Some People Will Do Anything to Avoid Paying Up on a Reward

By Jerry Meek

I’m not a big music fan, but a decision last week by the U.S. District Court for the Southern District of New York caught my eye.

It seems that Ryan Leslie – described in his Wikipedia page as an “American record producer, singer-songwriter, multi-instrumentalist and occasional rapper – lost his laptop and external hard drive while on tour in Germany.  Lost too was apparently some of Leslie’s intellectual property, including music and videos relating to his records and performances.

So Leslie posted a YouTube video, offering a $20,000 reward for the equipment’s return.  Eleven days later, he posted a second video, vowing to continue his “Euro tour” and increasing the reward to $1 million.

After Armin Augstein found and returned the laptop and hard drive, Augstein naturally wanted his reward.  When Leslie refused to pay up, Augstein sued.  Leslie argued that the offer for a reward wasn’t really an offer at all – instead, it was an “advertisement” or mere “invitation to negotiate.”  The offer was made on “YouTube,” he added, suggesting that no one could have taken it seriously.  Besides, he argued, he tried to access the intellectual property after the equipment was returned and couldn’t.  The reward had been offered, he contended, not for the equipment itself, but for the intellectual property the equipment held.

But, as the Court noted in Augstein v. Leslie, 11 Civ. 7512 (S.D.N.Y. Oct. 17, 2012), there was no dispute that – even after receiving notice of a potential lawsuit against him – Leslie allowed the equipment’s manufacturer to delete everything and send Leslie a replacement.  So, we’ll never know what was on the equipment.

According to the Court, the key question in resolving whether this was an “offer” or a mere “advertisement” is whether a “reasonable person” would have believed that this was an offer.  Here, Leslie’s offer was for someone to perform a specific action – finding the property.  As a result “a reasonable person viewing the video would understand that Leslie was seeking the return of his property and that by returning it, the bargain would be concluded.”

In addition, given that litigation was all but certain at the time that Leslie authorized the manufacturer to destroy the equipment, “Leslie and his team were at least negligent in their handling of the hard drive.”  The Court therefore sanctioned Leslie with an adverse inference – in other words, the Court ordered that it will be “assumed that the desired intellectual property was present on the hard drive” when Augstein returned it.

Augstein doesn’t have his reward yet.  But it looks like he’s well on his way.