From Law360:

Judge Won’t OK Settlement In Marilyn Monroe IP Feud: Law360, New York (September 12, 2013, 4:53 PM ET)

A California federal judge on Wednesday rejected a settlement between Marilyn Monroe’s estate and photograph-owners of the late starlet, calling the deal an attempt to “erase” its and the Ninth Circuit’s ruling that Monroe’s heirs had no right to license her image.

U.S. District Judge Margaret M. Morrow said the settlement, proposed last month, amounted to an end-run around an August 2012 precedential ruling by the Ninth Circuit that said Marilyn Monroe LLC had no control over the blond bombshell’s name and likeness.

“This case … appears to be a prime example of a party that hedged its bets and that, having lost, now seeks to erase the unfavorable ruling it received,” Judge Morrow wrote, quoting precedent against such legal maneuverings.

The attempted settlement was a bizarre twist to cap off more than eight years of hard-fought litigation and political wrangling over Monroe’s extremely lucrative publicity rights, which were reportedly worth $27 million in 2011.

Most of the case centered on where the starlet was legally living when she died in 1962. In California, individuals have a posthumous publicity right that can be bequeathed, but in New York, a person’s right to publicity expires with death.

Thus, if the late starlet was a California resident at her death, her estate would have inherited control of her name and likeness. If she was legally living in New York, the heirs would have nothing.

In May 2007, Judge Morrow ruled that the estate didn’t own Monroe’s image, because the California law that made publicity rights inheritable was only passed in 1984, decades after Monroe’s 1962 death.

But in direct response to that ruling — and partly due to Monroe LLC’s efforts at persuasion — the California legislature passed SB 771 that September, which said the publicity rights inheritance law was retroactive and applied to all those who had died prior to 1984.

The law, introduced by former child actor and then state legislator Sheila Kuehl, was explicitly designed to “abrogate” the Monroe ruling.

The new law didn’t matter, however, because the court quickly ruled that Monroe resided in New York at her time of death as a matter of judicial estoppel. Judge Morrow said the estate, to avail itself of favorable tax laws, had spent more than 40 years arguing that Monroe had lived in New York when she died and couldn’t reverse course to win control of her publicity rights.

In August 2012, the Ninth Circuit affirmed that ruling with some choice words for Monroe LLC, saying the estate “took one position on Monroe’s domicile at death for 40 years, and then changed their position when it was to their great financial advantage.”

“Marilyn Monroe is often quoted as saying, ‘If you’re going to be two-faced, at least make one of them pretty.’ There is nothing pretty in Monroe LLC’s about-face on the issue of domicile,” the appeals court said.

The ruling – which specifically said photo owners like the party Milton H. Greene Archives Inc. wouldn’t have to pay the estate to sell the photos – was mandated back to the district court in September 2012.

In August 2013, the parties filed the settlement that was at issue on Wednesday, asking the district court to dismiss the entire action with prejudice.

Since no claims were actually left to settle, Judge Morrow viewed the settlement as “a request that the court vacate the earlier judgment and dismiss the action with prejudice.” The judge said many factors weighed against granting such a request, not least of which was that it would wipe out Ninth Circuit precedent.

“As the history of the case suggests, and as the Ninth Circuit’s decision to publish its opinion reflects, the decision has substantial precedential value,” the judge wrote. “To the extent the parties’ request seeks vacation of the judgment entered by this court and affirmed by the Ninth Circuit, the court denies that relief.”

Attorneys for both sides didn’t return requests for comment.

The estate was represented by Douglas E. Mirell of Harder, Mirell & Abrams LLP; Daniel L. Warshaw of Pearson, Simon, Warshaw & Penny LLP; and Laura A. Wytsma of Loeb & Loeb LLP.

The photograph owners were represented by R. Lawrence Bragg of Vitale & Lowe; Surjit P. Soni, Glenn H. Johnson, Mark L. Sutton, Leo E. Lundberg Jr. and M. Danton Richardson of The Soni Law Firm; and Douglas E. Mirell of Harder, Mirell & Abrams LLP.

The case is Milton H. Greene Archives Inc. v. CMG Worldwide Inc. et al., case number 2:05-cv-02200, in the U.S. District Court for the Central District of California