By NEIL HARTNELL
Tribune Business Editor
The Ministry of Tourism has suffered a second defeat in its battle with an ex-Bahamian beauty queen-turned-songstress after a US judge dismissed its "breach of contract" counterclaim.
Senior judge Nancy Atlas, sitting in the southern Texas federal court, ruled that the ministry had failed to provide sufficient evidence to show Khiara Sherman's deal with the Bahamas Junkanoo Carnival organisers protected it from her copyright violation lawsuit.
The ministry's case was founded on the former Miss Bahamas Universe's 2015 agreement with the Bahamas National Festival Commission, which released the Junkanoo Carnival organiser and its sponsors from any copyright infringement liability over the use of her Fly Away With Me track.
As one of these "sponsors", it claimed that Mrs Sherman agreed to "indemnify, release and hold harmless" the ministry for any damages relating to her participation in promotional activity involving the song.
As a result, the ministry alleged that her copyright infringement lawsuit over its use of Fly Away With Me in tourism promotions without her purported permission violates the song competition's rules.
Judge Atlas, though, ruled that the ministry of tourism had "failed to meet its burden" of proof and provide "clear and specific evidence" that Ms Sherman had breached her 2015 contract with the Junkanoo Carnival organisers.
And, significantly, she left the door open for Ms Sherman to seek "additional remedies", including sanctions and other expenses, to deter the ministry of tourism from filing similar counterclaims against her in the future.
Judge Atlas's September 28, 2018, ruling marks the second legal reversal suffered by the ministry of tourism in its deepening battle with the former Miss Bahamas Universe over her copyright infringement/breach of contract claims. It had previously sought to have the case thrown out, only for the same judge to rule against it again.
Setting out the background to her latest ruling, Judge Atlas said: "In July 2014, Sherman submitted a recording of one of her songs, titled Fly Away With Me, to a Bahamas-based song competition called the Music Masters.
"This competition, which was designed to promote music from Bahamian artists, was run by a part-private, part-governmental entity called the Bahamas National Festival Commission. The Commission hosted the Music Masters as part of an annual festival called the Bahamas Junkanoo Carnival."
The Commission issued a pamphlet setting out the competition's rules, and Ms Sherman signed the 'entry form' and its terms that allowed the organisers to reproduce her work without paying any compensation.
Judge Atlas said two provisions in the rules were relevant to the Ministry of Tourism's case. The first was the indemnity to "release and hold harmless" the Commission for using songs in promotional activity, while the second granted the organisers the "unconditional right" to use entries as they saw fit via a licensing agreement.
"Sherman's Fly Away With Me ranked in the top 25 songs, and the Commission compiled it into a CD," the judgement said. "At some point, the Commission provided the CD to the Ministry of Tourism, a division of the Bahamian government that regularly promotes Bahamian art.
"The Ministry was a sponsor of the Music Masters competition. In 2016, the Ministry used Fly Away With Me in a promotional music video for one of its events."
This led to Ms Sherman's original copyright violation claim, which the Ministry countered by claiming her action "breached the licensing provision, the indemnity provision, and the reproduction provision" in the contract with the Commission.
Tackling the Ministry of Tourism's licensing arguments, Judge Atlas said: "According to the Ministry, by agreeing to these provisions, Sherman granted the Commission a broad license to use and reproduce Fly Away With Me, and Sherman breached these provisions by threatening and filing suit against the Ministry because the Ministry acted within the scope of the Commission's license - using the song for promotional purposes.
"Importantly, the Ministry does not argue that the Commission validly assigned to the Ministry the license to Fly Away With Me. Instead, the Ministry argues that it acted as the Commission's agent when it used Sherman's song. The Commission contends that it may enforce the licensing and reproduction provisions because it is a third-party beneficiary of those provisions."
The south Texas federal judge described this argument as "unavailing", as the Ministry of Tourism could produce nothing to prove the Commission had given it permission to act as its agent.
"The Ministry has not established by clear and specific evidence that it acts with authority to enforce the Commission's contractual rights as its agent," she wrote. "Second, the Ministry fails to show that it is a third-party beneficiary capable of enforcing the disputed provisions in its own name."
As for the Ministry of Tourism's argument that Ms Sherman had breached the indemnity provision by filing the original lawsuit, Judge Atlas said this suffered from the "flaw" that it was not a party to, of beneficiary of, this term.
"The Ministry plainly was not a signatory to the rules and regulations of the Commission's competition or the indemnity provision therein," she wrote. "The Ministry instead claims membership in the group of 'sponsors' mentioned in the indemnity provision.
"This argument fails because the indemnity provision does not 'sufficiently describe or designate' the term 'sponsor' to support any third-party beneficiary status...... The Ministry accordingly cannot show a prima facie case for breach of the indemnity provision because, first, the Ministry does not have the right to enforce the provision, and second, the express negligence doctrine prevents application of the provision to Sherman's copyright infringement claim."