwhile, is paying $1,900 a pop, for every single person bringing suit. DoorDash isn’t a random example either, as this exact thing was weaponized against them, when over 5,000 arbitrations brought simultaneously put them on the hook for $9.5 million before their highly paid lawyers ever walked into the room.
Eli Yudin is a stand-up comedian in Brooklyn. You can follow him on Twitter and Instagram at @eliyudin and listen to his podcast, What A Time to Be Alive, about the five weirdest news stories of the week on Apple Podcasts, Spotify or wherever else you get your podcasts.