UPDATE: Judge Allows Contract Claim Against Fox News to Proceed

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Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York has ruled that Fox News must answer to a breach of contract claim for its alleged continued airing of footage of convicted Ponzi artist Bernie Madoff and his spouse enjoying a spin on a yacht.

The case, Kenneth Stadt v. Fox News Network LLC (Case No. 1:09-cv-07910), was brought in September 2009, by the owner of  the video footage and included counts alleging copyright infringement, conversion, breach of contract and breach of fiduciary duty. [See "TUOL" post 9/17/09.] Fox sought to dismiss the latter three "state claims," arguing that they were preempted by the Copyright Act.

Judge Scheindlin obliged as to the conversion and fiduciary duty allegations, but sided with the plaintiff in her 23-page decision that Fox's alleged ongoing promotion of the Stadt footage as a "Fox Business Exclusive," could constitute a material breach of contract.  According to Stadt's original complaint, Fox paid him $10,000 in January of last year for the exclusive right to air the Madoff footage for 45 days, and then coughed up another $50,000 to show the Madoffs at sea for another 45 days. The plaintiff contends that Fox continued to show the allegedly copyrighted video of the seaworthy scammer once the exclusive rights period expired.