## Facts

- In 1993, Shirley Manson entered a recording agreement with Radioactive, J.V. requiring delivery of at least one album and granting options for up to six additional albums.
- The agreement contained New York choice-of-law and forum-selection clauses.
- Radioactive released a Manson album that sold poorly.
- In 1994, the band Garbage entered a recording agreement with Almo Records containing California choice-of-law and forum provisions, and Manson later joined Garbage under related arrangements that also included California-oriented provisions.
- After Almo was sold to Universal Music Group in 2000, disputes arose over whether Manson remained bound by her 1993 obligations.
- Manson and Garbage filed a California state action seeking, among other relief, a declaration that the 1993 agreement was unenforceable after seven years under California Labor Code § 2855.
- Radioactive filed a diversity action in federal court in New York alleging breach of contract and seeking declarations that New York law governed and that § 2855 did not apply.
- Manson moved to dismiss or stay the federal case in favor of the California case; Radioactive cross-moved for partial summary judgment on the choice-of-law and § 2855 issues.

## Issues

1. Whether the 1993 recording agreement’s New York choice-of-law clause governs such that California Labor Code § 2855 does not apply.
2. Whether the federal action should be dismissed or stayed under Colorado River abstention due to a parallel California state proceeding.

## Decision

- The court granted Radioactive’s motion for partial summary judgment, holding New York law governed the 1993 agreement and California Labor Code § 2855 was inapplicable to it.
- The court granted Manson’s motion under Colorado River and dismissed the federal action in favor of the California state case.
- The court found the California and New York actions parallel and concluded that exceptional circumstances justified abstention to avoid duplicative litigation and inconsistent results.

## Legal Principles

- Contractual choice-of-law and forum-selection clauses are generally enforced when the chosen law has a reasonable basis and enforcement does not violate a fundamental public policy of a more interested jurisdiction.
- Later agreements containing different choice-of-law terms do not displace an earlier contract’s choice-of-law clause absent clear modification or supersession.
- California Labor Code § 2855 is a California statutory limit on enforceability of certain personal-services contracts; it does not apply when the governing law is validly chosen as another state’s law for the contract at issue.
- Under Colorado River, a federal court may abstain in favor of parallel state litigation in exceptional circumstances, considering factors including forum convenience, avoidance of piecemeal litigation, order and progress of filings, source of governing law, and adequacy of the state forum.
- Dismissal (rather than a stay) is permissible where the state proceeding is expected to resolve the entire controversy and no federal issues require retention of jurisdiction.

## Conclusion

The court enforced the 1993 recording agreement’s New York choice-of-law clause, ruled that California’s seven-year personal-services limitation did not govern that contract, and nevertheless dismissed the federal case under Colorado River because the earlier-filed, parallel California action could fully adjudicate the parties’ dispute and dismissal avoided duplicative litigation.


Radioactive, J.V. v. Manson, 153 F. Supp. 2d 462 (S.D.N.Y. 2001)