Stan Lee’s Daughter, Lawyers Hit With $1 Million Sanction Over ‘Baseless’ Suit

Marvel Comics legend Stan Lee at Phoenix Comicon in 2014. (Gage Skidmore/Wikipedia)

LOS ANGELES (CN) — A federal judge in California hit the daughter of comic book legend Stan Lee with a $1 million sanction after finding she filed a frivolous intellectual-property lawsuit regarding issues that have long been resolved.

Lee, who died in November 2018 at the age of 95, is responsible for many of Marvel Comics’ most popular superheroes, including Spider-Man, Fantastic Four and Black Panther.

After Marvel fired Lee during its bankruptcy in 1998, he formed Stan Lee Entertainment and hired Gill Champion and Arthur Lieberman to help him run the company.

In her lawsuit, filed in the Central District of California, Joan Celia Lee said Champion and Lieberman’s company POW! Entertainment — which marketed her father’s works — misappropriated Stan Lee’s image and misled him into believing he owned his name and likeness rights.

The company aimed to “loot the assets” of Lee by purposefully engineering Stan Lee Entertainment’s collapse and entangling the comic book legend in a lopsided 1998 contract that transferred intellectual property rights to its successor SLM, short for Stan Lee Media Inc., the lawsuit said.

The conflict at the center of the lawsuit has been litigated at least five other times but Joan Celia Lee said in her lawsuit she had standing to bring her claims since she was not a party to those matters.

Lee sought declaratory and injunctive relief to clarify ownership of her father’s intellectual property, name, and likeness rights under the 1998 agreement.

Attorneys for POW! Entertainment moved to toss the complaint, saying Joan Lee’s claims were frivolous and brought forward for improper reasons.

In his 20-page ruling Thursday, U.S. District Judge Otis Wright II wrote the 1998 agreement clearly shows Stan Lee assigned his intellectual property rights to SLMI to facilitate compensation for his work.

Wright found Joan Lee’s claims are “baseless” and barred because they have already been adjudicated.

“Furthermore, the contractual obligation of the assignment of rights is determined by the 1998 agreement which has remained unaltered since 1998,” the ruling states. “As federal courts around the country have addressed this very issue for over a decade, res judicata bars this action.”

Wright’s ruling said Joan Lee sensationalized the claims in the news media and that her attorneys improperly filed the complaint.

“The court finds it completely unreasonable to file a suit premised on an issue debated and analyzed in more than five federal district courts over the last decade,” Wright found. “Filing such a claim could only have been accomplished without a competent and reasonable inquiry.”

Joan Lee’s attorneys are responsible for $250,000 of the sanction amount, according to the ruling. 

In an email, attorney Jonathan Freund said they will appeal to the Ninth Circuit.

“Needless to say, Ms. Lee is extremely disappointed with the court’s ruling and believes the court committed a range of procedural and substantive errors, which she will take to the Ninth Circuit for review. She firmly believes this erroneous decision will not withstand appellate scrutiny and will be reversed,” Freund wrote.

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