Superhero Journalists Revisited

You may recall our previous post about superhero journalists Clark Kent and Peter Parker, which discussed how copyright affected them differently as an employee and an independent contractor, respectively.  Well the times they are a changin’, and Clark Kent quit his job at the Daily Planet in Superman #13 to become a blogger.  This will have more than a few legal consequences for Kent, some of which we’ll touch on today and some of which will have to wait for a future post.

I. Intellectual Property

As an individual Kent will either be working as a freelancer, selling stories to companies like the Huffington Post, or he may publish stories himself.  Regardless of which business model Kent chooses, he’ll also have to choose a form of business association (corporation, LLC, etc).  Basically, he could either choose some sort of corporation, or he could operate a sole proprietorship.  The latter is easier, but it’s also riskier (more on that later).

With regard to IP, the different kinds of business association give him some options.  For example, he could be an employee of a corporation, in which case the copyright in his works would be automatically owned by the corporation, just as they were owned by the Daily Planet when he worked there.  Or, if he wasn’t an employee then he could assign those copyrights by contract.  And if he chose not to incorporate, then he could retain ownership of the copyrights as an individual.

One practical effect of this choice will come into play when contracts with publishers are signed.  If Kent’s company owns the copyrights (either automatically or by assignment), then the company will be the one selling the stories, which entails either assigning the copyright to the publisher or granting the publisher a license.  If Kent operates as an individual, then it’ll be Kent selling the stories directly.  Either way it’ll probably be Kent signing the contracts, since he’ll be his company’s sole employee/shareholder/member.  The difference will be whether he signs it something like “Clark Kent, Manager, KentCo LLC” or just “Clark Kent.”

So what’s the point of all of this?  Why would Kent bother setting up a company, especially if he’s going to be the only employee or if it won’t even have any employees?  The answers are, as they so often are in the law, liability and taxes.  Taxes will have to wait for a future post, but let’s take a brief look at liability.

II. Liability

As a writer working alone, Kent probably won’t have to worry too much about some of the common sources of liability for companies, such as products liability or workplace injuries.  But he will have to worry about suits for defamation, invasion of privacy, and related torts.  To a certain extent these risks can be insured against, and it’s usually part of commercial general liability insurance, but there are limits to what insurance will cover.  If Kent intentionally defames someone or (more likely) intentionally invades their privacy, then an insurer isn’t going to cover that.  This is where the liability protection of the corporate form comes in to play.

Basically, the way this works is that the plaintiff could sue Kent’s corporation or company but not Kent himself as an individual.  This means that the corporation’s assets would be vulnerable in the suit, but not Kent’s personal assets.  There are some exceptions to this general rule, however.  Sometimes a plaintiff can “pierce the corporate veil” and sue the employees or directors and officers of the corporation as individuals.  There are several reasons why this can happen, but some of the most common are when the corporation is just an “alter ego” of the individual (i.e. they aren’t really distinct entities) or when the corporation is under-capitalized (i.e it doesn’t have nearly the assets it should given the kinds of risks it undertakes).  Both of these are potential issues for a one-person corporation or LLC.  Kent will have to be careful to observe the corporate formalities, avoid commingling personal and corporate assets, and maintain adequate capital in the company.

If Kent decides not to incorporate but instead operate a sole proprietorship or even act as an individual, then he won’t have this benefit.  He could be named in the suit as an individual and his assets would all be up for grabs, subject to the limitations of bankruptcy.  Incorporation has some upfront costs and requires some effort to maintain, but it beats being on the wrong end of a million dollar damage award.

III. Conclusion

So far there haven’t been a lot of details in the comics, but it’ll be interesting to see where this part of the Superman story goes.  Clark Kent’s work at the Daily Planet has been an iconic part of the character for decades.  ”Clark Kent, mild-mannered blogger” doesn’t have quite the same ring to it.

14 Responses to Superhero Journalists Revisited

  1. Perhaps you could correct me if I am wrong, but I am not certain that a corporate form would provide all that much protection for a reporter operating on his own, especially regarding things like invasion of privacy.

    When a person does something which creates a cause of action, even in the line of business, you can generally sue them, their employer or both. In fact, you may have justify suing the employer under the doctrine of “respondeat superior” and prove that they were not on a “frolick” or clearly acting outside of their employment to get to the company. A classic example is a security gaurd that assaults someone. Even if it was clearly within their job description, the security gaurd can be personally on the hook (now the contract might provide that the company will step in and pay his costs and cover any loss, but that is a contract between the guard and his employer, not an operation of law). As a practical matter, lots of plaintiffs are content to ignore the gaurd (who might be judgment proof) and focus solely on the corporation and go to great lengths to prove that respondeat superior applies, but at least in theory the gaurd can be liabile.

    The same reasoning seems to cover many cases of invasion of privacy just as well, as well as related torts that might be committed during the investigation such as trespassing.

    It might be a bit easier to hide behind the corporation on defamation, because Clark could say it really was the company itself as an entity that published (or sold for publication) the piece. But it seems that even with a carefully structured corporation and no comingling that it wouldn’t be hard to say Clark is also responsible as an individual if he personally wrote the piece and then personally pushed the publish button (or handled the negotations) and then sue Clark and his company jointly and severally.

    Please correct me if I’m wrong, but I understand things like LLC’s to be more about protecting investors who primarily provide capital (or provide services not so directly related to tort in question) rather than protecting an individual from his tortious actions.

    • It was your second example that I had in mind. That is, that Clark would argue that the piece was published by KentCo, or that KentCo sold the piece to a publisher, and so Clark as an individual had no hand in it. You’re correct that Clark could still be sued as an individual for any torts he committed personally (e.g. trespassing on someone’s property in order to get a scoop).

      With regard to invasion of privacy: some of the privacy torts require publication (e.g. false light, disclosure of private facts), and so Clark could argue that it’s really KentCo that should be liable. But Clark could be held personally liable if he committed the tort of intrusion, which is probably what most people think of when they hear “invasion of privacy.”

      In any case, the corporate form is about protecting both investors and individuals, particularly the directors and officers.

      • I see your points. It might be able to protect him from personal liability for some of the privacy torts, but even there it seems there’s a reasonable argument that he did the violation personally when he is the sole actor involved, even if done in the name of company. Of course, given a properly capitalized corporate structure with liability insurance it might be a moot point as a practical matter since the plaintiff will be content if they can recover the entirety of the award/settlement without needing to care.

        Your point about protecting the other individuals particularly directors and officers is also well taken. But most of the situations where that comes up involve some degree of separation between the director and the action. I am not certain the protection would work so well if the director is the one who decides on the action, expects to receive benefits personally (even if only in the sense that it enables the company to pay his salary), approves the action on his own authority, and then actually executes every single step of the tortious action personally. Again, it would probably be a moot point practically if the corporate structure has enough assets/insurance to handle the payout, but it seems a court would be quick to either find joint liability for the director or pierce the veil if it was lacking.

        Either way, thanks for the clarification. After you explain it, I can certainly see how it would work in some cases.

      • Timothy raised my objections. So I’d like to take a “frolick”.

        Have you examined Superman’s liability for invasion of privacy? It seems to me that Supes is largely immune, because as a general case people have no expectation of privacy for things done publicly, which is generally defined as things done where they may be seen by persons who are lawfully allowed to be where they are seeing you. Superman just sees things better than ordinary, non-Supermen.

      • Generally I’d imagine that turning on X-ray vision to see through a wall into a house isn’t going to be protected (besides any lawsuits he might be hit with for giving people cancer).

      • “Generally I’d imagine that turning on X-ray vision to see through a wall into a house isn’t going to be protected”
        Now all you have to do is prove that Superman’s x-ray vision can be turned on and off. Good luck with THAT.

        “(besides any lawsuits he might be hit with for giving people cancer).”
        Well, that one’s not entirely clear, either. He can see into the X-ray band, but for x-ray vision to actually work, the x-ray emitter has to be on the opposite side of the object being x-rayed. (That’s why they have to put the film inside your mouth when they do dental x-rays.)

      • Considering that he apparently can see flesh and not just the skeleton I suspect his X-ray vision is actually something else so we can’t be sure that it’s safe. For that matter I seriously doubt that Superman has any guarantee that it’s safe. Has he actively tested it under laboratory conditions and followed the patients for years afterwards?

        And if the courts do know that Superman does have this power and he declines to confirm whether or not it is permanently ‘on’ I wonder if you could hit him with a court order to permanently wear some sort of glasses to prevent it. It would be for his own legal safety too, otherwise any time he’s seen looking at a women’s bathroom he might be charged with sexual harassment.

      • “Has he actively tested it under laboratory conditions and followed the patients for years afterwards?”
        Probably not. Have you performed any tests under laboratory conditions, and followed the subjects for years afterward, to see if YOUR observing them has damaged them? If someone wants to sue Superman for causing their cancer, they have to plead facts showing that Superman caused their cancer. They don’t get to accuse him, and then make him prove he didn’t.

        “And if the courts do know that Superman does have this power and he declines to confirm whether or not it is permanently ‘on’ I wonder if you could hit him with a court order to permanently wear some sort of glasses to prevent it.”
        That’s a reductio ad absurdum argument waiting to happen. YOU might see something private with your ordinary Earthling eyeballs. Do you think anyone can get a court order to make you wear some sort of glasses to prevent this?

        “It would be for his own legal safety too, otherwise any time he’s seen looking at a women’s bathroom he might be charged with sexual harassment.”
        I don’t think he has to worry as long as he stays in areas he’s lawfully permitted to be. If you don’t want ordinary people looking into your house, build it out of opaque materials and cover the windows with curtains. If you don’t want Superman looking into your house, line the walls with lead or some other dense material.

      • Presumably Clark’s eyes are very sensitive and can see wavelengths that people normally can’t. As pointed out, seeing x-rays would not enable Clark to see anything except bones. Of course, on Smallville his x-ray vision was portrayed that way so let’s assume he is actually seeing x-rays. The fact is that on a sunny day you are exposed to low levels of x-rays. Of course x-rays do not normally pass through walls and if they did they would probably pass straight through people too. It’s hard to imagine, logically, how he would be able to see through a wall and see the person on the other side. One possible argument is that his eyes are more sensitive to things that are moving around, which is actually true of human eyes too in that you are more likely to notice something moving around than something stationary. So, therefore, I would have to ultimately conclude that Clark’s x-ray vision is probably one of his more plausible powers compared to flight, superstrength, heat vision, etc.

      • I, unlike Superman, have no reason to believe that my eyesight might be potentially hazardous and certainly not something under normally understood functions of humans. If my eyes could indeed see through walls and I refused to explain under what circumstances I could or could not see something that literally no other human on Earth could see the courts might take exception to that. As I am a human with regular human capabilities I live in a system that has been built to handle what I (and every other human) can be reasonably expected to be capable of. There is no reason to believe that one human might, by natural function, give another radiation poisoning.
        Indeed, considering how alien Superman’s body is compared to virtually everything on Earth he would probably be well-advised to do a very thorough examination of his abilities and whether or not they might have a long-term impact on people and society.

        Then there’s the fact that we are not all Lex Luthor and the vast majority of us probably can’t afford to have our houses and offices lined with lead.

      • Back during the Byrne era, Byrne attempted to plausibly* explain most of Superman’s abilities. His eyes did not emit x-rays, they were simply sensitive to much more of the electromagnetic spectrum than ours, including x-rays. Thus he was actually forming a picture from a much wider range of stimuli than us, including x-rays, gamma rays, infra-red radiation, etc., which naturally occur in varying amounts everywhere. “X-ray vision” was simply a shorthand way of saying he could frequently “see through” solid objects. It’s far-fetched, of course, but even now technology can see heat signatures through solid objects. So it’s still better than “x-rays coming from the eyes.” Byrne also abolished “heat vision” back then (Supes actually used pyrokinesis that was accompanied by his eyes turning red), because he didn’t like the “science” of shooting heat beams from his eyes. I have no idea what the current state of Superman’s powers is — as he got nudged back up the scale to virtual omnipotence, I lost interest. But that’s how his vision powers operated back then.

        *In comic book terms, natch.

      • “I, unlike Superman, have no reason to believe that my eyesight might be potentially hazardous and certainly not something under normally understood functions of humans.”
        Really, do you not “see” by sunlight, which is known to cause cancer in humans?
        Ordinary photographic film also “sees” x-rays. What kind of hazardous materials license is required to handle photographic film?
        If you want to press a claim that Superman has given you cancer by looking at you, you will have the burden of proof. Superman doesn’t have to prove that he hasn’t harmed you (though of course, if he can, he will win).

        “Then there’s the fact that we are not all Lex Luthor and the vast majority of us probably can’t afford to have our houses and offices lined with lead.”
        Actually, it’s cheaper to leave the lead there than it is to remove it. It’s just that lead is more dangerous to people, particularly children, than is ionizing radiation, so most people paid to have the lead removed from their walls (and, of course, building codes were changed to prohibit lining the walls of homes with lead-based paint.)

  2. Would it count as check fraud for Superman to sign and cash a check signed to Clark Kent? Does it matter that no one else knows that Kent is merely a pseudonym? If it would count as check fraud would it make sense for Superman to incorporate so when he does sell work the client would pay the company which in turn could pay Superman in cash?

  3. Pingback: Guest Post: Clark Kent’s Taxes | Law and the Multiverse

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